2021 Annual Report

and Financial Statements

Strategic

Report

The Group 04

Financial Highlights 06

Our Group at a Glance 07

Five Year Summary 08

Chairman’s Statement 10

Chief Executive’s Review 14

Business Model and Strategy 18

Key Performance Indicators and Summary of 2021 Results 20

The Ferries Division 24

The Container and Terminal Division 32

Financial Review 36

Sustainability and ESG 40

Risk Management 62

Our Fleet 72

Executive Management Team 74

Corporate

Governance

The Board 78

Corporate Governance Statement 80

Report of the Audit Committee 94

Report of the Nomination Committee 100

Report of the Remuneration Committee 102

Report of the Directors 115

Directors’ Responsibility Statement 121

Financial

Statements

Independent Auditors’ Report 124

Consolidated Income Statement 132

Consolidated Statement of Comprehensive Income 133

Consolidated Statement of Financial Position 134

Consolidated Statement of Changes in Equity 135

Consolidated Statement of Cash Flows 137

Notes to the Financial Statements 138

Investor

and Other

Information

Investor Information 208

Other Information 210

Contents

Irish Continental Group

Irish Continental Group (ICG) is the leading Irish-

based maritime transport group. We carry passengers

and cars, Roll on Roll o freight and Container Lift

on Lift o freight, on routes between Ireland, Britain

and Continental Europe. We also operate container

terminals in the ports of Dublin and Belfast.

We aim for continued success in our chosen markets

and focus our eorts on the provision of a safe, reliable,

timely, good value and high-quality experience for all

our customers in a way that minimises our impact on

the environment.

We will achieve success by anticipating our customers’

needs and matching their requirements with superior

services through constant innovation and the rapid

application of technology.

We measure our success through the quality of our

service, as seen by our customers, which should result

in delivering sustained and protable growth for the

benet of all our stakeholders.

1

2021 Annual Report and Financial Statements

The Strategic Report contains certain forward-looking statements

and these statements are made by the Directors in good faith,

based on the information available to them up to the time of their

approval of this report. These statements should be treated with

caution due to the inherent uncertainties, including both economic

and business risk factors, underlying any such forward-looking

information.

The Strategic Report has been prepared for the Group as a whole

and therefore gives greater emphasis to those matters which are

signicant to Irish Continental Group and its subsidiaries when

viewed as a whole.

2

Irish Continental Group

Strategic

Report

The Group 04

Financial Highlights 06

Our Group at a Glance 07

Five Year Summary 08

Chairman’s Statement 10

Chief Executive’s Review 14

Business Model and Strategy 18

Key Performance Indicators and Summary of 2021 Results 20

The Ferries Division 24

The Container and Terminal Division 32

Financial Review 36

Sustainability and ESG 40

Risk Management 62

Our Fleet 72

Executive Management Team 74

3

Strategic Report

2021 Annual Report and Financial Statements

Estonia

Latvia

Lithuania

Denmark

Sweden

Norway

Romania

Bulgaria

Serbia

Croatia

Italy

Slovenia

Hungary

Austria

Slovakia

Switzerland

Belgium

Czech Rep.

Poland

Germany

France

United Kingdom

Netherlands

M50

M1

M2

M3

M4

M7

M50

M11

Dublin Ferryport Inland Depot

Dublin Port

Cherbourg

Rotterdam

Antwerp

Holyhead

Antwerp

Rotterdam

Pembroke

Dover

Cherbourg

Calais

Dublin

Rosslare

Belfast

Cork

Irish Ferries Ropax and

Cruise Ferry Services

Irish Ferries High Speed Ferry

Ports Served By Ferries:

Dublin, Rosslare, Holyhead,

Pembroke, Cherbourg, Dover, Calais

Group Geographical Coverage

Eucon Routes

Dublin Ferryport Terminals

Dublin Ferryport Inland Depot

Belfast Container Terminal

Ports Served By Container Ships:

Belfast, Dublin, Cork, Antwerp,

Rotterdam

Ferries Container & Terminal

Revenue

€334.5m

Capital Employed

€ 3 7 7.4 m

EBITDA

€52.3m

52%

48%

19%

81%

56%

44%

The Group operates through two divisions:

the Ferries Division, whose principal activities

include passenger and RoRo freight shipping

services under the Irish Ferries brand together

with ship chartering activities, and the Container

and Terminal Division, whose principal activities

include LoLo shipping activities under the

Eucon brand and the operation of two container

terminals, Dublin Ferryport Terminals (DFT) and

Belfast Container Terminal (BCT), within the two

main ports on the island of Ireland.

• Modern eet of multi-purpose ferries and LoLo

container vessels operating between the Republic of

Ireland and Britain and Continental Europe, and on

charter.

• Capacity to operate up to 37 daily sailings, increasing

to 47 during 2022.

• Key passenger and freight positions on short sea

routes between the Republic of Ireland to Britain, and

Britain to Continental Europe.

• Inclusive package holidays to the Republic of Ireland,

Britain and France.

• Vessel chartering activities both within and outside

the Group.

• Container shipping services between Ireland and

Continental Europe, operating a modern vessel eet

and equipment.

• Full door-to-door container transport service

between Ireland and over 20 countries.

• Strategically located container terminals in Ireland’s

main ports of Dublin and Belfast.

Ferries

Division

Container and

Terminal Division

The Group

4

Irish Continental Group

Estonia

Latvia

Lithuania

Denmark

Sweden

Norway

Romania

Bulgaria

Serbia

Croatia

Italy

Slovenia

Hungary

Austria

Slovakia

Switzerland

Belgium

Czech Rep.

Poland

Germany

France

United Kingdom

Netherlands

M50

M1

M2

M3

M4

M7

M50

M11

Dublin Ferryport Inland Depot

Dublin Port

Cherbourg

Rotterdam

Antwerp

Holyhead

Antwerp

Rotterdam

Pembroke

Dover

Cherbourg

Calais

Dublin

Rosslare

Belfast

Cork

Irish Ferries Ropax and

Cruise Ferry Services

Irish Ferries High Speed Ferry

Ports Served By Ferries:

Dublin, Rosslare, Holyhead,

Pembroke, Cherbourg, Dover, Calais

Group Geographical Coverage

Eucon Routes

Dublin Ferryport Terminals

Dublin Ferryport Inland Depot

Belfast Container Terminal

Ports Served By Container Ships:

Belfast, Dublin, Cork, Antwerp,

Rotterdam

5

Strategic Report

2021 Annual Report and Financial Statements

Revenue

€334.5m

2020: €277.1m

EBITDA (pre non-trading items)*

€52.3m

2020: €42.1m

Basic earnings per share

(2.6)c

2020: (10.2)c

Net debt*

€(142.2)m

2020: €(88.5)m

EBIT (including non-trading items)*

€(0.2)m

2020: €(10.4)m

Adjusted basic earnings per share*

(2.7)c

2020: (4.3)c

Return on average capital employed*

(0.1%)

2020: 0.2%

Financial Highlights

+20.7% +24.2%

+74.5%

-60.7%

+98.1%

+37.2%

* The Group uses alternative performance measures “APMs” which are

non-IFRS measures to monitor Group performance. Denitions and

reconciliation to IFRS measures are set out on pages 20 to 21.

2021

2020

€334.5m

€27 7.1m

2021

2020

€(0.2)m

€(10.4)m

2021

2020

(2.7)c

(4.3)c

2021

2020

(0.1%)

0.2%

2021

2020

€52.3m

€42.1m

2021

2020

(2.6)c

(10.2)c

2021

2020

€(142.2)m

€(88.5)m

6

Irish Continental Group

Irish Continental Group is a customer focused business with a

pivotal position in the logistics chain facilitating international

trade between Ireland, Britain and Continental Europe.

Our Group at a Glance

Strategic short sea RoRo routes operated

by Irish Ferries providing seamless

connections between Ireland, Britain and

Continental Europe for the 290,000 RoRo

units carried in 2021.

Reliability underpinned by major

investment in tonnage and maintenance

of quality assets ensuring the high levels

of schedule integrity demanded by our

customers.

Strategically located container terminals

which handled 335,500 container units

during 2021 in Ireland’s main ports of

Dublin and Belfast for shipping operators

providing services to key continental

hub ports and onwards access to global

markets.

Connected container transport services

provided by Eucon, transporting

346,600 teu (twenty foot equivalent) in

2021 between Ireland and 20 countries

throughout Europe by sea, road, rail and

barge.

Always on, always in touch, our shipping

and terminal services operate 24/7,

assisted by investment in modern booking

and tracking systems to ensure our

customers can keep in touch over a variety

of platforms.

Fastest crossing on the Irish sea on board

the Irish Ferries Dublin Swift fastcraft

service with a sailing time of two hours

between Dublin and Holyhead at speeds

of up to 65 kph.

Key contributor to regional tourism in all

countries we oer services, Irish Ferries

carried 667,800 passengers and 203,600

cars during 2021 with research indicating

that car tourists stay longer and travel

outside the main urban centres.

High standard on-board experience

enjoyed by our Irish Ferries customers

encompasses quality food, beverage,

entertainment and accommodation

services. Duty free shopping for

passengers travelling to and from Britain.

Passengers are never out of touch with

free satellite wi- services.

7

Strategic Report

2021 Annual Report and Financial Statements

Summary extract of Income Statement

2021 2020 2019

3

2018 2017

€m €m €m €m €m

Revenue 334.5 27 7.1 35 7.4 330.2 335.1

Operating expenses and employee

benets expense (282.2) (235.0) (270.6) (261.8) (254.1)

Depreciation, impairment and

amortisation (52.5) (41.3) (36.8) (22.1) (20.7)

(0.2) 0.8 50.0 46.3 60.3

Non-trading items

1

- (11.2) 14.9 13.7 28.7

Interest (net) (3.9) ( 7.6 ) (3.4) (0.8) (1.3)

(Loss) / prot before taxation (4.1) (18.0) 61.5 59.2 87.7

Taxation (0.8) (1.0) (1.3) (1.4) (4.4)

(Loss) / prot for the year (4.9) (19.0) 60.2 57.8 83.3

EBITDA 52.3 42.1 86.8 68.4 81.0

Per share information: €cent €cent €cent €cent €cent

Earnings per share

-Basic (2.6) (10.2) 31.7 30.4 44.1

-Adjusted basic

2

(2.7) (4.3) 23.8 23.1 31.0

Dividend per share - - 4.42 12.77 12.16

Shares in issue at year end: m m m m m

-At year end 182.8 187.0 187.4 190.3 189.9

-Average during the year 186.7 187.0 189.8 190.0 188.8

Five Year Summary

8

Irish Continental Group

Summary extract of Statement of Financial Position

2021 2020 2019

3

2018 2017

€m €m €m €m €m

Property, plant and equipment, right-of-

use and intangible assets 387.3 353.0 353.5 308.1 250.0

Retirement benet surplus 6.7 1.0 12.5 2.5 8.1

Other assets 117.9 224.9 225.8 203.7 135.2

Total assets 511.9 578.9 591.8 514.3 393.3

Equity capital and reserves 249.7 265.9 287.9 252.9 223.8

Retirement benet obligation 1.4 2.2 3.7 4.2 3.4

Other non-current liabilities 154.8 141.6 229.3 205.7 51.5

Current liabilities 106.0 169.2 70.9 51.5 114.6

Total equity and liabilities 511.9 578.9 591.8 514.3 393.3

Summary extract of Consolidated

Statement of Cash Flows

Net cash inow from operating activities 56.8 46.1 84.8 61.5 71.8

Net cash (outow) / inow from investing

activities (52.7) 7.8 (52.3) (158.8) 2 7.7

Net cash (outow) / inow from nancing

activities (116.4) (14.4) (46.5) 131.4 (51.3)

Cash and cash equivalents at the

beginning of the year 150.4 110.9 124.7 90.3 42.2

Eect of foreign exchange rate changes 0.4 - 0.2 0.3 (0.1)

Closing cash and cash equivalents 38.5 150.4 110.9 124.7 90.3

€m €m €m €m €m

Net (debt) / cash (142.2) (88.5) (129.0) (80.3) 39.6

Times Times Times Times Times

Net debt / EBITDA 2.6x 2.1x 1.5x 1.2x N/A

Gearing (net debt as a percentage of

shareholders’ funds) 57% 33% 45% 32% N/A

1. Non-trading items are material non-recurring items that derive from events or transactions that fall outside the ordinary activities of the Group and

which individually, or, if of a similar type, in aggregate, are separately disclosed by virtue of their size or incidence.

2. Adjusted basic earnings per share exclude pension interest and non-trading items.

3 The gures for years prior to 2019 have not been restated for the eects of IFRS 16 which was adopted with eect 1 January 2019. The eect on the

Consolidated Income Statement for nancial year 2019 was to decrease operating expenses by €9.4 million, increase depreciation charges by €8.6

million, increase interest expenses by €1.0 million and a net reduction in prot after tax of €0.2 million. The eect on the Consolidated Statement of

Financial Position was to increase assets by €35.3 million and liabilities by €35.5 million and reduce retained earnings by €0.2 million.

9

Strategic Report

2021 Annual Report and Financial Statements

Investment in future growth and our future sustainability

continued throughout 2021. We acquired one ferry, the

Isle of Innisfree during 2021 together with the charter of

a second vessel, the Blue Star 1. In addition, we agreed

to the purchase of a third vessel for delivery in 2022.

We also added a further container vessel, the CT Daniel

to our eet. As summarised below and detailed later

on in the Annual Report, we continued to invest in a

sustainable future for the Group. Continued investment

in the electrication of Dublin Ferryport Terminal (DFT)

took place, which will lead to an achievable and material

reduction in emissions from this container terminal

based in Dublin Port.

Despite the diculties in our passenger business, both

our RoRo freight operations and container and terminal

operations enjoyed another strong year of growth.

The Container and Terminal Division had another

exceptionally strong year, with growth in both revenues

and protability. Ferries Division RoRo revenues

recovered from a dicult start to the year following

the end of the transition period between the European

Union and the United Kingdom. The exibility of the

Ferries Division eet allowed Irish Ferries to quickly

adjust to changing trade ows in the rst half of the

year.

I would like to take this opportunity to thank all our

colleagues who made retention of these critical services

possible through the Covid-19 pandemic that is now

hopefully behind us. As in the prior year, particular

thanks are extended to our colleagues on our front line

in the ports, on our ships and in our terminals. Again,

this year and throughout this pandemic, their dedication

to their roles kept our ships sailing, our container

terminals operating and crucially the supply lines of our

island open.

Chairman’s Statement

2021 was another challenging year for the Group, with

a continuation of travel restrictions due to the Covid-19

pandemic. However, it was also a year of signicant progress

for the Group in particular the commencement of Irish Ferries

services on the strategic Britain – Continental Europe short

sea route between Dover and Calais. It has been a long-

term objective of the Group to expand into this route and its

commencement in 2021 is all the more impressive given the

current diculties in our market caused by the pandemic

related travel restrictions.

10

Irish Continental Group

Financial Outcome

The overall nancial outcome for the Group was a loss

before tax of €4.1 million (2020: loss of €18.0 million)

while operating loss before non-trading items was €0.2

million (2020: €0.8 million prot). EBITDA (pre non-

trading items) generated was €52.3 million (2020: €42.1

million) from total revenues of €334.5 million (2020:

€277.1 million).

EBITDA remained broadly in line with the prior year in

our Ferries Division where EBITDA before non-trading

items was €23.2 million (2020: €22.3 million). The

division saw increased revenues from the easing of

travel restrictions and commencement of the Dover –

Calais service which was oset by an increase in costs,

driven primarily by higher fuel prices and increased

activity.

Performance in our Container and Terminal Division

improved with an EBITDA of €29.1 million (2020: €19.8

million) through a continued focus on cost optimisation

and increases in revenue.

As in the prior year, when the Group also faced

challenging trading conditions, our diversied revenue

streams and cost containment measures protected

our strong balance sheet. While Net Debt increased

from €88.5 million to €142.2 million, this was primarily

due to strategic capital expenditure of €41.7 million.

It is testament to the strength of the business and the

balance sheet that despite the trading diculties, we

had the ability to continue investing in the future growth

of our business.

Strategic Development

The Group has continued to progress a number of key

strategic developments during the year.

In keeping with our progress over the last number of

years, we have placed a signicant focus on enhancing

our approach to ESG and sustainability. As detailed

in the Annual Report, we have rolled out a number

of exciting initiatives across the Group. These are

discussed later in the Annual Report at pages 40 to 61,

highlights of which include the signicant progress we

have made in reducing the emissions of our container

terminal operations. With the investment we have made

and continue to make in more environmentally friendly

terminal equipment, we are on course to achieve a

reduction in the emissions from our container terminal

operations of 70 per cent by 2025 (versus 2020).

The progress made to date and the expected future

investment have allowed us to target net zero emissions

in our container terminal operations by 2030. This year

also sees the publication of our environmental policy

and the development of our climate risk framework. As

a business, we recognise the growing importance of

providing transparency over our eorts to create value

in a sustainable manner, based on a set of topics which

we have identied as material to our business and our

stakeholders.

On 26 March 2021, ICG subsidiary Irish Ferries

announced that it would commence a new ferry

service on the Dover – Calais route. This new service

launched on 29 June 2021, with the introduction of

the Isle of Inishmore on the route. The service was

further expanded by the introduction of the Isle of

Innisfree onto the route on 16 December 2021. The

service oered will be further expanded by the planned

introduction of the Isle of Inisheer in the rst half of

2022. This is an exciting development for the Group

and in line with our long-term ambitions. The route

is a strategic short sea route between Britain and

Continental Europe. Following the introduction of the

Isle of Inisheer, Irish Ferries will oer up to 30 sailings

per day on the Dover – Calais route.

In the prior year, the Group took delivery of and

commissioned two electrically powered remotely

operated rubber-tyred gantries (RTGs) at DFT following

the previous successful commissioning of two similar

units. This increases the total number of electric

gantries in our Dublin Terminal to four continuing our

transition to this more environmentally ecient mode

of operation. Following the successful deployment of

these environmentally friendly electric rubber-tyred

gantries, DFT placed an order for an additional ve of

these cranes which will be delivered and commissioned

in the second half of 2022. The deployment of these

electric cranes will allow us to meet our target of

reducing emissions in our terminals by 70 per cent in

2025 (versus 2020) and reaching our target of net zero

emission in our terminals by 2030. Furthermore, the

delivery of these cranes and the relocation of our empty

depot facility to the Dublin Ferryport Inland Depot will

increase the capacity of DFT to meet the need of the

market.

Belfast Container Terminal (BCT) operates the

sole container terminal at Belfast under a services

concession agreement with Belfast Harbour

Commissioners (BHC) at a 27 acre site in Belfast

Harbour. The £40 million re-investment project by

11

Strategic Report

2021 Annual Report and Financial Statements

BHC commenced in 2020 and continued into 2021. The

project includes extensive civil works and the delivery

of two new ship-to-shore gantry cranes along with eight

new electrically operated RTGs. As per the investment

in DFT, this investment is essential to reducing

emissions in our terminal operations. The project is now

nearing completion and the deployment of the nal

three RTGs is expected to be completed by the end of

2022.

During 2020 the Group was successful in the public

tender to operate a container depot at the new Dublin

Inland Port. The Group has signed an agreement

to enter into a 20-year lease for this operation on

completion of certain civil works by the landlord. The

facility became operational in January 2022. The facility

will be used for the remote storage, maintenance and

upgrade of empty container boxes, releasing valuable

capacity for the handling of containers in the port area.

The Dublin Inland Port is located adjacent to Dublin

Airport with direct access to the M50 Motorway (Dublin

Ring Road) and Dublin Port via the Port Tunnel.

Exit of the United Kingdom from the European

Union

On 31 December 2020, the UK and EU ended the

post Brexit transition period. While trade ows have

decreased between Ireland and Britain, our customers

have gained more experience with custom formalities

and many are returning to the more ecient and

reliable short sea services. The change in trade ows

and volumes throughout the year has been managed

by having a exible eet that has allowed us to adjust

capacity on our direct continental RoRo and container

shipping services. While over the course of the entire

year (excluding our new service on Dover – Calais) this

has led to a reduction in RoRo volumes, the change in

yield mix has maintained RoRo revenues at levels only

slightly behind the prior year.

Still of concern to the Group is the lack of

implementation of appropriate checks on goods arriving

into Northern Ireland from Britain, which are required

under the Northern Ireland Protocol. To the extent that

goods are destined for the Republic of Ireland, this is

causing a distortion in the level playing eld as goods

that arrive directly into the Republic of Ireland ports

from Britain are being checked on arrival.

Corporate Governance

The Board acknowledges the importance of good

corporate governance practices. We have developed

a corporate governance framework based on the

application of the principles and provisions of the

UK Corporate Governance Code (2018) and the

Irish Corporate Governance Annex. I report on this

framework in the Corporate Governance Report on

pages 80 to 93.

During the year, I led the annual evaluation of Board

performance, which was externally facilitated, of which

further details are set out in the Corporate Governance

Report on pages 88 to 89. As Chairman, I am satised

that the Board operates eectively to ensure the long-

term success of the Group and that each Director is

contributing eectively and demonstrating commitment

to their role.

Dividend and share buyback

On 1 July 2020, the Group announced that due to the

eect of Covid-19, the Directors considered it prudent

not to proceed with the 2019 nal dividend previously

announced. With the continuation of travel restrictions

throughout 2020 and the consequential eects on

the Group’s nancial results, no interim dividend was

declared or paid relating to 2020. As travel restrictions

continued in and throughout most of 2021, the board did

not declare or pay any interim dividend relating to 2021.

Following the easing of travel restrictions in 2022, and

the consequent improvement in passenger revenues

together with the continuation of strong performance in

all other revenue streams, the Board has considered it

appropriate to recommence the payment of dividends.

The Board is proposing the payment of a dividend

of 9.00 cent per ordinary share on 7 July 2022 to

shareholders on the register at the close of business

on 10 June 2022. Irish dividend withholding tax will be

deducted where appropriate.

In November 2021, the Group bought back 4.6 million

shares which were cancelled. The total consideration

paid for these shares was €19.8 million (2020: €1.7

million).

Chairman’s Statement

Continued

12

Irish Continental Group

Outlook

Since our last update to the market, in the Trading

Update of 24 November 2021, trading to the end of 2021

in our freight business was strong with a continuation of

the trends that have seen freight customers returning to

the short sea routes. It was a disappointing end to 2021

for our passenger business with the reintroduction of

Covid-19 travel restrictions following the emergence of

the Omicron variant.

In the period from 1 January 2022 to 5 March 2022,

trading has been strong in the Ferries Division

with a continuation of the positive trends in our

freight business and a lifting of most Covid-19 travel

restrictions. Irish Ferries carried 35,900 cars in the

period, an increase of 392% over the same period in the

prior year. Excluding the new Dover – Calais service, on

a like-for-like basis car carryings grew by 163%. While

these increases are encouraging, it is over a seasonally

less signicant time of the year for passenger travel.

While the early months are typically a quiet period for

passenger travel, the increase in volumes seen in 2022

to date over the prior year are an encouraging indicator

for post Covid travel trends.

RoRo volumes in our Ferries Division have also started

strongly in 2022. Overall, Irish Ferries RoRo volumes are

up 145% on the same period in the prior year. Excluding

the new Dover – Calais service, RoRo volumes on the

legacy routes are up 27% on the prior year. This is a

continuation of the trend of a return of freight volumes

to the short sea routes. While the beginning of 2022

has also been encouraging in our RoRo business, still

of concern to the Group is the lack of implementation

of appropriate checks on goods arriving into Northern

Ireland from Britain that are destined for the Republic

of Ireland, unlike the required checks on goods arriving

directly into the Republic from Britain.

The Container and Terminal Division has had a weather

disrupted start to 2022 which has materially reduced

the number of sailings in the container business. The

number of sailings reduced by 17% versus the same

period in the prior year and this resulted in a 10.6%

reduction in containers shipped. Port lifts in our

container terminals decreased overall by 1%.

Our new service on Dover – Calais continues to perform

in line with our expectations and we are encouraged by

the very positive reception received on the route from

customers.

As in the prior year, there is still some uncertainty over

the possible emergence of further waves of Covid

infections and any eect they may have on travel

patterns. Also of concern is the conict in eastern

Europe and the extent to which fuel prices will remain

at current historically high levels. While we will pass

these increased costs through to customers, the

underlying eect of the conict on economic growth is

uncertain. Nevertheless, with our signicant investment

in a exible modern eet and in our container terminal

footprint combined with our strong balance sheet, this

places us in a very good position to benet from any

continued growth in all our markets.

John B. McGuckian,

Chairman

9 March 2022

13

Strategic Report

2021 Annual Report and Financial Statements

2021 Performance

2021 was a progressive year for the Group, which saw the

expansion of the Group’s ferry services to the Dover – Calais

route and continued growth in both our RoRo and LoLo

business. Despite the obvious challenges of the Covid-19

pandemic and the resulting travel restrictions, the Group

maintained essential shipping links on and o the island of

Ireland through operating its conventional ferries. The Group

utilised its exible shipping eet to ensure it could adjust and

service the short-term changes to trade ows following the

end of the Brexit transition period.

Chief Executive’s Review

The Group made a loss before tax of €4.1 million (2020:

loss of €18.0 million), at an operating level pre non-

trading items a small loss of €0.2 million (2020: prot

of €0.8 million) is reported. Operations were cash

generative at €56.8 million (2020: €46.1 million) and the

Group maintained a strong balance sheet.

The Chairman in his review noted the progress we have

made in the strategic development of the Group despite

the dicult backdrop in our markets. These include

signicant environmental investments in both of our

divisions and an improvement in our ESG reporting at a

Group level.

The performance in the Ferries Division saw a slight

increase in EBITDA to €23.2 million (2020: €22.3

million). While the performance is disappointing, we

take comfort and encouragement from the division’s

ability to introduce signicant cost containment

measures that ensured it remained protable at

an EBITDA level. This is testament to the division’s

underlying cost base.

Performance in the Container and Terminal Division

grew at an impressive rate during the year. EBITDA in

this division increased by 47.0% to €29.1 million (2020:

€19.8 million). This was driven by strong growth in

activity levels, with revenue growing by 18.8% to €174.0

million (2020: €146.5 million).

14

Irish Continental Group

Financial Position

The Group ended the year in a strong position

nancially notwithstanding that equity attributable

to shareholders decreased by €16.2 million to €249.7

million. To protect the Group’s already strong liquidity

position against the short-term uncertain trading

environment, a decision was made not to pay any

dividends during 2021 (2020: €nil). During the year,

the Group bought back 4.6 million shares which were

cancelled. The total consideration paid for these shares

was €19.8 million.

Net debt at year end was €142.2 million compared

to net debt of €88.5 million in the prior year. This

represents a net debt / EBITDA leverage of 2.6 times

under banking covenant denitions. The increase in

net debt is due to strategic capital expenditure of €41.7

million and share buyback of €19.8 million during the

year. Year end net debt of €142.2 million comprised

gross borrowings of €123.1 million (2020: €200.4

million), lease obligations of €57.6 million (2020: €38.5

million) less gross cash balances of €38.5 million (2020:

€150.4 million). Right-of-use lease obligations are

excluded for banking covenant purposes.

Strategic Performance

As Chief Executive, a key responsibility is to drive

future protable and sustainable growth of the Group.

I’m happy to report that on a strategic level signicant

progress was made during 2021 in preparing the Group

for future long term growth opportunities.

During the year, the Group commenced Irish Ferries

services on the new Dover – Calais route. The services

commenced on the 29 June 2021 with the deployment

of the Isle of Inishmore. The route was further boosted

with the introduction of the Isle of Innisfree onto the

route on the 16 December 2021. The Group purchased a

third ship for the route to be named the Isle of Inisheer.

This ship will enter service onto the route in the rst half

of 2022. The introduction of a third ship onto the route

for Irish Ferries will strengthen our position on the route

and ensure we are a viable alternative to the incumbent

operators.

In the prior year, the Group was successful in the public

tender to operate a container depot at the new Dublin

Inland Port. This is an important contract for the Group

as we look to expand our container operations in Dublin

in the knowledge of the scarcity of space to expand in

the core Dublin Port area. It is testament to the quality

EBITDA (pre non-trading items)

€52.3m

2020: €42.1m

EBIT (pre non-trading items)

€(0.2)m

2020: €0.8m

Return on average capital

(0.1%)

2020: 0.2%

Free cash ow before strategic

capital expenditure

€43.3m

2020: €35.3

Adjusted earnings per share

(2.7)c

2020: (4.3)c

+24.2%

-0.3pts

+22.7%

+37.2%

Key Financial Highlights

15

Strategic Report

2021 Annual Report and Financial Statements

of our container operations in the Port area that we

have been selected as the rst tenant of the new Inland

Port facility. Operations at this terminal commenced in

January 2022.

The Group’s management continually seeks investment

opportunities which meet the Group’s stringent return

hurdles both in terms of return and risk appetite,

a policy which is promoted at all levels within the

organisation. These investments are funded through a

combination of debt and cash generation from existing

activities.

Strategy and the Environment

The Group is conscious that its activities have an

environmental impact but is happy to note that reducing

that impact aligns with our overall strategy. In the

prior year, the Group proceeded with the signicant

investments in installing exhaust gas cleaning systems

(EGCS) and the ongoing program of electrication of

heavy plant at our container terminals. Both of these

investments, while reducing harmful emissions, also

bring health and safety benets to our operatives and

align with the strategic objective of delivering sustained

and protable growth. This investment continued in

2021, including the order of ve additional electric

cranes for our Dublin Ferryport Terminal. In addition

to the continued investment, the Group has this year

enhanced our target setting across the organisation,

developed a climate risk framework and published for

the rst time our environmental policy. Details of our

work in this space during the year are detailed in our

Sustainability and ESG Report at pages 40 to 61.

The Group currently collects various data related to

its environmental impact of its operations for external

reporting purposes. In recognition of the powerful

eect that data can have on creating awareness

of individual actions. In the prior year, the Group

commenced a program to collate and harness this data

as a tool to promote environmental responsibility within

the workforce. While we recognise that we still have

a way to go, we consider the steps taken over the last

number of years as creating the foundation from which

we can further develop our approach to sustainability,

ESG and strong reporting in the years ahead.

However, for certain aspects the Group will require

the shipping sector as a whole to work together. This

particularly relates to global regulation under the

auspices of the International Maritime Organisation

setting common standards and key equipment suppliers

adopting the latest technologies. As a small operator

in a global market, the Group will only apply proven

technologies which generate an economic return. The

International Maritime Organisation and the European

Union have recently set out decarbonisation goals

for the Maritime industry. These are set out in our

Sustainability and ESG Report on pages 40 to 61.

The Group is aware that our stakeholders require us to

be environmentally focused and the Group is committed

to continuous improvement in both the big and small

things that we do.

Exit of the United Kingdom from the European

Union

With the ending of the transition period on 31 December

2020 following Brexit, customs and other formalities

were introduced on freight movements on our routes

between Ireland and Britain. However, the long

standing Common Travel Area arrangements were

retained which allow free movement of passengers

between both jurisdictions. The UK has also retained

its adherence to the Convention on the Contract for

the International Carriage of Goods by Road which

facilitates the movement of goods to Continental

Europe via the UK. Of concern is the lack of

implementation of appropriate checks on goods arriving

into Northern Ireland from Britain, which are required

under the Northern Ireland Protocol. This creates a

distortion in the market, where such checks are applied

on goods arriving into Republic of Ireland ports.

The eect of the new formalities during 2021 was to

change RoRo freight shipping patterns for goods moving

between Ireland and Continental Europe, from the UK

landbridge to direct services. In response, with the

exibility of our eet, we adjusted capacity between our

short sea Ireland Britain services and direct Continental

services. While this has resulted in a reduction in RoRo

volumes, a higher yield mix has maintained revenues

at levels marginally behind last year. As our customers

have become more familiar with the new checking

arrangements, continental ows are returning to the

more ecient and weather reliable short sea services.

Following the end of the transition period, Duty

Free sales on our sailings into Britain recommenced,

Chief Executive’s Review

Continued

16

Irish Continental Group

following the previous abolition of Duty Free sales in

1999. While early signs are encouraging, until we see

a full return to post Covid-19 passenger levels, it will

be dicult to judge how benecial this will be for the

Group.

Stakeholders

The Group’s performance is dependent on the support

of our customers, suppliers and employees. I would

like to thank all our customers for their support during

this dicult year. We will continue to work with our

customers to meet their expectations into the future.

Our suppliers are key to our ability to deliver quality

services to our customers. We continually work with our

suppliers whether they be port operators, contracted

service providers or product suppliers to improve

eciencies and quality. We appreciate the co-operation

and exibility achieved in delivering our 24/7 services.

As in prior years, I would like to take this opportunity

to thank our employees for their continued dedication

to the operation of our services that are essential to the

island of Ireland. This dedication has never before been

so severely tested. It is testament to their dedication

and skill that the Group’s services on and o the island

were maintained.

Outlook

I look forward in 2022 to a return to normalised levels

in our passenger markets with the easing of Covid-19

travel restrictions, the continuation of the trends in

2021 which saw a gradual return of RoRo freight to our

short sea Irish Sea routes and the continued growth in

our Container and Terminal Division. The introduction

of a third vessel onto our Dover – Calais service will

give us an excellent platform to continue to grow and

rmly establish ourselves on the new route. As in prior

years, we will continue to seek out improvement and

investment opportunities for our longer-term success.

Eamonn Rothwell,

Chief Executive Ocer

9 March 2022

17

Strategic Report

2021 Annual Report and Financial Statements

Irish Continental Group is a focused provider of maritime passenger and freight services with its principal operations

in Northwest Europe. The Group operates through two divisions: the Ferries Division, whose principal activities

include passenger and RoRo freight shipping services under the Irish Ferries brand together with ship chartering

activities, and the Container and Terminal Division, whose principal activities include LoLo shipping activities

under the Eucon brand and the operation of two container terminals, Dublin Ferryport Terminals (DFT) and Belfast

Container Terminal (BCT), within the two main ports on the island of Ireland. Key risks and uncertainties aecting the

Group are set out on pages 67 to 71.

Further details on these operations are set out in the Strategic Report on pages 24 to 34.

Business Model and Strategy

Investment in quality

assets in order to achieve

economies of scale

consistent with a superior

customer service

Benchmarking costs to

industry best practice

to enable the Group to

compete vigorously in its

chosen markets.

This strategy is supported by our ve strategic pillars

Quality service

A modern ferry

eet

Long term

leasehold

interests and

operating

agreements

Access to

strategically

located ports

and slot times

Experienced

qualied sta

Recognised

brand names

Access to

nancial

resources

People and culture Financial

management

Safety Sustainability

The key resources supporting delivery of this strategy include

There are two principal elements to the Group’s strategy for delivering value to shareholders:

18

Irish Continental Group

19

Strategic Report

2021 Annual Report and Financial Statements

The Group uses a set of headline Key Performance Indicators (KPIs) to measure the performance of its operations

and of the Group as a whole which are set out and dened below.

Certain nancial measures used are not dened under International Financial Reporting Standards (IFRS).

Presentation of these Alternative Performance Measures (APMs) provides useful supplementary information which,

when viewed in conjunction with the Group’s IFRS nancial information, allows for a more meaningful understanding

of the underlying nancial and operating performance of the Group. These non-IFRS measures should not be

considered as an alternative to nancial measures as dened under IFRS. Descriptions of the APMs included in this

report are disclosed below.

APM Description Benet of APM

EBITDA EBITDA represents earnings before

interest, tax, depreciation, impairment,

amortisation and non-trading items.

Eliminates the eects of nancing and

accounting decisions to allow assessment

of the protability and performance of the

Group.

EBIT EBIT represents earnings before interest,

tax and non-trading items.

Measures the Group’s earnings from

ongoing operations.

Free cash

ow before

strategic capital

expenditure

Free cash ow comprises operating

cash ow less capital expenditure

before strategic capital expenditure

which comprises expenditure on vessels

excluding annual overhaul and repairs,

and other assets with an expected

economic life of over 10 years which

increases capacity or eciency of

operations.

Assesses the availability to the Group of

funds for reinvestment or for return to

shareholders.

Net debt Net debt comprises total borrowings

plus lease liabilities less cash and cash

equivalents.

Measures the Group’s ability to repay its

debts if they were to fall due immediately.

Adjusted Basic

Earnings Per

Share (EPS)

EPS is adjusted to exclude the non-

trading items and net interest (income) /

cost on dened benet obligations.

Directors consider Adjusted Basic EPS to

be a key indicator of long-term nancial

performance and value creation of a

public listed company.

ROACE ROACE represents return on average

capital employed. Operating prot

(before non-trading items) expressed as a

percentage of average capital employed

(consolidated net assets, excluding net

(debt) / cash, retirement benet surplus /

(obligation) and asset under construction

net of related liabilities.

Measures the Group’s protability and

the eciency with which its capital is

employed.

Pre-IFRS 16 Use of the term Pre-IFRS 16 denotes

that the APM or IFRS measure has been

adjusted to remove the eects of the

application of IFRS 16: Leases.

Measurement of covenants for bank

facility purposes

Key Performance Indicators and Summary of

2021 Results

20

Irish Continental Group

APM Description Benet of APM

Non-Financial

KPI

Description Benet of non-nancial KPI

Schedule

integrity

Schedule integrity (the number of sailings

completed versus scheduled sailings).

Schedule integrity is an important

measure for Irish Ferries’ vessels as it

reects the reliability and punctuality of

our service. This measure is meaningful to

both our passenger and freight customers

alike in facilitating them and their cargo to

arrive on time at their nal destination.

The following table sets forth the reconciliation from the Group’s operating loss (EBIT) for the nancial year to

EBITDA, free cash ow and net debt. See note 12 to the Consolidated Financial Statements for the calculation of

Basic and Adjusted Basic EPS.

Cash Flow

2021

€m

2020

€m

Operating loss (EBIT) (0.2) (10.4)

Non-trading items (note 10) - 11.2

Net depreciation, impairment and amortisation (note 9) 52.5 41.3

EBITDA 52.3 42.1

Working capital movements (note 34) 11.7 10.6

Pension service costs less payments (note 34) 0.6 (1.1)

Share based payments expense 0.3 0.2

Other 1.1 (0.6)

Cash generated from operations 66.0 51.2

Interest paid (8.4) (3.7)

Tax paid (0.8) (1.4)

Maintenance capital expenditure (13.5) (10.8)

Free cash ow before strategic capital expenditure 43.3 35.3

Strategic capital expenditure (41.7) (19.3)

Repayment of vessel contract deposit - 33.0

Free cash ow after strategic capital expenditure 1.6 49.0

Proceeds on disposal of property, plant and equipment 2.8 4.9

Buyback of equity (19.8) (1.7)

Proceeds on issue of ordinary share capital 0.7 0.2

Net cash ows (14.7) 52.4

Opening net debt (88.5) (129.0)

Recognition of right-of-use asset lease obligations (38.5) (12.5)

Translation / other (0.5) 0.6

Closing net debt (142.2) (88.5)

21

Strategic Report

2021 Annual Report and Financial Statements

The following table sets forth the reconciliation from the Group’s ROACE calculation:

ROACE

2021

€m

2020

€m

Equity 249.7 265.9

Net debt 142.2 88.5

Asset under construction (including prepayment deposits) (9.2) (3.3)

Retirement benet obligations 1.4 2.2

384.1 353.3

Retirement benet surplus (6.7) (1.0)

Capital employed 3 7 7.4 352.3

Average capital employed 364.9 358.3

Operating (loss) / prot (before non-trading items) (0.2) 0.8

ROACE (0.1%) 0.2%

The following table provides a reconciliation of the Group’s net debt position:

Net debt

2021

€m

2020

€m

Cash and cash equivalents (note 19) 38.5 150.4

Non-current borrowings (note 22) (115.8) (113.1)

Current borrowings (note 22) (7.3) (87.3)

Non-current lease obligations (note 23) (37.5) (27.8)

Current lease obligations (note 23) (20.1) (10.7)

Net debt (142.2) (88.5)

The calculation and performance of KPIs and a summary of the key nancial results for the year is set out in the table

below. A detailed review of the divisional operations is set out in the Strategic Report on pages 24 to 34.

Key Performance Indicators and Summary of

2021 Results

Continued

22

Irish Continental Group

Ferries Container & Terminal Inter- Segment Group

2021 2020 2021 2020 2021 2020 2021 2020

Comment €m €m €m €m €m €m €m €m

Revenue 175.5 141.4 174.0 146.5 (15.0) (10.8) 334.5 27 7.1

EBITDA 1 23.2 22.3 29.1 19.8 - - 52.3 42.1

Depreciation, impairment and

amortisation (40.6) (34.6) (11.9) (6.7) - - (52.5) (41.3)

Operating (loss) / prot (EBIT) 2 (1 7.4) (12.3) 1 7.2 13.1 - - (0.2) 0.8

Non-trading item (note 10) - (11.2) - - - - - (11.2)

Finance costs (note 7) (2.0) (6.4) (2.0) (1.4) - - (4.0) ( 7.8)

Finance income (note 6) - 0.2 0.1 - - - 0.1 0.2

(Loss) / prot before tax (19.4) (29.7) 15.3 11.7 - - (4.1) (18.0)

ROACE 3 (5.9)% (4.2)% 25.5% 21.0% (0.1)% 0.2%

EPS: (note 12)

EPS Basic 4 (2.6)c (10.2)c

EPS Adjusted Basic 4 (2.7)c (4.3)c

Free cash ow 5 43.3 35.3

Comment:

Financial KPIs

1. EBITDA: Group EBITDA for the year increased by 24.2%, to €52.3 million (2020: €42.1 million). The increase in

underlying EBITDA was primarily due to due to increased revenues and a continued focus on cost optimisation.

EBITDA in the Ferries Division increased by 4.0%, to €23.2 million, while the Container and Terminal Division

increased by 47.0%, to €29.1 million.

2. EBIT: Group EBIT (pre non-trading items) for the year decreased to €(0.2) million (2020: €0.8 million). The Ferries

Division decrease in underlying EBIT was 41.5%, primarily due to the set-up costs on the Dover – Calais route, while

the Container and Terminal Division was 31.3% higher, as a result of higher volumes and revenues. Group EBIT

including non-trading items increased to €(0.2) million (2020: €(10.4) million). The non-trading item in the prior

period relates to the transfer of pension liabilities to a third-party insurer.

3. ROACE: The Group achieved a return on average capital employed of (0.1)% (2020: 0.2%). The Ferries Division

achieved a return on average capital employed of (5.9)% (2020: (4.2)%) while the Container and Terminal Division

achieved 25.5% (2020: 21.0%).

4. EPS: Basic EPS was (2.6) cent compared with (10.2) cent in 2020. Adjusted Basic EPS (before non-trading items and

the net interest (income) / cost on dened benet obligations) was (2.7) cent compared with (4.3) cent in 2020.

5. Free cash ow before strategic capital expenditure: The Group’s free cash ow before strategic capital

expenditure was €43.3 million (2020: €35.3 million). The increase in free cash ow is mainly due to the increase

in EBITDA. Free cash ow before strategic capital expenditure is a meaningful measure of cash generated for

investment or return to shareholders.

Non-Financial KPIs

Schedule integrity: The Ferries Division delivered 96% of scheduled sailings compared with 98% in the previous year

across all services.

23

Strategic Report

2021 Annual Report and Financial Statements

France

United Kingdom

Dover

Calais

Dublin

M50

M1

M2

M3

M4

M7

M50

M11

Holyhead

Dublin Port

Cherbourg

Holyhead

Pembroke

Cherbourg

Rosslare

Irish Ferries Ropax and

Cruise Ferry Services

Irish Ferries High Speed Ferry

The Ferries Division

The Ferries Division operates

multipurpose ferry services carrying

both passengers and RoRo freight on

strategic short sea routes between

Ireland and Britain, Britain and France

and direct ferry services between

Ireland and France. The division also

engages in chartering activities.

The ferry services trade under the Irish Ferries brand.

Irish Ferries operates on four routes utilising a eet of

seven vessels, ve of which are owned and two which

are chartered-in. An eighth vessel was acquired by the

Group in January 2022.

In addition to the modern eet, Irish Ferries retains

rights to access appropriate berthing times at key

ports allowing Irish Ferries to facilitate its customers’

preferred sailing times.

The division also owns seven container vessels which

are time chartered at year end.

Fleet Summary

Operated by Ferries Division

Vessel Type Employment

Ulysses Cruise ferry Dublin – Holyhead

Isle of Inishmore Cruise ferry Dover – Calais

Isle of Innisfree Cruise ferry Dover – Calais

Blue Star 1 (chartered-in) Cruise ferry Rosslare - Pembroke

Epsilon (chartered-in) Ropax Dublin – Holyhead / Cherbourg

Dublin Swift High speed ferry Dublin – Holyhead

W.B. Yeats Cruise ferry Dublin – Holyhead / Cherbourg

Isle of Inisheer (acq’d Jan 2022) Ropax Dover – Calais

Chartered out by Ferries Division

Vessel Type Employment

Ranger LoLo container vessel Charter – 3rd Party

Elbfeeder LoLo container vessel Charter – Inter-Group

Elbtrader LoLo container vessel Charter – Inter-Group

Thetis D LoLo container vessel Charter – 3rd Party

CT Daniel LoLo container vessel Charter – 3rd Party

CT Rotterdam LoLo container vessel Charter – Inter-Group

Elbcarrier LoLo container vessel Charter – Inter-Group

24

Irish Continental Group

France

United Kingdom

Dover

Calais

Dublin

M50

M1

M2

M3

M4

M7

M50

M11

Holyhead

Dublin Port

Cherbourg

Holyhead

Pembroke

Cherbourg

Rosslare

Irish Ferries Ropax and

Cruise Ferry Services

Irish Ferries High Speed Ferry

25

Strategic Report

2021 Annual Report and Financial Statements

Revenue in the division was 24.1% higher than the

previous year at €175.5 million (2020: €141.4 million).

Revenue in the rst half of the year increased by 2.1% to

€62.9 million (2020: €61.6 million), while in the second

half revenue increased by 41.1%, to €112.6 million (2020:

€79.8 million). EBITDA increased to €23.2 million (2020:

€22.3 million) while EBIT was €(17.4) million compared

with €(12.3) million in 2020.

Fuel costs were €43.0 million, an increase of €10.2

million on the prior year. The division achieved a return

on capital employed of (5.9%) (2020: (4.2%)).

In total Irish Ferries operated 6,331 sailings in 2021

(2020: 4,501), the increase due to the reintroduction of

the fastcraft Dublin Swift and sailings on the new Irish

Ferries Dover – Calais service.

Car and Passenger Markets

It is estimated that the overall car market

1

, to and from

the Republic of Ireland, grew by approximately 25.8%

in 2021 to 357,200 cars, while the all-island market, i.e.

including routes into Northern Ireland, is estimated to

have increased by 54.0%. Irish Ferries’ car carryings

during the year were up on the previous year by 48.5%

to 203,600 cars (2020: 137,100 cars). The reduction

in carryings versus 2019 levels is primarily due to the

Covid-19 travel restrictions in place for most of the year.

The total sea passenger market (i.e. comprising car,

coach and foot passengers) to and from the Republic

of Ireland increased by 11.0% on 2020 to a total of 1.2

million passengers, while the all-island market increased

by 39.5%. Irish Ferries’ passenger numbers carried

increased by 28.7% at 667,800 (2020: 519,000). In the

rst half of the year, Irish Ferries’ passenger volumes

fell by 43.2% and in the second half of the year, which is

seasonally more signicant, the increase in passenger

numbers was 87.7%.

The Ferries Division delivered 96% of scheduled sailings

compared with 98% in the previous year across all

services.

In 2021, Irish Ferries maintained focus on supporting

passenger messaging on how to meet the varied

and rapidly changing Covid-19 travel restrictions.

Reassurance continued to be provided with our ‘Travel

Safe’ programme providing information about our on-

board environment with fresh air circulation, access

to outdoor decks, space for social distancing, as well

cleaning regimes and procedures onboard to maximise

Revenue

€175.5m

2020: €141.4m

EBITDA

€23.2m

2020: €22.3m

EBIT

€(17.4)m

2020: €(12.3)m

ROACE

(5.9%)

2020: (4.2%)

Non-trading item

-

2020: €(11.2)m

+24.1%

+4.0%

-41.5%

-1.7pts

+100.0%

2021 Overall Ferries Division

Performance

The Ferries Division

Continued

26

Irish Continental Group

27

Strategic Report

2021 Annual Report and Financial Statements

The Ferries Division

Continued

the safety for all passengers, all designed to give greater

customer condence. Implementation of exceptional

Covid-19 cancellation credit for economy tickets

during periods of travel restriction provided further

reassurance for customers who did not wish or were

unable to travel, in addition to the terms and conditions

of our exible tickets being improved recognising

passengers’ greater need to be able to make more

changes more easily.

The launch of the new Dover-Calais route was the key

focus for marketing and promotions activity in 2021,

albeit adapted and at a scale to acknowledge that the

launch was in a period of restricted travel regulations.

There was a comprehensive multimedia launch for the

new route involving traditional and digital TV and radio

advertising, paid search, social and public relations

activities. By November 2021, market research indicated

that 45% of British people were aware of our new

Dover-Calais service

2

.

Our website and social channels maintained their

importance as much visited and valued hubs for

information on these safety measures, the latest

updates on travel restrictions in the Irish, British and

French marketplaces, as well as providing reassurance

on the continuity of our sailing schedules. Our social

following increased across the main platforms including

Twitter, Facebook, and Instagram. There were several

technology improvements during the year including

the launch mid-year of the Hogia Ferry Systems’

standard booking system “BOOKIT” on the passenger

side, complemented with a new E-Commerce front

end booking ow on the IrishFerries.com website. AI

enabled automated web chat was introduced in the

last quarter to handle routine passenger enquiries more

eciently, particularly in relation to Covid-19 travel

restrictions information.

Irish Ferries continued to link throughout the year with

state tourism agencies in Ireland (Tourism Ireland and

Fáilte Ireland) as well as in our tourism source markets

for Wales (Visit Wales) and France (Normandy Tourism

and Cotentin Tourism) to ensure we had the latest

insights for each market. In the nal quarter of the year,

we participated in a collaborative “press the green

button” campaign with Tourism Ireland to encourage

tourists to return to Ireland.

1. (Market gures source: Passenger Shipping Association and Cruise &

Ferry)

2. (Inclusion in an online nationally representative omnibus survey carried

out amongst all adults 16+ by a third party market research company)

28

Irish Continental Group

In a year of ongoing complexity due to managing

Covid-19 pandemic challenges, we continued to work

in partnership with the travel trade, notwithstanding

the requirement to do this more on a virtual basis. In

2021, we were delighted to be recognised by travel

trade professionals and voted ‘Best Ferry Company’

for the 14th consecutive time by the Irish Travel Trade

News Awards, and in the UK ‘Best Ferry or Fixed Link

Operator’ in the Group Leisure & Travel awards for

the third year running. These awards were a welcome

recognition of our professionalism in continuing to

handle the volatile travel circumstances.

New Irish Ferries Uniform

Early in 2021, Irish Ferries commenced the rollout of

a new uniform, which will ultimately by worn by all

passenger facing on-board crew and port sta. The

uniform was the culmination of a year-long design

project between Irish Ferries and Irish fashion designer

Deborah Veale and involved extensive sta research and

engagement. The new look reects Irish Ferries status

as a modern ferry company with proud Irish roots and is

an important symbol of the brand for all our customers,

with the colour green more prevalent than before. In all,

23 garments have been selected giving on-board crew

and port sta a greater variety of styles from which to

choose from and are designed to t and atter all body

shapes and sizes. Sustainability considerations were to

the fore in the design process, with many of the uniform

materials made from recycled plastic bottles, preventing

them reaching our oceans and landll.

Frontline Crew

The challenges required of the Covid-19 pandemic,

were a key focus for frontline sta and crew who

continuously adapted to changing regulations,

managing the required health and safety procedures

and cleaning regimes as well as embracing a continuous

testing protocol. These measures ensured they were

kept safe while providing the highest standards on-

board to ensure continued connectivity for our island

and protection for our key freight workers and essential

travellers.

(see website with details of our ‘Travel Safe’ programme:

https://www.irishferries.com/travelsafe)

29

Strategic Report

2021 Annual Report and Financial Statements

The Ferries Division

Continued

RoRo Freight

The RoRo freight market* between the Republic of

Ireland, and the UK and France, fell in 2021. The total

number of trucks and trailers was down 10.1%, to

approximately 926,200 units. This was primarily due

to the non-implementation of the Northern Ireland

Protocol, which resulted in reduced checks on goods

arriving into Northern Ireland from Britain. On an all-

island basis, the market decreased by approximately

0.9% to 1.83 million units, clearly showing the distortion

in the level playing eld between goods arriving into

Northern Ireland versus the Republic.

Irish Ferries’ carryings (including Dover – Calais), at

290,000 freight units (2020: 335,500 freight units),

decreased by 13.6% in the year with volumes down

15.2% in the rst half and down 12.3% in the second half.

Irish Ferries has also been proactive in the online

environment for freight customers. In recent years high-

quality mobile options have been developed, alongside

the traditional desktop, whereby customers can access

our freight reservations systems with ease. This has

facilitated an increasing proportion of our business

being booked via our website, www.irishferriesfreight.

com.

