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Annual Report 2010 Enabling Supply Chain Visibility


Table of Contents SECTION ONE Chairman’s Statement Chief Executive Officer’s Statement

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SECTION TWO GS1 Review

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SECTION THREE Financial Statements Membership Report Minutes of the 29th GS1 Ireland AGM 2010

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CHAIRMAN’S STATEMENT

The adoption of GS1 standards to drive reform within the Public Sector has been successfully deployed in both Denmark and Sweden

Tony Minogue Chairman GS1 Ireland

I am delighted to address you as Chairman following my election at the 2010 AGM. I would firstly like to pay tribute to Aidan Keane our past Chairman who provided great leadership of our organisation over the previous four years. Aidan’s commitment during his term of office was exceptional, especially in his last year at a time of difficult personal circumstances. We wish Aidan, Rozen and the family the very best for the future.

opportunity for growth in our core sector of Consumer Packaged Goods (CPG) as well as in the Public Service Sector (including healthcare) through eGovernment initiatives. The planned launch of our GS1 DataSync.ie service is the single biggest project over the coming years. It will provide the foundation pillar supporting products and services to migrate to the Digital Universe. We have also embarked on a very intensive campaign to raise awareness of the relevance of standards in supporting the reform of the Public Sector. The adoption of GS1 standards to drive reform within the Public Sector has been successfully deployed in both Denmark and Sweden.

For my part I look forward to assisting GS1 Ireland on its journey to provide added value services to our members which will help them to improve their competitiveness. At this time of economic crisis all businesses, in particular SMEs (which make up almost 90% of our total membership) are looking for ways to reduce costs and achieve efficiencies in order to survive. 2010 was a year of stability in terms of membership despite the economic situation and this enabled us to attain a breakeven performance in terms of our bottom line. This was achieved despite holding our fees at 2008 levels and increasing our resources in preparation for the launch of DataSync.ie, our datapool service. The service has been successfully tested with a couple of retailers and a number of key suppliers and is now preparing for rollout.

We are therefore ready to support the new Government in implementing eBusiness messaging based on open global standards in order to reduce Public Expenditure in line with the EU budgetary targets. The use of GS1 standards greatly enhances the speed and adoption rate in which eBusiness can be deployed from the smallest SME to the largest global corporation or Government body. In a strange way the current economic situation enhances the case for standards adoption.

Tony Minogue Chairman GS1 Ireland April 2011

We also embarked on a comprehensive review of our strategy which we are now in the process of implementing. The review highlighted areas of

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CHIEF EXECUTIVE OFFICER’S STATEMENT

CLASS has demonstrated very effectively that UHF tags can be deployed in a clinical setting and that open standards are the only way to deliver interoperability between supply chain systems and clinical applications. Jim Bracken CEO GS1 Ireland

been shown to add cost and confusion and the result is inefficiencies which lead to uncompetitiveness and in some cases business process failures.

2010 was a year of consolidation for GS1 Ireland. We have entered 2011 on a positive note with a determination to continue promoting the case for the implementation of solutions based on our standards to help our existing members survive the current economic challenges.

This competitiveness issue has been recognised by the European Commission which has called for the implementation of eCommerce messaging across the Member States both in terms of Business to Government (B2G) and Business to Business (B2B) transactions. The Commission has articulated a clear vision for the total elimination of paper based methods by 2020. Such a vision will hopefully act as a spur for our own Government in their plans to reform the Public Sector. The Irish retail grocery sector has already demonstrated a very clear ROI on its early adoption of EDI over the past 18 years.

In the course of the year our new CRM (Customer Relations Management) system came online. This has enabled us to automate some of our processes along with improving the quality of our membership database. The integration of our back office system with our website will also improve the service to members and new entrants. We engaged new personnel who have added considerably to our overall level of skills and experience. Coupled with the new CRM system, GS1 is better positioned to serve the needs of our existing and future members. We are now providing additional added value services such as verification and advisory services.

New regulations from the EU, US and Asia requiring product traceability and authentication as a deterrent against counterfeit products is an additional driver for the deployment of standards-based solutions. The pending regulations which will require the serialisation of medicines and medical devices at the patient pack level can only be delivered by the use of GS1 globally unique numbering in conjunction with our standardised data carriers (barcodes and RFID tags). These regulations are going to require significant investment by industry, but the resulting visibility of products across the supply chain will more than compensate in terms of reduction of out of stocks, product wastage, improved patient safety and efficiency gains.

Recognition of the value of standards based solutions There has been a noticeable increase in the level of acceptance of the need for open standards in order to ensure ease of interoperabilty between disparate systems. This is no doubt due to a gradual recognition that proprietary solutions may work well within the four walls of any organisation but by the same token they inhibit the easy interchange of data between the various parties across the supply chain. Non standard solutions have

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deliver interoperability between supply chain systems and clinical applications.

Ireland at the forefront of authentication and traceability best practice solutions

DataSync.ie to enable quality master data management

It is good to be able to tell you that GS1 Ireland has been at the forefront in the development of solutions for authentication, traceability and supply chain visibility. The NCHCD solution for the track & trace of medication used for the treatment of haemophilia is regarded internationally as best practice. The solution is being further developed with the roll out of mobile phones with an app which enables the patients to carry out vital pre-use checks on product expiry and recall status. Once the treatment is complete the mobile app updates both the electronic patient record and the warehouse management system.

Following the decision of the GS1 Ireland Board, great progress was made with the piloting of our DataSync.ie solution for enabling more effective management of master data between suppliers and retailers. Studies such as the UK Data Crunch Report have highlighted the problems arising from poor quality master data. The DataSync.ie initiative by GS1 Ireland is therefore a major one which will help to improve the competitiveness of the retail grocery sector and in time also serve many other sectors including healthcare. DataSync.ie will of course be the key focus of our activities over the coming months.

In 2010 GS1 along with Georgia Tech Research Ireland (GTRI) and the Western Vascular Institute (WVI) delivered a successful pilot deployment of EPC/RFID tracking of endovascular devices at The Galway Clinic. The pilot, entitled CLASS, was carried out in conjunction with three of the top four global device manufacturers (Boston Scientific, Johnson&Johnson/Cordis and Medtronic) and demonstrated that UHF tags can be deployed within an operating theatre as well as in the open supply chain.

Business case for GS1 DataBar continues to grow In concluding the review of implementations in 2010, after piloting by GS1 Ireland and our sister offices in Korea, Netherlands, Japan, US and Canada the business case for using GS1 DataBar on Fresh Produce is beginning to look very attractive. Given the importance of the fresh category to overall retail margins it seems likely that increased adoption of GS1 DataBar could be on the cards.

Proprietary RFID applications in the US have shown an impressive ROI for individual hospitals. However, due to the lack of interoperability and the unsuitability of the tags for open supply chain use, the possibility of mass adoption is nil. Now, CLASS has demonstrated very effectively that UHF tags can be deployed in a clinical setting and that open standards are the only way to

Jim Bracken CEO GS1 Ireland April 2011

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GS1 REVIEW

A history of collaboration

More than just bar codes

The history of GS1 tells the story of why the retail supply chain is so important to us - in September 1969, a group of members of the Grocery Manufacturers’ of America (GMA) Association and the National Association of Food Chains met to express a need for some sort of cross industry product code for items on sale in grocery stores.

Today, of course, GS1 standards are much more than the bar code and include standards for electronic business messaging, data synchronization and RFID-based identification and solutions to a range of business issues. To create these standards, GS1 brings together all stakeholders in the supply chain – manufacturers, distributors, retailers, transporters, customs organisations, software developers, local and international regulatory authorities, and more. These companies, who may in fact have conflicting business interests, work together under our leadership to agree upon standards that make the supply chain faster, more effective, less complex and less costly.

An ad hoc committee on what was then called a Uniform Grocery Product Code was formed in August of the following year and agreed to work together to create a standard code for identifying products. The Uniform Grocery Product Code Council (UGPCC) was formed in 1972 to oversee and administrate this code. The bar code design – today so familiar to people across the globe – was chosen by this Council in 1973, and the very first bar code was scanned at the checkout of a Marsh’s Supermarket in Troy, Ohio (USA) on 26 June 1974.

