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Message
From: Henry Staunton
on behalf of — Henry Staunt
Sent: 03/12/2023 2
To: Nick Read {
Subject: Re: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Nick ,
A lot there for Karen to help with . It sounds as if you would like a bit more thinking time but if you want to
speak before Christmas just shout .
Henry
PS CONFIDENTIALLY I heard the word " Entitlement " mentioned by Karen wrt management's expectations
on bonuses ete and picked Karen up on it in the RemCo . I mentioned that accrued bonus type payments had
been cut ( by up to 50 % ) just to look good and management were " entitled " to expect fairer treatment . 1 do
not think there is a sense of entitlement by Owen or you and I do like the thought of the " entitlement " word
sticking . It would not be helpful and it would be best not to retreat . Please discuss the next time we speak .
Sent from Outlook for iOS
From: Nick Read <__.
Sent: Saturday, December 2, 2023 4:32 pm
To: Henry Staunto!
Subject: RE: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Thank you Henry. That is probably wise...there are one or two moving parts which require some thought.
Karen, I think will be good. She is getting to grips with the risk aversion, entitlement, and the Govt
peculiarities...this is needed. I think she will inspire confidence and pragmatism when it comes to Sycamore,
Rose1, Remco, culture change and some of the issues we need addressing in the immediate term, including
getting a contract agreed for Chris Brocklesby.
Nick
Nick Read
Group CEO
100 Wood Street
London EC2V 7AN
postoffice.co.uk
@
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From: Henry Staunton),
Sent: 02 December 2023 16:20
To: Nick Read ¢
Subject: Re: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Nick,
It was delicate and I am not oblivious of the PM NEDs errors . However , I do not think you and I were given a cast iron
hand to play .
Happy to make myself available and I will come in to the office . There are some big decisions to make - and if you need
the thinking time over the holidays that is not unreasonable.
Henry
Sent from Outlook for iOS
From: Nick Read <I
Sent: Saturday, December 2, 2023 11:00:38 AM
To: Henry Staunton!
Subject: Re: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Thank you for going to all the trouble to position this very delicate situation, Henry.
When the dust settles, once the ARA is signed and laid and we assess its impact, we should discuss how we want to take
a range of matters forward... I hope this can be before Christmas.
I do appreciate the time you have put into this at very short notice.
Nick
From: Henry Staunton}
Sent: Saturday, December 2, 2023 1
To: Nick Read <
Subject: Re: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Nick,
I have reread Foats summary of findings .
Can I first say that I spent hours last weekend on all this . I came into the office first thing on Monday to clear it up . I sat
like a lemon in my office for three hours and nobody briefed me on the update following the legal advice on Sunday .
Foat never popped in at all over Monday and Tuesday , and then I received your note at the close of platy on Friday .
Foat expects me to spend another weekend on this clearly . I have asked Eliot what time he has tomorrow ( I travel back
‘on Sunday ) and I will ask Foat to make himself available .
The summary note from Foat makes three recommendations :
.
.
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Incredible language but I will not be talking to Elliot about Foa’
suitability to be a Director etc etc . The PM Directors are most unhappy with PO treatment of Post Masters saying that
not much has changed over the years . I think that is unfair but am shaken when I read the language in the Summary of
Findings .
I was also not happy with wasting those hours on Monday .
Someone needs to get a grip on the way Legal operate .
It is past midnight and i will sleep on how I think we should take this forward .
I have never had a Legal Counsel in whose judgement I have so little faith - and I have been on 20 plus PLC Boards .
Best,
Henry
Sent from Outlook for iOS
From: Nick Read <}
Sent: Friday, December 1, 2023 5:11:15 PM
To: Henry Staunto:
Subject: FW: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Evening Henry,
Just following up on Tom’s note. I think there may have been some confusion around the third party
transaction position. I understand the team thought you were briefing Elliot last Friday on the Investigation and
outcome — which was why Ben volunteered to join the call. It would help if you could do this and of course Ben
is happy to support/lead. I don’t think this is something I should get involved in given his Board status.
Let me know how we might help.
