The Directors present their annual report and the audited financial statements of Bord na Móna plc
for the financial year ended 25 March 2015.

Principal Activities and Business Review

The Group supplies electricity generated from peat, wind, oil and biomass at its generating stations and supplies peat as a fuel to other electricity generating stations. The Group develops and operates wind farms and renewable energy projects. It also manufactures peat briquettes and horticultural products, supplies waste management services, provides environmental consultancy and commercial laboratory services and blends, bags and distributes coal products. Previously it manufactured wastewater treatment and odour emissions products.

The Chairman’s Statement on pages 4 to 7 and the Managing Director‘s Review on pages 8 to 11 contain a review of the development of the Group’s business during the year, the state of affairs of the businesses at 25 March 2015, recent events and likely future developments.

Results for the period


Profit for the financial year


Dividend paid


Profit retained for financial year


Details of the financial results of Bord na Móna plc for the financial year ended 25 March 2015 are given on pages 45 to 84.

A performance overview for the financial year ended 25 March 2015 including information on recent events are contained in the Chairman’s Statement on page 4 and the Managing Director’s Review on page 8.


Policy in Bord na Móna is determined by a twelve member Board appointed by the Minister for Communications, Energy and Natural Resources. Seven of the Directors are normally appointed for a term of five years. Four of the Directors are appointed for a term of four years, in accordance with the Worker Participation (State Enterprises) Acts 1977 and 1988. The Managing Director is appointed to the Board on appointment to that position. The names of the persons who were Directors as at 25 March 2015 are set out below.

John Horgan


Mike Quinn

Managing Director, appointed with effect from 2 January 2015

Philip Casey

appointed with effect from 1 January 2015

Denise Cronin

John Farrelly

appointed with effect from 17 June 2014

Kevin Healy

appointed with effect from 1 January 2015

Denis Leonard

appointed with effect from 17 June 2014

Seamus Maguire

appointed with effect from 1 January 2015

Gerard O’Donoghue

Colm Ó Gógáin

Term of office expired on 31 December 2014 and re−appointed with effect from 1 January 2015

Elaine Treacy

Barry Walsh

In addition the following were Directors during the period ended 25 March 2015:

Gabriel D’Arcy

Managing Director – resigned with effect from 1 October 2014

Paudge Bennett

Term of office expired on 31 December 2014

Paddy Fox

Term of office expired on 30 April 2014

Pat McEvoy

Term of office expired on 31 December 2014

Paschal Maher

Term of office expired on 31 December 2014

David Taylor

Term of office expired on 8 June 2014

Corporate Governance

As part of its commitment to quality the Group has continued to implement best practice in relation to the conduct of its business and in relation to financial and general reporting. The Group complies with the provisions of the Department of Finance’s “Code of Practice for the Governance of State Bodies” updated in 2009 (“the Code”). The Code sets out the governance framework agreed by Government for the internal management and the internal and external reporting relationships of Commercial State Bodies.

The Board

The Board is responsible for overseeing and directing the Bord na Móna Group and ensuring its long−term success. Decisions are made after appropriate information has been made available to Board members and with due consideration of the risks identified through the risk management process.

The Board has reserved a schedule of matters for its decision, including:

  • Approval of Group Strategy, Five Year Plan, Annual Budgets and interim and annual financial statements
  • Review of operational and financial performance
  • Approval of major capital expenditure
  • Review of the Groups’ system of financial control and risk management
  • Appointment of Managing Director
  • Appointment of the Company Secretary

The Board is provided with regular information on a timely basis which includes Key Performance Indicators for all areas of the business. Reports and papers are circulated to the Directors in preparation for Board and Committee meetings.

All members of the Board have access to the advice and services of the Company Secretary who is responsible to the Board for ensuring that Board procedures are complied with. The Group’s professional advisers are available for consultation by Directors as required. Individual directors may take independent professional advice in line with specified procedures.

Each Director received appropriate briefing on being appointed to the Board and access to training is provided by the Group during a Director’s term of office.

The Board completed a process for evaluating its performance during the period and a number of recommendations were noted and will be implemented in due course.

The Board and Management maintain an ongoing dialogue with stakeholders on strategic issues.

The Board considers that all Directors are independent in character and judgment. However the Board notes that the Managing Director and four Directors appointed in accordance with the Worker Participation (State Enterprises) Acts 1977 and 1988 have contracts of employment with Bord na Móna.