* (Market gures source: Passenger Shipping Association and Cruise &

Ferry)

Chartering

The Group continued to charter a number of vessels

to third parties during 2021. Overall external charter

revenues were €8.1 million in 2021 (2020: €5.9 million).

Of our seven owned LoLo container vessels, four are

currently on year-long charters to the Group’s container

shipping subsidiary Eucon on routes between Ireland

and the Continent whilst three are chartered to third

parties. The Oscar Wilde continues on a bareboat hire

purchase agreement with MSC Mediterranean Shipping

Company SA.

Outlook

We look forward to a further recovery of our tourism

markets as Covid-19 travel restrictions ease, and the

introduction of our third vessel on the new Dover –

Calais service. We expect continued growth in the RoRo

freight market and a continuation of the return of trac

from the direct continental routes to the landbridge.

Despite another dicult year for the Group and in

particular the Ferries Division, we take comfort from

the continued strength of our balance sheet, the

high quality and performance of our asset base and

improving the level of service provided to our customers

on the Dover – Calais service with the introduction of a

third vessel on the route.

30

Irish Continental Group

31

Strategic Report

2021 Annual Report and Financial Statements

Estonia

Latvia

Lithuania

Denmark

Sweden

Norway

Romania

Bulgaria

Serbia

Croatia

Italy

Slovenia

Hungary

Austria

Slovakia

Switzerland

Belgium

Czech Rep.

Poland

Germany

France

United Kingdom

Netherlands

Antwerp

Rotterdam

Dublin

Belfast

Cork

M50

M1

M2

M3

M4

M7

M50

M11

Dublin Port

Dublin Ferryport Inland Depot

Rotterdam

Antwerp

Eucon Geographical Coverage

Eucon Routes

Dublin Ferryport Terminals

Dublin Ferryport Inland Depot

Belfast Container Terminal

Ports Served by Container Ships:

Belfast, Dublin, Cork, Antwerp,

Rotterdam

The Container and Terminal division

provides direct container shipping

services between Ireland and

continental Europe together with the

operation of container terminals at both

Dublin and Belfast.

The division’s intermodal shipping line Eucon is the

market leader in the sector, operating a core eet of

six chartered container vessels ranging in size from

750 – 1,000 teu capacity, connecting the Irish ports

of Dublin, Cork and Belfast with the continental ports

of Rotterdam and Antwerp. Eucon is oering feeder

services to the Deep Sea Lines and a full intermodal

service where Eucon deploys 4,500 owned and leased

containers (equivalent to 8,100 teu) of varying types

thereby oering a full range of services from palletised,

project and temperature controlled cargo to Irish and

European importers and exporters from all points on

the island of Ireland to destinations across 20 European

countries. Door to door services are contracted to third

parties utilising a variety of transport modes including

road, rail and barge.

Dublin Ferryport Terminals (DFT) operates its Dublin

Port container facility from a leasehold facility with

remaining lease terms of between 74 and 100 years,

covering over 34 acres. The facilities comprise 480

metres of berths for container ships, with a depth

of nine to eleven metres and is equipped with three

modern Liebherr gantry cranes (40 tonne capacity)

and ten rubber-tyred gantries (40 tonne capacity) on

a strategically located site within three kilometres

of Dublin city centre and within one kilometre of the

Dublin Port Tunnel, providing direct access to Ireland’s

motorway network. DFT now operates four electrically

operated rubber-tyred gantries incorporating latest

technologies to allow for remote operation. Following

the successful deployment of these environmentally

friendly electric RTGs, DFT placed an order for an

additional ve of these cranes which will be delivered

and commissioned in the second half of 2022. The

delivery of these cranes and the relocation of our

empty depot facility in January 2022 to our new Dublin

Ferryport Inland Depot located at the new Dublin Inland

Port will increase the capacity of DFT to meet the needs

of the market.

Belfast Container Terminal (BCT) operates the

sole container terminal at Belfast under a services

concession agreement with Belfast Harbour

Commissioners (BHC) at a 27 acre site in Belfast

Harbour. This services concession agreement currently

extends to 2026. BHC are currently completing a £40

million re-investment project which includes extensive

civil works and the delivery of two new Liebherr gantry

cranes and eight new electrically operated RTGs

incorporating the latest technologies to allow for remote

operation similar to the RTGs operated at DFT. Civil

works have commenced on the building of two new

RTG stacks which we expect to be completed by the

end of 2022 alongside the commissioning of the nal

three RTGs. The nal two rail mounted gantry cranes

will be phased out of operation during 2022.

The Container and Terminal Division

32

Irish Continental Group

Estonia

Latvia

Lithuania

Denmark

Sweden

Norway

Romania

Bulgaria

Serbia

Croatia

Italy

Slovenia

Hungary

Austria

Slovakia

Switzerland

Belgium

Czech Rep.

Poland

Germany

France

United Kingdom

Netherlands

Antwerp

Rotterdam

Dublin

Belfast

Cork

M50

M1

M2

M3

M4

M7

M50

M11

Dublin Port

Dublin Ferryport Inland Depot

Rotterdam

Antwerp

Eucon Geographical Coverage

Eucon Routes

Dublin Ferryport Terminals

Dublin Ferryport Inland Depot

Belfast Container Terminal

Ports Served by Container Ships:

Belfast, Dublin, Cork, Antwerp,

Rotterdam

33

Strategic Report

2021 Annual Report and Financial Statements

EBITDA in the division increased by 47.0% to €29.1

million (2020: €19.8 million) while EBIT grew 31.3% to

€17.2 million (2020: €13.1 million).

In Eucon, overall container volumes shipped were up

9.6% compared with the previous year at 346,600 teu

(2020: 316,300 teu). There was a strong recovery on

volumes for all trade lanes in 2021 as supply chains

adjusted to the new Covid-19 operating environment.

To facilitate this increased demand we chartered a sixth

vessel into the eet in January 2021. The revenue gains

were oset by strong increases in the cost base more

particularly ship charter costs and fuel costs which we

recovered from our customers by increasing rates and

the continued application of the exible bunker and fuel

surcharges.

Containers handled at the Group’s terminals in Dublin

Ferryport Terminals (DFT) and Belfast Container

Terminal (BCT) were up 14.7% at 335,500 lifts (2020:

292,400 lifts). DFT’s volumes were up 15%, while BCT’s

lifts were up 14%. We have seen a strong increase

in volumes across the entire customer base and the

resultant increased revenues were partially oset by

increased energy and labour costs.

Outlook

In Eucon, we see a continued strong demand for

capacity in 2022 which has strongly increase ships

charter costs that will be passed onto customers

by increasing rates. We look forward to continuing

the growth trend in EBIT which is testament to our

investment in the business in driving eciencies and

nurturing close customer relationships. The transition

from diesel powered rubber-tyred gantries at our

Dublin terminal will continue in 2022 with the delivery

of ve additional electric rubber-tyred gantries capable

of remote operation. These new environmentally

friendly machines will continue to deliver operational

eciency and a safe working environment as we

continue the expansion of our capacity. The opening

of Dublin Ferryport Inland Depot at the Dublin Inland

Port has provided the opportunity to expand our empty

depot business while at the same time increase the

capacity at Dublin Ferryport Terminal. At our Belfast

Container Terminal facility in Belfast, we look forward

to continuing to work on the completion of the £40m

re-investment project with Belfast Harbour and assisting

in the delivery of additional terminal capacity to the

market.

Revenue

€174.0m

2020: €146.5m

EBITDA

€29.1m

2020: €19.8m

EBIT

€17.2m

2020: €13.1m

ROACE

25.5%

2020: 21.0%

+18.8%

+47.0%

+31.3%

+4.5pts

2021 Overall Container and Terminal

Performance

Revenue in the division increased to €174.0 million

(2020: €146.5 million). The revenue is derived from

container handling and related ancillary revenues at our

terminals and in Eucon from a mix of domestic door-to-

door, quay-to-quay and feeder services with 72% (2020:

70%) of shipping revenue generated from imports into

Ireland. With a exible chartered eet and slot charter

arrangements, Eucon was able to adjust capacity

and thereby continue to meet the requirements of

customers in a cost eective and ecient manner.

The Container and Terminal Division

Continued

34

Irish Continental Group

35

Strategic Report

2021 Annual Report and Financial Statements

Results

Revenue for the year amounted to €334.5 million (2020:

€277.1 million) while operating prot before non-trading items

amounted to a loss of €(0.2) million compared with a prot

of €0.8 million in 2020. Principal variations on the prior year

relate to the recovery in passenger volumes in the second half

of the year, increased activity in the Container and Terminal

division and the introduction of the new Irish Ferries service

on the English Channel.

Taxation

The tax charge is €0.8 million in 2021 compared with

a charge of €1.0 million in 2020. The corporation tax

charge of €0.7 million (2020: €1.2 million) comprises

Irish and UK corporation tax. Certain activities qualify

to be taxed under tonnage tax (which is an EU approved

special tax regime for qualifying shipping activities) in

Ireland. Reconciliation of the tax charge showing the

eect of the tonnage tax regime on the Group’s tax

charge is shown at note 8. The deferred tax charge was

€0.1 million in 2021 compared to a credit of €0.2 million

in 2020.

Earnings per share

Basic EPS was (2.6) cent compared with (10.2) cent in

2020. The primary reason for the increase in Basic EPS

is due to the non-trading item of €(11.2) million in the

prior year.

Adjusted EPS (before the net interest (income) / cost on

dened benet obligations and non-trading items) was

(2.7) cent compared with (4.3) cent in 2020.

Financial Review

36

Irish Continental Group

Cash ow and investment

EBITDA for the year was €52.3 million (2020: €42.1

million). There was a net inow of €11.7 million due to

positive working capital movements, pension funding

movements of €0.6 million and other net cash inows

amounting to €1.4 million, yielding cash generated from

operations amounting to €66.0 million (2020: €51.2

million).

Interest paid was €8.4 million (2020: €3.7 million) while

taxation paid was €0.8 million (2020: €1.4 million).

Capital expenditure outows amounted to €55.2

million (2020: €30.1 million) which included €41.7

million of strategic capital expenditure. Strategic

capital expenditure included the purchase of a seventh

container vessel the CT Daniel for €12.8 million, the

purchase of the Isle of Innisfree, a deposit payment for

the Isle of Inisheer and rubber-tyred gantry cranes for

Dublin Ferryport Terminal.

As in the prior year, no dividends were paid during the

year. €19.8 million (2020: €1.7 million) was expended in

buying back the Group’s equity.

The above cash ows resulted in a year-end net debt

of €142.2 million (2020: €88.5 million) net debt, which

comprised gross borrowings of €123.1 million (2020:

€200.4 million), lease obligations of €57.6 million (2020:

€38.5 million) oset by cash balances of €38.5 million

(2020: €150.4 million). The key net debt / EBITDA (pre

non-trading items) ratio was 2.6 times (2020: 2.1 times).

Dividend and share buybacks

On 1 July 2020, the Group announced that due

to the eects of Covid-19 on current trading and

notwithstanding that the Group retained a strong

liquidity position, the Directors had considered it

prudent not to proceed with the 2019 nal dividend

previously announced and also did not declare any

interim dividend.

In light of the travel restrictions continuing into 2021

and uncertainty around when they may be eased the

Directors also consider it prudent not to declare a nal

dividend in relation to the year ended 31 December

2020.

As travel restrictions continued in and throughout most

of 2021, the Board did not declare or pay any interim

dividend relating to 2021.

Following the easing of travel restrictions in 2022, and

the consequent improvement in passenger revenues

together with the continuation of strong performance in

all other revenue streams, the Board has considered it

appropriate to recommence the payment of dividends.

The Board is proposing the payment of a dividend

of 9.00 cent per ordinary share on 7 July 2022 to

shareholders on the register at the close of business

on 10 June 2022. Irish dividend withholding tax will be

deducted where appropriate. In November the Group

bought back 4.6 million shares which were cancelled.

The total consideration paid for these shares was €19.8

million (2020: €1.7 million).

Pensions

The Group has four, separately funded, company-

sponsored dened benet obligations covering

employees in Ireland, the UK and the Netherlands. The

Group also participates in the UK based industry-wide

scheme, the Merchant Navy Ocers Pension Fund

(MNOPF) in which participating employers share joint

and several liability. Aggregate pension assets in the

four company-sponsored schemes at year end were

€145.8 million (2020: €139.6 million), while combined

pension liabilities were €140.5 million (2020: €140.8

million). The total net surplus of all dened benet

pension schemes at 31 December 2021 was €5.3 million

in comparison to €1.2 million decit at 31 December

2020.

On 9 December 2020, the Trustee of the Group’s

principal dened benet pension scheme entered into

a transaction whereby the liabilities relating to pensions

in payment at the transaction date were transferred

to a third-party insurer on payment of a premium of

€160.6 million. This gave rise to a non-cash settlement

loss of €9.3 million being the dierence between the

present value of the transferred liabilities discounted at

the AA corporate bond rate used for IAS 19 valuation

purposes at the transaction date and the premium paid.

The Trustee, in agreement with the Company, also

augmented the pension benets of certain members

resulting in an augmentation cost of €1.1 million being

the present value of the future benet changes. The

Group’s subsidiary, Irish Ferries Limited, the sponsoring

employer of the scheme, underwrites the scheme’s

37

Strategic Report

2021 Annual Report and Financial Statements

administration expenses and incurred expenses totalling

€0.8 million relating to the above transaction. This

was an important step for the Group in both reducing

the quantum and volatility of pension liabilities on its

balance sheet and safeguarding pensioner benets into

the future.

Financial risk management

The principal objective of the Group’s treasury policy is

the minimisation of nancial risk at reasonable cost. To

minimise risk the Group may use interest rate swaps and

forward foreign currency contracts. The Group does not

trade in nancial instruments for speculative purposes.

Interest rate management

The interest rates on Group borrowings at 31 December

2021, comprising loan notes and nance lease

obligations have been xed at a contracted rate at the

date of drawdown with the relevant lender, eliminating

exposure to interest rate risk on borrowings. The

average eective interest rate at 31 December 2021

was 1.60% (2020: 1.60%). Debt interest cover under our

banking covenants to operating cash ows for the year

was 12.6 times (2020: 5.1 times).

Currency management

The Group has determined that the euro is the operating

currency in which it reports its results. The Group also

has signicant sterling and US dollar cash ows. The

Group’s principal policy is to minimise currency risk

by matching foreign currency assets and liabilities and

to match cash ows of like currencies. Exposure to

the US dollar relates mainly to fuel costs. The Group

has in place fuel surcharge arrangements with its

commercial customers which recovers a portion of

movements in euro fuel costs above a base level which

partially mitigates the exposure to US dollar currency

movements.

Commodity price management

Bunker oil costs constitute a separate and signicant

operational risk, partly as a result of historically

signicant price uctuations. In the Container and

Terminal Division bunker costs above a base level

are oset to a large extent by the application of

prearranged price adjustments with our customers.

Similar arrangements are in place with freight

customers in the Ferries Division. In the passenger

sector, changes in bunker costs are included in the

ticket price to the extent that market conditions will

allow. Bunker consumption was 129,400 tonnes in 2021

(2020: 107,300 tonnes). The increase in consumption

was primarily due to increased activity levels in the

Container and Terminal Division and the Ferries

Division’s new service on the English Channel. The

average cost per tonne of heavy fuel oil (HFO) fuel in

2021 was 40% higher than in 2020 while marine gas oil

(MGO) was 34% higher than in 2020.

Credit risk

The Group’s credit risk arising on its nancial assets

is principally attributable to its trade and other

receivables. The concentration of credit risk in relation

to trade is limited due to the exposure being spread

over a large number of counterparties and customers.

The Group also has a signicant long term receivable

relating to a bareboat hire purchase arrangement which

is secured by retention of title to the vessel.

Liquidity

It is Group policy to maintain available facilities which

allow the Group to conduct its business in an orderly

manner. The target level is reviewed from time to time

in line with the Group’s future requirements over the

medium term and will comprise cash deposits and

committed banking facilities. Total available facilities

at 31 December 2021 amounted to €118.9 million,

comprising cash balances of €38.5 million together

with undrawn committed facilities of €80.4 million

with average maturity of 2.4 years (2020: 3.1 years).

Total drawn facilities of €123.7 million had an average

maturity of 3.6 years (2020: 4.6 years) over remaining

terms of up to 9 years (2020: 10 years).

David Ledwidge,

Chief Financial Ocer

9 March 2022

Financial Review

Continued

38

Irish Continental Group

39

Strategic Report

2021 Annual Report and Financial Statements

Sustainability and ESG

2021 ESG Highlights

Environmental

Enhanced target setting across operations,

including a Net Zero 2030 emissions target

for our terminals.

Development of our climate risk framework

Publication of our environmental policy

Trial of sustainable biofuel blend on board

Dublin Swift

Trial of robotic underwater hull cleaning for

Elbtrader

Enhanced data monitoring of greenhouse

gases across eet

Early energy eciency design index

certication for Ulysses and Isle of Inishmore

Improved machinery eciency on board

Ulysses

Overhaul of electrical network at DFT

Use of 100 percent green electricity at BCT,

DFT and head oce

Replacement of petrol/diesel company cars

with new electric and hybrid models

9,000 new crew garments made from

recycled plastics equating to 150,000 plastic

bottles

Bamboo ooring tted in 1,100 new and

refurbished containers

Installation of solar panels on our DFT

engineering building

Investment in ve additional electric cranes

at DFT to replace existing diesel units in 2022

Continued rollout of ballast water treatment

project across eet

Installation of a wash water recycling system

at our Dublin Inland Port facility, providing

up to 90 percent savings in wash water

consumption

Upgrade of waste management contracts at

oce locations to improve contributions to

the circular economy

40

Irish Continental Group

Social and Governance

63 percent reduction in overall Lost Time

Injury Frequency rate versus 2020

Facilitation of hybrid working arrangements

for oce-based sta during Covid-19

Development of our Supplier Code of

Conduct

Enhancement of our human rights policies

and third-party communications on human

rights issues

Strengthening of partnerships with our

sponsored charities

Participation in campaigns to re-start

the wider tourism industry following the

Covid-19 travel restrictions

Promotion of fresh, local produce on board

our ferries

Introduction

Over the past 12 months, we have placed a signicant

focus on enhancing our approach to Environmental,

Social and Governance (ESG) and sustainability. The

following pages are designed to provide insight into our

approach to – and management of – environmental,

social, and governance issues across our value chain.

As a business, we recognise the growing importance of

providing transparency over our eorts to create value

in a sustainable manner, based on a set of topics which

we have identied as material to our business and our

stakeholders.

In developing this report, our approach was

informed by a review of best practice sustainability

reporting standards and frameworks. Guidelines and

recommendations by the Global Reporting Initiative

(GRI), the Sustainability Accounting Standards Boards

(SASB) and the integrated reporting framework have

all been considered for the creation of this report.

In addition, the UN Sustainable Development Goals

(SDGs) played a key role in the development of our

overarching strategy for ESG and sustainability. In

this report, we map the Group activities we feel best

support the SDGs. We have also reported indicators

under the Marine Transportation SASB standards, as

well as taking our rst steps to greater integration of

the requirements of the Task Force on Climate-related

Financial Disclosures (TCFD).

As we continue to enhance our disclosures, we remain

focused on improving our processes and procedures for

tracking, monitoring, and measuring our performance

in relation to the sustainability factors that are relevant

and important for our company and our industry. The

focus on ensuring the accuracy of our ESG data will be

central to our ability to drive performance in the period

ahead. While we recognise that we still have a way to

go, we consider the steps we have taken over the past

number of years as creating the foundation from which

we can further develop our approach to sustainability,

ESG and strong reporting in the years ahead.

During the year, we enhanced our ESG policies. We

have updated and implemented several policies to

ensure they address core risks and opportunities within

our business. These new and enhanced policies were

also designed to reect the changing landscape in

which we operate.

41

Strategic Report

2021 Annual Report and Financial Statements

In 2020, we outlined our ESG maturity level using the table below and the stages involved in the voyage ahead. While

we still have a way to go, we are pleased with our progress made against this timeline in 2021, with further targets

set across our vessel and terminal operations, the advancement of the decarbonisation project at our terminals

and enhanced reporting of metrics in line with SASB and TCFD frameworks. We continue to look beyond our own

operations and inuence sustainability considerations of our supply chain partners through processes documented in

our Supplier Code of Conduct.

Timeline

Up to 2021

• Enhanced understanding of the full range of Group activities that carry an ESG

impact.

• Sustainability is a key component of Group strategy.

• Review of sustainability reporting frameworks.

• Focus on data collection, identifying baselines and developing KPIs across all ESG

areas.

• Design of sustainability management programmes such as ‘Green Voyages’.

2022-2025

• Further sustainability targets to be set across our ESG areas.

• Sustainability programmes within our operations to be fully implemented and

eective.

• Enhanced reporting of ESG metrics in line with emerging reporting standards.

After 2025

• Progress towards the IMO’s CO2 reduction targets of 40 percent by 2030, towards

helping to achieve UN SDGs for 2030 and towards further targets set by the Group.

• Sustainability embedded in the ICG culture and in all key decisions made.

• Looking beyond our own operations to assess and positively inuence the ESG

activities of all entities that conduct business with the Group.

The Role of Materiality

The valuable insight provided by external reporting frameworks as well as the knowledge and experience of our

leadership team has helped shape our response to sustainability issues. However, in continuation of the process to

develop our approach to sustainability and ESG, we intend to carry out an in-depth materiality assessment during

2022. This is an important step in our adopted climate change risk framework outlined on pages 64 to 66. Although

there is a consistent focus on the disclosure of ESG and sustainability information, it can often be dicult to identify

and assess which information is most useful. Through research and extensive engagement with our key stakeholders,

we will determine the sustainability issues that are most likely to impact our ability to create value over the short,

medium, and long term. The output of the assessment will also inform the development of our long-term strategy

with the ongoing integration of sustainability factors into our strategy and interaction with stakeholders.

Sustainability and ESG

Continued

42

Irish Continental Group

Aligning operations with our contribution

‘Our purpose is to achieve continued success in our

chosen markets, delivering a safe, reliable, timely, good

value and high-quality experience to our customers in a

way that minimises our impact on the environment.’

At ICG, stakeholder and environmental focus have

been key elements within our longstanding mission

statement. Within our operating regions, ICG activities

positively impact society as a key transport provider

of goods and essential supplies and as a signicant

contributor, under the Irish Ferries brand, to the tourism

industries of Ireland, the UK and France, which includes

co-operative campaigning to support tourism in areas

least visited or most impacted by seasonal factors. In

more recent years, we have sought to align our purpose

and activities with wider reporting frameworks as a

means of maximising our positive impact on society. In

addition to the ve goals of the UN SDGs that we felt

we could most eectively contribute to in last year’s

annual report, we are also supporting SDG 9 through

our strategic focus on upgrade infrastructure and

retrot projects with increased resource-use eciency

and greater adoption of clean and environmentally

sound technologies and processes.

In 2021, we undertook an assessment to determine

where we are making the biggest contribution to the

SDGs. This involved mapping the 17 goals and 169

targets against information provided by our business

units when compiling this sustainability report, as well

as the formal policies set out within those business units

and at a corporate level. The outcome of this process

was used to rate our overall alignment and contribution

to each goal. As highlighted within the pages of this

report, the activities we believe best support the

Group’s core SDGs are:

Employee engagement practices

Striving for greater diversity and

inclusion, including through policies

and initiatives

Being a leader in health and safety,

utilising a data driven approach

Flexible working policies as well as

a range of employment benets

Upgrade of infrastructure and

retrot projects with increased

resource-use eciency

Adoption of clean and

environmentally sound

technologies and processes

Implementing eective waste

management systems throughout

our vessels

Development of our formal

environmental policy

Setting targets for the reduction

of our emissions

Expanding reporting and

engagement with external

stakeholders

Enhancing pollution prevention

systems

Novel and market leading circular

economy programmes preventing

plastics from reaching the oceans

43

Strategic Report

2021 Annual Report and Financial Statements

The Voyage Ahead

It is reported that the maritime industry is responsible

for 2.5 percent of global greenhouse gas (GHG)

emissions (UN Climate Change News, 2018). As an

organisation we recognise our responsibility to reduce

our emissions in line with stakeholder interests and

relevant targets set for the industry. ICG is a heavily

regulated business, and one that has been conscious

of its environmental footprint for a long time. To

demonstrate our commitment to environmental

sustainability, this year we formalised our Environmental

Policy, which can be found on our website.

Decarbonising our Vessel Operations

The International Maritime Organization (IMO), a

specialised agency of the United Nations responsible

for regulating shipping, and the European Union (EU)

have each set decarbonisation goals for the maritime

industry. Current IMO targets aim to reduce the

industry’s total CO2 emissions per transport work by 40

percent by the year 2030 and overall GHG emissions by

at least 50 percent by 2050 compared to 2008 levels.

The EU has targeted an industry reduction in GHG

intensity of 6 percent by 2030, accelerating in ve-year

stages to 75 percent by 2050, compared to 2020 levels.

While regulatory developments at the IMO and EU are

ongoing, we are aligning our decarbonisation strategy

with the IMO and EU goals and will adjust accordingly

to achieve, at a minimum, all required targets. As the

maritime industry has unique challenges arising from

the current lack of proven, accessible alternative

fuels, particularly for large vessels, our current

decarbonisation strategy for our vessels is focused on

achieving the above targets through a range of short-

term operational measures and longer-term technical

measures.

Operational Measures

• Operation of green voyage programme to optimise

voyage factors such as; port operations, navigational

routing and speed management.

• Environmental performance monitoring and advanced

data analytics using eet management software

S-Insight.

• Proactive monitoring of real-time vessel performance

through a live feed from the vessels’ engine

power management system, facilitating vessel

responsiveness during dierent operation modes,

including Eco-mode. In late 2021, installation

commenced onboard the W.B. Yeats which, if

successful, shall be expanded across the eet.

• Regular drydocking of vessels to reduce hull fouling

and ensure high maintenance of machinery. We are

currently trialling an underwater robotic hull cleaning

program for our Elbtrader vessel and are assessing

improvements in speed management and fuel

eciency.

• Use of experienced crews and port operations teams

to increase eciency.

• Continuous improvement of vessel performance in

line with relevant Ship Energy Eciency Management

Plans (SEEMPs).

• Ongoing research and trialling of accessible

alternative fuels, including sustainable biofuels

reduce emissions. The Dublin Swift underwent a trial

in 2021 using a small biofuel blend derived from used

cooking oils.

Technical Measures

• Long-term replacement of existing eet with

ecient ships incorporating latest technologies, in

line with vessel life cycles. Our W.B. Yeats vessel

is approximately 35 percent more ecient than its

predecessor Oscar Wilde.

Sustainability and ESG

Continued

44

Irish Continental Group

• Increased utilisation of onshore power within the EU

enabled by FuelEU Maritime proposals.

• Compliance with ongoing design eciency

requirements under IMO energy eciency design

index for new (EEDI) and existing (EEXI) ships. In 2021,

we obtained early class certication that Ulysses and

Isle of Inishmore exceed the required EEXI applicable

to existing ships from 2023 and will seek certication

for the remaining eet in 2022.

• Investment in exhaust gas cleaning systems on board

certain vessels that minimise sulphur emissions to

below levels mandated by existing regulation.

• Investment in upgraded, more ecient turbochargers

on board Ulysses in late 2021. This has resulted in

a signicant lowering of exhaust temperatures,

reducing overall wear and tear and improving fuel

eciency.

• Use of innovative, non-toxic, anti-fouling hull paints to

reduce resistance when moving through water.

• Use of energy ecient propeller blades to decrease

resistance and improve fuel eciency.

We continually research and assess the feasibility of

retrot projects to improve the emissions performance

of our eet, ensuring innovative technologies that are

safe and proven eective can be introduced where

appropriate. This includes;

• Ongoing investment and assessment of suitable

technologies to improve existing eet including; air

lubrication systems and wind assisted propulsion

systems.

• Collaboration with suitable marine technology

companies participating in clean energy projects and

innovations.

• Ongoing assessment of adjustments to vessel

structure to improve eciency, such as assessing

modications to a vessel’s hull shape.

A core element of our decarbonisation strategy is

to gather consistent data that aligns with regulatory

requirements. This includes ongoing emissions data

verication under both the EU Monitoring, Reporting

and Verication (MRV) Regulation for which Group

vessels have complied with since 2018, and the IMO

Fuel Oil Data Collection System (DCS) reporting which

came into eect in 2019.

Decarbonising our Terminal Operations

Whilst we are aligning with, and driving innovation to

go beyond, regulatory requirements for our eet, for

our Terminal operations we have made more immediate

progress in target setting. Alongside the publication of

this report, we are setting a target to achieve a 70 percent

emissions reduction in our Dublin (DFT) and Belfast (BCT)

terminal operations by 2025, versus 2020 levels. We are

also targeting net zero DFT and BCT terminal operations

by 2030.

The decarbonisation project at our terminals began in 2017

when our rst two electric powered Rubber-Tyred-Gantry

(RTG) cranes were introduced to DFT, in addition to our

diesel units. Our electric RTG capacity doubled in 2019

with the addition of two more units, replacing three diesel

cranes, while Belfast Harbour Commissioners upgraded

its entire yard crane eet with eight electrical RTG units

from 2019 to 2021. In 2022, DFT will commission ve

additional electric RTGs; two additions to the eet and

three replacements for end of life diesel cranes. This will

increase the overall DFT eet to 75 percent electrically

powered. In making this transition, signicant investment

is also underway to improve the terminal’s electrical

network, including the replacement of all medium

voltage switchgear, distribution cabling and transformers,

preparing the terminal for the requirements of the next 40

years. In late 2021, solar panels were installed on our DFT

engineering building, which will generate energy to heat

our building and power electric vehicle charging points

available to sta and company electric cars and vans.

Company cars are being replaced with electric and hybrid

models in line with replacement cycles. Four new electric

and hybrid cars were ordered in 2021 to replace old petrol

and diesel cars used by sales and operations sta. LED

lighting is installed within our terminal buildings and ood

and mast lighting systems around the terminals. Since

mid-2020, the electricity supply for our DFT terminal and

Dublin oces is certied green, while our Belfast Terminal

has been powered by 100 percent green electricity for the

last several years.

45

Strategic Report

2021 Annual Report and Financial Statements

Environmental Data

Shipping Operations

Topic Relevant Metric 2021 2020 2019 Unit of measure SASB Reference

Greenhouse

gas emissions

Gross global Scope 1

shipping emissions

399,796 336,535 381,261 Metric tons (t) CO2-e

TR-MT-110a.1

CO2 emissions per GT mile Grams (g) CO2 / gross

ton-nautical mile

• Ferries eet 16.58 15.34 15.72

N/A

CO2 emissions per transport work Grams (g) CO2 / cargo

ton-nautical mile

• Container eet 40.08 43.96 44.98

N/A

Total energy consumed 5,111,364 4,305,170 4,876,440 Gigajoules (GJ)

TR-MT-110a.3

Percentage heavy fuel oil 75.97% 74.91% 75.28% Percentage (%)

TR-MT-110a.3

Average Energy Eciency

Design Index (EEDI) for new

ships

18.5 18.5 18.5 Grams (g) of CO2 per

ton-nautical mile

TR-MT-110a.4

Air quality

NOx (excluding N20) 7,882 7,393 8,377 Metric tons (t)

TR-MT-120a.1

SOx 623 525 2,767 Metric tons (t)

TR-MT-120a.1

Particulate Matter (PM10) 396 341 562 Metric tons (t)

TR-MT-120a.1

Ecological

Impacts

Shipping duration in marine

protected areas or areas

of protected conservation

status

Nil Nil Nil Number of travel days

TR-MT-160a.1

Percentage of eet

implementing ballast water

exchange

94.12% 92.31% 92.31% Percentage (%)

TR-MT-160a.2

Percentage of eet

implementing ballast water

treatment

29.41% 15.38% 7.69% Percentage (%)

TR-MT-160a.2

Number of spills and

releases to the environment

1 2 1 Number

TR-MT-160a.3

Aggregate volume of

spills and releases to the

environment

0.01 0.201 0.02 Cubic meters (m3)

TR-MT-160a.3

Workforce

health and

safety

Lost time incident rate from

seafaring operations

1.0 4.7 4.6 Rate

TR-MT-320a.1

Business

ethics

Number of calls at ports

in countries that have

the 20 lowest rankings in

Transparency International’s

Corruption Perception Index

Nil Nil Nil Number

TR-MT-510a.1

Total amount of monetary

losses as a result of legal

proceedings associated

with bribery or corruption

€Nil €Nil €Nil Euro

TR-MT-510a.2

Sustainability and ESG

Continued

46

Irish Continental Group

Topic Relevant Metric 2021 2020 2019 Unit of measure SASB Reference

Accident

and safety

management

Number of marine

casualties

1 1 2 Number

TR-MT-540a.1

Percentage classied as

very serious

0% 100% 100% Percentage (%)

TR-MT-540a.1

Number of port state

detentions

Nil Nil Nil Number

TR-MT-540a.3

Activity Number of shipboard

workers

501 412 455 Number

TR-MT-000.A

Total distance travelled by

vessels

824,132 642,945 703,602 Nautical miles (nm)

TR-MT-000.B

Operating days 3,744 3,408 3,454 Days

TR-MT.000.C

Deadweight tonnage 100,485 95,819 84,662 Deadweight tons

TR-MT-000.D

Number of vessels in total

shipping eet

16 13 13 Number

TR-MT-000.E

- Owned 12 10 10 Number

- Chartered in 4 3 3 Number

-Chartered out 3 2 2 Number

Number of vessel port calls 6,423 5,221 5,534 Number

TR-MT-000.F

Twenty-foot equivalent

(TEU) capacity (Container

eet)

5,502 5,449 4,475 TEU

TR.MT.000.G

Terminal Operations

Relevant Metric 2021 2020 Unit of measure

Scope 1 emissions from Terminal operations 3,117 3,349 Metric tons (t) CO2-e

Scope 2 emissions from Terminal operations Nil 386 Metric tons (t) CO2-e

Total Scope 1 and 2 emissions from Terminal operations 3,117 3,735 Metric tons (t) CO2-e

Total energy consumed 74,373 71,732 Gigajoules (GJ)

Percentage renewable 43.21% 26.77% Percentage (%)

Overall Group

Relevant Metric 2021 2020 Unit of measure

Gross Global Scope 1 emissions 402,913 339,884 Metric tons (t) CO2-e

Gross Global Scope 2 emissions 82 468 Metric tons (t) CO2-e

Total Scope 1 and 2 emissions 402,995 340,270 Metric tons (t) CO2-e

Total fuel consumed 126,519 106,688 Metric tons (t)

Total energy consumed 5,187,201 4,738,369 Gigajoules (GJ)

47

Strategic Report

2021 Annual Report and Financial Statements

Key Terms, Denitions and Commentary

Terms Denitions Commentary

Scope 1

emissions

Direct GHG emissions from sources

that are controlled by the Group.

The Group determines its Scope 1 emissions

boundary in line with the Greenhouse Gas Protocol

(GHG Protocol) using the principle of operational

control. In establishing assets under operational

control, consideration is given to the length of

any charter arrangements, the responsibility for

the purchase and consumption of the fuel and the

responsibility for the operational activity of the

asset being used. CO2 emissions from shipping

are calculated using emission factors referenced in

IMO Resolution MEPC 245 (66) 2014 “Guidelines on

the method of calculation and the attained Energy

Eciency Index (EEDI) for new ships”. Scope 1

emissions from land-based activities are calculated

in line with GHG Protocol calculation tools.

Scope 2

emissions

GHG emissions from the generation

of purchased electricity consumed

by the Group.

Scope 2 emissions are calculated in line with the

GHG Protocol. Where possible, the Group applies

supplier specic emission factors to its electricity

consumed. Where this information is not available,

regional grid emission factors are obtained and

applied for the relevant electricity source used by

the provider.

CO2-e Carbon dioxide equivalent units. Co2-e includes direct CO2 emissions plus emissions

of other gases converted to CO2 based on their

equivalent global warming potential.

CO2

emissions per

GT mile

Grams of CO2 per gross ton-

nautical mile

The Group considers this metric useful to viewing

the carbon intensity of its ferries eet. Our ferries

are signicantly heavier than our container eet

and 2021 and 2020 assessments based on transport

work are not indicative of eet eciency or future

performance due to the impacts of Covid-19 on ferry

carryings and voyage management. An average

intensity for the overall ferries eet is disclosed. The

increase in 2021 from 2020 reects additions made

to our operating eet and the entry on a new route

of shorter distance, impacting overall eciency.

We are continuing to assess baseline performance

across all vessels and routes which should be

assisted by a return to pre-pandemic operating

conditions.

CO2

emissions

per transport

work

Grams of CO2 per cargo ton-

nautical mile

This is a widely adopted industry metric for

container vessels to assess environmental

performance. An average intensity for the overall

operated container eet is disclosed. Carbon

intensity for the operated eet improved by

approximately 9 percent versus 2020 and 10 percent

compared to 2019.

Sustainability and ESG

Continued

48

Irish Continental Group

Terms Denitions Commentary

NOx Nitrogen Oxides NOx emissions from shipping are calculated

using guidance from the NOx Technical Code and

MARPOL Annex VI Regulation 13, Nitrogen Oxides

(NOx). Emissions from land-based activities are

calculated in line with GHG Protocol calculation

tools.

SOx Sulphur Oxides SOx emissions are calculated by fuel-based emission

factors. For vessels with exhaust gas cleaning

systems (EGCS), a reported SO2/CO2 emission

ratio is used to determine the level to which the

sulphur content has been scrubbed down. Group

SOx emissions have signicantly reduced since the

installation of exhaust gas cleaning systems and

enhancement of sulphur emission regulations in

2020.

PM10 Particulate matter The mass of PM10 is calculated by means of an

energy-based emission factor depending on engine

type, engine tier and type of fuel consumed. Default

emission factors proposed by the Fourth IMO GHG

Study - July 2020 were applied.

Lost Time

Incident Rate

Lost time incidents per 1 million

hours worked

A lost time incident is an incident that results in

absence from work beyond the date or shift when it

occurred.

Marine

Casualties

An event, or sequence of events,

that occurs directly in connection

with the operations of a ship and

results in death, serious injury or loss

of a person from a ship or material

damage to a ship, collision of a

ship or material damage to marine

infrastructure external to a ship or to

the environment.

The reported marine casualty in 2021 relates to

contact of Blue Star 1 with a quay during a winter

storm. The incident was not considered serious.

Shipboard

workers

Those who work on aboard

operated vessels (including direct

employees and contractors)

The Group discloses an average number of

shipboard workers per vessel across operating

vessels per year. Shipboard workers increased by

approximately 22 percent in 2021 due to increases

to the operating eet and return to service of the

Dublin Swift.

Operating

days

The number of available days

in a reporting period minus the

aggregate number of days vessels

are o-hire due to unforeseen

circumstances

Operating days increased in 2021 due to the

strategic expansion of our ferries routing and return

to service of the Dublin Swift following the easing

of Covid-19 restrictions on non-essential passenger

travel.

49

Strategic Report

2021 Annual Report and Financial Statements

Water and Resource Use: Life Below Water /

Responsible Consumption

While globally there is a heightened emphasis on

emissions reduction, we are acutely aware that

environmental impact is much wider than just

emissions, and we continue to focus on minimising

waste and resource use, preventing pollution and

protecting biodiversity. Due to the nature of our

operations, the protection of marine life is of utmost

importance. While every eort is made to prevent

spills and releases overboard, accidental releases can

occur due to leaks, storms or human error. ICG has

zero-tolerance for dumping waste at sea and uses high-

quality port reception facilities and ISO certied waste

management partners to responsibly discharge and

treat various types of waste from our vessels and land-

based activities. All vessels use oil recovery systems

to recover spent oils which are then sent for recycling.

We undertake periodic inspection of our partners’

waste management facilities to gain comfort over their

waste treatment and reporting processes. We also use

specialised silicon-based non-toxic paints which avoid

the release of harmful agents to the sea.

All our vessels carry an Inventory of Hazardous

Materials (IHM) certicate on board to demonstrate the

control of hazardous materials on ships in compliance

with both the EU Ship Recycling Regulation (SRR) and

the Hong Kong Convention (HKC) for the Safe and

Environmentally Sound Recycling of Ships. All vessels

underwent thorough survey and inspection during

the year to ensure IHM certication was in place as

required.

During the year, we reviewed and upgraded several

waste management contracts at our Group locations. At

our Dublin oces, we improved our recovery processes

for general waste. Our waste management partner

employs a combination of Solid Recovered Fuel (SRF)

processing and Refuse Derived Fuel (RDF) processing

to recover and recycle metals and transfer processed

waste for alternative fuel and electricity production,

thereby contributing to the circular economy and

avoiding landll. Food and garbage waste generated

on vessels at sea is incinerated ashore for biosecurity

purposes. We joined UK Chamber of Shipping pledge

in 2019 to continuously minimise the generation of

shipborne garbage and to the collective goal of zero

pollution from ships to sea from plastics. To this eect,

we removed all single use plastics from our ships.

During 2020 and 2021, there was some temporary

reintroduction of single-use materials as preventative

measures for Covid-19, such as takeaway meals for

essential freight drivers. These items have since been

fully removed from our ferries.

Each crew and oce department have designated

waste management champions. Their responsibilities

are to ensure vessels and oce areas are compliant

with agreed procedures, to perform checks at waste

segregation areas and to improve awareness of

consumption methods within their respective areas.

The use of ballast water is important for the safety

and stability of our vessels. Ballast water management

involves the intake and discharge of ballast water

at dierent locations due to changes to cargo and

voyage conditions. However, this process can cause

transference of marine life which increases the

unintended risk of bringing invasive species to local

ecosystems. In line with the Ballast Water Management

Convention, shipowners are obligated to install Ballast

Water Treatment systems (BWT) on all vessels by 2024

to eliminate transference risk. We have invested and

committed signicantly to BWT installation projects

across our eet. The W.B. Yeats was delivered with BWT

while the Thetis D, Ulysses, Epsilon and Isle of Inishmore

projects were completed in 2021, with the remaining

eet scheduled for BWT installation across 2022 and

2023. The Dublin Swift does not use ballast water and is

therefore not applicable under the convention.

We onboard water for potable use from certied

sources and retain these supplies on-board in certied

sanitary conditions. Water stocks are regularly tested

in line with on-board policies to ensure it remains of

Sustainability and ESG

Continued

Plastics

removed

from ships

50

Irish Continental Group

a high quality. Recognising that potable water is a

scarce resource we have integrated water conservation

measures including devices such as ow controllers.

Where permitted, we use seawater for non-potable use,

which is treated prior to discharge back to sea.

During the year, an innovative container wash water

recycling system was installed at our new Dublin Inland

Port facility, providing up to 90 percent savings in

freshwater consumption. The system uses biological

and separation technology to return used and dirty

wash water back to clean and suitable re-use water.

If the system is proven successful, we intend to install

further recycling systems at our terminals.

Group Consumption Data

Relevant Metric 2021 2020 Unit of measure

Total municipal

solid waste

7,736 6,130 Cubic

metres (cm)

Total waste oil

and sludge

4,144 2,498 Cubic

metres (cm)

Total freshwater

consumption

64,680 61,686 Cubic

metres (cm)

Increases in waste and consumption volumes in 2021

reect the expansions made to our routes and operating

eet, as well as the resumption of non-essential

passenger travel towards the end of the busier tourism

season. We are working with our ship managers and

waste management partners across all oce locations

and ports served to develop a consistent classication

of waste streams to enable enhanced reporting and

performance management going forward.

Bamboo ooring is present on new and refurbished Eucon

containers. At 31 December 2021, 1,100, or approximately

25 percent of the Group’s container eet include bamboo

ooring. Bamboo self-regenerates from its roots and is

considered more sustainable than hardwood trees for its

ability to regenerate quickly.

We are promoting responsible consumption through our

selection of crew uniforms, which now contain 95 percent

recycled polyester recovered from plastic bottles. In 2021

ICG purchased 9,000 garments, equating to 150,000

plastic bottles being recycled and prevented from reaching

the oceans or landll sites. We continually incorporate

sustainability considerations into our procurement

process. We minimise the number of deliveries to our

vessels through containerised provisioning. Our supply

chain partner also oers procurement of any new items

requested on board The ICG Supplier Code of Conduct

sets out our expectations to suppliers regarding the

environment, ethics, human rights and health and safety.

Full details of this code can be found on our website.

DV PROFESSIONAL

Certiicate of plastic

oset through

Irish Ferries Tailoring

Irish Ferries have prevented 150,000

plastic bottles from reaching landill or our

oceans through 9000 tailored uniforms

dvprofessionaluniforms.ie

This is not a legal document.Estimations are an approximate calculation

Proudly awarded to

51

Strategic Report

2021 Annual Report and Financial Statements

 2021 2020 2019

 Incidents

Exposure

hours

Lost Time

Injury

Frequency Fatalities Incidents

Exposure

hours

Lost Time

Injury

Frequency Fatalities Incidents

Exposure

hours

Lost Time

Injury

Frequency Fatalities

ICG

employees

and visitors 1 595,200 1.7 0 0 595,200 - 0 1 595,200 1.7 0

Key

contractors

7 3,627,720 1.9 0 14 2,090,676 6.7 1 17 2,978,781 5.7 2

8 4,222,920 1.9 0 14 2,685,876 5.2 1 18 3,573,981 5.0 2

 2021 2020 2019 

LTIF on

land 4.6 6.3 6.3 

LTIF at sea   1.0    4.7    4.6 

Social: Employee Health and Safety and Diversity and Inclusion

Safety Data

Lost Time Injury Frequency (LTIF) measures the number

of recordable workplace incidents resulting in lost

days over a year per million hours worked. We are

encouraged by our safety performance during the year

which saw a 43 percent decrease in the overall number

of incidents reported and a 63 percent decrease in

LTIF, despite a 57 percent increase in the Group’s total

exposure hours. These results are within our previously

set targets for 2023 of LTIF on land <5 and LTIF at sea

<3.5. The Group has focused on creating a strong safety

culture and its performance for the year is a testament

to our sta, crews and key third-party contractors

who uphold high standards of safety in delivering a

quality service for our customers. Regrettably, there

were fatalities reported in 2020 and 2019 at our vessels

and container terminal. We co-operate fully with all

relevant authorities regarding serious incidents. We

also investigate all such incidents internally and ensure

all necessary steps are taken to improve and to prevent

reoccurrences.

Employee Data

31 Dec 2021 31 Dec 2020

Total number of employees 284 288

• Male 173 175

• Female 111 113

• % Female 39% 39%

• Full time 260 260

• Part time 24 28

• % Part Time Female 83% 86%

31 Dec 2021 31 Dec 2020

Board members 6 6

• Male 5 5

• Female 1 1

• % Female 17% 17%

Management sta 52 54

• Male 41 42

• Female 11 12

• % Female 21% 22%

Total number of new employee

hires 42 16

Total number of departures 47 34

Turnover rate 16% 11%

• Male 19% 13%

• Female 13% 10%

While our gender ratio is imbalanced in comparison

to wider society, it is characteristic of the maritime

industry, which has been historically androcentric.

According to the International Chamber of Shipping’s

Seafarer Workforce Report 2021, the proportion of

female seafarers is estimated to be 1.28 percent of

the global seafarer workforce. We are committed to

improving the representation of women at ICG through

developments to our policies and recruitment process.

To demonstrate our strong commitment to equality,

diversity, and inclusion, we developed our rst Equality,

Diversity and Inclusion Policy, which is available on

our website. We are committed to creating a positive

Sustainability and ESG

Continued

52

Irish Continental Group

working environment whereby all employees are

respected, valued and can reach their full potential.

We believe that a diverse workforce brings a range

of skills and experience which will help to make us

more creative and competitive. As well as treating

people with dignity and respect, ICG strives to create

a supportive environment in which all employees can

ourish and reach their full potential.

In order to attract, recruit, develop and retain the very

best people, we have created an approach based on

three key principles:

1. Equality - we promote equality of opportunity

by seeking to remove barriers, eliminating

discrimination, and ensuring equal opportunities and

access for all.

2. Diversity - we accept each person as an individual.

Our success is built on our ability to embrace diversity

– and we believe that everyone should feel valued

for their contributions. By working together, we will

deliver the best possible service for our sta and

stakeholders.

3. Inclusion - we create a working culture where

dierences are not merely accepted but valued;

where everyone can develop in a way that is

consistent with, and adheres to, ICG’s values of

impartiality, honesty, integrity, and objectivity.

Our aim is to be an organisation where people feel

involved, respected, and connected to our success.

At ICG, we strive to be a fully inclusive employer.

This includes supporting our workforce by providing

the exibility for a positive work life balance, while

continuing to ensure our needs as a business are

met. To this eect, we facilitated hybrid working

arrangements for our sta in response to changes in

the work environment brought upon by the Covid-19

pandemic. We hope that this has helped employees

with dependents to manage their responsibilities within

and outside of work.

Whistleblowing

ICG is committed to having the highest standards of

integrity and transparency. As part of this commitment,

we have had policies in place to protect employees

when whistleblowing since 2017. This year we enhanced

our policy and created a new Protected Disclosure

Policy to encourage employees or any person who

works or has worked for ICG to make a disclosure in

respect of signicant matters, and to provide protection

for the person making the disclosure.

We seek to always conduct our business honestly

and with integrity. It is our policy as an employer to

ensure that at every level of management our business

complies with all legal requirements that govern our

activities. However, we acknowledge that all businesses

face the risk of their activities going wrong from time

to time, or of unknowingly harbouring malpractice. We

believe we have a duty to take appropriate measures

to identify such situations and to attempt to remedy

them. By encouraging a culture of openness and

accountability, we believe we can help prevent such

situations occurring. The full details of our Protected

Disclosure policy can be found on our website.

Anti-bribery

ICG values its reputation and is committed to

maintaining the highest level of ethical standards in the

conduct of its business aairs. The actions and conduct

of our sta as well as others acting on our behalf are key

to maintaining these standards.

We take a zero-tolerance approach to bribery and

corruption and are committed to acting professionally,

fairly and with integrity in all our business dealings

and relationships wherever we operate and implement

and enforce eective systems to counter bribery. As

such we have developed an Anti-Bribery Policy which

applies to all employees, partners/directors, agents,

consultants, and contractors. The policy can be read in

full on our website.

Human Rights

We are committed to the highest standards of

business and ethical behaviour and to the respect of

internationally recognised human rights as established

in the Universal Declaration on Human Rights and the

International Labour Organisation’s Core Conventions.

Our Human Rights Policy, which applies to all ICG

employees, contractors, agents and business partners,

can be accessed through our website. We have a

zero-tolerance policy to modern slavery and human

tracking. We take an open and transparent approach,

taking steps to identify and tackle any instances of

modern slavery in our supply chain which we outline

in our Supplier Code of Conduct. ICG and its ship

management service providers undertake regular

training, including training provided by the United

Nations Migration Agency in relation to human

tracking and labour exploitation. Appropriate

training and guidance is provided to all commercial

and procurement sta. Further details of our Modern

Slavery and Human Tracking Policy can be found on

our website.

53

Strategic Report

2021 Annual Report and Financial Statements

Corporate Social Responsibility

While the seismic shift in stakeholder expectations

of business over the past two years has brought a

more material focus to sustainable business practices

and ESG, ICG remains committed to contributing to

causes that can make a dierence. ICG is proud to be a

member of the local communities in which we operate.

Over the past year, we have continued to support our

charitable partners through our CSR programme.

ICG are longstanding supporters of the Dublin Wicklow

Mountain Rescue Team (DWMRT). The team share our

commitment to the safety of our communities. Irish

Ferries assist the DWMRT with transport services for

rescue dogs, volunteers, and equipment to carry out

critical search and training operations in Ireland. In

October, Irish Ferries sta attended a training event

hosted by DWMRT. The event gave the Irish Ferries

team great insight into the important work undertaken

by DWMRT and the activities supported by our

partnership.

ICG is a nancial supporter of Sail Training Ireland, who

provide young people from all backgrounds with the

opportunity to participate in voyages on sailing vessels.

The voyages help equip participants with important

teamwork and communication skills, as well as

promoting self-condence, self-esteem and providing

leadership experience.

We would also like to thank our customers for making

their own contributions to important causes. Onboard

our Irish Ferries vessels we have collections to support

the Royal National Lifeboat Association (RNLI) who

are the largest charity saving lives across the seas

of the United Kingdom, the Republic of Ireland, the

Channel Islands and the Isle of Man. Our customers

also contributed to the Irish Heart Foundation by

choosing healthy meal options onboard. A percentage

of proceeds from healthy meals marked with a heart on

our menu is donated to the Irish Heart Foundation.

Over the past year, we have continued to support the

Irish Whale and Dolphin Association in their monitoring

work. We allow the Irish Whale and Dolphin Association

to come on board to conduct viewing exercises to

monitor the behaviour and populations of whale and

dolphin species around our coastline.

ICG are a proud supporter of the St. Patrick’s festival

in Ireland and provide transport for some of the

participating bands and acts who travel from the UK for

the event. Whilst this year’s festival was cancelled due

to Covid-19, we look forward to supporting the festival

again over the coming year.