Thank you
Nick
Nick Read
EA: I
100 Wood Street
London EC2V 7AN
postoffice.co.uk
From: Tom Lee {
Sent: 01 December
To: Henry Stauntot
Amanda Burton leno!
bs Nick Réad
; Daniel Ward fabelotti
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Subject: ARA Update - 1/12/2023
Post Office Limited - Document Classification: INTERNAL
Dear Board members,
Please find below this week’s ARA update:
«Laying and filing — per Boards request, a laying date of 14/12/23 has been confirmed with DBT which would
enable filing on 15/12/23. The laying slot won't be confirmed by No. 10 until 8/12/23 therefore there is a
possibility this could get moved into January (limited risk).
e —1R35—we received an email from HMRC this afternoon regarding IR35. The email doesn’t state their position,
however it does stipulate they will seek to provide a letter outlining next steps within 2 weeks. This could pose a
risk to signing date. Management are considering next steps and will seek to minimise the risk to signing.
e Related Party Transactions — an updated note has been drafted and agreed with PwC, now incorporating
transactions with key management personnel.
e Funding:
o CMAclearance on the £149m Inquiry and Remediation Matters funding was received on Wednesday.
Management are working with DBT on the associated funding commitment letter.
o Formal HMT approval of the £103m SPMP funding remains outstanding. Management are liaising with
DBT to obtain this ahead of CMA approval which is anticipated by 8/12/23.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
From: Tom Lee
Sent: 18 November 2023 00:21
; Benjamin Tidswell
on Jeffreys:
; Andrew Darfoor:.
wen
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Daniel Ward <7
Pp; Ben Foat ¢
>; Rachel Scarrabelotti
Subject: ARA Update - 17/11/2023
Dear Board members,
Please find below this week’s ARA update:
¢ Signing remains on track for 11/12/23 subject to funding progressing as expected.
« ARA~—drafting well progressed with final comments having being received from a number of stakeholders over
the past few days, including Board, UKGI and DBT. Comments were received from an external Copywrite and TB
Cardew today and are under review also.
e Accounting — all significant accounting judgments and estimates have been made for recommendation to ARC
on 27/11/23. This includes the final Remediation Matters accounting item in respect of PPR, with a non-
adjusting Post Balance Sheet Event disclosed.
* Going Concern — decision remains consistent, with the ARA prepared on a going concern basis. Progress has
been made on the Letter of Support with finalised wording expected to be agreed early next week.
e Funding — progress made on other funding matters with wording for the Security Headroom waiver (including
Working Capital Facility usage) agreed with DBT and expected to be signed early next week and extensions
provided for HSS and SRR payout funding out to 31/3/25. HMT have also approved the £150m of Inquiry and
Remediation Matters funding for operational matters, albeit the request for additional contingency has not
been granted. Management are working with DBT on this latter item, with updates to the Letter of Support
expected given latest forecasts indicate the contingency will be required.
Legal advice —
¢ Approvals — ARC and Board papers are expected to be circulated by Wednesday 22/11/23, including the updated
ARA and the PwC audit report. A Board sub-committee has been diarised for the morning of 11/12/23 to
approve the final ARA for signing, subject to Board approval of the sub-committee being established and being
granted delegated authority.
I'd like to thank individuals for the time afforded this week to discuss Going Concern and other significant matters, and
for providing comments on the ARA. Please do let me know if you have any questions.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
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From: Tom Lee
Sent: 10 November 2023 17:22
idswell
GRO >; Saf ismai
>; Brian Gaunt,
; Andrew Darfoor
<.. ee GRO on
subject: ARA Update - 16/11/2023
Dear Board members,
Please find below this week’s ARA update and also please find attached a number of documents for review (as
referenced below).
* Overall position remains positive and following discussion at ARC on 7/11 we are aiming to sign on 11/12.
e ARA- latest draft is attached for your review. This version has also been circulated to GE for review and
discussion on 15/11 ahead of a recommendation to ARC on 27/11. The front cover includes a list of items to
note, including where items require update or may change ahead of signing. If you have any comments on the
ARA please can you provide these ahead of 15/11 to ensure sufficient time to make amendments ahead of a
version being circulated to RC for approval.
