<p>Royal Mail Group Limited
Annual Report and Financial Statements
ail Group Lim
ited Annual Report and Financial Statem
Basis of presentation
Special purpose financial statements
As previously announced, Post Office Limited was transferred from under the ownership of
Royal Mail Group Limited to become a fellow subsidiary undertaking of Royal Mail Holdings plc
on 1 April 2012, one week into the 2012-13 reporting year. Accordingly, to enable comparative
analysis, special purpose consolidated financial statements for Royal Mail Group Limited
excluding Post Office Limited have been prepared for 2012-13, 2011-12 and 2010-11.
Adjusted 52 week basis
The 2012-13 financial year was a 53 week year and to provide meaningful comparisons,
revenue and operating costs are also presented on an adjusted 52 week basis.
The adjustment removes the 53rd week’s revenue and incremental costs associated with
General Logistics Systems (GLS) reports results for a 52 week year ending 31 March.
No adjustments have been made for GLS.
Like-for-like revenue and cost growth
In addition to the 52 week adjustment, the impact of translating GLS’s Euro results into
Sterling using different average exchange rates has also been eliminated to permit revenue
and cost growth rates to be calculated on a like-for-like basis.
The average rates for 2012-13 are £1 = €1.2262 compared with £1 = €1.1572 for 2011-12 –
a weakening in the Euro of six per cent. Had last year’s GLS revenue of €1,808 million
(reported as £1,562 million) been translated at the 2012-13 average rate, it would have been
reported as £1,474 million, or £88 million lower. The translational impact of foreign currency
on UKPIL’s revenue is some £2 million, which is not material and therefore has not been
included in the like-for-like calculations.
The transactional cash impact of foreign currency is not eliminated. There are natural hedges
in the Group to cover this exposure and the impact on operating profit is estimated as £