Sunower Lanyard

In our 2020 Annual Report we were pleased to announce

that in February 2020 Irish Ferries became the rst Irish

travel operator to introduce the hidden disability Sunower

Lanyard scheme across its entire eet. Available to all

passengers with hidden disabilities, and an addition to

the full range of services already available to passengers

with restricted mobility, the discreet Sunower Lanyard

enables crew who are specially trained, to readily identify

those on-board who may require some extra help, time,

or assistance. We continue to look for ways to ensure all

customers can enjoy our services.

Supporting Tourism and Local Economies

ICG collaborate with Tourism Ireland, Visit Wales, Cotentin

Tourism, Normandy Tourism and relevant port bodies on

co-operative campaigns to promote sustainable tourism.

The campaigns aim to help reduce seasonality issues and

highlight less visited areas and attractions.

This year we participated in Tourism Ireland’s ‘Press the

Green Button’ campaign to encourage tourists back

to Ireland after the downturn caused by the Covid-19

pandemic. The campaign aims to drive bookings for

holidays in Ireland and to position the tourism industry well

for 2022.

Where possible we seek to increase the use of local

suppliers and showcase local produce in supporting

artisan producers. This not only reduces our environmental

footprint but positively impacts our local economy. Typical

examples include our seafood supplier, a large, family-

owned shmonger based in the shing town of Howth in

North County Dublin who supply locally sourced seafood

utilising sustainable shing methods.

We source all our fruit and vegetables through Irish

distributors who guarantee to deliver the freshest

produce from farms all around Ireland. When in season,

Irish produce will always be selected before imported

goods. All our beef is Irish produced and our Irish dairy,

Sustainability and ESG

Continued

54

Irish Continental Group

cheddar cheese and eggs are Origin Green certied,

meaning the farms and producers we source from are

independently monitored and veried under Ireland’s

pioneering food and drink sustainability program. Our

breakfast meats are sourced in counties Kilkenny and

Cork.

We are a strong promotor of Irish beverages, not only

the larger brands but also smaller producers of craft

beers and spirits. In line with the demands of our guests

we oer a wide variety of plant-based food and drink

options in all our cafés and restaurants. Our coees are

provided by a Dublin-based roaster using the world’s

rst purpose-built carbon neutral roastery in Dublin. All

coees and teas served on board are fair trade certied.

We use local suppliers to service our new Dover-Calais

route, including our UK-based coee supplier that

engages in various social projects to support farmers in

Guatemala, Tanzania and Peru. We source our on-board

wines from a distributor in Cherbourg that provides

a vast selection of wines from large and small French

wineries. We promote local French wines through

special wine tasting events in conjunction with our

partner in Cherbourg. Customers have the opportunity

to meet with local wine producers and learn more about

dierent wine regions and varietals.

Task Force on Climate-Related Financial Disclosures

(TCFD) Report (within ESG report)

Details of how ICG is making progress in implementing

the recommendations of the TCFD are set out below. In

addition to the four key areas of governance, strategy,

risk management and metrics and targets, a complete

Appendix cross referencing disclosure against the 11

recommendations is included on page 59 of the Annual

Report.

Governance

Disclose the organisation’s governance around

climate-related risks and opportunities.

Everything we do at ICG is underpinned by strong

governance. Climate-related risks and opportunities are

managed and being integrated as a core component

of strategy and performance from the highest level of

the business. As a leading maritime transport group, in

what is an increasingly regulated industry, we recognise

how important it is for us to play a leading role in driving

more sustainable shipping. Our purpose and strategy

are fully aligned to this goal. Oversight of climate-

related issues is provided by the Board as a whole, with

support from the Audit Committee, in particular in

relation to climate risks and opportunities. In terms of

management, we have dedicated signicant resources

to ensuring that climate risks and opportunities are at

the forefront of day-to-day activities and operations.

We will continue to review the governance of climate-

related risks and opportunities in the year ahead to

ensure our frameworks evolves with the demands of the

outside world.

Strategy

Disclose the actual and potential impacts of climate-

related risks and opportunities on the Group’s

businesses strategy and nancial planning, where

such information is material.

Through our purpose, commitments to contribute to

the UN SDG and from regulation, ensuring our strategy

is aligned with reduced impact on the environment is

a core component of our eorts. It is for this reason

we have made signicant strides in detailing our

environmental impact over the past years while also

committing to reducing that impact, with data and

eective governance at the heart of those steps.

To gain a better understanding of how climate

change might impact our business, we reviewed

dierent scenarios occurring over the coming years.

These assessments looked at potential physical and

transitionary risks of a changing climate such as

ooding and water stress, as well as the risks associated

with a transition to a low-carbon economy such as

international climate policy and the impacts of carbon

pricing. As an industry with stringent environmental-

related regulations, the implications of regulatory steps

have been a core part of our scenario analyses since

before the introduction of the TCFD.

The analysis evaluated the implications for ICG’s

facilities, eet and suppliers, as well as the impacts

on our consumers. The analysis of both physical and

transition risks showed that in both scenarios there is

likely to be some nancial risks which would need to be

managed, but none that would materially impact our

business model.

While these analyses were conducted on a qualitative

basis and form the foundation of the climate-related

risks and opportunities provided below, we aim to

conduct a quantitative scenario analysis against a range

of warming scenarios in the periods ahead.

55

Strategic Report

2021 Annual Report and Financial Statements

Consequence (Negative

Scenario)

Financial Statement Impact

OpportunityRevenue Expenses Assets Liabilities

Capital and

Financing

Risk - Increase in extreme weather events

Sailing disruption, damage to

assets, increased insurance,

health and safety hazards,

damage to cargoes, supply

chain delays, access issues to

key locations

Decrease (fewer

sailings)

Increase

(Insurance costs,

repair costs)

Decrease

(damage to

assets)

Increase (health

and safety

hazards, damage

to cargoes)

Increase in tourism around

operating region due to

warmer climate. Tourism

boost from conscientious

travellers looking to holiday

locally and using a more

ecient mode of travel than

by air

Risk - Introduction of carbon emission allowances

Increased costs to purchase

allowances, penalties for

non-compliance, increase in

fuel costs, diculty to oset

costs over time through ticket

surcharges

Partial increase

(fuel surcharge

mechanism)

Increase

(purchase of

allowances,

increase in fuel

costs)

Increase

(provisions

for emissions

allowances

and potential

penalties)

Amounts paid may

contribute to an industry

innovation fund that ICG

could seek to benet from

Risk - Negative impact of meeting EEXI/EEDI requirements

Increased vessel docking

periods to undertake upgrade

works, increased capex

budgets to meet design

requirements, loss of trade

due to customer concerns

or imposed restrictions,

decreased asset values due to

poor ratings, reduced charter

revenues from inecient

vessels

Decrease

(increased vessel

docking periods,

loss of trade

due to customer

concerns

or imposed

restrictions,

reduced charter

revenues)

Increase

(impairment

depreciation

penalties)

Decrease (poor

vessel ratings)

Increased

(capex needed

to meet design

requirements)

Optimise vessel purchasing

and selling decisions to

consider future compliance

and further enhancement

costs

Reputational improvement

by operating fully compliant

vessels

Risk - Failure of carbon reducing investments and projects to achieve desired eciencies

Substantial capex investment

which fails to improve carbon

intensity, disproportionate fuel

cost reductions, leak, spillage,

re or unintended exposure

to alternative fuels harmful to

health, energy from alternative

sources not enough to meet

operational demand

Increase (costs

relating to higher

than expected

carbon intensity,

larger quantities

of alternative

fuels required to

meet operational

demand)

Increase

(potential

accidents and

hazards from

new fuels)

Increased

nancing to

meet capex

project

requirements

Take a position of market

leadership by adopting new

technologies to improve

environmental performance

Opportunity to market new

innovative features as unique

selling points

Reduction in ETS and fuel

levy costs

Risk - Poor ESG ratings from external agencies

Loss of investor and nancier

interest as the required ESG

grades are not met, loss of

revenues and/or customers

due to ESG concerns

Decrease (loss of

revenues and/or

customers)

Increase

(nancing costs

due to limited

debt options)

Decrease (loss

of nancier

interest)

Use agency feedback to

improve performance and

boost future ratings

Forge supply chain alliances

with customers if strong

ESG performance can be

demonstrated

Risk management

Disclose how the organisation identies, assesses and manages climate-related risks.

Climate-related risk management is integrated into our enterprise risk management process, as detailed extensively

on pages 62 to 66. The enterprise risk management process is designed to identify, assess, monitor and report on all

risk related to the business. Through the TCFD lens, ICG prioritised the climate risk and opportunity assessment, and

set out the following risks and opportunities related to climate change:

Sustainability and ESG

Continued

56

Irish Continental Group

Consequence (Negative

Scenario)

Financial Statement Impact

OpportunityRevenue Expenses Assets Liabilities

Capital and

Financing

Risk - Collective human failure to limit global warming to <1.5 degrees above pre-industrial levels

Risk to immobile assets

and operations at coastal

locations, public health and

safety risks, natural resource

and supply chain shortages

Decrease

(Operational

disruption at

coastal locations

due to ooding)

Increase (higher

cost of goods

and natural

resources due to

shortages)

Decrease (risk

to immobile

assets at coastal

locations)

Adopt science-based

targets, develop and execute

our climate change strategy

to play our part in limiting

global warming

Engage with landlords

and local authorities on

major incident plans and

contingencies in place at

ports

Enhance procedures to

responsibly manage water

consumption and other key

resources

Risk - Biodiversity loss within operating regions

Loss of species and crops,

resulting in food shortages and

public health and safety risks

Increase (higher

cost of goods

and natural

resources due to

shortages)

Help protect biodiversity

through ballast water

management systems and

other sustainable practices

Raise awareness in the

community about local

biodiversity issues

Enhance procedures to

responsibly manage water

consumption and other key

resources

Risk - Unavailable debt nancing for capital projects due to operational sustainability concerns

Construction of suitable

vessels and/or undertaking

of certain transport activities

not meeting sustainable

nance criteria, lack of growth

opportunities

Decrease (lack

of growth

opportunities)

Increase

(nancing costs

due to limited

debt options)

Decrease (loss

of nancier

interest)

Identify sustainable projects

that will achieve funding

to grow the business and

ensure long-term viability

Risk - Poor eet emissions ratings with respect to IMO CII and equivalent EU regulations using MRV

Commercial impact of

vessels undertaking reduced

speed passages to ensure

compliance, impairment of

vessels with poor ratings,

increased capex to meet

eciency requirements

Decrease

(commercial

impact of vessels

undertaking

reduced speed

passages)

Decrease

(Impairment of

vessels with poor

ratings)

Increased (capex

needed to

meet eciency

requirements)

Optimise vessel purchasing

and selling decisions to

consider future compliance

and further enhancement

costs

IMO encouraged rebates

and other concessions from

ports and authorities for

highly rated vessels

57

Strategic Report

2021 Annual Report and Financial Statements

Metrics and targets

Over the past number of years, we have commenced

collection and disclosure of a range of measures

used to assess and manage climate-related risks and

opportunities. We have now disclosed our scope 1 and

scope 2 emissions and intend to develop our reporting

to disclose our scope 3 emissions over time. ICG also

adheres to limits on sulphur content of fuel oils, in

relation to sulphur oxide (SOx) emissions from the

shipping sector, investing approximately €25 million

on the installation of exhaust gas cleaning systems

(EGCS) in our owned and operated eet. Studies have

shown that EGCS can remove 60 to 90 percent of

particulate matter (PM), including a portion of small and

ultrane PM, resulting in fewer particles released in the

atmosphere compared to consuming marine gas oil.

Separate to our emissions, we provide details of water

consumption and waste management throughout our

ESG report.

Sustainability and ESG

Continued

As a business, we have implemented the targets set by

the IMO and the EU, including:

• 40 percent reduction in carbon intensity from

shipping operations by 2030 compared to 2008 levels

• 50 percent reduction of all GHG from shipping

operations by 2050 compared to 2008 levels

• 6 percent reduction in GHG intensity from shipping

operations by 2030 compared to 2020 levels

• 75 percent reduction in GHG intensity from shipping

operations by 2050 compared to 2020 levels

We have also set the following targets for our terminal

operations:

• 70 percent reduction in Scope 1 and 2 emissions by

2025 versus 2020 levels. A 17 percent reduction was

achieved in 2021.

• Net zero Scope 1 and 2 operations by 2030.

Over the longer term, we recognise the importance of

science-based target setting and look forward to future

engagement with the Science Based Targets initiative

(SBTi) as we await specic guidance for the transport

sector which is currently in development.

58

Irish Continental Group

Task Force on Climate-Related Financial Disclosures Appendix

Governance Strategy Risk Management Metrics and Targets

Disclose the organisation’s

governance around

climate related risks and

opportunities.

Disclose the actual and

potential impacts of

climate-related risks

and opportunities on the

organisation’s businesses,

strategy, and nancial

planning where such

information is material.

Disclose how the

organisation identies,

assesses, and manages

climate-related risks.

Disclose the metrics and

targets used to assess

and manage relevant

climate-related risks and

opportunities where such

information is material.

Recommended Disclosures

(a) Describe the board’s

oversight of climate-related

risks and opportunities.

Refer to pages 55 and 65

(a) Describe the

climate-related risks

and opportunities the

organisation has identied

over the short, medium, and

long term.

Refer to pages 55 to 57

(a) Describe the

organisation’s processes for

identifying and assessing

climate-related risks

Refer to pages 56 to 57 and

pages 64 to 66

(a) Disclose the metrics used

by the organisation to assess

climate related risks and

opportunities in line with its

strategy and risk management

process

Refer to pages 46 to 47 and

page 58

(b) Describe management’s

role in assessing and

managing climate-related

risks and opportunities.

Refer to page 65

(b) Describe the impact

of climate related risks

and opportunities on the

organisation’s businesses,

strategy, and nancial

planning.

Refer to pages 56 to 57 and

page 65

(b) Describe the

organisation’s processes for

managing climate-related

risks.

Refer to pages 64 to 66

(b) Disclose Scope 1, Scope

2, and, if appropriate, Scope

3 greenhouse gas (GHG)

emissions, and the related

risks.

Refer to page 47 and pages

56 to 57

(c) Describe the resilience of

the organisation’s strategy,

taking into consideration

dierent climate-related

scenarios, including a 2°C

or lower scenario.

Refer to pages 56 to 57 and

page 66

(c) Describe how processes

for identifying, assessing,

and managing climate-

related risks are integrated

into the organisation’s

overall risk management.

Refer to pages 62 to 66

(c) Describe the targets

used by the organisation

to manage climate-related

risks and opportunities and

performance against targets.

Refer to page 58

59

Strategic Report

2021 Annual Report and Financial Statements

Disclosures by Non-Financial Undertakings under

Article 8 of the EU Taxonomy Regulation

The Group is required to apply the requirements of

the EU Taxonomy Regulation. The EU Taxonomy, rst

published in 2020, is a classication system intended

to establish a list of environmentally sustainable

economic activities and sectors that play a key role in

climate change mitigation and adaptation to support

sustainable nancing. Under the Taxonomy, for an

economic activity to be considered environmentally

sustainable, certain criteria must be met across six

environmental objectives:

1. Climate change mitigation

2. Climate change adaptation

3. The sustainable use and protection of water and

marine resources

4. The transition to a circular economy

5. Pollution prevention and control

6. The protection and restoration of biodiversity and

ecosystems.

Ahead of reporting on the alignment of ICG activities

with the Taxonomy next year, the Group is currently

required to disclose the proportion of its turnover,

CapEx and OpEX eligible for assessment under the

Taxonomy.

Based on a comprehensive analysis of the Group’s

economic activities against the range of activities

listed in the EU Climate Delegated Act and NACE

classication system, the Group determines it has

Taxonomy-eligible undertakings in accordance with

activity 6.10 ‘Sea and coastal freight water transport,

vessels for port operations and auxiliary activities’

(Annex I: climate change mitigation/ Annex II: climate

change adaptation).

All integrated services necessary to and dependent on

the operation of vessels for the combined transport

of freight and passengers on sea or coastal waters are

also considered eligible and are therefore included

within the reported metrics below. This includes service

activities incidental to water transportation such as; on

board passenger services, Group stevedoring services

and quay-to-door container transport services that

are component activities embedded within our sea

transport oerings to customers.

The Group’s Consolidated Financial Statements

have been prepared for the nancial year ending 31

December 2021 in accordance with IFRS. The amounts

used for the calculation of the turnover, CapEx and

OpEx ratios are accordingly based on the reported data

in those Consolidated Financial Statements.

KPIs

Turnover KPI

The turnover KPI is calculated by the proportion of the

net turnover derived from services that are Taxonomy-

eligible.

Turnover KPI =

100%

Taxonomy-eligible net turnover

Net turnover

The total turnover of €334.5 million for the nancial

year ending 31 December 2021 is the basis for the

denominator for the turnover KPI as presented in the

Consolidated Income Statement on page 132.

The total turnover of €334.5 million reported in the

Consolidated Income Statement was examined across

all Group companies to determine whether it was

generated from Taxonomy-eligible activities as set out

in Annex I (Substantial contribution to climate change

mitigation) and Annex II (Substantial contribution to

climate change adaptation) of the Climate Delegated

Act. A detailed analysis of the items included in the

sales turnover is used to allocate the respective sales

turnover to the Taxonomy-eligible economic activities.

The sum of the sales turnover of the Taxonomy-eligible

economic activities for the nancial year ending 31

December 2021 represents the numerator. The Group

has determined its revenue generating activities to be

fully eligible.

Sustainability and ESG

Continued

60

Irish Continental Group

CapEx KPI

The CapEx KPI is calculated as the proportion of the

capital expenditure of an activity that is Taxonomy-

eligible.

CapEx KPI = 100%

Taxonomy-eligible

investment

Additions to tangible and

intangible assets

The capital expenditures amount to €55.2 million,

comprising strategic and maintenance capital

expenditures. The sum of the additions that reect

investments in Taxonomy-eligible activities forms the

numerator.

OpEx KPI

The OpEx KPI is calculated as the proportion of the

operating expenditure associated with Taxonomy-

eligible activities.

OpEx KPI = 100%

Taxonomy-eligible operating

expenses

Total OpEx as dened in the

EU-Taxonomy

The amounts reecting direct non-capitalised costs

relating to short-term leasing, maintenance and repair

expenses and any other direct expenditures relating

to the day-to-day servicing of Group assets or third

parties to whom the activities are outsourced that

are necessary to ensure the continued and eective

functioning of such assets were considered for the

denominator calculation.

The numerator is derived from an analysis of the

operating expenses associated with Taxonomy-eligible

activities.

61

Strategic Report

2021 Annual Report and Financial Statements

Overview

Exposure to risk is an inherent element to carrying out

the business activities of the Group; the operation of

vessels and provision of related services. Eective risk

management and internal control systems are essential

to protect the Group from exposure to unnecessary

risks and to ensure the sustainability of the Group’s

business.

The Board has overall responsibility for establishing

procedures to manage risk, oversight of the internal

control framework and determining the nature and

extent of the principal risks the Group is willing to

accept in order to achieve its long-term objectives.

The Board has created a culture of risk awareness

throughout the organisation whereby risk consideration

is embedded in decision making processes.

The Board has delegated the appraisal of the Group’s

risk management and internal control systems to

the Audit Committee. This assessment is carried

out through the review of reports and presentations

made by the Risk Management Committee (RMC) and

Group Internal Audit. Further information on the Audit

Committee activities is set out in its report on pages 94

to 99.

Risk Architecture, Strategy and Protocols

The Group follows international standard ISO 31000

(2018) ‘Risk Management – Guidelines’ in designing its

risk architecture, strategy and protocols (RASP).

Risk Management

1st Line of Defence 2nd Line of Defence 3rd Line of Defence

Management Controls Financial Control Internal Audit

Internal Control Measures Risk Management

Monitoring

Compliance

The rst line of defence rests with

management acting through their stas

who are responsible for the design,

implementation and monitoring of

internal control measures within their

respectivebusinessareas.

The second line of defence comprises

of oversight functions such as

Group Finance and Group Marine

and Safety. These functions are

involved in policy setting andprovide

assurance overrstline activities.

The third line of defence consists

ofthe Group Internal Audit function,

which performs independent oversight

of the rst two lines and reports

directly tothe AuditCommittee

on matters of internal control,

complianceandgovernance.

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Audit Committee / Board

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Audit

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The Group’s risk architecture includes the roles and responsibilities of the Board and Group personnel in managing

risk, along with internal reporting requirements. This is illustrated by the ’three lines of defence’ model.

62

Irish Continental Group

Roles, responsibilities, risk management policy,

objectives and process overviews are documented

within the Group’s Risk Code. The Group adopts an

Enterprise Risk Management (ERM) system that takes a

unifying, broad and integrated approach to managing

risks and aligns risk management to the achievement of

strategic objectives.

Role of the Risk Management Committee

The Risk Management Committee (RMC) established

by the Group comprises members from across the three

lines of defence, as well as having Board representation.

With its mandate from the Board, the RMC is tasked

with;

• Making appropriate recommendations to the Board

on all signicant matters relating to the development

of risk strategy and processes of the Group.

• Keeping under review the eectiveness of the Group’s

risk management systems.

• Reviewing the Group’s risk exposures in relation to the

Board’s risk appetite.

• Maintaining a robust Group Risk Register and

ensuring risks are identied comprehensively and

assessed consistently across classied risk areas.

Risk Management Process

The Group’s Risk Management Process is underpinned

by its RASP methodology and is led by the RMC. The

Group’s process is based on the revised international

standard ISO 31000 (2018), ‘Risk Management –

Guidelines’, and provides an iterative and systematic

approach to managing risks throughout the Group.

Risk Assessments and Monitoring

The Board sets the Group’s risk appetite for classied

risk areas. Risk appetite is communicated through

the adoption of Risk Appetite Statements. These

statements, along with internal capabilities, resources

and industry factors provide context to how the Group’s

strategy is pursued and to which risks are assessed.

With respect to climate and ESG issues, the views of

stakeholders are also considered by the Board in setting

appropriate appetite levels. Refer to pages 64 to 66

for an overview of the Group’s climate risk framework.

The Board has a low acceptance for risks that may

impact safety of vessels, workers and customers and

compliance with relevant laws and regulations.

Each business owner is responsible for ensuring

comprehensive risk identication and assessment is

carried out covering their sphere of responsibility. Risks

are identied through various means, including the use

of an identication tool guiding risk assessors through

several internal and external factors in identifying

potential barriers to respective objectives. Risks are

assigned to risk owners with responsibility for the

activity generating the risk. Where a risk contains

multiple causes and consequences, risk owners are

required to collaborate in performing a cause and

consequence analysis.

For some risks, this collaboration spans across

departments and divisions within the Group.

Risk owners are ultimately responsible for the

completion and maintenance of risk assessments across

their respective risk areas. Risks are measured in terms

of the likelihood of occurrence and estimated impact

using a standardised scoring model. All evaluations

are made from a Group perspective and are relative

to Group risk appetite. Guidance tools are in place to

ensure Group-wide consistency is achieved across risk

assessments.

Existing control measures are documented and assessed

within the risk assessment forms in determining

residual risk scores. All risk assessments are reviewed

by members of the RMC before they are released to

the Group Risk Register. The RMC and risk owners

can prescribe the implementation of further control

measures at the review stage.

Scope, Context,

Criteria

Communication and Consultation

Risk Identication

Risk Analysis

Risk Evaluation

Monitoring and Review

Recording and Reporting

Risk Assessments

Risk Treatment

63

Strategic Report

2021 Annual Report and Financial Statements

The Group Risk Register is the central online repository

for documenting, assessing and prioritising risks, and

for documenting and prescribing control measures.

The Register forms a signicant portion of the Group’s

risk management process. The Group Risk Register is

reviewed on a regular basis by the RMC.

Any necessary changes to the Group Risk Register are

made throughout the year and can be prompted by;

• The occurrence of a risk event.

• The identication of new emerging risks or as

circumstances of existing emerging risks change.

• Quarterly RMC meetings.

• Internal Audit or regulatory reviews.

• Annual risk owner reassessment.

• Changes in Key Risk Indicator measurements.

• New risk assessments completed within business area

teams.

Risk information within the Group Risk Register is

analysed and used for reporting principal risks to the

Board and for Internal Audit planning. A presentation of

the Group’s principal and emerging risks is made to the

Board at least annually or more frequently if warranted

by developments. At these presentations the Board

challenges the RMC in their processes and evaluations

of the principal and emerging risks identied in the

context of the Group’s own risk policy, risk appetite and

general market developments both within and outside

the industry sector. Key Risk Indicators are in place for

highly ranked individual risks at the residual level, to

ensure exposure levels are monitored, agged to the

Board and corrective actions taken before impacts are

fully realised.

Emerging Risks

Risk monitoring is an ongoing process to reect the

dynamic nature of the environment in which the Group

operates. The Group acknowledges three types of

emerging risks that can arise. The rst type are new

risks that emerge in the Group’s external environment.

These are identied through the ongoing Group risk

identication process. The second type are previously

identied risks recorded in the Group Risk Register

whose impact on Group activities has changed,

prompting a reassessment. The third type are new risks

emerging from the internal environment when changes

to core processes are made. These are identied

when undertaking new projects or engaging with new

business partners.

Emerging risks are closely monitored and assessed as

their uncertain nature can result in the risks becoming

signicant within a short timeframe. Emerging risks

currently under review at the date of this report relate

to greater employer responsibility for employee welfare,

greater environmental and climate awareness driving

increased corporate responsibility and regulatory

requirements and long-term risks and opportunities

associated with technological advancements.

Managing Climate Change Risks

The Group has adopted a framework, based on

guidance from the Institute of Risk Management, which

identies the key areas that require attention to enable

the development and execution of its climate change

risk management strategy. This framework is integrated

within the Group’s RASP and related risks assessments

are released to the Group Risk Register.

1. Climate Change Risk Landscape

The Group identies climate risks using the same

processes as other emerging risks, with additional

emphasis on expert climate risk publications and

regulatory updates. Climate change risks are unique

in how they; aect every individual and organisation,

are long term in nature and are highly uncertain in

their ultimate progressions and impacts. Due to these

considerations, the Group’s climate risk register

contains the following additional details;

1. Climate Change

Risk Landscape

2.

Eective

Governance

Systems

3.

Stakeholder

Insights and

Research

4.

Risk

Appetite

Setting

5.

Materiality

Assessment over

Alternative

Horizons

6.

Strategic

Positioning and

Roadmap

7.

Implementing

Mitigation

and Resilience

Plans

8.

Operationalise

Metrics and

Targets

Risk Management

Continued

64

Irish Continental Group

• Risks are assessed over three dierent time horizons;

0-3 years, 3-10 years and >10 years, with the 0-3-year

horizon assessments transferring to the Group Risk

Register.

• Impacted stakeholder groups are identied for

engagement on associated risks.

• Opportunities are identied for each risk to support

strategic positioning and resilience planning.

• Impacts are linked to nancial statement areas.

A summary of the Group’s climate risks, impacts and

opportunities is disclosed on pages 56 to 57.

2. Eective Governance Systems

The Group applies the same risk governance structure

to climate change risks as all enterprise risks. The RMC

advises the Board on risk appetite, risk management

approach and important risk management issues and

considerations, which are ultimately approved by the

Board or used to facilitate decision making.

The RMC presents to the Board during the year on all

important risk management issues, including climate

change and ESG risks. Executive Management are

also equipped to update the Board on such matters

throughout the year, as 75 percent of the Executive

Management Team are RMC members. The Group’s

recent Board appointments helps ensure there is

adequate Non-Executive Director representation with

ESG expertise to challenge the RMC and Executive

Management on relevant issues.

The RMC is comprised of management across all areas

of the business, including; risk and sustainability, sales,

operations, health and safety, planning and nance.

Collectively, the RMC has the skills, knowledge and

experience to best manage the Group’s climate change

risks and their wide-ranging impacts. ESG issues

are incorporated in the incentive plans of Executive

Management and dedicated management roles within

the RMC.

3. Stakeholder Insights and Research

The interests and expectations of stakeholders are

important considerations in the Group’s climate

risk management approach. In 2022, the Group will

undertake a stakeholder research program to gain

insights on ESG issues facing the Group. This will

facilitate an evaluation of our core strategic, operational

and compliance processes concerning the environment

and climate change expectations. Mapping of these

insights will help align stakeholder values to the Group’s

strategic objectives and core processes.

4. Risk Appetite Setting

Following the outcome of the stakeholder engagement

program, the RMC will develop more specic risk

appetite areas across a range of ESG issues. Areas of

highest stakeholder importance will be considered in

setting the appetite levels for Board approval. All ESG

and climate change risks going forward will then be

assessed, and mitigation plans updated to ensure they

remain proportionate to the relevant appetite levels.

5. Materiality Assessment over Alternative Horizons

Climate change risks are assessed over three separate

horizons; 0-3 years, 3-10 years and >10 years. Current

known transition risks are most signicant in the short

and medium term and are expected to curtail from the

third time horizon as the Group shifts towards a low

carbon economy. While physical risks require attention

today, signicant physical impacts for the Group may

only be experienced over the long-term horizon.

Assessments over the long-term horizon are most

challenging to calculate but are key to future resilience

planning. The Group is exploring further methods to

help quantitively analyse the impact of certain future

scenarios.

6. Strategic Positioning and Roadmap

Following a full assessment of risks and opportunities

over separate time horizons, the Group can assess

strategically its current position against long-term goals.

This stage allows the Group to identify any changes to

its business model necessary for long-term success,

with a focus on opportunity management. Further

climate change related controls and projects are then

agreed.

Short Term

(1 -3 years)

Low

Impact

Physical Risk

Transition Risk

Medium

Impact

High

Impact

Medium Term

(3 -10 years)

Long Term

(>10 years)

65

Strategic Report

2021 Annual Report and Financial Statements

7. Implementing Mitigation and Resilience Plans

Further controls and projects to help address climate

change risks are implemented and managed. Current

resilience plans, including the Group’s Major Incident

Response Plans and Disaster Recovery Plans are also

reviewed and updated periodically for additional

information gathered throughout the process.

8. Operationalise Metrics and Targets

Metrics and targets, including carbon intensity and

absolute GHG emissions are monitored and reviewed.

Relevant Key Risk Indicators are also introduced to

monitor high residual risks, in line with the Group’s risk

management process.

Signicant and Emerging Risk Events

Covid-19 Pandemic

The Group responded promptly when the Covid-19

pandemic began to aect operations in 2020 and this

continued throughout 2021. Actions taken had two

principal emphases:

1. Measures to ensure continuing safe operations

and the communication of such measures to

all stakeholders including state authorities and

customers; and,

2. Measures to ensure the nancial viability of services

throughout cost-cutting, eciencies and service

restrictions.

A specic and detailed pandemic risk assessment was

carried out in 2020 with input from across all divisions

and departments which was updated throughout 2021

as necessary.

While some services continued to be curtailed in

2021 and passenger travel was impacted by varying

regulations during the year, all operations have been

maintained safely including during times of increased

passenger demand for ferry services. Global supply

chain congestion meanwhile brought opportunities

for the Container and Terminal Division. The Group

is strongly positioned for success in 2022 as regional

restrictions are removed and tourism can safely return

to pre-pandemic levels.

Brexit

A specic and detailed risk assessment was developed

prior to the end of the transition period on 31 December

2020. This risk assessment was updated throughout

2021 and the risks which materialised were in relation

to:

1. Negative impact on the Republic of Ireland (ROI) – Great

Britain (GB) freight market due to additional customs and

health formalities; and,

2. Market distortion due to re-routing of freight trac via

Northern Ireland and via the direct route to France, to

avoid customs and health formalities. However, this risk

has also brought the opportunity of increased demand

for our ROI – France route.

The Group will continue to monitor the impacts of Brexit,

particularly as additional requirements for GB customs

controls are implemented in 2022.

Environmental Regulations and Impacts

The Group is exposed to long-term physical eects of

climate change and to near and long-term transition risks

associated with the movement towards a low carbon

economy, driven by changing stakeholder expectations

and environmental regulations. During the year, signicant

regulatory measures and proposals were announced by

the IMO and the EU to help achieve the respective GHG

reduction targets of each organisation for the maritime

transport industry.

Current IMO Measures

• An annual operational Carbon Intensity Indicator (CII)

assessment and rating from 2023 to determine how

eciently a ship transports goods or passengers.

• The introduction of the Energy Eciency Design Index

for existing ships (EEXI) which sets from 2023 a baseline

technical design eciency that vessels must meet.

Current EU Proposals

• The extension of the ETS to the maritime industry on

a phased-in basis from 2023 to full implementation by

2026, requiring ICG to purchase and submit emissions

allowances for each equivalent tonne of CO2 emitted

from vessel operations.

• The introduction of the FuelEU Maritime regulation to

limit the GHG intensity of energy used on board vessels

from 2025.

• The removal of the heavy fuel oil exemption for the

industry under the Energy Taxation Directive.

The Group will continue to monitor these developments

and liaise with regional chambers of shipping, shipowners’

associations and other industry representatives as further

information is announced. These regulations could have

signicant nancial and operational impacts for the Group

and are currently being managed within the climate risk

framework. In mitigation of potential nancial impacts,

the Group shall seek to recover increased costs through

its value chain. The Group has been an early adopter of

technology and assessments to certify EEXI compliance for

Risk Management

Continued

66

Irish Continental Group

Principal Risks and Uncertainties

Linkage to strategic pillars:

Quality Service People and Culture Financial Management Safety Sustainability

Description and Impact Risk Treatment 2021 Developments

Strategic Risk - Commercial & Market

The Group operates in a highly

competitive industry with

market risks and opportunities

arising from uncertain political

and economic landscapes. The

Group is at risk of markets not

performing in line with expected

growth and at risk of loss in

market share to competitors,

impacting protability.

The Group undertakes regular assessments

of its cost base and performs competitor

benchmarking.

Direct and indirect competitor activity and

market performance is closely monitored

which allows the Group to respond swiftly.

The Group focuses on ensuring a safe,

reliable and high-quality service is provided

to customers in order to maintain and

strengthen alliances.

Exposure to commercial and market risks

increased in magnitude during the year

as the Group announced its entry to the

Dover – Calais route and competitors

introduced additional capacity on existing

markets served.

Strategic Risk - Economic and Political

Economic and political factors

including instability and changes

to laws on travel and trade could

adversely impact the Group’s

activities and demand for its

services.

Geopolitical risks, including war

risks could have devastating

Global impacts, including

impacts to Group operations.

The Group liaises with various associations

and governmental bodies to share views on

proposed legislative changes.

Micro and macroeconomic activity is

closely monitored to ensure Group decision

making is informed and timely.

In 2021, there was a negative impact

experienced on the Ireland-GB freight

market due to additional customs and

health formalities as a result of Brexit and

Covid-19.

There was also market distortion caused

by the re-routing of freight trac via

Northern Ireland via France direct to avoid

post-Brexit related customs formalities.

The Group is closely monitoring

developments in Eastern Europe following

the invasion of Ukraine by Russia in

February 2022.

the Isle of Inishmore and Ulysses in 2021, with further

studies and measures across the remainder of the eet

scheduled in 2022. The W.B. Yeats is assessed as a new

vessel under the Energy Eciency Design Index (EEDI)

and is excluded from EEXI.

War in Eastern Europe

The Group is deeply concerned by developments in

Eastern Europe following the invasion of Ukraine by

Russia. A full organisational-wide risk assessment was

conducted as geopolitical tensions escalated in early

February 2022. Among the potential impacts under

ongoing assessment at the Annual Report release date

include:

• The impact of economic sanctions on Russia on Group

operations and fuel prices

• Impact on passenger demand due to ticket price ination

• Increased cyber security risk to assets and operations

• Business continuity risks associated with supply of fuel

and key third party contractors

Viability assessment

The principal risks identied through the Group’s risk

processes have been considered by the Directors when

preparing the Viability Statement on pages 116 to 117, as

part of their assessment of the prospects for the Group.

67

Strategic Report

2021 Annual Report and Financial Statements

Description and Impact Risk Treatment 2021 Developments

Operational Risk - Business Continuity

The Group’s operations are

exposed to the risk of re, ood,

storms, vessel incidents and loss

of critical supplies caused by

accident or by natural disaster.

Minor disruptions can impact

revenues while major disruptive

events can result in the loss of

critical infrastructure causing

signicant nancial loss and

reputational damage.

The Group places strategic importance

on investment in quality assets and safety,

including vessels suitable for challenging

sailing conditions and experienced crews

and operations teams.

The Group has detailed, coordinated

and rehearsed business continuity plans

containing crisis management and disaster

recovery components to respond to major

incidents at land or at sea and ensure

aected operations can be resumed

promptly and safely.

The Group continues to follow public

health guidelines and updates to

governmental travel restrictions relating

to the Covid-19 pandemic, which saw

non-essential passenger travel resume and

the Dublin Swift return to service in late

summer.

The Group is optimistic its services can

operate fully and safely throughout the

entire 2022 tourism season.

Some minor disruptions caused by

extended drydocking periods and acute

weather events including Storm Barra

were experienced during the year.

Operational Risk - Health and Safety

The Group is inherently

exposed to the risk of incidents,

including; workplace accidents,

vessel collisions and damages,

hazardous cargo and incidents

involving passengers.

There is also a risk of outbreak of

contagious illness among sta,

crews and customers.

These events could result in loss

of life, serious personal injury

or illness, asset damage and

reputational impact concerning

safety.

The Group and its service providers adhere

to dened operating safety and quality

policies and procedures. All sites are

regularly inspected by internal second line

functions and external regulatory bodies.

Emergency procedures and safety training

are conducted regularly.

Hazardous cargoes are managed in

accordance with international maritime

regulations.

Group vessels, oces and facilities are

thoroughly and frequently sanitised.

World Health Organisation (WHO) and

governmental guidance and instructions

are followed. Crews are tested before and

during their work on board vessels.

Hybrid working arrangements are facilitated

for sta to prevent spread of contagious

illnesses.

Health and safety metrics for the year are

disclosed on page 52.

The rollout of vaccination programmes

throughout Europe in 2021 helped to

protect sta, crew and customers from

Covid-19 impacts and contributed to the

safe resumption of non-essential travel for

passengers.

The Group is closely monitoring the

impacts of new Covid-19 variants and

will continue to exercise caution in how

meetings and business activities are

conducted.

Risk Management

Continued

68

Irish Continental Group

Description and Impact Risk Treatment 2021 Developments

Operational Risk - Operational Compliance

The Group’s activities are

governed by a range of IMO, ag

state, port state, EU and national

governmental regulations.

There is a risk that instances of

non-compliance may occur that

causes disruption, reputational

damage or nancial penalties.

Ongoing training is provided to operations

sta and contractors in line with regulatory

requirements.

New regulations are discussed and assessed

at management meetings, together with

measures to ensure compliance.

The Group’s vessels and port operations are

subject to regular inspections and audits

from internal second line functions and

external bodies.

The Group will continue to monitor new

regulatory developments at the IMO and

the EU and liaise with regional chambers

of shipping, shipowners’ associations and

other industry representatives as further

information is announced. Compliance

risks related to reducing emissions are

managed within the Group’s climate

change risk framework.

Operational Risk - Environmental Protection

The Group is exposed to long-

term physical eects of climate

change and to near and long-

term transition risks associated

with the movement towards a

low carbon economy. These risks

and impacts are detailed further

on pages 56 to 57.

There is also a risk of spillages or

incidents causing pollution and

discharge to the sea.

Physical and transition climate change risks

are managed within the Group’s climate

change risk framework.

The Group is employing a range of technical

and operational measures to achieve its

GHG reduction targets. Refer to pages 44 to

45 for further details.

Over the last 12 months, the Group has

placed signicant focus on enhancing its

approach to ESG and sustainability. Refer

to the Sustainability and ESG Report on

pages 40 to 61 for further information on

activities and developments during the

year.

Operational Risk - Human Capital

There is a risk of failure to

attract qualied and talented

individuals and additionally a risk

of losing key personnel. Sta

could become unmotivated or

dissatised with the working

environment. These risks can

ultimately lead to a poor standard

of customer service and decision

making, aecting the Group’s

market position, reputation and

stakeholder relationships.

Pay and conditions are reviewed and

benchmarked to ensure the Group remains

competitive.

ICG is an equal opportunities employer

and seeks a diverse workforce to promote

a strong and accepting culture and to help

make informed decisions.

Sta are encouraged and supported in their

pursuits of further education and career

advancement.

Long-term incentive plans are in place

to retain and motivate key management

personnel.

Work from home arrangements can

be attractive opportunities for many

individuals. The Group introduced hybrid

working arrangements in response to

changes in the work environment brought

upon by the Covid-19 pandemic.

69

Strategic Report

2021 Annual Report and Financial Statements

Description and Impact Risk Treatment 2021 Developments

IT Systems and Cyber Risk - Information Security and Cyber Threats

The Group is heavily reliant on its

IT systems to support business

activities. These systems are

susceptible to data breaches

and cyber attacks that can result

in disruption, heavy nes and

reputational damage.

The Group employs a suite of physical

access controls and technical controls to

prevent, detect, mitigate and remediate

malicious threats and unusual activity.

Such controls include rehearsals for major

cyber incidents, vulnerability management

processes and security awareness training

for sta and key contractors.

Cyber-attacks continue to grow in volume

and sophistication and have particularly

intensied since the beginning of the

Covid-19 pandemic.

Notably, in May 2021, a critical national

infrastructure provider in Ireland

experienced a signicant ransomware

cyber-attack causing major disruption and

damages to systems. This was the largest

cyber-attack in Irish history and highlights

the importance for the Group to remain

vigilant and ensure all eorts to protect its

systems are made.

Financial Risk - Financial Loss

The Group is at risk of losses

caused by ineective or

inecient nancial policies or

practices, such as; inadequate

budgeting and planning,

insurance provisioning, project

management or credit control

techniques.

The Group’s nancial management

activities are performed by experienced and

knowledgeable personnel. Regular internal

management reporting ensures negative

variances and trends are identied timely

and acted upon.

Close relations with insurance brokers

are maintained and emerging risks are

considered when assessing coverage.

Major projects require pre-approval of

the Board. Due diligence procedures are

carried out for project contractors and

new commercial customers while ongoing

performance management of projects and

debtors are in place.

During the year, the Group successfully

implemented a new ferry booking system

and underwent eet expansion to service

its new Dover-Calais route. The Group

continues to monitor performance

of these projects during and after

implementation.

Financial Risk - Volatility

The Group is exposed to adverse

uctuations in fuel prices and

exchange rates which can reduce

revenues, increase cost base and

reduce overall protability.

Group policy has been to purchase

commodities in the spot markets and remain

unhedged. The Group operates a dynamic

surcharge mechanism with its freight

customers which allows prearranged price

adjustments in line with Euro fuel costs to help

mitigate US Dollar exposure arising from fuel

purchases. In the passenger sector, in addition

to xed environmental surcharges, changes in

bunker costs are included in the ticket price to

the extent that market conditions will allow.

The Group employs a matching policy to

mitigate exposure to Sterling. Decreases in

translation of Sterling revenues to Euro are

largely oset against corresponding decreases

in translation of Sterling costs.

Fuel prices were highly volatile in 2021,

but overall have increased substantially

over 2020, leading to an increase in Group

fuel costs.

The Group’s magnitude for exposure

to unfavourable Sterling movements

increased during the year, following

entering the Dover-Calais route to be

serviced by three vessels.

Risk Management

Continued

70

Irish Continental Group

Description and Impact Risk Treatment 2021 Developments

Financial Risk - Retirement Benet Scheme

The Group’s pension liabilities

are exposed to risks arising

from changes in interest rates,

ination, demographics and

market values of the underlying

investments, resulting in

increased scheme obligations or

decreased scheme assets.

A portion of the Group’s dened benet

risks are transferred to a third-party

insurance company.

All actuarial assumptions are substantiated

and challenged where necessary.

Regular communication is maintained

with the scheme investment managers to

monitor performance relative to agreed

benchmarks.

In 2021, the Group continued its de-

risking initiatives and active investment

management.

Financial Risk - Fraud

A signicant volume of

transactions is processed

throughout the course of the

year. These include a large

amount of payment exchanges

in the booking process, on

board passenger vessels and

at port ticket desks. This level

of activity inherently carries

a risk of fraud through the

processing of improper payments

or misappropriation of cash or

assets.

Any instance of fraud aecting

ICG could result in nancial

loss, reputational and cultural

damage.

Improper payments are prevented by a

segregation of duties within the payment

set-up, payment approval and accounts

posting processes. Further training and

procedures are in place to ensure any

requested changes to vendor payments are

validated.

Daily reconciliations are performed at

cash processing locations. All cash counts

require supervisor oversight and CCTV

cameras are installed to deter and capture

any inappropriate behaviour.

Internal audit procedures are designed with

consideration for the scope of fraud where

relevant.

The Group is not aware of any conrmed

or suspected instances of fraud during the

year.

The Group recently enhanced its

Protected Disclosure (Whistleblowing)

Policy to encourage employees or any

person who works or has worked for the

Group to make a disclosure in respect

of signicant matters included instances

of fraud. This policy is available on our

website.

Financial Risk - Financial Compliance

As a public listed company

with operations in dierent

jurisdictions, the Group must

comply with multiple nancial

and administrative regulations.

Any policy changes or instances

of non-compliance could result

in nancial loss, penalties or

reputational damage.

The Group relies on its professional sta

to ensure necessary lings are timely,

complete and accurate.

Third party experts are engaged when

required to advise on complex matters.

The Group engages productively with Irish

tax authorities through the Co-Operative

Compliance Framework.

Additional assurance is also gained from

the work of the Group’s external auditors.

The Group is monitoring developments

in the G20 global tax deal that would

increase the rate of corporation tax in

Ireland to 15 percent. As the Group is

assessed under the tonnage tax regime it

does not currently envisage changes to its

tax requirements.

The Group is also monitoring and

assessing the nancial and administrative

impact of proposals to include the

maritime industry in the EU ETS.

71

Strategic Report

2021 Annual Report and Financial Statements

Isle of Inishmore

Year Built 1997

Acquired 1997

Gross Tonnage 34,031

No. Engines 4

Speed 21.5 knots

Lane Metres 2,100

Car Capacity 855

Passenger Capacity 2,200

Beds 208

Isle of Inisheer

Year Built 2000

Acquired 2022

Gross Tonnage 25,152

No. Engines 4

Speed 22.5 knots

Lane Metres 1,950

Car Capacity 500

Passenger Capacity 589

Beds 218

Isle of Innisfree

Year Built 1992

Acquired 2021

Gross Tonnage 28,833

No. Engines 4

Speed 21.0 knots

Lane Metres 2,300

Car Capacity 600

Passenger Capacity 1,140

Beds 78

W.B. Yeats

Year Built 2018

Acquired 2018

Gross Tonnage 54,975

No. Engines 4

Speed 22.5 knots

Lane Metres 2,800

Car Capacity 1,216

Passenger Capacity 1,885

Beds 1,706

Ulysses

Year Built 2001

Acquired 2001

Gross Tonnage 50,938

No. Engines 4

Speed 22 knots

Lane Metres 4,100

Car Capacity 1,342

Passenger Capacity 1,875

Beds 186

Our Fleet

Dublin Swift

Year Built 2001

Acquired 2016

Gross Tonnage 8,403

No. Engines 4

Speed 35 knots

Lane Metres -

Car Capacity 251

Passenger Capacity 817

Beds -

Epsilon (chartered in)

Year Built 2011

Acquired chartered-in

Gross Tonnage 26,375

No. Engines 2

Speed 23 knots

Lane Metres 2,800

Car Capacity 150

Passenger Capacity 500

Beds 272

Blue Star 1 (chartered in)

Year Built 2000

Acquired chartered-in

Gross Tonnage 29,858

No. Engines 4

Speed 27 knots

Lane Metres 1,718

Car Capacity 700

Passenger Capacity 1,500

Beds 192

72

Irish Continental Group

Elbfeeder

Year Built 2008

Acquired 2015

Gross Tonnage 8,246

Deadweight 11,157

Capacity 974 TEU

Thetis D

Year Built 2009

Acquired 2019

Gross Tonnage 17,488

Deadweight 17,861

Capacity 1,421 TEU

CT Daniel

Year Built 2006

Acquired 2021

Gross Tonnage 9,990

Deadweight 11,190

Capacity 868 TEU

Elbcarrier

Year Built 2007

Acquired 2015

Gross Tonnage 8,246

Deadweight 11,166

Capacity 974 TEU

Elbtrader

Year Built 2008

Acquired 2015

Gross Tonnage 8,246

Deadweight 11,153

Capacity 974 TEU

CT Rotterdam

Year Built 2009

Acquired 2019

Gross Tonnage 8,273

Deadweight 11,157

Capacity 974 TEU

Music (chartered in)

Year Built 2007

Acquired chartered-in

Gross Tonnage 7,852

Deadweight 9,300

Capacity 803 TEU

Ranger

Year Built 2005

Acquired 2015

Gross Tonnage 7,852

Deadweight 9,300

Capacity 803 TEU

Mirror (chartered in)

Year Built 2007

Acquired chartered-in

Gross Tonnage 7,852

Deadweight 9,344

Capacity 803 TEU

73

Strategic Report

2021 Annual Report and Financial Statements

Executive Management Team

Chief Financial Ocer

David Ledwidge, aged 42, was appointed to the Board

in March 2016. David joined the Group in 2006 from

professional services rm Deloitte where he qualied

as a Chartered Accountant. He has held various

nancial positions within the Group, including Group

Risk Accountant and Finance Director of Irish Ferries.

He was appointed to his current role as Group Chief

Financial Ocer in May 2015.

Managing Director – Ferries Division

Andrew Sheen, aged 50, a Chartered Engineer, has

been involved in shipping for over 30years and has

worked with Irish Ferries in a variety of operational

roles for over15years.He re-joined ICG from the

UK Maritime & Coastguard Agency and has been a

Director of Irish Ferries since 2013. He was appointed

to his current role as Managing Director of the Ferries

Division in March 2015. He is currently President of

the Irish Chamber of Shipping and is a Director of the

International Chamber of Shipping.

Managing Director - Container and Terminal Division

Declan Freeman, aged 46, joined the Group in 1999

from professional services rm Deloitte where he

qualied as a Chartered Accountant. He has worked in

a number of nancial and general management roles in

the Group up to his appointment as Managing Director

of Eucon in 2011. He was appointed to his current role

as Managing Director of the Container and Terminal

Division in 2012.

Eamonn Rothwell

BComm, MBS,

FCCA, CFA UK

Andrew Sheen

MSc,BEng(Hons),

CEng,FIMarEST,

FRINA.

David Ledwidge

FCA, BSc (Mgmt)

Declan Freeman

FCA

Chief Executive Ocer

Eamonn Rothwell, aged 66, has been a Director for

35 years having been appointed as a non-executive

Director in 1987 and subsequently to the position of

Chief Executive Ocer in 1992. He is also a Director

of Interferry European Oce A.I.S.B.L. He is a former

Director of The United Kingdom Mutual War Risks

Association Limited, Interferry Inc and The United

Kingdom Mutual Steam Ship Assurance Association

(Bermuda) Limited. He is a past executive Director of

former stockbrokers NCB Group, now part of Tilman

Brewin Dolphin. Prior to that, he worked with Allied Irish

Banks plc and Fáilte Ireland (The Irish Tourist Board).

74

Irish Continental Group

75

Strategic Report

2021 Annual Report and Financial Statements

76

Irish Continental Group

Corporate

Governance

The Board 78

Corporate Governance Statement 80

Report of the Audit Committee 94

Report of the Nomination Committee 100

Report of the Remuneration Committee 102

Report of the Directors 115

Directors’ Responsibility Statement 121

77

Strategic Report

2021 Annual Report and Financial Statements

Chairman

John B. McGuckian, aged 82, has been a Director for

34 years having been appointed as a non-executive

Director in 1988 and Chairman in 2004. He has a wide

range of interests, both in Ireland and internationally.

He is also a Director of Cooneen Textiles Limited. He

is a former Director of a number of listed companies

and he has previously acted as the Chairman of;

the International Fund for Ireland, the Industrial

Development Board for Northern Ireland, UTV Media

plc and as Senior Pro-Chancellor and Chairman of the

Senate of the Queen’s University of Belfast.

Committee Membership: Audit Committee, Remuneration Committee,

Nomination Committee (Chairperson)

Independent Director

Dan Clague, aged 62 is a Managing Director of

Stephens Europe, an independent investment bank

for middle market companies where Dan leads the

Transport Services and Infrastructure Group. With

over 25 years' experience in investment banking, Dan

has previously held senior positions with Hawkpoint

Partners, SG Hambros, ABN Amro and Baring Brothers.

Prior to entering investment banking, Dan spent a

number of years working in the maritime sector as a

shipping and ports manager. He has global experience

of both public and private company mergers and

acquisitions across the transport industry including the

RoRo, LoLo and port sectors. Dan is based in London.