* Going Concern — ARC recommended on 7/11, based on management’s assessment, that the accounts be
prepared on a going concern basis. There is a material uncertainty over the going concern position relating to
the reliance placed on continued government support in the absence of guarantees. There are a number of
hurdles to overcome in order to provide the support required however these are progressing well, including:
waivers over Security Headroom and Government Borrowing Facilities usage — waivers agreed and working
through ministerial approval currently; Extensions to HSS and SRR funding to 31 March 2025 — expected to be
forthcoming w/c 13/11; Funding for SPMP plus Inquiry and Remediation Matters running costs — progressing in
line with expectations; Overarching Letter of Support — wording almost finalised, expect to be confirmed by c.
20/11 and signed early December (latest version attached for reference).
e Board member briefings — over the next couple of weeks all Board members, excluding those on Audit
Committee, have a session in diaries with Post Office finance and legal to discuss Going Concern and Wrongful
Trading in more detail ahead of the Board meeting on 28/11 to approve the ARA (subject to any final
amendments and potential delegation to a sub-committee).
«Deloitte have completed their review activities over the front half of the ARA. This work involved agreement of
management identified metrics back to underlying support. It is not an overarching review of the ARA and does
not consider completeness of disclosures or test any items audited by PwC. A copy of the report is attached for
reference.
* One material accounting item remains open, in relation to Remediation Matters, with management aiming to
close this out over the coming week.
If you have any comments on the ARA or other items please feed these back to myself and Daniel Ward by 15/11.
Thanks
Tom
Tom Lee
Group Financial Controller
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Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
From: Tom Lee
Sent: 03 November 2023 17:06
To: Henry Staunton; Benjamin Tidswell
J ; Brian Gaunt!
Jacobs!
; Alisdair Cameron a‘
imon Jeffreys ; Lorna Gratton:
Owen
Rachel Scarrabelotti
Subject: ARA Update - 03/11/2023
Dear Board members,
Please find below this week’s ARA update.
Overall position is that we are on track for signing in December (aiming for w/c 11/12) however there is still a lot
to do to ensure this can occur, with significant reliance on DBT delivering on funding, waivers and a Letter of
Support.
* ARAwas reviewed by GE on 1/11 and has been circulated to ARC for review and discussion on 7/11.
e The ARC on 7/11 is focused on an initial review of the ARA, discussion and confirmation around preparing the
ARA on a Going Concern basis and the key accounting judgments and estimates.
e PwC audit is progressing well, with the focus currently on the significant provisions and Going Concern.
* Deloitte have completed the majority of their review activities over front half metrics / statements with an
interim report to be reviewed at ARC next week and a final report due to be issued on 10/11.
e Wrongful Trading advice will be refreshed and provided to Board as part of the ARA approval process on 28/11.
«Given the complexity and judgement involved in the going concern position briefing sessions have / are going in
the diary for all Board members ahead of the meeting on 28/11.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
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postoffice.co.uk
From: Tom Lee
Sent: 27 October 2023 2
To: Henry Staunton Benjamin Tidswell
Owen
Rachel Scarrabelotti
Dear Board members,
Please find below this week’s ARA update.
« ARA- draft well progressed and circulated to GE today for review and discussion on 1/11/23. Same draft will be
circulated to ARC on Monday for review and discussion on 7/11/23.
« Deloitte review - activity well underway but delays are being experienced primarily on the review of
Remuneration Committee sections. Delays are impacting the review of c.150 of the 211 metrics identified, with
the delay driven by the need to redact information from evidence before sharing with Deloitte.
e¢ Going Concern — disclosures drafted and assessment performed with a paper being circulated to ARC for review
on 7/11/23. Decisions are required on levels of assurance needed to enable signing.
e Letter of Support — updated letter received from DBT today and circulated to GE. This will form part of the ARC
Going Concern review on 7/11/23. The level of assurance provided by the letter is a key item for discussion,
given the level of reliance that Board will need to place on this for the overall Going Concern assessment and the
language used by DBT in the letter i.e. no certainties or guarantees offered.
e Waivers — final drafting being agreed. DBT appear willing to provide a signed waiver in advance of ARA signing,
with appropriate mechanics built into the letter to enable it to be drawn down on if / when required over a
predefined period.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
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From: Tom Lee
Sent: 20 October 2023 1
To: Henry Staunto!
Benjamin Tidswell
ndrew Darfoor {
_{>; Daniel Ward Rachel Scarrabelotti
Subject: ARA Update - 20/10/23
Dear Board members,
Please find below this week’s ARA update.
e The ARA is well progressed, with updated sections received from all parties. We intend to circulate an updated
version for GE and ARC review on 27/10 and 31/10 respectively, along with supporting papers.