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GS1 REVIEW

GS1 Standards: enabling supply chain visibility

Enabling full visibility of the supply chain is at the core of GS1’s work. The importance and implications of achieving full visibility are emphasised through the work undertaken by GS1 and the development of standards that not only allow the identification of objects but also a far deeper level of knowledge concerning the events related to those objects.

Focusing on business value Supply chain visibility is important as it translates directly into business value. A recent study showed clearly that best-in-class supply chain performers – measured as those companies with the lowest out-ofstocks, lowest landed costs and highest on time shipment rates – also have the most visibility into their supply chains.

What is Visibility?

In addition to this sort of internal visibility, in today’s world where supply chains are often complex and global, the achievement of full visibility also demands cooperation between multiple players. In order for visibility data to be shared and understood across the supply chain, it is necessary to have the standards agreed to by all parties.

Visibility is a broad concept that relates to knowing where things are at any point in time and why they are there (or where they have been in the past). Visibility means leveraging a range of standards and business applications in order to see more event-based information relating to key business processes. It is increasingly a key capability for businesses to be able to address the perennial issue of “if you can’t ‘see’ something then you can’t measure it, and if you can’t measure it, it’s probably costing your business too much!”

Standards for visibility cover three key areas:

Many supply chain processes can be transformed through deeper, more accurate and rich visibility information. These processes could include improving overall supply chain accuracy, velocity and effectiveness; the management of inventory; product tracking (where is it now) and tracing (where has it been); confirming the chain of custody and ownership of a product as it moves through the supply chain; product authentication that confirms a product is genuine and not counterfeit; managing products returned by customers and confirming that they were legitimately purchased. There are literally hundreds of business processes that could be improved and transformed through the use of visibility information.

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Identification standards that provide the foundation for data and interface standards;

Data standards that define the content and meaning of visibility data so that one supply chain party can understand data that it receives from another supply chain party;

Interface standards that define how supply chain parties can interact with each other to exchange visibility data.


GS1 REVIEW

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GS1 REVIEW

There can be no real visibility of objects unless there is a standard way for all stakeholders in the supply chain to capture and share information. The necessary standards to enable the achievement of visibility exist today: •

Identify – The GS1 System includes globally accepted unique identification numbers that provide a common language to communicate product information from company to company. Capture – The GS1 System uses approved bar code symbologies and EPC-enabled RFID tags to encode GS1 identification numbers. Share – The GS1 System supports multiple standardised ways to share information. Electronic Data Interchange (EDI), Electronic Product Code Information Services (EPCIS) and the Global Data Synchronisation Network (GDSN).

The GS1 System provides a solid foundation and an integrated suite of global standards that can enable businesses to achieve global supply chain visibility. Visibility means knowing exactly where a given item or asset is at any point in time, and therefore enabling improvements to be made to the management and control of those assets. With greater information, organisations can stop making assumptions and start making informed decisions based on accurate information about the actual conditions.

Real benefits Businesses around the world are realising the benefits that can be gained from leveraging GS1 standards to achieve greater visibility into the supply chain. In these times of intense competition, every opportunity must be seized to improve effectiveness, reduce cost, and increase the speed and accuracy of operations; and this, in order to ultimately serve the customer, consumer or patient needs. These benefits are being achieved within organisations, between supply chains parties and across industry sectors thanks to the GS1 System.

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GS1 REVIEW

Automatic Identification & Data Capture

Where supply chains meet consumers

From efficiency to safety in healthcare

Automatic identification and data capture, or AIDC, is the collective name for the variety of technologies and methods used to identify objects and places, collect information about them, and share that information within and between different companies and organisations.

After more than 30 years, AIDC is building a future for safety in the supply chain on the strong foundation of supply chain efficiency. The year 2010 witnessed a major milestone in the history of AIDC. For the first time, there is now a global agreement on a standards based way of identifying drugs and medical devices in the healthcare sector. These GS1 Healthcare Product Identification Standards cover the identification needs of over 90% of all medical products.

Thanks to AIDC, shoppers get through the supermarket checkout line and the clothes shop cashier desk more quickly; the prices consumers pay for their purchases are accurate and up to date; stores know what products they need to re-order; and everyone benefits from having more variety on store shelves that are rarely empty.

This work in the healthcare sector also resulted in a groundbreaking move in standards for retail pharmacies and hospitals. Global standards for automatic identification provide the opportunity to make the healthcare supply chain more efficient and safer for patients. With an increased need for smaller two dimensional bar code symbols containing more data, the GS1 Healthcare global user group has strongly recommended that stakeholders invest in the camera or image-based scanners needed to scan these bar code symbols when replacing existing laser bar code scanners or in new installations. This will facilitate the future adoption of global standards for automatic identification in the healthcare supply chain.

Bar code symbols and RFID tags are two of the most frequently-used carriers of the data which enables automatic identification – and of course, the most visible part of GS1’s activity. GS1 BarCodes (including GS1 DataBar, GS1 DataMatrix, and several others) and GS1 EPCglobal RFID tags are used billions of times every day, everywhere in the world, in almost every industry sector.

Linking sectors and technologies GS1 AIDC connects sectors to sectors and technologies to technologies. Thanks to our AIDC activity, GS1 allows different companies to work together more smoothly, and enables technologies from the past to work with technologies from the future. GS1 is working harder than ever before to enhance the interoperability between different technologies, an objective that can be seen in our output across the year, such as a new release of EPC tag data standards, work on a serialisation strategy, efforts on EPC headers and EPC/bar code interoperability, and more. We’ve also reached out to a new sector – Aerospace and Defense – where we are confident our global neutral standards can be helpful and useful.

Fresh food identification GS1’s work in the area of safety for fresh foods also moved forward this year. Working groups have advanced the GS1 Fresh Foods Identification strategy, approved in 2008, to make possible a wide variety of food safety applications. In other fresh foods news, after the success of GS1 DataBar pilots, implementation is now planned in many regions. The importance of implementing AIDC in fresh foods is not to be underestimated: fresh foods represent about 50% of total store sales in grocery, but most of these sales do not yet use the GS1 Global Trade Identification Number (GTIN). Once a fresh foods identification strategy is deployed in this sector, a variety of applications such as traceability, category management and more are possible.

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GS1 REVIEW

Musgrave awarded Global Traceability Conformance certificate

The Musgrave Group has become Ireland’s first retailer to claim the GS1 Global Traceability Award which recognises that their traceability procedures comply with global best practice, meet all regulatory requirements and correctly implement GS1 global supply chain standards. Commenting on Musgrave’s Award, Ray Bowe, Head of Food Safety & Quality at Musgrave, said: “We are absolutely delighted to have received such an internationally acclaimed and accredited award. It provides us with a strong independent validation and endorsement of the traceability system we have invested in and is further evidence of the high standards in place at SuperValu, by giving transparency to consumers of the origin of their fresh meat.” The Global Traceability Conformance Award was made for SuperValu’s meat traceability system “Foodtrace” developed in conjunction with Irish company, Valent Systems.

John O’Callaghan (L) IT Director, Musgrave Retail Partners Ireland and Jim Bracken (R) Chief Executive Officer, GS1 Ireland, at the presentation of the award.

Presenting the GS1 Global Traceability Conformance Award to Musgraves, Jim Bracken, Chief Executive, GS1 Ireland said: “The award demonstrates not only Musgrave’s commitment to achieving excellence and best practice in its supply chain, but also clearly positions Musgrave as an industry leader in the implementation of a robust fresh meat traceability system for all its SuperValu stores.

The GS1 GTC Programme In order to receive the GTC Award companies must successfully undergo a stringent audit to verify that their traceability system, through the implementation of GS1 global supply chain standards, enables them to efficiently and accurately comply with relevant legislative and industry traceability requirements. The GS1 GTC programme enables any organisation to establish its actual traceability level and to be benchmarked against agreed supply chain requirements and best practices.