Committee Membership: Audit Committee, Remuneration Committee,

Nomination Committee

The Board

The Group’s non-executive Directors are:

Senior Independent Director

John Sheehan, aged 56, was appointed to the Board

in October 2013. John is Chief Financial Ocer

with Ardagh Group, a leading operator in the global

glass and metal packaging sector with operations

principally in Europe and North America. John has

over 20 years of experience at management level with

exposure to international acquisition and development

projects. He was formerly Head of Equity Sales at NCB

Stockbrokers, now part of Tilman Brewin Dolphin,

where he spent thirteen years in a range of roles and

directly covered various industry sectors including

transport and aviation. John qualied as a Chartered

Accountant with PwC.

Committee Membership: Audit Committee (Chairperson), Remuneration

Committee (Chairperson), Nomination Committee

Independent Director

Lesley Williams, aged 56, was appointed to the Board

in January 2021. Lesley has over 25 years’ experience

in capital markets having held senior positions with

Investec Bank plc as Head of Irish Equities, Euronext

Dublin (formerly the Irish Stock Exchange) as Head of

Irish Market and Goodbody Stockbrokers as Head of

Institutional Equity Sales. Lesley holds a number of

independent non-executive directorships in the asset

management and International fund sectors. She is

also a past director of Dublin Port Company where

she held the position of Chairperson of the Audit and

Risk Committee. Lesley is an Associate member of

the Chartered Financial Analyst Institute (CFA) from

which she also holds a certicate in ESG investing and

is a Fellow of the Chartered Institute for Securities and

Investment.

Committee Membership: Audit Committee, Remuneration Committee,

Nomination Committee

John B. McGuckian

BSc (Econ)

John Sheehan

FCA

Daniel Clague

Lesley Williams

78

Irish Continental Group

Chief Executive Ocer

Eamonn Rothwell, aged 66, has been a Director for

35 years having been appointed as a non-executive

Director in 1987 and subsequently to the position of

Chief Executive Ocer in 1992. He is also a Director

of Interferry European Oce A.I.S.B.L. He is a former

Director of The United Kingdom Mutual War Risks

Association Limited, Interferry Inc and The United

Kingdom Mutual Steam Ship Assurance Association

(Bermuda) Limited. He is a past executive Director of

former stockbrokers NCB Group, now part of Tilman

Brewin Dolphin. Prior to that, he worked with Allied Irish

Banks plc and Fáilte Ireland (The Irish Tourist Board).

Committee Membership: Nomination Committee

Chief Financial Ocer

David Ledwidge, aged 42, was appointed to the

Board in 2016. David joined the Group in 2006 from

professional services rm Deloitte where he qualied

as a Chartered Accountant. He has held various

nancial positions within the Group, including Group

Risk Accountant, and most recently as Finance Director

of Irish Ferries. He was appointed to his current role as

Group Chief Financial Ocer in May 2015.

The Group’s executive Directors are:

The company secretary is:

Company Secretary

Thomas Corcoran, aged 57, joined the Company

in 1989 from the international professional

services rm PwC, where he qualied as a

Chartered Accountant. He has held a number

of nancial positions within the Group and

is currently Group Financial Controller and

Company Secretary. He was appointed

Company Secretary in 2001.

Eamonn Rothwell

BComm, MBS, FCCA,

CFA UK

Thomas Corcoran

BComm, FCA

David Ledwidge

FCA, BSc (Mgmt)

79

Corporate Governance

2021 Annual Report and Financial Statements

Dear Shareholder,

As the coronavirus pandemic has continued to impact

on society, the Board has overseen the consideration of

stakeholder needs and experiences, and the integration

of these throughout work and discussions in the

Boardroom. This approach reects the Board’s focus on

embedding high standards of corporate governance,

with the objective of providing a transparent and

engaging account of our approach throughout our

Annual Report.

A Focus on Purpose

Our purpose – to achieve continued success in our

chosen markets, delivering a safe, reliable, timely, good

value and high-quality experience to our customers in

a way that minimises our impact on the environment

– has guided actions at every level of the organisation

throughout the year. In the immediate term, this

meant a relentless focus on the health and safety of

our employees, customers and wider stakeholders.

With a longer-term view, it has resulted in signicant

eorts to review our impact on the environment and,

where possible, go above and beyond the signicant

changes to the regulatory environment for shipping.

The pandemic has not distracted from the challenges

presented by climate change and ICG will continue

to do its utmost to reduce the impact it has on the

environment. As part of those eorts, we have for the

rst time set out a plan for net zero in our land-based

operations, with further details set out on page 45.

Enhancing Board eectiveness

Social distancing guidelines have resulted in signicant

changes to the way we work and engage. One of

our priorities during FY2021 was to ensure the Board

continues to operate at a highly eective standard.

With the inability to meet physically, a comprehensive

engagement programme has drawn on technology

to create new platforms for conversations. While not

a direct substitute for in-person discussion, these

have been successful in ensuring the connectivity

and collaboration necessary to ensure the eective

functioning of the Board and senior leadership.

While we had deferred the external Board evaluation

during 2020 due to the challenges facing society and

the business, it took place during 2021. The evaluation

showed that the Board and each of its Committees

continue to operate eectively. The value of external

evaluations lies in ensuring the Board consistently tests

itself and always strives to improve. Further details of

the evaluation are set out on pages 88 to 89.

Board Changes

There were two additions to the Board in the year.

On 4 January 2021, Lesley Williams joined the Board,

followed by Dan Clague on 26 August 2021. We are

fortunate to have been able to add such impressive

individuals to our Board. While each possess many

talents, Lesley’s capital markets and ESG expertise will

be relevant, with Dan’s knowledge at the intersection

of investment banking, transport and infrastructure

already adding signicant depth of expertise to

the Board. For the rst time, we have also provided

a skills matrix for our Directors, which will inform

succession and Board refreshment plans, as well as the

requirements for Board development and learning.

Catherine Duy and Brian O’Kelly stepped down

during 2021 and we are grateful for their contribution

throughout their tenure. Following these changes, the

Board is fully aware that the composition of the Board

does not align with the ambitions set by the Hampton-

Alexander Review and, closer to home, targets from the

Balance for Better Business. As a Board, we recognise

the benets of diversity and through the Nomination

Committee, we place a particular focus on ensuring

any candidate pool for Board or senior management

positions provides the Board an opportunity to promote

diversity within the Board and senior team.

Corporate Governance Report

80

Irish Continental Group

Monitoring culture

As a Board, we have welcomed the growing focus on

the idea of culture within businesses from investors and

regulators. One of the key tests of the past 12 months

has been the resilience of employees and business’

culture. While there has been signicant upheaval in

our sector, given the focus on safety throughout the

business, we were probably positioned better than most

to respond to the evolving requirements of a pandemic

and associated regulation. The impact of coronavirus

on the metrics that depict our culture will be monitored

closely as we progress through 2022, alongside actions

to reiterate broader cultural expectations. One of the

most meaningful means of understanding culture, and

subsequently taking steps to drive enhancements, is

direct feedback from employees at all levels of the

organisation. With this in mind we will be undertaking

a new program to engage our employees with talent

development.

Creating value for stakeholders

While the requirements of the UK Code apply to Irish

businesses, certain aspects of its framework are based

on UK legislation. Once such aspect is provision 5 of

the 2018 Code, which sets out the expectation that

the Board details how stakeholder interests have been

taken into account. Nonetheless, while section 172

of the UK Companies Act does not directly apply to

ICG, stakeholder interests have never been in sharper

focus, and the importance of Environmental, Social

and Governance (ESG) matters to investors continues

to grow at pace. To ensure the Board remains in touch

with material issues and concerns, it has increased the

resources dedicated to sustainability practices, and has

put in place a more robust reporting framework that

takes into account stakeholder interests. The Board’s

annual review of sustainability priorities reects our

wider social contract, which in 2021 saw the adoption

of an environmental policy, a complete revision of

many existing policies and, our inaugural reporting

against SASB standards for our industry and the

commencement of our disclosure against the TCFD.

Work is also continuing as part of the review of all

governance documentation, to ensure the most material

risks and opportunities are elevated to the highest parts

of the organisation, with material non-nancial data

being integrated into the same risk management and

KPI framework as its nancial counterparts.

UK Corporate Governance Code

I am pleased to report that we applied the provisions

of the 2018 UK Corporate Governance Code (the ‘2018

Code’) during the year. In those limited instances

where compliance was not achieved in the specic

circumstances of the Group, we have provided

explanation. Details of our compliance, the composition

of our Board, its corporate governance arrangements,

processes and activities during the year, and reports

from each of the Board’s Committees, are set out on the

following pages.

Finally, I would like to thank all of our shareholders

for their continued support, and I look forward to

welcoming you to our AGM on 11 May 2022. The Board

will be available to answer any questions you may have

about the business of the meeting.

John McGuckian

Chairman

9 March 2022

81

Corporate Governance

2021 Annual Report and Financial Statements

Corporate Governance Code

The Group is committed to the principles of corporate

governance contained in the UK Corporate Governance

Code (the Code) issued in July 2018 by the Financial

Reporting Council, as adopted by Euronext Dublin, for

which the Board is accountable to shareholders. The

Irish Corporate Governance Annex (the Irish Annex)

issued by Euronext Dublin also applies to the Group.

This Corporate Governance Report presented in

the context of the full Annual Report and Financial

Statements for the year ended 31 December 2021

sets out how the Board has applied the Principles

of the Code. This is supported through reporting on

compliance with the Provisions of the Code. The Board

considers that, other than for the deviations noted

below which have been explained in this Corporate

Governance Report, throughout the period under review

the Group has been in compliance with the provisions

of the Code and the requirements set out in the Irish

Annex.

Provision 5 of the Code requires the Board to describe in

its Annual Report how the interests of key stakeholders

and the matters set out in Section 172 of the United

Kingdom Companies Act of 2006. While that Act does

not apply to Irish companies, the Board is satised that

these matters have been addressed in discussions and

disclosures throughout this Annual Report including

discussion on strategy and business model, business

review, risk processes, environmental matters and

stakeholder engagement. Provision 5 also requires that

employee engagement be facilitated by one of three

prescribed methods. As the Board has not chosen one

or more of these methods, it explains at page 84 the

alternative arrangements which are in place and why it

considers that they are eective. Under Provision 19 of

the Code, the Chair should not remain in post beyond

nine years from the date of their rst appointment. This

report at page 87 provides details to the continuing

tenure of Mr. John B. McGuckian as Chairman beyond

nine years.

Provision 36 requires that the Remuneration Committee

should develop a formal policy for post-employment

shareholding requirements encompassing both

unvested and vested shares. The Report of the

Remuneration Committee at page 113 sets out the

reasoning for not establishing a formal policy given

that the existing arrangements under the Remuneration

Policy result in contractual restrictions on share

disposals of up to ve years post-employment.

Corporate Governance Report

Continued

Provision 39 requires that notice or contract periods

should be one year or less. The Report of the

Remuneration Committee at page 112 sets out why in

relation to one Director a notice period of two years will

apply in certain circumstances.

Corporate Governance Framework

Board Leadership and Company Purpose

The Board is collectively responsible for the long-term

sustainable success of the Group through provision

of leadership within a framework of prudent and

eective controls which enables risk to be assessed and

managed. Pursuant to the Constitution, the Directors

of the Company are empowered to exercise all such

powers as are necessary to manage and run the

Company, subject to the provisions of the Companies

Act 2014.

In discharging this responsibility, the Board has adopted

a formal schedule of matters specically reserved to

it for decision, which covers key areas of the Group’s

business including approval of nancial statements,

budgets (including capital expenditure), acquisitions

or disposals of signicant assets, dividends and share

redemptions, board appointments and setting the risk

appetite. Certain additional matters are delegated to

Board Committees.

In discharging their duties, the Board has arrangements

in place for Directors to disclose any direct or indirect

interests which may possibly conict with the interests

of the Company.

Group Strategy and Corporate Governance

On page 18 we describe the Group’s strategy. This

strategy is supported by our ve strategic pillars,

consideration of which is interwoven throughout the

Board agenda for each meeting and throughout this

report.

82

Irish Continental Group

Strategic pillar Key activities during the period

Quality service

Investment in quality assets is

essential to ensure a reliable,

timely and high-quality service to

our customers which is essential

to retaining the Group’s pivotal

position in international logistics

chain and to driving growth in the

Group’s business.

• The oversight and monitoring of performance of the eet

• Evaluation and approval of ongoing expansion including:

 Commencement of new ferry services between Dover and Calais.

 Increase in the operational ferry eet from 5 to 8 vessels, 2 of which

were purchased and 1 chartered.

 Increase in the container vessel eet from 6 to 7 vessels.

 Approval of the acquisition of 5 new electrically powered RTGs at

Dublin Ferryport Terminals as part of a replacement and expansion

program.

 Vessel upgrade works involving customer facing and background

technical improvements.

 Commencement of operations at the Dublin Inland Port.

People and culture

Our customers’ experience is

directly aected through their

interaction with our employees and

third-party contractors.

• Overview of service quality reports.

• Monitoring of feedback from sta brieng sessions.

• Monitoring of Covid-19 initiatives to ensure safety of customers and

the workforce.

• Review of whistleblowing procedures.

Financial management

Pursuit of investment opportunities

within stringent risk and reward

hurdles, avoidance of speculative

nancial positions and Capital

management.

• Reviewed the regular reports from the CEO and CFO regarding the

Group’s operations.

• Monitored the nancial liquidity and adequacy of borrowing facilities.

• Challenge of investment proposals presented by the executive team in

terms of resilience and risk appetite.

• Consideration of commodity and currency exposures.

• Assessed the Group’s capital allocation, dividend and buyback

transactions.

• Approved the post Brexit migration of Company share trade settlement

from CREST to Euroclear Bank.

Safety

The operational safety of our

vessels and terminal facilities is

paramount to maintaining the

reputation of our brands which is

vital to future success and a strong

safety culture is promoted across

all activities.

• Oversight of Group operational safety reviews.

• Review of arrangements introduced to protect customers, sta and

crew aboard our vessels against Covid-19.

• Attended briengs from the Risk Management Committee.

• Review of risk appetite statements.

• Reviewed eectiveness of the Group’s internal control and risk

management systems.

Sustainability

The Group seeks to minimise

the impact of its activities on the

environment through constant

innovation, eciency and

awareness.

• Oversight of Group compliance with existing regulations and potential

eects of new regulations.

• Approval of additional resources to formalise the development of

integrated Group sustainability policy and framework.

• Approval of projects to improve the group’s environmental footprint.

83

Corporate Governance

2021 Annual Report and Financial Statements

Stakeholder Engagement

At Irish Continental Group, we believe success in our

business will deliver sustained and protable growth

for the benet of all our stakeholders. To nurture this

success regular dialogue takes place at relevant levels

within the Group and feedback is delivered to the Board

through the CEO and presentations from the senior

executive team.

Shareholders

The Board acknowledges its responsibility to engage

with shareholders to ensure that their interests are

being met and to listen to any areas of concern which

they may raise.

The Board encourages communications with

shareholders and welcomes their participation at all

general meetings of the Company. While it was not

possible to accommodate physical attendance at the

2021 AGM due to government restrictions on gatherings

imposed due to Covid-19, the Company provided a live

audio feed and a facility to submit questions in advance

of the meeting.

Regular formal updates are provided to shareholders

and are available on the Group’s website. During

2021, these included Trading Updates, the Half-Yearly

Financial Report, and the Annual Report and Financial

Statements together with investor presentations. Irish

Continental Group’s website, www.icg.ie, also provides

access to other corporate and nancial information,

including all regulatory announcements and a link to the

current ICG Unit price.

Other than during close periods and subject to the

requirements of the Takeover Code, when applicable,

the Chief Executive and the Chief Financial Ocer

have a regular dialogue with its major shareholders

throughout the year and report on these meetings to the

Board. The Senior Independent Director is also available

on request to meet with major shareholders.

The 2022 Annual General Meeting is scheduled for 11

May 2022. Arrangements will be made for the 2021

Annual Report and 2022 Annual General Meeting

Notice to be available to shareholders at least 20

working days before the meeting and for the level of

proxy votes cast for and against each resolution and the

number of abstentions, to be announced at the meeting.

Further details on the procedures applicable to general

meetings are set out on pages 91 to 92.

Further investor relations information is available on

pages 208 to 209 of this Annual Report.

Workforce

We rely on our workforce to promote our values. Our

customers’ experience and consequentially our success

is directly aected through their interaction with our

workforce comprising our own employees and third-

party contractors. In return we recognise our obligation

to promote employee development in an environment

which promotes diversity and inclusion and provides a

safe working environment.

The Board notes the Code provision relating to

workforce engagement and the methods which might

be used to eect same. The Board has considered these

against the nature of the manner in which the Group’s

activities are performed. As is common practice in

the maritime sector, our vessels are crewed through

third-party managers. The Group has no legal rights

to engage with the individual crew members who are

directed and controlled by the third-party manager.

The contracts between the Group and the crewing

managers include detailed service level arrangements

and requirements that the third-party adhere to

international IMO regulations regarding employment

terms for seafarers. The Group monitors the crewing

manager certication on an ongoing basis. The Group

has also entered into third-party labour contracts with

respect to its terminal operations.

Corporate Governance Report

Continued

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t

y

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n

v

i

r

o

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m

e

n

t

Shareholders

C

u

s

t

o

m

e

r

s

W

o

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k

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e

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u

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84

Irish Continental Group

At peak season, the Group engages in excess of

1,000 persons, of which approximately 300 are direct

employees. The Board has considered that the most

appropriate manner in which it can ensure that the

interests of persons employed directly or indirectly

can be considered is through challenging the CEO and

divisional managing directors on their regular reports to

the Board.

Both formal and informal processes underlie

engagement with the direct workforce. Formal

processes include general brieng sessions to all

employees through the management chain. There are

also annual sta reviews which promote the exchange

of views. The Group has also formulated grievance

and whistleblowing procedures whereby employees

can report any concern in condence. The Group

also has arrangements in place for the provision of

condential counselling services. Informally, given the

small direct workforce, there is an open access policy

whereby any employee has access to any manager up

to the CEO. Senior management also regularly visit all

Group locations. Within these processes, executive

management report on workforce matters to the Board.

Site visits are also arranged for Board members.

However, during the Covid-19 pandemic these were

curtailed in line with Group safety protocols to limit

unnecessary contacts.

Customers

Our strategy centres around meeting our customers

maritime transport requirements whether that is

being a key partner in their organisation’s international

logistics chain or personal travel arrangements. We

engage with our customers on a daily basis through the

provision of our services but also proactively work in

partnership with our customers so that they can achieve

their objectives. Through listening to our customer

feedback and requirements we adapt our oering

in the provision of safe, reliable, timely, good value

and high quality maritime transport, while continuing

initiatives to minimise the impact of our operations on

the environment. The Board receives regular updates

from the CEO and senior managers on customer

performance and market developments.

Suppliers

The Group’s partnerships with its suppliers are essential

to the Group’s success in delivering its services. We

work closely with our suppliers to ensure the quality of

supplies and services meet our exacting requirements.

We support our suppliers with their innovation

projects which benet the way we can deliver our

services. Increasingly this involves initiatives with an

environmental benet whether it be a new or improved

product or a new way of doing things. We have in place

a Supplier Code of Conduct which purpose is to ensure

our procurement processes are aligned with our values

and policies across the areas of environment, ethics,

human rights and health and safety. The Board receives

regular updates from the CEO and senior managers on

the performance of key suppliers and innovations.

Environment and Society

The Group acknowledges its societal responsibility to

conduct business in a manner that protects our shared

environment. We operate in a highly regulated industry

which requires adherence to high standards of waste

and resource management, pollution prevention and

increasingly rigorous compliance measures to reduce

greenhouse gas emissions across the maritime sector.

This involves continuous engagement with port and ag

state authorities, industry representative bodies, and

local and international regulatory agencies. A key step

in the Group’s climate change risk framework outlined

on pages 64 to 66 is to engage in a research program

to incorporate stakeholder views on the environment

and climate change expectations into the Group’s risk

appetite setting and strategic planning processes.

ICG is recognised as a critical infrastructure operator

in providing essential transport services under the Irish

Ferries and Eucon brands. This requires collaboration

with the Irish government on areas of business

continuity and network and information security. Irish

Ferries is also a signicant contributor to the tourism

industries of Ireland, the UK and France and engages in

co-operative campaign programs with regional tourism

bodies to promote local tourism.

We also support various community initiatives and

charities that align with our strategic pillars of safety

and sustainability.

85

Corporate Governance

2021 Annual Report and Financial Statements

Division of Responsibilities

The Board comprises of two executive and four non-

executive Directors. The roles of Chairman and Chief

Executive are separate, set out in writing and approved

by the Board.

The Board has adopted the corporate governance

structure set out below which it believes provides for

segregation of the oversight functions from those of

executive management.

Chairman: The Board is led by the Chairman who is

responsible for its overall eectiveness in directing the

Group.

John B. McGuckian has served as Chairman of the

Board since 2004 and is responsible for leading the

Board, ensuring its eectiveness through;

• Setting the Board’s agenda and ensuring that

adequate time is available for discussion.

• Promoting a culture of openness and debate by

facilitating the eective contribution of non-executive

Directors in particular and ensuring constructive

relations between executive and non-executive

Directors.

• Ensuring that the Directors receive accurate, timely

and clear information.

• Ensuring eective communication with shareholders.

Chief Executive: The Board has delegated the

management of the Group to the Executive

Management Team, through the direction of Eamonn

Rothwell who has served as Chief Executive since 1992.

The Chief Executive is responsible for implementing

Board strategy and policies and closely liaises with the

Chairman and manages the Group’s relationship with its

shareholders.

Senior Independent Director: The Board, having

considered his experience, appointed John Sheehan

as the Senior Independent Director eective from 26

January 2022. The Senior Independent Director acts

as a sounding board for the Chairman and serves as

an intermediary for the other Directors if necessary.

The Senior Independent Director is also available

to shareholders if they have concerns which have

not been resolved through the normal channels of

Chairman, Chief Executive or for which such contact

is inappropriate. Brian O’Kelly served as the Senior

Independent Director up to his retirement as Director on

17 December 2021.

Non-executive Directors: Non-executive Directors

through their knowledge and experience gained outside

the Group constructively challenge and contribute to

the development of Group strategy. Non-executive

Directors scrutinise the performance of management in

meeting agreed goals and objectives and monitor the

Corporate Governance Report

Continued

Company

Secretary

Audit

Committee

Chief Executive

Remuneration

Committee

Executive Management Team

Nomination

Committee

Board of Directors

Chairman

86

Irish Continental Group

reporting of performance. They satisfy themselves on

the integrity of nancial information and that nancial

controls and systems of risk management are robust and

defensible. Through their membership of Committees,

they are responsible for determining appropriate levels

of remuneration of executive Directors and have a prime

role in appointing and, where necessary, removing

executive Directors, and in succession planning.

Company Secretary: The Company Secretary provides

a support role to the Chairman and the Board ensuring

good information ows within the Board and its

committees and between senior management and

non-executive Directors, as well as facilitating induction

and assisting with professional development as required

and advising the Board through the Chairman on

governance matters. Thomas Corcoran has served as

Company Secretary since 2001.

Committees: During the year ended 31 December

2021, there were three standing Board Committees

with formal terms of reference; the Audit Committee,

the Nomination Committee and the Remuneration

Committee. In addition, the Board will establish ad-hoc

sub-committees to deal with other matters as necessary.

All Board committees have written terms of reference

setting out their authorities and duties delegated by the

Board. The terms of reference are available, on request,

from the Company Secretary and are available on the

Group’s website. The reports of the committees are set

out at pages 94 to 114.

Independence: All of the non-executive Directors

are considered by the Board to be independent of

management and free of any relationships which

could interfere with the exercise of their independent

judgement. In considering their independence, the

Board has taken into account a number of factors

including their length of service on the Board, other

directorships held and material business interests.

Mr. McGuckian has served on the Board for more than

nine years since his rst appointment. Notwithstanding

this tenure the Board, as advised by the Nomination

Committee, considers Mr. McGuckian to be

independent having regard to the independent mindset

with which he carries out his role. The Board has

considered the knowledge, skills and experience that he

contributes and assesses him to be both independent

in character and judgement and to be of continued

signicant benet to the Board. Mr McGuckian was also

assessed to be independent at the date of appointment

as Chairman in 2004. While conscious of the

recommendations of the UK Code, the Board – through

the Nomination Committee – considered it in the best

interests of the Company and its stakeholders for the

Chair to continue for 2022. Mr. McGuckian extensive

knowledge of the business ensures appropriate

challenge and leadership of the Board during this time

of strategic development and continuing risk of the

Covid-19 pandemic.

Meetings: The Board agrees a schedule of regular

meetings each calendar year and also meets on other

occasions if necessary with contact between meetings

as required in order to progress the Group’s business.

Where a Director is unable to attend a meeting, they

may communicate their views to the Chairman. The

Directors receive regular and timelyinformation in

a form and quality appropriate to enable the Board

to discharge its duties. Non-executive Directors are

expected to utilise their expertise and experience

to constructively challenge proposals tabled at the

meetings. The Board has direct access to the Executive

Management Team who regularly brief the Board in

relation to operational, nancial and strategic matters

concerning the Group.

Director attendances at scheduled meetings are set

out below. In addition, there was regular contact and

updates between these scheduled meetings. The

Chairman also held meetings with the non-executive

Directors without the executive Directors present and

the non-executive Directors also meet once a year,

without the Chairman present.

Attendance at scheduled Board meetings during the

year ended 31 December 2021 was as follows:

Member A B Tenure

J. B. McGuckian (Chair) 7 7 34 years

E. Rothwell 7 7 35 years

C. Duy (resigned: 12 May

2021)

3 3 9 years

D. Ledwidge 7 7 6 years

B. O’Kelly (resigned: 17

December 2021)

7 7 9 years

J. Sheehan 7 7 8 years

Lesley Williams

(appt: 4 January 2021)

7 7 1 year

Dan Clague

(appt: 26 August 2021)

2 2 0.5

years

Column A: the number of scheduled meetings held during the year where

the Director was a member of the Board.

Column B: the number of scheduled meetings attended during the year

where the Director was a member of the Board.

87

Corporate Governance

2021 Annual Report and Financial Statements

Access to Advice: There is a procedure for Directors

in the furtherance of their duties to take independent

professional advice, at the expense of the Group, if

they consider this necessary. The Group carries director

liability insurance which indemnies Directors in

respect of legal actions that may be taken against them

in the course of discharging their duties as Directors.

All Directors have access to the advice and services of

the Company Secretary, who is responsible to the Board

for ensuring that Board procedures are followed and

that applicable rules and regulations are complied with.

Composition, Succession and Evaluation

Composition: The Board comprises two executive and

four non-executive Directors. Excluding the Chairman,

a majority of the Board comprises independent non-

executive Directors in line with the recommendation of

the Code.

Details of the professional and educational backgrounds

of each Director encompassing the experience and

expertise that they bring to the Board are set out

on pages 78 to 79. The Board believes that it is of a

size and structure and that, the Directors bring an

appropriate balance of skills, experience, independence

and knowledge to enable the Board to discharge its

respective duties and responsibilities eectively, with

no individual or group of individuals dominating the

Board’s decision making. Each of the non-executive

Directors has a broad range of business experience

independent of the Group both domestically and

internationally. The appointments that took place during

2021 further underpinned that diversity of background

and experience.

The Board has established a Nomination Committee

to lead the appointments process and plan for orderly

succession at Board and senior management level. The

Nomination Committee report is set out on pages 100

to 101.

Appointments: All Directors are appointed by the

Board, following a recommendation by the Nomination

Committee, for an initial term not exceeding three

years, subject to annual re-election at the Annual

General Meeting. Prior to their nomination as a non-

executive Director, an assessment is carried out to

determine that they are independent. Non-executive

Directors’ independence is thereafter reviewed annually,

prior to recommending the resolution for re-election at

the AGM. Under the Articles each Director is subject to

re-election at least every three years but in accordance

with the Code, the Board has agreed that each Director

will be subject to annual re-election at the AGM.

The terms and conditions of appointment of non-

executive Directors appointed after 2002 are set out

in their letters of appointment, which are available for

inspection at the Company’s registered oce during

normal oce hours and at the AGM of the Company.

During 2021, there were two new non-executive

appointments to the Board, Lesley Williams on 4

January 2021 and Dan Clague on 26 August 2021. Both

were deemed independent on appointment. Catherine

Duy and Brian O’Kelly resigned as Directors during

2021, both having served nine years as a Director of the

Company.

Development and Induction: On appointment,

Directors are given the opportunity to familiarise

themselves with the operations of the Group, to

meet with executive management, and to access any

information they may require. Each Director brings

independent judgement to bear on issues of strategy,

risk and performance. The Directors also have access

to the Executive Management Team in relation to any

issues concerning the operation of the Group.

The Board recognises the need for Directors to be

aware of their legal responsibilities as Directors and

it ensures that Directors are kept up to date on the

latest corporate governance guidance, company law

developments and best practice.

Performance Evaluation: The Board conducts an annual

self-evaluation of the Board as a whole, the Board

processes, its committees and individual Directors.

The purpose of the evaluation process includes

identication of improvements in Board procedures

and to assess each Director’s suitability for re-election.

The process, which is led by the Chairman, is forward

looking in nature. On a triennial cycle an independent

external facilitator is engaged to further assist the

process, though this engagement was deferred from

2020 to 2021 due to Covid-19 considerations.

The 2021 evaluation was facilitated by Carol Bolger

CDir. who has no connection to the Group. The process

involved completion of in-depth questionnaires and

engagement. The focus areas included ensuring

eective oversight in a virtual environment, Board

composition, quality of information, time allocation

and decision making processes. The responses were

collated and the external facilitator presented a

report of the questionnaire ndings to the Chairman

together with observations thereon. The Chairman

Corporate Governance Report

Continued

88

Irish Continental Group

used this report to lead a discussion with the Board on

overall eectiveness. Within this process, the non-

executive Directors, led by the Senior Independent

Director, evaluated the Chairman’s performance. The

performance of individual directors was also assessed

by the Chairman following discussions, held by the

Chairman, with directors on an individual basis.

Following the conclusion of the process, the Chairman

reported to the Board on the outcome of the evaluation

process which indicated that the Board as a whole

was operating eectively for the long-term success

of the Group and that each Director was contributing

eectively and demonstrating commitment to the role.

While no areas of concern were highlighted, a number

of Board process matters are to be followed up with

a view to improving overall reporting to the Board.

Separately, the Senior Independent Director reported

that the Chairman was providing eective leadership of

the Board.

Audit Risk and Internal Control

The Board has described its business model on page

18 setting out how the Company generates value over

the longer term and the strategy for delivering the

objectives of the Company.

The Board has overall responsibility for determining the

Group’s risk appetite but has delegated responsibility

for the review, design implementation and monitoring

of the Group’s internal control system to the Audit

Committee. These systems are designed to manage

rather than eliminate the risk of failure to achieve

business objectives, and can only provide reasonable,

and not absolute, assurance against material

misstatement or loss.

In accordance with Guidance on Risk Management,

Internal Control and Related Financial and Business

Reporting (September 2014) issued by the FRC, the

Board conrms that there is a continuous process for

identifying, evaluating and managing the signicant

risks faced by the Group, that it has been in place for

the period under review and up to the date of approval

of the Financial Statements, and that this process is

regularly monitored by the Board. The report of the

Audit Committee is set out on pages 94 to 99. The risk

management framework and processes including the

principal risks and uncertainties identied are set out on

pages 62 to 71.

No material weaknesses in internal controls were

reported to the Board during the year.

Taking account of the Group’s current position

and principal risks, the Directors have set out their

assessment of the prospects for the Group in the

Viability Statement on pages 116 to 117.

Reporting

The Board is committed to providing a fair, balanced

and understandable assessment of the Group’s position

and prospects to shareholders through the Annual

Report, the Interim Statement and any other public

statement issued by the Group. The Directors have

considered the Annual Report based on a review

performed by the Audit Committee and have concluded

that it represents a fair, balanced and understandable

assessment of the Group’s position and prospects.

Remuneration

The Board has delegated the approval of remuneration

structures and levels of the executive Directors and

senior management to the Remuneration Committee

whose report is set out at pages 102 to 114.

Diversity

The Board has adopted a Board Diversity Policy in

compliance with the European Union (Disclosure of

non-nancial and diversity information by certain

large undertakings and Groups) Regulation 2017. The

promotion of a diverse Board makes prudent business

sense, promotes eective decision-making and ensures

stronger corporate governance.

The Group seeks to maintain a Board comprised of

talented and dedicated Directors with a diverse mix of

expertise, experience, skills and backgrounds reecting

the diverse nature of the business environment in which

the Group operates. For purposes of Board composition,

diversity includes, but is not limited to, age, gender or

educational and professional backgrounds.

When assessing Board composition or identifying

suitable candidates for appointment or re-election

to the Board, the Group, through the Nomination

Committee, considers candidates on merit against

objective criteria having due regard to the benets of

diversity and the needs of the Board.

The Nomination Committee will give due regard to

diversity when reviewing Board composition and

considering Board candidates. The Committee will

report annually, in the corporate governance section of

the Annual Report, on the process it has used in relation

to any Board appointments.

89

Corporate Governance

2021 Annual Report and Financial Statements

Beyond the Board, of 62 individuals holding a

managerial position, 21% are female. While the Board

acknowledges the imbalance of this ratio compared to

society at large, it is reective in part of the sector in

which the Group operates. Against this background,

the Board has not set any gender ratio target but is

committed to improving this ratio over time. In that

regard the Nomination Committee and Executive

Management Team, as appropriate, will actively

seek out a greater pool of female candidates when

undertaking any future recruitment process.

Matters Pertaining to Share Capital

The information set out below is required to be

contained in the Report of the Directors under

Regulation 21 of the European Communities (Takeover

Bids (Directive 2004/25/EC)) Regulations 2006 (S.I.

255/2006). The information represents the position at 31

December 2020.

For the purposes of Regulations 21(2)(c), (e), (j) and (k)

of the European Communities (Takeover Bids (Directive

2004/25/EC)) Regulations 2006 (S.I. 255/2006), the

information given under the following headings: (i)

Substantial Shareholdings page 118; (ii) Share Option

Plans page 112; (iii) Long Term Incentive Plan pages 108

to 109; (iv) Service Contracts page 112; and (v) Share-

based Payments pages 179 to 181; (vi) Borrowings pages

167 to 169; are deemed to be incorporated into this

statement.

Share Capital

The authorised share capital of the Company is

€29,295,000 divided into 450,000,000 ordinary shares

of €0.065 each (ordinary shares) and 4,500,000,000

redeemable shares of €0.00001 each (redeemable

shares). The ordinary shares represent approximately

99.85% and the redeemable shares represent

approximately 0.15% of the authorised share capital. The

issued share capital of the Company as at the date of

this report is 182,794,567 ordinary shares. There are no

redeemable shares currently in issue.

Ordinary shares and redeemable shares (to the extent

redeemable shares are in issue) are inextricably linked as

an ICG Unit. An ICG Unit is dened in the Constitution

of the Company as one Ordinary Share in the Company

and ten Redeemable Shares (or such lesser number

thereof, if any, resulting from the redemption of one or

more thereof) held by the same holder(s).

The rights and obligations attaching to the ordinary

shares and redeemable shares are contained in the

Constitution of the Company.

The Directors may exercise their power to redeem

redeemable shares from time to time pursuant to the

Company’s Constitution where there are redeemable

shares in issue.

The structure of the Group’s and Company’s capital and

movements during the year are set out in notes 20 and

21 to the Financial Statements.

Restrictions on the Transfer of Shares

There is no requirement to obtain the approval of the

Company, or of other holders of ICG Units, for a transfer

of ICG Units. Certain restrictions may from time to time

be imposed by laws or regulations such as those relating

to insider dealing.

For so long and to the extent that any redeemable

shares are in issue, transfers of ordinary shares and

redeemable shares can, in those circumstances, only

be eected where the transfer of one class of share

(e.g. ordinary share) involves a simultaneous transfer

of the other linked class of shares (e,g, redeemable

share) as an ICG Unit. As noted, there are currently no

redeemable shares in issue. An ICG Unit comprised

one ordinary share and nil redeemable shares at 31

December 2021 and 31 December 2020.

ICG Units are, in general, freely transferable but, in

accordance with the Companies Act 2014 (as amended)

and the Constitution, the Directors may decline to

register a transfer of ICG Units upon notice to the

transferee, within two months after the lodgement of a

transfer with the Company, in the following cases:

1. if redeemable shares are in issue, where the transfer

of shares does not involve a simultaneous transfer

of the other class of shares with which such shares

are linked as an ICG Unit (as described immediately

above);

2. a lien is held by the Company; or

3. in the case of a purported transfer to or by a minor

or a person lawfully adjudged not to possess an

adequate decision-making capacity;

4. unless the instrument of transfer is accompanied

by the certicate of the shares to which it relates (if

any) and such other evidence as the Directors may

reasonably require to show the right of the transferor

to make the transfer; or

5. unless the instrument of transfer is in respect of one

class only (unless redeemable shares are in issue and

the proposed transfer is in respect of ICG Units).

ICG Units held in certicated form are transferable upon

production to the Company’s Registrars of the original

Corporate Governance Report

Continued

90

Irish Continental Group

share certicate and the usual form of stock transfer or

instrument duly executed by the holder of the shares.

ICG Units held in uncerticated form are transferable

in accordance with the rules or conditions imposed

by the operator of the relevant system which enables

title to the ICG Units to be evidenced and transferred

without a written instrument and in accordance with

the Companies Act, 1990 (Uncerticated Securities)

Regulations 1996 (S.I. 68/1996) and Section 1085 of the

Companies Act 2014 (as amended).

The rights attaching to ordinary shares and redeemable

shares comprised in each ICG Unit remain with the

transferor until the name of the transferee has been

entered on the Register of Members of the Company.

No person holds securities in the Company carrying

special rights with regard to control of the Company.

The Company is not aware of any agreements between

holders of securities that may result in restrictions in the

transfer of securities or voting rights.

The Powers of the Directors Including in Relation

to the Issuing or Buying Back by the Company of its

Shares

Under the Constitution of the Company, the business

of the Company is to be managed by the Directors

who may exercise all the powers of the Company

subject to the provisions of the Companies Acts 2014

(as amended), the Constitution of the Company and to

any directions given by members at a General Meeting.

The Constitution further provides that the Directors

may make such arrangements as may be thought t

for the management of the Company’s aairs including

the appointment of such attorneys or agents as they

consider appropriate and delegate to such persons

such powers as the Directors may deem requisite or

expedient.

At the Company’s AGM held on 12 May 2021, resolutions

were passed whereby

1. the Company, or any of its subsidiaries, were

authorised to make market purchases of up to 15% of

the issued share capital of the Company.

2. the Directors were authorised until the conclusion

of the next AGM, to allot shares up to an aggregate

nominal value of 66.66% of the then present issued

ordinary share capital and the present authorised but

unissued redeemable share capital of the Company

subject to the provision that any shares allotted in

excess of 33.33% of the then present issued ordinary

share capital must be allotted pursuant to a rights

issue.

In line with market practice, members will be asked to

renew these authorities at the 2022 AGM.

General Meetings and Shareholders Voting and other

Rights

Under the Constitution, the power to manage the

business of the Company is generally delegated to the

Directors. However, the members retain the power to

pass resolutions at a General Meeting of the Company

which may give directions to the Directors as to the

management of the Company.

The Company must hold an AGM each year in addition

to any other meetings in that year and no more than 15

months may elapse between the date of one AGM and

that of the next. The AGM will be held at such time and

place as the Directors determine. All General Meetings,

other than AGMs, are called Extraordinary General

Meetings.

Extraordinary General Meetings shall be convened by

the Directors or on the requisition of members holding,

at the date of the requisition, not less than ve percent

of the paid up capital carrying the right to vote at

General Meetings and in default of the Directors acting

within 21 days to convene such a meeting to be held

within two months, the requisitionists (or more than half

of them) may, but only within three months, themselves

convene a meeting.

No business may be transacted at any General Meeting

unless a quorum is present at the time when the

meeting proceeds to business. Two or more members

present in person or by proxy and entitled to vote at

such meeting constitutes a quorum.

The holders of ICG Units have the right to receive notice

of, attend, speak and vote at all General Meetings of the

Company.

In the case of an AGM or of a meeting for the passing of

a Special Resolution or the appointment of a Director,

21 clear days’ notice at the least, and in any other case

14 clear days’ notice at the least (assuming that the

members have passed a resolution to this eect at the

previous year’s AGM), needs to be given in writing in

the manner provided for in the Constitution to all the

members, Directors, Secretary, the Auditor for the time

being of the Company and to any other person entitled

to receive notice under the Companies Act.

Voting at any General Meeting is by a show of hands

unless a poll is properly demanded. On a show of hands,

every member who is present in person or by proxy has

91

Corporate Governance

2021 Annual Report and Financial Statements

one vote regardless of the number of shares held by a

shareholder. On a poll, every member who is present in

person or by proxy has one vote for each share of which

he/she is the holder. A poll may be demanded by the

Chairman of the meeting or by at least three members

having the right to vote at the meeting or by a member

or members representing not less than one-tenth of the

total voting rights of all the members having the right to

vote at the meeting or by a member or members holding

shares in the Company conferring a right to vote at the

meeting, being shares on which an aggregate sum has

been paid up equal to not less than one-tenth of the

total sum paid up on all the shares conferring that right.

Deadlines for Exercising Voting Rights

Voting rights at General Meetings of the Company are

exercised when the Chairman puts the resolution at

issue to the vote of the meeting. A vote decided on a

show of hands is taken forthwith. A vote taken on a poll

for the election of the Chairman or on a question of

adjournment is also taken forthwith and a poll on any

other question is taken either immediately, or at such

time (not being more than 30 days from the date of the

meeting at which the poll was demanded or directed) as

the Chairman of the meeting directs. Where a person is

appointed to vote for a member as proxy, the instrument

of appointment must be received by the Company

not less than 48 hours before the time appointed for

holding the meeting or adjourned meeting at which the

appointed proxy proposes to vote, or, in the case of a

poll, not less than 48 hours before the time appointed

for taking the poll.

EU (Shareholders' Rights) Regulations 2020

The holders of ICG Units have the right to attend,

speak, ask questions and vote at General Meetings

of the Company. The Company, pursuant to Section

1105 of the Companies Act 2014 and Regulation 14 of

the Companies Act 1990 (Uncerticated Securities)

Regulations 1996, species record dates for General

Meetings, by which date members must be registered in

the Register of Members of the Company to be entitled

to attend and vote at the meeting.

Pursuant to Section 1104 of the Companies Act 2014,

a member, or a group of members who together hold

at least three per cent of the issued share capital of

the Company, representing at least three per cent of

the total voting rights of all the members who have a

right to vote at the meeting to which the request for

inclusion of the item relates, have the right to put an

item on the agenda, or to modify an agenda which has

been already communicated, of a General Meeting.

In order to exercise this right, written details of the

item to be included in the General Meeting agenda

must be accompanied by stated grounds justifying

its inclusion or a draft resolution to be adopted at the

General Meeting together with evidence of the member

or group of members shareholding must be received,

by the Company, 42 days in advance of the meeting to

which it relates.

The Company publishes the date of its AGM on its

website www.icg.ie on or before 31 December of the

previous nancial year.

Rights to Dividends and Return of Capital

Subject to the provisions of the Company’s Constitution,

the holders of the ordinary shares in the capital of the

Company shall be entitled to such dividends as may be

declared from time to time on such shares. The holders

of the redeemable shares (if any) shall not be entitled to

any dividends.

On a return of capital on a winding up of the Company

or otherwise (other than on a conversion, redemption or

purchase of shares), the holders of the ordinary shares

shall be entitled, pari passu with the holders of the

redeemable shares (if any) to the repayment of a sum

equal to the nominal capital paid up or credited as paid

up on the shares held by them respectively. Thereafter,

the holders of the ordinary shares shall be entitled to

the balance of the surplus of assets of the Company

to be distributed rateably according to the number of

ordinary shares held by a member. The redeemable

shares shall not confer upon the holders thereof any

rights to participate further in the prots or assets of

the Company.

Rules Concerning Amendment of the Company’s

Constitution

As provided in the Companies Act 2014, the Company

may, by special resolution, alter or add to its

Constitution. A resolution is a special resolution when

it has been passed by not less than 75 per cent of the

votes cast by members entitled to vote and voting in

person or by proxy, at a General Meeting at which not

less than 21 days’ notice specifying the intention to

propose the resolution as a special resolution, has been

duly given.

Rules Concerning the Appointment and Replacement

of Directors of the Company

Other than in the case of a casual vacancy, Directors

of the Company are appointed on a resolution of the

members at a General Meeting, usually the AGM.

Corporate Governance Report

Continued

92

Irish Continental Group

No person, other than a Director retiring at a General

Meeting is eligible for appointment as a Director

without a recommendation by the Directors for that

person’s appointment unless, not less than six or more

than 40 clear days before the date of the General

Meeting, written notice by a member, duly qualied

to be present and vote at the meeting, of the intention

to propose the person for appointment and notice

in writing signed by the person to be proposed of

willingness to act, if so appointed, shall have been given

to the Company.

The Directors have power to ll a casual vacancy or to

appoint an additional Director (within the maximum

number of Directors xed by the Constitution of the

Company (as may be amended by the Company in

a General Meeting)) and any Director so appointed

holds oce only until the conclusion of the next

AGM following their appointment, when the Director

concerned shall retire, but shall be eligible for

reappointment at that meeting.

Each Director must retire from oce no later than

the third AGM following their last appointment or

reappointment. In addition, one-third of the Directors

for the time being (or if their number is not three or a

multiple of three, then the number nearest to one-third),

are obliged to retire from oce at each AGM on the

basis of the Directors who have been longest in oce

since their last appointment.

The Company has adopted the provisions of the UK

Corporate Governance Code in respect of the annual

election of all Directors. All Directors will retire at the

forthcoming AGM and following review are being

recommended for re-election.

A person is disqualied from being a Director, and

their oce as Director ipso facto vacated, in any of the

following circumstances:

1. if s/he is adjudicated bankrupt or being bankrupt has

not obtained a certicate of discharge in the relevant

jurisdiction; or

2. if in the opinion of a majority of his/her co-Directors,

the health of the Director is such that he or she can

no longer be reasonably regarded as possessing an

adequate decision-making capacity so that s/he may

discharge his/her duties; or

3. if s/he ceases to be, or is removed as a Director by

virtue of any provision of the Acts or the Articles, or

s/he becomes prohibited by law from being a Director

or is restricted by law in acting as a Director; or

4. if s/he (not being a Director holding for a xed term

an executive oce in his/her capacity as a Director)

resigns his/her oce by notice in writing to the

Company; or

5. if s/he is absent for six successive months without

permission of the Directors from meetings of the

Directors held during that period and the Directors

pass a resolution that by reason of such absence s/he

has vacated oce; or

6. if s/he is removed from oce by notice in writing

served upon him/her signed by all his/her co-

Directors; if s/he holds an appointment to an

executive oce which thereby automatically

determines, such removal shall be deemed an act of

the Company and shall have eect without prejudice

to any claim for damages for breach of any contract

of service between him/her and the Company; or

7. if s/he is convicted of an indictable oence not being

an oence under the Road Trac Act, 1961 or any

statutory provision in lieu or modication thereof.

Notwithstanding anything in the Constitution or in

any agreement between the Company and a Director,

the Company may, by Ordinary Resolution of which

the required notice has been given in accordance with

Section 146 of the Companies Act 2014, remove any

Director before the expiry of their period of oce.

Replacement of CREST with Euroclear Bank for

Electronic Settlement of Trading in the Company’s

shares

On 15 March 2021 electronic settlement of trades in

the Company’s shares migrated from the UK CREST

System to Euroclear Bank SA/NV, an international

central securities depository based in Belgium and part

of the Euroclear Group. This migration was necessary

as a result of the exit of the United Kingdom from the

EU and the legislative requirement that electronic

settlement occur through an authorised central

securities depository that is established in a member

state of the EU or under an approved third country

arrangement. The required shareholder authorisations

for the migration were given at an EGM held on 12

February 2021.

93

Corporate Governance

2021 Annual Report and Financial Statements

Dear shareholder,

I am pleased to present the Report of the Audit

Committee (the Committee) for the year ended 31

December 2021.

The Committee plays an important role in ensuring

the Group’s nancial integrity for shareholders

through oversight of the nancial reporting process,

including the risk and control systems which underlie

that process. This report sets out how the Committee

fullled its duties under its Terms of Reference, the

UK Corporate Governance Code, the Irish Annex and

relevant legislation.

Composition

There were some changes to the Committee composition

during the year. As Chairman, I welcome new Committee

members Lesley Williams and Dan Clague. I also thank

Catherine Duy and Brian O’Kelly who resigned during

the year for their contributions as members of the

Committee during their tenure.

The Audit Committee membership during the year is set

out in the table below which also details attendance and

tenure.

Member A B Tenure

J. Sheehan (Chair) 4 4 8 years

C. Duy (resigned, 12 May 2021) 2 2 9 years

B. O’Kelly (resigned, 17 December

2021)

4 4 9 years

L Williams (appt’d. 8 April 2021) 4 4 0.7 years

D. Clague (appt’d. 26 August

2021)

1 1 0.5 years

Column A: the number of scheduled meetings held during the year where

the Director was a member of the Committee.

Column B: the number of scheduled meetings attended during the year

where the Director was a member of the Committee.

At 31 December 2021, the Committee comprised of

three Non-Executive Directors, all of whom have been

determined by the Board to be independent. The

members bring signicant professional expertise to

their roles gained from a broad level of experience

gained outside of the Group. This, together with their

experience as Directors of the Company, assures that

the Committee as a whole has competence relevant to

the sector in which the Group operates. The member’s

biographies are set out on pages 78 to 79. The Board has

determined that John Sheehan has recent and relevant

nancial experience and that all members have wide

experience of corporate nancial and risk matters.

Overall, the Committee is independent and possesses

the skills and knowledge to eectively discharge its

duties under the Committee’s Terms of Reference. The

Company Secretary acts as secretary to the Committee.

There were four scheduled meetings during the year at

which all then current members attended. In addition,

where requested, the Chief Executive Ocer, the Chief

Financial Ocer and Chair and other members of

the Risk Management Committee also attended. The

scheduled meetings normally take place on the same

day as Board meetings. The Chairman provides updates

to the Board on key matters discussed and minutes are

circulated to the Board.

Role and Responsibilities

The role, responsibilities and duties of the Audit

Committee are set out in written terms of reference

which are reviewed annually. The Terms of Reference

are available on the Group’s website www.icg.ie.

The principal responsibilities of the Committee cover

the following areas;

• Supporting the Board in fullling its responsibilities

in relation to the integrity of the nancial reporting

process including assessment of key estimates,

critical accounting judgements, going concern and

viability statements.

• Advise whether the Annual Report and Financial

Statements, taken as a whole, are fair, balanced

and understandable and provides the information

necessary for shareholders to assess the Group and

Company’s position and performance, business model

and strategy.

Report of the Audit Committee

94

Irish Continental Group

• Overseeing the functioning of the internal audit

function.

• Monitor the eectiveness of the Group’s internal

controls and risk management systems, including

structures and arrangements supporting the

Directors’ Compliance Statement.

• Managing the relationship with the external auditor,

including consideration of the appointment of the

external auditor, the level of audit fees, and any

questions of independence, provision of non-audit

services, resignation or dismissal.

Work Performed

The principal work undertaken by the Committee during

the period under review was focused on the following

areas;

Financial Reporting

The Committee reviewed the Group’s Half Yearly

Financial Report for the six months ended 30 June 2021,

the Preliminary Statement of Results and Annual Report

and Financial Statements, for the nancial year ended 31

December 2021 and the two Trading Statements issued

during the year. These reviews considered;

• Assessment of the eects of new standards eective

for reporting in nancial year 2021;

• Other than for any new standards, the consistency,

appropriateness and application of the Group’s

accounting policies;

• The clarity and completeness of disclosures and

compliance with nancial reporting standards,

legislative and regulatory requirements;

• Whether these reports, taken as a whole, were

fair, balanced and understandable and provide the

information necessary for shareholders to assess the

Group’s position and performance, business model

and strategy;

• A comparison of these results with management

accounts; and

• The critical accounting judgements and key sources

of estimation applied in the preparation of the

Financial Statements.

In assessing if the Financial Statements have dealt

appropriately with each area of judgement, the

Committee challenged the key assumptions and

methodologies used by management in formulating

estimates. The key sources of estimation uncertainty

and critical accounting judgements applied in the

preparation of the Financial Statements for the nancial

year ended 31 December 2021 are set out below and

also discussed on pages 149 to 152.

Key Estimates

• Post-employment benets

The Group operates a number of Group sponsored

pension schemes and is also a participating employer

in the Merchant Navy Ocers Pension Fund, a multi-

employer scheme. Details of these schemes are set

out in note 32 to the Financial Statements. The size

of the pension obligations at €140.5 million (2020:

€140.8 million) is material to the Group and sensitive

to actuarial assumptions. The Committee has

reviewed actuarial advice received from the Group’s

external actuary on the assumptions used by the

scheme actuary in estimating the outstanding pension

obligations at the year end. The Committee was

satised that the assumptions used were reasonable

and that the obligations set out in the Financial

Statements are consistent with the assumptions and

fairly presented.

• Useful lives for property, plant and equipment and

intangible assets

Long-lived assets comprising primarily of property,

plant and equipment and intangible assets represent

a signicant portion of total assets. Changes in

the useful lives may have a signicant impact on

the annual depreciation and amortisation charge.

