report  accounts contents
introduction 3
chairman’s statement 4
highlights 5
chief executive’s review 6
financial review 16
directors and advisers 20
corporate governance 22
corporate social responsibility 26
remuneration report 27
directors’ report 35
independent auditors’ report 38
consolidated income statement 39
consolidated balance sheet 40
company balance sheet 41
cash flow statements 42
statements of changes in shareholders’ equity 43
notes to the financial statements 44
five year summary of results 73
notice of meeting 74 introduction
business post is the uk’s largest independent
express delivery company and the leading 
alternative to royal mail in the deregulated market
for mail services
03
the group is organised into three divisions – parcel
services mail services and specialist services
parcel services is the largest division with revenue of
£196m in the year ended 31 march 2006 representing 70
of the group total  offering primarily next day b2b b2c and
crossborder collection and delivery services through the
express homeserve and international brands parcel
services operates through a national network of 59 depots
for domestic shipments and a number of business partners
for international deliveries  we are the chosen uk partner of
fedex express the world’s leading express delivery
company
mail services comprising uk mail is licenced by
postcomm the independent regulator to offer mail services
throughout the united kingdom  it is the group’s fastest
growing division and from commencement in may 2004
achieved revenue in the year ended 31 march 2006 of £40m
representing 15 of the group total  currently offering
services to business customers uk mail provides a twoday
timedefinite delivery service with full trackandtrace
capabilities
specialist services comprises the group’s sameday and
palletised goods delivery activities through the uk today
bxtech and uk pallets brands with revenue of £42m
representing 15 of the group total  uk today and bxtech
offer a range of fulfilment services including ad hoc contract
and international courier logistics and technical twoman
deliveries uk pallets provides collection and delivery
services for palletised goods through a partnership network
with over 70 independent logistics and distribution
businesses throughout the uk
each of the divisions shares a reputation for highquality
delivery services using information systems which are at the
forefront of the industry
parcel services represents 70 of the group revenue
uk mail represents 15 of the group revenue
specialist services revenue £42m
03 the board remains confident of the
group’s long term potential prospects for
mail services remain excellent
chairman’s statement
excellent progress has been made in uk mail and
specialist services during the period  however it has
been a very challenging year within parcel services
particularly in the second half  
results
revenue increased by 19 to £2782m 2005 £2333m
uk mail contributed £302m of the total revenue increase 
of £449m    
operating profit before exceptional items reduced to £121m
2005 £199m reflecting a decline in profitability levels
within parcel services but benefiting from the reversal of
ifrs charges for sharebased incentives operating profit
totalled £54m 2005 £199m  after net interest payable of
£04m 2005 £03m profit before tax and exceptional items
was £117m 2005 £196m  after exceptional items pretax
profit totalled £50m 2005 £196m  
dividends
the board remains confident of the group’s long term
potential and the prospects for recovery accordingly
following payment of an unchanged interim dividend of 64p
the board proposes a final dividend of 108p 2005 128p
the final dividend will be payable on 20 july to shareholders
on the register at the close of business on 30 june 2006
business
both the progressive decline in revenue growth during the
year and the markedly lower profitability within parcel services
can be attributed in large part to the impact of a number of
unsuccessful profitimprovement initiatives introduced during
the year  under the new leadership of guy buswell a
comprehensive performance improvement plan has been
developed and is being rigorously implemented encouraging
early progress has been made particularly in improving
customer service levels but it will take time for the full benefit
of these actions to show through in the group results 
uk mail enjoyed another excellent year increasing revenue
fourfold and making an operating profit contribution of £32m
prospects for mail services remain excellent
specialist services made good progress increasing revenue
by 18 and operating profit before exceptional items by 21
rewarding both expanded sales activity and focus on margins
management
we announced at the beginning of december the
appointment of guy buswell formerly managing director of
uk mail as chief executive following the resignation of paul
carvell  since his appointment guy has made a number of
significant changes to the management team designed to
streamline the management of the group’s activities and
provide greater focus on those areas requiring margin
improvement  
we also announced on 23 may 2006 that after more than
seven years as group finance director peter fitzwilliam will
step down from the board on 2 june 2006  peter has made
a substantial contribution to the group including assisting
most recently in the current performance improvement
strategy  we are grateful for all he has done and wish him
the very best with his future plans
peter will be succeeded by steven glew with effect from 5
june 2006  steven has an excellent record of delivering
successful change programmes within quoted companies
most notably mothercare plc and booker plc and we are
delighted to welcome him to the board
strategy
the group’s strategy remains to focus on three areas of
business – parcel services mail services and specialist
services  the business model of parcel services is sound
and there is significant scope for recovery  the opportunities
for uk mail operating through the group’s core network
remain particularly exciting and the board believes that the
group can maintain its position as the leading competitor to
royal mail for the foreseeable future  the businesses within
specialist services operate outside the core network and
continue to offer attractive growth opportunities on a stand
alone basis
as previously stated the board believes that the group
contains the elements necessary for substantial profitable
growth 
prospects
service levels remain high and the number of customers
following a period of decline during the year is now on an
upward trend  encouraging progress is being made in
tackling the issues within the franchise network and
initiatives to rebalance the mix of customers and reduce unit
costs within parcel services are in the process of being
implemented  the board is confident that these will address
the major underlying issues affecting profitability but by their
nature will take time to show through in the financial results
for the group the board expects progress in the underlying
results in the coming year albeit weighted to the second half
peter kane
chairman
04 highlights
operational
• fedex express contract renewed for
further five years
• comprehensive action plan being 
implemented to improve the 
performance of parcel services
• encouraging early progress with 
recent service levels amongst the 
highest in the group’s history
revenue up by 
19 to £2782m
uk mail’s revenue up fourfold to
£404m
group pretax profit was
£50m
uk mail operating profit
contribution of
£32m
financial
uk mail made further excellent progress 
reinforcing its position as the market leader in 
downstream access mail
05 chief executive’s review parcel services
parcel services comprises the
group’s overnight businessto
business express businessto
consumer homeserve 
and crossborder international 
parcel delivery activities using a
national network of 59 parcel depots 
06 chief executive’s review parcel services
the first priority is to ensure that high levels
of customer service are provided on a
consistent and reliable basis
parcel services
during the year parcel services increased revenue by 5 to
£1958m representing 70 of the group total 2005 80 
after a strong start to the year with daily volumes well ahead
of the previous year growth progressively deteriorated to the
point where in the final quarter they were below those of the
previous year  preexceptional operating profit declined to
£174m 2005 £303m operating profit was £111m 2005
£303m  
express revenue declined slightly to £1308m 2005 £1313m
homeserve increased revenue by 22 to £328m 2005 £268m
and international by 12 to £316m 2005 £281m 
both the progressive decline in revenue growth during the
year and the markedly lower profitability can be attributed in
large part to the impact of a number of unsuccessful profit
improvement initiatives introduced during the year  these
included shortterm cost reduction initiatives which adversely
impacted service levels  these service issues and a series of
price increases in the summer in turn affected customer
numbers particularly smes with the result that the average
selling price declined and operational efficiency reduced
furthermore additional costs were incurred in supporting a
number of underperforming franchises  
following my appointment as group chief executive in early
december 2005 i have identified a series of remedial actions
which i am confident will improve levels of profitability within
parcel services the first priority is to ensure that high levels of
customer service are provided on a consistent and reliable
basis  under the leadership of a newlyappointed operations
director the results of this focus are already evident with
service levels in the first three months of 2006 being among
the highest in the group’s history   
the chart below illustrates the improvement made across the
period december 2005 to march 2006 when compared with
same period a year earlier and rebased so that december
2004 equals 100
this improvement along with our ability to deliver tailored it
solutions was a central factor in the decision of fedex
express to renew business post’s contract as global service
participant in the uk  our existing five year contract will be
replaced with a new five year contract with effect from 3
september 2006 on similar commercial terms
the network’s operational efficiency is affected by the balance
of collections and deliveries in individual locations  in simple
terms the more equal the balance the more efficiency is
optimised  over time changes within the customer base have
impacted this balance and sales activity is now being
targeted on those sites which would benefit most significantly
accordingly sales incentives have been introduced to
encourage new business from smaller customers both to
increase average selling prices and to enhance utilisation of
collection and delivery vehicles  
07
dec 04 jan 05 feb 05 mar 05 apr 05 may 05 jun 05 jul 05 aug 05 sep 05 oct 05 nov 05 dec 05 jan 06 feb 06 mar 06
94
96
98
100
102
104
106
108
rebased service levels chief executive’s review parcel services
in addition to these sitebased initiatives additional focus is
being placed on linehaul  the bulk overnight movement of
parcels through a renewed focus on capacity utilisation
opportunities have already been identified to reduce the
number of routes operated releasing vehicles from the fleet
the initial impact of this action is evident in the chart of
linehaul costs per parcel below rebased so that april 2004
equals 100 and will remain one of the key cost reduction
initiatives pursued during the current year
the impact of the events of the past year has been acute
both within business post’s own sites and also its franchise
locations  the level of profitability within the franchise
network has been poor and in order to maintain continuity of
service for customers increased levels of funding were
provided during the year  the impact on the network has led
both to a reassessment of the recoverability of amounts
previously advanced to franchises and also the future
viability of some individual franchise locations  
certain franchise locations were identified where prospects
for improvement were poor  a number of these have been
converted to business post ownership since the start of
2006  all conversions have been effected without any
detrimental impact on service levels but have resulted in
oneoff costs of transition which have been reported as an
exceptional item the number of franchises has been
reduced from 42 at its peak to 21 today
a key element of our strategy going forward is to reduce the
unacceptable level of customer attrition suffered during 2005
and before for more than two years we have been
developing an educational and training programme that is
designed to improve the quality of the customer experience
on all those occasions and in those situations when
customers come into contact with our organisation
it was always anticipated that this would be a long term
project as it has to reach over 3500 employees and
associates and in many cases inspire changes in their
behaviour this activity is beginning to yield measurable
results supported as it is by the parallel development of the
onyx customer relationship management system now the
mainstay of our customer service activity
responsibility for managing and servicing our large
customer base now falls with the newly created client
services group under the management of the client
services director this department creates a bridge between
the sales and operations functions and assumes the
responsibility for customer service that they previously
shared the impact their work is having is already becoming
apparent as a direct result of the focus they now bring to this
vital business activity and is illustrated in the chart below
08
increased efficiency in linehaul operations
operational service at historically high levels
enhanced customer service standards
85
90
95
100
105
110
115
120
ebased
apr may jun jul aug sep oct nov dec jan feb mar
200405                   200506
10000
12000
14000
16000
18000
20000
22000
number of accounts trading in 200506
apr may jun jul aug sep oct nov dec jan feb mar
up to £500          £500  £4999          £5000
linehaul costs per parcel
customer numbers
rebased 09 chief executive’s review mail services
uk mail is now recognised as the
leading alternative to royal mail
10 less than two years after commencing trading 
uk mail had an annualised throughput of 
approximately 700 million items
chief executive’s review mail services
market share approaching 3
major new contracts agreed
encouraging progress for unsorted service
highlights
11
mail services
uk mail enjoyed another excellent year increasing revenue
fourfold to £404m representing almost 15 of the group
total up from 4 last year  at the year end less than two
years after commencing trading uk mail had an annualised
throughput of approximately 700 million items  this
represents approaching 3 of the market is ahead of
schedule and reinforces uk mail’s position as the market
leader in downstream access operating profit of £32m
2005 breakeven was achieved and further strong progress
is expected in the current year
new uk mail customers signed over the past year include
carphone warehouse o2 standard life and a contract with
first data international fdi a leading mail production
company to handle significant volumes of mail for one of the
uk’s leading financial institutions this builds on uk mail’s
earlier success in the financial services market adding to the
major contract won in 2005 with the royal bank of scotland
group
as well as excellent progress in the market for presorted
mail items where strong levels of new business wins have
continued good progress has also been made in the market
for unsorted mail  uk mail’s unsorted mail service
introduced progressively throughout the year has made an
encouraging start and contributed a modest amount to uk
mail’s operating profit  four machines are already in place
and further machines are planned for introduction during the
coming year  
the royal bank of scotland group rbs has awarded
approved supplier status to uk mail this is a new scheme
that is designed to further recognise the achievements of
their highest performing suppliers in addition uk mail is
entitled to use the supplier excellence mark as a winner in
the rbs supplier excellence awards
rbs are one of the uk’s largest mailers and first awarded
postal business to uk mail in march 2005 the size of the
contract has continued to grow as uk mail have
progressively increased their share of the rbs mail output chief executive’s review specialist services
specialist services comprises 
uk pallets a nationwide palletised
goods delivery service and sameday
courier activities through uk today
and bxtech
12 higher sales activity and business 
development initiatives
uk pallets network strengthened
uk today absorbs bxtech
highlights
overall preexceptional profit within specialist services
increased by 21 against a revenue increase of 18  
chief executive’s review specialist services
13
specialist services
overall operating profit before exceptional items within
specialist services increased by 21 to £23m 2005
£19m against a revenue increase of 18 operating profit
was £21m 2005 £19m
uk pallets
uk pallets increased revenue by 19 to £275m
representing an unchanged 10 of group revenue  this is
an encouraging performance against a background of a
maturing market and reflects the benefits of expanded sales
activity during the year  with a new managing director and
management structure in place a number of new business
development initiatives are being pursued
the partner network continues to gather strength and
improve coverage with new appointments being made in key
areas this adds to the scope and quality of the services
provided by uk pallets to its customers
increased focus is falling within the business on the
fundamentals of safety accuracy and control in the
presentation and handling of freight shipped through the
system success in this task will have a directly beneficial
effect on the retention and development of customers
throughout the network
courier
business post’s same day courier activities increased
revenue by 16 to £141m representing 5 of the group
total  a focus on profit margins during the year yielded good
results with a 14 increase in operating profit margins  the
management of the group’s courier activities has recently
been restructured amalgamating bxtech and uk today into
one business under single management  this restructuring
is expected to yield further profit improvements in the coming
year
a recent review of the main business activities of the
combined courier group has yielded a marketing and
product development plan that is focused on the key
strengths and competencies that it possesses this has
allowed the development of a targeted plan of sales activity
that is designed to yield new business of good fit and high
margin chief executive’s review staff  associates
award for training programme
enhanced communication programme
foundations laid for the future
highlights
14
the year 200506 has been a difficult year for all our staff
and also our associates working within our franchised
operations and as ownerdrivers  despite their considerable
efforts they have not seen their hard work and enthusiasm
rewarded in the financial results for the group
as a result we are working hard to engage all those people
who work for the group and particularly those based at our
network sites we need them to pay greater attention to the
basics of our business – to get it right today so that it
doesn’t become a problem tomorrow we need to inspire
and motivate them to bring about the fundamental
improvements that are needed and we are dedicating
considerably more time and effort to internal
communications
the programme includes a new staff magazine a much
enhanced intranet site information points at every location
and the installation of pcs in staff amenity areas to support
our learning and development programme
creative and relevant training courses will boost staff morale
as well as their knowledge our learning and development
programme was recognised by a national training award in
2005 and we will continue to build on an already excellent
standard
i strongly believe that business post has a great future and
thank all our staff and associates for their support
guy buswell
chief executive 15 financial review 
ifrs
these are the first group results prepared under euadopted international financial reporting standards “ifrs”  
the principal impact of ifrs on the accounts of the group has been the requirement to quantify the fair value of share options
including those issued in prior years and spread that across the relevant vesting period and the change to an impairment test
for goodwill which removed the annual amortisation charge  full details of the impact of the implementation of ifrs are
included in note 36 to the financial statements
revenue
2006 2005
revenue £2782m £2333m
the overall revenue increase of 19 reflects the differing characteristics of the markets in which the group operates
and the relative successes of the group’s divisions growth of 19 was achieved as follows
2006 2005 increase
parcel services £1958m £1870m 5
mail services £404m £102m 296
specialist services £416m £353m 18
parcel services experienced mixed fortunes during the year with homeserve and international revenues growing by 22 and
12 respectively but express revenues declining slightly  after a strong start with daily volumes well ahead of the previous
year growth progressively deteriorated to the point where in the final quarter they were below those of the previous year  
mail services comprising uk mail commenced trading in may 2004 and has achieved rapid progress in both the market for
presorted mail items and also in the market for unsorted mail in which a new service was introduced progressively
throughout the year  uk mail was the first company to offer nationwide mail delivery services as an alternative to royal mail
following deregulation of the mail market in 2000 and remains the market leader in downstream access  uk mail contributed
£302m of the total revenue increase of £449m
within specialist services uk pallets increased revenue by 19 and courier increased revenue by 16 representing good
progress and rewarding the expanded sales activity during the year  
profit
2006 2005
operating profit before exceptional items £121m £199m
pretax profit before exceptional items £117m £196m
operating profit £54m £199m
pretax profit £50m £196m
operating profit before exceptional items reduced to £121m 2005 £199m reflecting a decline in profitability levels within parcel
services but benefiting from the reversal of ifrs charges for sharebased incentives following the failure of share incentives to meet
their relevant performance conditions  an ifrs credit of £04m compares with a charge of £10m in the prior year  operating profit
totalled £54m 2005 £199m  after net interest payable of £04m 2005 £03m profit before tax and exceptional items was
£117m 2005 £196m
uk mail contributed £302m of the total 
revenue increase of £449m
16 the progressive decline in revenue growth within parcel services and
the impact of unsuccessful profit improvement initiatives impacted the