The importance of best practice traceability systems cannot be overestimated. We only have to see both the financial and reputational damage that can be caused to a brand, particularly around product recalls. We would therefore urge all those responsible for implementing traceability in their company’s operations and supply chain to participate in the GS1 Global Traceability Programme to ensure their traceability levels are independently audited and benchmarked against agreed supply chain minimum requirements and best practices for traceability.”

To obtain information on the GS1 Global Traceability Standard and the Conformance Programme please log on to www.gs1.org/traceability.

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GS1 REVIEW

Innovative GS1 compliant patient home scanning system launched by National Haemophilia Treatment Centre

Patients at the National Centre for Hereditary Coagulation Disorders (NCHCD), based at St James’ hospital, Dublin are now able to use a new, innovative mobile phone based system to manage details of their medication and infusions. The system extends the management of bar coded medication into the patient’s home and is fully compliant with GS1 standards. The patients involved are supplied with a smartphone preloaded with a user-friendly application (app) which is used to record the details of a bleed and treatment. By using the phone to scan the data matrix barcode on their ID card the patient logs on to the system. Thereafter they are brought step-by-step through the process of recording the date and time of their treatment along with details of the medication used. The key features of the app include its ability to confirm: • the medication is in-date • it is the correct medication for the identified patient and • that the medicine is not on a recall list. The app’s functionality incorporates not only a medication verification system but also an electronic patient diary, recording reasons for treatment infusion as well as automatically capturing the date and time of infusion.

BENEFITS PATIENT

HOSPITAL

• In-home treatment solution • Simple interface • Safety checks before infusing • Right medication • Right time

• Optimised supply chain management • Realtime reporting and analysis • Stock visibility • Alert system

NCHCD Project Manager, Feargal Mc Groarty says “studies show that patient outcomes improve when they actively participate in their own care. This smart phone app successfully demonstrates new ways to improve the effectiveness and efficiency of established approaches to managing chronic diseases, by helping patients record and manage their Feargal McGroarty, medication in real time. By integrating National Haemophilia everyday technology such as smart System Project Manager phones and bar codes with current models of chronic disease management we have been able to improve interactivity between patients and health care professionals. More accurate data collection in real time, leads to improved patient safety whilst helping control the cost of healthcare delivery.” Laurence D’Arcy of Crimson Tide, developers of the App, believes that the system is unique in its ability to extend the benefits of the GS1 system into the hands of the patient. “We have combined an easy to use patient system with the security of GS1 track and trace and the benefits to NCHCD range from better drug management to reporting and patient satisfaction.”

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GS1 REVIEW

Irish RFID Healthcare Pilot Hailed a Success

Georgia Tech Ireland (GTI), the Western Vascular Institute and GS1 Ireland joined efforts to develop a model for endovascular-device tracking to include RFID technology and bar codes from the point of manufacture to the operating room.

The project's focus was on using the global EPC RFID standards to track and trace medical devices from the point of manufacture to the patient. "In order to be efficient and effective in data sharing, a common language of globally accepted standards is essential," said Jim Bracken, CEO GS1 Ireland.

The pilot at Galway Clinic found that UHF RFID tags on high-value implantable endovascular products, such as catheters and stents, can be successfully used in a high-volume clinical setting to improve patient safety and lower costs by reducing the risk of errors, out-ofstocks and product expiration.

The solution trialled by the group included a single, shared database that a variety of stakeholders could access via the Internet using software based on EPCglobal's Electronic Product Code Information Services (EPCIS) specifications, and the use of GS1 standard bar codes and UHF EPC Gen 2 tags.

The team intends the project, known as the Clinical Laboratory Automated Stockroom System (CLASS) Project, to provide a model solution, based on global standards, for more effectively managing inventory throughout the entire medical device supply chain, from manufacture through to point of use.

"With 10 to 20 procedures being performed each day—many of which are complicated enough due to the variety of patients—the last thing surgeons need to worry about is whether we have the right product in stock or if the product has passed its expiry date," says Sherif Sultan, the clinic's consultant vascular and endovascular surgeon.

With support from medical device manufacturers Boston Scientific, Medtronic and Cordis (owned by Johnson & Johnson), the group began the collaboration in an effort to improve supply chain efficiency and reduce the cost of missing or expired items used in endovascular procedures. Improved patient safety and greater efficiency and visibility in the supply chain could help address the escalating costs for healthcare services as well as meet regulatory demands, such as the Unique Device Identification (UDI) requirements of the U.S. Food and Drug Administration.

The research group's ultimate goal is to help members of the medical technology industry, healthcare providers and clinicians to implement RFID and bar code based traceability systems and share data from those systems to make the supply chain and inventory management more visible. “The CLASS project demonstrated that RFID could identify and track the movement of high-value endovascular devices”, said Kevin McGuinness, senior project manager at Georgia Tech Ireland.

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GS1 REVIEW

Global Data Synchronisation

Growth and solidity

Focused on data quality

The Global Data Synchronisation Network, or GDSN, was launched in August 2004 with 74,000 items registered in the GS1 Global Registry. Since that time, adoption, implementation and growth has increased exponentially across the world. In fact, in December 2010, the GS1 Global Registry surpassed 6.5 million registered items! This milestone clearly demonstrates sustainable growth of data synchronisation as a result of increased adoption and use of the GS1 Global Data Synchronisation Network around the world by trading partners across various sectors. Over 20,000 leading companies and organisations across more than 90 countries have already made the Global Data Synchronisation Network a cornerstone of their success, increasing efficiencies and lowering supply chain costs. More than 20 million messages transited across the Network from one GDSN-certified data pool to another in 2010.

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Data synchronisation programmes cannot function in the absence of data quality programmes: good quality data is a foundation for collaborative commerce and global data synchronisation. By improving the quality of data, trading partners reduce costs, improve productivity and accelerate speed to market. In the Retail and Consumer Packaged Goods sector, for example, bad data contributes to inefficiencies and lost sales. Without the GDSN, the multitude of different methods companies use to share data – spreadsheets, web portals, emails, paper catalogues – add to the complexity, redundancy, and promulgation of bad data and inefficiencies created by ‘work-arounds’ for procedures which no longer meet business needs. And worse, they create unnecessary costs.


GS1 REVIEW

UK study shows accurate product data is the bedrock of efficient supply chains A major report released by GS1 UK in 2010 revealed the sizeable opportunity which Britain’s retail sector can realise through improving data practices in the supply chain. GS1 UK’s ‘Data Crunch’ report estimated that UK grocery retailers and suppliers can realise savings of at least £1 billion over the next five years as data inconsistencies are ironed out across the industry and pass the benefits to consumers through better informed choices and improved shopper experience. The report also reveals the existing business opportunity for retailers and suppliers to address the issue of increased demand for better product information from consumers, governments, regulators and pressure groups. In collaboration with the country’s four largest supermarkets (Tesco, Sainsbury’s, Asda and Morrisons) and four of the largest product suppliers (Nestle, Unilever, Proctor & Gamble and Mars) GS1 UK used IBM’s analytics capability to assess the ‘Data Crunch’ product data, which included more than one million records from the participating retailers and suppliers. By comparing the product data held by suppliers with that stored on the supermarkets’ systems, the research uncovered inconsistencies in what should have been identical information in over 80 per cent of cases. After calculating the impact this has in terms of lost or late deliveries, inaccurate orders, surplus transport costs and duplicated work, GS1 UK found the savings opportunity for the retail industry was more than £700 million and a further £300 million opportunity for new sales.