The Committee reviewed the useful life estimates

of signicant assets including technological

developments, regulatory developments, operating

performance and industry scrapping cycles and were

satised that the estimates used were reasonable.

Critical Accounting Judgements

• Impairment

The Group does not have assets which are required

to be tested annually for impairment. In relation

to other signicant assets, the Committee made

inquiries of management to determine whether there

were any indications of impairment. The Committee

acknowledged the continuing eects of Covid-19

measures on the Group’s trading position in its ferry

operations and the sector in general and considered

whether this amounted to an indication of impairment

and, if so, whether asset valuations were materially

negatively aected.

95

Corporate Governance

2021 Annual Report and Financial Statements

Report of the Audit Committee

Continued

Based on the evidence provided by management

the Committee were satised that there were no

indicators of general declines in the market value

of the types of vessels included in the Group’s eet.

Nonetheless, in referencing accounting standard

IAS 36: Impairment of Assets, management,

having considered each of the events described

at paragraph 12 of the standard, assessed that the

decline in protability from its passenger operations

amounted to an indicator of impairment for its ferry

eet at 31 December 2021 and on reassessment

also at 31 December 2020. The Group’s position as

previously reported in the 31 December 2020 nancial

statements, was that the remaining useful lives of the

vessels were suciently long to allow the downturn in

performance and cash generated by the vessels noted

in 2020 to be temporary and therefore not regarded

as an impairment indicator.

The Committee reviewed and challenged

management on their approach and conclusion that

the continuing eect of Covid-19 travel restrictions

on passenger revenues amounted to an indicator

of impairment. The Committee cognisant of the

requirement for consistency between years were

satised as to the appropriateness of the assessment

and the conclusion that an indicator of impairment

existed at 31 December 2021 and also, following

reassessment, at 31 December 2020 requiring a

recoverable value estimate of the ferry eet to be

prepared at both reporting dates.

The Committee reviewed management’s calculations

of the recoverable value estimates which were

prepared based on the conditions and information

available at each reporting date. The Committee

examined the methodology, key assumptions and

key judgements used including the limitations of

the independent vessel valuations, the rationale for

treating the ferry eet as a single cash generating

unit, growth rates and the discount rate used in the

value in use calculations.

The Committee was satised that the recoverability

assessment performed at each reporting date was

robust, comprehensive and supported the carrying

value of the ferry eet as at 31 December 2021 and

2020. The Committee agreed that no provision for

impairment against the carrying value of the Group’s

ferry eet was required at 31 December 2021 or at 31

December 2020.

• Going concern

The Committee reviewed the appropriateness of

using a going concern assumption for the preparation

of the Group Financial Statements.

The Committee noted that the introduction of

measures in response to Covid-19 by governments

in the jurisdictions in which we operate services in

March 2020 and which have continued in various

forms throughout the period to 31 December 2021

have had a material eect on the Group’s nancial

results. Notwithstanding the downturn in protability

due to the reduced passenger revenues, the Group’s

RoRo, LoLo, chartering and port stevedoring

services operated largely in line with expectations

and the Group has continued to generate cash from

operations.

The Committee also noted that government imposed

Covid-19 travel restrictions have been largely removed

from the beginning of 2022 for passengers who

are fully vaccinated and passenger volumes have

increased over the prior year levels. However, there

remains a risk of a resurgence of Covid infections and

the possibility of re-imposition of restrictions in the

future. All other revenue streams were performing

satisfactorily up to the date of the approval of the

nancial statements.

The Committee met with management and reviewed

and challenged their going concern modelling

including assumptions and sensitivities in a number of

trading scenarios including a possible re-imposition

of travel restrictions and the eects of emerging

geopolitical issues on fuel prices. The Committee also

considered existing and future nancial resources

which could reasonably be expected to be available

to the Group on normal market terms. The going

concern modelling covered a period of 12 months

from the date of approval of the Financial Statements.

Following completion of the above, the Committee

were satised that the Group will have adequate

nancial resources to continue in operational

existence for the foreseeable future and the use of

the going concern basis remained appropriate in the

preparation of the nancial statements. The Going

Concern Statement is set out on page 116.

96

Irish Continental Group

Viability Statement

The Committee reviewed and challenged management’s

assumptions and scenarios together with the

calculations supporting the Viability Statement set out

on pages 116 to 117. The Committee also considered the

appropriateness of the ve year assessment time frame

and that the Group’s principal and emerging risks had

been appropriately considered. The Committee was

satised that a robust assessment had been completed

and reported this to the Board.

Fair, balanced and understandable

The Committee reviewed this Annual Report and

Financial Statements to ensure that in its opinion taken

as a whole, it is fair, balanced and understandable and

provides the information necessary for shareholders to

assess the Group’s position and performance, business

model and strategy.

Recommendations to the Board

Based on the work undertaken, the Committee reported

to the Board that the Annual Report and Financial

Statements for the year ended 31 December 2021 taken

as a whole, is fair, balanced and understandable, and

provides the information necessary for shareholders

to assess the Group and Company’s position and

performance, business model and strategy and

recommended that the Annual Report and Financial

Statements be approved by the Board.

The Committee had also recommended the approval

of the Half Yearly Financial Report for the six months

ended 30 June 2021 and the Trading Statements issued

during 2021.

Engagement with Regulators

The Committee also oversaw management’s

engagement with the Irish Auditing and Accounting

Supervisory Authority (IAASA) regarding their inquiries

into certain aspects of the Financial Statements for

the year ended 31 December 2020. The Chairman also

met with IAASA in relation to their audit quality review

of Deloitte, auditor to the Company for year ended 31

December 2020.

Risk Management and Internal Control

The Board is responsible for the Group’s risk

management and system of internal control. The Board’s

approach to risk management is set out in the Risk

Management Report at page 62. The Committee, on

behalf of the Board, reviews the eectiveness of the

Group’s control environment including internal controls

and risk management systems.

The Risk management report describes the principal

risks and uncertainties faced by the Group. Risks

are grouped under strategic, operational, IT system

and cyber and nancial risks. The risk management

system is dynamic and monitors for signals of new

emerging risks. During 2021 two areas were being

actively monitored; ongoing changes as a result of

Brexit and environmental regulation. Since the year

end geopolitical risks in eastern Europe are also being

monitored.

The Committee oversees the work of the Risk

Management Committee (RMC) which coordinates a

unied system of ongoing identication, monitoring and

reporting of risks throughout the Group. The activities

of the RMC are undertaken alongside the activities of

Internal Audit.

During the year, the Committee met with members of

the RMC and presentations were made outlining the

work undertaken in managing risk monitoring systems,

procedures for ensuring the Group Risk Register is

being updated for new and emerging risks and the

management of exposure to principal risks. The work

of the RMC is also central in putting consideration of

risk to the fore in business decision making throughout

the Group. The Committee reviewed the updated Risk

Appetite Statements prepared by the RMC which

were then presented to the Board for approval. The

Committee also received regular reports throughout the

year including internal audit reviews, operational and

safety risk reviews including information technology

and cyber security. In addition, the Chairman meets

regularly with Group Internal Audit and the Committee

approved the 2021 Internal Audit Plan.

The Committee undertook a review of the RMC and

Internal Audit activities. The Committee was satised

that risk management and internal control system

had been in place throughout the nancial year. In

conducting the review the Committee acknowledges

that the risk management and internal control system is

designed to manage and mitigate rather than eliminate

risk. The Committee was satised that the RMC and

Internal Audit were achieving their objectives and that

the Group control environment remains appropriate

and eective. This assessment has been reported to the

Board.

97

Corporate Governance

2021 Annual Report and Financial Statements

Report of the Audit Committee

Continued

The Committee also reviewed the eectiveness of

the arrangements and structures which the Company

has designed and put in place to secure material

compliance with its Relevant Obligations as dened

under Companies Act 2014. Relevant obligations

comprise compliance with certain company law and

tax obligations. The Committee reported to the Board

that the arrangements and structures were sucient

to secure material compliance with its Relevant

Obligations

External Audit

The Committee is responsible for managing the

relationship with the Group’s external auditor and

monitoring their performance, objectivity and

independence.

Audit Tender

Under Part 27 of the Statutory Audits of Companies

Act 2014, given the tenure of the Company’s previous

auditor Deloitte, the Company was required to conduct

a tender process in relation the appointment of a new

auditor for the external audit in respect of the nancial

year commencing 1 January 2021. As Deloitte had

served in excess of 20 years, they were not eligible for

re-appointment.

The tender process was led by the Audit Committee

Chair in conjunction with a tender committee

comprising management of the Company and involved

a number of steps;

• Research into audit rms with the capability and

reputation to provide audit services to the Company

and Group

• Request for expressions of interest from a selection of

identied audit rms.

• Shortlisting of rms who were then invited to submit

audit proposals. As part of this process teams from

shortlisted rms met with management at Group

and divisional level to gain insights into the Group’s

operations and control environment.

• The Company maintained scorecards from the above

interactions covering areas of team competence,

service approach, communication, commitment and

proactivity.

• The CEO and Committee chair met separately with

the shortlisted rms

• The submitted written proposals were assessed by

the Company

Following completion of the process, the Committee

made a recommendation to the Board for appointment

of auditor. After due consideration of the Audit

Committee recommendation, the Board proposed that

a resolution be put to shareholders at the 2021 AGM

for the appointment of KPMG as the new auditor to the

Company. This resolution was passed by shareholders

on 12 May 2021.

2021 Audit Process

The Committee met with KPMG prior to the

commencement of the audit of the Financial Statements

for the nancial year ended 31 December 2021. The

Committee considered KPMG’s internal policies

and procedures for maintaining independence and

objectivity and their approach to audit quality. The

Committee assessed the quality of the external audit

plan as presented by KPMG and satised itself as to

the expertise and resources being made available. The

Committee also reviewed the terms of the Letter of

Engagement and approved the level of remuneration.

KPMG reported their key audit ndings to the

Committee in March 2022 prior to the nalisation of

the Financial Statements. This report, which included

a schedule of unadjusted errors and misstatements,

signicant judgements and estimations and key areas of

risk, was considered by the Committee in forming their

recommendation to the Board. The Committee also

considered the representations sought by KPMG from

the Directors.

KPMG’s key audit ndings report included control

weaknesses noted during their audit, none of which

were considered of a serious nature so as to cause

KPMG to amend the scope of their original audit plan.

The Committee has considered these and, having

discussed with management, have directed remedial

action be taken where considered appropriate.

The Committee evaluated KPMG’s performance which

included an assessment of KPMG’s communication

process with the Committee and senior management,

knowledge of the Group and industry sector and

resource commitment to the external audit and the

Committee is satised that in conducting the audit of

the 2021 Financial Statements KPMG were eective,

objective and independent.

98

Irish Continental Group

As auditor, KPMG conrmed to the Company that they

comply with the Ethical Standards for Auditors (Ireland)

2016 as issued by IAASA and that, in their professional

judgement, they and, where applicable, all KPMG

network rms are independent and their objectivity is

not compromised.

KPMG conrmed to the Company that the lead partner

will be rotated every ve years to ensure continued

objectivity and independence. Mr. Colm O’Sé has

acted as lead partner for the audit of the 2021 Financial

Statements.

Auditor Independence

The Committee permits the external auditor to provide

non-audit services where they are permitted under

Part 27 of the Statutory Audits of Companies Act

2014 and are satised that they do not conict with

auditor independence. The Committee’s policy on

the provision of non-audit services requires that each

engagement for the provision of non-audit services

requires approval of the Committee. The Committee

approved the engagement of the external auditor to

provide certain tax compliance services and reporting

accountant services in respect of the 2021 nancial year.

This approval was granted on the basis of procedural

eciency.

The Audit Committee has considered all relationships

between the Company and the external audit rm,

KPMG, including the provision of non-audit services as

disclosed in note 9 to the nancial statements which are

within the thresholds set out in Part 27 of the Statutory

Audits of Companies Act 2014. The Committee does

not consider that those relationships or the level of

non-audit fees impair the auditor’s judgement or

independence.

John Sheehan

Chair of the Audit Committee

9 March 2022

99

Corporate Governance

2021 Annual Report and Financial Statements

Dear shareholder,

I am pleased to present the Report of the Nomination

Committee (the Committee) for the year ended 31

December 2021.

This Report sets out how the Committee fullled

its duties under its terms of reference and the UK

Corporate Governance Code, the Irish Annex and

relevant legislation.

At the heart of every organisation are its people,

culture and values, which underpins the important role

of the Nomination Committee. The Committee sets

the framework for the development of an inclusive

and high-performing leadership team and workforce.

Reecting on the Committee’s work at Board-level

during 2021, a stated focus was Board refreshment, with

two appointments made. This was a formal and rigorous

process, which was designed to ensure the Board’s

depth of experience continued to expand. As part of

orderly succession and refreshment of the Board, two

Directors also stepped down during 2021. At the time of

writing, the Board is comprised of four non-executive

directors and two executives.

With the Board changes which took place during the

year there were consequent changes made to the

Committee. I was appointed Chairman on the 12 May,

following the resignation of former Chair, Catherine

Duy. Brian O’Kelly also stepped down as a member

of the Committee and Board on 17 December. Both

Catherine and Brian had served nine years as non-

executive directors of the Company and I extend our

gratitude to both for their service. The two new non-

executive Directors Lesley Williams and Dan Clague

joined the Committee during the year.

The Committee had a prominent role in the external

board evaluation, ensuring that it delivered its aim

of promoting greater eectiveness at Board and

Committee level.

Composition

The Committee membership is set out in the table

below which also details attendance and tenure. All

Directors bring signicant professional expertise to their

roles on this Committee as set out in their professional

biographies on pages 78 to 79.

Member A B Tenure

J.B. McGuckian* (Chair) (appt’d.

12 May 2021)

2 2 0.5 years

C. Duy* (resigned 12 May

2021)

- - 9 years

B. O’Kelly* (resigned 17

December 2021)

2 2 9 years

J. Sheehan* 2 2 5 years

L. Williams* (appt’d. 8 April

2021)

1 1 0.7 years

D. Clague* (appt’d 26 August

2021)

1 1 0.5

years

E. Rothwell 2 2 12 years

* Independent director

Column A: the number of scheduled meetings held during the year where

the Director was a member of the Committee.

Column B: the number of scheduled meetings attended during the year

where the Director was a member of the Committee.

In addition to the scheduled meeting, there was

signicant engagement between Committee members

throughout the period to progress the Committee’s

business.

Role and Responsibilities

The role, responsibilities and duties of the Committee

are set out in written terms of reference and are

reviewed annually. The Terms of Reference are available

on the Group’s website www.icg.ie.

Its duties are to regularly evaluate the balance of skills,

knowledge, experience and diversity of the Board and

Committees and lead the process for appointments,

ensure plans are in place for orderly succession to both

the Board and senior management positions, overseeing

the development of a diverse pipeline for succession.

Report of the Nomination Committee

100

Irish Continental Group

Work Performed

The Committee considered the results of the external

evaluation of the Board and the changes to Board

composition made during 2021. The Committee was

satised that the Board continues to be of adequate

size and composition to suit the current scale of its

operations and has an appropriate balance of skills,

knowledge, experience and diversity to enable it to

eectively discharge its duties.

As outlined in a number of areas of this report, the

Committee is placing a particular focus on ensuring

greater diversity at Board and senior management level.

We are condent the changes we make to succession

planning will address this imbalance versus best

practice in the periods ahead. Outside of gender and

ethnic diversity, as a Committee, we are condent the

current Board’s skillset ensures the ability to oversee

management and contribute to the development of

strategy.

The Committee notes the Code’s comments on non-

executive Director tenure and the tenure prole of the

existing non-executive Directors. As reported last year,

the Committee continued researching future potential

candidates to ensure orderly Board refreshment

during 2020 and 2021. That process culminated in the

appointment of Lesley Williams and Dan Clague, who

have both brought fresh insight and discussion to the

Board. From the 2022 AGM, the average tenure of the

non-executive directors, including the Chairman will be

11 years.

Outside of the newly appointed Directors. the

Committee reviewed and recommended to the Board

the re-appointment of the remaining Directors. In

considering the proposals for the re-election, the

Committee had particular regard for the tenure of John

B. McGuckian. John has served as Chairman of the

Board since 2004 and as a non-executive Director since

1988. This recommendation was proposed following a

robust review of the knowledge, skills and experience

that he contributes, in the interests of the Company and

stakeholders. The Committee assessed him to be both

independent in character and judgement and to be of

continued signicant benet to the Board. Recognising

the guidance of the UK Code, the Committee was also

cognisant of the appointment of John well in advance

of the revisions to market expectations on Chair tenure.

The Committee expects to align with the provisions of

the UK Code on this issue in the future; however, at this

time, and particularly in light of the ongoing challenges

in the Company’s industry, the Committee determined

it appropriate for John to continue as Chair and leader

of the Board. The Committee was also satised that the

role of the senior independent director further ensures

clear division between management and oversight.

The Committee did not identify any issues that

were likely to impair, or could appear to impair the

independence of the non-executive Directors, John

Sheehan, Lesley Williams and Dan Clague.

No Committee member voted on a matter concerning

their position as a Director.

The Committee reviewed the processes agreed in

respect of workforce engagement described at pages

84 to 85 and was satised that these arrangements

remain appropriate to the Group’s circumstances.

The Group values diversity and the benets it can

provide in promoting the success of the business.

The Board’s Diversity Policy is set out on pages 89 to

90. In considering any appointment to the Board the

Committee identies the set of skills and experience

required. Individuals are selected based on the required

competencies of the role with due regard for the

benets of diversity. Currently, the female composition

of the Board and senior management reports was 14%

and 21%, respectively. In relation to future Board and

senior manager appointments the Committee will

actively seek out a greater pool of female candidates for

consideration. External search agencies independent

of the Group are engaged to assist where appropriate

and their mandates include considerations of gender

diversity and, in the periods ahead, ethnic diversity.

No recruitment for senior management positions

requiring the input of the Committee took place during

the period.

John B. McGuckian

Chairman

9 March 2022

101

Corporate Governance

2021 Annual Report and Financial Statements

Dear Shareholder,

I am pleased to introduce the Directors’ Remuneration

Report for the rst time for year ended 31

December 2021, which includes the Annual Report

on Remuneration and an abridged version of our

Directors’ Remuneration Policy which was approved

by shareholders at our 2021 AGM. On behalf of the

Committee and the Board, I would like to thank my

predecessor, Brian O’Kelly, for his service as Chair of

the Remuneration Committee over the past number of

years.

The socio-economic challenges presented by

the Covid-19 pandemic continued during FY2021,

requiring agility to protect our people and maintain

the performance of the business. Throughout the

Covid-19 pandemic, the Company has put the safety

and well-being of its workforce front and centre,

alongside delivering services to customers and

safeguarding stakeholder interests. As a prudent step,

a general salary freeze was applied for FY2021 across

the workforce, including Executive Directors and other

Senior Management Team members. As is outlined

elsewhere in this Annual Report, our focus throughout

the past year has been on protecting colleagues,

supporting customers, and promoting a return to travel

in a safe manner. Thanks to the extraordinary hard work

and dedication of our employees, we have continued

to deliver high quality services to our customers and

support the interests of our other stakeholders.

Overview of Performance

During 2021, the twin challenges of Brexit and the

continuing Covid-19 situation represented a signicant

headwind on operations and nancial performance,

with the safety of sta and customers remaining

our number one priority. Despite these challenges,

the Committee was satised that the business and

executives again performed strongly in terms of what

they could control. This included exibility in terms of

freight, as well positive performance for periods during

the year when the pandemic and associated restrictions

had subsided.

The overall trading performance resulted in an operating

loss (before non-trading items) of €0.2 million compared

to an operating prot (before non-trading items) of €0.8

million in 2020. The Committee acknowledges that this

performance was negatively aected by the ongoing

depressed passenger revenues as a result of the pandemic

together with the start-up losses associated with the

commencement of operations on our new strategically

signicant Dover - Calais service. The reported result

belies a strong nancial performance in our RoRo freight,

container and terminal and chartering operations each of

which reported growth compared with the prior year. The

Committee further notes the Group’s operations were cash

generative and that a number of strategic investments and

expansion of operations occurred during the year which

positions the Group for future growth.

The Committee acknowledges the strong contribution

of the Executive Directors during nancial year 2021 and

the actions taken in response to ongoing disruptions

from factors outside of their control, including domestic

and international restrictions on travel, a general level of

caution among large portions of our passenger base and

post-Brexit eects on freight shipping patterns. The level

of performance achieved, which was cash generative at

an operating level, has demonstrated the resiliency of the

business and provides a platform for strong performance

as the impact of the pandemic subsides.

Our approach to remuneration and variable pay seeks to

consistently link variable remuneration to performance:

when performance is strong, executives will be awarded

higher levels of variable pay and when performance

is behind where we would want it to be, variable

remuneration will be low or nil. The Committee considers

the most important aspect of variable remuneration to be

the alignment between it and the interests of shareholders,

stakeholders and management.

Noting the robust performance in FY2021 against the

challenging background, the Committee concluded that

modest bonus payouts were appropriate for 2021 for

certain directors and senior managers. The CFO received

a total pay-out at 22% of maximum while in the case of the

legacy arrangement applying to the CEO, as in 2020, no

bonus was awarded, given its sole link to EPS performance

We are satised the Committee’s actions are aligned with

the philosophy of our shareholder approved remuneration

policy, which favours long-term equity ownership over

short-term remuneration. We were pleased that, at the

2021 AGM, a signicant majority of shareholders agreed.

Report of the Remuneration Committee

102

Irish Continental Group

Implementation of Policy

At the 2021 AGM, 87% of voting shareholders supported

our proposed remuneration policy, a level at which

the Committee is satised endorses our arrangements

to incentivising Executive Directors. In determining

whether or not to continue with the legacy arrangement

in respect of the CEO, the Committee conducted an

in-depth review of market practice and alternative

methods of driving superior alignment between the

CEO and our shareholders. While there were certain

other structures that had positive elements, there was

no structure that the Committee felt matched the

current arrangement in terms of ensuring alignment

with shareholder remuneration. As part of that review

the Committee looked at a number of particular

elements of the current arrangement and benchmarked

them against investor expectations and peer practice.

Specically, the framework requires:

• A minimum of 50% of annual bonus (after tax

liabilities) to be invested in equity, with the

Committee exercising discretion to apply a higher

percentage in recent years.

• A ve-year deferral, continuing to apply post-

employment, for the entire portion of the awards

reinvested in equity under the annual bonus.

• A ve-year holding period, continuing to be

applied post-employment, following a three-year

performance period for awards vesting under the

Performance Share Plan, for a total of an eight-year

time horizon from grant to release, which is market

leading; and,

• Shareholding guidelines for all executive directors and

members of the Executive Committee of a minimum

three times base salary to be achieved within ve

years of appointment.

These requirements create some of the most stringent

deferral and holding mechanisms in the Irish and UK

markets, locking in signicant holdings with alignment

periods of between ve and eight years. By way of

illustration, in the event of a pay-out of 200% of salary

under the bonus and a grant of 200% under the PSP (the

maximum permitted), the following restrictions would

apply to the CEO’s variable remuneration. Of the total

quantum of 400% of salary:

• A maximum of 100% of salary would be eligible to be

released in cash immediately.

• A minimum of 100% of salary would be deferred into

equity and restricted for a minimum of ve years from

award.

• Subject to the achievement of stretching performance

criteria, a maximum of 200% of salary would be

restricted for release for a minimum of eight years.

• While there are no planned changes to the

implementation of the policy in 2022, as with every

year, the Committee will review the eectiveness of

the incentive arrangements to ensure they continue to

drive the next stage of the Company’s journey and will

consult with shareholders in the event that any material

deviations are proposed. One area of particular focus for

the Committee in 2022 will be aligning the company’s

latest eorts on sustainability with the remuneration

framework, through the incorporation of certain

measures in the incentive schemes.

Workforce Remuneration

As a Remuneration Committee we are always mindful of

the extent to which the remuneration of the executives

aligns with the experience of our stakeholder groups. We

have taken a close interest in the actions that have been

taken to protect our employees and support their wellbeing

during the past year. The Committee has received regular

updates on relevant matters aecting the workforce

and have overseen the implementation of a range of

measures to help and support its direct employees. The

team has performed extremely well in these challenging

circumstances, with high levels of customer satisfaction

and the maintenance of continuous services for essential

supply chains, including medical, food and beverage,

in times of signicant disruption. As the impact of the

pandemic hopefully subsides in periods ahead, the

Committee hopes to oversee further sta development,

including reward frameworks that are increasingly aligned

with sustainable practices and the development of

succession planning.

Salary Increases

As detailed later on in this report, the Committee

conducted a review of salary and xed pay arrangements

at the end of 2021, which focused on the importance of

remuneration arrangements remaining competitive as the

business enters a crucial juncture, in terms of the exiting

of the pandemic and executing on the evolution of our

strategy. While these were the primary considerations

of the Committee, it was also cognisant of using

benchmarking data as a reference point in determining the

appropriate salary levels for high performing executives.

Following the in-depth review, the Committee determined

that it would increase the salaries of the CEO and CFO by

20% and 26%, respectively.

103

Corporate Governance

2021 Annual Report and Financial Statements

Consideration of Discretion

The Committee reviewed the outcomes of both

the annual bonus and long-term incentive plan and

considered the results both against the relevant

performance targets and the wider internal and external

context. As set out at the start of this report, it was

noted that the business had remained resilient during

the pandemic. However, in the case of the CEO, the

formulaic calculations based on Group performance

indicated that no bonus would be payable under the

legacy arrangement. This was also the case in 2020.

Notwithstanding the robust earnings and cash

ow performance against the challenging business

backdrop, as well as the signicant strategic

achievement of launching the Group’s rst services

on the Dover-Calais cross-channel route during the

year, the world’s busiest route for ro-ro freight trac,

in the case of the CFO, the Committee considered it

appropriate to exercise discretion and reduced the

formulaic outcome on that element of annual bonus

related to Group nancial performance to nil, while also

applying a 10% reduction to other elements.

With regard to the vesting outcomes under the long-

tern incentive plan, the Committee agreed that the

formulaic vesting outcomes were appropriate given

performance against the three-year targets and

concluded that a reduction in vesting outcome was

not required. One of the strengths of our approach

to remuneration is the market leading deferral

requirements which, unlike the vast majority of our

listed peers, allows us the exibility to restrict the

disposal of vested awards for up to ve years.

Integrating ESG Measures

Over the past two years, there has been signicant

growth in the focus on ESG and sustainability, with

investors and wider stakeholders raising expectations as

to how companies are embedding environmental, social

and governance criteria into strategies and everyday

operations. As outlined elsewhere is this Annual Report,

during the last year, the business has signicantly

advanced its integration of a range of ESG factors into

the risk management and strategy frameworks. That

process continues to progress, and the Committee will

look to ensure the outcomes of it are reected in the

reward structure for Executives and the wider employee

base in the period ahead.

Outlook

2021 has once again been one of disruption and

adaptation as our colleagues, customers and wider

society have dealt with the developing Covid-19

pandemic. Our people and business have shown

resilience and strength in the face of these challenges

and it is this dedication and commitment which will

enable the next stage of our development. The rest of

this report sets out both our Policy, as approved by 87%

of voting shareholders at the 2021 AGM, and our Annual

Report on Remuneration which sets out the decisions

and outcomes summarised in this letter in further detail.

The Remuneration Committee

The Remuneration Policy and Framework is overseen by

the Remuneration Committee. Committee membership

during 2021 is set out in the table below which also

details attendance and tenure. All Directors bring

signicant professional expertise to their roles on this

Committee as set out in their professional biographies

on pages 78 to 79.

Member A B Tenure

J. Sheehan (Chair – appt’d : 26

August 2021)

4 4 8 years

B. O’ Kelly (resigned 17

December 2021)

4 4 9 years

C. Duy (resigned 12 May 2021) 2 2 5 years

L. Williams (appt’d 8 April 2021) 2 2 1 years

D. Clague (appt’d 26 August

2021)

1 1 0.5

years

Column A: the number of scheduled meetings held during the year where

the Director was a member of the Committee.

Column B: the number of scheduled meetings attended during the year

where the Director was a member of the Committee.

The Committee met four times during the period with

follow up contacts between meetings. The Chairman

provided an update to the Board on key matters

discussed.

Report of the Remuneration Committee

Continued

104

Irish Continental Group

Role and Responsibilities

The role, responsibilities and duties of the Committee

are set out in written terms of reference which are

reviewed annually. The Terms of Reference are available

on the Group’s website www.icg.ie.

The Committee’s duties are to establish a remuneration

framework that;

• Will attract, motivate and retain high calibre

individuals;

• Will reward individuals appropriately according to

their level of responsibility and performance;

• Will motivate individuals to perform in the best

interest of the shareholders; and

• Will not encourage individuals to take risks in excess

of the Company’s risk appetite.

Against this framework the Committee approves

remuneration levels and awards based on an individual’s

contribution to the Company against the background

of underlying Company nancial performance having

regard to comparable companies in both size and

complexity.

The Company is subject to Company Law as enacted

in Ireland. The Shareholders’ Rights Directive 2017/828

(SRD II Directive) was transposed into Irish law by the

European Union (Shareholders’ Rights) Regulations

2020 (Regulations). This requires the Company to

prepare a Remuneration Policy and submit this to a

shareholder vote once every four years and otherwise

when a material change to the policy is proposed. In

compliance with SRD II, the Company submitted a

Remuneration Policy to shareholders at the 2021 AGM

by way of an advisory resolution which received 87%

approval. This Remuneration Report sets out how we

have applied the Remuneration Policy during FY 2021

and will be put to a shareholder vote as an advisory

resolution at the 2022 AGM.

Remuneration Outcomes for executive

Directors in 2021

Total Directors’ single gure remuneration for the year

was €1,821,000 compared with €1,608,000 in 2020 and

details are set in the table below:

Base salary

Performance pay

Benets Pension

Options /

PSP

1

Fees

Tota l

2021

Restricted

shares Cash

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

Executive Directors

E. Rothwell 580 - - 35 - 304 - 919

D. Ledwidge 318 75 32 22 43 102 - 592

Total for executives 898 75 32 57 43 406 - 1,511

Non-executive Directors

J. B. McGuckian - - - - - - 125 125

C. Duy - - - - - - 18 18

B. O’Kelly - - - - - - 50 50

J. Sheehan - - - - - - 50 50

L. Williams - - - - - - 50 50

D. Clague - - - - - - 17 17

Total for non-executives - - - - - - 310 310

Total 898 75 32 57 43 406 310 1,821

1. 31% of the options granted on 8 March 2019 under the PSP are expected to vest during 2022 based on performance to 31 December 2020, subject to

continued employment up to the vesting date.

2. The value of any options vesting will be based on the actual share price at date of vesting. For the purposes of the above disclosure, the value of an

option has been based on the dierence between the option subscription price and the average closing price of an ICG Unit between 1 October and 31

December 2021.

105

Corporate Governance

2021 Annual Report and Financial Statements

Details of Directors’ remuneration for the year ended 31 December 2020 are set out below:

Base salary

Performance pay

Benets Pension

Options /

PSP

1

Fees

Tota l

2020

Restricted

shares Cash

€’000 €’000 €’000 €’000 €’000 €’000 €’000 €’000

Executive Directors

E. Rothwell 580 - - 35 - 258 - 873

D. Ledwidge 318 - - 22 43 77 - 460

Total for executives 898 - - 57 43 335 - 1,333

Non-executive Directors

J. B. McGuckian - - - - - - 125 125

C. Duy - - - - - - 50 50

B. O’Kelly - - - - - - 50 50

J. Sheehan - - - - - - 50 50

Total for non-executives - - - - - - 275 275

Total 898 - - 57 43 335 275 1,608

1. The value of options which vested during 2021 based on nancial performance to 31 December 2020 reported in the prior year based on the average

closing price of an ICG Unit between 1 October 2020 and 31 December 2020 has been restated based on the actual closing price on the vesting date.

The restatement amounted to an increase in the previously reported benet of €17,000 in respect of Eamonn Rothwell and €5,000 in respect of David

Ledwidge.

Base Salary

Neither executive received an increase in salary during 2021, reecting continued alignment between remuneration

decisions and stakeholder experience. The average change of pay for the general employee base was nil. Any

adjustments to salary for employees were eective from 1 January 2021.

Director’s Pension Benets

The aggregate pension benets attributable to the executive Directors at 31 December 2021 are set out below:

D. Ledwidge

Tota l

2021

Tota l

2020

€’000 €’000 €’000

Increase in accumulated accrued annual benets (excluding ination) in

the period 1 1 1

Transfer value of the increase in accumulated accrued benets

(excluding ination) at year end* 4 4 4

Accumulated accrued annual benets on leaving service at year end 18 18 17

* Note: Calculated in accordance with actuarial guidance note GNII.

There were no pension benets attributable to Eamonn Rothwell as he has reached normal retirement age under the

pension scheme rules and pension benets have vested.

Report of the Remuneration Committee

Continued

106

Irish Continental Group

With regard to David Ledwidge, costs in relation to

dened benet pension arrangements were €20,000

(2020: €20,000) with a further €23,000 (2020:

€23,000) related to the dened contribution pension

arrangements.

The Company also provides lump sum death in service

benets and the premiums paid during the year

amounted to €6,000 and €1,000 in relation to Eamonn

Rothwell and David Ledwidge respectively.

Performance Related Pay

Eamonn Rothwell

Eamonn Rothwell has been with ICG since its inception

as a public company and otation in 1988. As detailed

in the Remuneration Policy passed at the 2021 AGM, a

legacy contractual arrangement continues to govern Mr.

Rothwell’s performance related pay.

The CEO annual bonus performance award is

predominantly driven by a formula based on basic

EPS growth which incorporates an adjustment for

share buybacks and rights issues. The Committee also

retains discretion to make adjustments for any non-

cash non-trading items. The Company believes that

EPS is consistent and transparent. EPS growth drives

long-term value creation for all stakeholders and has

increased in line with the company’s scaling over the

past two decades. EPS is one of the key performance

indicators by which the Board assesses the overall

performance of the Company and, as such, the

Committee deems it an appropriate incentive for the

Company’s most senior employee.

The Committee reassessed the CEO performance

incentive arrangements and in its view the

arrangements remain an eective means of driving

performance and aligning the interests of the CEO,

shareholders and wider stakeholders.

The Committee considered the performance of

Mr. Rothwell and the signicant eort expended in

managing and protecting the Group’s businesses

throughout another year of external challenges,

including government imposed Covid-19 travel

restrictions and caution among customers. The

Committee also considered the achievement in

launching the Group’s strategically signicant Dover

Calais service. Despite the long standing legacy

arrangement regarding his annual performance award

being impacted signicantly by factors outside of

the CEO’s control, the Committee did not consider

it appropriate to exercise discretion to adjust the

formulaic outcome. The Committee considered a nil

payout driven by the application of the performance-

related pay formula as appropriate driven by two

key factors: simplicity and performance alignment.

When nancial performance is strong and shareholder

experience is healthy, payouts will accrue. When the

converse is the case, performance related pay will be

correspondingly reduced to a minor or nil amount,

which runs in contrast to more complex schemes

commonplace at listed companies.

David Ledwidge

The Committee assessed Mr. Ledwidge’s performance

in his role over the period and concluded that Mr.

Ledwidge was performing in line with expectations and

contributing positively to the longer term development

of the Group.

The Committee considered it appropriate to retain for

Mr. Ledwidge the maximum annual bonus opportunity

of 150% current year salary, as per the Remuneration

Policy, against the following parameters;

• 75% based on Group nancial outturn where, against

the background of continuing uncertainty attributable

to Covid-19 travel restrictions in early 2021, the

targets were set based o 2020 outturn;

• 15% based on personal objectives including

completion of certain operational projects and input

into strategic development;

• 10% on the continuing development of an ESG

framework into the overall risk framework and

enhancement of ESG reporting.

Based on the 2021 nancial outturns, the Committee

determined that a bonus amount was eligible to be paid

under the nancial outturn element. However, following

a holistic evaluation of Company performance and

in recognition of the external operating environment

which had faced the company, the Committee reduced

the nancial portion of the bonus to nil. In doing so, the

Committee had particular regard for the fact that no

dividends had been paid to shareholders during 2021,

that the Group had availed of certain wage supports

earlier in the year and that certain travel restrictions

remained in place at 31 December 2021. As means of

reecting the experience of shareholders and wider

stakeholders, the Committee was satised that reducing

the nancial portion of the bonus to nil was appropriate.

107

Corporate Governance

2021 Annual Report and Financial Statements

The Committee also assessed the personal objectives

set and noted Mr. Ledwidge’s signicant eort during

the year in protecting the Group’s nances and balance

sheet against signicant disruption and his contribution

to strategic initiatives to position the Group for future

growth. The Committee further noted the work

achieved to date on ESG frameworks and reporting.

Taking into account the positive aspects of personal

performance, the Committee considered that a full

bonus pay-out of €119,000 accrued under these criteria.

However, the Committee again, in consideration of the

matters discussed above determined it appropriate that

this be reduced by 10% to €107,000 and also required

that (i) the full amount, rather the minimum 50%, be

invested in equity through the Group’s restricted share

scheme, less any amount required to discharge tax

liabilities and (ii) that payment of the award would be

dependent on the removal of travel restrictions. This

amount was paid to Mr. Ledwidge in February 2022, and

reported in the single gure remuneration table for year

ended 31 December 2021. No annual bonus had been

awarded in relation to nancial year 2020.

Restricted Shares

In relation to Mr. Ledwidge, €75,000 of his annual bonus

award was applied towards the acquisition of 17,201 ICG

units which will be held in the employee trust for a period

of ve years.

Long Term Incentive

(i) Options expected to vest during 2022 based on

performance to 31 December 2021

The Committee has considered the performance

conditions attaching to the options granted under

the PSP on 8 March 2019 which are tested against

Group performance up to 31 December 2021. The

2021 outcomes have been adjusted for the eects of

the application of IFRS 16 Leases so that the diluted

earnings per share, return on average capital employed

and free cash ow ratio metrics are comparable over

the performance period. The overall vesting rate is

expected to be 31% (2020: 34%) and the table below

details the expected vesting on each metric.

Performance Condition Weighting Threshold Maximum Actual Outcome

Diluted adjusted earnings per share 25% 26.6c 32.3c (2.6)c 0% out of 25%

Return on average capital employed 25% 13% 20% 5.5% 0% out of 25%

Free cash ow ratio 25% 100% 130% 322.4% 25% out of 25%

Total shareholder return

• Versus peer group 12.5% (15.1%) 20.7% (5.7%) 6% out of

12.5%

• Versus Ftse 250 12.5% 28.6% 65.2%. (5.7%) 0% out of 12.5%

30% vesting occurs at threshold performance increasing pro-rata up to the maximum vesting threshold. Vesting will

be conditional on the continued employment of the option holders at the vesting date in 2022. At 31 December 2021,

there were 749,818 outstanding options granted on 8 March 2019, including 226,000 and 76,500 options in favour of

Mr. Rothwell and Mr. Ledwidge respectively of which 70,060 and 23,560 are expected to vest during 2022 under the

above performance outturns.

The gross value of those options expected to vest in favour of the executive Directors based on performance to 31

December 2021 has been included in the total Director remuneration table for year ended 31 December 2021, based

on an estimated share price of €4.41, being the average closing price of an ICG Unit between 1 October 2021 and 31

December 2021.

Report of the Remuneration Committee

Continued

108

Irish Continental Group

(ii) Options Vested during 2021

As reported in last year’s report, the Committee

determined based on performance up to 31 December

2020 the vesting of the options granted under the PSP

on 9 March 2018 at an exercise price of €0.065 at a

vesting rate of 34 per cent, vesting 430,737 options in

total.

Mr. Rothwell held 64,260 of the PSP vested options.

Share option remuneration of €258,000 based on the

market price at the vesting date has been disclosed in

the 2020 remuneration table (adjusting the €241,000

previously disclosed last year which was estimated

based on year end 2020 prices). Under the rules of

the PSP, the 64,260 PSP options which vested were

exercised and are subject to retention in trust for a

period of ve years.

Mr. Ledwidge held 19,210 of the PSP vested options.

Share option remuneration of €77,000 based on the

market price at the vesting date has been disclosed in

the 2020 remuneration table (adjusting the €72,000

previously disclosed last year which was estimated

based on year end 2020 prices). Under the rules of

the PSP, the 19,210 PSP options which vested were

exercised and 19,210 are subject to retention in trust for

a period of ve years.

The share price at date of vesting was €4.26.

(iii) Grants during 2021

The long term incentive scheme applicable for the 2021

nancial year was the PSP approved by shareholders

on 17 May 2017. The Committee had suspended future

awards under the legacy 2009 Share Option Plan which

remains in place to facilitate the administration of

previously granted options.

On 12 March 2021, the Committee granted options

over 1,042,500 ICG Units to employees of the Group.

These included an annual award of options granted to

Mr. Rothwell and Mr. Ledwidge in line with the annual

limits set out in the PSP rules being 200% and 150% of

salary respectively. The total number of options granted

to Mr. Rothwell and Mr. Ledwidge based on a share

price of €4.26 were 272,000 and 111,500 respectively, a

reduction in absolute numbers from 2020.

Vesting of these awards are based on the achievement

of the following performance conditions over a three-

year vesting period;

• Adjusted Diluted Earnings per Share (EPSd)

• Return on Average Capital Employed (ROACE)

• Free Cash Flow Ratio (FCFR)

• Total Shareholder Return (TSR)

Each condition is equally weighted and in all cases

30% vests at threshold performance and 100% vests

at maximum with pro-rata vesting between these two

levels.

The performance levels were calibrated as follows;

Vesting Threshold

Minimum Maximum

EPSd 5% 12%

ROACE 13% 20%

FCFR 100% 130%

TSR Median Top Quartile

The Committee noted in setting the above targets that

EPS for nancial year 2020 was negative, largely due

to the eect of government imposed travel restrictions.

In recognition of the continuing uncertainty around

the timing of the removal of these restrictions and the

challenges in setting a base EPS level, the Committee

agreed in relation to the 2021 grants to set base EPS

at 0.1 cent per share. The targets relating to the other

measures were retained at previous year levels

TSR is measured against a combination of the

performance of the FTSE 250 index and a grouping of

peer companies comprising DFDS, Tallink Grupp, Viking

Line, Air-France KLM, Ryanair, EasyJet, Getlink, Origin

Enterprises, Dalata Hotel Group and C&C Group.

The Committee considered the timing of grant of

awards in the rst quarter of 2021 and whether there

were circumstances which may create a perception

that participants benetted from ‘windfall gains’. The

Committee noted that the price used was reective

of recent closing prices and was higher than that

used in 2020 resulting in a reduction of the number

of option grants by 8.5% on average. As with each

award, the Committee will review any outcome at the

time of vesting to ensure that there has not been any

disproportionate windfall to any participant based on

external factors.

The 2021 PSP awards granted were calculated based

on a share price of €4.26, the closing share price on

the day preceding the award date. In 2020, the PSP

awards granted were calculated based on a share price

of €3.90.

109

Corporate Governance

2021 Annual Report and Financial Statements

Options Held

Details of movements in share options granted to Directors under the Performance Share Plan and the legacy Share

Option Plan are set out in the table below:

E. Rothwell

Option Type

Date of

Grant 31-Dec-20 Granted Exercised Lapsed 31-Dec-21

Option Price

(€)

Earliest

Vesting Date

Latest Expiry

Date

Unvested

Performance

Share Plan

1

9-Mar-18 189,000 - (64,260) (124,740) - 0.065 - -

Performance

Share Plan

2

5-Mar-19 226,000 - - - 226,000 0.065 5-Mar-22 -

Performance

Share Plan

2

6-Mar-20 297,000 - - - 297,000 0.065 6-Mar-23 -

Performance

Share Plan

2

12-Mar-21 - 272,000 - - 272,000 0.065 12-Mar-24 -

Vested but not

yet exercised 5-Mar-15 700,000 - - - 700,000 3.58 - 4-Mar-25

1,412,000 272,000 (64,260) (124,740) 1,495,000

D. Ledwidge

Option Type

Date of

Grant 31-Dec-19 Granted Exercised Lapsed 31-Dec-20

Option Price

(€)

Earliest

Vesting Date

Latest Expiry

Date

Unvested

Performance

Share Plan

1

9-Mar-18 56,500 - (19,210) (37,290) - 0.065 - -

Performance

Share Plan

2

05-Mar-

19 76,000 - - - 76,000 0.065 5-Mar-22 -

Performance

Share Plan

2

6-Mar-20 122,000 - - - 122,000 0.065 6-Mar-23 -

Performance

Share Plan

2

12-Mar-21 - 111,500 - - 111,500 0.065 12-Mar-24 -

Vested but not

yet exercised 5-Mar-15 150,000 - - - 150,000 3.58 - 4-Mar-25

404,500 111,500 (19,210) (37,290) 459,500

1. These are expected to vest during 2022 at a vesting rate of 31% based on performance to 31 December 2021 and the gross value has been included in

the Director remuneration schedule. The delivered shares less any permitted sales to discharge tax liabilities, will be held in trust for a period of ve

years from the exercise date.

2. These will vest and become exercisable three years from the third anniversary of grant in accordance with achievement of the performance conditions

set at date of grant. These options will normally have to be exercised on or shortly after the vesting date and the delivered shares, less any permitted

sales to discharge tax liabilities, held in trust for a period of ve years from the exercise date.

Report of the Remuneration Committee

Continued

110

Irish Continental Group

Remuneration for executive Directors in 2022

The Committee will continue to apply the existing

Remuneration Policy, approved by shareholders in May

2021, during nancial year 2022.

Base Salary

The Committee has reviewed the salaries of the

CEO and CFO against market competitive levels for

similar sized ISEQ and FTSE companies, taking into

account the performance of the executive directors;

in particular their leadership of the company through

the challenges of Brexit, the Covid pandemic and

signicant expansion of operations. The Committee

notes that these challenges were successfully managed

without accessing cash from shareholders, while at

the same time paying down debt and returning cash

to shareholder via share repurchases. It should also

be noted that through this period the Group has

positioned itself for further growth in both its Ferries

and the Container and Terminal divisions, to underpin

further shareholder value creation over the longer-

term. In light of the strong contribution in protecting

the resiliency of the business, and to ensure that both

executive directors are retained to execute on the

signicant strategic initiatives undertaken during the

past 18 months, the Committee determined that it

would address the gap in salary between the executive

directors and rates in the market.

The Committee concluded that it was appropriate in

this context to award a 20% increase in annualised

base salary to Eamonn Rothwell, CEO. The Committee

determined that the proposed salary level was

appropriate in the context of the CEO’s experience and

performance, and market norms, being at the median

level for other ISEQ companies of comparable scale and

the FTSE250 more broadly.

The Committee also awarded a 26% increase in

annualised base salary to David Ledwidge, CFO, for

2022. The adjustment brings the CFO in line with the

median level of base pay for ISEQ20 companies of

similar market capitalisation, and the lower quartile for

other FTSE 250 companies. The Committee concluded

that this salary level reects the CFO’s continued strong

contribution and individual performance in his role.

These changes are eective from 1 January 2022.

Pension arrangements and other benets

Pension arrangements and other benets will be

unchanged from 2021.

Annual Bonus

The Committee following review has retained the long-

standing legacy CEO bonus arrangements for FY2022.

The Committee remains satised that the outcomes

reect Group performance, noting that no bonus was

awarded in nancial years 2020 and 2021 under this

arrangement, in line with its straightforward alignment

structure between Group performance and payouts,

with a particular focus on EPS.

In relation to the CFO, he will be eligible for an annual

bonus award with maximum opportunity of 150%

of base salary. In line with 2021, any award of bonus

is weighted 75% on the Group achieving stretching

nancial targets, in excess of budget levels, 10% on ESG

related measures and 15% on personal objectives.

Long-term incentive

The Committee will make an annual award of options

under the PSP in line with the plan limits of 200% of

base salary for the CEO and 150% for the CFO. The

performance metrics, EPS growth, return on capital

employed, cash ow generation and relative TSR will be

set at the same levels as for the 2021 awards.

Other Matters

Minimum Shareholding Requirements

The Company encourages individuals to acquire and

retain signicant shareholdings to align interests of

management with those of shareholders. The Company

has a minimum shareholding requirement of three

times base salary. The holding levels are expected to

be met within ve years from the date of appointment.

The Committee considers these minimum holding

requirements to exceed market norms. The market

value inherent in vested options and any shares held

under the Company’s restricted share arrangements will

count towards determining an individual’s holdings.

111

Corporate Governance

2021 Annual Report and Financial Statements

The market value of the holdings of executive Directors

and executive management at 31 December 2021 as a

multiple of base salary at that date are shown in the

following table:

Salary multiple held*

Eamonn Rothwell 235.6 times

David Ledwidge 3.1 times

Other executive management 7.3 times

* Includes FY 2021 remuneration invested in equity in 2022 and included

in the Director’s single gure remuneration table at 31 December 2021

Non–Executive Directors

Non-executive Directors receive a fee which is set by

the Committee and approved by the Board. They do

not participate in any of the Company’s performance

award plans or pension schemes. As part of the overall

review of remuneration structures, the Committee

recommended the fee payable to the Board Chairman

to be the same as the prior year at €125,000 per annum

and other non-executive Directors at €50,000.

Non-executive Directors do not have notice

periods and the Company has no obligation to pay

compensation when their appointment ceases. The

letters of appointment are available for inspection at

the Company’s registered oce during normal business

hours and at the AGM.

Director’s Service contracts

Non-executive Directors have been appointed under

letters of appointment for periods of three years subject

to annual re-election at the AGM.

In respect of Mr. Rothwell, CEO, there is an agreement

between the Company and Mr. Rothwell that, for

management retention reasons, in the event of a change

in control of the Company (where over 50% of the

Company is acquired by a party or parties acting in

concert, excluding Mr. Rothwell) he will have the right

to extend his notice period to two years or to receive

remuneration in lieu thereof.

This amendment to Mr. Rothwell’s contract of

employment was agreed by the Remuneration

Committee a number of years ago to retain and

motivate the CEO during a series of attempted

corporate takeover actions.

The letters of appointment for other executive Directors

do not provide for any compensation for loss of oce

other than for payments in lieu of notice and, except as

may be required under Irish law, the maximum amount

payable upon termination is limited to 12 months

equivalent. No future executive contracts will include

similar change of control provisions.

On termination, outstanding options may at the

absolute discretion of the Committee, be retained by

the departing individual in accordance with the good

leaver / bad leaver provisions of the relevant plan. Any

shares delivered to an individual which are subject

to a retention period will remain unavailable to the

individual until the end of the retention period and

where applicable will be subject to clawback under the

provisions of the Clawback Policy.

Share Option Schemes

There were no long-term incentive plans in place during

the year other than the Group’s 2009 share option plans

(suspended as regards new grants) and the PSP.

The purpose of the share option plans is to encourage

identication of option holders with shareholders’

longer term interests. Under the plans, options have

been granted both to Directors and to employees of the

Group. The options were granted by the Committee on

a discretionary basis, based on the employees expected

contribution to the Group in the future. Non-executive

Directors are not eligible to participate in the plan.

In the ten year period ended 31 December 2021, the

total number of options granted, net of options lapsed

amounted to 4.4% of the issued share capital of the

Company at 31 December 2021.

A charge is recognised in the Consolidated Income

Statement in respect of share options issued to

executive Directors. The charge in respect of executive

Directors for the nancial year ended 31 December 2021

is €478,000 (2020: €715,000).

Report of the Remuneration Committee

Continued

112

Irish Continental Group

Clawback Policy

The Committee recognises that there could

potentially be circumstances in which performance

related pay (either annual bonuses, and / or longer

term incentive awards) is paid based on misstated

results or inappropriate conduct resulting in material

damage to the Company. Whilst the Company has

robust management and internal controls in place to

minimise any such risk, the Committee has in place

formal clawback arrangements for the protection

of the Company and its investors. The clawback of

performance related pay comprising the annual bonus

and PSP awards would apply in certain circumstances

including;

• a material misstatement of the Company’s nancial

results;

• a material breach of an executive’s contract of

employment;

• any wilful misconduct, recklessness, and / or fraud

resulting in serious injury to the nancial condition or

business reputation of the Company.

For executive Directors and members of the Executive

Management Team a minimum of 50 per cent of the

annual bonus will be invested in ICG equity which

must be held for a period of ve years, which will be

subject to clawback for a period of two years per the

circumstances noted above. Any awards granted under

the PSP will be subject to clawback during the vesting

period and any shares delivered on vesting will be

subject to clawback for an initial two year period per the

circumstances noted above.

Post-employment holdings

The Committee, in designing its performance pay

initiatives, as explained below, has ensured that

executive Directors and senior managers retain an

appropriate level of shareholding post-employment. For

the past nine years, the Company has had a structure

in place under which all equity awarded to executives

(either under the annual bonus plan or PSP) is placed

in a trust for a period of ve years. Executives are

restricted from disposing of those shares during this

ve-year period even in circumstances where they are

no longer in the employment of the Company. This

ensures strong alignment with investors and other

stakeholders’ post-employment and ensures that

departing executives retain an interest in the business

for a signicant period after leaving the Company.