group’s profits particularly in the second half of the year as illustrated
in the table adjacent
exceptional costs totalled £67m 2005 £nil comprising £59m in
relation to the franchise network and £08m for management changes
and restructuring  
in previous years group policy had been to treat advanced funding to
franchisees as debt with recovery being assessed on a periodic
basis  for the year to march 2006 all prior period debt was written off
in full resulting in an exceptional charge of £32m furthermore
certain locations were identified where prospects for improvement were poor a number of these have been converted to business post
ownership since the start of 2006  all conversions have been effected without any detrimental impact on service levels but have
resulted in oneoff costs of transition expected to amount to around £27m and reported as an exceptional item
since his appointment as chief executive on 5 december 2005 guy buswell has made a number of significant changes to the
management team designed to streamline the management of the group’s activities and provide greater focus on those areas requiring
margin improvement  the executive group has been reduced from 17 to 11 the management structures within parcel services and
specialist services have been simplified and a number of new appointments have been made in key operational areas the costs
relating to this restructuring together with those relating to the departure of the previous chief executive amounted to £08m net of
associated ifrs sharerelated credits
after exceptional items pretax profit totalled £50m 2005 £196m 
earnings
2006 2005
earnings per share 69p 256p
reduced earnings per share reflect the decline in profitability within parcel services marginally offset by a lower tax rate  the effective tax
rate of 26 2005 30 reflects credits relating to the exercise of share options in the current and prior years  
dividends
2006 2005
dividends per share  2005 final paid july 128p 121p
dividends per share  2006 interim paid january 64p 64p 
following payment of an unchanged interim dividend of 64p per share a final dividend per share of 108p is proposed payable on 20 july
2006 to shareholders on the register at close of business on 30 june 2006 this compares with a final dividend in respect of 2005 of 128p
19
financial review
17
express revenues £1308m
homeserve revenues up by 22 to £328m
international revenues up by 12 to £316m
£m 2005 2006
h1 h2 total h1 h2 total
parcel services 150 153 303 100 74 174
mail services 05 05 00 11 21 32
specialist services 07 12 19 15 08 23
central – likeforlike 60 53 113 58 54 112
– ifrs 05 05 10 05 09 04
interest 010203010304
preexceptional pbt 86 110 196 62 55 117
2005
h1 h2 total
150 153 303
05 05 00
07 12 19
60 53 113
05 05 10
01 02 03
86 110 196
2006
h1 h2 total
100 74 174
11 21 32
15 08 23
58 54 112
05 09 04
01 03 04
62 55 117
divisional split  h1h2 cash flow
2006 2005
cash inflow from operating activities £128m £151m
net debt £96m £56m
net cash inflow from operating activities totalled £128m 2005 £151m  net debt at the yearend of £96m compared with
£56m last year a strong working capital position partly offsetting lower levels of profitability
gross capital expenditure increased to £82m 2005 £67m as a result of the purchase of sorting machines for uk mail
£12m of this expenditure was lease financed these lease obligations are included within the net debt reported above
balance sheet
2006 2005
goodwill £95m £95m
equity shareholders’ funds £558m £627m
gearing 17 9
the balance sheet remains strong  although the group’s aftertax return on average net assets declined during the year gearing
remains low operating profit interest cover was 14x whilst operating profit interest cover before exceptional items was 30x
risk
the board regularly considers the principal risks facing the group and establishes processes to limit their impact without stifling
entrepreneurial enterprise
overall since the vast majority of the group’s activities are provided to uk businesses the fortunes of the group are linked to the
general health of the uk economy  the group’s exposure is limited by being spread across a wide range of industry sectors with
the most significant being the high tech sector which generates roughly 20 of group revenue  fedex express the world’s
leading express delivery company accounts for less than 5 of revenue and no other customer accounts for over 4
operating in the transport and services sector the group’s principal costs are people and vehiclerelated  levels of
unemployment affect the availability of staff and drivers but the group’s expansion is not expected to be constrained by these
factors  working hours will increasingly be subject to the european working time directive which restricts employees’ weekly
hours  the group has evaluated the likely impact of this directive and considers that it will not have a significant impact on its
operations  fuel represents an important cost but significant increases can be passed on to customers via a fuel surcharge
mechanism common throughout the industry
handling millions of transactions each year the group is highly reliant on the availability and smooth running of its operational
computer systems  any widescale systems failure would cause significant disruption to the business but disaster recovery
procedures are well established and regularly tested
exposure to financial risk
the group is not significantly exposed to the effects of fluctuations in exchange rates since all income is in sterling and costs
denominated in foreign currency represent less than 5 of all expenditure
the group’s profitability traditionally strong levels of operating cash flow and low indebtedness mean that it is not significantly
exposed to liquidity risk
the group’s exposure to interest risk has been reduced by means of an interest rate cap hedging contract
treasury policy
the treasury function is run prudently with cash invested in low risk cash deposits  the group uses an account in euros to hedge
the group’s limited exposure to purchases denominated in european currency and gains and losses on the retranslation of the
account offset increases or decreases in the sterling equivalent value of foreign purchases  at the year end the balance on this
account was £05m
share price performance
business post’s shares underperformed the rising uk stock
market during the year as expectations of the profit outcome
for the year deteriorated expectations stabilised towards the
end of a challenging period in parcel services and the share
price began a relative recovery at the end of the year as the
group announced progress in tackling the issues in this
division and the renewal of its major longterm contract with
fedex on similar commercial terms
peter fitzwilliam
finance director
200
300
400
500
600
700
800
120
share price pence
share performance graph
source datastream
apr 05 may 05 jun 05 jul 05 aug 05 sep 05 oct 05 nov 05 dec 05 jan 06 feb 06 mar 06
business post                                                    ftse all share ex investment trust
financial review 
18 19 directors  advisers
michael kane 56  nonexecutive director
joined business post in 1974 became
managing director in 1984 chief executive in
november 1995 and nonexecutive director in
march 1997 acted as chief operating officer
from july 2000 until resuming his non
executive role on 1 april 2001 
peter fitzwilliam 46  group finance director
joined the board on 1 february 1999 from
rank group where he was head of finance 
at odeon cinemas previously he was with
pricewaterhousecoopers has announced his
intention to step down from the board on 
2 june 2006 
philip stephens 64 
independent nonexecutive director
was appointed a nonexecutive director on 1
april 2004  he is nonexecutive chairman of
oakdene homes and egdon resources and a
nonexecutive director of foresight 4 vct   until
his retirement in 2002 he was involved in 
corporate finance and broking for more than 
35 years
dennis clark 62  
nonexecutive director and senior
independent director
has been the finance director of hunting
since 1989 he was appointed to the board on
1 october 1998 
bill cockburn cbe td 63  deputy chairman
was chief executive of the post office from 
1992 to 1995 chief executive of wh smith from
1995 to 1997 and group managing director of 
bt from 1997 to 2001 he was appointed as a
nonexecutive director on 1 april 2002 and 
advises the group on mail matters
guy buswell 44  chief executive
joined business post in 1989 and was 
appointed sales director in 1992 after a 
period elsewhere in the industry he rejoined the
company in 1997 and was appointed to the
board on 12 august 1998 became managing
director of uk mail from 1 july 2002 and chief
executive from 5 december 2005
20
peter kane 59  chairman
founded the company and with michael kane
his brother was responsible for its development
until becoming a nonexecutive director in 1996
after a period as chief executive from august
1998 he resumed his nonexecutive role on 1
april 2001 and was appointed chairman on 10
july 2001 
alec ross 50  group services director
joined the company in june 1997 with 20
years’ experience in systems development in
transport and logistics and was appointed to
the board as it director on 15 september
1998 became group services director from 
5 december 2005
stockbrokers and financial advisers arbuthnot arbuthnot house 20 ropemaker street london ec2y 9ar
financial pr hogarth partnership no 1 london bridge london se1 9bg
auditors pricewaterhousecoopers llp the atrium 1 harefield road uxbridge ub8 1ex
solicitors dechert llp 2 serjeants’ inn london ec4y 1lt     
eversheds llp 115 colmore row birmingham b3 3al 
bankers lloyds tsb 125 colmore row birmingham b3 2ds
barclays 1 churchill place canary wharf london e14 5hp
registrars computershare investor services po box 82 the pavilions bridgwater road bristol bs99 7nh
registered office express house 464 berkshire avenue slough sl1 4pl 21 corporate governance
the listing rules of the uk listing authority require listed companies to disclose how they comply with the principles of good governance and code of best practice
known as the combined code the code was originally adopted in 1998 and was revised during 2003  this statement which incorporates the statement on corporate
social responsibility explains how the company has applied the principles of good governance set out in the code 
the board
during the year business post maintained a balance of executive and nonexecutive directors bringing a wide range of skills and experience to the board biographical
details of the current directors are set out in the directors and advisers statement of the five nonexecutive directors dennis clark and philip stephens are judged to
be independent according to the guidelines set out in the combined code and dennis clark has been appointed by the board to be the senior independent director
michael and peter kane are not judged to be independent due to their significant shareholdings and bill cockburn is not judged to be independent due to his 
consultancy contract with uk mail whilst the company retains two independent nonexecutive directors in line with the code’s requirements for smaller companies
for part of the year the company was a member of the ftse 350 index for which the code’s requirements are more stringent requiring under provision a32 that at
least half the board comprise directors judged to be independent  all the nonexecutive directors make a significant contribution to the functioning of the board and its
committees and no one individual or group dominates the board’s decisionmaking process 
all directors are required by the company’s articles of association to submit themselves for reelection at least every three years the names of those directors stand
ing for reelection to the board this year are set out in the notice of the forthcoming annual general meeting there are two nonexecutive directors standing for re
election at the agm and the board strongly supports their reelection for the reasons set out in the directors’ report 
the board’s focus is on strategy formulation policy and control there is a formal schedule of matters reserved for decision by the board which retains all major opera
tional and risk management decisions with the board these include the approval of major items of expenditure or commitment including acquisitions major operational
projects including new contract wins financing including leasebuy decisions and the use of derivatives and insurance and changes in policy relating to the franchise
network the board routinely monitors the various financial operational and commercial risks facing the company through reports from management 
the chairman is primarily responsible for the working of the board and the chief executive for the running of the business and implementation of board strategy and
policy there is a clear division of responsibilities between the chairman and the chief executive and this has been agreed by the board  the board meets formally at
least 8 times a year with other meetings as necessary the board receives reports in advance of each meeting from the chief executive and finance director address
ing the financial performance of the company and developments since the previous meeting with further reports on particular issues as appropriate reports are also
supplied to directors in months when a board meeting does not take place all directors have access to the advice and services of the company secretary and there is
a procedure whereby directors wishing to do so in the furtherance of their duties may take independent professional advice at the company’s expense 
the board has a number of committees the principal ones being the audit remuneration and nomination committees membership of these committees and their prin
cipal terms of reference are set out in the table below  
audit committee
dennis clark chairman 
peter kane philip stephens
assists the board in fulfilling its responsibili
ties in respect of
overseeing the group’s financial statements
monitoring the adequacy of internal controls
and risk management processes
the selection compensation independence and
performance of the group’ s external auditors
the independence and performance of the
group’s internal auditor
remuneration committee
philip stephens chairman 
dennis clark peter kane
sets remuneration for all executive directors
including sharebased incentives pensions
and other benefits
monitors the level and structure of remunera
tion for the first layer of management below
board level
approves initial grants and subsequent exercise
of all sharebased incentives
responsible for appointing remuneration con
sultants
business post group plc
board of directors
nomination committee
peter kane chairman 
guy buswell dennis clark 
bill cockburn philip stephens
leads the process for and recommends to the
board all appointments to the board
reviews succession planning for the board
22   business post group plc corporate governance
peter kane is a member of the nomination remuneration and audit committees resulting in noncompliance with the combined code’s provisions a41 b21 and c31
that membership of the remuneration and audit committees should comprise entirely independent directors and that the nomination committee should comprise a majority
of independent directors however with over 30 years of indepth experience of the business and as a significant shareholder the board believes that his membership of
these committees is appropriate and that he brings an invaluable knowledge and experience to their operation 
the following table shows the attendance of directors at regular board meetings and at meetings of the audit remuneration and nomination committees during the year 
board audit remuneration nomination
number held 10 2 3 1
guy buswell 10
paul carvell resigned 5 december 2005 6 2 2
dennis clark 8 2 3 1
bill cockburn 10 2 3 1
peter fitzwilliam 10 2 
russell hodgson resigned 30 september 2005 4
michael kane 9
peter kane 9 2 3 1
alec ross 10
philip stephens 10 2 3 1
attendance by directors who are not members of the committee was at the request of the chairman of the committee  the nomination committee met once during the
year to consider the appointment of a chief executive  the committee concluded that in view of the successful development of uk mail under guy buswell’ s leadership
together with the benefits of his extensive understanding of the group’s activities it was not necessary to consider external candidates
during the year the directors have again reviewed the effectiveness of the board as a whole and its committees  the individual directors initially completed separate
questionnaires and the results were compiled and analysed by the company secretary who prepared a summary report for the board  the areas covered included board
and committee composition dynamics and accountability preparation for and performance at meetings and induction and professional development 
in addition to regular board meetings the chairman regularly convenes meetings of the nonexecutive directors to assess the performance of the board in the
absence of the executive directors the performance of the chairman was considered as part of the questionnaires completed by the directors and discussed
separately by the nonexecutive directors without the chairman present the board and its committees are satisfied that they are operating effectively 
directors’ remuneration
the board considers that the company complies with the main principles of the combined code in relation to remuneration by having a formal and transparent
procedure for developing policy on executive remuneration and for fixing the remuneration packages of directors no director is involved in deciding his own
remuneration a significant proportion of remuneration is structured so as to link rewards to corporate and individual performance the board believes that levels
of remuneration are sufficient to attract retain and motivate directors of the quality required to run the company successfully but without paying more than is
necessary  details of directors’ remuneration are set out in the remuneration report 
relations with shareholders
whilst there is a substantial shareholding represented on the board the company values its dialogue with both institutional and private investors twoway
communication with institutional investors analysts and private investors is actively pursued and a series of presentations and meetings are held through the year
carefully recognising statutory constraints concerning the disclosure of information feedback from these meetings is collated by the company’s advisers and circulated
to members of the board to ensure that they are kept informed concerning the views of shareholders in addition the chairman periodically attends meetings with
shareholders and nonexecutive directors are invited to attend results presentations 
report  accounts 23 corporate governance
this year’s annual general meeting will be held on 11 july 2006 at which time the chairmen of the audit remuneration and nomination committees will be available
to answer shareholder questions the company will continue its practice of proposing individual resolutions including separate resolutions relating to the directors’
report and accounts and the remuneration report and of reporting the proxy voting in respect of each resolution 
accountability and directors’ responsibilities
company law requires the directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the company and the
group and of the profit or loss of the group for that period
in preparing those financial statements the directors are required to select suitable accounting policies and then apply them consistently make judgements and
estimates that are reasonable and prudent state that the financial statements comply with ifrs and prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the group will continue in business 
the directors confirm that they have complied with the above requirements in preparing the financial statements
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the company and the
group and to enable them to ensure that the financial statements comply with the companies act 1985 they are also responsible for safeguarding the assets of the
company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
the maintenance and integrity of the business post group plc website is the responsibility of the directors the work carried out by the auditors does not involve
consideration of those matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were
initially presented on the website 
legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions 
internal controls
the board of directors has overall responsibility for ensuring that the group maintains a system of internal control to provide it with reasonable assurance regarding
effective and efficient operations internal financial control and compliance with laws and regulations there are inherent limitations in any system of internal control
and accordingly even the most effective system can provide only reasonable and not absolute assurance  
the turnbull report issued by the institute of chartered accountants in england and wales in september 1999 provided further guidance as to how the combined code
principles on internal control should be applied in practice 
the board considers that the company has complied with the turnbull report throughout the year there is a formal ongoing process for identifying managing and
reviewing any changes in the risks faced by the company this process operates under the direction of and is regularly reviewed by the board 
the key features of the internal control system within the group are 
• clearly defined delegation of responsibilities including relevant authorisation levels 
• clearly documented internal procedures set out in operational and administration manuals 
• regular compliance audit visits to all owned and franchised locations which monitor compliance with procedures and assess the integrity of financial information 
• review of financial procedures by the internal auditor 
• close involvement of executive directors in monitoring and managing the main risk areas of the business 
• regular information provided to senior management covering financial performance and key business indicators and 
• monthly monitoring of results against budget and forecast with major variances being followed up and management action taken where necessary 
details of the group’s activities in relation to its environmental employment and health and safety responsibilities are set out in the corporate social responsibility
statement 
24   business post group plc corporate governance
the board has reviewed the effectiveness of the internal control systems during the period covered by the accounts and up to the date of the approval of the
accounts this review covered all controls including financial operational and compliance controls and risk management 
audit committee and auditors
the membership and principal terms of reference of the audit committee are set out above the committee is chaired by dennis clark who as a qualified
accountant and the finance director of hunting plc is considered to have recent and relevant financial experience 
during the year the committee met twice to discharge its responsibilities these responsibilities included 