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The estimated opportunity for the industry to realise over £700 million in savings were found to fall into two main areas: avoiding shrinkage and eliminating workaround processes (such as manual investigations to cross check the accuracy of the data). The total savings from eliminating workarounds and corrections was estimated at £135 million for retailers and £100 million for suppliers. Additionally, the total savings from avoiding shrinkage were placed at £250 million and £225 million for retailers and suppliers respectively. To read more about the GS1 UK Data Crunch Report log on to: www.gs1uk.org/datacrunch.asp


GS1 REVIEW

GS1 MobileCom publishes White Paper

“Mobile in Retail: Getting your in-store environment ready for mobile”, is a GS1 white paper which explores the opportunities for brands and retailers as consumers begin to use mobile phones to plan their shopping and while actually visiting stores. It details ways in which GS1 standards can support this strong emerging market. What are the opportunities for using the mobile phone to enhance consumers’ shopping experiences? How can we benefit from the fact that the mobile phone is already a part of many consumers shopping experience? Europeans shop for grocery products 3-5 times a week on average. That accounts for millions of mobile phone users in stores every day of the week - mobile phone users who regularly use their phones while shopping to contact family about their purchasing decisions. With the explosive rise in popularity of the new generation of “smartphones” that are fundamentally built around having mobile web access, internet usage is increasingly being integrated into everyday life. Many analysts predict that web access on mobile phones will become just as pervasive as it currently is on computers. When smartphones become ubiquitous, mobile internet access will of course affect the grocery shopping experience. But rather than just letting consumers bring their own mobile internet experiences into the store, should retailers take a more active part? And if so, what can they do to actively enhance the shopping experience? Those were the questions GS1 and ECR Sweden had when entering into the HotShopper trial. Not only did they find very compelling reasons for retailers to take an active part in the in-store mobile experience, they also witnessed first-hand how consumers, by downloading a multitude of

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apps (small mobile phone applications) are actively taking part in transforming the very foundations of the internet itself. We are witnessing the rise of an internet where everyday mobility is becoming the fundamental focus for app development. An internet where most, if not all, mainstream usage is focused on what we do differently in different locations. This fact will of course have implications for, and give rise to opportunities for, retail businesses. HotShopper; A GS1 Sweden, ECR Sweden and Ericsson Pilot run at ICA Maxi Lindhagen Hypermarket Store in Stockholm, Sweden in September 2010. Mobile phones are becoming part of the shopping experience. And smartphones become more wide spread, mobile internet access will change how consumers shop for groceries. In order to examine the opportunities GS1 Sweden and ECR Sweden in conjunction with Ericsson and ICA Maxi Lindhagen Hypermarket ran a live mobile commerce trial in September 2010.


GS1 REVIEW

In the pilot, 35 consumers equipped with an Android-based HotShopper mobile app, scanned Arla dairy products to find out more information about ingredients and additives, to get inspiration for recipes and receive special offers.

These three needs open interesting opportunities for brand owners as well as for retailers given that mobile apps are a comparatively cheap way to communicate directly with consumers. Mobile apps also move the store closer to the consumer, being present even when the consumer is not in the physical store. We will see – and have already seen some industry players moving relatively quickly into mobile apps and extended product information. Cooperation around the distribution of packaging content would improve cost efficiency and early standardisation would improve the scalability of solutions.

During the trial the participants immediately recognised the relevance of the mobile phone app to their daily shopping. They perceived the information on the phone to be better than that on the package. Consumers in the study expressed the following shopping experience needs: 1. A need for the integration of all information from packaging and price information, to self-scanning, special offers, loyalty cards and payments. 2. A need for the better integration of grocery shopping into everyday life; scanning ads at home, writing shopping lists, in-store shopping convenience and using recipes in the kitchen. 3. A need to extend the convenience and control provided by the Hot-Shopper app beyond grocery shopping.

One important focus of the Swedish HotShopper project was to enable brand owners, retailers, mobile operators, software developers, service and solution providers and organisations to work together. The project has clearly shown that this is possible, and that collaboration gives good results. In addition, standardisation and the use of wide-spread and future-proof technologies are often both cost-efficient and a sustainable way to go. It is now up to the parties in each industry to move forward with standardisation and collaboration in relevant areas.

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GS1 REVIEW

Mobile-savvy shopper report

The impact of poor third-party app data on shopper behaviour Smart phone usage is growing fast. GS1 UK’s consumer research conducted by global market research specialist, TNS, shows that 1 in 3 (32%) consumers now have a smart phone. This goes hand in hand with the explosion in app development and usage. Over three billion mobile apps have been downloaded from the iPhone App Store and there is an emerging trend in utility apps that help 21st century ‘savvy shoppers’ make better informed choices before buying.

So what can be done about the issue? The report states that crowd or multiple sourcing techniques frequently produce poor quality product data and can therefore be identified as the cause of bad mobile data. Therefore, it is strongly recommended that industry accesses product information from a reliable source that can be trusted. Markets around the world are witnessing the emergence of a new type of consumer, the 21st century ‘savvy shopper’. They are cross-channel shoppers who use a range of methods to access information and buy products.

The key to making these services credible though is to provide accurate product information that consumers can trust. But the mobile-savvy shopper report raises serious questions about the ability of the current data infrastructure to support the growing development of apps that provide consumers with additional product information.

This new approach to shopping brings with it a growing demand for more and better product information. Industry trends show that demand for more product information is significantly increasing. GS1 UK’s Data Crunch Report forecasted that this demand would grow by 400% in the next five years. Consumers now and in the future will expect more information from product packaging. On grocery products many consumers expect to see nutritional information, allergy notifications and whether or not the product conforms to certain lifestyle choices. Before they purchase electrical products, a large number of consumers want to compare technical specifications, read reviews and compare prices.

The research examined the quality of product descriptions and image data available in three third-party, generic apps. 375 grocery products were selected at random and scanned using the three apps. GS1 UK and Cranfield School of Management were then able to rate the accuracy of data available to the apps by comparing it to data authorised by the brand owner. From a total of 1,125 scans across all three apps, only 9% of scans returned the correct product description when compared with the brand owner’s approved data. A staggering 75% of scans returned absolutely no product information at all and 87% of scans returned no image. But when information was returned the story did not get any better, with product information being wrong 1 in 5 times.

Historically, shoppers have had a tangible product which they can take off the shelf and use their primary senses to evaluate. Savvy shopping habits mean the consumer can now make key buying decisions remote from the physical product. They will therefore be less prone to marketing techniques such as shelf placement, packaging graphics and branding, but they will also be accessing core product information from numerous sources, not simply from the back of the pack or the brand owner.

This lack of accurate and trustworthy product data is having a significant impact on consumers. 50% of consumers claimed that they needed an accurate description and image to feel confident that the product is the right one. And 34% of consumers won’t buy the product at all without confidence in the data.

Much of this purchasing behaviour existed before the digital age, but modern technology such as the smart phone, makes this information much more accessible. There are a growing number of mobile apps available to smart phone users in the UK.

And it is bad news for app developers too given the lack of data available. Over 1 in 4 (27%) respondents claimed that if they could not find the products they were looking for they would stop using the app altogether.

Many of these enable consumers to search for additional product information which has led to a significant increase in purchases being made using mobile phones. Recent

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GS1 REVIEW

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Where should the data come from?

Source: Channel Advisor 100%

5%

90%

10%

80%

10%

70%

75%

2% 13%

15%

As the research highlights, where product information is gathered from a variety of different formats from numerous sources, it produces poor quality mobile data which in turn confuses the consumer. This research has also shown that if consumers are confused by the data then it has a significant impact on their shopping behaviour and the likelihood of them buying the product. Therefore, it is strongly recommended that industry follow the lead of major UK retailers and accesses product information that has been authenticated and comes from a trusted and reliable source.

5% 13%

41%

43% 43%

60% 50% 26%

40%

24%

30%

28%

20%

20%

18%

2007

2008

10% 0%

9%

2000

2009

Direct to website sales

Comparison Shopping Engines (CSEs) (e.g. Kelkoo or Google products)

Marketplace (e.g. ebay, Amazon)

Mobile phones

Paid Search (e.g. Google Ads)

Social (e.g. Facebook)

The onus is on brand owners and app developers to ensure that their product information comes from a trusted source. Brand owners who want to take advantage of the growing mobile-savvy shopper market, need to have a process in place to ensure that their data is kept up-to-date and accurate, and that it is made available to app developers and retailers. As shown in the research, this will affect consumer behaviour which will ultimately impact sales.

research found that product sales on mobile devices now constitute 5% of all internet sales.* Smart phone users also tend to be younger consumers who are more inclined to be savvy shoppers. GS1 UK’s research found that the majority of smart phone users were aged between 16 and 44. But clearly, in the next decade this group will become older, but continue to use smart phone technology and it will become the norm increasing the number of savvy shoppers.