Remuneration of Directors

Fees for Directors are determined by the Government and set out in writing by the Minister for Communications, Energy and Natural Resources. Directors remuneration is outlined in note 4 to the financial statements on page 62.

The aggregate expenses paid to the Directors in 2014/2015 were €32,112 (2013/2014: €33,001).

Board Meetings

The Board met 11 times during the financial year.

Committees of the Board

There are four standing Committees of the Board which operate under formal terms of reference.

The members of the Risk and Audit Committee (RAC) as at 25 March 2015 were Denise Cronin (Chairperson), John Farrelly and Barry Walsh. The Committee met 5 times during the financial year. The Committee meets periodically with the internal auditor and the external auditor to discuss the Group’s internal accounting controls, the internal audit function, the choice of accounting policies and estimation techniques, the external audit plan, the statutory audit report, financial reporting, risk management and other related matters. The internal auditor and external auditor have unrestricted access to the Risk and Audit Committee. The Chairman of the Committee reports to the Board on all significant issues considered by the Committee and the minutes of its meetings are circulated to all Directors.

The Remuneration Committee deals with the remuneration and expenses of the Managing Director and senior management within Government guidelines, Human Capital Planning, Succession Management, Pensions and other HR matters. The members as at 25 March 2015 were John Horgan (Chairman), Elaine Treacy and Gerard O’Donoghue. The Managing Director, Mike Quinn, attends the Committee except when his own position is being discussed. The Committee met 8 times during the financial year.

The Finance Committee considers the financial aspects of matters submitted to the Board, including the Annual Budget and Five Year Plan, and the procurement, disposal and leasing of land, buildings and facilities. The members as at 25 March 2015 were John Horgan (Chairman), Kevin Healy, Denis Leonard, Seamus Maguire and Mike Quinn. The Committee met twice during the financial year.

The Health & Safety Committee advises the Board on Health & Safety matters within the Bord na Móna Group. The members as at 25 March 2015 were Colm O’Gogain (Chairman), Philip Casey, Gerard O’Donoghue and Mike Quinn. The Committee met 3 times during the financial year.

From time to time the Board also establishes temporary Committees to deal with specific matters under defined terms of reference.

On 23 January 2014 the Board established a Committee to oversee the process for the appointment of a Managing Director with effect from 1 February 2015, when the contract of employment of the then current Managing Director expired. The members of the Committee were John Horgan (Chairman), Denise Cronin and Barry Walsh. The Committee met twice during the financial year. Mr. Mike Quinn was appointed as Managing Director with effect from 2 January 2015 as recommended by the Committee.

During the year, the Board also established a Committee to review the outcome of the Board Evaluation process and to make recommendations to the Board. The members of the Committee as at 25 March 2015 were Barry Walsh (Chairman) Elaine Treacy and Colm O’Gogain. The Committee met twice during the financial year.

The Board also established a Committee to review certain aspects of a potential joint venture project by Bord na Móna in a wind farm project. The members of the Committee which met once during the financial year were John Horgan (Chairman), Mike Quinn and John Farrelly.

Attendance at Board and Committee Meetings

The table below summarises the attendance of Directors at Board and Committee meetings which they were eligible to attend during the year ended 25 March 2015.

(a) Directors as at 25 March 2015


Board Meetings Attended/Eligible

Committee Meetings Attended/Eligible


Directors as at 25 March 2015

J Horgan Chairman



M Quinn Managing Director



Appointed from 2 January 2015

P Casey



Appointed from 1 January 2015

D Cronin



J Farrelly



Appointed from 17 June 2014

K Healy



Appointed from 1 January 2015

D Leonard



Appointed from 17 June 2014

S Maguire



Appointed from 1 January 2015

G O’Donoghue



C Ó Gógáin



Appointed from 1 January 2015

E Treacy



B Walsh



(b) Directors who served during the year ended 25 March 2015


Board Meetings Attended/Eligible

Committee Meetings Attended/Eligible


Directors who served during the Financial Year

G D’Arcy Managing Director



Resigned 31 October 2014

P Bennett



Term expired 31 December 2014

P Fox


Not Applicable

Term expired 30 April 2014

P McEvoy



Term expired 31 December 2014

P Maher



Term expired 31 December 2014

D Taylor


Not applicable

Term expired 8 June 2014

Internal Controls

The Directors have overall responsibility for the Group’s systems of internal control and for reviewing its effectiveness. These systems are designed to manage risk and can give reasonable, but not absolute, assurance against material misstatement or loss. The Board confirms that it has reviewed the effectiveness of the system of internal control during the financial year.