• monitoring the integrity of the half year and annual financial statements by considering reports from the finance director and the external auditors setting 
out the basis of preparation of the results and the principal reporting judgements therein 
• reviewing the company’s internal controls by considering reports from both the internal and external auditors during the year and an annual report on the 
effectiveness of internal controls from the chief executive and finance director 
• monitoring the scope and effectiveness of the internal auditor by considering work plans reports throughout the year and attendance at audit committee 
meetings 
• monitoring the independence objectivity and effectiveness of the external auditors by considering the quality of people and service the robustness of the 
audit and the quality of delivery and approving their terms of engagement and remuneration 
• reviewing the company’s policy for the engagement of the external auditors to supply nonaudit services and 
• monitoring the company’s whistleblowing procedures 
compliance with the combined code
with the exception of the composition of its committees where the code requires a greater proportion of members to be nonexecutive directors judged to be
independent the board considers that the company has complied with the provisions of section 1 of the combined code 2003 throughout the financial year
additionally whilst the company was a member of the ftse 350 index the company was not in compliance with provision a32 that at least half the board
comprised directors judged to be independent
report  accounts 25 corporate social responsibility
the board recognises its environmental and employment responsibilities and
continues to devote significant resources towards improving standards
environmental
the group recognises that it has a responsibility to reduce its impact on the
environment responsibility for communicating the group’s environmental
policy and monitoring compliance rests with the group services director aided
by the transport manager hr manager and health  safety manager
business post is acutely aware of the impact that transport operations have on
the environment and the company is committed to reducing this impact the
key objective is to establish a balance between cost effective solutions and
changes which result in tangible benefits business post is very keen to
introduce initiatives aimed at reducing the effect on the environment 
the sloping front double decker trailer designed in conjunction with the
group’s trailer supplier donbur bodies and trailers has dramatically reduced
the fuel consumption of the towing vehicle thus reducing co2 emissions by up
to 25 tonnes per vehicle per year the design is easily applied to existing fleet
trailers and material as nearly all components from the original design are re
used with 66 of these trailers currently in the fleet the saving in fuel and co2
is significant based on current route mileages the reduction in co2 emissions
is around 1625 tonnes per annum the work on this design has already
resulted in 2 awards from green fleet and east 
all powered vehicles have bespoke aerodynamic air kits designed by ecotek
which have resulted in mpg improvements of between 510 these
vehicles are on a four year replacement cycle allowing business post to keep
pace with technology and ensuring optimum performing vehicles they are
maintained by manufacturer main dealers further to ensure only quality
components and oils are used for peak performance vehicles and trailers are
specified to run on roadfriendly air suspension reducing wear of components
damage to the road network and noise pollution all trailers incorporate led
lighting as opposed to bulbs which removes a waste disposal problem
the group has 60 vehicles in its fleet that run on lpg biodiesel where
available is used at corporate sites in a 95 5 blend independent tests
reported improved fuel efficiency and co2 emission reduction of 1520
independent operator trials reported similar improvements and in addition no
changes are required to storage or vehicles the other advantage of biodiesel
is that the plant from which the oil is extracted takes co2 from the atmosphere
during its growth
health  safety 
the group fully embraces the legal obligation to protect the health safety and
welfare of employees and others who may be affected by our operations
robust policies have been developed and are monitored to ensure training risk
assessment safe systems of work and accident investigation procedures are
deployed throughout the network a written health and safety report is
provided to each group board meeting which is reviewed and discussed
health and safety responsibilities accident trends and projects are also
discussed at operating board meetings a full audit is carried out each year at
all corporate operating locations we have commenced the introduction of
new antispill kits in all corporate sites and have reenforced our procedures
for carrying dangerous goods by incorporating a new database on our intranet
site so that sites can validate whether particular goods can be carried and if
so in what quantities 
employment
the group has continued to make significant progress in human resource
management over the last year the employee consultative group has been
strengthened to provide a robust platform for all employees to make a
significant contribution to bringing about change in the workplace and to
provide a forum for the exchange of information opinions and feedback there
are now 59 sitebased representatives 8 regional and one national
representative the last is employed on a full time basis and elected by the
employee representatives an annual employee survey is conducted each may
and continues to provide invaluable feedback on issues affecting our
employees our investors in people accreditation was successfully renewed in
september 2004 and our employee turnover has continued to fall having now
reduced every year for the last 5 years the group continues to coach and train
managers in a wide variety of skill areas including dispute resolution
performance management accident investigation and supervisory skills the
groups training and development activities were recognised with a national
training award last september the group has adopted both the hci and
childcare voucher schemes and we have introduced a new basic skills
training course aimed at those of our employees needing tuition in english and
mathematics to support our staff welfare programme the group provides
through a third party a 24 hour confidential help line that provides counselling
and advice on a wide range of subjects the group continues to ensure all the
requirements of current and future employment and health and safety
legislation are met
charitable support
nch the children’s charity has been the chosen charity partner for business
post group its employees and its franchisees for eleven years the group
donates one penny to nch for every consignment carried for customers who
pay their accounts by direct debit and in the last year this raised £77067 
business post staff across the whole company rose to the challenge during the
last year and raised over £16000 for nch with a wide variety of events
including a netball tournament sky diving and parachuting ‘it’s a knockout’ 
a golf day fancy dress and dress down days and a valentines ball
26  business post group plc remuneration report
the directors present the remuneration report for the year ended 31 march 2006 this report is unaudited except for those parts which are indicated otherwise
the members of the remuneration committee during the year were philip stephens chairman dennis clark and peter kane during the year and at the request
of the remuneration committee the group’s chief executive paul carvell and deputy chairman bill cockburn gave advice and assistance to the remuneration
committee  in addition as part of its periodic review of best practice the remuneration committee sought advice from external remuneration consultants new
bridge street consultants concerning the continuing relevance and appropriateness of the company’s remuneration arrangements
remuneration policy
the remuneration policy of the group including the policy for executive directors is determined by the remuneration committee of the board the membership of
which consists entirely of nonexecutive board members the company’s nonexecutive chairman peter kane is not considered to be independent but his
experience within both the company and the industry for over 30 years is considered to be invaluable to the committee 
the remuneration policy for nonexecutive directors is determined by the board 
the objectives of the committee are 
1 to ensure that directors and senior executives are fairly rewarded for their individual contributions to the group’s overall performance 
2 to ensure that the remuneration of the executive directors and senior executives of the group is set by a committee of board members who have no personal
interest in the outcome of the decisions and who will give due regard to the interests of shareholders and to the financial and commercial health of the group 
the remuneration policy of the group for 2006 and beyond is to provide competitive remuneration arrangements for executive directors and senior executives which
are commensurate with those of other companies of a similar nature size and standing and which reflect the group’s business and financial objectives and the
goals of corporate governance remuneration arrangements are addressed within the context of the group’s current performance its progress towards strategic
objectives and individual executives’ personal performance 
elements of the remuneration package of executive directors
remuneration of executive directors comprises the following elements 
base salaries
base salaries are determined in relation to job responsibilities and sustained level of individual performance and are reviewed annually 
bonuses
the company operates a bonus scheme for executive directors the level of bonus payment is dependent upon the group’s performance evaluated against both
the prior year and annual budget and also upon each director’s achievement of personal objectives set out at the beginning of the year in normal circumstances
the maximum payment is limited to 50 of annual salary and payments in respect of personal objectives may not exceed payments in respect of the group’s
financial performance because the achieved profits for the year fell short of the targets set out at the beginning of the year no payments under the bonus scheme
were made however due to the exceptional result achieved by uk mail the remuneration committee awarded a discretionary bonus of £75000 to guy buswell
who until his appointment as the group’s chief executive was uk mail’s managing director
benefits
health and sickness insurance schemes are provided for executive directors and include private health cover permanent health insurance and death in service benefits
executive directors receive an annual car allowance and contributions of between 125 and 15 of each individual director’s base salary into a defined contribution
pension scheme 
sharebased incentive schemes
the company utilises a long term incentive plan and a share matching plan to provide longer term sharebased incentives for executive directors  the schemes
are designed to motivate and reward achievement of a combination of challenging corporate financial targets and enhancement of shareholder value  shareholder
approval will also be sought at the agm for oneoff awards to the new chief executive and group finance director  specific details of the schemes are outlined below
report  accounts 27 remuneration report
long term incentive plan
in order to provide the remuneration committee with flexibility to offer competitive awards to senior executives shareholder approval will be sought at the agm
to increase the maximum potential annual award of shares to an executive from 75 of salary to 100 of salary with the additional flexibility to grant awards
worth up to 150 of salary in exceptional circumstances such as on recruitment or in acute retention scenarios
shareholder approval will also be sought at the agm for amendments to the performance conditions that will apply to future awards
• 40 of the awards will be determined by eps growth conditions  for the awards in 2007 25 will vest for growth of 15 pa over the three
year period from 2006 to 2009 with 100 vesting for growth of 20 pa over that period
• 60 of the awards will be determined by total shareholder return “tsr” performance relative to ftse allshare companies excluding 
investment trusts with 25 of awards vesting for median performance over the threeyear performance period rising to 100 of awards vesting for upper
quartile performance
the remuneration committee believes that this balance of performance conditions will successfully align the interests of directors with shareholders whilst also
rewarding the achievement of challenging growth targets relating to the underlying financial performance of the company  eps will be calculated for all relevant
schemes on a consistent basis during the transition to international financial reporting standards
share matching plan
selected executives may be invited to invest a portion of their cash bonus in the acquisition of company shares worth up to 25 of their pretax salary  where
such an investment is made the executives will receive under the share matching plan approved by shareholders at the 2004 agm a matching award of shares
of equivalent value  
onethird of the award will vest if eps growth is at least rpi4 pa over a single threeyear performance period increasing to full vesting for eps growth of at
least rpi6 pa
oneoff senior executive awards
the remuneration committee has determined that subject to shareholder approval guy buswell should receive a oneoff award comprising an option over
170000 shares following his appointment as chief executive broadly equivalent in value at the date of his appointment to twice his revised salary and steven
glew should receive a oneoff award comprising an option over 50000 shares provided shareholders approve his election as group finance director broadly
equivalent in value at the date of this report to one times his salary  
the committee believes that it is vital that these senior executives should have sufficient equity incentives to motivate retain and to align their interests with
shareholders at this challenging time for the company   
however the committee also recognises that shareholders’ interests will only be properly addressed by awards designed to incentivise and reward the
achievement of exacting performance criteria above and beyond those required under the normal ltip 
accordingly the extent to which these awards vest will be determined by the company’s eps in 2009 relative to the budgeted eps for 2007  the awards will only
begin to vest for growth of 15 pa between these two figures with 100 vesting for growth of 20 pa  although the performance period for these awards is
three years the targets are expressed as growth from the budget figure for 2007 in order to ensure that the targets are more challenging than those under the
ltip   as a result the eps value required in 2009 for these oneoff awards to begin to vest is higher than the eps value required in that year for the maximum ltip
award to vest
other details relating to these awards are contained in the directors’ report
other schemes
the company can make grants of share options under an existing executive share option scheme although executive directors have not received option grants
since 2003 and it is currently intended that they would only receive future option grants in exceptional circumstances  executive directors are eligible to participate
in the group’s sharesave scheme on the same terms as other employees  
28  business post group plc remuneration report
shareholding guidelines
on the exercise of awards under any of the company’s longterm incentive schemes executive directors are expected to retain at least half of the aftertax profit
in the form of shares until they have a shareholding at least equal to their base salaries
composition of remuneration package
the targeted composition of each executive director’s remuneration excluding longterm incentives is that 75 is nonperformance related and 25 is
performance related  the remuneration of each nonexecutive director is 100 nonperformance related except that in addition to his director’s and consultancy
fees bill cockburn has a longterm incentive arrangement whereby he is entitled to receive bonuses if the profit of uk mail exceeds specified targets within a
four year period of the commencement of trading which was on 10 may 2004
directors’ service contracts
it is the company’s policy that whilst there should not be a fixed duration in respect of directors’ service contracts each contract contains notice periods of not
more than one year and contains a clause whereby the contractual termination payments do not exceed the director’s remuneration for the previous calendar year
nonexecutive directors are initially appointed for a three year term all directors are required by the company’s articles of association to submit themselves for
reelection at least every three years
details of directors’ service contracts including the unexpired term of their contract at 31 march are
initial contract notice period unexpired contractual
date term termination payment
guy buswell 310306 12 months 12 months 12 months remuneration
paul carvell 210601 12 months na 12 months remuneration
dennis clark 011001 3 months 18 months none
bill cockburn 010402 3 months 24 months none
peter fitzwilliam 300999 6 months 6 months 6 months remuneration
russell hodgson 020101 6 months na 6 months remuneration
michael kane 011001 3 months indefinite none
peter kane 011001 12 months indefinite none
alec ross 010201 6 months 6 months 6 months remuneration
philip stephens 310304 3 months 12 months none
russell hodgson resigned on 30 september 2005 paul carvell resigned with effect from 5 december 2005 
in the event of termination following a change of control executive directors are entitled to termination payments of 12 months’ remuneration
as announced on 23 may 2006 steven glew is to join the board as group finance director with effect from 5 june 2006 both his contractual notice period and
termination payment will be a period of up to 12 months additionally as discussed in the directors report subject to shareholder approval at the 2006 annual
general meeting steven will be granted a oneoff long term appointment incentive award over 50000 shares
performance graph
the adjacent graph compares the total
shareholder return for an investment in the
shares of business post with the return for the
same investment in the ftse all share index
excluding investment trusts over a five year
period commencing on 1 april 2001 in the
opinion of the directors following the
reclassification of business post in early 2006
the ftse all share index excluding investment
trusts is currently the most appropriate index
against which the total shareholder return of the
company should be measured
0
50
100
150
200
250
300
350
total return index
source datastream
apr 01 oct 01 apr 02 oct 02 apr 03 oct 03 apr 04 oct 04 apr 05 oct 05
business post
ftse all share ex investment trust  total return index
report  accounts 29 remuneration report
directors’ remuneration
this part of the remuneration report is audited information
salary benefits 2006 2005
 fees in kind bonus termination total total
£000 £000 £000 £000 £000 £000
guy buswell 186 12 75 –– 273 162
paul carvell 206 11 –– 312 529 264
resigned 5 december 2005
dennis clark 27 –– –– –– 27 27
bill cockburn 93 –– 67 –– 160 111
peter fitzwilliam 165 12 –– –– 177 157
russell hodgson 91 7 –– –– 98 196
resigned 30 september 2005
michael kane 43 –– –– –– 43 23
peter kane 60 2 –– –– 62 62
alec ross 136 12 –– –– 148 125
phillip stephens 27 –– –– –– 27 26
richard saville resigned 31 may 2004 –– –– –– –– –– 4
1034 56 142 312 1544 1157
 included in bill cockburn’s remuneration are fees of £40000 as a nonexecutive director and payments of £53004 in respect of consultancy provided to the 
company’s uk mail subsidiary the company has a separate long term incentive agreement with bill cockburn in relation to his consultancy services  under 
this mr cockburn will be entitled to receive bonuses if the profit of uk mail exceeds specified targets within a four year period of the commencement of trading
on 10 may 2004 and £67000 has been accrued in the financial statements in respect of the anticipated payment in 2008
 included in michael kane’s remuneration are fees of £22000 as a nonexecutive director and payments of £20800 in respect of consultancy on operational 
matters michael kane’s remuneration was paid to his companies beaufield management ltd and beaufield entertainment ltd for the provision of his services
as a director 
no director waived emoluments in respect of the year ended 31 march 2006 
pensions
this part of the remuneration report is audited information
the following amounts were contributed during the year to the directors’ personal pension schemes which are defined contribution schemes
2006 2005
£000 £000
guy buswell 22 16
paul carvell 22 26
peter fitzwilliam 21 18
russell hodgson 12 24
alec ross 17 14
30   business post group plc remuneration report
interests in share options
this part of the remuneration report is audited information
details of the options held by each director are set out below
directors’ executive share options
date of earliest expiry exercise number at exercised lapsed number at market gains on
grant exercise date price 1 april in year in year 31 march price on exercise
date 2005 2006 exercise £000
guy buswell
310502 310505 310512 418p 26315 26315 –– –– 637p 58
300503 300506 300513 411p 28101 –– –– 28101 –– ––
300703 300706 300713 450p 25667 –– –– 25677 –– ––
80083 26315 –– 53768
paul carvell
130701 011205 130711 204p 294117 –– 294117 –– –– ––
310502 310505 310512 418p 50239 50239 –– –– 613p 98
300503 300506 300513 411p 54744 –– 54744 –– –– ––
399100 50239 348861 ––
peter fitzwilliam
310502 310505 310512 418p 29904 –– –– 29904 –– ––
300503 300506 300513 411p 32846 –– –– 32846 –– ––
300703 300706 300713 450p 30000 –– –– 30000 –– ––
92750 –– –– 92750
russell hodgson
310502 310505 310512 418p 29904 29904 –– –– 613p 58
300503 300506 300513 411p 32846 –– 32846 –– –– ––
300703 300706 310713 450p 30000 –– 30000 –– –– ––
181103 181106 181113 487p 71868 –– 71868 –– –– ––
164618 29904 134714 ––
alec ross
310502 310505 310512 418p 24521 –– –– 24521 –– ––
300503 300506 300513 411p 26277 –– –– 26277 –– ––
300703 300706 310713 450p 24000 –– –– 24000 –– ––
74798 –– –– 74798
exercise gains in the above table are calculated at the exercise date although shares may have been retained 
no other directors have been granted share options in the shares of the company or other group entities none of the terms and conditions of the share options
were varied during the year 
the exercise of options is subject to the condition that the growth in the company’s earnings per share shall exceed the increase in the index of retail prices from
the date of grant by more than 3 pa