As an independent industry body, GS1 recommends that product data sourced from, or authenticated by, the brand owner is best practice for mobile apps.

An industry wide solution The issues that have been highlighted by this research have implications for all companies involved in consumer markets. With the trend of mobile usage growing, industry needs to address the issue of data quality in mobile scanning apps as a priority, before it gets worse. It is highly recommended that an industry initiative to improve the quality of generic mobile app data should be set up to address the issues raised in the research and leverage the potential of the mobile app market. As a notfor-profit organisation with a strong reputation for bringing companies together to address industry-wide issues, GS1 is best placed to facilitate this type of initiative. Brand owners, app developers and retailers are strongly encouraged to take part in this process.

Initially, scanning apps were used predominantly for price comparison purposes. With a greater demand for smart phones and mobile apps, comes a greater demand for functionality beyond just comparing prices. Due to the demand from consumers for additional information, there has been an increasing trend towards providing additional functionality such as ingredient and environmental data. GS1 UK wanted to find out more about the scale of the data quality issue and the impact of missing or wrong product data on consumer behaviour. The research findings provide an insight into what needs to be addressed for industry to leverage the opportunities presented by the mobile phone phenomenon. GS1 UK has used this comprehensive research to outline concrete recommendations about how retailers, brand owners and app developers can address the issue.

Smart phone owners by age group

Recommendations for retailers, brand owners and app developers The research highlights how poor product data in thirdparty mobile apps can not only erode consumer confidence, but also affect their purchasing decisions. A failure to address the issue of poor product data will damage the credibility of companies who want to interact with consumers through marketing channels such as the web and mobile. This will ultimately damage sales and overall profitability. The longer industry fails to address this problem, the worse the problem will get.

An extract from the report prepared by GS1 UK in conjunction with Cranfield School of Management , January 2011 18


GS1 REVIEW

GS1 in Europe Forum

In October 2010 GS1 Ireland was delighted to welcome over 200 senior managers from European GS1 offices for the biennial briefing on supply chain standards in action in Europe today. Keynote speakers included Senator Feargal Quinn, Ms. Patricia Reilly and Mr. Gerald Santucci from the European Commission, Moshe Rappoport from the IBM Research Centre in Switzerland, as well as representatives from GS1 Standards users including Coca Cola and Deutsche Bundesbank. At the Forum Board Meeting Patricia Reilly, a cabinet member in the office of Máire Geoghegan-Quinn, European Commissioner for Research, Innovation and Science presented the Commission’s ‘Innovation Union’ initiative to the Board of GS1 in Europe. The ‘Innovation Union’ sets out a strategic approach to transform Europe into an Innovation Economy, using the public sector to stimulate the private sector and remove bottlenecks which currently stop ideas reaching the market. These obstacles include lack of finance, fragmented research systems and markets, under-use of public procurement of innovative products and services and slow standard setting. In early 2011 the Commission plans to make a legislative proposal to speed up and modernise standard-setting to foster innovation and enable greater interoperability between various technology-based systems. Ms Reilly acknowledged that organisations such as GS1, which promote the implementation of global supply chain standards, are critical players. The Commission welcomes the work that GS1 has already completed and is excited about the possibilities of a number of pilot projects already underway, which will bring about real innovation and efficiencies in the way business is conducted across the supply chain.

Moshe Rappoport, IBM

“The European Commission clearly recognises the value that global standards will bring to the economy and society in general. GS1 standards enable accurate information and visibility of products in the supply chain, and as such, their deployment can play a critical role in increasing competitiveness levels in the EU. We look forward to working more closely with the European Commission in its efforts to forge stronger European Innovation Partnerships,” commented Jim Bracken, Chief Executive GS1 Ireland.

Senator Feargal Quinn

19


GS1 REVIEW

Building strategies for the new decade

The Future Value Chain 2020 Report from the Consumer Goods Forum

The Trends

What do you want to achieve in 2020? Are you focused on making your business more sustainable, optimising a new shared supply chain, engaging with technologyenabled consumers or helping consumers improve their health and wellbeing? The aim of the Consumer Goods Forum* Future Value Chain Initiative is to identify the critical trends that will impact and shape companies over the next 10 years. In this their third Future Value Chain Report, published following a series of workshops held in Hong Kong, India, Australia, New Zealand, US and with the GS1 in Europe Board, twelve trends that will determine shape of our future in terms of society, shopper behaviour, the environment and technology were identified. Arising from these trends, four strategic objectives on which the consumer goods industry needs to focus were agreed. Our ability to achieve these objectives is essential for the success of the consumer goods industry over the coming decade. This lies at the heart of the 2020 Future Value Chain project. In the conclusion of the prior “2018 Future Value Chain” report, it was noted that the difference between success and failure in the consumer goods industry in the next 10 years would be businesses’ ability to adapt to rapid and significant change. This is still true. However, it is also clear that success will also require focused strategies and effective tactics – for individual companies and for the industry as a whole. This third report provides industry and companies with the framework – in the form of trends, objectives and tactics – to build strategies and action plans for 2020.

1. Increased urbanisation Increased urbanisation and the rise of megacities will impact the size of stores, logistics and the supply chain, and distribution infrastructures. 2. Aging populations Aging populations will have economic and political consequences related to the amount of money spent on necessities like food and drink and the type of delivery services, store formats and locations offered to older consumers. 3. Increasing spread of wealth Increasing spread of wealth will lead to a growing middle class in developing regions, impacting consumption and availability of food items and providing a source of growth for manufacturers and retailers. 4. Consumer technology adoption Increased impact of consumer technology adoption will be reflected not only in consumers’ own behavior but also in their ability to influence the buying behavior of other consumers as the use of social and digital media continues to spread. 5. Increased consumer demands Increase in consumer service demands will define new service models, offered via the Internet, that move beyond selling individual products and will bring different types of “solutions” to consumers and shoppers. 6. Growing importance of health and wellbeing Increased importance of health and wellbeing will have significant ramifications as sales of healthful products and services are expected to nearly quadruple in the coming five years. 7. Sustainability Growing consumer concern about Sustainability will lead consumers to look to governments and companies to play a major role in combating climate change. 8. Shifting of economic power Shifting of economic power to countries like China and India will cause trade areas to evolve and a new generation of globally competitive companies from these developing markets to emerge.

20


GS1 REVIEW

US

China

India

Japan

China will overtake the US to become the world’s largest economy as early as 2017. And by 2012, India will have overtaken Japan to become the world’s third largest economy.

9. Scarcity of natural resources Scarcity of natural resources like energy, water and food will become a growing issue as demand is projected to outstrip easily available supplies over the next decade, resulting in increasing production costs. 10. Increase in regulatory pressure Increase in regulatory pressure will be seen particularly for hot-button areas like the environment, sustainability and food safety.

21

11. Adoption of supply chain technologies Rapid adoption of supply chain technology capabilities will enable a more synchronised value chain with greater visibility and traceability. 12. Impact of next-generation information technologies Impact of next-generation information technologies like cloud computing will lead to a new way to deal, jointly, with business and technology in the consumer goods industry.


GS1 REVIEW

The Objectives What industry wants to achieve The overall impact of these root trends is significant, and will require a fundamental change in the way consumer products companies and retailers run their businesses and serve consumers and shoppers. Things not only need to be done differently, they also need to be done collaboratively. The strategic objectives, based on the above twelve trends are: 1. Make Our Business More Sustainable 2. Optimize a Shared Supply Chain 3. Engage with Technology-Enabled Consumers 4. Serve the Health and Wellbeing of Consumers The trends link to these objectives. For example, trends such as scarcity of natural resources and increased regulatory pressure will be direct change drivers for the industry’s supply chain in the coming decade. The rapid adoption of consumer technology and the increase in consumer service demands will require industry and companies to rethink the way they engage with technologyenabled consumers.

A Call to Action for Industry The 2020 Future Value Chain Report concludes with a number of calls to action for the Consumer Goods industry: •

be ready for 2020 by increasing collaboration

support the Consumer Goods Forum programs

challenge company strategy and preparedness for 2020

use the Future Value Chain framework to develop a strategy and tactical plan that responds to external shopper, consumer and societal trends.