Management is responsible for the identification and evaluation of significant risks, together with the design and operation of suitable internal control systems. The system of internal control is designed to ensure that transactions are executed in accordance with Management’s authorisation, that reasonable steps are taken to safeguard assets and to prevent fraud, and that proper financial records are maintained. Management reports to the Board on material changes in the business and external environment which affect risk.

The principal procedures which have been put in place by the Board to provide effective internal control include:

  • an organisation structure with clear operating and reporting procedures, authorisation limits, segregation of duties and delegated authorities;
  • clearly defined management responsibilities have been established throughout the Group and the services of qualified personnel have been secured and duties properly allocated among them;
  • a statement of decisions reserved to the Board;
  • a risk management process which enables the identification and assessment of risks, that could impact business performance and objectives and ensures that appropriate mitigation plans are formulated to minimise the residual risk;
  • a comprehensive budgeting process for each business and the central support services culminating in an annual Group budget approved by the Board;
  • a comprehensive planning process for each business and the central support services culminating in an annual Group long−term plan, approved by the Board;
  • a comprehensive financial reporting system with actual performance against budget, forecasts, performance indicators and significant variances reported monthly to the Board;
  • a set of policies and procedures relating to operational and financial controls including capital expenditure;
  • procedures for addressing the financial implications of major business risks, including financial instructions, delegation practices, and segregation of duties and these are supported by monitoring procedures;
  • management at all levels are responsible for internal control over its respective business functions; and
  • procedures for monitoring the effectiveness of the internal control systems include the work of the RAC, management reviews, the use of external consultants and internal audit.

Internal audit considers the Group’s control systems by examining financial reports, by testing the accuracy of transactions and by otherwise obtaining assurances that the systems are operating in accordance with the Group’s policies and control requirements. Internal audit report directly to the RAC on the operation of internal controls and make recommendations on improvements to the control environment if appropriate.

The Group has a robust framework in place to review the adequacy and monitor the effectiveness of internal controls covering financial, operational, risk management and compliance controls. The Board is satisfied that the system of internal control in place is appropriate for the business.

The Board has reviewed the effectiveness of the system of internal control up to the date of approval of the financial statements. The RAC performed a detailed review and reported its findings back to the main Board. The process used to review the effectiveness of the system of internal controls includes:

  • review and consideration of the internal audit work programme and consideration of its reports and findings;
  • review of the regular reporting from internal audit on the status of the internal control environment and the status of recommendations raised previously from their own reports and reports from the external auditor;
  • review of reports from the external auditor which contain details of any material internal financial control issues identified by them in their work as auditors, and
  • review of the risk register reports, the counter measures in place to mitigate the risk, the remaining residual risk and actions required or being taken to further mitigate the risks.

Risk Management

The Board has overall responsibility for risk management including determining the nature and extent of significant risks that it is willing to accept in pursuit of its strategic and operational objectives.

To address this, the Board has established a risk management system that provides for the continuous identification, assessment, implementation of mitigating actions and controls, and the monitoring and reporting of significant risks within Bord na Móna.

The Risk and Audit Committee (RAC) is the forum for risk governance within Bord na Móna acting under delegated authority from the Board.

The RAC is responsible for assisting the Board in fulfilling its oversight activities with regard to assessing, reviewing and monitoring the risks inherent in the business and the control processes with respect to such risks. The RAC is supported on a day to day basis by an appointed Chief Risk Officer (CRO).

The CRO is responsible for overseeing the day to day risk management activities and has responsibility for ensuring that an effective risk management system, proportionate to the nature, scale and complexity of Bord na Móna is developed and maintained.

Bord na Móna has an established enterprise wide risk management system that ensures that risks are consistently identified, assessed, recorded and reported across all business units and support functions. The risk management system provides appropriate governance structures to support sound risk management practices, formal assignment of risk responsibilities throughout Bord na Móna as well as the procedures to be used in the identification, assessment, monitoring and reporting of risks, including relevant mitigation actions and controls.