Consequently, under the annual bonus scheme a

minimum of 50% of an annual award must be invested

in shares and held in trust for a holding period of ve

years. Similarly, any shares delivered pursuant to the

vesting of options under the PSP must normally be

held in trust for a holding period of ve years (for

a total time horizon of eight years). Therefore, at

termination executive Directors and senior management

participating in these schemes will contractually retain

an interest in shares for up to a period of ve years post-

employment, proportional to the amount of variable pay

awarded over the nal ve years of employment. At 31

December 2021, the following vested share awards were

held in employee trusts relating to executive Directors

and members of the executive management team with

release dates between January 2022 and January 2027.

No. shares*

Value

€m

Salary multiple

held Release prole

Eamonn Rothwell 2,484,434 11.2 19.4 times 1.5 years

David Ledwidge 167,828 0.8 2.4 times 3.1 years

Other executive management 758,325 3.4 4.1 times 2.9 years

* Includes FY 2021 remuneration invested in equity in 2022 and included in the Director’s single gure remuneration table at 31 December 2021

113

Corporate Governance

2021 Annual Report and Financial Statements

External Appointments

No executive director retained any remuneration receivable in relation to external board appointments.

Payments to former Directors

There were no pension payments or other payments for loss of oce paid to any former Directors during the year.

Employee Average Remuneration

The annual percentage change in payments to directors and an average full time equivalent employee across

the Group over the past ve years, together with the annual change in the ISEQ index and Company annual total

shareholder return were as follows;

2021 2020 2019 2018 2017

Directors 9.1% (58.4%) 1.1% (17.0%) 1 7.5 %

FTE Employee 19.9% (16.4%) 5.7% 3.2% (3.5%)

ISEQ 15.7% 4.0% 33.7% (20.8%) 9.4%

ICG TSR 0.6% (7.0%) 17.2% (24.6%) 30.7%

The payments to Directors and employees include base salaries, overtime, allowances, bonuses and Directors’ fees

but exclude employer costs expensed to the Income Statement relating to social welfare, pensions and share options.

External Advisers

The Committee’s independent advisor during the year

was Ellason LLP, who provide advice and external

market perspectives on remuneration for the Executive

Directors. During the year, this included advice on

short-term incentive design and provision of market

data on base salaries. Ellason LLP is a member of the

UK’s Remuneration Consultants Group and a signatory

to its Code of Conduct. Other than the services above,

Ellason LLP did not provide any other services to the

Group in the period from 1 January 2021 to the date of

this report.

Market price of shares

The closing price of the shares on Euronext Dublin on

31 December 2021 was €4.525 and the range during the

year was €3.84 to €4.82.

John Sheehan

Chair of the Remuneration Committee

9 March 2022

Report of the Remuneration Committee

Continued

114

Irish Continental Group

The Directors present their Report together with the

audited Financial Statements of the Group for the

nancial year ended 31 December 2021.

Results for the year and Business

Developments

Details of the results for the nancial year are set out

in the Consolidated Income Statement on page 132

and in the related notes forming part of the Financial

Statements. The fair review of the development of the

business of the Company and its subsidiaries is set out

in the Strategic Report on pages 4 to 75. This includes

a description of the principal activities, principal risks,

uncertainties, alternative performance measures and

environmental and employee matters.

Research and Development

The Group actively monitors developments in vessel

design and vessel availability with an emphasis on

product improvement, environmental eciency

and achievement of economies of scale. During the

reporting period the Group has worked with external

suppliers to adopt new technologies into its operations,

both on its vessels and onshore.

Dividend and Share Buyback

The Company did not pay any dividends during nancial

year 2021. The Company is proposing to pay a dividend

of 9.00 cent per ICG Unit on 7 July 2022 to shareholders

on the register at the close of business on 10 June 2022.

The cumulative payment to all shareholders is estimated

at €16.5 million. Irish dividend withholding tax will be

deducted where applicable.

The Company has adopted a progressive approach to

returning cash to shareholders, through a combination

of dividends and share buybacks. Against the

background of the Covid-19 pandemic and its eects on

the nancial performance of the Company, no dividends

have been paid during the years ended 31 December

2021 and 2020. The Company during nancial year

2021 bought back 4,565,000 (2020: 570,000) of its

shares, representing 2.4% (2020: 0.3%) of its issued

share capital at the beginning of the nancial year for a

total consideration of €19.8 million (2020: €1.7 million).

Further details are contained at note 20 to the nancial

statements.

Dividends are declarable at the discretion of the

Directors, and as with buybacks, following assessment

of the Company’s performance, its cash resources

and distributable reserves. At 31 December 2021, the

Company’s retained earnings amounted to €140.3

million all of which were considered to be distributable.

Board of Directors

The Company’s Constitution requires that one third of

the Directors are required to retire from oce at each

AGM of the Company. However, in accordance with the

provisions contained in the UK Corporate Governance

Code, the Board has decided that all Directors should

retire at the 2022 AGM and oer themselves for re-

election. Biographical details of the Directors are set

out on pages 78 to 79 of this report and the result of the

annual board evaluation is set out on pages 88 to 89.

During the year Catherine Duy and Brian O’Kelly

retired from the Board on 12 May 2021 and 17 December

2021 respectively. Lesley Williams and Dan Clague

joined the Board on 4 January 2021 and 26 August 2021

respectively.

Accounting Records

The Directors believe that they have complied with the

requirements of Section 281 to 285 of the Companies

Act 2014 with regard to maintaining adequate

accounting records by employing accounting personnel

with appropriate expertise and by providing adequate

resources to the nance function. The accounting

records of the Company are maintained at the

Company’s registered oce, Irish Continental Group

plc, Ferryport, Alexandra Road, Dublin 1, Ireland.

Non-Financial information

The Group is not subject to the reporting requirements

of the European Union (Disclosure of Non-Financial

and Diversity Information by certain large undertakings

and groups) Regulations 2017 (as amended).

Notwithstanding the Group provides certain non-

nancial information in its Sustainability and ESG

Report contained at pages 40 to 61.

Report of the Directors

115

Corporate Governance

2021 Annual Report and Financial Statements

Going Concern

The Financial Statements have been prepared on the

going concern basis. The Directors report that, after

making inquiries, they have a reasonable expectation

at the time of approving the Financial Statements,

that the Group and Company are going concerns,

having adequate nancial resources to continue in

operational existence for the foreseeable future. In

forming this view, the Directors have considered the

future cash requirements of the Group and Company

in the context of the economic environment of 2022,

the principal risks and uncertainties facing the Group

(pages 67 to 71), the Group’s 2022 budget plan and the

medium-term strategy of the Group, including capital

investment plans. The future cash requirements have

been compared to bank facilities which are available to

the Group and Company.

The introduction of measures in response to Covid-19

by governments in the jurisdictions in which we operate

services in March 2020 and which have continued in

various forms throughout the period to 31 December

2021 had a material eect on the Group’s nancial

results. This was particularly concentrated on our

passenger business where international travel was

aected resulting in a material reduction in passenger

revenues compared to pre-pandemic levels. The Group

has, despite the imposition of restrictions, continued

to operate its passenger services on all routes in

conjunction with its RoRo services. Following the ending

of the Brexit transition period, the Group experienced

changed travel patterns with a reduction in RoRo

carryings overall but revenue losses on the Ireland - UK

routes were signicantly replaced with higher yielding

revenues on our direct services on Ireland – France

routes.

Notwithstanding the downturn in protability due to

reduced passenger revenues, the Group’s RoRo, LoLo,

chartering and port stevedoring services operated

largely in line with expectations and the Group

generated cash from operations of €66.0 million

(2020: €51.2 million) in nancial year 2021, with free

cash ow after maintenance capital expenditures of

€43.3 million (2020: €35.3 million). The Group retained

cash balances and committed undrawn facilities at

31 December 2021 of €118.9 million. From 1 January

2022 maximum leverage covenants have reverted to

the previous contracted levels of 3 times EBITDA. The

leverage covenant level at 31 December 2021 calculated

in accordance with the lending agreements, was within

maximum permitted levels at 2.6 times EBITDA.

Government imposed travel restrictions have been

largely removed from the beginning of 2022 for

passengers who are fully vaccinated and passenger

volumes have increased over the prior year levels.

However there remains a risk of a resurgence of

Covid infections and the possibility of re-imposition of

restrictions in the future. All other revenue streams are

performing satisfactorily up to the date of the approval

of the nancial statements.

In making their going concern assessment, the Directors

have considered a number of trading scenarios

including a re-imposition of travel restrictions. This

modelling assumed a full schedule of services of

the conventional ferry eet and cash management

within the terms of the Group’s existing nancing

arrangements. Based on this modelling, the Directors

believe the Group retains sucient liquidity to operate

for at least the period up to March 2023.

Viability Statement

The Directors have assessed ICG’s viability over a

timeframe ofve years which the Directors believe

reects an appropriate timeframe for performing

realistic assessments of future performance given

the dynamic nature of our markets as regards the

competitive landscape, economic activity, long-

life assets and the continued capital investment

commitments related to our operations.

In making their assessment, the Directors took account

of ICG’s current nancial and operational positions

and contracted capital expenditure. These positions

were then rolled forward based on a set of assumptions

on expected outcomes to arrive at a base projection.

Sensitivity analysis was then performed on the base

projection against potential nancial and operational

impacts, in severe but plausible scenarios, of the

principal risks and uncertainties and the likely degree of

eectiveness of current and available mitigating actions

as set out on pages 67 to 71. It was further assumed

that functioning nancial markets exist throughout the

assessment period with bank lending available to the

Group on normal terms and covenants. The process,

which was performed by management, was subject to

examination and challenge by the Audit Committee and

the Board.

Report of the Directors

Continued

116

Irish Continental Group

Based on this assessment, the Directors have a

reasonable expectation that the Company and the

Group will be able to continue in operation and meet

all their liabilities as they fall due over the ve year

assessment period.

Directors’ Compliance Statement

The Directors acknowledge that they are responsible for

securing compliance by the Company with its Relevant

Obligations as dened by the Companies Act 2014 (the

Relevant Obligations).

The Directors conrm that they have drawn up and

adopted a compliance policy statement setting out the

Company’s policies that, in the Directors’ opinion, are

appropriate to the Company with respect to compliance

with its Relevant Obligations.

The Directors further conrm the Company has put in

place appropriate arrangements or structures that are,

in the Directors’ opinion, designed to secure material

compliance with its Relevant Obligations. For the year

ended 31 December 2021, the Directors have reviewed

the eectiveness of these arrangements and structures

during the nancial year to which this Report relates.

In discharging its obligations under the Companies

Act 2014, as set out above, the Directors have relied

on the advice of persons employed by the Company

or retained by it under a contract for services, who the

Directors believe to have the requisite knowledge and

experience to advise the Company on compliance with

its Relevant Obligations.

Disclosure of Information to Statutory Auditors

In accordance with the provisions of Section 330 of the

Companies Act 2014, each Director of the Company at

the date of approval of this report individually conrms

that;

• So far as they are aware, there is no relevant audit

information, as dened in the Companies Act 2014, of

which the Statutory Auditor is unaware; and

• They have taken all the steps that they ought to have

taken as a Director to make themselves aware of

any relevant audit information (as dened) and to

ensure that the Statutory Auditor is aware of such

information.

International Financial Reporting Standards

ICG presents its Financial Statements in accordance

with International Financial Reporting Standards

(IFRS) as adopted by the European Union. The Group

has adopted all of the new and revised Standards and

Interpretations issued by the International Accounting

Standards Board (IASB) and the International Financial

Reporting Interpretations Committee (IFRIC) of the

IASB that are relevant to its operations and eective for

accounting periods beginning on 1 January 2021 and

that have been adopted by the European Union.

Principal Risks and Uncertainties

The Group has a risk management structure in place

which is designed to identify, manage and mitigate

the threats to the business. The key risks facing the

Group include strategic, operational, nancial and

information technology and cyber risks arising in the

ordinary course of business. Further details of risks and

uncertainties are set out on pages 67 to 71.

117

Corporate Governance

2021 Annual Report and Financial Statements

Report of the Directors

Continued

Substantial Shareholdings

The latest notications of interests of 3 per cent or more in the share capital of the Company received by the

Company on or before 9 March 2022 and as at 31 December 2021 were as follows:

Benecial Holder as Notied

9 March 2022 31 December 2021

Number of Units % of Issued Units Number of Units % of Issued Units

Eamonn Rothwell 29,922,604 16.3% 29,922,604 16.0%

Wellington Management Company, LLP 18,714,065 10.2% 18,666,332 9.9%

Kinney Asset Management, LLC 13,469,752 7. 3% 11,444,752 6.1%

Ameriprise Financial Inc. 12,712356 6.9% 16,862,148 9.0%

Marathon Asset Management, LLP 10,899,056 5.9% 12,878,846 6.8%

FMR, LLC 6,229,035 3.4% 6,229,035 3.3%

Brewin Dolphin Wealth Management 5,895,833 3.2% 5,895,833 3.1%

Directors, Secretary and their Interests

The interests of the Directors and Secretary of the Company and their spouses and minor children in the share

capital of the Company at 31 December 2021 and 1 January 2021 all of which were benecial, were as follows:

31/12/2021

ICG Units

01/01/2021

ICG Units

31/12/2021

Share Options

01/01/2021

Share Options

Director

John B. McGuckian 296,140 296,140 - -

Eamonn Rothwell 30,095,384 30,030,114 1,495,000 1,412,000

David Ledwidge 149,968 130,758 459,500 404,500

John Sheehan 90,000 80,000 - -

Lesley Williams 10,000 - - -

Dan Clague - - - -

Company Secretary

Thomas Corcoran 272,780 246,064 506,000 475,500

Note: Lesley Williams was appointed to the Board on 4 January 2021. Dan Clague was appointed to the Board on 26 August 2021. Catherine Duy resigned

on 12 May 2021 and Brian O’Kelly resigned on 17 December 2021.

ICG Units are explained on page 208 of this report.

118

Irish Continental Group

Auditors

As required under Section 381(1)(b) of the Companies

Act 2014, the AGM agenda will include a resolution

authorising the Directors to x the remuneration of the

auditors.

Section 383 of the Companies Act 2014 provides for

the automatic re-appointment of the auditor of an

Irish company at a company’s AGM, unless the auditor

has given notice in writing of his unwillingness to be

re-appointed or a resolution has been passed at that

meeting appointing someone else or providing expressly

that the incumbent auditor shall not be re-appointed.

As outlined in the Audit Committee Report on page 98,

the company replaced its auditor Deloitte Ireland LLP

(“Deloitte”) following a competitive tender process.

Deloitte acted as auditor in relation to the nancial

statements for the year ended 31 December 2020.

Deloitte was not eligible for re-appointment due to the

length of its tenure as auditor to the Company. KPMG

were appointed auditor by the shareholders voting on

an ordinary resolution tabled at the AGM held on 12

May 2021.

Corporate Governance

The Group applies the principles and provisions of The

UK Corporate Governance Code (2018) as adopted

by Euronext Dublin and the UK Financial Conduct

Authority and of the Irish Corporate Governance Annex

(the Irish Annex) issued by Euronext Dublin. A Corporate

Governance Report is set out on pages 80 to 93 and is

incorporated into this Report by cross reference.

The Group has established an Audit Committee whose

Report is included at pages 94 to 99.

Key Performance Indicators

The Group uses a set of headline Key Performance

Indicators (KPIs) to measure the performance of its

operations. These KPIs are set out on pages 20 to 21 and

are incorporated into this report by cross reference.

Future Developments

We look forward to a recovery of our passenger markets

as Covid-19 with the easing of travel restrictions and

the introduction of the third vessel on the new Dover –

Calais service. We expect continued growth in the RoRo

freight market and a gradual return of trac from the

direct continental routes to landbridge.

Despite another dicult year for the Group and in

particular the Ferries Division, we take comfort from

the continued strength of our balance sheet, the

high quality and performance of our asset base and

improving the level of service provided to our customers

on the Dover – Calais service with the introduction of

a third vessel on the route. We see a continued strong

demand for capacity in 2022 in our container shipping

services operated by Eucon. The opening of Dublin

Ferryport Inland Depot at the Dublin Inland Port has

provided the opportunity to expand our empty depot

business while at the same time increase the capacity

at Dublin Ferryport Terminal. At our Belfast Container

Terminal facility in Belfast, we continue working on

the completion of the £40m re-investment project

with Belfast Harbour and assisting in the delivery of

additional terminal capacity to the market.

The post pandemic increase in global trade has

given rise to cost pressures particularly increased

ships charter and fuel costs will be passed through

the logistics chain in the form of increased rates.

Nevertheless, we look forward to continuing the growth

trend in EBIT which is testament to our investment in

the business in driving eciencies and nurturing close

customer relationships.

The Group notes the ever increasing expectations

and regulatory requirements to reduce the eects of

its operational footprint on the environment. While

the Group acknowledges that its operations have an

inevitable eect on the environment, reducing this

eect is embedded within the Group’s strategy through

achievement of eciencies and reected in our capital

investment program.

119

Corporate Governance

2021 Annual Report and Financial Statements

Events after the Reporting Period

No events have occurred between 31 December 2021

and the date of approval of these Financial Statements

which require to be separately reported.

Annual Report and Financial Statements

This Annual Report together with the Financial

Statements for the nancial year ended 31 December

2021 was approved by the Directors on 9 March 2022.

The Directors consider that the Annual Report and

Financial Statements, taken as a whole, is fair, balanced

and understandable and provides the information

necessary for shareholders to assess the Company’s

position and performance, business model and strategy.

Annual General Meeting

Notice of the AGM, which will be held on 11 May 2022,

will be notied to shareholders in April 2022.

On behalf of the Board

Eamonn Rothwell,

Director

David Ledwidge,

Director

9 March 2022

Registered Oce: Ferryport, Alexandra Road, Dublin 1,

Ireland.

Report of the Directors

Continued

120

Irish Continental Group

The Directors are responsible for preparing the

Annual Report and the Group and Company nancial

statements, in accordance with applicable law and

regulations.

Company law requires the Directors to prepare

Group and Company nancial statements for each

nancial year. Under that law, the Directors are

required to prepare the Group nancial statements

in accordance with IFRS as adopted by the European

Union and applicable law including Article 4 of the

IAS Regulation. The Directors have elected to prepare

the Company nancial statements in accordance with

FRS 101 Reduced Disclosure Framework as applied in

accordance with the provisions of Companies Act 2014.

Under company law the Directors must not approve the

Group and Company nancial statements unless they

are satised that they give a true and fair view of the

assets, liabilities and nancial position of the Group and

Company and of the Group’s prot or loss for that year.

In preparing each of the Group and Company nancial

statements, the Directors are required to:

• select suitable accounting policies and then apply

them consistently;

• make judgements and estimates that are reasonable

and prudent;

• state whether applicable Accounting Standards have

been followed, subject to any material departures

disclosed and explained in the nancial statements;

• assess the Group and Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern; and

• use the going concern basis of accounting unless they

either intend to liquidate the Group or Company or to

cease operations, or have no realistic alternative but

to do so.

The Directors are also required by the Transparency

(Directive 2004/109/EC) Regulations 2007 and the

Transparency Rules of the Central Bank of Ireland to

include a management report containing a fair review of

the business and a description of the principal risks and

uncertainties facing the Group.

The Directors are responsible for keeping adequate

accounting records which disclose with reasonable

accuracy at any time the assets, liabilities, nancial

position and prot or loss of the Company and which

enable them to ensure that the nancial statements

comply with the provision of the Companies Act

2014. The Directors are also responsible for taking

all reasonable steps to ensure such records are kept

by its subsidiaries which enable them to ensure that

the nancial statements of the Group comply with

the provisions of the Companies Act 2014 including

Article 4 of the IAS Regulation. They are responsible for

such internal controls as they determine is necessary

to enable the preparation of nancial statements

that are free from material misstatement, whether

due to fraud or error, and have general responsible

for safeguarding the assets of the Group, and hence

for taking reasonable steps for the prevention and

detection of fraud and other irregularities. The Directors

are also responsible for preparing a Directors’ Report

that complies with the requirements of the Companies

Act 2014.

The Directors are responsible for the maintenance and

integrity of the corporate and nancial information

included on the Group’s and Company’s website icg.

ie. Legislation in the Republic of Ireland concerning the

preparation and dissemination of nancial statements

may dier from legislation in other jurisdictions.

Responsibility statement as required by the

Transparency Directive and UK Corporate

Governance Code

Each of the Directors, whose names and functions are

listed on pages 78 to 79 of this Annual Report, conrm

that, to the best of each person’s knowledge and belief:

• The Group nancial statements, prepared in

accordance with IFRS as adopted by the European

Union and the Company nancial statements

prepared in accordance with FRS 101 Reduced

Disclosure Framework, give a true and fair view of the

assets, liabilities, and nancial position of the Group

and Company at 31 December 2021 and of the prot

or loss of the Group for the year then ended;

• The Directors’ Report contained in the Annual

Report includes a fair review of the development and

performance of the business and the position of the

Group and Company, together with a description of

the principal risk and uncertainties that they face; and

• The Annual Report and nancial statements, taken

as a whole, provides the information necessary to

assess the Group’s performance, business model and

strategy and is fair, balanced and understandable and

provides the information necessary for shareholders

to assess the Company's position and performance,

business model and strategy.

On behalf of the Board

Eamonn Rothwell,

Director

David Ledwidge,

Director

Directors’ Responsibility Statement

121

Corporate Governance

2021 Annual Report and Financial Statements

122

Irish Continental Group

Financial

Statements

Independent Auditors’ Report 124

Consolidated Income Statement 132

Consolidated Statement of Comprehensive Income 133

Consolidated Statement of Financial Position 134

Consolidated Statement of Changes in Equity 135

Consolidated Statement of Cash Flows 137

Notes to the Financial Statements 138

123

Financial Statements

2021 Annual Report and Financial Statements

Independent Auditors’ Report to the Members of

Irish Continental Group plc

Report on the audit of the nancial statements

Opinion

We have audited the nancial statements of Irish

Continental Group plc (‘the Company’) and its

consolidated undertakings (‘the Group’) for the year

ended 31 December 2021, contained within the

reporting package 635400FQKB6QXERQOC74-

2021-12-31-en.zip, which comprise the Consolidated

Income Statement, the Consolidated Statement of

Comprehensive Income, the Consolidated Statement

of Financial Position, the Consolidated Statement of

Changes in Equity, the Consolidated Statement of

Cash Flows; Company Statement of Financial Position,

Company Statement of Changes in Equity, and related

notes, including the summary of signicant accounting

policies set out in note 2. The nancial reporting

framework that has been applied in the preparation of

the Group nancial statements is Irish Law, including

the Commission Delegated Regulation 2019/815

regarding the single electronic reporting format (ESEF)

and International Financial Reporting Standards (IFRS)

as adopted by the European Union and, as regards the

Company nancial statements, Irish Law and FRS 101

Reduced Disclosure Framework issued in the United

Kingdom by the Financial Reporting Council.

In our opinion:

• the nancial statements give a true and fair view of

the assets, liabilities and nancial position of the

Group and Company as at 31 December 2021 and of

the Group’s loss for the year then ended;

• the Group nancial statements have been properly

prepared in accordance with IFRS as adopted by the

European Union;

• the Company nancial statements have been properly

prepared in accordance with FRS 101 Reduced

Disclosure Framework issued by the UK’s Financial

Reporting Council; and

• the Group and Company nancial statements have

been properly prepared in accordance with the

requirements of the Companies Act 2014 and, as

regards the Group nancial statements, Article 4 of

the IAS Regulation.

Basis for opinion

We conducted our audit in accordance with

International Standards on Auditing (Ireland) (ISAs

(Ireland)) and applicable law. Our responsibilities under

those standards are further described in the Auditor’s

Responsibilities section of our report. We believe that

the audit evidence we have obtained is a sucient and

appropriate basis for our opinion. Our audit opinion is

consistent with our report to the Audit Committee.

We were appointed as auditor by the shareholders

on 12 May 2021. This is our rst period as auditor. We

have fullled our ethical responsibilities under, and we

remained independent of the Group in accordance with,

ethical requirements applicable in Ireland, including

the Ethical Standard issued by the Irish Auditing and

Accounting Supervisory Authority (IAASA) as applied to

public interest entities. No non-audit services prohibited

by that standard were provided.

Conclusions relating to going concern

In auditing the nancial statements, we have concluded

that the Director’s use of the going concern basis

of accounting in the preparation of the nancial

statements is appropriate.

• We evaluated the Directors’ assessment of the entity’s

ability to continue to adopt the going concern basis of

accounting.

• Our evaluation of the Director’s assessment of the

Group’s and Company’s ability to continue to adopt

the going concern basis of accounting included:

• Evaluating the Group’s process around the going

concern assessment performed by management;

• Agreeing the underlying cash ow projections to

Board approved forecasts, assessing how these

forecasts are compiled, and assessing the accuracy of

management’s forecasts;

• Testing of the clerical accuracy of management’s

going concern model including the data used in their

downside scenario;

• Evaluating the key assumptions within management’s

forecasts;

• Assessing whether the plausible downside scenario

prepared by management appropriately considered

the principal risks facing the business;

• Evaluating the feasibility of management’s mitigating

actions in the plausible downside scenario; -

Substantiation of certain nancial resources available

to the Group;

• Evaluating management’s assessment of the Group’s

ability to comply with debt covenants; and

• Assessing the appropriateness of the going concern

disclosures by evaluating the consistency with

management’s assessment and for compliance with

the relevant reporting requirements.

124

Irish Continental Group

Valuation of vessels – Group and Company

Group - €294.1m (2020 - €277.7m); Company – €144.4m (2020 - €150.1m)

Refer to note 2 (accounting policy), note 3 (Critical accounting judgements and key sources of estimation

uncertainty) and notes 13 and 40 (Group and Company nancial disclosures respectively)

The key audit matter How the matter was addressed in our audit

Property, plant and equipment

amounted to €328.2 million (Company:

€144.6 million) as of 31 December 2021,

of which €294.1 million (Company:

€144.4 million) related to owned vessels.

The vessel-related depreciation charge

for the year ended 31 December 2021

was €27.8 million (Company: €5.7

million).

We identied the valuation of vessels as

a key audit matter. This matter consists

of:

1. the evaluation of the key assumptions

used in estimating the periodic

depreciation of vessels, including the

key assumptions relating to useful

economic life and expected residual

values; and

2. the identication of the Group’s ferry

eet as a single Cash Generating Unit

and the assessment of its recoverable

value as part of the impairment

review, including the selection of

key assumptions regarding future

passenger revenue and future costs.

We obtained and documented an understanding of the Group’s process

in place and tested the design and implementation of the relevant control

in place over the Group’s process to value vessels including the control

relating to the development of the assumptions in relation to the useful

economic life and expected residual values together with the calculation

of the recoverable values of vessels.

In respect of part a) of the key audit matter, we assessed the estimated

useful lives and estimated residual values assumptions by comparing;

• the estimated useful lives to the Group’s own experience of disposals

of vessels and to industry data relating to the lives of ships that were

scrapped during the nancial year, and

• the estimated residual values of vessels to industry data relating to the

value of scrap metal.

In respect of part b) of the key audit matter, we assessed the accuracy

of the Group’s calculations used in assessing those assets subject

to impairment testing and considered whether the assumptions

and methodology applied to the assets tested were reasonable and

appropriate.

Based on the work we have performed, we have not

identied any material uncertainties relating to events

or conditions that, individually or collectively, may

cast signicant doubt on the Group or the Company’s

ability to continue as a going concern for a period of at

least twelve months from the date when the nancial

statements are authorised for issue.

In relation to the Group and the Company’s reporting on

how they have applied the UK Corporate Governance

Code and the Irish Corporate Governance Annex, we

have nothing material to add or draw attention to in

relation to the Directors’ statement in the nancial

statements about whether the Directors considered

it appropriate to adopt the going concern basis of

accounting.

Our responsibilities and the responsibilities of the

Directors with respect to going concern are described

in the relevant sections of this report.

Key audit matters: our assessment of risks of

material misstatement

Key audit matters are those matters that, in our

professional judgment, were of most signicance in

the audit of the nancial statements and include the

most signicant assessed risks of material misstatement

(whether or not due to fraud) identied by us, including

those which had the greatest eect on: the overall audit

strategy; the allocation of resources in the audit; and

directing the eorts of the engagement team. These

matters were addressed in the context of our audit of

the nancial statements as a whole, and in forming

our opinion thereon, and we do not provide a separate

opinion on these matters.

In arriving at our audit opinion above, the key audit

matters, in decreasing order of audit signicance, were

as follows:

125

Financial Statements

2021 Annual Report and Financial Statements

The key audit matter How the matter was addressed in our audit

We evaluated the key assumptions used in the Group’s value in

use calculations with regard to those assets subject to impairment

assessment by:

• Challenging the Group’s identication of its ferry eet as a single

Cash Generating Unit by assessing its basis and conclusions for same

including the nature of the assets, the interdependence of the assets

and the routes they are used for, and the transferability of the asset

between routes;

• Assessing the reasonability of the key assumptions made by the Group

regarding future passenger revenue and future costs;

• Comparing the future cash ow projections used in the value in use

calculation to the projections used in the Group’s going concern and

Viability Statement analyses;

• Assessing other inputs used in the value in use calculation in respect of

future revenues, costs and other cash ows by comparing them to past

performance and known contracted future cash ows, and performing

reasonability assessments on uncontracted future cash ows;

• Challenging the completeness of future cash outows given known

future industry developments;

• Assessing the reasonability of the terminal values included in the value

in use calculation;

• Assessing the reasonability of the discount rate used in calculating the

present value of the future cash ows with reference to the Group’s

cost of capital; and

• We performed sensitivity analysis over the Group’s assumptions with

regard to cash ows and discount rate, to assess the impact of changes

to those assumptions on the Group’s determination of the recoverability

of vessels.

We also reviewed asset valuations obtained from experts engaged by the

Group and considered whether they supported the Group’s assessment of

impairment at 31 December 2021.

We evaluated the completeness, accuracy and relevance of disclosures

required by IAS 36, including disclosures about sensitivities and major

sources of estimation uncertainty.

As a result of our work performed, we found that the judgements made

by the Group in relation to:

• the key assumptions used in estimating the periodic depreciation

of vessels relating to the expected useful life, the expected residual

values; and

• the identication of the Group’s ferry eet as a single Cash Generating

Unit and assessment of its recoverable value including key assumptions

regarding future passenger revenue and future costs

were reasonable and we found the related disclosures to be appropriate.

Independent Auditors’ Report to the Members of

Irish Continental Group plc

Continued

126

Irish Continental Group

Valuation of net dened benet pension asset – Group only

Refer to note 2 (accounting policy), note 3 (Critical accounting judgements and key sources of estimation

uncertainty) and note 32 (nancial disclosures)

Valuation of the net dened benet pension asset of €5.3m consisting of pension assets of €6.7m and decits of

€1.4m (2020 – net pension liability of €1.2m consisting of pension assets of €1.0m and decits of €2.2m)

The key audit matter How the matter was addressed in our audit

The Group operates a number of

dened benet pension schemes.

The valuation of such schemes

requires judgement and is subject

to volatility arising from movements

in actuarial assumptions and the

selection of same.

We consider that the valuation of

the net dened benet pension

assets includes estimation

uncertainty in relation to the key

assumptions used, in particular

the discount rate. In addition,

the valuation of the net dened

benet pension asset is sensitive

to changes in those assumptions

applied.

We obtained and documented our understanding of the process in place

to value the dened benet pension schemes, including the selection of

actuarial assumptions used, in particular the discount rate used.

We tested the design and implementation of the controls in place over

ensuring the completeness and accuracy of information provided to

the actuary, in order for them to perform their valuation of the pension

schemes, and the selection of the discount rate.

We made inquiries of management to understand the key assumptions

made in calculating the net dened benet pension asset.

We challenged, with the support of our actuarial specialist, the key

actuarial assumptions applied in the calculation of the valuation of

the dened benet pension asset, in particular the key discount rates

assumptions. We also assessed the ination rate and mortality/life

expectancies used. This included a comparison of these assumptions

against externally available data. We also considered the adequacy of the

Group’s disclosures in respect of the sensitivity of the net dened benet

pension asset to these assumptions.

We found the assumptions used in, and the resulting valuation of the

net dened benet pension asset to be reasonable and the related

disclosures to be adequate.

127

Financial Statements

2021 Annual Report and Financial Statements

Company key audit matter

In addition to the two matters noted above which applied to the Group and Company, the following additional key

audit matter applied to the Company only:

Valuation of investment in subsidiaries €14.4m (2020 - €14.7m)

Refer to note 38 (accounting policy) and note 43 (nancial disclosures)

The key audit matter How the matter was addressed in our audit

Investments in subsidiary

undertakings are carried on the

Company balance sheet at cost

less impairment. There is a risk

of impairment in respect of the

carrying value of these investments

if the future performance and

cashows of such subsidiaries

is not sucient to support the

carrying value of the Company’s

investments.

We focused on this matter due

to the materiality of the balance

in the context of the Company

balance sheet and the uncertainty

associated with assumptions used

in forecasting future performance

and cashows.

We obtained and documented our understanding of management’s

process in place for monitoring the carrying values of investments in

subsidiaries.

We considered management’s assessment of impairment indicators.

We compared the carrying value of investments in the Company’s

subsidiary undertakings to the net assets of each subsidiary and to the

market capitalisation of the Company.

We considered the audit procedures performed in relation to the

impairment testing performed by management over the carrying value

of vessels as outlined in the key audit matter above, in particular the

assumptions relating to the forecasting of future performance and

cashows.

As a result of our audit work performed, we found that management’s

assessment of the valuation of investments in subsidiary undertakings to

be appropriate.

Our application of materiality and an overview

of the scope of our audit

Materiality for the Group nancial statements as a

whole was set at €2.5 million. This has been calculated

as 0.75% of the benchmark of total revenue for the year

ended 31 December 2021, which we have determined in

our professional judgement, to be one of the principal

benchmarks within the nancial statements relevant to

users in assessing the nancial statements of the Group.

We report to the Audit Committee all corrected and

uncorrected audit misstatements we identied in our

audit in excess of €150,000, in addition to other audit

misstatements below that threshold that we believe

warranted reporting on qualitative grounds. We applied

materiality to assist us determine what risks were

signicant risks and the procedures to be performed.

Materiality for the Company nancial statements was

set at €1.5 million, determined with reference to a

benchmark of the Company’s total assets of which it

represents 0.5%.

Of the Group’s 14 reporting components, we subjected

all to full scope audits for group purposes. The structure

of the Group’s nance function is such that certain

transactions and balances are accounted for by the

central Group nance team, with the remainder

accounted for in the Group’s components. We

performed comprehensive audit procedures, including

those in relation to the key audit matters as set out

above, on those transactions accounted for at Group

and component level. Our audits covered 100% of

total Group revenue and 100% of Group total assets,

including 100% of the Company’s revenue and total

assets. The work on all components was performed by

the Group team.

The audits undertaken for Group reporting purposes

at the key reporting components were all performed

to component materiality levels. These component

materiality levels were set individually for each

component and ranged from €20,000 to €1.6 million.

The Group audit team were also auditors to all of the

Group’s signicant components.

Independent Auditors’ Report to the Members of

Irish Continental Group plc

Continued

128

Irish Continental Group

Other information

The Directors are responsible for the preparation of

the other information presented in the Annual Report

together with the nancial statements. The other

information comprises the information included in the

Directors’ Report, the Strategic Report, the Corporate

Governance Report and the Investor and Other

Information.

The nancial statements and our auditor’s report

thereon do not comprise part of the other information.

Our opinion on the nancial statements does not cover

the other information and, accordingly, we do not

express an audit opinion or, except as explicitly stated

below, any form of assurance conclusion thereon.

Our responsibility is to read the other information and,

in doing so, consider whether, based on our nancial

statements audit work, the information therein is

materially misstated or inconsistent with the nancial

statements or our audit knowledge. Based solely on that

work we have not identied material misstatements in

the other information.

Based solely on our work on the other information

undertaken during the course of the audit, we report

that:

• we have not identied material misstatements in the

Directors’ report;

• in our opinion, the information given in the Directors’

report is consistent with the nancial statements; and

• in our opinion, the Directors’ report has been

prepared in accordance with the Companies Act

2014.

Disclosures of principal risks and longer-term

viability

Based on the knowledge we acquired during our

nancial statements audit, we have nothing material to

add or draw attention to in relation to:

• the Principal Risks disclosures describing these risks

and explaining how they are being managed and

mitigated;

• the Directors’ conrmation within the Viability

Statement that they have carried out a robust

assessment of the principal risks facing the Group,

including those that would threaten its business

model, future performance, solvency and liquidity;

and

• the Directors’ explanation in the Viability Statement

of how they have assessed the prospects of the

Group, over what period they have done so and why

they considered that period to be appropriate, and

their statement as to whether they have a reasonable

expectation that the Group will be able to continue in

operation and meet its liabilities as they fall due over

the period of their assessment, including any related

disclosures drawing attention to any necessary

qualications or assumptions.

Other corporate governance disclosures

We are required to address the following items and

report to you in the following circumstances:

• Fair, balanced and understandable: if we have

identied material inconsistencies between the

knowledge we acquired during our nancial

statements audit and the Directors’ statement that

they consider that the Annual Report and nancial

statements taken as a whole is fair, balanced and

understandable and provides the information

necessary for shareholders to assess the Group’s

position and performance, business model and

strategy;

• Report of the Audit Committee: if the section of

the Annual Report describing the work of the Audit

Committee does not appropriately address matters

communicated by us to the Audit Committee;

• Statement of compliance with UK Corporate

Governance Code: if the Directors’ statement does

not properly disclose a departure from provisions of

the UK Corporate Governance Code specied by the

Listing Rules of Euronext Dublin for our review.

• If the Directors’ statement relating to Going Concern

required under the Listing Rules of Euronext Dublin

set out on page 116 is materially inconsistent with our

audit knowledge.

We have nothing to report in these respects.

129

Financial Statements

2021 Annual Report and Financial Statements

In addition as required by the Companies Act 2014, we

report, in relation to information given in the Corporate

Governance Statement on pages 80 to 93, that:

• based on the work undertaken for our audit, in

our opinion, the description of the main features

of internal control and risk management systems

in relation to the nancial reporting process and

information relating to voting rights and other matters

required by the European Communities (Takeover

Bids (Directive 2004/EC) Regulations 2006 and

specied for our consideration, is consistent with

the nancial statements and has been prepared in

accordance with the Act;

• based on our knowledge and understanding of the

Company and its environment obtained in the course

of our audit, we have not identied any material

misstatements in that information. and

• the Corporate Governance Statement contains

the information required by the European Union

(Disclosure of Non-Financial and Diversity Information

by certain large undertakings and groups) Regulations

20 17.

We also report that, based on work undertaken for our

audit, the information required by the Act is contained

in the Corporate Governance Statement.

Our opinions on other matters prescribed by the

Companies Act 2014 are unmodied

We have obtained all the information and explanations

which we consider necessary for the purpose of our

audit.

In our opinion, the accounting records of the Company

were sucient to permit the nancial statements

to be readily and properly audited and the nancial

statements are in agreement with the accounting

records.

We have nothing to report on other matters on which

we are required to report by exception

The Companies Act 2014 requires us to report to you if,

in our opinion:

• the disclosures of Directors’ remuneration and

transactions required by Sections 305 to 312 of the

Act are not made;

• the Company has not provided the information

required by Section 1110N in relation to its

remuneration report for the nancial year 31

December 2020.

We have nothing to report in this regard.

The Listing Rules of Euronext Dublin require us to

review:

• the Directors’ Statement in relation to going concern

and longer-term viability;

• the part of the Corporate Governance Statement on

page 82 relating to the Company’s compliance with

the provisions of the UK Corporate Governance Code

and the Irish Corporate Governance Annex specied

for our review; and

• certain elements of disclosures in the report to

shareholders by the Board of Directors’ Remuneration

Committee.

We have nothing to report in this regard.

Independent Auditors’ Report to the Members of

Irish Continental Group plc

Continued

130

Irish Continental Group

Respective responsibilities and restrictions on

use

Directors’ responsibilities

As explained more fully in their statement set out

on page 121, the Directors are responsible for: the

preparation of the nancial statements including being

satised that they give a true and fair view; such internal

control as they determine is necessary to enable the

preparation of nancial statements that are free from

material misstatement, whether due to fraud or error;

assessing the Group and Company’s ability to continue

as a going concern, disclosing, as applicable, matters

related to going concern; and using the going concern

basis of accounting unless they either intend to liquidate

the Group or the Company or to cease operations, or

have no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance

about whether the nancial statements as a whole are

free from material misstatement, whether due to fraud

or error, and to issue our opinion in an auditor’s report.

Reasonable assurance is a high level of assurance,

but does not guarantee that an audit conducted in

accordance with ISAs (Ireland) will always detect a

material misstatement when it exists. Misstatements

can arise from fraud, other irregularities or error and

are considered material if, individually or in aggregate,

they could reasonably be expected to inuence the

economic decisions of users taken on the basis of the

nancial statements. The risk of not detecting a material

misstatement resulting from fraud or other irregularities

is higher than for one resulting from error, as they

may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control

and may involve any area of law and regulation and not

just those directly aecting the nancial statements.

A fuller description of our responsibilities is provided on

IAASA’s website at http://www.iaasa.ie/Publications/

Auditing-standards/International-Standards-on-

Auditing-for-use-in-Ire/Description-of-the-auditor-s-

responsibilities-for.

The purpose of our audit work and to whom we owe our

responsibilities

Our report is made solely to the Company’s members,

as a body, in accordance with Section 391 of the

Companies Act 2014. 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 our report, or for the opinions we

have formed.

Colm O’Sé

for and on behalf of

KPMG

Chartered Accountants, Statutory Audit Firm

1 Stokes Place

St. Stephen’s Green

Dublin 2

10 March 2022

131

Financial Statements

2021 Annual Report and Financial Statements

	Notes	2021	2020

Revenue	4	334.5	277.1
Depreciation, impairment and amortisation	9	(52.5)	(41.3)
Employee benefits expense	5	(20.8)	(18.0)
Other operating expenses	9	(261.4)	(217.0)
Operating (loss) / profit before non-trading items		(0.2)	0.8
Non-trading items	10	-	(11.2)
Operating loss		(0.2)	(10.4)

Finance income	6	0.1	0.2
Finance costs	7	(4.0)	(7.8)
Loss before tax		(4.1)	(18.0)

Income tax expense	8	(0.8)	(1.0)

Loss for the financial year: all attributable to equity holders of the parent	9	(4.9)	(19.0)

Earnings per share – expressed in euro cent per share
Basic	12	(2.6c)	(10.2c)
Diluted	12	(2.6c)	(10.2c)

		2021	2020

Assets
Non-current assets
Property, plant and equipment	13	328.2	313.5
Intangible assets	14	1.9	1.2
Right-of-use assets	15	57.2	38.3
Retirement benefit surplus	32 iv	6.7	1.0
Finance lease receivable	16	13.6	16.6
Deferred tax asset	25	0.1	0.3
		407.7	370.9
Current assets
Inventories	17	3.8	1.9
Trade and other receivables	18	61.9	55.7
Cash and cash equivalents	19	38.5	150.4
		104.2	208.0
Total assets		511.9	578.9

Equity and liabilities
Equity
Share capital	20	11.9	12.2
Share premium	21	20.4	19.7
Other reserves	21	(8.1)	(9.3)
Retained earnings		225.5	243.3
Equity attributable to equity holders of the parent		249.7	265.9

Non-current liabilities
Borrowings	22	115.8	113.1
Lease liabilities	23	37.5	27.8
Deferred tax liabilities	25	1.3	0.5
Provisions	27	0.2	0.2
Retirement benefit obligation	32 iv	1.4	2.2
		156.2	143.8
Current liabilities
Borrowings	22	7.3	87.3
Lease liabilities	23	20.1	10.7
Trade and other payables	26	75.5	69.2
Provisions	27	3.1	2.0
		106.0	169.2
Total liabilities		262.2	313.0
Total equity and liabilities		511.9	578.9

			Undenominated	Share

Balance at 1 January 2021	12.2	19.7	7.5	5.1	(21.9)	243.3	265.9

Loss for the financial year	-	-	-	-	-	(4.9)	(4.9)
Other comprehensive income	-	-	-	-	1.3	6.2	7.5
Total comprehensive income for the financial year	-	-	-	-	1.3	1.3	2.6

Employee share-based payments expense	-	-	-	1.3	-	-	1.3
Share issue	-	0.7	-	-	-	-	0.7
Share buyback	(0.3)	-	0.3	-	-	(19.8)	(19.8)
Settlement of employee equity plans through market purchase	-	-	-	-	-	(1.0)	(1.0)
Transferred to retained earnings on exercise of share options	-	-	-	(1.7)	-	1.7	-
Reserve movements in the year	(0.3)	0.7	0.3	(0.4)	1.3	(17.8)	(16.2)

Balance at 31 December 2021	11.9	20.4	7.8	4.7	(20.6)	225.5	249.7

			Undenominated	Share

Balance at 1 January 2020	12.2	19.5	7.5	5.9	(20.7)	263.5	287.9

Loss for the financial year	-	-	-	-	-	(19.0)	(19.0)
Other comprehensive income	-	-	-	-	(1.2)	(0.5)	(1.7)
Total comprehensive income for the financial year	-	-	-	-	(1.2)	(19.5)	(20.7)

Employee share-based payments expense	-	-	-	1.9	-	-	1.9
Share issue	-	0.2	-	-	-	-	0.2
Share buyback	-	-	-	-	-	(1.7)	(1.7)
Settlement of employee equity plans through market purchase	-	-	-	-	-	(1.7)	(1.7)
Transferred to retained earnings on exercise of share options	-	-	-	(2.7)	-	2.7	-
Reserve movements in the year	-	0.2	-	(0.8)	(1.2)	(20.2)	(22.0)

Balance at 31 December 2020	12.2	19.7	7.5	5.1	(21.9)	243.3	265.9

		2021	2020

Loss for the financial year		(4.9)	(19.0)
Adjustments for:
Finance costs (net)		3.9	7.6
Income tax expense		0.8	1.0
Retirement benefit scheme movements	34	0.6	9.3
Depreciation of property, plant and equipment		31.9	29.3
Amortisation of intangible assets		0.3	0.2
Depreciation of right-of-use assets		20.3	9.5
Impairment charges		-	2.3
Share-based payment expense less market purchase cost		0.3	0.2
Increase in provisions		1.1	0.2
Working capital movements	34	11.7	10.6
Cash generated from operations		66.0	51.2
Income taxes paid		(0.8)	(1.4)
Interest paid		(8.4)	(3.7)
Net cash inflow from operating activities		56.8	46.1

Cash flow from investing activities
Proceeds on disposal of property, plant and equipment		2.8	4.9
Lease inception costs		(0.3)	-
Return of vessel contract deposit		-	33.0
Purchases of property, plant and equipment and intangible assets	34	(55.2)	(30.1)
Net cash (outflow) / inflow from investing activities		(52.7)	7.8

Cash flow from financing activities
Share buyback		(19.8)	(1.7)
Repayments of leases liabilities	34	(19.8)	(9.2)
Repayments of bank loans		(87.5)	(3.7)
Drawdown of bank loans		10.0	-
Proceeds on issue of ordinary share capital		0.7	0.2
Net cash (outflow) from financing activities		(116.4)	(14.4)

Net (decrease) / increase in cash and cash equivalents		(112.3)	39.5
Cash and cash equivalents at beginning of year		150.4	110.9
Effect of foreign exchange rate changes		0.4	-
Cash and cash equivalents at end of year	19	38.5	150.4

1. General information

Irish Continental Group plc (ICG) is a public limited company incorporated in Ireland (Company registration number:

41043) and listed on Euronext Dublin and the London Stock Exchange. The addresses of its registered oce and

principal places of business are disclosed on the inside back cover of the Annual Report.

The Group carries passengers and cars, RoRo freight and container LoLo freight, on routes between Ireland, Britain

and Continental Europe. The Group also operates container terminals in the ports of Dublin and Belfast.

The Company charters vessels and is the holding Company of a number of subsidiary companies.

2. Summary of accounting policies

Statement of Compliance

The consolidated and the Company nancial statements have been prepared in accordance with International

Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and

interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the

Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS Regulation. The Company

has availed of the exemption in Section 304 of the Companies Act 2014 and has not presented the Company Income

Statement, which forms part of the Company’s nancial statements, to its members and the Registrar of Companies.

Basis of preparation

The Financial Statements have been prepared on the going concern basis and the historical cost convention, as

modied by:

• measurement at fair value of share based payments at initial date of award;

• recognition of the dened benet surplus as plan assets less the present value of the dened benet obligation

All gures presented in the Financial Statements are in euro and are rounded to the nearest one hundred thousand

except where otherwise indicated.

Basis of consolidation

The Consolidated Financial Statements incorporate the nancial statements of the Company and entities controlled

by the Company (its subsidiaries) made up to 31 December each year. Control is achieved where the Company:

• has the power over the investee;

• is exposed, or has rights, to variable return from its involvement with the investee; and

• has the ability to use its power to aect its return.

In assessing control, potential voting rights that are currently exercisable or convertible are taken into account.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the

Company loses control of the subsidiary. Specically, the results of subsidiaries acquired or disposed of during the

year are included in the Consolidated Income Statement from the date the Company gains control until the date the

Company ceases to control the subsidiary.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Notes Forming Part of the Consolidated

Financial Statements

for the nancial year ended 31 December 2021

138

Irish Continental Group

New standards and interpretations

New and revised accounting standards and interpretations have been issued which are set out below. These will be

adopted by the Group from the eective dates.

Standards eective for the Group from 1 January 2021

Standard Description Eective date for periods commencing

IFRS 9, IAS 39, IFRS 7, IFRS 4 and

IFRS 16 (amendments)

Interest Rate Benchmark Reform 1 January 2021

IFRS 16 (amendment) Covid-19 related rent concessions 1 June 2020

The above amended standards has been applied in the preparation of the nancial statements for the year ended 31

December 2021 but did not have any material impact on the results or nancial position of the Group.

Standards eective for the Group from 1 January 2022 or later

Standard Description Eective date for periods commencing

IAS 1 (amendments) Classication of liabilities as

current or non-current

1 January 2024 *

IAS 1 (amendments) Disclosure of Accounting Policies 1 January 2023 *

IFRS 17 Insurance Contracts 1 January 2023

IFRS 4 (amendments) Extension of the Temporary

Exemption from Applying IFRS 9

1 January 2023

IAS 12 (amendment) Income Taxes – Deferred Tax

related to Assets and Liabilities

arising from a Single Transaction

1 January 2023 *

IAS 16 (amendments) Property, Plant and Equipment -

Proceeds before Intended Use

1 January 2022

Annual Improvements to IFRS

Standards 2018–2020

1 January 2022

IFRS 3 (amendments) Reference to the Conceptual

Framework

1 January 2022

IAS 37 (amendments) Onerous Contracts - Cost of

Fullling a Contract

1 January 2022

IAS 8 (amendments) Denition of Accounting Estimates 1 January 2023 *

* Not yet endorsed by the EU

2. Summary of accounting policies – continued

139

Financial Statements

2021 Annual Report and Financial Statements

The above standards and amendments to standards have not been applied in the preparation of the nancial

statements for the year ended 31 December 2021. They are not expected to have a material impact on the results or

nancial position of the Group when applied in future periods.

Accounting policies applied in the preparation of the Financial Statements for the nancial year ended 31 December

2021:

Revenue recognition

Revenue is measured based on the consideration specied in a contract concluded with a customer and excludes any

amounts collected on behalf of third parties including taxes.

The principal activities from which the Group generates its revenue are set out below.

Ferries Division

Product or Service Nature and satisfaction of performance obligation

Passenger Transport Passenger revenue is recognised over time as services are provided. Contracts are

concluded during the booking process with a high degree of probability of collection

of the sales proceeds. Sales proceeds are recognised as deferred revenue which

the single performance obligation from the departure point to destination point are

subsequently released to revenue over the elapsed time taken to complete the single

performance obligation being the provision of transport between the departure point

and destination point. The price is xed at the time of booking. Where a customer

is eligible to participate in loyalty programmes, the price is allocated based on the

relative stand-alone selling price or expected selling price based on company data.

Deferred revenue is reduced for any refund paid to a customer where the Company

is unable to complete the performance obligation. Ticket breakage, i.e. deferred

untravelled revenue for no shows, is recognised in full once the original booked travel

date has expired based on a no refund policy.

RoRo Freight RoRo freight revenue is recognised over time as services are provided. Contracts are

concluded during the booking process with a high degree of probability of collection

of the sales proceeds. Sales proceeds are recognised as deferred revenue which are

subsequently released to revenue over the elapsed time taken to complete the single

performance obligation being the provision of transport between the departure

point and destination point. The price is xed at the time of booking or is otherwise

variable if the customer has an active rebate arrangement. The contract price less

the estimates of the most probable rebate amount is allocated to the performance

obligation with the rebate amount retained in deferred revenue until paid.

Onboard Sales Revenue from sales in bars and restaurants is recognised at the time of sale. The

Group recognises a single contract for all goods and services in a transaction basket

at the time of transaction with payment received at the same time. There is a single

identiable obligation to transfer title with the price xed at the time of transaction.