To access a copy of the Future Value Chain Report log onto www.futurevaluechain.com

These four industry objectives are not only relevant at the global level; they also apply at the regional and country levels, although with some differences in their “accents” and degree of impact.

*The Consumer Goods Forum (CGF) is a global, paritybased industry network, driven by its members. It brings together the CEOs and senior management of over 650 retailers, manufacturers, service providers and other stakeholders across 70 countries and reflects the diversity of the industry in geography, size, product category and format. Forum member companies have combined sales of EUR 2.1 trillion. The Forum was created in June 2009 by the merger of CIES - The Food Business Forum, the Global Commerce Initiative (GCI) and the Global CEO Forum. The Consumer Goods Forum is governed by its Board of Directors, which includes 50 manufacturer and retailer CEOs and Chairmen. The Forum provides a unique global platform for knowledge exchange and initiatives around five

strategic priorities – Emerging Trends, Sustainability, Safety & Health, Operational Excellence and Knowledge Sharing & People Development – which are central to the advancement of today’s consumer goods industry. The Forum’s vision is: “Better lives through better business”. To fulfill this, its members have given the Forum a mandate to develop common positions on key strategic and operational issues affecting the consumer goods business, with a strong focus on noncompetitive process improvement. The Forum’s success is driven by the active participation of the key players in the sector who together develop and lead the implementation of best practices along the value chain.

22


23


FINANCIAL STATEMENTS

GS1 (GLOBAL STANDARDS 1 (IRELAND)) LIMITED (A company limited by guarantee and not having a share capital)

REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2010 CONTENTS

DIRECTORS AND OTHER INFORMATION REPORT OF THE DIRECTORS STATEMENT OF DIRECTORS’ RESPONSIBILITIES REPORT OF THE INDEPENDENT AUDITORS ACCOUNTING POLICIES INCOME AND EXPENDITURE ACCOUNT BALANCE SHEET CASH FLOW STATEMENT NOTES TO THE FINANCIAL STATEMENTS

24


FINANCIAL STATEMENTS

DIRECTORS AND OTHER INFORMATION SUPERVISORY BOARD AND ADVISORS as at 31 December 2006

Board of Directors

Auditors

Tony Minogue – Chairman

Mazars

Rory Connaughton

Harcourt Centre

Jim Copeland

Block 3

Susan Moore-D’Arcy

Harcourt Road

John Farrelly

Dublin 2

Damian Harte Liam Hartnett Helen Keelan

Bankers

Michael Kelly

Bank of Ireland

Daragh Monahan

College Green

Eric Morrissey

Dublin 2

John O’Callaghan Marco Pattori

Bank of Ireland

Bob Semple

Merrion Road

David Skerritt

Dublin 4

Veronica Sullivan PJ Timmins Solicitors Mason, Hayes and Curran Secretary and Registered Office

6th Floor South Bank House

Jim Bracken

Barrow Street

The Nutley Building

Dublin 4

Merrion Road Dublin 4

Registered Number: 404327

25


FINANCIAL STATEMENTS

REPORT OF THE DIRECTORS The directors submit their report together with the audited financial statements for the year ended 31 December 2010. 1.

PRINCIPAL ACTIVITIES The mission of the company is to support Irish companies in their efforts to improve supply and demand chain efficiency. The principal activities of the company are the licensing of global company prefixes and global location numbers to identify products and locations for the purpose of automatic data capture and for EDI. The GS1 global standards cover Bar Coding, eCommerce, Data Synchronisation and EPC/RFID. The company also provides education and training for its user companies.

2.

RESULTS AND REVIEW OF BUSINESS Total income, inclusive of deposit interest, for the year ended 31 December 2010 was €1,304,352 (2009: €1,283,117). The number of active user companies was 2,955 (2009: 2,910). The surplus for the year amounted to €506 (2009: €74,803). The reserves on 31 December 2010 were €1,169,844 (2009: €1,169,338). The core membership of the company is stable and mature.

3.

DIVIDENDS The company is a not for profit company and clause 6 of the Memorandum and Articles of Association expressly forbids any form of distribution to the members of the company.

4.

EVENTS SINCE THE YEAR END There have been no significant events affecting the company since the year end.

5.

RESEARCH AND DEVELOPMENT The company has been evaluating the value of research and development relevant to the implementation of GS1 standards across the existing end users and for the extension of the user base itself. The company is also participating in a research and development project, CLASS, which is evaluating the implementation of RFID technology for tracing and tracking medical devices.

6.

FUTURE DEVELOPMENTS The directors have a strategy in place to develop within other sectors of the market, such as e- procurement across the public sector including healthcare, DIY hardware and also to provide new services to existing members.

7.

DIRECTORS In accordance with the Articles of Association no directors are required to retire at the next Annual General Meeting. The names of the persons who were directors at any time during the year ended 31 December 2010 are set out below. Unless otherwise stated, they all served as directors for the entire year ended on that date. Aidan Keane (resigned 10 December 2010) Tony Minogue Elaine Attridge (resigned 10 June 2010) Rory Connaughton Jim Copeland Susan Moore-Darcy (appointed 16 September 2010) John Farrelly Damian Harte Liam Hartnett Helen Keelan Michael Kelly

8.

Daragh Monahan Eric Morrissey John O’Callaghan Marco Pattori Johnnie Philips (resigned 11 March 2010) Bob Semple David Skerritt Veronica Sullivan (appointed 10 December 2010) PJ Timmins Claude Tonna-Barthet (resigned 10 June 2010)

DIRECTORS AND SECRETARY AND THEIR INTERESTS The company is limited by guarantee and does not have any share capital. Therefore the directors and secretary who served during the year did not have a beneficial interest in the company.

26


FINANCIAL STATEMENTS

9.

TRANSACTIONS INVOLVING DIRECTORS There were no contracts or arrangements of any significance in relation to the company’s business, or that of related companies, in which the directors or secretary of the company had any interest, as defined in the Companies Act, 1990, at any time during the year ended 31 December 2010.

10. BOOKS AND RECORDS The directors are responsible for ensuring that proper books and accounting records, as outlined in Section 202 of the Companies Act 1990, are kept by the company. The directors have appointed appropriate accounting personnel in order to ensure compliance with those requirements. The books and accounting records of the company are maintained at The Nutley Building, Merrion Road, Dublin 4. 11. AUDITORS The auditors, Mazars, Chartered Accountants, have expressed their willingness to be re-appointed in accordance with Section 160(2) of the Companies Act 1963.

On behalf of the Board, Tony Minogue and David Skerritt 10 March 2011

STATEMENT OF DIRECTORS’ RESPONSIBILITIES The directors are responsible for preparing the annual report and the financial statements in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland, including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the surplus or deficit of the company 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;

-

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company 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 books of account which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Acts 1963 to 1983 and 1990 to 2009 as applicable to companies limited by guarantee and not having a share capital. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board, Tony Minogue and David Skerritt 10 March 2011

27


FINANCIAL STATEMENTS

REPORT OF THE INDEPENDENT AUDITORS To the shareholders of GS1 (GLOBAL STANDARDS 1 (IRELAND)) LIMITED We have audited the financial statements of GS1 (Global Standards 1 (Ireland)) Limited for the year ended 31 December 2010 which comprise the Income and Expenditure Account, Balance Sheet, Cash Flow Statement and the related notes. These financial statements, on pages 9 to 18, have been prepared under the historical cost convention and the accounting policies set out on pages 9 and 10. This report is made solely to the company’s members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors As described in the Statement of Directors’ Responsibilities the company’s directors are responsible for preparing the financial statements in accordance with applicable law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view in accordance with Generally Accepted Accounting Practice

in Ireland and are properly prepared in accordance with the Companies Acts, 1963 to 1983 and 1990 to 2009 as applicable to companies limited by guarantee and not having a share capital. We also report to you whether in our opinion: proper books of account have been kept by the company; and whether the information given in the directors’ report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit, and whether the financial statements are in agreement with the books of account. We also report to you if, in our opinion, any information specified by law regarding directors’ remuneration and directors’ transactions is not disclosed and, where practicable, include such information in our report. We read the directors’ report and consider the implications for our report if we become aware of any apparent misstatements within it.