The key concepts of this risk management system include:

  • a clearly defined risk management strategy that includes risk management objectives, key risk management principles, and the assignment of risk management responsibilities within Bord na Móna;
  • a risk management framework and reporting cycle to identify, assess, manage, monitor and report on the risks that Bord na Móna is or may be exposed to. Bord na Móna use a combination of a ‘top down’ and ‘bottom up’ risk assessment and management process as outlined in the diagram above;
  • as part of the “bottom up” risk assessment, regular risk workshops are held each year with the business units and central support units. At these risk workshops each individual risk is assessed, scored and the mitigating controls in place identified. The top risks to the Group are identified, collated and presented to the Senior Management Team. They then discuss, review, amend and score these risks before and after mitigating controls to identify the top Group risks. This review is an important part of the annual overall “top down” risk assessment carried out in the Group.
  • a risk monitoring plan that outlines the review, challenge and oversight activities of the CRO.
  • reporting procedures which ensure that risk information is actively monitored, managed and appropriately communicated at all levels within Bord na Móna. On a quarterly basis each business and central support unit updates their risk assessments as part of the risk review and reporting process. These are then reviewed with the RAC on a semi−annual basis; and
  • embedding a strong risk management culture across all levels of the Group.

Principal Risks


Bord na Móna’s business activities are subject to a broad range of legislative provisions and regulations. The scope of activities subject to material regulatory changes makes this a significant risk affecting all Bord na Móna’s businesses. The company operates diverse businesses increasingly affected by regulatory change. The Group continually monitors relevant legislative and regulatory changes. Some of the key regulatory risks affecting our businesses are:

  • Powergen business
  • an evolving EU regulatory framework for electricity from 2017 affecting the Single Electricity Market (SEM) and a reduction in the annual capacity payment for power plants;
  • the changing regulatory landscape which is driving increased biomass usage in the peat fired generating stations with consequential supply chain and cost implications;
  • EUA carbon allowances for power plants (and briquette factories) resulting in increased costs.
  • increasing difficulty in obtaining planning permission for power and infrastructure projects.
  • Feedstock business
  • increased regulation on peat extraction; and
  • the expiration of the public service obligation on electricity generated by the peat fired stations.
  • Consumer & Professional business
  • the increasing restrictions on the sale of bituminous coal and the imposition of carbon taxes; and
  • the trend towards the dilution of peat with non-peat based materials in retail Horticulture products in the UK market;
  • Resource Recovery business
  • expected imposition of pay by weight on domestic waste collection services which may adversely affect the business model.

The Group’s ability to put effective controls in place to mitigate the impact of some of these Regulatory risks can be limited.

Business Continuity

The Group’s operations are subject to operational risks, disruption and other risk events such as I.T. system failure, critical plant failure and environmental disruption. The Group has specific mitigation plans to address business disruption if such events were to occur. The Group has identified the necessity to upgrade its accounting and supply chain applications and implementation of the Oracle e-business suite in a Financial Shared Services environment on a phased deployment basis has commenced.

Employee Risks

The Group faces a number of risks related to its employees. A key risk is the ability of the organisation to retain and attract key staff members as the Irish economy continues to expand and demand for experienced employees grows.


The weather can have a significant impact on the Group’s operating performance. For instance, adverse summer weather can impact on our ability to harvest peat and to maintain sufficient peat stocks to meet the needs of our customers resulting in a material adverse impact on the operating performance of our peat related businesses. The sales demand for growing media, briquettes, and coal is also weather dependent at specific time periods throughout the year. Operating profits from the Group’s significant investment in two wind farms at Mountlucas and Bruckana will depend on actual wind yields. While we believe that the expected wind yields have been modelled on a sufficiently conservative basis to give a high level of confidence in the long term level of return on investment, it can be anticipated that there will be volatility in the returns actually achieved in any specific financial year due to weather variations.


The Group faces strong competition in all of the markets in which it operates. The Group needs to continually respond to changing market conditions. In particular our mature businesses must focus on cost reduction in order to remain competitive in the changing market environment. To this end a number of crucially important business transformation projects aimed at increasing efficiency and reducing costs are in progress. Successful implementation of these business transformation projects is essential to the medium and long term economic viability of these businesses. The nature of the changes envisaged, could adversely affect industrial relations in certain parts of the Group.

