In line with our approach to strategy development, the Board carried out a detailed review of the Group’s strategy during the year, with valuable participation of representatives from the Departments of Communications, Climate Change and Natural Resources, Public Expenditure and Reform and NewERA.
The Government published its Energy White paper “Ireland’s Transition to a Low Carbon Energy Future 2015 – 2030” in December 2015. This set out a vision and framework to guide energy policy. Bord na Móna’s Strategy is fully consistent with that policy and we look forward to being major contributors to the fulfilment of the country’s medium term needs for renewable energy.
We signalled one of the biggest changes of use involving Irish land in modern history. 60,000 hectares of peatlands that are now being used to provide energy peat to three power stations will transition to new uses by 2030. After 2030, the Company will no longer harvest peat for energy and will have completed its move to new sustainable businesses, located across our landholding.
Following lengthy negotiations the Company has reached agreement with our employees on a new collective agreement that covers pay up to 2019 and new working methods necessary to secure employment in the changing regulatory and operating environment facing our businesses. I would like to thank the Workplace Relations Commission and the Labour Court for the assistance they gave the parties in reaching this agreement.
I am glad to confirm that all Bord na Móna pension schemes have funding plans in place, which are subject to regular reviews in accordance with the provisions of the Pensions Acts.
The Group paid a dividend amounting to €10.1 million during the year, of which €9.6 million was paid to the State and €0.5 million was paid to the Employee Share Ownership Plan (ESOP).
Over the last ten years Bord na Móna has paid €67 million in dividends.
At time of writing, considerable uncertainty existed on the extension of Planning Permission for the Edenderry power plant. The plant is currently operating under a temporary High Court stay until 14 October 2016, pending a decision by An Bord Pleanála in respect of our application to extend planning permission for the plant until 2030. The delay in publishing the guidelines for wind farm development is also causing concern.
The Board has continued to focus on corporate governance, based on best practice, emerging regulation and trends. Significant progress was made towards the implementation of a comprehensive process for considering and reporting on the risks faced by the Group. The Board assesses all significant investments using rigorous methodologies to ensure we meet our responsibility to safeguard the Company’s assets. Details of the Group’s Risk Management process can be found here.
Over the last ten years Bord na Móna has paid €67 million in dividends
I am satisfied that the Group has an appropriate and responsive system of internal controls to mitigate significant risks, keep exposures at an acceptable level and ensure that Bord na Móna continues its effective approach to corporate governance.
During the year the Directors completed a process to evaluate Board performance and also assessed the skills mix of Board members. Recommendations for improvements are now being implemented. A comprehensive programme was put in place to brief and inform Directors, of all companies within the Group, of their responsibilities and obligations under the Companies Act 2014.
Colm Ó Gógáin stepped down as a Director in May 2016, following his retirement from the Company. I want to acknowledge the major contribution to Bord na Móna made by Colm during his term on the Board and as a long serving employee. In accordance with the Worker Participation (State Enterprises) Acts 1977 and 1988, Paschal Maher was appointed to the Board in May 2016. I am pleased to welcome Paschal back to the Board; he had previously served as a Director in 2014.
My sincere thanks are due to my Board colleagues for their commitment and support during the year.
I must also thank the Minister for Communications, Climate Change and Natural Resources, Denis Naughten TD, and his predecessor Alex White TD, Minister for Communications, Energy and Natural Resources. Mark Griffin, Secretary General and other officers of the Department deserve our thanks for their interest and advice.
Over the year the Company interacted on a regular basis on governance matters with the NewERA Division of the National Treasury Management Agency (NTMA) and the Department of Public Expenditure and Reform. I wish to thank Eileen Fitzpatrick and her colleagues in NewERA and the various officials in the Department for their support during the year.
This was the first full financial year for Mike Quinn, the Group’s Managing Director. He has implemented a restructuring of the businesses to bring better focus on the key strategically important initiatives. He has forged a redesigned management structure and is managing the Group with a rigorous monitoring and reporting system. I want to congratulate Mike and his team on their achievements and commitment to the Company over the year.
All our employees have been asked to commit to the delivery of our transformation plans for the future of the Group and they have responded positively. I want to thank everyone for their dedication and hard work in delivering another year of progress for the Group, despite the challenges that emerged. A survey of employee engagement showed a substantial improvement in morale and this is greatly welcomed.
The Board is determined to ensure a successful, vibrant and sustainable future for the Group which will enhance the interests of all our stakeholders and continue Bord na Móna’s significant economic, social and environmental contribution to Ireland.
30 June 2016