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POLB04(7™)
POLB 04/86 - 04/109
Post Office Limited
(company ho. 2154540)
Minutes of the meeting of the Board
held at 80-86 Old Street, London
on October 13" 2004
Present:
Sir Michael
Hodgkinson Non-executive Chairman
David Mills Chief Executive
lan Anderson Human Resources Director
Peter Corbett Finance Director
Brian Goggin Chief Executive, Bank of Ireland
Graham Halliday Banking & Financial Services Director
Allan Leighton. Chairman, Royal Mail Holdings (for POLB04/66,— POLB04/97)
David Miller Chief Operating Officer
Gordon Steele Sales & Marketing Director
In attendance:
Jonathan Evans Company. Secretary
Neil Owen Notes
David. Smith Delivery. Director (Acting IT Director)
Simon Broome Head of People Change, Crown Office Strategy (for POLB04/94
- POLB04/95) +
Martin Gafsen Investment Director, Group Finance (for POLB04/98 —
POLB04/100)
Byron Roberts Programme Director, Crown Office Strategy Strategy (for
POLB04/94 - POLB04/95)
Apologies:
Elmar Toime Executive Deputy Chairman, Royal Mail Holdings
POLB04/86 ELMAR TOIME
The Chairman reported that Elmar. Toime would be leaving
Royal Mail Group within the near future. He would therefore be
resigning his position as director of the Company.
POLB04/87 MINUTES.OF PREVIOUS MEETING POLB(04)6™
The Board approved the minutes of the Board meeting of 1*
September 2004.
POLB04/88 STATUS REPORT POLB(04)71
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The Board noted the report, and in additior
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POLB04/90 CHIEF EXECUTIVE’S REPORT
David Mills reported the following matters to the Board:
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(iv) meeting had
taken place to discuss the Strategic Plan for
2005/06. A detailed 3 year plan would be written,
together with a narrative for which would outline
the following 2 years;
(ii) Meeting with sub-postmasters, West
Ham,Football Ground: The meeting had gone well
and had underlined how important it was for Post
Office Ltd to appeal strongly to ethnic minority
groups with its products and services;
Action:
David Miller i
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POLB04/101
HORIZON - NEXT GENERATION BUSINESS CASE
(DELEGATED AUTHORITY) POLBO04(82)
David Smith presented the: Horizon — Next Generation Business
Case to the Board. The Board noted ‘that:
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(ii)
(iii)
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the business case concerned the next stages of
work required in order to obtain a firm price
quotation from Fujitsu;
legal resources: need to be engaged to support the
negotiation. of an amended contract between Post
Office Ltd and Fujitsu to build, implement and
operate Horizon ‘Next Generation’;
the current Fujitsu contract expired in 2010. To put
a new contract in place would require preparation
of an ITT in January 2005. This would ensure the
available options were maximised and would
improve the negotiating position;
this preparatory work would be essential to ensure
the target of reducing the Directly Managed
Branch cost base by 25% was achieved;
the S90 Release scheduled for Autumn 2004
would provide the last opportunity to amend the
current Horizon’system.
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Action:
David Smith
Action:
David Smith
POLB04/102
POLB04/103
POLB04/104
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The Board agreed that:
(i) The IT Roadmap evaluation business. case would
be refined to more clearly define the objectives,
the parameters of the programme, and the
minimum acceptable outcome.
(ii) Evidence would be provided that negotiations with
Fujitsu represented clear value as against the
alternative of going out to tender;
(iii) I It would be reviewed whether the legal fees related
to the entire business case, or the scoping
exercise.
SUBSIDIARY / ASSOCIATE COMPANY ITEMS FOR
APPROVAL POLB04(83)
The Board noted the minutes of the Post Office Financial
Services Board meetings of 18" May 2004, 18" June 2004 and
21° July 2004.
FUNCTIONAL REPORTS
FINANCE REPORT POLB(04)84
The Board noted the report.
In addition the Board noted that a deal had been struck with the
DWP to address the volatility of pre-funding.
OPERATIONS REPORT POLB(04)85
The Board noted the report. The Board further noted that:
(i) the new Minister, Gerry Sutcliffe, had proposed a
monthly ‘surgery’ at the House of Commons from
April 2005, the likely result of which would be to
reduce the number of questions tabled by the floor;
(ii) protracted discussions concerning Network
Reinvention branch closures continued in
Birmingham. The matter could result in a judicial
review.
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POLB04/107 IT REPORT POLB(04)88
The Board noted the report. The Board further noted:
(i) most of the challenging issues concerning Pinpads
had finally been overcome;
(ii) a risk existed that the Chip and Pin deadline would
not be met, but every effort was being made to
ensure it was achieved.
The Board agreed that:
(iii) an article would be provided to ‘The Sub-
Action: postmaster’ explaining the reasons for the Card
David Smith & Account outage on 23 September 2004, and
Graham Halliday outlining the short time in which the majority of
systems were back up and running;
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POLB04/108 HUMAN RESOURCES POLB(04)89
The Board noted the report.
The Board agreed that in situations where fraud had been
perpetrated against the Company, the appropriate Civil Orders
would be used immediately and in advance of any Criminal
proceedings. This would help recovery efforts by ensuring that
the assets of those involved in criminal activity were quickly
Action: secured. David Miller would verify the current procedures and
David Miller report back to the Board.
POLB04/109 ANY OTHER BUSINESS POLB(04)90
Sub-postmaster Exhibition: David Mills reported that a
subsidiary of Hayes Travel had been provided with a stand at
the Sub-postmaster exhibition to promote their bureau de
change product. The Chairman advised the meeting that First
Choice plc (of which he is also Chairman) had a 37%2%
shareholding in Hayes Travel Services).
The Board agreed that:
(i) it was both damaging and inappropriate for a direct
competitor of Post Office Ltd to be accommodated
at the exhibition in this way;
Action: (ii) Post Office. Ltd would re-consider the subsidy
Graham Halliday provided to the. NFSP if they continued to
undermine the position. of Post Office Ltd;
(iii) a list of competing non-Post Office Ltd financial
services products would be compiled.and provided
for. review by the Board
(iv) I acommunication would be circulated to branches
highlighting that these third party arrangements
would not be covered by the agreements Post
Office Ltd had reached concerning Money
Laundering and the Financial Services Act.
(v) Post Office Ltd would maintain a presence at the
exhibition so as not to draw unnecessary publicity
to the situation.
CLOSE
There being no further business, the meeting was closed.
I Sir Michael Hodgkinson
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