Retail Concessions Revenues earned from retail concessions is recognised over time based on declarations

received up to the reporting date. For each concession the Group recognises a single

contract involving the grant of a licence or creation of a right to provide services

onboard vessels creating a single identiable obligation. The price is variable being

based on a prot share model.

Notes Forming Part of the

Consolidated Financial Statements

Continued

2. Summary of accounting policies – continued

140

Irish Continental Group

Container and Terminal Division

Product or Service Nature and satisfaction of performance obligation

Container Shipping LoLo container shipping revenue is recognised over time as services are provided.

Contracts are concluded during the booking process with a high degree of probability

of collection of the sales proceeds. Sales proceeds are recognised as deferred revenue

which are subsequently released to revenue over the time based on eort expended on

each activity (collection, shipping and delivery) undertaken in fullment of the single

performance obligation being the provision of transport between the departure point and

destination point. The price is xed at the time of booking.

Stevedoring Stevedoring revenue is recognised over time in line with the number of containers loaded

or discharged onto vessels in fullment of obligations. Contracts are concluded with

customers covering services to be provided over time with a high degree of probability

of collection of the sales proceeds. Sales proceeds are recognised once the performance

obligations are satised i.e. the loading or discharge of a vessel. The price is xed at the

time of contract or is otherwise variable if the customer has an active rebate arrangement.

The contract price less the best estimate of the most probable rebate amount is allocated

to the performance obligation with the rebate amount retained in deferred revenue. As

rebates are paid to customers, amounts included in deferred revenue are released with

experience adjustments included as revenue.

Leasing

Identifying a lease

Where a contract conveys the right to control the use of an identied asset for a period of time in exchange for

consideration it is treated as a lease.

a) As Lessee

Where the Group acts as a lessee, the Group recognises a right-of-use asset and lease liability at the lease

commencement date, which is the date the underlying asset is available for our use.

Right-of-use assets are initially measured at cost plus initial direct costs incurred in arranging a lease, and

subsequently measured at cost less any accumulated depreciation and impairment losses (if any) and adjusted for

certain remeasurement of lease liabilities. The recognised right-of-use assets are depreciated on a straight-line basis

over the shorter of their estimated useful lives and the lease term. Right-of-use assets are subject to impairment

under IAS 36 Impairment of assets. Right-of-use assets are presented as a separate line item in the Statement of

Financial Position.

Lease liabilities are initially measured at the present value of lease payments that are not paid at the commencement

date, discounted using the incremental borrowing rate if the interest rate implicit in the lease is not readily

determinable. The lease liability is subsequently increased by the interest cost on the lease liability and decreased

by lease payments made. In the Consolidated Statement of Cash Flows the payments made are separated into

the principal portion (presented within nancing activities), and interest (presented in operating activities). Lease

liabilities are remeasured and a corresponding adjustment is made to right of use assets if there is a change in future

lease payments, a change in the lease term, or as appropriate, a change in the assessment of whether an extension

option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.

The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or

less from the commencement date. The Group also applies the lease of low-value assets recognition exemption

to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets

are recognised as an expense on a straight-line basis over the term of the lease. The Group also avails of practical

expedients permitted under IFRS 16 Leases. The portfolio approach is applied to leases of containers where a master

leasing agreement exists and in relation to the time charter of vessels does not separate non-lease components from

lease components treating each time charter as a single component.

2. Summary of accounting policies – continued

141

Financial Statements

2021 Annual Report and Financial Statements

b) As Lessor

The Group treats bareboat hire purchase sale agreements in relation to the disposal of vessels as nance leases

where it transfers substantially all the risks and rewards incidental to ownership of the underlying vessel to the

charterer. The sales proceeds recognised at the commencement of the lease term by the Group are that implied by

the fair value of the asset, which together with any initial direct costs equal to the net investment in the lease and

are presented as a nance lease receivable in the Statement of Financial Position. Loss allowances on the nance

lease receivables are estimated at an amount equal to lifetime expected credit losses. Following initial measurement

nance lease income is recognised in revenue and is allocated to accounting periods so as to reect a constant

periodic rate of return on the outstanding net investment.

Lease payments receivable arising from the grant of a right-of-use vessel which do not meet the requirement of a

nance lease are recognised as revenue on a straight-line basis over the term of the relevant charter. The provision of

operation and maintenance services is recognised on a daily basis at the applicable daily rate under the terms of the

charter.

Concession and Licence agreements

Payments made under concession arrangements, where the Group benets from the use of an asset or right and the

obligation to make the payments has not been recognised in the Statement of Financial Position as a lease obligation,

are charged to the Consolidated Income Statement as the rights conferred under the terms of the arrangement are

consumed.

Benets received and receivable as an incentive to enter into a concession agreement are also spread on a straight-

line basis over the agreement term as a reduction of the expense.

The Group does not classify that element of a contract as a lease where the right to control the use of an identied

asset for a period of time is based on variable consideration based on activity levels. In these circumstances any

variable consideration is expensed to the Income Statement as the right is consumed.

Non-trading items

The Group treats material items either individually or, if of a similar type, in aggregate, that derive from events

or transactions that fall outside the ordinary activities of the Group as non-trading items. Non-trading items are

presented separately on the face on the Consolidated Income Statement, separately disclosing any tax eects.

Foreign currencies

The individual nancial statements of each Group entity are prepared in the currency of the primary economic

environment in which the entity operates (its functional currency). For the purpose of the Consolidated Financial

Statements, the results and nancial position of each entity are expressed in euro, which is the functional currency of

the Company, and the presentation currency for the Consolidated Financial Statements.

In preparing the nancial statements of the individual companies, transactions in currencies other than the

entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of

the transactions. At each reporting date, monetary assets and liabilities denominated in foreign currencies are

retranslated at the rates prevailing on the reporting date. Non-monetary items that are measured in terms of

historical cost in a foreign currency are not retranslated. Exchange dierences arising on the settlements of monetary

items and on the retranslation of monetary items, are included in the Consolidated Income Statement for the

nancial year and presented in euro.

For the purpose of presenting Consolidated Financial Statements, the assets and liabilities of the Group’s foreign

operations are expressed in euro using exchange rates prevailing on the reporting date. Income and expense items

are translated at the average exchange rates for the year, unless exchange rates uctuate signicantly during the

period, in which case the exchange rates at the date of transactions are used.

Notes Forming Part of the

Consolidated Financial Statements

Continued

2. Summary of accounting policies – continued

142

Irish Continental Group

Exchange dierences arising on the translation of foreign currency subsidiaries, if any, are recognised in the

Consolidated Statement of Comprehensive Income and accumulated in equity in the translation reserve. On

disposal of a foreign subsidiary the cumulative translation dierence for that foreign subsidiary is transferred to the

Consolidated Income Statement as part of the gain or loss on disposal.

In order to hedge its exposure to certain foreign exchange risks, the Group may, from time to time, enter into forward

contracts and options.

On consolidation, exchange dierences arising from the translation of the net investment in foreign operations are

recognised in the Statement of Other Comprehensive Income and accumulated in equity.

Finance costs

Finance costs comprises interest expense on borrowings, negative interest on bank deposits, interest on lease

obligations and interest on net dened benet pension scheme liabilities. All borrowing costs are recognised in the

Consolidated Income Statement under nance costs using the eective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are

assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the

cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment

income earned on the temporary investment of specic borrowings pending their expenditure on qualifying assets

is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in the

Consolidated Income Statement in the nancial year in which they are incurred.

Finance Income

Finance income comprises interest income on bank deposits, interest earned on nance lease receivables, interest

on the net dened benet pension scheme assets and interest on any other interest bearing nancial assets. Interest

income is recognised in the Consolidated Income Statement under nance income using the eective interest

method.

Retirement benet schemes

Dened benet obligations

For dened benet obligations, the cost of providing the benets and the liabilities of the schemes are determined

using the projected unit credit method with assets valued at bid price and actuarial valuations being carried out by

independent and professionally qualied actuaries at each reporting date. Current service costs, past service cost,

or credit, and net interest expense or income are recognised in the Consolidated Income Statement. Adjustments

in respect of a settlement, a curtailment and past service cost, or credit, are recognised in the Consolidated

Income Statement in the period of a plan amendment. Remeasurement comprising actuarial gains and losses is

reected in the Statement of Financial Position with a charge or credit recognised in the Consolidated Statement of

Comprehensive Income in the period in which they occur.

The net interest income on dened benet obligations has been recorded in the Consolidated Income Statement

under nance income. Net interest is calculated by applying the discount rate at the beginning of the period to the

net dened benet liability or asset.

In addition to the pension schemes operated by the Group, certain former employees are members of the Merchant

Navy Ocers Pension Fund (MNOPF). As the Group has no control over the calls for contributions made from the

MNOPF, it has determined that the fund should be accounted for as a dened benet obligation and its liability

recognised accordingly. The Group’s share of the MNOPF decit as advised by the trustees is included with the other

Group schemes.

The retirement benet obligation recognised in the Consolidated Statement of Financial Position represents the

decit or surplus in the Group’s dened benet obligations. Any surplus resulting from this calculation is limited to

past service cost, plus the present value of available refunds and reductions in future contributions to the scheme.

2. Summary of accounting policies – continued

143

Financial Statements

2021 Annual Report and Financial Statements

Dened contribution pension schemes

Payments to dened contribution pension schemes are recognised as an expense as they fall due. Any contributions

outstanding at the period end are included as an accrual in the Consolidated Statement of Financial Position.

Employee benets expense

Wages, salaries, bonuses, social security contributions, paid annual leave and sick leave are accrued in the period

in which the associated services are rendered by the employees of the Group. A liability for a termination benet is

recognised at the earlier of when an entity can no longer withdraw the oer of the termination benet and the entity

recognises any related restructuring costs.

Share-based payments

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments

are measured at fair value (excluding the eect of non-market based vesting conditions) at the date of grant. The fair

value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis

over the vesting period, based on the Group’s estimate of the shares expected to vest as a result of the eect of non-

market based vesting conditions.

For awards where vesting will be determined by market based vesting conditions, those granted prior to 1 January

2019 were fair value measured using a binomial pricing model. Monte-Carlo modelling was used for awards granted

after 1 January 2019.

The expected life used in the model has been adjusted, based on management’s best estimate, for the eects of non-

transferability, exercise restrictions and behavioural considerations.

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable

is based on taxable prot for the year. Taxable prot diers from prot as reported in the Consolidated Income

Statement because it excludes items of income or expense that are taxable or deductible in other years and it further

excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates

that have been enacted or substantively enacted by the reporting date. A provision is recognised for those matters

for which the tax determination is uncertain, but it is considered probable that there will be a future outow of funds

to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable.

A proportion of the Group’s prots fall within the charge to tonnage tax, under which regime taxable prots are

relieved to an amount based on the tonnage of vessels employed during the year. In accordance with the IFRIC

guidance on IAS 12 Income Taxes, the tonnage tax charge is included within other operating expenses in the

Consolidated Income Statement.

Deferred tax is the tax expected to be payable or recoverable on dierences between the carrying amounts of assets

and liabilities in the nancial statements and the corresponding tax bases used in the computation of taxable prot

and is accounted for using the statement of nancial position liability method. Deferred tax liabilities are generally

recognised for all taxable temporary dierences and deferred tax assets are recognised to the extent that it is

probable that taxable prots will be available against which deductible temporary dierences can be utilised. Such

assets and liabilities are not recognised if the temporary dierence arises from the initial recognition of goodwill or

from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that

aects neither the tax prot nor the accounting prot.

Deferred tax liabilities are recognised for taxable temporary dierences arising on investments in subsidiaries, except

where the Group is able to control the reversal of the temporary dierences and it is probable that the temporary

dierence will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no

longer probable that sucient taxable prots will be available to allow all or part of the asset to be recovered.

Notes Forming Part of the

Consolidated Financial Statements

Continued

2. Summary of accounting policies – continued

144

Irish Continental Group

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or

the asset realised based on tax laws and rates that have been enacted or substantively enacted at the statement of

nancial position date. Deferred tax is charged or credited to the Consolidated Income Statement, except when it

relates to items charged or credited directly to the Consolidated Statement of Comprehensive Income or is dealt

with in equity.

Deferred tax assets and deferred tax liabilities are oset when there is a legally enforceable right to set o current tax

assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and

the Group intends to settle its current tax assets and liabilities on a net basis.

Property, plant and equipment

Vessels

Vessels are stated at cost less accumulated depreciation and any accumulated impairment losses.

Depreciation on vessels is charged so as to write o the cost less residual value over the estimated economic useful

life on a straight-line basis. The amount initially recognised in respect of Ropax vessels less estimated residual value,

is allocated between hull and machinery and hotel and catering elements for depreciation purposes. In respect of

LoLo vessels, all value is attributed to hull and machinery.

In considering residual values of vessels, the Directors have taken into account the valuation of the scrap value of

the ships per light displacement tonne. Residual values are reviewed annually and updated if required. Estimations

of economic life of vessels are a key accounting judgement and estimate in the nancial statements. Any change in

estimates are accounted for prospectively.

The estimated economic useful lives of vessels are as follows:

Hull and Machinery

• Conventional Ropax vessels 30 - 35 years

• Fast ferries 15 - 25 years

• LoLo 25 years

Hotel and Catering 10 years

For conventional ferries, hull and machinery components are depreciated over an initial estimated useful life of 30

years but this is reviewed on a periodic basis for vessels remaining in service 25 years after original construction.

Drydocking

Costs incurred in renewing the vessel certicate are capitalised as a separate component under vessels in property,

plant and equipment and depreciated over the period to the next expected drydocking required for certicate

renewal. Costs and accumulated depreciation relating to expired certicates are treated as disposals. The estimated

useful lives for drydock assets are as follows:

Passenger vessels 1 year

Container vessels 1 – 5 years

Estimations of economic life and residual values are reassessed at each reporting date. Any change in estimates are

accounted for prospectively.

2. Summary of accounting policies – continued

145

Financial Statements

2021 Annual Report and Financial Statements

Other assets

Property, plant and equipment, other than and freehold land, are stated at cost less accumulated depreciation and

any accumulated impairment losses. Freehold land is stated at cost and is not depreciated. Cost comprises purchase

price and directly attributable costs.

The amount initially recognised in respect of an item of other assets is allocated to its signicant parts and each

such part is depreciated separately. In respect of stevedoring equipment related costs are allocated between

superstructure and plant.

With the exception of freehold land and assets under construction, depreciation on property, plant and equipment

is charged so as to write o the cost over the estimated economic useful lives, using the straight-line method, on the

following bases:

Buildings 10 – 150 years

Plant, equipment and vehicles 4 – 25 years

Plant superstructure 12 – 20 years

Assets under construction, the construction of which takes a substantial period of time are recorded at the

cost incurred to date less any impairment loss and no depreciation is charged on these amounts. Depreciation

commences when the assets are ready for their intended use. Cost includes borrowing costs capitalised in

accordance with the Group’s accounting policies. Borrowing costs directly attributable to the construction

of property, plant and equipment are capitalised as part of the cost of the assets up to the date of substantial

completion.

Gains or losses on the disposal of property, plant and equipment represent the dierence between the net proceeds

and the carrying value at the date of sale. Income is accounted for when there is an unconditional exchange of

contracts, or when all necessary terms and conditions have been fullled.

Intangible assets

Costs incurred on the acquisition and commissioning of computer software are capitalised, as are costs directly

associated with developing computer software programmes, if it is probable that the expected future economic

benets that are attributable to these assets will ow to the Group and the cost of these assets can be measured

reliably. Computer software costs recognised as assets are written o on a straight-line basis over their estimated

useful lives, which is normally ve years.

Impairment of property, plant and equipment and intangible assets

At each reporting date, the Group performs a review to ascertain whether there are any indications of impairment

which may aect carrying amounts of its property, plant and equipment and intangible assets. If any such indications

exist, the recoverable amount of the asset is estimated in order to determine whether the aected assets have

actually suered an impairment loss. Where an asset does not generate cash ows that are independent from other

assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the

estimated future cash ows are discounted to their present value using a pre-tax discount rate that reects the

current market assessments of the time value of money and the risks specic to the asset for which the estimates of

future cash ows have not been adjusted.

If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the

carrying amount of the asset or cash generating unit is reduced to its recoverable amount. An impairment loss is

recognised as an expense immediately.

Notes Forming Part of the

Consolidated Financial Statements

Continued

2. Summary of accounting policies – continued

146

Irish Continental Group

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating unit) is increased

to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the

carrying amount that would have been determined had no impairment loss been recognised for the assets (cash

generating units) in prior years. A reversal of an impairment loss is recognised as income immediately.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost represents suppliers’ invoiced cost net of any

related discounts etc. determined on a rst in, rst out basis. Net realisable value represents the estimated selling

price less all costs to be incurred in marketing, selling and distribution.

Treasury shares

Consideration paid to purchase the Company’s equity share capital is deducted from the total shareholders’ equity

and classied as treasury shares until such shares are cancelled. No gain or loss is recognised on the purchase, sale,

issue or cancellation of the treasury shares. Where such shares are subsequently sold or reissued, any consideration

received is included in total shareholders’ equity.

Where shares are cancelled an amount equivalent to the nominal value of the cancelled shares is transferred from

retained earnings to the undenominated capital reserve.

Financial instruments

Financial assets and nancial liabilities are recognised on the Group and Company’s Statement of Financial Position

when the Group and Company becomes a party to the contractual provisions of the instrument.

Trade receivables

Trade and other receivables are initially recognised at transaction price and subsequently carried at amortised cost,

net of allowance for expected credit losses. Any trade and other receivables included in non-current assets are

carried at amortised cost in accordance with the eective interest rate method.

The Group applies the simplied approach to providing for expected credit losses (ECL) under IFRS 9 Financial

Instruments, which requires expected lifetime losses to be recognised from initial recognition of the trade

receivables. The Group uses an allowance matrix to measure the ECL of trade receivables based on its credit loss

rates. Expected loss rates are based on historical payment proles of sales and the corresponding historical credit

loss experience. The historical loss rates are adjusted to reect current and forward economic factors if there

is evidence to suggest these factors will aect the ability of the customer to settle receivables. The Group has

determined the ECL default rate using market default risk probabilities with regards to its key customers. Balances

are written o when the probability of recovery is assessed as being remote.

Trade receivables are derecognised when the Group no longer controls the contractual rights that comprise the

receivables, which is normally the case when the asset is sold or the rights to receive cash ows from the asset have

expired, and the Group has not retained substantially all the credit risks and control of the receivable has transferred.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and on demand deposits.

2. Summary of accounting policies – continued

147

Financial Statements

2021 Annual Report and Financial Statements

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classied according to the substance of the

contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in

the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specic nancial

liabilities and equity instruments are set out below.

Bank borrowings

Interest-bearing bank loans and overdrafts are recorded at fair value, net of transaction costs incurred. Overdrafts

are set o against cash balances in accordance with the contractual terms of any set o agreement. Finance charges,

including premiums payable on settlement or redemption and direct issue costs, are expensed in the Consolidated

Income Statement using the eective interest rate method and any unamortised costs at the reporting date are

deducted from the carrying amount of the instrument. Bank borrowings are classied as nancial liabilities and are

measured subsequently at amortised cost using the eective interest rate method.

Trade payables

Trade payables are classied as other nancial liabilities, are initially measured at fair value, and are subsequently

measured at amortised cost, using the eective interest rate method.

Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received in share capital with any premium

over nominal value recorded in the share premium account. Any associated issue costs are deducted from retained

earnings.

Contingent liability

A contingent liability is disclosed unless the possibility of an outow of resources embodying economic benets is

remote.

Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that

the Group will be required to settle that obligation. Provisions are measured at the Directors’ best estimate of the

expenditure required to settle the obligation at the statement of nancial position date and are discounted to present

value where the eect is material.

Financial guarantee contracts

Where the Group enters into nancial guarantee contracts to guarantee the indebtedness of other parties, the

Group considers these to be insurance arrangements and accounts for them as such. The Group treats the guarantee

contract as a contingent liability until such time it becomes probable that the Group will be required to make a

payment under the guarantee.

Distributions

Distributions are accounted for when they are paid, through retained earnings. Dividend income from investments

is recognised when the shareholders’ rights to receive payment have been established (provided that it is probable

that the economic benets will ow to the Group and the amount of revenue can be measured reliably). Dividends

received from fellow subsidiaries are eliminated on consolidation.

Operating prot

Operating prot is stated after non-trading items arising from continuing operations.

Notes Forming Part of the

Consolidated Financial Statements

Continued

2. Summary of accounting policies – continued

148

Irish Continental Group

3. Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s and Company’s accounting policies, the Directors are required to make judgements,

estimates and assumptions about the carrying amounts of assets and liabilities. The estimates and associated

assumptions are based on historical experience and other factors that are considered to be relevant. Actual results

may dier from these amounts. The estimates and underlying assumptions are reviewed on an ongoing basis.

Key sources of estimation uncertainty and critical accounting judgements are as follows:

Estimates

Post-employment benets

The Group’s and Company’s total obligation in respect of dened benet pension obligations is calculated by

independent, qualied actuaries, updated at least annually. The size of the obligation is sensitive to actuarial

assumptions. These include demographic assumptions covering mortality and longevity, and economic assumptions

covering price ination, benet and salary increases together with the discount rate used. The size of the scheme

assets is also sensitive to asset return levels and the level of contributions from the Group and Company. Further

details are set out in note 32. Many of the actuarial assumptions are dependent on market developments and are

outside the control of the Company and Group and movements may give rise to material adjustments in future

estimates of post-employment obligations.

The Group and Company is a participating employer in the Merchant Navy Ocer Pension Fund (MNOPF), a multi-

employer dened benet pension scheme. The MNOPF was in surplus at the most recent valuation date of 31 March

2021. Under the rules of the fund all employers are jointly and severally liable for the decit. The decit included

in the nancial statements for the Group and Company represents an apportionment of the overall scheme decit

based on the most recent notication received from the trustees dated May 2013 and which was 1.53% for the Group

and 0.51% for the Company, less any decit payments made. Should other participating employers’ default on their

obligations, the Group and Company will be required to absorb a larger share of the scheme decit calculated in the

same manner as the current apportionment.

Useful lives for property, plant and equipment

Long lived assets comprising primarily of property, plant and equipment represent a signicant portion of total

assets. The annual depreciation and amortisation charge depends primarily on the estimated useful lives of each

type of asset. Management regularly reviews these useful lives and change them if necessary, to reect current

conditions. In determining these useful lives management considers technological change, patterns of consumption,

physical condition and expected economic utilisation of the asset. Changes in the useful lives may have a signicant

impact on the annual depreciation and amortisation charge. Details of the useful lives are included in the accounting

policy headed property, plant and equipment. Further details are set out in note 13.

In relation to one vessel, which is operated on a seasonal basis and primarily dedicated to passenger only carryings

and was not operated during 2020, the Directors noted that this vessel had been maintained in line with all regulatory

and class requirements during the lay-up period and the Directors determined that no revision in remaining useful life

was warranted. The vessel returned to service during Summer 2021.

Critical accounting judgements

Impairment

The Group does not hold any assets, including goodwill, which requires an annual assessment of recoverable

amount.

In line with the requirements of IAS 36: Impairment of assets, the Group assessed its property, plant and equipment

and intangible assets to determine if there were any indications of impairment. Factors considered in identifying

whether there were any indications of impairment included the economic performance of assets, technological

developments, new rules and regulations, shipbuilding costs and carrying value versus market capitalisation of the

Group.

149

Financial Statements

2021 Annual Report and Financial Statements

During the period ended 31 December 2021, the Group experienced a continuation of the reduced level of passenger

carryings due to the imposition of government restrictions placed on travel in the jurisdictions that we oer services.

These restrictions, rst introduced in March 2020, continued in various forms up to January 2022, and have

materially aected the protability outcome from our Irish Ferries branded operations for nancial years 2021 and

2020. The impact of Covid related restrictions has had a signicant impact on Passenger trac with car volumes on

a like for like basis (excluding Dover Calais) down 60% (2020: 66%) compared with 2019. However, reassuringly with

the easing of restrictions during the second half of 2021, car volumes increased 64% versus the prior year (down 45%

compared with the same period in 2019). As against this, the Container and Terminal Division continued to perform

strongly in both 2020 and 2021.

Having actively participated in the market during 2021, there are no indicators of general declines in the market value

of the types of vessels included in the Group’s eet noted. The Group’s market participation included the agreement

for the acquisition of two ferries and two container vessels, (including a vessel contracted for in early 2022) and

numerous charter agreements of both ferries and container vessels. Indeed, the Group’s observation was that both

vessel values and charter rates increased signicantly during 2021. Nonetheless, in referencing accounting standard

IAS 36: Impairment of Assets, management, having considered each of the events described at paragraph 12 of the

standard, assessed the decline in protability from its passenger operations amounted to an indicator of impairment

for its ferry eet at 31 December 2021 and on reassessment also at 31 December 2020. The Group’s position as

previously reported in the 31 December 2020 nancial statements, was that the remaining useful lives of the vessels

were suciently long to allow the downturn in performance and cash generated by the vessels noted in 2020 to be

temporary and therefore not regarded as an impairment indicator.

Having concluded that an impairment indicator existed, the Group sought to assess the recoverable amount of

the ferry eet employed by Irish Ferries based on the conditions and information available at each reporting date.

At 31 December 2021 Irish Ferries was expected to operate a ferry eet of six (2020: ve) owned and two (2020:

one) chartered vessels operating over four (2020: three) routes between Ireland, the UK and France, including

one additional vessel which was contracted at 31 December 2021 and delivered in January 2022. There is a large

interdependency between the vessels and routes, vessels are interchangeable between routes and certain customer

contracts are based on the Group operating services across multiple routes. Consequently, the Group views the Irish

Ferries ferry eet as a single cash generating unit and has undertaken impairment testing on that basis.

The Group engaged an independent shipbroker Simsonship (2020: Clarkson’s Valuation Services) to provide

valuations on its ferry eet on an unseen basis. These valuations are prepared on standard market terms on the

assumption of assets being encumbrance free with a willing buyer and seller. The Group adjusted these valuations

by providing for an estimate of disposal costs to arrive at a fair value less cost of disposal (FVLCOD) valuation of

the eet. The Group was satised that the carrying value of the ferry eet was strongly supported by the FVLCOD

estimate both at 31 December 2021 and 2020.

Notwithstanding the headroom over carrying value indicated by the FVLCOD estimate, the Group acknowledges the

potential limitations of such valuation estimates where there are limited transactions, the majority of the Group’s eet

by value is bespoke to its requirements and true value can only be assessed if oered for sale to one or more willing

purchasers. Against that background, the Group sought to derive its own valuations through performance of a value

in use exercise.

The value in use exercise involved projecting cash ows over a ten year period and discounting these to a present

value using an estimate of the weighted average cost of capital. Assets were assigned a terminal value at the end of

the projection period based on the straight line write down of year-end broker valuations over the remaining useful

life of the asset. The starting position for projecting cashows at 31 December 2021 and 2020 was to use the budget

as approved by the Board for the subsequent year and to project forward for the following years assuming that

passenger car markets will recover to 2019 levels by 2024 and 2023 respectively. Thereafter, revenue growth of 2%

over ination was assumed. Other key assumptions include those relating to capital expenditure, fuel costs and other

operating costs. The cashow projections for years 1 to 5 were consistent with the base scenario used for the viability

assessment.

Notes Forming Part of the

Consolidated Financial Statements

Continued

3. Critical accounting judgements and key sources of estimation uncertainty – continued

150

Irish Continental Group

Sensitivity on this base scenario was performed for a number of downside scenarios, including assuming a longer

recovery period as well as assuming higher fuel and dry-docking costs, exing the discount rate and terminal

values. The Directors are satised that the value in use projections robustly supported the broker valuations and

consequently the carrying value of the eet at 31 December 2021 and 2020. The Directors have reviewed the

methodology, key assumptions and results of the impairment testing as described above and concluded that any

reasonably possible movement in the assumptions used in the impairment test at 31 December 2021 or 2020 would

not result in the identication of an impairment.

One vessel which is operated on a seasonal basis and primarily dedicated to passenger only carryings was not

operated during 2020. Within the assessment carried out above, this temporary surplus to operational requirements

was not deemed to be an indication of impairment at 31 December 2020 as it was then intended to return this vessel

to service when restrictions lift and it was being maintained in an operational ready state. This vessel returned to

service during Summer 2021. The standalone FVLCOD for this vessel based of the independent broker valuation at 31

December 2021 and 2020 together the results of management’s value in use calculation for the ferry eet as a single

CGU supported the carrying value of this vessel at 31 December 2021 and 2020.

Consequently, based on the recoverability assessment described above, the Directors concluded that no provision for

impairment against the carrying value of the Group’s ferry eet was required at 31 December 2021 or 2020.

Going Concern

The Financial Statements have been prepared on the going concern basis. The Directors report that, after making

inquiries, they have a reasonable expectation at the time of approving the Financial Statements, that the Group

and Company are going concerns, having adequate nancial resources to continue in operational existence for the

foreseeable future. In forming this view, the Directors have considered the future cash requirements of the Group

and Company in the context of the economic environment of 2022, the principal risks and uncertainties facing the

Group (pages 67 to 71), the Group’s 2022 budget plan and the medium-term strategy of the Group, including capital

investment plans. The future cash requirements have been compared to bank facilities which are available to the

Group and Company.

The introduction of measures in response to Covid-19 by governments in the jurisdictions in which we operate

services in March 2020 and which have continued in various forms throughout the period to 31 December 2021 had a

material eect on the Group’s nancial results. This was particularly concentrated on our passenger business where

international travel was aected resulting in a material reduction in passenger revenues compared to pre pandemic

levels. The Group has, despite the imposition of restrictions, continued to operate its passenger services on all routes

in conjunction with its RoRo services. Following the ending of the Brexit transition period, the Group experienced

changed travel patterns with a reduction in RoRo carryings overall but revenue losses on the UK routes were

signicantly replaced with higher yielding revenues on our direct services to France.

Notwithstanding the downturn in protability due to reduced passenger revenues, the Group’s RoRo, LoLo,

chartering and port stevedoring services operated largely in line with expectations and the Group generated cash

from operations of €66.0 million (2020: €51.2 million) in nancial year 2021, with free cash ow of €43.3 million

(2020: €35.3 million) after maintenance capital expenditure. The Group retained cash balances and committed

undrawn facilities at 31 December 2021 of €118.9 million. From 1 January 2022 maximum leverage covenants have

reverted to the previous contracted levels of 3 times EBITDA. The leverage covenant level at 31 December 2021

calculated in accordance with the lending agreements, was within maximum permitted levels at 2.6 times EBITDA.

Government imposed travel restrictions have been largely removed from the beginning of 2022 for passengers who

are fully vaccinated and passenger volumes have increased over the prior year levels. However there remains a risk

of a resurgence of Covid infections and the possibility of re-imposition of restriction in the future. All other revenue

streams are performing satisfactorily up to the date of the approval of the nancial statements.

3. Critical accounting judgements and key sources of estimation uncertainty – continued

151

Financial Statements

2021 Annual Report and Financial Statements

In making their going concern assessment, the Directors have considered a number of trading scenarios including

a re-imposition of travel restrictions. The base scenario assumptions included a return of passenger volumes

following the easing of travel restrictions, but remaining behind pre-pandemic activity levels. The downside scenario

assumptions included passenger carryings at similar levels to 2021. This modelling assumed a full schedule of

services of the conventional ferry eet and reduced services on the fast craft route in the downside scenario. The

modelling further assumed that there were no changes to the Group’s existing contractual nancing arrangements.

Based on this modelling the Directors believe the Group retains sucient liquidity to operate for at least the period

up to March 2023.

4. Segmental information

Business segments

The Executive Board is deemed the chief operating decision maker within the Group. For management purposes, the

Group is currently organised into two operating segments; Ferries and Container and Terminal. These segments are

the basis on which the Group reports internally and are the only two revenue generating segments of the Group.

The Ferries segment derives its revenue from the operation of combined RoRo passenger ferries and the chartering of

vessels. The Container and Terminal segment derives its revenue from the provision of door-to-door and feeder LoLo

freight services, stevedoring and other related terminal services.

Segment information about the Group’s operations is presented below.

Ferries

Container &

Terminal Inter- segment Total

€m €m €m €m

Revenue

2021

External revenue 161.7 172.8 - 334.5

Inter-segment revenue 13.8 1.2 (15.0) -

Total 175.5 174.0 (15.0) 334.5

2020

External revenue 131.8 145.3 - 27 7.1

Inter-segment revenue 9.6 1.2 (10.8) -

Total 141.4 146.5 (10.8) 2 7 7.1

Inter-segment revenue is at best estimates of prevailing market prices. The inter-segment revenue in the Ferries

Division in 2021 of €13.8 million (2020: €9.6 million) primarily relates to container vessels which are on time charter to

the Group’s container shipping subsidiary, Eucon.

Revenue has been disaggregated into categories which reect how the nature, amount, timing and uncertainty of

revenue and cash ows are aected by economic factors. As revenues are recognised over short time periods of

no more than days, a key determinant to categorising revenues is whether they principally arise from a business to

customer (passenger contracts) or a business to business relationship (freight and charter contracts) as this impacts

directly on the uncertainty of cash ows.

Notes Forming Part of the

Consolidated Financial Statements

Continued

3. Critical accounting judgements and key sources of estimation uncertainty – continued

152

Irish Continental Group

Ferries Container & Terminal Total

2021 2020 2021 2020 2021 2020

€m €m €m €m €m €m

Revenue

Passenger 59.0 33.7 - - 59.0 33.7

Freight 94.6 92.2 172.8 145.3 26 7.4 237.5

Chartering 8.1 5.9 - - 8.1 5.9

Total 161.7 131.8 172.8 145.3 334.5 2 7 7.1

For the year ended 31 December 2021, €323.6 million was recognised over time (2020: €272.3 million) and €10.9

million was recognised at a point in time (2020: €4.8 million). No single external customer in the current or prior

nancial year amounted to 10 per cent or more of the Group’s revenues. Of total Group revenues of €334.5 million

(2020: €277.1 million), €7.4 million (2020: €5.1 million), all of which relates to the Ferries Division, is recognised under

IFRS 16 with the remainder being recognised as revenue under IFRS 15.

Ferries Container & Terminal Total

2021 2020 2021 2020 2021 2020

€m €m €m €m €m €m

Result

Operating (loss) / prot before non-

trading items (1 7.4 ) (12.3) 1 7.2 13.1 (0.2) 0.8

Finance income - 0.2 0.1 - 0.1 0.2

Finance costs (2.0) (6.4) (2.0) (1.4) (4.0) ( 7.8)

Non-trading items - (11.2) - - - (11.2)

(Loss) / prot before tax (19.4) (29.7) 15.3 11.7 (4.1) (18.0)

Income tax expense (0.1) (0.3) (0.7) (0.7) (0.8) (1.0)

(Loss) / prot for the nancial

year (19.5) (30.0) 14.6 11.0 (4.9) (19.0)

Statement of Financial Position

Assets

Segment assets 36 7.0 341.4 106.4 87.1 473.4 428.5

Cash and cash equivalents 29.9 117.2 8.6 33.2 38.5 150.4

Consolidated total assets 396.9 458.6 115.0 120.3 511.9 578.9

Liabilities

Segment liabilities 49.8 48.2 31.7 25.9 81.5 74.1

Borrowings and lease liabilities 140.0 190.7 40.7 48.2 180.7 238.9

Consolidated total liabilities 189.8 238.9 72.4 74.1 262.2 313.0

Consolidated net assets 207.1 219.7 42.6 46.2 249.7 265.9

Other segment information

Capital additions 44.0 30.8 2.6 4.8 46.6 35.6

Right-of-use asset additions 22.0 7.2 16.8 5.3 38.8 12.5

Depreciation, impairment and

amortisation 40.6 34.6 11.9 6.7 52.5 41.3

4. Segmental information – continued

153

Financial Statements

2021 Annual Report and Financial Statements

Ferries Container & Terminal Total

2021 2020 2021 2020 2021 2020

€m €m €m €m €m €m

Other operating expenses

Fuel 43.1 23.8 12.0 9.0 55.1 32.8

Labour 28.7 22.9 9.7 8.4 38.4 31.3

Port costs 44.0 38.9 33.7 29.5 7 7.7 68.4

Haulage - - 50.0 43.9 50.0 43.9

Other 20.7 20.4 34.5 31.0 55.2 51.4

Inter-segment (1.2) (1.2) (13.8) (9.6) (15.0) (10.8)

Total other operating expenses 135.3 104.8 126.1 112.2 261.4 2 1 7.0

Geographic analysis of revenue by origin of booking

2021 2020

€m €m

Revenue

Ireland 135.6 116.2

United Kingdom 64.1 55.1

Netherlands 73.7 58.6

Belgium 36.7 31.7

France 4.5 1.3

Other 19.9 14.2

Total 334.5 27 7.1

Geographic location of non-current assets

2021 2020

€m €m

At Sea and in transit

Vessels 315.8 288.3

Containers 9.9 7.8

325.7 296.1

On Shore

Ireland 51.6 45.7

Other 10.0 11.2

61.6 56.9

Carrying amount at 31 December 387.3 353.0

Non-current assets exclude nancial assets, retirement benet assets and deferred tax assets. Due to the mobile

nature of certain assets in property, plant and equipment, their geographic location is not always xed.

Notes Forming Part of the

Consolidated Financial Statements

Continued

4. Segmental information – continued

154

Irish Continental Group

5. Employee benets expense

The average number of employees during the nancial year was as follows:

2021 2020

Ferries 197 203

Container and Terminal 86 88

283 291

The number of employees at nancial year-end was 284 288

Aggregate costs of employee benets were as follows:

2021 2020

€m €m

Wages and salaries 17.2 14.4

Covid-19 government subsidies (1.4) (1.7)

Social insurance costs 1.7 1.3

Dened benet obligations – current service cost (note 32 vii) 1.7 1.7

Dened benet obligations – settlement loss (note 32 vii) - 9.3

Dened benet obligations – augmentation cost - 1.1

Dened contribution pension scheme – pension cost (note 32) 0.3 0.4

Share-based payment expense (note 31) 1.3 1.9

Total employee benet costs incurred 20.8 28.4

Amounts recognised as non-trading item (note 10) - (10.4)

Total employee benets expense before non-trading items 20.8 18.0

There were no sta costs capitalised during the nancial year (2020 €nil) in relation to management and supervision

of the contracts for the construction of new vessels. Of the total employee expense of €20.8 million (2020: €28.4

million), €nil (2020: €10.4 million) relating to dened benet scheme settlement losses and augmentation costs were

included as part of the reported non-trading item (note 10).

6. Finance income

2021 2020

€m €m

Net interest income on dened benet assets (note 32 vii) 0.1 0.2

Total nance income 0.1 0.2

155

Financial Statements

2021 Annual Report and Financial Statements

7. Finance costs

2021 2020

€m €m

Interest on bank overdrafts and loans 2.7 6.7

Interest on lease obligations 1.3 1.1

Total nance costs 4.0 7. 8

8. Income tax expense

2021 2020

€m €m

Current tax 0.7 1.2

Deferred tax (note 25) 0.1 (0.2)

Total income tax expense for the nancial year 0.8 1.0

The Company and its Irish tax resident subsidiaries have elected to be taxed under the Irish tonnage tax scheme.

Under the tonnage tax scheme, taxable prot on eligible activities is calculated on a specied notional prot per day

related to the tonnage of the vessels utilised. In accordance with the IFRIC clarication of tonnage taxes issued May

2009, the tonnage tax charge is not considered an income tax expense under IAS 12 Income Taxes, and has been

included in other operating expenses in the Consolidated Income Statement.

Domestic income tax is calculated at 12.5% of the estimated assessable prot for the year for all activities which do

not fall to be taxed under the tonnage tax scheme. Taxation for other jurisdictions is calculated at the rates prevailing

in the relevant jurisdictions. The income tax expense for the year includes a current tax charge of €0.7 million and a

deferred tax charge of €0.1 million.

The total tax expense for the nancial year is reconciled to the accounting prot as follows:

2021 2020

€m €m

Loss before tax (4.1) (18.0)

Tax at the domestic income tax rate of 12.5% (2020: 12.5%) - -

Losses not eligible for surrender under loss provisions 2.4 1.9

Eect of tonnage relief (2.2) (1.6)

Dierence in eective tax rates 0.8 (0.3)

Items for which no tax deduction is available - 0.8

Other items (0.2) 0.2

Income tax expense recognised in the Consolidated Income Statement 0.8 1.0

Notes Forming Part of the

Consolidated Financial Statements

Continued

156

Irish Continental Group

9. Loss for the year

2021 2020

€m €m

Loss for the year arrived at after charging:

Depreciation of property, plant and equipment (note 13) 31.9 29.3

Amortisation of intangible assets (note 14) 0.3 0.2

Impairment of property, plant and equipment (note 13) - 2.3

Depreciation of right-of-use assets (note 15) 20.3 9.5

Net depreciation, amortisation and impairment costs 52.5 41.3

Fuel 55.1 32.8

Labour 37.2 30.2

Port costs 7 7.7 68.4

Haulage 50.0 43.9

Other 41.4 41.7

Other operating expenses 261.4 2 1 7.0

Foreign exchange (gains) / losses (0.5) 0.4

Expenses relating to lease payments not included in the measurement of the lease

liability

Short-term leases 2.2 4.0

Variable lease payments 2.1 1.3

KPMG Ireland Deloitte Ireland

Group Auditor’s remuneration: €’000 €’000

The audit of the Group nancial statements 260.0 222.0

Other assurance services 40.0 28.0

Tax advisory services 45.0 35.0

Other non-audit services - 4.0

345.0 289.0

The portion of the above audit fees attributable to the Company nancial statements payable to KPMG was €75,000.

157

Financial Statements

2021 Annual Report and Financial Statements

10. Non-trading items

2021 2020

€m €m

Non-trading expense - (11.2)

There were no non-trading items in the year ended 31 December 2021. On 9 December 2020, the Trustee of the

Group’s principal dened benet pension scheme entered into a transaction whereby the liabilities relating to

pensions in payment at the transaction date were transferred to a third-party insurer on payment of an initial

premium of €160.6 million in 2020 and a further premium of €8.5 million in 2021. This gave rise to a non-cash

settlement loss of €9.3 million being the dierence between the present value of the transferred liabilities discounted

at the AA corporate bond rate used for IAS 19 valuation purposes at the transaction date and the premium paid.

The Trustee, in agreement with the Company, also augmented the pension benets of certain members resulting in

an augmentation cost of €1.1 million being the present value of the future benet changes.

The Group’s subsidiary Irish Ferries Limited, the sponsoring employer of the scheme, underwrites the scheme’s

administration expenses and incurred expenses totalling €0.8 million relating to the above transaction.

11. Dividends

2021 2020

€m €m

Final dividend of 0c per ICG Unit RE: nancial year ended 31 December 2020 (2020:

nil) - -

Interim dividend of 0c per ICG Unit RE: the nancial year ended 31 December 2021

(2020: nil) - -

- -

The Board is proposing a nal dividend of 9.00 cent per ordinary share amounting to €16.5 million out of the

distributable reserves of the Company.

12. Earnings per share

2021 2020

’000 ’000

Weighted average number of ordinary shares for the purposes of basic earnings per

share 186,715 186,981

Eect of dilutive potential ordinary shares: Share options - -

Weighted average number of ordinary shares for the purpose of diluted earnings per

share 186,715 186,981

The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted to

reect shares issued and acquired from the market during the year (note 20).

Notes Forming Part of the

Consolidated Financial Statements

Continued

158

Irish Continental Group

The earnings used in both the adjusted basic and adjusted diluted earnings per share are adjusted to take into

account the net interest on dened benet obligations (note 32) and the eect of non-trading items after tax.

The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the parent is

based on the following data:

2021 2020

€m €m

Earnings

Earnings for the purposes of basic and diluted earnings per share -

Loss for the nancial year attributable to equity holders of the parent (4.9) (19.0)

Non-trading item after tax (note 10) - 11.2

Net interest income on dened benet assets (note 32 vii) (0.1) (0.2)

Earnings for the purposes of adjusted basic and adjusted diluted earnings per

share (5.0) (8.0)

2021 2020

Cent Cent

Basic earnings per share (2.6) (10.2)

Diluted earnings per share (2.6) (10.2)

Adjusted basic earnings per share (2.7) (4.3)

Adjusted diluted earnings per share (2.7) (4.3)

Diluted earnings per ordinary share

Dilutedearnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares

outstanding for the dilutive eect of share options. All 5,646,854 options outstanding at the end of the reporting

period (2020: 5,756,140) were excluded from the diluted earnings per share calculation because of their anti-dilutive

eect. Options excluded comprised 2,790,000 (2020: 2,296,500) vested options and 2,856,854 (2020: 3,459,640)

unvested options which have not yet satised the required performance conditions for vesting.

12. Earnings per share – continued

159

Financial Statements

2021 Annual Report and Financial Statements

13. Property, plant and equipment

Assets under

Construction Vessels

Plant, Equipment

and Vehicles

Land and

Buildings Total

€m €m €m €m €m

Cost

At 1 January 2020 6.9 429.1 60.4 26.0 522.4

Additions 1.6 2 7.4 5.6 - 34.6

Reclassication (0.1) 0.1 - - -

Disposals (5.4) (11.0) (1.1) - (17.5)

Impairment (2.3) - - - (2.3)

Currency adjustment - (1.4) (0.1) - (1.5)

At 31 December 2020 0.7 444.2 64.8 26.0 535.7

Additions 0.5 42.7 2.2 0.2 45.6

Reclassication (0.6) 0.6 - - -

Disposals - ( 7.6) (5.6) - (13.2)

Impairment - - - - -

Currency adjustment - 1.4 0.2 - 1.6

At 31 December 2021 0.6 481.3 61.6 26.2 569.7

Accumulated depreciation

At 1 January 2020 - 152.1 43.9 9.3 205.3

Depreciation charge for the nancial year - 25.7 3.2 0.4 29.3

Eliminated on disposals - (11.0) (1.1) - (12.1)

Currency adjustment - (0.3) - - (0.3)

At 31 December 2020 - 166.5 46.0 9.7 222.2

Depreciation charge for the nancial year - 27.8 3.4 0.7 31.9

Eliminated on disposals - ( 7.6 ) (5.6) - (13.2)

Currency adjustment - 0.5 0.1 - 0.6

At 31 December 2021 - 187.2 43.9 10.4 241.5

Carrying amount

At 31 December 2021 0.6 294.1 1 7.7 15.8 328.2

At 31 December 2020 0.7 2 7 7.7 18.8 16.3 313.5

In accordance with IAS 16, the property, plant and equipment of the Group and Company has been reviewed in

relation to the residual values used for the purpose of depreciation calculations. In considering residual values of

passenger vessels, the Directors have taken into consideration the valuation of the scrap value of the vessels per

light displacement tonne. Residual values are reviewed annually and updated where the Directors consider the latest

estimates of residual value estimates would lead to a signicant change in depreciation charges.

Notes Forming Part of the

Consolidated Financial Statements

Continued

160

Irish Continental Group

Estimations of economic life of vessels are a key judgemental estimate in the nancial statements and further

details are set out in note 3. In relation to the remaining estimated economic life of the vessels, a one year increase/

decrease would have a €1.6 million (2020: €1.0 million) decrease/ €2.0 million (2020: €1.2 million) increase in

depreciation in the Consolidated Income Statement, and a €1.6 million (2020: €1.0 million) increase/ €2.0 million

(2020: €1.2 million) decrease on the carrying value of property, plant and equipment in the Statement of Financial

Position.

During the year ended 31 December 2021 and 2020 no sta costs or interest costs were included in additions. Assets

under construction at 31 December 2021 of €0.6 million (2020: €0.7 million) relate to construction completed on

assets not in operation at the year end.

During the prior year, a contract for the construction of a new vessel was cancelled due to the inability of the

shipyard to deliver the vessel. Previously paid contractual deposits were returned to the Company by the deposit

guarantor. An impairment charge of €2.3 million was recognised in the prior year against costs previously capitalised

not related to the deposit guarantee.

14. Intangible assets

2021 2020

€m €m

Cost

At 1 January 11.5 10.5

Additions 1.0 1.0

At 31 December 12.5 11.5

Amortisation

At 1 January 10.3 10.1

Charge for the nancial year 0.3 0.2

At 31 December 10.6 10.3

Carrying amount

At 31 December 1.9 1.2

At 1 January 1.2 0.4

The intangible assets included above, all computer software, have nite useful lives of ve years over which the

assets are amortised. Amortisation is on a straight-line basis.

13. Property, plant and equipment – continued

161

Financial Statements

2021 Annual Report and Financial Statements

15. Right-of-use assets

Vessels

Plant and

Equipment

Land and

Buildings Total

€m €m €m €m

Cost

At 1 January 2020 10.9 8.2 29.5 48.6

Additions 10.1 2.4 - 12.5

Derecognition on lease expiry - (2.6) - (2.6)

Currency adjustment - - (0.7) (0.7)

At 31 December 2020 21.0 8.0 28.8 57.8

Additions 28.5 5.0 5.3 38.8

Lease remeasurement (0.3) - - (0.3)

Derecognition on lease expiry - (0.9) - (0.9)

Currency adjustment - - 1.0 1.0

At 31 December 2021 49.2 12.1 35.1 96.4

Accumulated depreciation

At 1 January 2020 5.7 4.7 2.2 12.6

Charge for the period 5.6 1.9 2.0 9.5

Derecognition on lease expiry - (2.6) - (2.6)

At 31 December 2020 11.3 4.0 4.2 19.5

Charge for period 16.2 1.9 2.2 20.3

Derecognition on lease expiry - (0.9) - (0.9)

Currency adjustment - - 0.3 0.3

At 31 December 2021 27.5 5.0 6.7 39.2

Carrying amount

At 31 December 2021 21.7 7.1 28.4 57. 2

At 31 December 2020 9.7 4.0 24.6 38.3

Right-of-use assets are depreciated on a straight-line basis over the lease term. Where a lease contract contains

extension options the Group includes such option periods in its valuation of right-of-use assets where it is reasonably

certain to exercise the option. Initial direct costs incurred in the period relating to the acquisition of leases and

included in additions amounted to €0.3 million (2020: €nil).

Plant and equipment mainly relates to containers used in the Group’s container eet leased under various master

agreements with an average remaining term of 3.9 years (2020: 3.4 years). Land and buildings comprised (i) leased

land at Dublin Port from which the Group operates a container terminal where the average remaining lease term was

93 years (2020: 94 years); (ii) a concession agreement at Belfast Harbour from which the Group operates a container

terminal where the average remaining lease term was 4.7 years (2020: 5.7 years) and (iii) land leased during 2021 at

Dublin Inland Port from which the Group operates a container depot where the average remaining lease term was

20.0 years.

Related lease liabilities of €57.6 million (2020: €38.5 million) are disclosed in note 23 to the Consolidated Financial

Statements.

Notes Forming Part of the

Consolidated Financial Statements

Continued

162

Irish Continental Group

16. Finance lease receivable

2021 2020

€m €m

At 1 January 19.4 22.1

Amounts received (3.6) (3.6)

Net benet recognised in revenue 0.8 0.9

At 31 December 16.6 19.4

In 2019, the Group entered into a bareboat hire purchase sale agreement for the disposal of a vessel. Legal title to the

vessel transfers to the lessor only on payment of the nal instalment. The deferred consideration has been treated as

a nance lease receivable at an amount equivalent to the net investment in the lease.

Amounts received less the net benet recognised in revenue, a total of €2.8 million (2020: €2.7 million) has been

recognised in the Consolidated Statement of Cash Flows as proceeds on disposal of property, plant and equipment.

The amounts receivable under the agreement at 31 December were as follows:

2021 2020

€m €m

Within one year 3.6 3.6

Between one and two years 3.6 3.6

Between two and three years 3.6 3.6

Between three and four years 7.3 3.6

Between four and ve years - 7. 3

Greater than ve years - -

Undiscounted payments receivable 18.1 21.7

Unearned income (1.5) (2.3)

Present value of payments receivable / Net investment in the lease 16.6 19.4

Analysed as:

Current nance lease receivable 3.0 2.8

Non-current nance lease receivable 13.6 16.6

16.6 19.4

The Group is not exposed to foreign currency risk as a result of the lease arrangement, as it is denominated in euro.

Residual value risk on the vessel under lease is not signicant, because of the existence of a secondary market in

vessels.

The Directors of the Company estimate the loss allowance on the nance lease receivable at 31 December at an

amount equal to lifetime expected credit losses. None of the nance lease receivable at 31 December 2021 was past

due. Taking into account the historical payment experience up to the date of approval of these nancial statements

has been in line with the agreed contractual arrangement together with the retention of legal title, the Directors of

the Group consider that the allowance for expected credit losses is immaterial.

163

Financial Statements

2021 Annual Report and Financial Statements

17. Inventories

2021 2020

€m €m

Fuel and lubricating oil 3.5 1.7

Catering and other stocks 0.3 0.2

3.8 1.9

The Directors consider that the carrying amount of inventories approximates their replacement value.

Cost of inventories recognised as an expense in the Consolidated Income Statement amounted to €60.4 million

during the nancial year (2020: €36.7 million).