report  accounts 31 remuneration report
sharesave scheme
date of earliest expiry exercise number at granted exercised lapsed number at gains on
grant exercise date price 1 april in year in year in year 31 march exercise
date 2005 2006 £000
guy buswell
290604 010807 010208 398p 2368 –– –– –– 2368 ––
peter fitzwilliam
290604 010807 010208 398p 2368 –– –– –– 2368 ––
alec ross
030102 010205 010805 290p 3275 –– 3275 –– –– 11
exercise gains in the above table are calculated at the exercise date on which date the market price of the company’s shares was 633p although shares may have
been retained the sharesave scheme provides a savings plan to purchase shares and has no performance criteria in order to participate
the market price of the company’s shares at the end of the year was 383p and the range of prices during the year was between 301p and 687p
interests in shares
the interests of the directors in the ordinary shares of 10p each of the company were as follows 
31 march 1 april
2006 2005
guy buswell 17917 12711
paul carvell resigned 5 december 2005 38611 38886
dennis clark 3500 3500
bill cockburn 12004 8000
peter fitzwilliam 11285 9785
russell hodgson resigned 30 september 2005 6945 8945
michael kane 7001294 7001294
peter kane 18233801 18133801
alec ross 12714 11214
philip stephens 10000 5000
 or date of resignation
all directors’ interests are beneficially held save for 3333334 ordinary shares which are held by beneficiaries who are persons connected with peter kane there
has been no change in the interests set out above between 31 march and 31 may 2006 
32   business post group plc remuneration report
long term incentive plan
this part of the remuneration report is audited information
directors’ interests in shares held in the long term incentive plan are as follows
date of award performance number at granted exercised lapsed number at
award price period 1 april in year in year in year 31 march
ending 2005 2006
guy buswell
161104 545p 310307 16063 –– –– –– 16063
240505 575p 310308 –– 16847 –– –– 16847
paul carvell
161104 545p 310307 34422 –– –– 34422 ––
240505 575p 310308 –– 35869 –– 35869 ––
peter fitzwilliam
161104 545p 310307 16637 –– –– –– 16637
240505 575p 310308 –– 17934 –– –– 17934
russell hodgson
161104 545p 310307 20940 –– –– 20940 ––
alec ross
161104 545p 310307 10372 –– –– –– 10372
240505 575p 310308 –– 11130 –– –– 11130
awards granted in 2004 and 2005 may be exercised between three and ten years following the date of grant determined primarily by reference to the company’s
tsr measured against the tsr of all the other companies in the support services sector listed in the ftse all share index at the start of the financial year in which
an award is granted over a period of three financial years the proportion of the award which may be exercised depends upon the ranking of the company’s tsr
whereby 10 of shares may be exercised if the company achieves median ranking rising prorata to 100 if the company’s ranking falls within the top 10  no
shares are exerciseable if the company’s ranking is below the median 
the exercise of awards is also subject to the condition that the growth in the company’s earnings per share shall exceed the increase in the index of retail prices
from the date of grant by more than 3 pa 
the average price of the company’s shares on the five dealing days prior to 24 may 2005 was 575p
the company’s employee share ownership trust holds shares in the company for subsequent transfer to employees under the long term incentive plan  shares
held by the trust are not voted at shareholder meetings and do not accrue dividends  at 31 march 2006 the trust held a total of 414252 shares in respect of its
future obligations under the company’s long term incentive plan
report  accounts 33 remuneration report
share matching plan
this part of the remuneration report is audited information 
details of shares purchased and matching grants awarded during the year are as follows
date of earliest number at granted lapsed number at
grant exercise date 1 april in year in year 31 march
2005 2006
guy buswell
161104 161107 870 –– –– 870
paul carvell
161104 161107 870 –– 870 ––
peter fitzwilliam
161104 161107 1400 –– –– 1400
russell hodgson
161104 161107 870 –– –– 870
alec ross
161104 161107 870 –– –– 870
awards may be exercised between 36 months and 42 months following the date of grant
philip stephens
on behalf of the board
31 may 2006
34   business post group plc directors’ report
the directors present their report and the audited financial statements for the
year ended 31 march 2006 
principal activity and business review
business post group plc is a public limited company incorporated and domiciled
in england it is quoted on the london stock exchange lse bpg the group’s
principal activity is the provision of express collection and delivery services for
parcels mail and palletised goods the information that fulfils the requirements
of the business review can be found in the chairman’s statement chief
executive’s review financial review and corporate social responsibility
statement which are incorporated in this report by reference
results and dividend
the profit for the financial year of £37 million is reported in the consolidated
income statement a final dividend of 128p per share in respect of the year
ended 31 march 2005 was paid on 21 july 2005 an unchanged interim dividend
of 64p per share in respect of the year ended 31 march 2006 was paid on 3
january 2006 and the directors recommend a final dividend of 108p per share
payable on 20 july 2006 to shareholders on the register on 30 june 2006
corporate governance
a statement on corporate governance and the group’s compliance with the
combined code is set out in the corporate governance statement 
donations
during the year the group made charitable donations of £77067 2005 £98702
to the national children’s home charity for general charitable purposes the
group made no political donations
directors
details of the current directors are shown in the directors and advisers statement
together with their biographical details and dates of appointment russell
hodgson retired on 30 september 2005 and paul carvell resigned with effect from
5 december 2005
in accordance with the articles of association dennis clark and peter kane retire
by rotation at the annual general meeting and being eligible offer themselves
for reelection details of their terms of appointment can be found in the
remuneration report as was announced on 23 may 2006 peter fitzwilliam who
would otherwise have retired by rotation will retire as a director with effect from
2 june 2006 and steven glew has been appointed by the board as finance
director with effect from 5 june 2006 details of the terms of his appointment
can be found in the remuneration report mr glew has held senior finance
positions in tesco stores plc crown sports plc and booker plc until its merger
with iceland plc in july 2000  from 2003 to december 2005 he was group
finance director at mothercare plc where he was integrally involved in the
turnaround of the business in accordance with the articles of association
steven glew will retire at the annual general meeting and being eligible offers
himself for election  the board strongly supports the election of steven glew and
the reelection of dennis clark and peter kane and recommends that
shareholders vote in favour dennis clark and peter kane are both nonexecutive
directors  dennis clark having served as the finance director of hunting plc a
ftse 350 company for over 16 years brings significant experience of operating
in the plc environment  his financial background and extensive knowledge of
corporate governance and financial reporting matters are of particular benefit to
the group in his role as chairman of the audit committee peter kane founded the
company in 1971 and with his brother michael was responsible for its
development over 25 years his comprehensive understanding of the business is
invaluable to the board  
the chairman has undertaken an evaluation of dennis clark and the non
executive directors have undertaken an evaluation of peter kane both of whom
are submitting themselves for reelection  they confirm that their performance
continues to be effective and that they commit sufficient time to the fulfilment of
their duties as directors and committee members as appropriate 
directors’ interests
the interests of the directors and their families as appearing in the register
maintained under the provisions of section 325 of the companies act 1985 in the
share capital of the company on 31 march 2006 are set out in the remuneration
report 
substantial shareholders
in addition to the interests of peter kane 334 and michael kane 128 as
at 31 may 2006 the company had been notified of the following notifiable
interests in its issued share capital
no of shares
aegon uk plc group of companies 3884447 71
mr john kane 3453333 63
ms joanna bailey 3333333 61
fmrfidelity international limited 1765336 32
mr john kane and ms joanna bailey are the adult children of peter kane
annual general meeting  special business
the notice of the annual general meeting to be held on 11 july 2006 may be
found at the back of the report and accounts in addition to the routine business
of the meeting the special business set out below will be transacted 
on 12 july 2005 resolutions were passed by the company’s shareholders
whereby the directors were given authority under section 80 of the companies
act 1985 until the conclusion of the 2006 annual general meeting to allot
shares up to a maximum of the authorised but unissued share capital of the
company the directors recommend by resolution 8 to be proposed at the
forthcoming annual general meeting that this authority should be renewed so
that it applies until the conclusion of the next annual general meeting of the
company 
if resolution 8 is approved by shareholders the directors will have authority to
allot up to 15467014 ordinary shares representing 284 of the ordinary shares
currently in issue of which 1572169 29 of the ordinary shares currently in
report  accounts 35 directors’ report
issue are currently reserved for issue under the company’ s share option schemes
the balance available for allotment is therefore 13894845  ordinary shares
representing 255 of the ordinary shares currently in issue the company does
not currently have any treasury shares in issue the directors have no present
intention of exercising the authority except in connection with the issue of shares
under the company’s share option schemes 
in addition the directors were given authority under section 95 of the companies
act 1985 until the conclusion of the 2006 annual general meeting to allot equity
securities for cash other than to existing shareholders in proportion to their
holdings up to an aggregate nominal amount equal to 5 of the issued ordinary
share capital the directors recommend by resolution 9 to be proposed at the
forthcoming annual general meeting that this authority should be renewed up to
an aggregate nominal amount of £272664 being equal to 5 of the ordinary
shares currently in issue until the conclusion of the 2007 annual general
meeting or 11 october 2007 whichever is the earlier 
the companies act 1985 allows shares purchased by the company to be held as
treasury shares which may then be cancelled sold for cash or used to meet the
company’s obligations under its share option schemes the requirements to allot
equity securities for cash to existing shareholders in proportion to their holdings
will also apply to the sales by the company of any shares it holds as treasury
shares these requirements may be similarly disapplied by shareholders the
authority sought and limits set by resolution 9 will then apply also to a sale of
treasury shares however the directors have no present intention of holding
shares in treasury pursuant to the companies act 1985 
at the 2005 annual general meeting the company was given authority under
article 9 of its articles of association and section 166 of the companies act 1985
until the conclusion of the 2006 annual general meeting to make market
purchases of up to 10 of the issued ordinary share capital for cancellation at a
price of not less than 10 pence per ordinary share and not more than 105 of the
average of the midmarket quotations for an ordinary share of the company as
derived from the daily official list of the london stock exchange for the five
business days prior to the date of purchase 
the authority sought by resolution 10 to make market purchases of its own
ordinary shares is intended to apply equally to shares to be held by the company
as treasury shares in accordance with the companies act however as
mentioned above the directors have no present intention of holding shares in
treasury pursuant to the companies act 1985 
the directors recommend by resolution 10 to be proposed at the forthcoming
annual general meeting that this authority should be renewed until the
conclusion of the 2007 annual general meeting the directors did not exercise
the company’s power to purchase its own shares in the year ended 31 march
2006 and do not intend to exercise this power other than in circumstances where
they consider this to be in the shareholders’ interests and where this would result
in an increase in earnings per share 
if they do utilise this authority the directors will neither be encouraging nor
recommending shareholders to buy or sell shares in the company nor in any way
suggesting that it is an appropriate time to deal in such shares
share incentive arrangements
shareholder approval is being sought at the forthcoming annual general meeting
in relation to two proposals recommended by the directors 
a by resolution 11 alterations to the terms of the company’s long term 
incentive plan that would increase the maximum award limit from 75 to
100 of base salary with the additional flexibility to grant awards 
worth up to 150 of salary in exceptional circumstances and to apply 
different performance conditions to future awards based on a mixture 
of eps and tsr conditions as set out in the remuneration report and
b by resolution 12 the grant of oneoff long term appointment incentive 
awards to two senior executives “an award”
the rationale for these proposals is set out in the remuneration report the board
strongly believes that these proposals are in the best interests of shareholders and
recommends that shareholders vote in favour of both resolutions 
the terms of the proposed awards are summarised below
general
subject to shareholder approval at the 2006 annual general meeting “agm”
the two proposed awards will be granted as soon as practicable after the agm 
the awards will relate to 170000 ordinary shares in the company in the case of
the group’s chief executive broadly equivalent in value at the date of his
appointment on 5 december 2005 to twice his salary and 50000 ordinary shares
in the company in the case of the group’s new finance director provided
shareholders approve his election broadly equivalent in value at the date of this
report to one times his salary
structure of the awards
the awards will be structured as options with a four week exercise period after
they vest no payment will be required for the grant or exercise of the awards
an award will not be transferable other than to the executives personal
representatives’ in the event of his death  the awards will not be pensionable
subject to the conditions detailed below the awards will normally vest when the
company’s audited results for 2009 are published  
performance condition
vesting of the awards will be subject to a performance condition that measures
the growth in the company’s earnings per share “eps”  the extent to which the
awards vest will be determined by comparing eps in 2009 to the budgeted eps for
2007  the awards will only begin to vest for annual eps growth above 15 pa
3225 compound eps growth over the expected period with 100 vesting for
eps growth of 20 pa 44 eps growth over the expected performance period
for intermediate levels of eps growth vesting will be on a straight line basis
where an award can be exercised following cessation of employment
performance will be measured over the normal period on a change of control of
the company the awards will vest in full
36   business post group plc directors’ report
ceasing employment
an award will normally lapse on cessation of employment however it will
vest at the normal time and subject to the performance condition if after 31
march 2007 the executive resigns in connection with a breach of his service
agreement by the company or his employment is unfairly terminated or he
leaves through ill health injury or death  in such circumstances if the
cessation occurs on or before 31 march 2008 the award shall vest in respect
of two thirds of the shares that could otherwise have been acquired if such
cessation occurs after that date all of those shares will vest
corporate events
in the event of a takeover scheme of arrangement or winding up of the
company not being an internal corporate reorganisation or if the
remuneration committee so determines in the event of a demerger special
dividend or other similar event is proposed the awards will vest in full or to
the extent previously determined on cessation of employment  in the event of
an internal corporate reorganisation the awards will be replaced by
equivalent new awards over shares in a new holding company
rights attaching to shares
any shares allotted on the vesting of the awards will rank equally with all
other shares then in issue but will not qualify for dividends or other rights for
which the record date is earlier than the date of their allotment
adjustment of awards
in the event of any variation in the share capital of the company or a demerger
the payment of a special dividend or any other event that would affect the
market price of the company’s shares to a material extent the remuneration
committee may make such adjustment as it considers appropriate to the
number of shares subject to an award
alterations
shareholder approval is required for alterations to an award that are to the
advantage of the executive where these are to the number of shares that may
be issued or treasury shares that may be transferred the basis for
determining an executive’s entitlement to ordinary shares and the terms of
those shares and adjustments that may be made to the award on a variation
of capital  this requirement shall not however apply to minor alterations to
benefit the administration of the award to take account of a change in
legislation or to obtain or maintain favourable tax exchange control or
regulatory treatment for participants or any business post group company
employment policy
the group’s policy is to maintain as far as practicable close consultations
with employees on matters likely to affect their interests and to this end
established an employee consultative group in april 2003 the group is an
equal opportunities employer and holds an investors in people certificate 
the group’s policy and practice is to encourage the recruitment and
subsequent training career development and promotion of disabled persons
according to their aptitudes and abilities and the retention and retraining of
employees who also become disabled during their employment 
further information concerning the group’s human resource management
activities is set out in the corporate social responsibility statement 
directors’ indemnities
in accordance with the company’s articles of association directors are
granted an indemnity from the company to the extent permitted by law in
respect of liabilities incured as a result of their office the company maintains
insurance against certain liabilities which could arise from a negligent act or
a breach of duty by its directors and officers in the discharge of their duties 
supplier payment policy
the group’s policy concerning the payment of its trade payables is to follow
the cbi’s prompt payers’ code the group endeavours to agree standard terms
of payment with its major suppliers at the commencement of business
suppliers fulfilling the conditions of supply are paid in accordance with the
agreed standard terms other suppliers are paid in accordance with
contractual terms as agreed from time to time the company does not have
trade payables and accordingly no trade payable days calculation is presented 
environmental responsibility and health and safety
a statement on the steps taken to operate the business in pursuit of good
environmental and health standards is set out in the corporate social
responsibility statement 
auditors
so far as the board is aware there is no relevant audit information that is
information needed by the groups auditors in connection with preparing their
report of which the groups auditors are unaware and all steps have been
taken to ensure that the board is aware of any relevant audit information and
to establish that the groups auditors are aware of that information
a resolution to reappoint pricewaterhousecoopers llp as auditors to the
group will be proposed at the annual general meeting 
by order of the board 
peter fitzwilliam 
company secretary
31 may 2006
report  accounts 37 independent auditors’ report
independent auditors report to the members of business post group plc
we have audited the group and parent company financial statements the
‘‘financial statements’’ of business post group plc for the year ended 31 march
2006 which comprise the consolidated income statement consolidated and
company balance sheets cash flow statements statements of changes in
shareholders’ equity and the related notes these financial statements have
been prepared under the accounting policies set out therein we have also
audited the information in the directors’ remuneration report that is described
as having been audited
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the directors’
remuneration report and the financial statements in accordance with applicable
law and international financial reporting standards ifrss as adopted by the
european union are set out in the statement of directors’ responsibilities
our responsibility is to audit the financial statements and the part of the
directors’ remuneration report to be audited in accordance with relevant
legal and regulatory requirements and international standards on auditing uk
and ireland this report including the opinion has been prepared for and only
for the company’s members as a body in accordance with section 235 of the
companies act 1985 and for no other purpose  we do not in giving this
opinion accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing
we report to you our opinion as to whether the financial statements give a true
and fair view and whether the financial statements and the part of the
directors’ remuneration report to be audited have been properly prepared in
accordance with the companies act 1985 and article 4 of the ias regulation
we report to you whether in our opinion the information given in the directors
report is consistent with the financial statements we also report to you if in
our opinion the company has not kept proper accounting records if we have
not received all the information and explanations we require for our audit or
if information specified by law regarding directors’ remuneration and other
transactions is not disclosed
we review whether the corporate governance statement reflects the