Across the Group a financial shared services model is also currently being implemented which will further reduce costs and drive efficiencies. The implementation of an Enterprise wide I.T system is a key element in reducing the risks associated with the company’s reliance on old legacy systems and driving competitiveness.

Financial Risk

The Group’s operations expose it to a variety of financial risks that include the effects of changes in foreign exchange risk, credit risk, liquidity and interest rate risk. The Group has in place a risk management programme that seeks to manage the financial exposures of the Group by actively managing foreign exchange exposure together with debt finance and the related finance costs.

The Group’s treasury operations are managed in accordance with policies approved by the Board. These policies provide principles for overall financial risk management and cover specific areas such as interest rate, credit, liquidity and foreign exchange risk.

Price risk

The Group is exposed to commodity price risk. Due to competitive pressures the Group’s ability to pass on price increases may be limited. Actively hedging these exposures is in many cases not possible or is prohibitively expensive. As a result, the Group accepts, in certain instances, the inherent exposures associated with dealing in these commodities. The Directors will reconsider the appropriateness of this policy on a regular basis and, in particular, should the Group’s operations change in size or nature.

Foreign exchange risk

Bord na Móna’s functional currency is the euro. Group policy is to minimise the impact of material variations due to foreign exchange movements. The Group is exposed to foreign exchange risks in the normal course of business, principally on the sale and purchase of both sterling and US dollar. Certain natural economic hedges exist within the Group and the Group policy is to match and hedge the currencies across different divisions. At the year end, the Group had $273,000,000 fixed rate debt which was hedged by swap arrangements.

Credit risk

The Group continually examines its credit policies in light of changing economic conditions that the Group operates in. Management, with the approval of the Board, has an ongoing programme of mitigating actions to reduce identified credit risks which include improved exception reporting and automated use of credit limits to manage risk. In addition, credit insurance is in place for the larger customers of the Group.

Counterparty risk

The Group is exposed to credit risk from the counterparties with whom it holds its bank accounts and transacts with in the financial markets. Bord na Móna policy is to continually manage counterparty risk taking account of, amongst other relevant factors, published credit ratings. Bord na Móna closely monitors and measures its counterparty limits for all financial institutions that cash deposits are placed with. This matter is regularly reviewed by the Board.

Liquidity risk

Overall, the Group’s operations are cash generative. The Group is now primarily financed by short and medium term debt with this debt maturing on dates between 2016 and 2020.

Interest rate and cash flow risk

In order to ensure stability of cash outflows and hence manage interest rate risk, the Group has a policy of maintaining at least 50 per cent of its debt at fixed rate. Through a series of interest rate swaps, the Group has fixed the interest rates on all of its debt. At March 2015, the Group had fixed 100% (2014: 100%) of its private placement debt. Further to this the Group seeks to minimise the risk of uncertain funding in its operations by borrowing within a spread of maturity periods. Financial instruments are used to manage interest rate and financial risk. The Group does not engage in speculative activity and the treasury operating policy is risk averse.

Health and Safety and Environmental Risk

The Group’s operations are subject to an increasingly stringent range of environmental regulations, health and safety law and other regulations and standards. A breach of any such law or regulation could result in the imposition of material sanctions on the Group and could have a material adverse effect on the Group’s businesses. The Group employ special expertise to ensure full compliance, together with continuous staff training and robust monitoring procedures designed to prevent a material breach of statutory or other regulatory obligations.

Directors’ and Secretary’s Shareholdings

The Bord na Móna Employee Share Ownership Plan (ESOP) continues to hold 5% of the total ordinary shares in Bord na Móna plc on behalf of 2,102 eligible participants (serving and retired employees) in the Bord na Móna Employee Share Ownership Trust or the Bord na Móna Approved Profit Sharing Scheme (APSS).

Mr P Casey, Mr K Healy, Mr S Maguire and Mr C Ó Gógáin and the Secretary are participants in the Bord na Móna Employee Share Ownership Plan and each has a notional allocation of 1,771 ordinary shares in Bord na Móna plc which are held in the Bord na Móna Approved Profit Sharing Scheme. Mr P Bennett, Mr P Fox, Mr P McEvoy and Mr P Maher who served as Directors in the year ended 25 March 2015 are participants in the Bord na Móna Employee Share Ownership Plan and each has a notional allocation of 1,771 ordinary shares in Bord na Móna plc which are held in the Bord na Móna Approved Profit Sharing Scheme. The other Directors and their families had no interests in the shares of Bord na Móna plc or any other Group company during the year ended 25 March 2015.