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. 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 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 are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our

28

opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion the financial statements: • give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the company’s affairs as at 31 December 2010 and of its surplus and cashflow for the year then ended; and • have been properly prepared in accordance with the requirements of the Companies Acts, 1963 to 1983 and 1990 to 2009 as applicable to companies limited by guarantee and not having a share capital. We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The financial statements are in agreement with the books of account. In our opinion the information given in the directors’ report is consistent with the financial statements. Mazars Chartered Accountants & Registered Auditors Harcourt Centre Block 3 Harcourt Road Dublin 2 10 March 2011


FINANCIAL STATEMENTS

ACCOUNTING POLICIES The significant accounting policies adopted by the company are as follows: a)

Basis of Financial Statements The financial statements have been prepared under the historical cost convention and in accordance with financial reporting standards promulgated in Ireland by the Institute of Chartered Accountants in Ireland.

b)

Income Income represents amounts receivable in respect of services provided during the year and is stated exclusive of value added taxation.

c)

Tangible Assets Tangible fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated in order to write off the cost of tangible fixed assets over their estimated useful lives, using the straight line method. Computer, software and office equipment 20% / 50% straight line Furniture and fixtures 50% straight line Leasehold improvements 12.5% straight line

d)

Foreign Currencies Foreign currencies which arise principally in connection with current assets and current liabilities are translated at the rate of exchange ruling at the balance sheet date. Profits and losses from foreign currency transactions are dealt with in the income and expenditure account.

e)

Taxation The company is exempt from corporation tax on its ordinary activities in accordance with the Taxes Consolidation Act, 1997.

f)

Pensions Pension costs arising under the defined contribution scheme are charged to the income and expenditure account as incurred.

g)

Leased Assets Rentals in respect of operating leases are charged to the income and expenditure account as incurred.

h)

Financial Assets Financial assets are stated at cost less provision for any permanent diminution in value.

29


FINANCIAL STATEMENTS

INCOME AND EXPENDITURE ACCOUNT Notes Income

2

Expenditure Operating <deficit>/surplus

Year ended 31 December 2010 €

Year ended 31 December 2009 €

1,280,518

1,254,915

<1,297,888 >

<1,200,393 >

<17,370 >

54,522

23,834

28,202

Interest receivable and similar income

5

Surplus before taxation

6

6,464

Taxation

7

<5,958 >

13

506 ===

74,803 ======

Notes

31 December 2010 €

31 December 2009 €

8

187,627

131,905

9

204,946 632,939 600,000 1,437,885

136,202 789,931 600,000 1,526,133

<455,668 >

<488,700 >

Surplus after taxation

82,724 <7,921 >

A statement of total recognised gains and losses has not been prepared as there were no gains or losses for the year or the preceding year other than as stated above. All income is in respect of continuing operations.

BALANCE SHEET FIXED ASSETS Tangible assets CURRENT ASSETS Debtors Bank Financial assets

10

CREDITORS Amounts falling due within one year

11

NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES CAPITAL AND RESERVES Revenue reserves

13

982,217

1,037,433

1,169,844 ========

1,169,338 ========

1,169,844 ========

1,169,338 ========

Year ended 31 December 2010 €

Year ended 31 December 2009 €

CASH FLOW STATEMENT Notes Net cash <outflow>/inflow from operating activities

<73,330 >

45,430

Returns on investments and servicing of finance

23,834

28,202

Taxation

<4,302 >

<5,472 >

<103,194 >

<57,744 >

<156,992 >

10,416

789,931

779,515

632,939 ========

789,931 ========

12

Capital expenditure and financial investment Payments to acquire tangible fixed assets <Decrease>/increase in cash in the year Cash at beginning of year Cash at end of year

30


FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 1.

LEGAL STATUS OF COMPANY GS1 (Global Standards 1 (Ireland)) Limited is a company incorporated under the Companies Act 1963, without share capital, the liability of which is limited by the guarantee of its members, such amount as may be required, but not exceeding €1.00.

2.

INCOME Income represents the amounts receivable in respect of services provided and is stated exclusive of value added taxation.

3.

STAFF COSTS Wages and salaries Employer PRSI Pension costs

2010 € 452,129 48,350 18,680

2009 € 399,321 47,253 25,072

519,159 =======

471,646 =======

The average number of persons employed by the company in the financial period was 8 (2009: 7). 4.

PENSION The company operates a defined contribution scheme for its employees, the contributions to which are paid to an independently administered fund. The pension cost for the year represents contributions payable to the fund. The contribution charged to the income and expenditure account for the year was €18,680 (2009: €25,072).

5.

INTEREST RECEIVABLE AND SIMILAR CHARGES Interest receivable

6.

SURPLUS BEFORE TAXATION Surplus before taxation has been arrived at after charging: Auditors’ remuneration Directors’ remuneration Depreciation

7.

TAXATION Corporation tax for the year Under provision in respect of prior year

2010 € 23,834 =======

2009 € 28,202 =======

2010 €

2009 €

10,000 47,472 =======

10,000 32,611 =======

2010 €

2009 €

5,958 5,958 =======

7,050 871 7,921 =======

Factors affecting tax charge for year The current tax charge for the year is different to the current charge that would result from applying the standard rate of Irish corporation tax to the surplus before taxation. The differences are explained below: Surplus before taxation Surplus for the year multiplied by the standard rate of corporation tax in Ireland - 12.5%

6,464

82,724

808 =======

10,340 =======

Effects of: The current tax charge for the year is different to the current charge that would result from applying the standard rate of Irish corporation tax to the surplus before taxation. The differences are explained below: Non taxable mutual trading income Passive income taxable at higher rate

2,171 2,979

Current tax charge for the year

5,958 =======

<6,815 > 3,525 7,050 =======

In accordance with the Taxes Consolidation Act, 1997, the company is exempt from corporation tax on its ordinary activities. The company is only liable to corporation tax in respect of its deposit interest income at the rate of 25%.

31


FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 8.

TANGIBLE ASSETS Leasehold improvements €

Fixtures & fittings €

Office equipment €

Computers €

Total €

143,570

2,020

24,406

164,882

334,878

-

-

429

102,765

103,194

143,570

2,020

24,835

267,647

438,072

At 31 December 2009

70,279

2,020

24,406

106,268

202,973

Charge for year

17,946

-

172

29,354

47,472

At 31 December 2010

88,225

2,020

24,578

135,622

250,445

At 31 December 2009

73,291

-

-

58,614

131,905

At 31 December 2010

55,345 =======

=======

257 =======

132,025 =======

187,627 =======

2010 €

2009 €

55,721 97,431 38,720 12,677 397

9,027 111,383 13,739 2,053

204,946 =======

136,202 =======

2010 €

2009 €

600,000 -

600,000 -

600,000 =======

600,000 =======

Cost At 31 December 2009 Additions At 31 December 2010 Depreciation

Net Book Amount

9.

DEBTORS Amounts falling due within one year Trade debtors Prepayments Amounts owed by related party (Note 14) Value added tax Corporation tax

10.

FINANCIAL ASSETS Financial investments – at cost At beginning of year Additions At end of year

Financial assets comprise financial investments with a 100% capital guarantee which is due to mature in 2013. The protected amount, before tax, is the higher of: - the original amount invested - 80% of the highest value of the protected consensus bond series 2 during the investment (adjusted for any withdrawal or income taken) - the cash in value of the investment at that stage. The capital protection on the investment with Irish Life Assurances Plc is provided by JP Morgan Chase Bank. The protection as provided by Irish Life is restricted to the investment returns and capital protection actually received from JP Morgan Chase Bank.

32


FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS 11.

CREDITORS Amounts falling due within one year

2010 €

2009 €

387,227 43,410 4,750 20,281

421,585 42,836 5,671 18,608

455,668 =======

488,700 =======

2010 €

2009 €

Operating <deficit>/surplus Depreciation Movement in debtors Movement in creditors

<17,370 > 47,472 <70,400 > <33,032 >

54,522 32,611 <12,201 > <29,502 >

Net cash <outflow>/inflow from operating activities

<73,330 > =======

45,430 =======

Trade creditors and accruals Deferred income Other creditors Paye/Prsi

12.