company’s compliance with the nine provisions of the 2003 frc combined
code specified for our review by the listing rules of the financial services
authority and we report if it does not we are not required to consider
whether the board’s statements on internal control cover all risks and controls
or form an opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures
we read other information contained in the annual report and consider
whether it is consistent with the audited financial statements the other
information comprises only the chairman’s statement the highlights the
chief executive’s review the financial review the directors and advisers the
corporate governance statement the corporate social responsibility
statement the unaudited part of the remuneration report the directors
report and the five year summary of results we consider the implications for
our report if we become aware of any apparent misstatements or material
inconsistencies with the financial statements our responsibilities do not
extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on
auditing uk and ireland issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts and
disclosures in the financial statements and the part of the directors’
remuneration report to be audited it also includes an assessment of the
significant estimates and judgments made by the directors in the preparation
of the financial statements and of whether the accounting policies are
appropriate to the group’s and company’s circumstances consistently applied
and adequately disclosed
we planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
and the part of the directors’ remuneration report to be audited are free from
material misstatement whether caused by fraud or other irregularity or error
in forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements and the part of the
directors’ remuneration report to be audited
opinion
in our opinion
• the group financial statements give a true and fair view in accordance with
ifrss as adopted by the european union of the state of the group’ s affairs as
at 31 march 2006 and of its profit and cash flows for the year then ended
• the parent company financial statements give a true and fair view in
accordance with ifrss as adopted by the european union as applied in
accordance with the provisions of the companies act 1985 of the state of
the parent company’s affairs as at 31 march 2006 and cash flows for the
year then ended
• the financial statements and the part of the directors’ remuneration report
to be audited have been properly prepared in accordance with the
companies act 1985 and article 4 of the ias regulation and
• the information given in the directors report is consistent with the
financial statements
pricewaterhousecoopers llp
chartered accountants and registered auditors
uxbridge
31 may 2006
38   business post group plc 2006 2005
notes £m £m
revenue 2 2782 2333
cost of sales 2313 1847
gross profit 469 486
administrative expenses 415 287
operating profit before exceptional items 121 199
exceptional items 3 67 
operating profit 5 54 199
interest payable 4 08 07
interest receivable 4 04 04
profit before taxation 50 196
taxation 7 13 59
profit for the year 37 137
basic earnings per share 9 69p 256p
diluted earnings per share 9 68p 252p
the profit for the financial year arises from the group’s continuing activities and is wholly attributable to equity holders of the company
consolidated income statement
for the year ended 31 march 2006
the related notes numbered 1 to 36 form part of these financial statements
report  accounts 39 consolidated balance sheet
as at 31 march 2006
2006 2005
notes £m £m
assets
noncurrent assets
goodwill 10 95 95
intangible assets 11 07 06
investment properties 12 11 11
property plant and equipment 13 355 331
trade and other receivables 17 04 33
deferred tax assets 21 01 18
473 494
current assets
inventories 16 02 02
trade and other receivables 17 533 472
current tax assets 02 
cash and cash equivalents 18  34
537 508
liabilities
current liabilities
borrowings 20 16 10
trade and other payables 19 327 238
current tax liabilities  28
provisions 22 13 01
356 277
net current assets 181 231
noncurrent liabilities
borrowings 20 80 80
deferred tax liabilities 21 13 14
provisions 22 03 04
96 98
net assets 558 627
shareholders’ equity
ordinary shares 23 55 54
share premium 24 146 122
retained earnings 25 357 451
total shareholders’ equity 558 627
the financial statements on pages 39 to 72 were approved by the board of directors on 31 may 2006 and were signed on its behalf by
peter kane                                                                                                                                                                                                      peter fitzwilliam
chairman finance director
the related notes numbered 1 to 36 form part of these financial statements
40   business post group plc company balance sheet
2006 2005
notes £m £m
assets
noncurrent assets
investment in subsidiaries 15 117 117
deferred tax assets 21 01 18
118 135
current assets
trade and other receivables 17 581 426
cash and cash equivalents 18  01
581 427
liabilities
current liabilities
borrowings 20 48 10
trade and other payables 19 103 22
current tax liabilities  03
151 35
net current assets 430 392
noncurrent liabilities
borrowings 20 70 80
net assets 478 447
shareholders’ equity
ordinary shares 23 55 54
share premium 24 146 122
retained earnings 25 277 271
total shareholders’ equity 478 447
the financial statements on pages 39 to 72 were approved by the board of directors on 31 may 2006 and were signed on its behalf by
peter kane peter fitzwilliam
chairman finance director
as at 31 march 2006
the related notes numbered 39 to 72 form part of these financial statements
report  accounts 41 group company
2006 2005 2006 2005
notes £m £m £m £m
operating activities
cash generated from operations 27 172 206 76 63
interest received 04 04  
interest paid 08 07 04 05
taxation paid 36 61 03 
other non cash items 04 09 05 10
net cash inflow from operating activities 128 151 64 68
investing activities
acquisition of subsidiaries net of cash acquired  06  06
proceeds from disposal of property plant and equipment 07 01  
purchase of property plant and equipment 13 78 64  
purchase of intangible assets 11 04 03  
net cash outflowinflow from investing activities 75 60  06
financing activities
dividends paid to shareholders 104 99 104 99
proceeds from refinancing under finance leases 12   
net proceeds from issue of ordinary share capital 23 24 24 20 24 20
purchase of business post shares by the esot 23 13 12 13 12
repayment of borrowings 20 10 10 10 10
net cash outflow from financing activities 91 101 103 101
net decrease in cash and cash equivalents 32 38 10 39 27
cash and cash equivalents at 1 april 32 34 44 01 28
cash and cash equivalents at 31 march 32 04 34 38 01
cash flow statements
for the year ended 31 march 2006
the related notes numbered 1 to 36 form part of these financial statements
42   business post group plc group company
2006 2005 2006 2005
notes £m £m £m £m
shareholders’ equity at 1 april 627 560 447 398
adoption of ias 32 and ias 39 01  01 
dividends paid to shareholders 8 104 98 104 98
purchase of business post shares by the esot 23 13 12 13 12
employees’ share option scheme
value of employee services 05 10 05 10
proceeds from shares issued 25 20 25 20
tax on items taken directly to equity 08 10 15 13
profit for the year 37 137 144 116
shareholders’ equity at 31 march 558 627 478 447
statements of changes in 
shareholders’ equity
for the year ended 31 march 2006
the related notes numbered 1 to 36 form part of these financial statements
report  accounts 43 notes to the financial statements
1 principal accounting policies
accounting policies for the year ended 31 march 2006
the principal accounting policies adopted in the preparation of these
financial statements are set out below these policies have been
consistently applied to all the years presented unless otherwise stated
basis of preparation
these financial statements have been prepared in accordance with eu
adopted international financial reporting standards ifrs and
international financial reporting interpretations committee ifric
interpretations and with those parts of the companies act 1985
applicable to companies reporting under ifrs
the financial statements have been prepared under the historical cost
convention as modified by the revaluation of certain financial assets and
financial liabilities held for trading
the preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period although these estimates are based
on managements best knowledge of the amount event or actions actual
results ultimately may differ from those estimates
the estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the financial year are the recoverability of trade and franchise receivables
note 17 goodwill impairment note 15 and provisions note 22
the group financial statements consolidate the financial statements of
business post group plc and its subsidiary companies for the year ended 31
march 2006 advantage has been taken of section 230 of the companies
act 1985 not to include the companys own profit and loss account the
profit of the company for the year was £144m 2005 £116m
conversion to ifrs
this is the first year that the group has produced financial statements
under ifrs the adoption of ifrs from the transition date of 1 april 2004
has resulted in a number of adjustments to the previously reported results
and equity shareholders funds presented under uk generally accepted
accounting principles uk gaap the main changes were in relation to
sharebased payments goodwill dividends intangible assets deferred
taxation and financial instruments
ifrs 1 ‘firsttime adoption of international financial reporting
standards’ permits those companies adopting ifrs for the first time to
take certain exemptions from the full requirements of ifrs in the
transition period the group has applied the following key exemptions
 business combinations the group elected not to apply ifrs 3
business combinations retrospectively to business combinations
acquired prior to the date of transition
 financial instruments the group applied the ifrs 1 exemption from
the requirement to restate comparative information for the effects of
adopting ias 32 ‘financial instruments disclosure and presentation’ and
ias 39 ‘financial instruments recognition and measurement’
comparative information as at 1 april 2004 and for the year to 31 march
2005 is presented under uk gaap applicable at that time
the group elected to apply ifrs 2 ‘sharebased payments’
retrospectively in full to all options granted but not fully vested at the
date of transition
note 36 ‘transition to ifrs’ provides further details
the group has not adopted any standards early
consolidation
subsidiaries are consolidated from the date on which control is
transferred to the group and cease to be consolidated from the date on
which control is transferred out of the group on acquisition of a
subsidiary all the subsidiarys assets and liabilities that exist at the date
of acquisition are recorded at their fair values reflecting their condition at
that date changes to those assets and liabilities and the resulting gains
and losses that arise after the group has gained control of the subsidiary
are credited or charged to the post acquisition income statement
the results assets and liabilities of the franchise network are not
consolidated into the groups’ results as the group does not have a
participating share ownership in the franchises or the ability to direct and
control their activities additionally the group does not share in the
majority of the risks and rewards
goodwill
goodwill represents the excess of the cost of an acquisition over the fair
value of identifiable net assets of a subsidiary at the date of acquisition
goodwill is measured at cost less impairment losses and is tested for
impairment at least annually
on the disposal of a business goodwill relating to that business
remaining on the balance sheet is included in the determination of the
profit or loss on disposal
intangible assets
intangible assets include acquired computer software licences not part of
the operating software acquired with a related piece of hardware these
are capitalised on the basis of the costs incurred to acquire and bring to
use the specific software these costs are amortised on a straight line
basis over their estimated useful lives normally three to four years
intangible assets created within the business are not capitalised and
expenditure is charged against profits in the year in which it is incurred
property plant and equipment
property plant and equipment are stated at cost less accumulated
depreciation and any impairment in value land is not depreciated
depreciation is calculated over the estimated economic useful life of
the asset as follows
freehold buildings fifty years on a straight line basis
short leasehold improvements the period of the lease on a 
straight line basis
motor vehicles plant and equipment 10 to 33 annually on a 
reducing balance basis
computer equipment 14 to 33 annually on a 
straight line basis
44   business post group plc notes to the financial statements
the normal expected useful lives and residual values of the major
categories of property plant and equipment are reviewed annually
the carrying value of property plant and equipment is reviewed at least
annually any resultant impairment losses are charged immediately to the
income statement
investment properties
investment properties comprise freehold and leasehold land and
buildings held for long term rental yields that are not occupied by the
group 
investment properties are accounted for under the cost model at cost
less accumulated depreciation and accumulated impairment losses
investments in subsidiaries
investments in group subsidiaries are stated at cost less any provision for
impairment
inventories
inventories are stated at the lower of cost and net realisable value
cost is determined using the firstinfirstout method and net realisable
value is the estimated selling price less costs of disposal in the ordinary
course of business
finance and operating leases
costs in respect of operating leases are charged on a straight line basis
over the term of the lease
leasing agreements which transfer to the group substantially all the
benefits and risks of ownership of an asset are treated as if the asset has
been purchased outright the assets are included in fixed assets and the
capital elements of the leasing commitments are shown as obligations
under finance leases the lease rentals are treated as consisting of
capital and interest elements the capital element is applied to reduce
the outstanding obligations and the interest element is charged against
profit so as to give constant periodic rates of charge on the remaining
balance outstanding at each accounting period assets held under finance
leases are depreciated over the shorter of the lease term and the useful
lives of equivalent owned assets
revenue
revenue reflects all sales invoiced by business post whether delivered
by network services or a franchisee as the group remains the principal in
all transactions revenue is recognised in the accounting period in which
consignments are delivered to customers
income from the sale of franchises is recognised over the life of the
franchise agreement in proportion to the share of services rendered by
reference to the proportion of the total services to be provided
income from investment properties is recognised on a straight line basis
over the term of the lease even if the payments are not received on such
a basis
all revenues are stated net of value added tax
deferred taxation
full provision is made for deferred taxation on all taxable temporary
differences deferred tax assets and liabilities are recognised separately
on the balance sheet deferred tax assets are recognised only to the
extent that they are expected to be recoverable
deferred taxation is recognised in the income statement unless it
relates to taxable transactions taken directly to equity in which case
the deferred tax is also recognised in equity the deferred tax is
released to the income statement at the same time as the taxable
transaction is recognised in the income statement
pension costs
the group sponsors employees personal pension plans the assets of
the plans are held separately from those of the group in independently
administered funds the pension costs charged in the income statement
represent contributions payable by the group to the plans together with
the administration charges of the plans
foreign currencies
transactions in foreign currencies are recorded in sterling at the rate
ruling at the transaction date monetary assets and liabilities
denominated in foreign currencies are translated at the rate of
exchange ruling at the balance sheet date all exchange differences
arising from trading transactions are dealt with in the income
statement
sharebased payments
the costs of equitysettled sharebased payments are recognised in the
income statement with a corresponding increase in equity over the
vesting period as services are provided to the group the charge is
based on the fair value of the equity instrument granted and the number
of equity instruments that are expected to vest
the fair value is measured at grant date and takes account of vesting
conditions that relate to the market price of the companys shares in
order to determine the value of the instrument a pricing model relevant
to the type of instrument is used
the costs of cashsettled sharebased payments are recognised in the
income statement with a corresponding increase in equity over the
vesting period as services are provided to the group the charge is
based on the fair value of the liability at each reporting date with any
changes in fair value recognised in the income statement
provisions
provisions are recognised when the group has a present obligation legal
or constructive as a result of a past event it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation where the group expects a provision to be reimbursed for
example under an insurance contract the reimbursement is recognised as
a separate asset but only when the reimbursement is virtually certain if
the effect of the time value of money is material provisions are
determined by discounting the expected future cashflows at a pretax rate
that reflects current market assessments of the time value of money and
where appropriate the risks specific to the liability where discounting is
used the increase in the provision due to the passage of time is
recognised as an interest expense
report  accounts 45 notes to the financial statements
exceptional items
unusual nonrecurring items of income and expense that are considered
to be material are classified as “exceptional items” on the face of the
income statement and separately disclosed
dividends
dividends are recognised in the financial statements as follows
interim dividends are recognised as a distribution from retained earnings
in the period in which they are paid
final dividends are recognised as a distribution from retained earnings in
the period in which they are declared at the general meeting
financial instruments
financial assets and financial liabilities are recognised in the group’s
balance sheet when the group becomes a party to the contractual
provisions of the instrument financial assets are derecognised when the
group no longer has the rights to cash flows the risks and rewards of
ownership or control of the asset financial liabilities are derecognised
when the obligation under the liability is discharged cancelled or expires
 trade receivables these are recognised and carried at the original
invoice amount less an allowance for any noncollectable amounts
impairment is made when there is objective evidence that the group will
not be able to collect the debts impairments are written off to the income
statement when identified
 franchise receivables these are recognised and carried at the
original amount owed to the group less an allowance for any non
collectable amounts impairment is made when there is objective
evidence that the group will not be able to collect the receivable
impairments are charged to the income statement when identified
 share capital ordinary shares are classified as equity incremental
costs directly attributable to the issue of new shares are shown in equity
as a deduction from the proceeds received own equity instruments that
are reacquired treasury shares or shares held in the employee share
ownership trust esot are deducted from equity no gain or loss is
recognised in the income statement on the purchase sale issue or
cancellation of the group’s own equity instruments
 cash and cash equivalents these comprise cash in hand and current
balances with banks and similar institutions which are readily
convertible to known amounts of cash and which are subject to
insignificant risk of changes in value and have an original maturity of
three months or less
 interest rate cap the fair value of the instrument is remeasured at
fair value at each reporting date with any gains or losses credited or
charged to the income statement
 interestbearing loans and borrowings all interestbearing loans
and borrowings are initially recognised at fair value plus directly
attributable transaction costs after initial recognition interestbearing
loans and borrowings are subsequently measured at amortised cost using
the effective interest method amortised cost is calculated by taking into
account any issue costs and any discount or premium
for the purpose of the cash flow statements cash and cash equivalents
consist of cash and cash equivalents as defined above net of outstanding
bank overdrafts
financial risk management
foreign exchange risk
the group is not significantly exposed to the effects of fluctuations in
exchange rates since all income is in sterling and costs denominated in
foreign currency principally the euro represent less than 5 of all
expenditure the group maintains an account in euros to hedge the
groups limited exposure to purchases denominated in european
currency and any gains or losses on the retranslation of this account
offset increases or decreases in the sterling equivalent value of foreign
purchases at the year end the balance on this account was £05m
interest rate risk
the group has both interestbearing assets and interestbearing
liabilities subject to floating rates
the group provides both short and longterm finance to a number of
franchises accruing interest at a premium to the bank of england base rate
shortterm finance is principally obtained from a sterling bank overdraft
with interest charged at a rate linked to the bank of england base rate
the group has a sterling term loan in place to provide longer term
finance the interest rate on the term loan is based on a floating rate
linked to the london inter bank offer rate libor
additionally a separate interest rate cap exists to reduce the groups
exposure to fluctuations in libor on the sterling term loan based on
the agreed repayment schedule ensuring that the interest rate exposure
is capped at 60 until the contractual expiry date of the agreement in
july 2008 to date the interest rate cap has not been breached
price risk