«Formal going concern assessment is underway and will be shared with PwC for review next week. This captures
latest forecasts and funding status.
eLetter of Support — updated version received from DBT yesterday (19/10) and currently being reviewed by
management. Further discussions will be required to get the requisite level of support.
« Waivers — waivers for security headroom and usage of the working capital facility are substantially agreed. The
discussion is now around when / if these should be signed ahead of ARA signing, given the forecast breaches
have been pushed back (potential breach still forecast for December 23). Managements view is that signing of
these would signal DBT’s intent to support the Group and therefore would support the Going Concern position.
e Deloitte review activities over specific front half sections are fully underway and a status update will be brought
to ARC on 7/11.
e Remediation Matter provisions have been to RC and will be discussed with ARC chair on 24/10, ahead of
discussion at ARC on 7/11.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
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From: Tom Lee
Sent: 13 October 2023 1)
Jacobs I
Alisdair Cameron <
imon Jeffreys
Rachel Scarrabelotti
Daniel Ward <!_
Subject: ARA Update - 13/10/23
Dear Board Members,
Please find below this week’s ARA update.
« Updated ARA sections, reflecting initial review comments, have been received from most teams. Key sections to
receive updates on are the CEO and Chairman statements, so we can reflect the overall messaging in the
remainder of the document.
«© GE meeting held on 11/10 to discuss the initial draft ARA, expectations of GE and next steps. Next version of ARA
due to go to GE on 27/10 for discussion on 1/11.
« Draft ARA to be sent to UKGI and PwC for initial review early next week.
e Deloitte review is now underway for all sections requested. Remuneration Committee section remains the
biggest risk (excluding ED&I which is well progressed) with a vast amount of data to be verified.
* Revised Letter of Support drafted and shared with UKGI, DBT and PwC. Meeting scheduled with DBT 17/10 to
discuss. Asim to agree wording ahead of Arc on 7/11
* Provision estimates for Remediation Matters areas are going to HRC on 18/10 for review and approval ahead of
going to ARC on 7/11.
Thanks
Tom
Tom Lee
Group Financial Controller
Central Finance
No 1 Future Walk,
Chesterfield, S49 1PF
postoffice.co.uk
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From: Rachel Scarrabelotti
Sent: 09 October 2
To: Henry Staunton
Benjamin Tidswell
Subject: ARA Update
Dear Board Members,
Please find below a brief update prepared by Tom Lee regarding the status of the Post Office Limited Annual Report and
Accounts (“ARA”) for the year ended 26 March 23:
eA first draft of the ARA is substantially complete and has been through initial management reviews. This version
contains all the main sections except the CEO statement which is being redrafted and excludes the Going
Concern assessment. This version has been circulated to GE for review and discussion on 11/10/23 which shall
include a discussion of comparing our current proposed disclosures against how much we need/wish to disclose
given the agreement at September ARC around what our reporting requirements are.
e Overall tone of document being sought is matter of fact approach, being neither triumphalist about our
successes nor unduly self-flagellating about our mistakes — past and present. External consultants are lined up to
perform a review of the document from the external lens in due course. Details being confirmed.
« Deloitte have begun their review procedures which are designed to provide additional comfort over the front
half of the ARA and supplement the formal external audit work performed by PwC. We intend their work on the
RemCo report to commence at the end of this week; with a focus on the financial information. Review of other
sections has begun.
e The Letter of Support from DBT, which will form a key component of the Going Concern assessment, is being
drafted, with comments received from DBT last week and is now with Post Office management to redraft and
review. We are aiming to have wording finalised in time for the 7° November ARC. which means the letter of
support has to be finalised across parties by 31 October such that ARC has sufficient time to consider the
proposed ARA disclosures and letter of support in tandem.
e The underlying accounting is progressing with decisions on impairment and Remediation Matters provisions
expected to be finalised ahead of 7" November ARC. Going Concern is also targeted for then, however the
complexities may push this beyond that date; which given the point above is not where we wish to be and if in
that position, will need to be discussed at ARC on 7 November.
The intention is to provide weekly updates to members of Board and GE on the status of the ARA, subject to there being
progress or risks to report on.
Best,
Rachel
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