13.

NET CASHFLOW FROM OPERATING ACTIVITIES Amounts falling due within one year

REVENUE RESERVES

At beginning of the year Surplus for the year At end of year

14.

2010 €

2009 €

1,169,338 506 1,169,844 ========

1,094,535 74,803 1,169,338 ========

RELATED PARTY TRANSACTIONS On 30 September 2010, the company entered into a shared services agreement with Efficient Consumer Response Ireland (ECR), an unincorporated organisation to identify jointly, existing and new opportunities for cooperation and collaboration including endorsement of GS1 standards within ECR guidelines for mutual benefit. Subsequent to the 30 September 2010, the company recharged certain wages and administration costs amounting to €44,355 and the balance outstanding as at 31 December 2010 was €38,720. There were no other transactions during the year that required disclosure under Financial Reporting Standard 8 – “Related Party Transactions”.

15.

COMMITMENTS In November 2005, the company took assignment of a 35 year lease with 21 years remaining, with an annual rental commitment in respect of its premises at The Nutley Building, Merrion Road, Dublin 4. The annual commitment of €94,200 is subject to review at five year intervals as specified in the lease agreement. The next review date is November 2011.

16.

COMPARATIVE AMOUNTS In order to improve the presentation and disclosure in these financial statements, certain prior year figures and disclosures have been reclassified under different headings.

17.

APPROVAL OF FINANCIAL STATEMENTS The financial statements were approved by the board of directors on 10 March 2011.

33


MEMBERSHIP REPORT

GS1 IRELAND MEMBERS BY SECTOR 2010

NEW MEMBERS 2010 BY SECTOR

34


MINUTES OF THE 29TH GS1 IRELAND AGM 2010

MINUTES OF 29TH GS1 GLOBAL STANDARDS 1IRELAND LIMITED AGM Held 10th June 2010 At GS1 Ireland, The Nutley Building, Merrion Road, Dublin 4 Ireland

period ended 31 December 2009 (the “Accounts”) The Accounts were made available to all in advance of the meeting. The Chairman invited any comments and queries on the Accounts. Responding to a question raised by H Keelan, M. Divilly of Mazars Ireland, confirmed that there were no issues in the management letter to be brought to the attention of the directors or members of the Company. There being no further questions, the adoption of the Accounts was proposed by H Keelan, seconded by T Minogue, and unanimously approved.

Present: Aidan Keane (Chairman) Tony Minogue (Vice Chairman) PJ Timmins David Skerritt Liam Hartnett Helen Keelan Rory Connaughton

BWG Foods Glanbia Clery & Co. Johnson Brothers Health Express Sirikit Holfeld Graphics

Agenda Item 3: Appointment and remuneration of the auditors Also in Attendance: The re-appointment of Mazars Ireland as auditors to the Company and the authorisation of the directors to fix the remuneration of the auditors was proposed by R Connaughton, seconded by L Hartnett, and unanimously approved.

Mr Jim Bracken, GS1 Ireland Ms Catherine Best, Mason Hayes+Curran Ms Mairead Divilly, Mazars (by telephone conference)

Agenda item 4: To elect the following as members of the Supervisory Board who retire in rotation in accordance with the articles of association of the Company:

Proxy Nominations: Jacob Fruitfield Limited SAFC Arklow Limited Superquinn Limited Cadbury Ireland Limited Bearhug Limited Thai Food Company Limited Symantec Limited MFP Sales Limited CPI Limited Irish Table Top Group Limited Interchem (Ireland) Limited Quality Plastics Limited

Mr. Aidan Keane Mr. Eric Morrissey Mr. PJ Timmins The election of Aidan Keane was proposed by H. Keelan, seconded by T. Minogue and unanimously approved. The election of Eric Morrissey was proposed by H. Keelan, seconded by T. Minogue and unanimously approved. The election of PJ Timmins was proposed by H. Keelan, seconded by T. Minogue and unanimously approved.

Welcome Address The Chairman welcomed all to the AGM and formally opened the meeting. It was noted that four proxy forms had been received. The Chairman distributed a copy of the GS1 Ireland Annual Report 2008 to each person attending. Before addressing the business of the day the Chairman thanked the Board Members, Jim Bracken and the rest of the GS1 Team for their efforts during 2009 and also Mazars for their services as Auditors.

Agenda item 5: To elect the following as members of the Supervisory Board: Mr. John O’Callaghan Mr. Claude Tonna Barthet Mr. Marco Pattori Ms Elaine Attridge Mr. Timmy Faughnan

Ordinary Business The election of John O’Callaghan was proposed by PJ Timmins, seconded by D Skerrit and unanimously approved.

Agenda Item 1: To adopt the minutes of the 2009 Annual General meeting There being no matters arising the Minutes were taken as read and proposed by R Connaughton, seconded by David Skerritt, and unanimously approved.

The election of Marco Pattori was proposed by PJ Timmins, seconded by D Skerrit and unanimously approved. It was noted that Claude Tonna Barthet, Elaine Attridge and Timmy Faughnan had confirmed that they no longer wished to be proposed for election to the Supervisory Board.

Agenda Item 2: To receive and consider the Financial Statements and the Report of the Directors and Auditors for the

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MINUTES OF THE 29TH GS1 IRELAND AGM 2010

Agenda Item 6: To pass the following as a special resolution of the Company: “That the definitions set out in Clause 2 and the objects set out in Clause 3 of the Memorandum of Association of the Company presented to the meeting and marked for identification purposes with the letter “A” be and are adopted as Clause 2 and Clause 3 of the Company in substitution for and to the exclusion of the existing Clause 2 and the existing Clause 3 of the Company.”

“7. If upon the winding up or dissolution of the Company there remains after the satisfaction of all its debts and liabilities any property whatsoever the same shall not be paid to or distributed among the members of the Company but shall be given or transferred to some other body or bodies having main objects similar to the main object(s) of the Company and which shall prohibit the distribution of its or their income and property among its or their members to an extent at least as great as imposed on the Company under or by virtue of Clause 6 hereof, such institution or institutions to be determined by the members of the Company at or before the time of dissolution.”

D Skerritt proposed, H Keelan seconded, and it was unanimously resolved that the definitions set out in Clause 2 and the objects set out in Clause 3 of the Memorandum of Association of the Company presented to the meeting and marked for identification purposes with the letter “A” be and are adopted as Clause 2 and Clause 3 of the Company in substitution for and to the exclusion of the existing Clause 2 and the existing Clause 3 of the Company.

Agenda Item 8: To pass the following as a special resolution of the Company: “That the Articles of Association of the Company in the printed document presented to the meeting and marked for identification purposes with the letter “B” be and are adopted as the new Articles of Association of the Company in substitution for and to the exclusion of the existing Articles of Association.”

Agenda Item 7: To pass the following as a special resolution of the Company: “That the Memorandum of Association of the Company be amended by the insertion of the following additional clause, numbered 7: “7. If upon the winding up or dissolution of the Company there remains after the satisfaction of all its debts and liabilities any property whatsoever the same shall not be paid to or distributed among the members of the Company but shall be given or transferred to some other body or bodies having main objects similar to the main object(s) of the Company and which shall prohibit the distribution of its or their income and property among its or their members to an extent at least as great as imposed on the Company under or by virtue of Clause 6 hereof, such institution or institutions to be determined by the members of the Company at or before the time of dissolution.”

PJ Timmins proposed, T Minogue seconded, and it was unanimously resolved that the Articles of Association of the Company in the printed document presented to the meeting and marked for identification purposes with the letter “B” be and are adopted as the new Articles of Association of the Company in substitution for and to the exclusion of the existing Articles of Association.

Special Business

Any other business and conclusion There being no other business the Chairman declared the meeting ended.

R Connaughton proposed, L Hartnett seconded, and it was unanimously resolved that the Memorandum of Association of the Company be amended by the insertion of the following additional clause, numbered 7:

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