fuel represents one of the major costs that the group faces price risk is
minimised as significant increases in the fuel price can be passed onto
customers via a fuel surcharge mechanism common throughout the
express delivery industry
credit risk
trade receivables
the group has no significant concentrations of credit risk the groups
exposure is limited by being spread across a wide range of industry
sectors with the most significant being the high tech sector which
generates roughly 20 of group revenue fedex express the worlds
leading express delivery company accounts for less than 5 of revenue
and no other customer accounts for over 4 the group has
implemented policies that require appropriate credit checks on potential
customers before sales commence
franchise receivables
franchise receivables represent both short and longterm amounts
advanced by the group the recoverability of which is dependent on the
trading performance of the individual franchise and that of the group
and the economy in general
liquidity risk
the board reviews both the long and shortterm financing requirements
of the group to ensure that there are sufficient available funds both for
the daytoday operations of the group and for planned capital
investments
at the year end the group had undrawn borrowing facilities of £10m
under a facility expiring on 31 december 2006
46   business post group plc 2 segmental information
the groups primary segment reporting is by business sector with geographical reporting being the secondary format the business segments consist of parcel
services express international and homeserve specialist services uk pallets and courier mail services uk mail and other network services and
central support central support comprises common group head office functions including hr finance and it costs assets and liabilities are allocated to
specific business segments wherever possible there are no sales between business segments
the group manages its business segments on a national basis with all its operations in the uk as are nearly all of the customers the group therefore
considers that it operates in one geographic market the uk
primary reporting format  business segments
the business segment results for the year ended 31 march 2006 are as follows
parcel mail specialist
services services services other group
£m £m £m £m £m
revenue 1958 404 416 04 2782
operating profitloss 111 32 21 110 54
interest payable 08
interest receivable 04
profit before taxation 50
taxation 13
net profit attributable to equity shareholders 37
segment assets 633 149 83 145 1010
segment liabilities 137 102 43 170 452
other segment items
capital expenditure including acquisitions
 property plant and equipment note 13 28 18 01 31 78
 intangible assets note 11  02 01 01 04
depreciation  owned assets note 13 20 01 03 23 47
amortisation of intangible assets note 11  01  02 03
impairment of trade receivables 11  06  17
impairment of franchise receivables 70    70
the business segment results for the year ended 31 march 2005 are as follows
parcel mail specialist
services services services other group
£m £m £m £m £m
revenue 1870 102 353 08 2333
operating profitloss 303  19 123 199
interest payable 07
interest receivable 04
profit before taxation 196
taxation 59
net profit attributable to equity shareholders 137
segment assets 644 82 79 197 1002
segment liabilities 101 27 46 201 375
other segment items
capital expenditure including acquisitions
 property plant and equipment note 13 27  02 35 64
 intangible assets note 11   01 02 03
depreciation  owned assets note 13 18  03 21 42
depreciation  investment properties note 12    01 01
amortisation of intangible assets note 11    02 02
impairment of trade receivables 08  01  09
impairment of franchise receivables 09    09
company
the companys business is to invest in its subsidiaries and therefore it operates in a single segment
notes to the financial statements
report  accounts 47 3 exceptional items
2006 2005
£m £m
franchiserelated costs
 provision against amounts relating to prior years 32 
 conversion costs including claims 27 
management restructuring 08 
exceptional items 67 
franchiserelated costs represent a provision of £32m against amounts owed by certain franchises relating to periods prior to 1 april 2005 together with
further costs of £24m to cover converting underperforming franchise sites to corporate sites in the year to 31 march 2006 and £03m in relation to claims
from prior franchisees
management restructuring costs relate to the departure of paul carvell as chief executive and a number of significant changes to the management team
following the appointment of guy buswell after deduction of related sharebased credits
4 finance costs  net
2006 2005
£m £m
interest payable on
bank overdraft 03 02
term loan 05 05
interest payable 08 07
interest receivable on amounts due from franchises 04 04
finance costs  net 04 03
5 operating profit
2006 2005
£m £m
the following items have been chargedcredited in arriving at operating profit
employee benefits expense note 6 499 441
cost of inventories recognised included in cost of sales 79 58
depreciation of owned property plant and equipment notes 12 13 47 43
amortisation of intangibles included in administrative expenses note 11 03 02
other operating lease rentals payable
 plant and machinery 69 61
 property 41 30
repairs and maintenance expenditure on property plant and equipment 18 15
other operating lease rentals receivable
 plant and machinery 08 08
 property 05 02
trade receivables impairment included in administrative expenses 17 09
franchise receivables impairment included in administrative expenses 70 09
services provided by the groups auditor
2006 2005
£m £m
during the year the group obtained the following services from the groups auditor at costs as detailed below
audit services  statutory audit  01 01
other assurance services  02
tax compliance services 01 01
02 04
 this includes £12000 2005 £10900 for the audit of the parent company
notes to the financial statements
48   business post group plc 6 employees and directors
employee benefit expense for the group during the year
2006 2005
£m £m
wages and salaries 457 386
social security costs 41 39
other pension costs  07 06
sharebased payments 06 10
499 441
 other pension costs all relate to defined contribution schemes
average monthly number of people including executive directors employed
2006 2005
£m £m
by business group
parcel services 1717 1505
mail services 55 27
specialist services 397 378
central 144 132
2313 2042
the average number of persons employed by the company was nil 2005 nil
key management compensation
2006 2005
£000 £000
salaries and shortterm employee benefits 1076 1092
postemployment benefits 94 65
termination benefits 312 
sharebased payments 325 296
1157 1453
the key management figures given above include the main board directors both executive and nonexecutive
details of directors emoluments are set out in the remuneration report
7 taxation
analysis of charge in period
2006 2005
£m £m
current tax  current year 14 60
current tax  adjustment in respect of prior years 01 
deferred tax note 21  current year 01 01
deferred tax note 21  prior years 01 
taxation 13 59
notes to the financial statements
report  accounts 49 the differences between the total current tax shown above and the amount calculated by applying the standard rate of uk corporation tax to the profit before
tax are explained below
2006 2005
£m £m
profit on ordinary activities before tax 50 196
profit on ordinary activities multiplied by rate of corporation tax in the uk of 30 2005 30 15 59
effects of
deferred tax in respect of share options  03
expenses not deductible for tax purposes 01 03
adjustment in respect of prior years 03 
total tax charge 13 59
additionally £15m of deferred tax has been charged 2005 £10m credited directly to equity in respect of share options £07m of current tax has been
credited 2005 £nil directly to equity in respect of share options
8 dividends
2006 2005
group and company £m £m
final 2005 paid 1280p 2004 1205p per 10p share 69 65
interim paid 640p 2005 640p per 10p share 35 34
in addition the directors are proposing a final dividend in respect of the financial year ending 31 march 2006 of 108p per share which will absorb an
estimated £58 million of shareholders funds it will be paid on 20 july 2006 to shareholders who are on the register of members on 30 june 2006
9 earnings per share
basic earnings per share is calculated by dividing the profit for the year the earnings attributable to ordinary shareholders by the weighted average number
of ordinary shares outstanding during the year excluding those held in the employee share ownership trust note 23 which are treated as cancelled
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary
shares the group has two classes of dilutive potential ordinary shares those share options granted to employees where the exercise price is less than the
average market price of the companys ordinary shares during the year and the contingently issuable shares under the groups long term incentive plan
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below
2006 2005
weighted weighted
average average per share
earnings number of per share earnings number of amount
£m shares amount pence £m shares pence
basic eps
earnings attributable to ordinary shareholders 37 53962493 69 137 53586502 256
effect of dilutive shares
options  364214 01  870480 04
long term incentive plan  243696   18429 
diluted eps 37 54570403 68 137 54475411 252
notes to the financial statements
50   business post group plc notes to the financial statements
10 goodwill
2006 2005
group £m £m
cost
at 1 april 95 108
adjustment in respect of uk pallets ltd  13
at 31 march 95 95
aggregate impairment
at 1 april and 31 march  
net book value
at 1 april and 31 march 95 95
as required under ias 36 impairment of assets  goodwill has been allocated to the lowest level of cashgenerating unit and has been tested for impairment
the carrying amounts of goodwill by company are as follows
2006 2005
£m £m
bxt ltd 16 16
uk pallets ltd 79 79
net book value at 31 march 95 95
goodwill is tested for impairment annually at the time the group prepares its annual budgets each impairment review takes account of the recoverable
amount of the cashgenerating units which is determined based on a value in use basis the growth rates used are in the range 7 to 10 pa for the first
five years and 225 thereafter being the long term gdp growth rate of the uk economy the pretax discount rates are in the 6 to 7 range
management believes that there will be no structural changes in either the palletised goods or technical courier markets which will affect these forecasts
11 intangible assets
2006 2005
group £m £m
cost
at 1 april 15 12
additions 04 03
at 31 march 19 15
aggregate amortisation
at 1 april 09 07
charge for the year 03 02
at 31 march 12 09
net book value at 31 march 07 06
net book value at 1 april 06 05
all amortisation charges in the year have been charged through administrative expenses
computer software has a useful economic life of between 3 and 4 years
report  accounts 51 notes to the financial statements
12 investment properties
2006 2005
group £m £m
cost
at 1 april and 31 march 17 17
accumulated depreciation
at 1 april 06 05
charge for the year  01
at 31 march 06 06
net book value at 31 march 11 11
net book value at 1 april 11 12
investment properties are accounted for under the cost model at cost less accumulated depreciation and accumulated impairment losses and are
depreciated over fifty years on a straight line basis
one 2005 one investment property is held by the group located in the west midlands and is being sublet under an operating lease the rental income
recognised in the year was £02m 2005 £02m
the property was valued by qualified professional valuers working for the company of dtz debenham tie leung chartered surveyors acting in the capacity
of external valuers all such valuers are chartered surveyors being members of the royal institution of chartered surveyors rics dtz debenham tie
leung is a wholly owned subsidiary of dtz holdings plc the “dtz group in the financial year to 30 april 2006 the proportion of total fees payable by the
group to the total fee income of the dtz group was less than 5
the property was valued on the basis of market value at £36m primarily derived using comparable recent market transactions on arms length terms the
valuation was carried out in accordance with the rics appraisal and valuation standards dtz debenham tie leung have not previously carried out
valuations for business post group plc
the company does not own any investment properties 2005 nil
13 property plant and equipment
motor
short vehicles
freehold land leasehold plant and computer
and buildings improvements equipment equipment total
group £m £m £m £m £m
cost
at 1 april 2005 220 09 167 103 499
additions 04 07 50 17 78
disposals   19  19
at 31 march 2006 224 16 198 120 558
accumulated depreciation
at 1 april 2005 21 04 85 58 168
charge for the year 03 01 20 23 47
disposals   12  12
at 31 march 2006 24 05 93 81 203
net book value at 31 march 2006 200 11 105 39 355
52   business post group plc notes to the financial statements
motor
short vehicles
freehold land leasehold plant and computer
and buildings improvements equipment equipment total
group £m £m £m £m £m
cost
at 1 april 2004 213 08 151 71 443
additions 07 01 23 33 64
disposals   07 01 08
at 31 march 2005 220 09 167 103 499
accumulated depreciation
at 1 april 2004 19 03 74 37 133
charge for the year 02 01 17 22 42
disposals   06 01 07
at 31 march 2005 21 04 85 58 168
net book value at 31 march 2005 199 05 82 45 331
the company owned no tangible fixed assets at 31 march 2006 2005 £nil
14 assets held under finance leases
assets held under finance leases have the following net book amount
2006 2005
£m £m
cost 13 
aggregate depreciation 01 
net book value 12 
included in assets held under finance leases are plant and equipment with a net book value of £10m 2005 £nil and computer software of £02m 2005
£nil
15 investments
company
fixed asset investments 2006 2005
£m £m
investments in subsidiaries
at 1 april 121 143
adjustment in respect of uk pallets ltd  22
at 31 march 121 121
aggregate impairment 
at 1 april and 31 march 04 04
net book amount as at 31 march 117 117
investments in subsidiaries are stated at cost less impairment
a list of the principal subsidiary undertakings is given in note 35
report  accounts 53 notes to the financial statements
16 inventories
2006 2005
£m £m
technical swap outs  01
fuel stock 02 01
02 02
the group consumed £79m 2005 £58m of inventories during the year
17 trade and other receivables
group company
2006 2005 2006 2005
£m £m £m £m
trade receivables net of provisions for impairment 491 418  
franchise receivables net of provisions for impairment 17 60  
amounts due from subsidiary undertakings   581 425
other debtors 03 05  
prepayments and accrued income 26 22  01
537 505 581 426
less  noncurrent franchise receivables 04 33  
533 472 581 426
concentrations of credit risk with respect to trade receivables are limited due to the groups customer base being large and unrelated with no one customer
accounting for more than 5 of trade receivables
franchise receivables represent both short and longterm amounts advanced by the group the recoverability of which is dependent on the trading
performance of the individual franchise and that of the group and the economy in general
the effective interest rate for all noncurrent franchise receivables is 60 2005 60 all of which are due within 4 years from the balance sheet date
18 cash and cash equivalents
group company
2006 2005 2006 2005
£m £m £m £m
cash at bank and in hand  34  01
the effective interest rate on the cash and bank balances was approximately 46 2005 37 accruing on a daily basis
19 trade and other payables  current
group company
2006 2005 2006 2005
£m £m £m £m
trade payables 167 112  
amounts owed to franchises 23 27  
amounts owed to subsidiary undertakings   102 21
other taxes and social security payable 67 47  
accruals 68 49 01 01
deferred income 02 03  
327 238 103 22
54   business post group plc notes to the financial statements
20 borrowings
group company
2006 2005 2006 2005
£m £m £m £m
current
bank loans and overdrafts due within one year or on demand
bank overdrafts 04  38 
sterling term loan unsecured 10 10 10 10
finance lease obligations 02   
16 10 48 10
noncurrent
sterling term loan unsecured 70 80 70 80
finance lease obligations 10   
80 80 70 80
the term loan whilst unsecured is guaranteed by subsidiaries of business post group plc and is repayable in equal annual instalments of £1m
interest on the term loan is reset every quarter as at 31 march 2006 the effective rate of interest on the term loan was approximately 52 2005 56
reviewable on 27 april 2006 the loan is subject to various covenants
21 deferred tax
deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 30 2005 30
the movement on the deferred tax account is as shown below
group company
2006 2005 2006 2005
deferred tax account £m £m £m £m
at 1 april 04 07 18 05
income statement chargecredit 01 01 02 03
chargedcredited to equity 15 10 15 10
at 31 march 12 04 01 18
deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net
group company
2006 2005 2006 2005
deferred tax asset £m £m £m £m
at 1 april 18 05 18 05
income statement chargecredit 02 03 02 03
chargedcredited to equity 15 10 15 10
at 31 march 01 18 01 18
deferred tax assets on share based payments are calculated on the difference between the market price at the balance sheet date and the option exercise
price the excess of the deferred tax over the cumulative income statement charge is recognised in equity
report  accounts 55 notes to the financial statements
deferred tax liabilities
the movement on the deferred tax liability account is as shown below
group company
2006 2005 2006 2005
deferred tax liability on accelerated capital allowances £m £m £m £m
at 1 april 14 12  
income statement creditcharge 01 02  
at 31 march 13 14  
deferred tax liabilities on accelerated capital allowances are calculated on the difference between the accounting net book value of the assets and their
carrying amount for tax purposes
deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net
the deferred income tax chargedcredited to equity during the year is as follows
group company
2006 2005 2006 2006
£m £m £m £m
deferred tax on sharebased payments 15 10 15 10
22 provisions
franchise
properties claims related costs totals
£m £m £m £m
at 1 april 2005 05   05
charged to the income statement 01 03 24 28
utilised in the year 01  16 17
at 31 march 2006 05 03 08 16
provisions have been analysed between current and noncurrent as follows
2006 2005
£m £m
current 13 01
noncurrent 03 04
16 05
vacant properties
the group holds leases over two vacant properties both of which are on the market with a view to subletting provision is made for rental during the
anticipated time that these properties will be on the market in determining this provision the cash flows have been discounted at the groups pretax
borrowing rate
property leases
the provision for property leases relates to dilapidations on properties under leases expiring within 1 year and up to 13 years the properties have been
inspected by the group property manager and estimates made for the anticipated dilapidation expenditure to be incurred prior to subletting or reversion
of the lease
claims
the provision for claims relates to £03m of legal actions from previous franchisees note 3
franchiserelated costs
franchiserelated costs represent an exceptional provision of £24m to cover the cost of converting underperforming franchise sites to corporate sites in the
year to 31 march 2006 note 3
56   business post group plc notes to the financial statements
23 called up share capital
group and company 2006 2005
£m £m
authorised
70000000 2005 70000000 ordinary shares of 10p each 70 70
issued allotted and fully paid
2006 2005
ordinary shares of 10p each shares £m shares £m
at 1 april 53924283 54 53297614 53
allotted under share option schemes 606579 01 626669 01
at 31 march 54530862 55 53924283 54
potential issues of ordinary shares
certain employees and franchisees hold options to subscribe for shares in the company at prices ranging from nil to 575p under six share option schemes
approved by shareholders between 1993 and 2005 as follows
year of exercise exercise 2006 2005
scheme grant price period numbers numbers
employee share option scheme 1995 214p 300698 to 300605  12641
sharesave scheme 20002005 170p496p 050103 to 010211 306842 350210
new executive 2001 share option scheme 20012003 204p487p 051204 to 181113 1059180 2128197
franchisee option scheme 2002 20022005 380p575p 120705 to 250515 208271 329065
ltip 20042005 nil 161107 to 240515 524465 344975
share matching plan 2004 nil 161107 to 160508 4010 4880
2102768 3169968
employee share ownership trust
the companys employee share ownership trust holds shares in the company for subsequent transfer to employees under the long term incentive plan
shares held by the trust are not voted at shareholder meetings and do not accrue dividends at 31 march 2006 the trust held a total of 414252 shares
2005 214252 shares all other shares carry voting rights and accrue dividends
during the year the trust purchased 200000 ordinary shares of 10p at an average cost of £645 funded by a cash contribution from the company
24 share premium account
2006 2005
£m £m
group and company
at 1 april 122 103
premium on shares issued during the year under share option schemes 24 19
at 31 march 146 122
report  accounts 57 notes to the financial statements
25 retained earnings
group company
2006 2005 2006 2005
£m £m £m £m
at 1 april 451 404 271 242
adoption of ias 32 and ias 39 01  01 
retained profit for the year 37 137 144 116
sharebased payments
 value of employee services 05 10 05 10
tax on items taken directly to equity 08 10 15 13
purchase of business post shares by the esot 13 12 13 12
dividends paid to shareholders 104 98 104 98
at 31 march 357 451 277 271
26 sharebased payments
in order to align the interests of employees and franchisees with those of shareholders share options are awarded to both employees and franchisees under
discretionary share incentive plans and employees under allemployee share plans as follows
employee share option scheme
awards under the employee share option scheme were made between 1993 and 2000 exercisable within 3  10 years of the grant date exercise of an option
is subject to continued employment with settlement in the form of shares 
options granted under the employee share option scheme were exercisable on the third anniversary of the date of grant subject to the condition that the
growth in the companys earnings per share exceeded the increase in the index of retail prices from the date of grant 
sharesave plan
the company has offered a sharesave plan since 1996 to eligible employees including directors the plan is an inland revenue approved allemployee
share plan the inland revenue does not permit performance conditions to be attached to the exercise of options under the plan participants are granted
options over the companys shares each participant may save up to £250 per month to purchase shares in the company at a discount for the 2005 grant
the discount was 20 of the market value at the time the option was granted
new executive 2001 share option scheme