Codes of Conduct

The Code of Conduct for Employees continued to be in place during the 2015 financial year. A Code of Conduct for Directors was adopted in April 2002 and remains in place.

Human Resources

Bord na Móna adopts a coherent Human Resource (HR) Strategy that creates a progressive business culture with empowered managers leading committed capable people, all focused on delivering the Group strategy. Bord na Móna strives to attract target candidates, whilst recognising and retaining the best people, through a commercially competitive reward policy, an investment in the development of our people and our offer of interesting and worthwhile opportunities.

During the year the HR function was reorganised to provide more effective and cost efficient service and support to internal customers.

Our reward policy is designed to reward individuals in accordance with their contribution, potential and market worth. The Group continues to apply an Annual Performance Payments model clearly connected to the overall Group strategy.

We continued to invest in the development of our employees throughout the year by implementing an informed succession planning and talent development programme to help harness the identified talent amongst management and technical professional employees. Building a strong pipeline of talented individuals is crucial to the Group’s long-term success and will help to ensure that we remain competitive and develop our businesses to meet the emerging needs of our customers.

The Group revised its approach to the Graduate programme, focusing our effort on introducing individuals at an early career level who bring the latest academic knowledge and contribute to the overall commercial results of the Group. In addition, Bord na Móna continue to support the many and varied labour reactivation programmes (JobBridge, Springboard, Momentum and a number of similar local initiatives), providing meaningful placements for participants to re-enter the workforce.

Senior Management continues its support of the change management effort in various Business Units and support functions through the provision of subject matter experts and the development of a new Business Transformation toolkit for Managers. The Group is operating to an agreed Internal Relations Protocol with the Group of Unions designed to facilitate stronger working relationships, allowing both parties to work together on business challenges through joint engagement on a timely basis.

Quality and Customer Service

The Board has adopted a policy that Bord na Móna will voluntarily obtain the relevant ISO accreditation and/or other relevant accreditation for all its activities.

The Group has adopted the Code of Practice for the Delivery of Services to Customers of Commercial State Companies.

Going Concern

The Directors, having made enquiries, believe that Bord na Móna has adequate resources to continue in operation for the foreseeable future and that it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Post Balance Sheet Events

A funding proposal on the General Employee Superannuation Scheme deficit was agreed in April 2015, between the Board, active and deferred members, pensioners and the Pension Authority and subsequently received Ministerial consent. The changes to the scheme which are outlined in note 24 to the Financial Statements on pages 24 to 83 are not accounted for in the year ended March 2015 as it represents a non adjusting event. There were no other post balance sheet events that would require adjustment to, or disclosure in, the 2015 financial statements.

Accounting Records

The directors believe that they have complied with the requirements of Section 281 of the Companies Act, 2014, with regard to the obligation to keep adequate accounting records, by employing accounting personnel with appropriate expertise and by providing adequate resources to the finance function. The accounting records are kept at the Group’s registered office, Main Street, Newbridge, Co Kildare.

Prompt Payment of Accounts

The Directors acknowledge their responsibility for ensuring compliance, in all material respects, with the provisions of the Prompt Payments of Account Act, 1997, the European Communities (Late Payment in Commercial Transactions) Regulations of 2002, 2012  and 2013 (S.I.s No 388 of 2002, No. 580 of 2012 and No. 74 of 2013 respectively ) (“the Regulations”)  Procedures have been implemented to identify the dates upon which invoices fall due for payment and to ensure that payments are made by such dates. Such procedures provide reasonable but not absolute assurance against material non−compliance with the Regulations. The Directors are satisfied that Bord na Móna Plc has complied with the requirements of the Regulations in all material respects in relation to external supplier payments within the EU.

Political donations

The Board made no political donations during the year.


In accordance with Section 383(2) of the Companies Act, 2014, the auditor KPMG, Chartered Accountants will continue in office.

On Behalf of the Board,

John Horgan


Mike Quinn

Managing Director

25 June 2015