2013

Evidence on official site
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Post Office Limited — Strictly Confidential

POLB 13(7")
POLB 13/51-13/55
POST OFFICE LIMITED
(Company no. 2154540)
(the ‘Company’)

Minutes of a Board meeting held on 1* July 2013
held by conference call

Present:

Alice Perkins Chairman

Neil McCausland Senior Independent Director
Tim Franklin Non-Executive Director
Virginia Holmes Non-Executive Director
Alasdair Marnoch Non-Executive Director
Susannah Storey Non-Executive Director
Paula Vennells Chief Executive Officer
Chris Day Chief Financial Officer

In Attendance:

Alwen Lyons Company Secretary

Mark Davies Communications Director

Sue Barton Strategy Director

Kevin Gilliland Network and Sales Director
POLB 13/51 INTRODUCTION

(a) A quorum being present, the Chairman opened the meeting.

POLB 13/52 HORIZON

(a) The CEO apologised for the short notice in keeping the Board
updated but explained that issues had arisen over the last couple of
days. She gave an update on the Horizon review which was being
undertaken by Second Sight and their interim report which was to
be presented at a meeting of MPs on the 8" July. The investigation
to date had found no systemic issues with the Horizon computer
system but had highlighted areas for improvement in support areas
such as training.

{b) The CEO explained that the Horizon, like any large computer
system, would occasionally have anomalies and two were know of
over recent years. The Business had dealt with these anomalies to
ensure no sub postmaster was out of pocket and these anomalies
had not affected any of the cases which Second Sight had
reviewed. Second Sight had been told of these anomalies and they
would include them in their report.

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Post Office Limited — Strictly Confidential

(c) The CEO was concerned that the report from the independent
forensic accountants was not as factual as expected and could lead
to loose language at the MP meeting.

ACTION: The Board asked the Business to challenge Second Sight to

CEO/ (d) ensure changes were made to the report where possible and asked

Mark Davies the Business to prepare their communication to combat any
inaccuracies.

POLB 13/53
MUTUALISATION TIMELINE
Sue Barton reported that all the changes discussed at the Board

(a) Awayday had been incorporated into the mutualisation timeline and

that it would clearly show that the strategic plan milestones referred
to the year-end dates for 2013-2020. It had been agreed with BIS
that the report would timeline would be an internal document not for
publication.

POLB 13/54

2013/20 STRATEGIC PLAN — CURRENT STATUS

(a) Sue Barton gave an update on the NFSP sessions underway
where she and Kevin Gilliland had shared the strategic plan. It was
clear that their main concern was the enhanced compensation
although the NFSP understood that there was no headroom in the
plan for additional payments.

The Chairman explained that the Secretary of State had agreed to

(b) a meeting and was now getting involved in the process and that
she and the CEO were meeting him and the Minister on the 11"
July. He understands the scheduled approach but wants the
Business to consider a ‘cliff’ to incentivise the sub postmasters to
convert or loose the opportunity for investment. Sue Barton
explained that this would not persuade Sub postmasters to move
until the date of the ‘cliff as they would want to retain their Core
Tier Payment for as long as possible.

The Board discussed the need to move at pace to defend the

(c) position especially in the mails market, and whether the move to
network expansion could be the solution. Sue Barton explained that
although the advantage of Network expansion was speed and cost,
the increasing the network could cannibalise the work from existing
branches and make them even less viable.

Sue Barton was asked to develop an option which incorporated the
ACTION: Sue Barton (qd) _ idea of a ‘cliff’ as suggested by the Secretary of State but ensuring
that there were levers to ensure sub postmasters were incentives
to leave early. This was to be presented to the Board before the

Post Office Limited — Strictly Confidential

meeting with SoS on the 11" July

POLB 13/55 CLOSE

There being no further business the meeting was closed

I Neil McCausland I

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