awards were made under an executive share option scheme between 2001 and 2003 to employees at senior management level and above exercisable
within 3  10 years of the grant date options were granted with a fixed exercise price equal to the market price of the shares under option at the date of
the grant 
options granted under the executive share option scheme are exercisable on the third anniversary of the date of grant subject to the condition that the
growth in the companys earnings per share exceeds the increase in the index of retail prices from the date of grant by more than 3 pa
additionally exercise of an option is subject to continued employment with settlement in the form of shares
franchisee share option scheme
the franchisee share option scheme was introduced in 2002 under the scheme the remuneration committee can grant options over shares in the
company to franchisees of the company options are granted with a fixed exercise price equal to the market price of the shares under option at the date
of the grant the contractual life of an option is 3  10 years awards under the scheme are generally reserved for franchisees who have met operational
performance criteria in the year prior to the award and currently there are 24 franchisees participating
options granted under the franchisee share option scheme are exercisable on the third anniversary of the date of grant subject to the condition that the
growth in the companys earnings per share exceeds the increase in the index of retail prices from the date of grant by more than 3 pa
additionally exercise of an option is subject to a continued franchisee relationship with settlement in the form of shares
long term incentive plan ltip
following a decision by the remuneration committee an ltip was introduced in 2004 as a more effective means of incentivising the companys senior
management than the executive share option scheme under the ltip the remuneration committee can grant options over shares in the company to
employees of the company with a contractual life of an option being 3  10 years
58   business post group plc notes to the financial statements
awards may be exercised determined primarily by reference to the companys total shareholder return tsr performance over a period of 3 years
under this condition the companys tsr is measured against the tsr of all the other companies in the support services sector listed in the ftse all
share index at the start of the financial year in which an award is granted over a period of 3 financial years the proportion of the award which may be
exercised depends upon the ranking of the companys tsr whereby 10 of shares may be exercised if the company achieves median ranking rising
prorata to 100 if the companys ranking falls within the top 10 no shares are exercisable if the companys ranking is below the median
the exercise of awards is also subject to the condition that the growth in the companys earnings per share shall exceed the increase in the index of retail
prices from the date of grant by more than 3 pa
additionally exercise of an option is subject to continued employment with settlement in the form of shares
share matching plan smp
in 2004 the remuneration committee introduced a smp  designed to further align the interests of certain invited executives to longterm shareholders
under the rules selected executives may be invited to invest a proportion of their cash bonus in the acquisition of company shares up to 25 of their
pretax salary where such an investment is made the executives will receive a grant of a matching award over shares in the company with an equivalent
value which may be exercised between 36 and 42 months following the date of grant
the proportion of the award which may be exercised depends upon the growth in the companys earnings per share and is subject to a minimum growth of
4 pa above the index of retail prices “rpi” over the three year performance period one third of the award may be exercised if growth is in excess of
rpi growth by 12 over the period two thirds if growth is in excess by between 12 and 15 and in full if growth exceeds rpi growth by 18 over the
period the awards lapse if the minimum condition is not achieved at the end of the three year performance period
exercise of an option is subject to continued employment with settlement in the form of shares
phantom share option bonus scheme
the company has offered a phantom share option bonus scheme to bill cockburn to incentivise him in the growth of uk mail the bonus payable is
determined primarily by reference to the profit of uk mail ltd in its third full financial year of trading ie year ending 31 march 2008
under the rules where profit is between £4 million and £10 million there will be a 40 to 100 prorata entitlement to the bonus with no payment
where profits are lower than £4 million the maximum bonus entitlement will be the higher of £400000 or a bonus calculated by reference to a notional
holding of 200000 ordinary shares in the company acquired at the average middle market price in the five dealing days immediately preceding 12
march 2002 and valued at the average middle market price in the five dealing days immediately following the announcement of the companys financial
results for the year ended 31 march 2008
exercise of an option is subject to continued employment save for termination either by the company or due to ill health incapacity or death settlement is
in the form of cash
calculation of fair values
for equitysettled sharebased transactions fair values of share options awarded in the financial year are measured at the date of grant of the option using
a share pricing option model where the model is dependent on the companys tsr over a period the monte carlo model is used in all other
circumstances the blackscholes model is used nonmarket conditions such as the company meeting earnings per share targets are not incorporated
into the calculation of fair value at the grant date but are reflected in the amount of compensation expense accrued over the vesting period the expected
life of options depends on the behaviour of option holders which is incorporated into the option model consistent with historic observable data
for cashsettled sharebased transactions fair values of share options awarded in the financial year are measured at each balance sheet date at the fair
value of the liability with all changes immediately recognised in the income statement nonmarket conditions such as the company meeting earnings
targets are not incorporated into the calculation of fair value at the grant date but are reflected in the amount of compensation expense accrued over the
vesting period the expected life of options is determined by reference to the contractual terms
report  accounts 59 notes to the financial statements
the fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitations of the optionpricing model used the
significant assumptions used to estimate the fair value of the options granted in the financial year are as follows
franchisee
share
option saye saye ltip
grant date 200505 270605 270605 240505
share price at grant date £575 £632 £632 £593
exercise price £575 £496 £496 
number of franchiseesemployees 19 183 32 167
number of shares granted 30434 110372 27917 369362
vesting period years 3353
expected volatility 201 201 318 201
option life years 10 3 5 10
expected life years 3353
riskfree interest rate 43 41 41 42
expected dividends expressed as a dividend yield 33 30 30 32
possibility of ceasing employment before vesting 330 450 450 409
expectations of meeting performance criteria na na na 532
fair value per option £147 £161 £213 £147
the riskfree rate was determined from the uk gilts zerocoupon yield curve the expected volatility is estimated by considering the companys historic
average share price volatility over similar periods to the expected life of the option under consideration in addition the expected dividend yield was based
at the prevailing rates at each of the grants a reconciliation of option movements over the year to 31 march 2006 is shown below
2006 2006 2005 2005
weighted weighted
average average
exercise exercise
number price number price
outstanding as at 1 april 3169968 £351 3306181 £377
granted 538085 £160 698443 £209
lapsed 998089 £279 208305 £399
exercised 607196 £399 626351 £314
outstanding as at 31 march 2102768 £322 3169968 £351
exercisable at 31 march 229506 £389 88242 £261
options are exercisable as follows 2006 2005
weighted weighted weighted weighted
average average average average
weighted remaining remaining weighted remaining remaining
average life life average life life
range of exercise number expected contracted exercise number expected contracted
exercise prices price of shares years years price of shares years years
£000  £099  528475 27 89  349855 29 95
£100  £199 £170 8536 05 03 £170 28187  13
£200  £299   £210 329079 24 57
£300  £399 £388 262763 13 34 £383 499783 19 48
£400  £499 £438 1276473 08 68 £431 1963064 15 80
£500  £599 £575 26521 26 91   
the weighted average share price during the year for options exercised was £618 2005 £575 the total credit for the year relating to employee share
based payments was £06m 2005 charge £10m £05m of which related to equitysettled sharebased payment transactions and £01m to cashsettled 
sharebased transactions after deferred tax the net credit was £04m 2005  £07m
60   business post group plc notes to the financial statements
27 reconciliation of profit to net cash flow from operating activities
included within the net cash inflow from operating activities are the following working capital cashflows 
group company
2006 2005 2006 2005
£m £m £m £m
profit for the year 37 137 150 121
taxation 13 59  
interest payable 08 07  
interest receivable 04 04  
exceptional items 67   
depreciation and amortisation 51 45  
increase in inventories  01  
increase in trade and other receivables 91 93 155 77
increase in trade and other payables 80 55 81 19
increase in provisions 11 01  
net cash flow from operating activities 172 206 76 63
28 derivatives and other financial instruments
short term debtors and creditors
short term debtors and creditors have been excluded
interest rate risk profile of financial liabilities
the interest rate risk profile of the groups financial liabilities at 31 march 2006 after taking account of the interest rate cap used to manage the interest
profile was
2006 2005
floating floating
rate rate
book value financial book value financial
total liabilities total liabilities
£m £m £m £m
term loan 80 80 90 90
bank overdraft 04 04 
finance leases 12 12 
96 96 90 90
the interest rate on the term loan is based on a floating rate linked to the london inter bank offer rate libor a separate interest rate cap exists to
reduce exposure to fluctuations in the libor rate ensuring that the interest exposure is capped at 60 the loan has been disclosed as a floating rate
financial liability as the interest cap has not been breached the interest rate on the overdraft is based on a floating rate linked to the bank of england rate
all financial liabilities are sterling denominated
all the groups creditors falling due within one year other than bank and other borrowings are excluded from the above table either due to the exclusion
of short term items or because they do not meet the definition of a financial liability such as tax balances
report  accounts 61 notes to the financial statements
maturity profile of financial assets
the maturity profile of the carrying amount of the groups noncurrent financial assets at the end of the year was as follows
2006 2005
floating floating
rate rate
£m £m
between one and two years 04 15
between two and five years  10
after five years  08
04 33
financial assets comprise loans to franchises the interest rate is fixed within the loan agreement debtors due within one year are excluded from the above
table as they are of a short term nature 
maturity profile of financial liabilities
the maturity profile of the carrying amount of the groups noncurrent financial liabilities at the end of the year was as follows
2006 2005
other financial other financial
group debt liabilities total group debt liabilities total
£m £m £m £m £m £m
between one and two years 10 02 12 10 02 12
between two and five years 30 06 36 30 01 31
after five years 30 05 35 40 01 41
70 13 83 80 04 84
other financial liabilities comprise finance leases note 20 and provisions note 22 creditors due within one year are excluded from the above table as they
are of a short term nature
borrowing facilities
the group has undrawn borrowing facilities of £10m 2005 £10m these facilities are in place until 31 december 2006
fair value of financial assets and liabilities
the following table provides a comparison by category of the carrying amounts and fair values of the groups financial assets and liabilities 31 march 2006
and 2005 fair value is the amount at which a financial instrument could be exchanged in an arms length transaction between informed and willing parties
other than a forced or liquidation sale and excludes accrued interest where available market values have been used to determine fair values where market
values are not available fair values have been calculated by discounting expected cash flows at prevailing interest rates set out below is a summary of the
methods and assumptions used for each category of financial instrument
2006 2005
book value fair value book value fair value
£m £m £m £m
primary financial instrument held or issued to
finance the groups operations
short term borrowings 14 14 10 10
long term borrowings 70 70 80 80
finance leases 12 12 
cash at bank and in hand  34 34
interest earning long term debtors 04 04 33 33
derivative financial instrument held to manage the
interest rate profile
interest rate cap  01 01
62   business post group plc notes to the financial statements
an interest rate cap agreement expiring on 31 july 2008 with interest capped at 6 was taken out during 2004 to minimise exposure to increases in the
floating rate of interest on the term loan note 20
summary of methods and assumptions
interest rate cap fair value is based on the market price of comparable instruments at the balance sheet date
long term borrowings the fair value of the bank loan approximates to the value reported in the balance sheet since it 
carries a floating rate where payments are reset to market rates at intervals less than one year
finance leases fair value is based by discounting the cash flows at prevailing interest rates
hedges
as explained in the financial review section of the report and accounts entitled exposure to financial risk the groups policy is to hedge the interest
rate risk through using an interest rate cap
there are no unrecognised gains or losses arising from the above hedge which have not been charged to the income statement during the year
financial instruments held for trading purposes
the group does not trade in financial instruments
currency analysis of monetary net assets
the only monetary assets or liabilities that are denominated in a foreign currency are euro bank account balances of £05m 2005 £06m
29 operating lease commitments  minimum lease payments
group group
2006 2005
vehicles vehicles
land and plant and land and plant and
buildings equipment buldings equipment
£m £m £m £m
commitments under noncancellable operating leases expiring
within one year 32 60 23 56
later than one year and less than five years 87 88 63 64
after five years 56  43 
at 31 march 2006 175 148 129 120
the group leases various properties under noncancellable operating lease agreements the leases have various terms escalation clauses and renewal
rights the group also leases vehicles and office equipment under noncancellable operating lease agreements
the company had no operating lease commitments during the year 2005 nil
30 contingent liabilities
the company has guaranteed bank and other borrowings of subsidiary undertakings in a crossguarantee agreement on an undrawn group borrowing facility
amounting to £10m 2005 £10m
31 capital and other financial commitments
group
2006 2005
£m £m
contracts placed for future capital expenditure not provided in the financial statements 04 04
report  accounts 63 notes to the financial statements
32 analysis of net debt
group
at 1 april at 1 april at 31 march
2004 cash flow other 2005 cash flow other 2006
£m £m £m £m £m £m £m
cash at bank and in hand 46 12  34 34  
bank overdrafts 02 02   04  04
44 10  34 38  04
debt due within one year 10 10 10 10 10 10 10
debt due after one year 90  10 80  10 70
finance leases      12 12
100 10  90 10 12 92
net debt 56   56 28 12 96
company
at 1 april at 1 april at 31 march
2004 cash flow other 2005 cash flow other 2006
£m £m £m £m £m £m £m
cash at bank and in hand 28 27  01 39 38 
bank overdrafts      38 38
28 27  01 39  38
debt due within one year 10 10 10 10 10 10 10
debt due after one year 90  10 80  10 70
100 10  90 10  80
net debt 72 17  89 29  118
33 related party transactions
p kane a director of the company and members of his close family and certain family trusts the beneficiaries of which are persons connected with p kane
control directly and indirectly 459 of the issued share capital of the company in addition his brother m kane controls a further 128 of the issued share
capital of the company
key management compensation is disclosed in note 6
during the year the company carried out the following transactions with other group companies
2006 2005
£m £m
dividend income 149 128
the balances outstanding at 31 march 2006 between the company and other group companies were as follows
2006 2005
£m £m
current
amounts due from subsidiary undertakings 581 425
amounts owed to subsidiary undertakings 102 21
34 post balance sheet events
following the year end a further five of the groups underperforming franchise sites have been converted to corporate ownership
the directors are proposing a final dividend in respect of the financial year ending 31 march 2006 of 108p per share which if approved will be paid on 
20 july 2006 to shareholders on the register of members on 30 june 2006
64   business post group plc notes to the financial statements
35 principal subsidiaries
the company has the following principal wholly owned trading subsidiaries all operating within the united kingdom
percentage of
nominal value
of ordinary
country of shares held by
subsidiary nature of business incorporation the group
business post ltd parcel and express mail collection and delivery services england 100
bxt limited technical courier services england 100
uk mail ltd collection and delivery of business mail england 100
uk pallets ltd collection and delivery services for palletised goods england 100
the company holds 100 of the voting rights of each of the above subsidiaries
the financial results of all of the subsidiaries listed above are included within the consolidated report and accounts
36 transition to ifrs
the group adopted ifrs on 1 april 2004 with the exception of ias 32 and ias 39 which were adopted on 1 april 2005 this note sets out the impact of ifrs
on the financial statements
group
consolidated income statement year ended 31 march 2005
effect of 
transition
transition uk gaap to ifrs ifrs
notes £m £m £m
revenue 2333  2333
cost of sales 1847  1847
gross profit 486  486
administrative expenses 12 283 04 287
operating profit 203 04 199
net interest payable 03  03
profit before taxation 200 04 196
tax on profit on ordinary activities 24 62 03 59
profit for the year 138 01 137
basic earnings per share 257p 256p
diluted earnings per share 253p 252p
report  accounts 65 notes to the financial statements
consolidated balance sheet
as at 31 march 2005
effect of
transition
transition uk gaap to ifrs ifrs
notes £m £m £m
assets
noncurrent assets
goodwill 1 90 05 95
intangible assets 5  06 06
investment properties 5  11 11
property plant and equipment 5 348 17 331
trade and other receivables 33  33
deferred tax assets 24  18 18
471 23 494
current assets
inventories 5  02 02
trade and other receivables 5 474 02 472
cash and cash equivalents 34  34
508  508
liabilities
current liabilities
borrowings 10  10
trade and other payables 3 307 69 238
current tax liabilities 28  28
provisions 5  01 01
345 68 277
net current assets 163 68 231
noncurrent liabilities
borrowings 80  80
deferred tax liabilities 14  14
provisions 5 05 01 04
99 01 98
net assets 535 92 627
shareholders funds
share capital 54  54
share premium 122  122
retained earnings 1234 359 92 451
535 92 627
66   business post group plc notes to the financial statements
consolidated balance sheet at 1 april 2004
date of transition to ifrs at 1 april 2004
effect of 
transition
transition uk gaap to ifrs ifrs
notes £m £m £m
assets
noncurrent assets
goodwill 1 108  108
intangible assets 5  05 05
investment properties 5  12 12
property plant and equipment 5 327 17 310
trade and other receivables 48  48
deferred tax assets 24  05 05
483 05 488
current assets
inventories 5  01 01
trade and other receivables 5 374 01 373
cash and cash equivalents 46  46
420  420
liabilities
current liabilities
borrowings 10  10
trade and other payables 3 268 64 204
current tax liabilities 28  28
provisions 5  01 01
306 63 243
net current assets 114 63 177
noncurrent liabilities
borrowings 90  90
deferred tax liabilities 12  12
provisions 5 04 01 03
106 01 105
net assets 491 69 560
shareholders funds
share capital 53  53
share premium 103  103
retained earnings 1234 335 69 404
491 69 560
report  accounts 67 notes to the financial statements
consolidated cash flow statement
year ended 31 march 2005
effect of
transition
uk gaap to ifrs ifrs
£m £m £m
operating activities
operating profit 203 04 199
depreciation of property plant and equipment 45 02 43
amortisation of goodwill 05 05 
amortisation of intangibles  02 02
interest received 04  04
interest paid 07  07
taxation paid 61  61
other non cash items  09 09
changes in working capital excluding the effects of
acquisitions and disposal of subsidiaries
increase in inventories  01 01
increase in receivables 94 01 93
increase in payables 55  55
increase in provisions 01  01
net cash inflow from operating activities 151  151
investing activities
purchase of subsidiary undertakings 06  06
proceeds from disposal of property plant and equipment 01  01
purchase of property plant and equipment 67 03 64
purchase of intangible assets  03 03
net cash outflow from investing activities 60  60
financing activities
equity dividends paid 99  99
issue of share capital 20  20
purchase of business post shares by the esot 12  12
repayment of borrowings 10  10
net cash outflow from financing activities 101  101
net decrease in cash and cash equivalents 10  10
cash and cash equivalents at beginning of period 44  44
cash and cash equivalents at end of period 34  34
68   business post group plc notes to the financial statements
company
company balance sheet
at 31 march 2005
effect of
transition transition
notes uk gaap to ifrs ifrs
£m £m £m
assets
noncurrent assets
investments 117  117
deferred tax assets 24  18 18
117 18 135
current assets
trade and other receivables 3 575 149 426
cash and cash equivalents 01  01
576 149 427
liabilities
current liabilities
borrowings 10  10
trade and other payables 3 91 69 22
current tax liabilities 03  03
104 69 35
net current assets 472 80 392
noncurrent liabilities
borrowings 80  80
80 00 80
net assets 509 62 447
shareholders’ funds
share capital 54  54
share premium 122  122
retained earnings 234 333 62 271
509 62 447
report  accounts 69 notes to the financial statements
company balance sheet at april 2004
date of transition to ifrs
at 31 april 2004
effect of
transition transition
notes uk gaap to ifrs ifrs
£m £m £m
assets
noncurrent assets
investments 139 22 117
deferred tax assets 24  05 05
139 17 122
current assets
trade and other receivables 3 492 141 351
cash and cash equivalents 28  28
520 141 379
liabilities
current liabilities
borrowings 10  10
trade and other payables 3 88 85 03
98 85 13
net current assets 422 56 366
noncurrent liabilities
borrowings 90  90
90  90
net assets 471 73 398
shareholders’ funds
share capital 53  53
share premium 103  103
retained earnings 234 315 73 242
471 73 398
70   business post group plc notes to the financial statements
company cash flow statement
year ended 31 march 2005
effect of
transition transition
notes uk gaap to ifrs ifrs
£m £m £m
operating activities
operating profit 130 09 121
interest paid 05  05
other non cash flow items 01 09 10
changes in working capital excluding the effects of acquisitions and disposal
of subsidiaries
increase in receivables 77  77
increase in payables 19  19
net cash inflow from operating activities 68  68
investing activities
purchase of subsidiary undertakings 06  06
net cash outflow from investing activities 06  06
financing activities
equity dividends paid 99  99
issue of share capital 20  20
purchase of business post shares by the esot 12  12
repayment of borrowings 10  10
net cash outflow from financing activities 101  101
net decrease in cash and cash equivalents 27  27
cash and cash equivalents at beginning of period 28  28
cash and cash equivalents at end of period 01  01
uk gaap required cash flows to be presented under seven different headings whereas ias 7 ‘cash flow statements’ requires cash flows to be presented
under three headings cash flows from operating investing and financing activities consequently there are a number of reclassifications there are no
material differences between the cash flow statement presented under ifrs and the cash flow statement presented under uk gaap 
report  accounts 71 notes to the financial statements
notes to the ifrs adjustments
key income statement and balance sheet adjustments
1 business combinations
goodwill is not amortised under ifrs 3 business combinations but is subject to an annual impairment review
the company has applied the exemption within ifrs 1 firsttime adoption of international financial reporting standards not to restate its business
combinations prior to the transition date consequently under ifrs goodwill written of to reserves prior to the transition date has not been reinstated
2 sharebased payments
uk gaap required that there was no charge to the income statement for share options where the exercise price was equal to the market price at the grant
date or for employee sharesave schemes in accordance with ifrs 2 sharebased payments all sharebased payments including share option costs are
recognised as an expense over the vesting period
as encouraged by the ifrs transitional provisions ifrs 2 has been applied to all grants of equity instruments issued that had not fully vested at transitional
date rather than only those granted after 7 november 2002 the fair values of awards granted prior to 7 november 2002 were published on the business
post website on 16 may 2005
for the year ended 31 march 2005 application of ifrs 2 results in a pretax charge to the income statement of £09m the pretax effect is offset by a
deferred tax credit of £03m and thus the net effect on posttax profit for the year ended 31 march 2005 is £06m deferred tax is calculated on the basis
of the difference between the market price at the balance sheet date and the option exercise price the excess of the deferred tax over the cumulative
income statement charge is recognised in equity for the year ended 31 march 2005 this amounted to a credit of £10m to retained earnings the deferred
tax asset recognised as at 31 march 2004 and 31 march 2005 relating to the share option schemes is £05m and £18m respectively
3 dividends
ifrs requires dividends to be recognised within equity in the period in which they are approved under uk gaap dividends were recognised within the
income statement in the period in which they were declared
4 deferred taxation
uk gaap required deferred taxation to be recognised on timing differences whereas ifrs requires that deferred taxation is provided on all temporary
differences including the revaluation of nonmonetary assets to the extent that a tax charge is foreseeable
under uk gaap  deferred tax assets and liabilities were shown on a net basis ifrs requires separate disclosure of deferred tax assets and liabilities
consequently an additional £18m deferred tax asset as calculated on the difference in the market price of a business post group share at the balance
sheet date and the option exercise price following the application of ifrs 2 sharebased payments has been included within noncurrent assets as at 31
march 2005
5 balance sheet reallocations and other
ifrs significantly widens the definition of investment properties investment properties previously disclosed within property plant and equipment has now
been separately reclassified the net book value of investment properties reclassified was £12m at 1 april 2004 and £11m at 31 march 2005
under uk gaap capitalised computer software was included within property plant and equipment in accordance with ifrs capitalised software not
integral to plant and equipment is classified as an intangible asset the net book value of computer software reclassified as intangible assets was £05m
at 1 april 2004 and £06m at 31 march 2005
under uk gaap  group provisions were not disclosed according to their expected usage date ifrs requires that provisions should be classified into current
liabilities and noncurrent liabilities as a result £01m of provisions have been reclassified as current liabilities in the consolidated balance sheet as at 1
april 2004 and 31 march 2005
inventories previously disclosed within other debtors and prepayments have been reclassified
72   business post group plc five year summary of results
ifrs ifrs uk gaap uk gaap uk gaap
2006 2005 2004 2003 2002
notes £m £m £m £m £m
revenue 2782 2333 1927 1563 1317
cost of sales 2313 1847 1496 1221 1001
gross profit 469 486 431 342 316
administrative expenses a b 415 287 244 186 170
operating profit 54 199 187 156 146
net interest payable 04 03  05 05
profit before taxation 50 196 187 161 151
taxation a 13 59 61 49 45
profit for the financial year 37 137 126 112 106
earnings per share  basic 69p 256p 238p 212p 200p
dividends per share c 192p 185p 180p 169p 160p
the calculation of earnings per share for the five years ended 31 march 2006 is based on the following weighted numbers of shares in issue
31 march 2006 53962493
31 march 2005 53586502
31 march 2004 53155846
31 march 2003 53048564
31 march 2002 53012798
notes
the table above presents the results of the group under ifrs for the years ended 31 march 2006 and 31 march 2005 the results for the three years ended 31
march 2004 have not been restated from uk gaap existing at that time to ifrs in order to comply with ifrs we believe that the principal adjustments that would
be required to restate uk gaap results to ifrs are
a under ifrs the costs of all sharebased payments including employee sharesave schemes are recognised whereas under uk gaap  only awards granted at a
discount to the market were recognised with sharesave specifically exempted additionally the recognition of an accounting sharebased payment cost under ifrs
necessitates the recognition of an associated deferred taxation asset which is charged to the income statement or where applicable directly to equity
b under ifrs goodwill is not amortised but is subject to an annual impairment review the company has applied the exemption not to restate its business
combinations prior to the transition date and consequently goodwill previously written off to reserves has not been reinstated
c under ifrs dividends payable are recognised in the period in which they are approved rather than the period in which they were declared as was required
under uk gaap  as a result the above table includes the 1205p final dividend in respect of the year ended 31 march 2004 in both the year ended 31 march 2004
uk gaap figures and the year ended 31 march 2005 ifrs figures
report  accounts 73 notice of meeting
notice is hereby given that the annual general meeting of business post group plc will be held at arbuthnot house 20 ropemaker street london ec2y 9ar at
12 noon on 11 july 2006 for the following purposes 
ordinary business
1 to receive the directors’ report and the accounts for the year ended 31 march 2006 resolution 1
2 to declare a final dividend of 108p net per ordinary share for the year ended 31 march 2006 payable to 
shareholders on 20 july 2006 who are on the register on 30 june 2006 resolution 2
3 to approve the remuneration report of the directors resolution 3
4 to reelect dennis clark as a director resolution 4
5 to reelect peter kane as a director resolution 5
6 to elect steven glew as a director resolution 6
7 to reappoint the auditors pricewaterhousecoopers llp  and to authorise the directors to determine the auditors’ remuneration resolution 7
special business
to consider and if thought fit to pass the following resolutions which will be proposed as to resolutions 8 11 and 12 as ordinary resolutions and as to resolutions
9 and 10 as special resolutions 
8 that 
81 the directors be and they are hereby generally and unconditionally authorised for the purposes of section 80 of the companies act 1985 “the act” to
exercise all the powers of the company to allot relevant securities within the meaning of section 802 of the act up to a maximum aggregate nominal
amount of £1546701 provided that this authority shall unless previously revoked or varied by the company in general meeting expire at the conclusion
of the next annual general meeting of the company after the passing of this resolution save that the company may before such expiry make an offer or
agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities in  pursuance
of such an offer or agreement as if the authority conferred hereby had not expired and 
82 the authority hereby conferred upon the directors replaces the authority conferred upon the directors pursuant to the resolution passed by shareholders of
the company on 12 july 2005 provided that such replacement shall not have retrospective effect 
resolution 8
9 that 
91 the directors be and they are hereby empowered to allot equity securities within the meaning of section 94 of the companies act 1985 “the act”
wholly for cash pursuant to the authority conferred on the directors by resolution 8 contained in the notice of the annual general meeting of the
company of which this resolution forms part as if subsection 1 of section 89 of the act did not apply to any such allotment provided that this power
shall be limited to 
911 the allotment of equity securities in connection with a rights issue open offer or otherwise in favour of ordinary shareholders where the equity
securities respectively attributable to the interests of all ordinary shareholders are proportionate as nearly as may be to the respective number of
ordinary shares held by them and for the purposes of this resolution “rights issue” means an offer of equity securities open for acceptance for a
period fixed by the directors to 
a holders on the register on a fixed record date of ordinary shares in proportion to their respective holdings and 
b holders on the register on a fixed record date of other equity securities to the extent expressly required or if considered appropriate by the
directors permitted by the rights attached thereto 
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or
legal or practical problems under the laws of or the requirements of any regulatory body or any stock exchange or otherwise in any territory and
912 the allotment otherwise than pursuant to paragraph 911 above of equity securities up to an aggregate nominal value of £272664 
and shall unless previously revoked or varied by the company in general meeting expire on the earlier of 11 october 2007 or the conclusion of the
next annual general meeting of the company after the passing of this resolution save that the company may before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance
of such offer or agreement as if the power conferred hereby had not expired and 
92 all authorities conferred under section 95 of the companies act 1985 prior to the date of this annual general meeting be and they are hereby revoked
provided that such revocation shall not have retrospective effect 
resolution 9
74   business post group plc notice of meeting
10 that pursuant to article 9 of the company’s articles of association and section 166 of the companies act 1985 the company be and is hereby authorised
to make market purchases of ordinary shares of 10p each in the capital of the company provided that 
101 the maximum number of ordinary shares hereby authorised to be purchased is 5453298 
102 the minimum price which may be paid for each ordinary share is 10 pence per ordinary share which amount shall be exclusive of expenses 
103 the maximum price which may be paid for each ordinary share is in respect of an ordinary share contracted to be purchased on any day an amount
exclusive of expenses equal to 105 of the average of the midmarket quotations for an ordinary share of the company as derived from the daily official
list of the london stock exchange for the five business days immediately preceding the day on which the ordinary share is contracted to be purchased 
104 the authority hereby conferred shall expire on the earlier of 11 october 2007 or the conclusion of the next annual general meeting of the company
after the date of passing this resolution unless such authority is renewed prior to such time and 
105 the company may conclude a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will
or may be exercised wholly or partly after the expiry of such authority and may make a purchase of ordinary shares in pursuance of any such contract
as if the authority hereby conferred had not expired 
resolution 10
11 that the directors are hereby authorised to amend the rules of the business post group plc long term incentive plan the “ltip” as summarised in the 
directors’ report for the year ended 31 march 2006
resolution 11
12 that the proposed long term appointment incentive awards to two senior executives of the company as summarised in the directors’ report for the year
ended 31 march 2006 be approved 
resolution 12
by order of the board 
peter fitzwilliam 
company secretary 
31 may 2006 
report  accounts 75 notice of meeting
notes 
1 this document is important and requires your immediate attention if you are in any doubt as to the action you should take you should consult
your stockbroker bank manager solicitor accountant or other professional adviser authorised under the financial services and markets act 2000 immediately
2 if you have sold or transferred all your ordinary shares in business post group plc please send this document and the enclosed form of proxy to the stockbroker
or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee
3 explanatory statements relating to special business of the annual general meeting are contained in the directors’ report under the headings annual general
meeting  special business and share incentive arrangements
4 a member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend and on a poll to vote instead of him
such proxy or proxies need not be a member of the company 
5 a form of proxy is provided to be effective a form of proxy must be completed signed and together with the original or a notarially certified copy of any
power of attorney or other authority under which it is executed lodged at the company’s registrars computershare investor services plc po box 82 
the pavilions bridgwater road bristol bs99 7nh not later than 48 hours before the time of the meeting depositing a completed form of proxy will not
preclude a member from attending the meeting and voting in person 
6 there will be available for inspection at the registered office of the company on any weekday except saturday during normal business hours from the date
of this notice until the day of the annual general meeting and at the place of the annual general meeting for a period of 15 minutes prior to and during the
annual general meeting copies of contracts of service between directors and the company and the register of directors’ interests in shares of the company
kept in accordance with section 325 of the act 
7 the rules of the ltip as it is proposed will be amended under resolution 11 and the terms of the long term appointment incentive awards proposed to be
granted pursuant to resolution 12 will be available for inspection at the offices of new bridge street consultants llp  20 little britain london ec1a 7dh during
normal business hours on any weekday excluding saturdays sundays and english public holidays from the date of this notice up to and including the date
of the annual general meeting and at the place of the meeting for at least 15 minutes prior to the meeting until its conclusion
8 the company pursuant to regulation 41 of the uncertified securities regulations 2001 specifies that only those shareholders registered in the register of
members of the company as at 1200 pm on 9 july 2006 shall be entitled to attend and vote at the aforesaid general meeting in respect of the number of
shares registered in their name at that time changes to entries on the relevant register of securities after 1200 pm on 9 july 2006 shall be disregarded in
determining the right of any person to attend or vote at the meeting 
76   business post group plc 28 june 2006 shares become ex dividend
30 june 2006 record date for dividend
11 july 2006 annual general meeting
20 july 2006 payment of final dividend for the year ended 31 march 2006
november 2006 announcement of interim results and interim dividend for the year ending 31 march 2007
january 2007 payment of interim dividend for the year ending 31 march 2007
financial calendar
operations
express house
wolseley drive
heartlands
birmingham  b8 2sq
tel 0121 335 1111
fax 0121 335 1160
wwwbusinesspostbiz
finance
express house
464 berkshire avenue
slough 
berkshire  sl1 4pl
tel 01753 706070
fax 01753 706071
wwwbusinesspostbiz
company number
02800218
head offices
report  accounts 77  designed and produced by business post marketing
portrait photography by so photo
operational photography by harvest studios
wwwbusinesspostbiz
08451 552 552 


Summary:
 the board remains confident of the
group’s long term potential prospects for
mail services remain excellent
chairman’s statement
excellent progress has been made in uk mail and
specialist services during the period  however it has
been a very challenging year within parcel services
particularly in the second half  
results
revenue increased by 19 to £2782m 2005 £2333m
uk mail contributed £302m of the total revenue increase 
of £449m    
operating profit before exceptional items reduced to £121m
2005 £199m reflecting a decline in profitability levels
within parcel services but benefiting from the reversal of
ifrs charges for sharebased incentives operating profit
totalled £54m 2005 £199m  after net interest payable of
£04m 2005 £03m profit before tax and exceptional items
was £117m 2005 £196m  after exceptional items pretax
profit totalled £50m 2005 £196m  
dividends
the board remains confident of the group’s long term
potential and the prospects for recovery accordingly
following payment of an unchanged interim dividend of 64p
the board proposes a final dividend of 108p 2005 128p
the final dividend will be payable on 20 july to shareholders
on the register at the close of business on 30 june 2006
business
both the progressive decline in revenue growth during the
year and the markedly lower profitability within parcel services
can be attributed in large part to the impact of a number of
unsuccessful profitimprovement initiatives introduced during
the year  under the new leadership of guy buswell a
comprehensive performance improvement plan has been
developed and is being rigorously implemented encouraging
early progress has been made particularly in improving
customer service levels but it will take time for the full benefit
of these actions to show through in the group results 
uk mail enjoyed another excellent year increasing revenue
fourfold and making an operating profit contribution of £32m
prospects for mail services remain excellent
specialist services made good progress increasing revenue
by 18 and operating profit before exceptional items by 21
rewarding both expanded sales activity and focus on margins
management
we announced at the beginning of december the
appointment of guy buswell formerly managing director of
uk mail as chief executive following the resignation of paul
carvell  since his appointment guy has made a number of
significant changes to the management team designed to
streamline the management of the group’s activities and
provide greater focus on those areas requiring margin
improvement  
we also announced on 23 may 2006 that after more than
seven years as group finance director peter fitzwilliam will
step down from the board on 2 june 2006  peter has made
a substantial contribution to the group including assisting
most recently in the current performance improvement
strategy  we are grateful for all he has done and wish him
the very best with his future plans
peter will be succeeded by steven glew with effect from 5
june 2006  steven has an excellent record of delivering
successful change programmes within quoted companies
most notably mothercare plc and booker plc and we are
delighted to welcome him to the board
strategy
the group’s strategy remains to focus on three areas of
business – parcel services mail services and specialist
services  the business model of parcel services is sound
and there is significant scope for recovery  the opportunities
for uk mail operating through the group’s core network
remain particularly exciting and the board believes that the
group can maintain its position as the leading competitor to
royal mail for the foreseeable future  the businesses within
specialist services operate outside the core network and
continue to offer attractive growth opportunities on a stand
alone basis
as previously stated the board believes that the group
contains the elements necessary for substantial profitable
growth 
prospects
service levels remain high and the number of customers
following a period of decline during the year is now on an
upward trend  encouraging progress is being made in
tackling the issues within the franchise network and
initiatives to rebalance the mix of customers and reduce unit
costs within parcel services are in the process of being
implemented  the board is confident that these will address
the major underlying issues affecting profitability but by their
nature will take time to show through in the financial results
for the group the board expects progress in the underlying
results in the coming year albeit weighted to the second half
peter kane
chairman
04