18. Trade and other receivables

2021 2020

€m €m

Trade receivables 47. 3 45.8

Allowance for expected credit losses (1.8) (1.7)

45.5 44.1

Prepayments

Deposit on vessel 3.2 -

Deposits relating to other property, plant and equipment 5.4 2.6

Other prepayments 2.5 4.0

Finance lease receivable (note 16) 3.0 2.8

Other receivables 2.3 2.2

61.9 55.7

The Group and Company extend credit to certain trade customers after conducting a credit risk assessment. Year-

end trade receivables represent 52 days sales at 31 December 2021 (2020: 57 days). Deposits paid relating to other

property, plant and equipment include advance payments for services or goods where title has not transferred at the

period end.

The Group’s trade receivables are analysed as follows:

Gross value

Expected credit

losses Net value Gross value

Expected credit

losses Net value

2021 2021 2021 2020 2020 2020

€m €m €m €m €m €m

Not past due

Within terms 42.6 (1.0) 41.6 42.6 (1.1) 41.5

Past due

Within 3 months 4.4 (0.5) 3.9 2.6 (0.4) 2.2

After 3 months 0.3 (0.3) - 0.6 (0.2) 0.4

47.3 (1.8) 45.5 45.8 (1.7) 44.1

Notes Forming Part of the

Consolidated Financial Statements

Continued

164

Irish Continental Group

Expected credit losses

The Group has applied the IFRS 9 simplied model of recognising lifetime expected credit losses for all trade

receivables as these items do not have a signicant nancing component. The concentration of credit risk is limited

due to the exposure being spread over a large number of counterparties and customers. In measuring the expected

credit losses, the trade receivables have been grouped by shared credit risk characteristics and by days past due.The

expected loss rates are heavily inuenced by the past rate of actual credit losses. Trade receivables are written o

when there is no reasonable expectation of recovery. The Group also considers expected credit losses in relation to

prepaid capital purchases such as vessel building deposits as there is a risk of non-delivery. The Group has a limited

history of credit losses.

2021 2020

€m €m

Movement in the allowance for expected credit losses

Balance at beginning of the nancial year 1.7 1.5

Increase in allowance during the nancial year 0.1 0.2

Balance at end of the nancial year 1.8 1.7

In relation to the amounts paid as deposits on capital works, signicant progress on these works had been completed

by the nancial statement approval date. No allowance has been made for expected credit losses on refundable

deposits.

19. Cash and cash equivalents

For the purposes of the Statement of Cash Flows, cash and cash equivalents include cash on hand and in banks.

There were no bank overdrafts outstanding at 31 December which met the osetting conditions under IAS 32

Financial Instruments. Cash and cash equivalents at the end of the reporting period as shown in the Statement of

Cash Flows were:

2021 2020

€m €m

Cash and cash equivalents 38.5 150.4

Cash and cash equivalents comprise cash held by the Group and Company and short-term bank deposits with an

original maturity of three months or less. The carrying amount of these assets approximates their fair value. 95 per

cent of the cash and cash equivalents were on deposit in institutions rated A2 or above by Moodys. The Directors

consider the credit risk of these counterparties to be compatible with the Group’s credit policy and operational

requirements.

The geographic spread by deposit institution for the Group was as follows:

2021 2020

€m €m

Ireland 32.5 131.1

United Kingdom 3.3 0.2

Europe 2.7 19.1

Total 38.5 150.4

The cash and cash equivalents gure of €38.5 million at 31 December 2021 includes a deposit of €3.5 million (2020:

€3.4 million) over which the Group has granted a charge in favour of the Irish Ferries Pension Trustee Limited as

continuing security for amounts due under a decit funding agreement concluded with the Trustee on behalf of the

Irish Ferries Limited Pension Scheme.

18. Trade and other receivables – continued

165

Financial Statements

2021 Annual Report and Financial Statements

20. Share capital

Group and Company

Authorised 2021 2021 2020 2020

Number €m Number €m

Ordinary shares of par value €0.065 each 450,000,000 29.3 450,000,000 29.3

Redeemable shares of par value

€0.00001 each 4,500,000,000 - 4,500,000,000 -

29.3 29.3

Allotted, called up and fully paid 2021 2021 2020 2020

Number €m Number €m

Ordinary shares

At beginning of the nancial year 186,980,390 12.2 187,419,390 12.2

Share issue 379,177 131,000 -

Share buyback (4,565,000) (0.3) (570,000) -

At end of the nancial year 182,794,567 11.9 186,980,390 12.2

There were no redeemable shares in issue at 31 December 2021 or 31 December 2020.

The Company has one class of share unit, an ICG Unit, which at 31 December 2021 comprised one ordinary share and

nil redeemable shares. The share unit, nor any share therein, does not carry any right to xed income.

The number of ICG Units issued during the year was 379,177 (2020: 131,000) and total consideration received

amounted to €0.7 million (2020: €0.2 million). These ICG Units were issued under the Group’s and Company’s share

option plans.

During the year, the Company bought back 4,565,000 (2020: 570,000) ICG Units on the market at prices of €4.25 (in

respect of 3,565,000 ICG units) and €4.37 (in respect of the remaining 1,000,000 ICG units purchased) (2020: €3.10)

per ICG Unit. Total consideration paid of €19.8 million (2020: €1.7 million) was charged against retained earnings.

The nominal value of the shares cancelled of €297,000 (2020: €37,000) was retained in a undenominated capital

redemption reserve. The buybacks were conducted in line with the Group’s capital management policy at prices

which the Directors considered were in the best interests of the remaining shareholders.

Holders of ordinary shares are entitled to such dividends that may be declared from time to time on such shares

and are entitled to attend, speak and vote at the Annual General Meeting of the Company. On return of capital on a

winding up, the holder of ordinary shares is entitled to participate in a distribution of surplus assets of the Company.

Redeemable shares do not entitle holders to any dividend nor any right to participate in the prot or assets of the

Company other than to the repayment of a sum equal to the nominal value of 0.001 cent per share on a winding up of

the Company. Redeemable shares do not entitle the holder to attend, speak or vote at the Annual General Meeting.

Notes Forming Part of the

Consolidated Financial Statements

Continued

166

Irish Continental Group

21. Analysis of Equity

Group and Company

Share premium

The share premium account comprises the excess of monies received in respect of share capital over the nominal

value of shares issued.

Capital reserves

This consists of reserves arising on consolidation and the undenominated capital redemption reserve.

Reserves arising on consolidation relate to the acquisition of a subsidiary. At 31 December 2021, the reserve balance

was €0.1 million. The balance is unchanged from 31 December 2020, 1 January 2021 and 1 January 2020.

The undenominated capital redemption reserve represents the nominal value of share capital repurchased. During

the year, €297,000 was transferred from retained earnings representing the nominal value of shares cancelled. At 31

December 2021, the reserve balance stands at €7.7 million (2020: €7.4 million).

Share options reserve

The share options reserve represents the cumulative charge to the Consolidated Income Statement of share options

issued which are not yet exercised.

Translation reserve

Exchange dierences relating to the translation of the net assets and results of the Group’s foreign currency

denominated subsidiaries, from their functional currency into the Group’s presentational currency, being euro, are

recognised directly in the translation reserve.

22. Borrowings

2021 2020

€m €m

Bank loans 73.8 151.3

Private placement loan notes 50.0 50.0

Origination fees (0.7) (0.9)

123.1 200.4

On demand or within one year 7.3 87.3

In the second year 7.3 7.3

In the third year 6 7.4 7.3

In the fourth year 7. 5 57.4

Fifth year and after 33.6 41.1

123.1 200.4

Less: Amount due for settlement within 12 months (7.3) (87.3)

Amount due for settlement after 12 months 115.8 113.1

167

Financial Statements

2021 Annual Report and Financial Statements

Obligations under the Group borrowing facilities have been cross guaranteed by Irish Continental Group plc, Irish

Ferries Limited, Eucon Shipping & Transport Limited, Zatarga Limited, Irish Ferries Finance DAC and ICG Shipping

(W.B. Yeats) Limited but are otherwise unsecured.

The currency prole of the Group’s borrowings is set out in note 24 (iii).

Borrowing facilities

2021 2020

€m €m

Overdraft and trade guarantee facilities

Amounts utilised – trade guarantee (note 36) 0.6 0.6

Amounts undrawn 15.4 15.4

Total committed overdraft facilities 16.0 16.0

Committed loan facilities

Amounts drawn 123.8 201.3

Amounts undrawn 65.0 75.0

Total committed loan facilities 188.8 276.3

Uncommitted facilities 242.8 224.1

At 31 December 2021, the Group had total committed loan and overdraft facilities of €204.8 million (2020: €292.3

million) which comprised of amounts utilised of €124.4 million (2020: €201.9 million) and amounts undrawn of €80.4

million (2020: €90.4 million). Uncommitted facilities relate to bank and private placement shelf agreements which

are available for drawing at the discretion of the relevant lender. All borrowings at 31 December 2021 were unsecured

and cross guaranteed by certain subsidiaries within the Group and are denominated in euro.

The Group’s borrowing facilities comprise of the following;

i) A bank overdraft and trade guarantee facility with permitted drawing amounts of €16.0 million. At 31 December

2021, €0.6 million (2020: €0.6 million) was utilised on this facility by way of trade guarantees and €nil (2020: €nil)

was utilised as an overdraft. Interest rates are calculated by reference to the lender’s prime rate plus a xed margin.

This facility, available for drawing by the Company and certain subsidiaries, is reviewed annually and is repayable on

demand.

ii) A multicurrency revolving credit facility with permitted drawing amounts of €75.0 million, which may be

increased to €125.0 million in total at the discretion of the lenders on application. At 31 December 2021, €10.0 million

(2020: €nil) was drawn under this facility. Interest rates are arranged at oating rates, calculated by reference to

EURIBOR or other reference rate depending on currency drawn plus an agreed margin which varies with the Group’s

net debt to EBITDA ratio, which creates a cash ow interest rate risk. This facility is available for drawing by the

Company and certain subsidiaries and matures on 30 September 2024.

iii) Amortising term loan facility totalling €63.8 million (2020: €151.3 million) made available by the European

Investment Bank to fund the construction of two new cruise ferries one of which was delivered in December 2018.

These facilities had been drawn in full and are repayable in equal instalments over a ten year period commencing

December 2020 and ending during 2030. Interest rates were xed for the duration of the term at rates ranging

from 1.616% to 1.724%. Following the cancellation of the contract for the second cruise ferry during 2020 due to the

insolvency of the shipbuilder, €72.0 million worth of loans were repaid early together with €15.5 million of scheduled

repayments during the year ended 31 December 2021.

Notes Forming Part of the

Consolidated Financial Statements

Continued

22. Borrowings – continued

168

Irish Continental Group

iv) Multicurrency private placement loan note shelf agreements agreed with a number of investors with a potential

drawing amount of €242.8 million. Loan notes for a total amount of €50.0 million with a maturity of 30 November

2024 at an interest rate of 1.40% have been issued under this facility. The remaining balance of €192.8 million total

is available for drawing at the discretion of investors up to 6 October 2023 following agreement of a three year

extension to the initial agreed drawing period. Interest rates are set at each drawing date and maturity may extend

for up to 15 years.

The weighted average interest rates paid during the nancial year were as follows:

2021 2020

Bank overdrafts 0.41% 0.52%

Bank loans 1.61% 1.58%

The average interest rates reect the terms of the renancing arrangements concluded in prior periods. There was

€10.0 million (2020: €nil) worth of bank loans drawn during 2021 from an existing loan facility. Interest rates on all

bank loans drawn in prior periods were xed at date of drawdown. The Group’s nancing facilities contain provisions

that where there is a change in control of the Company, lenders may cancel the facilities and declare all utilisations

immediately due and payable. A change of control is where any person or group of persons acting in concert

becomes the owner of more than 50 per cent of the voting share capital of the Company.

In the opinion of the Directors, the Group and Company are in compliance with the covenants contained in its

borrowing agreements as of 31 December 2021.

23. Lease liabilities

2021 2020

€m €m

At 1 January 38.5 36.0

Additions 38.5 12.5

Payments (21.1) (10.3)

Lease remeasurement (0.3) (0.1)

Lease interest expense recognised in period 1.3 1.1

Currency adjustment 0.7 (0.7)

At 31 December 5 7.6 38.5

Analysed as:

Current liabilities 20.1 10.7

Non-current liabilities 3 7.5 27. 8

5 7.6 38.5

22. Borrowings – continued

169

Financial Statements

2021 Annual Report and Financial Statements

The maturity prole of lease liabilities is set out below:

2021 2020

€m €m

Committed lease obligations

Within one year 20.1 10.7

Between one and two years 9.1 4.7

Between two and three years 3.7 2.7

Between three and four years 3.3 2.5

Between four and ve years 2.1 2.2

Between ve and 10 years 2.1 1.4

Greater than 10 years 17. 2 14.3

5 7.6 38.5

Outstanding lease terms vary from one month to eight years except in the case of leasehold land where the terms

vary between 20 and 100 years. At 31 December 2021, the average incremental borrowing rate applying to lease

liabilities was 2.5% (2020: 2.8%). The incremental borrowing rate in the case of lease liabilities recognised on

application of IFRS 16 was estimated at 1 January 2019 and in all other cases at the date of commencement of the

lease. The incremental borrowing rate is estimated as that rate of interest available to the Group for borrowings over

a similar term as the obligation to acquire a similar asset. The Group’s obligations are secured by lessors’ title to the

leased assets.

All lease contracts relating to land and property contain market review clauses. The leases for land and property in

Dublin contain seven yearly upward only rent reviews based on market rates. The next review is due on 1 January

2024. The lease contract relating to land and property in Belfast includes an annual review based on UK Retail Price

Ination.

The average interest rate at 31 December 2020 on outstanding lease liabilities was 2.5% (2020: 2.9%) for remaining

lease terms of between 1 month and 100 years.

The above lease liabilities do not include any variable payments based on throughput of leased facilities, short term

leases of less than one year or leases relating to low value assets. These are expensed as incurred and disclosed at

note 9.

Related right-of-use assets of €57.2 million (2020: €38.3 million) are disclosed in note 15 to the Consolidated Financial

Statements. Expenses of €4.3 million (2020: €5.3 million) relating to short-term leases, variable lease payments and

leases of low-value assets were recognised in the income statement and are disclosed in note 9 to the Consolidated

Financial Statements.

24. Financial instruments and risk management

The Group’s activities expose it to a variety of nancial risks including market risk (such as interest rate risk, foreign

currency risk, commodity price risk), liquidity risk and credit risk. The Group’s funding, liquidity and exposure to

interest and foreign exchange rate risks are assessed within the Group’s risk management systems and included on

the Group’s risk register. Risk mitigation measures may include use of nancial derivatives, foreign currency forward

contracts, interest rate swaps and cash ow matching.

Notes Forming Part of the

Consolidated Financial Statements

Continued

23. Lease liabilities – continued

170

Irish Continental Group

i) Categories of nancial instruments

Financial assets and liabilities

2021

Loans and

receivables at

amortised cost

Financial

liabilities at

amortised cost Carrying value Fair value

€m €m €m €m

Finance lease receivable 16.6 - 16.6 16.6

Trade and other receivables 58.9 - 58.9 58.9

Cash and cash equivalents 38.5 - 38.5 38.5

Borrowings - 123.1 123.1 124.8

Trade and other payables 57. 9 5 7.9 5 7.9

2020

Loans and

receivables at

amortised cost

Financial

liabilities at

amortised cost Carrying value Fair value

€m €m €m €m

Finance lease receivable 19.4 - 19.4 19.4

Trade and other receivables 52.9 - 52.9 52.9

Cash and cash equivalents 150.4 - 150.4 150.4

Borrowings - 200.4 200.4 208.4

Trade and other payables - 52.3 52.3 52.3

Fair value hierarchy

The Group does not have any nancial assets or nancial liabilities that are carried at fair value in the Consolidated

Statement of Financial Position at 31 December 2021 and 31 December 2020. In relation to those nancial assets and

nancial liabilities where fair value is required to be disclosed in the Notes to the Consolidated Financial Position,

these nancial assets and nancial liabilities are classied within Level 3 (2020: Level 3) of the fair value hierarchy as

market observable inputs (forward rates and yield curves) which are used in arriving at fair values.

The Group has adopted the following fair value measurement hierarchy for nancial instruments:

• Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities;

• Level 2: other techniques for which all inputs that have a signicant eect on the recorded fair value are

observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3: techniques that use inputs which have a signicant eect on the recorded fair value that are not based on

observable market data.

The following are the signicant methods and assumptions used to estimate fair values of nancial assets and

nancial liabilities:

Finance lease receivable

Finance lease recognised based on the estimated net investment in the lease being the present value of the

contractual future cash ows discounted at the rate implicit in the lease.

24. Financial instruments and risk management – continued

171

Financial Statements

2021 Annual Report and Financial Statements

Trade and other receivables / payables

For trade receivables and trade payables, with average settlement periods of 50 days (2020: 57 days) and 81 days

(2020: 76 days) respectively, the carrying value less allowance for expected credit losses, where appropriate, is

estimated to reect fair value due to their short-term nature.

Cash and cash equivalents

For cash and cash equivalents, all with a maturity of three months or less, the nominal amount is estimated to reect

fair value.

Borrowings

The fair value of bank loans has been determined based on a discounted cash ow analysis with the most signicant

input being the discount rate reecting the Group’s own credit risk. For nance leases the Group considers that the

incremental borrowing cost used to calculate the carrying value includes a fair estimate of counterparty risk and the

carrying value approximates fair value.

Derivative nancial instruments

There are no derivative nancial instruments outstanding at 31 December 2021 and 31 December 2020 and none were

entered into in either 2020 or 2021.

ii) Interest rate risk

At 31 December 2021, interest rates on short-term bank deposits were contracted for terms of less than three months

at average eective rates of (0.3)% (2020: (0.3%)).

The interest rates on all Group borrowings at 31 December 2021 comprising loan notes and term loans has been xed

at contracted rates at the date of drawdown with the relevant lender eliminating exposure to interest rate risk on

borrowings. The average interest rate at 31 December 2021 was 1.60% (2020: 1.60%) for remaining terms of between

2.9 and 9.5 years.

The interest rates on all lease liabilities at 31 December 2021 were xed at the incremental borrowing rate at the later

of the IFRS 16 eective application date of 1 January 2019 or lease commencement date eliminating exposure to

interest rate risk on lease liabilities.

Sensitivity to interest rates

As all of the Group’s borrowings are xed for the full remaining borrowing terms, the Group has not prepared

calculations to measure the estimated eect of changes in market interest rates on the Consolidated Income

Statement and Equity Review.

iii) Foreign currency risk management

The Group publishes its consolidated nancial statements in euro and conducts business in dierent foreign

currencies. As a result, it is subject to foreign exchange risk due to exchange rate movements which will aect the

Group’s transaction costs and the translation of the results and underlying net assets of its foreign operations.

Sterling denominated prots are translated to euro at the average rate of exchange for the nancial year. The average

rate at which sterling prots were translated during the year was €1:£0.8596 (2020: €1:£0.8896).

Exchange rate exposures are managed within approved policy parameters. The Group did not utilise forward foreign

exchange contracts during the year ended 31 December 2021 or 31 December 2020.

Notes Forming Part of the

Consolidated Financial Statements

Continued

24. Financial instruments and risk management – continued

172

Irish Continental Group

Sensitivity

The currency risk sensitivity analysis is set out below:

Under the assumptions; (i) a 10% strengthening in euro exchange rates against all currencies, prot before tax would

have increased by €4.8 million (2020: increase of €3.2 million) and equity (before tax eects) would have increased

by €3.2 million (2020: increase of €1.3 million); (ii) a 10% weakening in euro exchange rates against all currencies,

prot before tax would have decreased by €6.2 million (2020: decrease of €4.0 million) and equity (before tax

eects) would have decreased by €4.3 million (2020: decrease of €1.5 million).

The currency prole of the carrying amounts of the Group’s monetary assets and monetary liabilities at the reporting

date are as follows:

2021 Euro Sterling US Dollar Total

€m €m €m €m

Trade receivables (net) - 3.4 0.3 3.7

Cash and cash equivalents 0.2 6.0 1.5 7.7

Total assets 0.2 9.4 1.8 11.4

Trade and other payables - 11.3 6.2 17.5

Lease liabilities - - 0.7 0.7

Total liabilities - 11.3 6.9 18.2

Net assets / (liabilities) 0.2 (1.9) (5.1) (6.8)

2020 Euro Sterling US Dollar Total

€m €m €m €m

Trade receivables (net) - 6.4 1.0 7.4

Cash and cash equivalents - 12.2 1.0 13.2

Total assets - 18.6 2.0 20.6

Trade and other payables - 11.8 3.4 15.2

Lease liabilities - - 0.2 0.2

Total liabilities - 11.8 3.6 15.4

Net assets / (liabilities) - 6.8 (1.6) 5.2

iv) Commodity price risk

In terms of commodity price risk, the Group’s vessels consume heavy fuel oil (HFO), marine diesel / gas oil (MDO /

MGO) and lubricating oils, all of which continue to be subject to price volatility. The Group must also manage the

risks inherent in changes to the specication of fuel oil which are introduced under international and EU law from

time to time.

24. Financial instruments and risk management – continued

173

Financial Statements

2021 Annual Report and Financial Statements

The Group’s policy has been to purchase these commodities in the spot markets and to remain unhedged. In the

Container and Terminal Division, movements in fuel costs are oset to a large extent by the application of pre-

arranged price adjustments with our customers. Similar arrangements are in place with freight customers in the

Ferries Division. In the passenger sector, changes in fuel costs are included in the ticket price to the extent that

market conditions will allow.

v) Liquidity risk

The Group and Company are exposed to liquidity risk which arises primarily from the maturing of short-term and

long-term debt obligations. There were no open derivative contracts at 31 December 2021 or 31 December 2020. The

Group and Company’s policy is to ensure that sucient resources are available either from cash balances, cash ows

or undrawn committed bank facilities, to ensure all obligations can be met as they fall due. To achieve this objective,

the Group and Company:

• monitor credit ratings of institutions with which the Group and Company maintain cash balances;

• limit maturity of cash balances; and

• borrow the bulk of its debt needs under committed bank lines or other term nancing and by policy maintains a

minimum level of undrawn committed facilities.

At each year-end, the Group’s rolling liquidity reserve (which comprises cash and undrawn committed facilities and

which represents the amount of available cash headroom in the Group funding structure) was as follows:

2021 2020

€m €m

Cash and cash equivalents 38.5 150.4

Committed undrawn facilities 80.4 90.4

Liquidity reserve 118.9 240.8

Management monitors rolling cash ow forecasts on an ongoing basis to determine the adequacy of the liquidity

position of the Group. This process also incorporates a longer term liquidity review to ensure renancing risks are

adequately catered for as part of the Group’s strategic planning.

Liquidity analysis

The following table sets out the maturity and liquidity analysis of the Group’s nancial liabilities into the relevant

maturity groupings based on the remaining period at the reporting date to the contractual maturity date:

Notes Forming Part of the

Consolidated Financial Statements

Continued

24. Financial instruments and risk management – continued

174

Irish Continental Group

Liquidity Table 2021

Weighted

average

period until

maturity

Carrying

amount

Contractual

amount

Less than 1

year

Between 1 –

2 years

Between 2 –

5 years

Between 5 –

10 years

More than

10 years

Years €m €m €m €m €m €m €m

Liabilities

Trade and other payables - 75.5 75.5 75.5 - - - -

Bank loans 3.6 123.1 130.3 9.1 9.1 85.1 27.0 -

Lease liabilities 27.1 5 7.6 101.5 22.0 9.4 11.4 5.5 53.2

Total liabilities 256.2 307.3 106.6 18.5 96.5 32.5 53.2

Liquidity Table 2020

Weighted

average

period until

maturity

Carrying

amount

Contractual

amount

Less than 1

year

Between 1 –

2 years

Between 2 –

5 years

Between

5-10 years

More than

10 years

Years €m €m €m €m €m €m €m

Liabilities

Trade and other payables - 69.2 69.2 69.2 - - - -

Bank loans 4.6 200.4 216.3 96.1 9.1 76.0 35.1 -

Lease liabilities 39.1 38.5 82.9 11.3 5.9 9.6 4.7 51.4

Total liabilities 308.1 368.4 176.6 15.0 85.6 39.8 51.4

vi) Credit risk

The Group and Company monitors its credit exposure to its counterparties via their credit ratings (where applicable)

and where possible limits its exposure to any one party to ensure that there are no signicant concentrations

of credit risk. Notwithstanding the foregoing, due to the nature of the underlying transaction there is a material

exposure to a single counterparty in relation to the lease receivable. Mitigation of this exposure to nance

lease receivables is explained at note 16. Credit risk in relation to trade and other receivables and cash and cash

equivalents has been discussed in notes 18 and 19 respectively. The maximum exposure to credit risk is represented

by the carrying amounts in the Statement of Financial Position.

vii) Capital management

The objective when managing capital is to safeguard the Group’s ability to continue in business and provide returns

for shareholders together with maintaining the condence of all stakeholders. No changes were made in the

objectives, policies or processes for managing capital during the nancial years ended 31 December 2021 and 31

December 2020.

The capital structure of the Group consists of net debt (borrowings as detailed in note 22 oset by cash and cash

equivalents) and equity of the Group (comprising issued capital, reserves and retained earnings as detailed in notes

20 and 21). The Group seeks to maintain an optimal capital structure to reduce the overall cost of capital while

balancing the benets of dierent capital sources. Within this framework the Group considers the amount and tenor

of borrowings and distributions to shareholders either through dividends or buybacks.

During the year the Company bought back 4.5 million ICG units at a cost of €19.8 million and issued 0.4 million ICG

Units under its share option plans raising €0.7 million. The Group repaid €77.5 million of bank borrowings (net of

drawdowns), lease liabilities increased by €19.8 million and cash and cash equivalents reduced by €112.3 million.

24. Financial instruments and risk management – continued

175

Financial Statements

2021 Annual Report and Financial Statements

The Group actively monitors the externally imposed capital requirements contained in our debt facilities which set a

maximum leverage ratio of net debt to earnings before interest tax depreciation and amortisation. Having agreed a

temporary increase in this leverage ratio against the background of the Covid-19 pandemic to 4 times which applied

during the nancial year ended 2021, this will revert to 3 times for testing dates after 1 January 2022. At 31 December

2021, the leverage ratio under covenant denitions was 2.6 times (2020: 1.6 times).

At 31 December 2021, the net debt position of the Group was €142.2 million (2020: net debt of €88.5 million) and

total equity balances amounted to €249.7 million (2020: €265.9 million).

25. Deferred tax liabilities

Companies within the Group where appropriate, have elected to be taxed under the Irish tonnage tax scheme

in respect of all eligible shipping activities. Certain activities will not fall within the tonnage tax scheme and will

continue therefore to be subject to standard rates of corporation tax. These activities give rise to deferred tax assets

and liabilities and the impact of these is shown below.

Deferred tax assets arise where taxable losses in excess of expected future reversing taxable temporary dierences

have been incurred that are available for oset against future taxable prots. Deferred tax assets are recognised

to the extent that it is probable that future taxable prot will be available against which the unused tax losses and

unused tax credits can be utilised. A deferred tax asset of €0.1 million (2020: €0.1 million) has not been recognised

in respect of tax losses as suitable taxable prots are not expected to arise. The Group estimates the probable

amount of future taxable prots, using assumptions consistent with those employed in the Group’s nancial planning

process, and taking into consideration applicable tax legislation in the relevant jurisdiction. These calculations

require the use of estimates.

The Group has not provided deferred tax in relation to temporary dierences applicable to investments in

subsidiaries on the basis that the Group can control the timing and realisation of these temporary dierences and it is

probable that the temporary dierence would be immaterial and will not reverse in the foreseeable future.

The following are the deferred tax liabilities and assets recognised by the Group, and the movements thereon, during

the current and prior reporting periods:

2021

Accelerated tax

depreciation

Retirement

benet

obligation Total

€m €m €m

At beginning of the nancial year 0.4 (0.2) 0.2

Charge to the Statement of Consolidated Income 0.1 - 0.1

Charge to Statement of Other Comprehensive Income - 0.9 0.9

At end of the nancial year 0.5 0.7 1.2

Analysed as:

Non- current asset (0.1)

Non-current liability 1.3

1.2

Notes Forming Part of the

Consolidated Financial Statements

Continued

24. Financial instruments and risk management – continued

176

Irish Continental Group

2020

Accelerated tax

depreciation

Retirement

benet

obligation Total

€m €m €m

At beginning of the nancial year 0.5 0.2 0.7

Credit to the Statement of Consolidated Income (0.1) (0.1) (0.2)

Credit to Statement of Other Comprehensive Income - (0.3) (0.3)

At end of the nancial year 0.4 (0.2) 0.2

Deferred tax is recognised in the Consolidated Statement of Comprehensive Income to the extent it arises on prots

or losses recognised in that statement.

26. Trade and other payables

2021 2020

€m €m

Within one year

Trade and other payables 30.7 24.8

Accruals 27.2 27.5

5 7.9 52.3

Deferred revenue 15.3 13.0

Payroll taxes 0.7 0.2

Social insurance cost 0.2 0.1

Value-added tax 1.4 3.6

75.5 69.2

Trade payables and accruals comprise amounts outstanding for trade purchases and ongoing costs and are non-

interest bearing. They also include deferred revenue amounts of €15.3 million (2020: €13.0 million) relating to cash

received in respect of performance obligations outstanding not yet complete by the Group. Movements in deferred

revenue balances during the period were as follows:

2021 2020

€m €m

At 1 January 13.0 5.0

Passenger revenue (59.0) (33.7)

Cash received 61.3 41.7

At 31 December 15.3 13.0

The average trade credit period outstanding was 81 days at 31 December 2021 (2020: 76 days). Certain suppliers

reserve the right to charge interest on balances past their due date.

The Group has nancial risk management policies in place to ensure that all payables are paid within the credit

timeframe.

25. Deferred tax liabilities – continued

177

Financial Statements

2021 Annual Report and Financial Statements

27. Provisions

2021 2020

€m €m

Claims provision

At beginning of the nancial year 2.2 2.0

Utilisation of provision - (0.1)

Increase in provision 1.1 0.3

At end of the nancial year 3.3 2.2

Analysed as follows:

Current liabilities 3.1 2.0

Non-current liabilities 0.2 0.2

3.3 2.2

The claims provision comprises;

(i) the insurance excess payable by the Group and Company in a number of potential compensation claims, arising

in the normal course of business. Provision is made for incidents reported prior to the reporting date but for which

no claim has been received. No provision has been recognised for incidents that may have occurred prior to the

reporting date, but which had not been reported to the Group, as based on past experience these are not expected

to be material;

(ii) ex-gratia discounts which can be claimed by customers against future travel the timing and presentation of which

are uncertain. Provisions relate to claims lodged with the Group where a future cash outow is expected to occur.

The expected cash outows that were expected to be incurred during 2020 and 2021 were delayed due to continuing

Covid-19 related postponements in the legal process and are expected to be resolved during 2022.

28. Commitments

2021 2020

€m €m

Commitments for the acquisition of property, plant and equipment – approved

and contracted for, but not accrued

Approved and contracted 42.0 5.9

Less accrued at 31 December (10.6) (4.0)

Approved and contracted for not accrued 31.4 1.9

29. Short-term vessel charter and container hire obligations

2021 2020

€m €m

Within one year - 0.6

There were no outstanding commitments at 31 December 2021 (2020: €0.6 million) relating to short-term vessel

charter and container hire obligations. An expense of €4.3 million (2020: €5.3 million) was recognised in the period

where the related rights were not recognised as a right-of-use asset. The 2021 expense is analysed in note 9.

Notes Forming Part of the

Consolidated Financial Statements

Continued

178

Irish Continental Group

30. Operating lease income

The aggregate future minimum lease payments receivable under non-cancellable operating leases are as follows:

2021 2020

€m €m

Within one year 1 7.2 2.7

Between one and two years 13.2 -

Between two and three years 3.7 -

34.1 2.7

The lease payments receivable relate to the charter of container vessels.

31. Share-based payments

The Group operates two equity-settled share option schemes under which certain employees have been issued with

share options as described below.

The Performance Share Plan (PSP) is the active plan under which option awards may be granted. Details of the award

and vesting conditions are set out in the Report of the Remuneration Committee. Vesting is contingent on market

conditions such as total shareholder return and non-market conditions such as earnings per share, free cash ow and

return on average capital employed. During the year, 1,042,500 (2020: 1,120,500) options were granted under the PSP

with a vesting period of three years.

The 2009 Share Option Plan remains in place with respect to outstanding grants made prior to 2016 but no new

grants will be made following the adoption of the PSP. The number of shares over which options may be granted may

not exceed 10 per cent of the shares of the Company in issue.

Options are forfeited where the grantee ceases employment with the Group unless retention, is permitted by the

Remuneration Committee under good leaver rules. The Scheme Rules allow for the early exercise of outstanding

options upon a change in control of the Company.

The number and weighted average exercise price of share options granted under the above plans is as follows:

2021 2020

Number of share

options

Weighted

average exercise

price

Number of share

options

Weighted

average exercise

price

€ €

Outstanding at 1 January 5,756,140 1.59 5,871,785 1.61

Granted during the year 1,042,500 0.065 1,120,500 0.065

Exercised during the year (637,530) 1.25 (660,424) 0.62

Forfeited during the year (514,256) 0.065 (575,721) 0.065

Outstanding at 31 December 5,646,854 1.47 5,756,140 1.59

Exercisable at 31 December 2,790,000 2.94 2,296,500 2.50

Weighted average share price at date of exercise of

options 4.35 3.48

Weighted average remaining contractual life of options

outstanding at year-end 1.8 years 2.3 years

In settlement of the options exercised during the year, the Company issued 379,177 (2020: 131,000) new ICG units

with the balance settled through market purchase.

179

Financial Statements

2021 Annual Report and Financial Statements

The exercise prices of options outstanding at 31 December are as follows:

2021 2020 Price

Options Options €

Exercisable:

2009 Share Option Plan

Vested Options 825,000 1,161,500 1.57

Vested Options 205,000 230,000 2.97

Vested Options 1,760,000 905,000 3.58

Exercisable at 31 December 2,790,000 2,296,500

Not Exercisable:

2009 Share Option Plan

Second Tier Options - 905,000 3.58

Performance Share Plan 2,856,854 2,554,640 0.065

2,856,854 3,459,640

Outstanding at 31 December 5,646,854 5,756,140

Options issued under the 2009 Share Option Plan were market priced options with a maximum life of 10 years. These

had been measured at fair value using a binomial option pricing model. All options issued under the 2009 Option Plan

have vested to participants and the fair value of these has been expensed to the Income Statement over the period

from date of grant to date of vesting determination.

Options granted under the PSP are priced at the nominal price of the shares comprised in an ICG unit. Vesting of

options under the PSP are contingent on the achievement of certain market and non-market performance hurdles.

The fair value of options subject to market conditions is estimated using Monte-Carlo simulation. The fair value of

options subject to non-market conditions is estimated based on the market value at date of grant adjusted for the

eects of non-transferability, exercise restrictions and behavioural considerations. The fair value is expensed to the

Income Statement evenly over a vesting period of three years with an adjustment made at each reporting period for

the estimated vesting rate for those options subject to non-market vesting conditions.

Outstanding options had been granted on 26 March 2012, 1 September 2014, 5 March 2015, 8 March 2019, 6 March

2020 and 12 March 2021. The estimated fair values of the options are as follows:

Year of Grant 2021 2020 2019 2015 2015 2014 2014 2012 2012

Share Plan PSP PSP PSP 2009 Plan 2009 Plan 2009 Plan 2009 Plan 2009 Plan 2009 Plan

- - -

Basic

Tier

Second

Tier

Basic

Tier

Second

Tier

Basic

Tier

Second

Tier

Fair value of option:

Options subject to market

performance conditions €2.15 €0.96 €1.59 €0.4528 €0.5581 €0.2992 €0.4449 €0.3240 €0.3680

Options subject to non-

market performance

conditions €3.63 €3.07 €4.18 - - - - - -

Notes Forming Part of the

Consolidated Financial Statements

Continued

31. Share-based payments – continued

180

Irish Continental Group

The inputs into the valuation model in the respective years of grant were as follows:-

Year of Grant

2021

2020 2019 2015 2015 2014 2014 2012 2012

Basic

Tier

Second

Tier

Basic

Tier

Second

Tier

Basic

Tier

Second

Tier

At date of grant:

Weighted average share

price €4.26 €3.77 €4.945 €3.580 €3.580 €2.970 €2.970 €1.570 €1.570

Weighted average

exercise price €0.065 €0.065 €0.065 €3.580 €3.580 €2.970 €2.970 €1.570 €1.570

Expected volatility 43% 29% 27% 29% 31% 27% 30% 34% 33%

Expected life 3 years 3 years 3 years 7 years 9 years 7 years 9 years 7 years 9 years

Risk free rate (0.562%) (0.462%) (0.498%) 0.090% 0.299% 0.439% 0.765% 1.323% 1.799%

Expected dividend yield 2.15% 3.70% 2.50% 5.16% 4.72% 5.83% 4.89% 4.97% 4.41%

Expected volatility was determined by calculating the historical volatility of the Company’s share price.

In 2021, the share-based payment expense recognised in the Consolidated Income Statement was €1.3 million (2020:

€1.9 million).

The share-based payment expense has been classied in the Consolidated Income Statement as follows:

2021 2020

€m €m

Employee benets expense 1.3 1.9

Share-based payment expense of €478,000 (2020: €715,000) relates to the Directors of the Company. The balance

on the share option reserve in the Consolidated Statement of Financial Position at 31 December 2021 is €4.7 million

(2020: €5.1 million).

32. Retirement benet schemes

The Group operates dened contribution pension schemes in all of its main operating locations. The Group also has

dened benet obligations as set out below. Scheme assets are held in separate trustee administered funds.

Dened Contribution Scheme

The Group operates a dened contribution pension scheme, which provides retirement and death benets for all

recently hired employees. The total cost charged in the Consolidated Income Statement of €0.3 million (2020: €0.4

million) represents employer contributions payable to the externally administered dened contribution pension

scheme at rates specied in the rules of the scheme. There was €nil in outstanding contributions included in trade

and other payables at 31 December 2021 (2020: €nil).

31. Share-based payments – continued

181

Financial Statements

2021 Annual Report and Financial Statements

Dened Benet Obligations

i) Group sponsored schemes

The Group operates contributory dened benet obligations, which provide retirement and death benets for other

employees who are not members of the dened contribution pension scheme. The dened benet obligations

provide benets to members in the form of a guaranteed level of pension payable for life, the level of the benets

depend on the member’s length of service and salary.

The assets of these schemes are held separately from those of the Group in schemes under the control of trustees.

The trustees are responsible for ensuring the schemes are run in accordance with the applicable trust deed and

the pension laws of the relevant jurisdiction. The trustees invest the funds in a range of assets with the objective

of maximising the fund return whilst minimising the cost of funding the scheme at an acceptable risk prole. In

assessing the risk prole the trustees take account of the nature and duration of the liabilities and review investment

strategy regularly.

The pension charges and payments in respect of the schemes are in accordance with the advice of professionally

qualied actuaries. The latest actuarial valuation reports for these schemes, which are not available for public

inspection, are dated between 31 March 2018 and 31 October 2018. The valuations employed for disclosure purposes

have been based on the most recent funding valuations for each scheme adjusted by the independent actuaries to

allow for the accrual of liabilities up to 31 December 2021 and to take account of nancial conditions at this date. The

present value of the dened benet obligation, and the related current service cost and past service credit, were

measured using the projected unit credit method and assets have been valued at bid value.

The pension contributions paid in the year ended 31 December 2021 amounted to €1.1 million (2020: €2.8 million)

while the current service cost charged to the Consolidated Income Statement amounted to €1.7 million (2020: €1.7

million).

The prole of membership across all schemes at 31 December was as follows;

2021 2020

Current employees 145 157

Members with deferred benets 500 536

Pensioners 134 109

Total 779 802

Buyout transaction

On 9 December 2020, the Trustee of the Group’s principal dened benet pension scheme entered into an

irrevocable agreement whereby the liabilities relating to pensions in payment at the transaction date were transferred

to a third-party insurer on payment of an initial premium of €160.6 million. This gave rise to a non-cash settlement

loss of €9.3 million being the dierence between the present value of the transferred liabilities discounted at the

AA corporate bond rate used for IAS 19 valuation purposes at the transaction date and the premium paid. A further

premium of €8.5 million was paid to the insurer during 2021 on completion of a data verication exercise. The

obligations associated with this payment had been included in the pension scheme obligations as at 31 December

2020 and no additional settlement gain or loss arose on payment of this further premium.

Notes Forming Part of the

Consolidated Financial Statements

Continued

32. Retirement benet schemes – continued

182

Irish Continental Group

The Trustee, in agreement with the Company, also augmented pension benets of certain members resulting in an

augmentation cost of €1.1 million being the present value of the future benet changes, which was recognised in the

Income Statement for the year ended 31 December 2020.

In conjunction with the 9 December 2020 transaction, the Group concluded a new decit funding agreement with

the trustee replacing the previous decit funding agreement agreed in 2014. Under the new agreement, the Group

retained the obligation to make decit payments to the scheme of €1.5 million per annum, adjusted for ination, for

a projected period up to 2023, or until the decit is eliminated if earlier. During 2021 the Trustee conrmed that the

Scheme met the minimum funding standard including risk reserves as set out in Irish pensions legislation leading to

a cessation of the requirement to continue making the decit funding payments. The Trustee continues to retain a

charge over the escrow deposit created and funded under the former funding agreement until 31 December 2023,

with the balance payable to the scheme in certain circumstances. The balance held in the escrow account at 31

December 2021 was €3.5 million (note 19).

Netherlands Scheme

The Group operates a dened benet pension scheme for certain employees based in The Netherlands. All the

liabilities of this scheme are matched by insurance contracts other than for ination adjustment to accrued benets

for current employees.

ii) Merchant Navy Ocers Pension Fund (MNOPF)

In addition to the pension schemes operated by the Group, the Group has obligations in respect of past service of

certain former employees who are members of the MNOPF, an industry wide multi-employer scheme and which is

closed to future accrual. The latest actuarial valuation of the scheme, which is available for public inspection, is dated

31 March 2021 and disclosed a net past service surplus of £55.0 million, equivalent to a gross funding level of 102%.

The Group’s share of the MNOPF obligations, as most recently advised by the trustees, is 1.53% (2020: 1.53%). The

obligation valuation in these nancial statements at 31 December 2021 is based on the actuarial decit contribution

demands notied to the Group and which remain outstanding at the reporting date. The last decit demand received

by the Group was dated May 2013 and has been fully paid.

On this basis, the share of the overall decit in the MNOPF estimated to be attributable to the Group at 31 December

2021 is €nil (2020: €nil). During the year the Group made payments of €nil (2020: €nil) to the trustees.

iii) Principal risks and assumptions

The Group is exposed to a number of actuarial risks as set out below:

Investment risk

The pension schemes hold investments in asset classes such as equities which are expected to provide higher returns

than other asset classes over the long term, but may create volatility and risk in the short term. The present value

of the dened benet obligations liability is calculated using a discount rate by reference to high quality corporate

bond yields; if the future achieved return on scheme assets is below this rate, it will create a decit. IAS 19 Employee

Benets provides that the discount rate used to value retirement benets should be determined by reference to

market yields on high quality corporate bonds consistent with the duration of the liabilities. Due to a narrow bond

universe, the Group denes high quality bonds in the Eurozone as those rated AA or higher by at least one rating

agency. In respect of sterling schemes, corporate bonds must be rated AA, or higher, by at least two rating agencies.

32. Retirement benet schemes – continued

183

Financial Statements

2021 Annual Report and Financial Statements

Salary risk

The present value of the dened benet liability is calculated by reference to the projected salaries of scheme

participants at retirement based on salary ination assumptions. As such, any variation in salary versus assumption

will vary the schemes’ liabilities.

Life expectancy risk

The present value of the dened benet obligations liability is calculated by reference to the best estimate of the

mortality of scheme participants both during and after their employment. An increase in the life expectancy of the

scheme participants will change the scheme liabilities.

Ination risk

A signicant proportion of the benets under the plans are linked to ination with higher ination leading to higher

liabilities.

The Directors have taken independent actuarial advice on the key judgements used in the estimate of retirement

benet scheme assets and liabilities.

The principal assumptions used for the purpose of the actuarial valuations were as follows:

Sterling liabilities Euro liabilities

2021 2020 2021 2020

Discount rate 1.85% 1.30% 1.20% 0.70%

Ination rate 3.60% 3.15% 2.00% 1.20%

Rate of annual increase of pensions in payment 2.20% - 3.40% 3.05% 1.00%

0.30% -

0.40%

Rate of increase of pensionable salaries 1.10% 0.95% 0.00% - 1.20%

0.00% -

0.90%

The euro and sterling discount rates have been determined in consultation with the Group’s independent actuary,

who has devised proprietary models referencing market yields at the balance sheet date on high quality corporate

bonds consistent with the duration of the liabilities. For 31 December 2021, the high quality corporate bond

population include those rated AA or higher by at least two rating agencies.

Sterling obligations include the eects of the UK GMP equalisation court decisions. The estimated eect was to

increase the obligations of the UK scheme by 0.1%.

Notes Forming Part of the

Consolidated Financial Statements

Continued

32. Retirement benet schemes – continued

184

Irish Continental Group

The average life expectancy used in the principal Group schemes at age 60 is as follows:

2021 2020

Male Female Male Female

Irish Schemes:

Current retirees 26.6 years 29.5 years 26.5 years 29.5 years

Future retirees 29.0 years 31.5 years 28.9 years 31.5 years

UK Schemes:

Current retirees 27.8 years 29.4 years 27.7 years 29.3 years

Future retirees 29.3 years 30.9 years 29.2 years 30.8 years

Assumptions regarding life expectancies are set based on actuarial advice in accordance with published statistics

and experience in each jurisdiction.

Sensitivity of pension liability judgemental assumptions

The Group’s total obligation in respect of dened benet obligations is calculated by independent, qualied

actuaries, updated at least annually and totals €140.5 million at 31 December 2021 (2020: €140.8 million). At 31

December 2021, the Group also has scheme assets totalling €145.8 million (2020: €139.6 million), giving a net pension

surplus of €5.3 million (2020: decit of €1.2 million). The size of the obligation is sensitive to actuarial assumptions.

The sensitivity analyses below are based on a change in an assumption while holding all other assumptions constant

with the exception of the rate of ination assumption which impacts other ination linked assumptions. The

sensitivity analysis intends to provide assistance in understanding the sensitivity of the valuation of pension liabilities

to market movements on discount rates, ination rates and mortality assumptions for scheme beneciaries. The

analyses are for illustrative purposes only as in practice assumptions rarely change in isolation.

There has been no change from the prior year in the methods and assumptions used in preparing the sensitivity

analyses below.

2021

Assumption Change in assumption

Impact on euro schemes

liabilities

Impact on sterling scheme

liabilities

Combined impact on

liabilities

Discount rate 0.5% increase in

discount rate

9.5% decrease in

liabilities

8.4% decrease in

liabilities

9.3% decrease in

liabilities

Rate of ination* 0.5% increase in

price ination

10.3% increase in

liabilities

6.0% increase in

liabilities

9.4% increase in

liabilities

Rate of mortality Members

assumed to live

one year longer

4.0% increase in

liabilities

4.3% increase in

liabilities

4.1% increase in

liabilities

32. Retirement benet schemes – continued

185

Financial Statements

2021 Annual Report and Financial Statements

2020

Assumption Change in assumption

Impact on euro schemes

liabilities

Impact on sterling scheme

liabilities

Combined impact on

liabilities

Discount rate 0.5% increase in

discount rate

9.8% decrease in

liabilities

8.7% decrease in

liabilities

9.6% decrease in

liabilities

Rate of ination* 0.5% increase in

price ination

9.5% increase in

liabilities

7.3% increase in

liabilities

9.1% increase in

liabilities

Rate of mortality Members

assumed to live

one year longer

2.8% increase in

liabilities

4.7% increase in

liabilities

3.2% increase in

liabilities

*The rate of ination sensitivity includes its impact on the rate of annual increase of pensions in payment assumption and the rate of increase of

pensionable salaries assumption as they are both ination linked assumptions.

The size of the scheme assets which are also sensitive to asset return levels and the level of contributions from the

Group are analysed by asset class in part (iv) of this note.

iv) Retirement benet assets and liabilities

The amount recognised in the Consolidated Statement of Financial Position in respect of the Group’s dened benet

obligations is as follows:

Scheme with liabilities in sterling Schemes with liabilities in euro Total

2021 2020 2021 2020 2021 2020

€m €m €m €m €m €m

Equities 13.5 10.9 68.9 62.9 82.4 73.8

Bonds 15.1 13.3 2 7.4 28.2 42.5 41.5

Property - - 1.0 4.8 1.0 4.8

Insurance contracts - - 10.9 12.3 10.9 12.3

Other 3.4 3.1 5.6 4.1 9.0 7.2

Fair value of scheme assets 32.0 27.3 113.8 112.3 145.8 139.6

Present value of scheme

liabilities (28.3) (28.0) (112.2) (112.8) (140.5) (140.8)

Surplus / (decit) in

schemes 3.7 (0.7) 1.6 (0.5) 5.3 (1.2)

Three of the dened benet obligation schemes accounted for by the Group are in a net surplus position and

are shown in non-current assets in the Consolidated Statement of Financial Position. One of the dened benet

obligation schemes accounted for by the Group is in a net decit position and is shown in non-current liabilities.

The overall weighted average duration of the Group’s dened benet obligations is 19.7 years (2020: 19.7 years).

The weighted average duration of euro scheme obligations was 20.1 years (2020: 19.9 years) and of sterling scheme

obligations was 17.9 years (2020: 18.5 years).

Notes Forming Part of the

Consolidated Financial Statements

Continued

32. Retirement benet schemes – continued

186

Irish Continental Group

The split between the amounts shown in each category is as follows:

2021 2020

€m €m

Non-current assets – retirement benet surplus 6.7 1.0

Non-current liabilities – retirement benet obligation (1.4) (2.2)

Net surplus / (decit) in pension schemes 5.3 (1.2)

v) Movements in retirement benet assets

Movements in the fair value of scheme assets in the current year were as follows:

2021

Schemes in

sterling Schemes in euro Total

€m €m €m

At beginning of the nancial year 27.3 112.3 139.6

Interest income 0.3 0.8 1.1

Actuarial gains 3.1 12.4 15.5

Exchange dierence 1.9 - 1.9

Employer contributions 0.3 0.8 1.1

Contributions from scheme members 0.1 0.2 0.3

Transfer of assets - (8.5) (8.5)

Benets paid (1.0) (4.2) (5.2)

At end of the nancial year 32.0 113.8 145.8

2020

Schemes in

sterling Schemes in euro Total

€m €m €m

At beginning of the nancial year 27.8 270.6 298.4

Presentational change - 5.2 5.2

Interest income 0.5 2.7 3.2

Actuarial gains 1.1 4.1 5.2

Exchange dierence (1.5) - (1.5)

Employer contributions 0.3 2.5 2.8

Contributions from scheme members 0.1 0.3 0.4

Transfer of assets - (160.6) (160.6)

Benets paid (1.0) (12.5) (13.5)

At end of the nancial year 27.3 112.3 139.6

The transfer of assets during 2021 and 2020 relate to the premium paid relating to the buyout transaction concluded

on 9 December 2020. Further details are provided at note 32(i) above.

32. Retirement benet schemes – continued

187

Financial Statements

2021 Annual Report and Financial Statements

vi) Movement in retirement benet liabilities

Movements in the present value of dened benet obligations in the year were as follows:

2021

Schemes in

sterling Schemes in euro Total

€m €m €m

At beginning of the nancial year 28.0 112.8 140.8

Service cost 0.4 1.3 1.7

Interest cost 0.4 0.6 1.0

Contributions from scheme members 0.1 0.2 0.3

Actuarial (loss) / gain (1.6) 10.0 8.4

Exchange dierence 2.0 - 2.0

Transfer of liabilities - (8.5) (8.5)

Benets paid (1.0) (4.2) (5.2)

At end of the nancial year 28.3 112.2 140.5

2020

Schemes in

sterling Schemes in euro Total

€m €m €m

At beginning of the nancial year 26.2 263.4 289.6

Presentational change - 5.2 5.2

Service cost 0.5 1.2 1.7

Interest cost 0.5 2.5 3.0

Contributions from scheme members 0.1 0.3 0.4

Augmentation cost - 1.1 1.1

Settlement loss - 9.3 9.3

Actuarial gain 3.1 2.9 6.0

Exchange dierence (1.4) - (1.4)

Transfer of liabilities - (160.6) (160.6)

Benets paid (1.0) (12.5) (13.5)

At end of the nancial year 28.0 112.8 140.8

The transfer of liabilities during 2021 and 2020 relate to the buyout transaction concluded on 9 December 2020,

which also gave rise to the settlement and augmentation losses reported in the year ended 31 December 2020.

Further details are provided at note 32(i) above.

Notes Forming Part of the

Consolidated Financial Statements

Continued

32. Retirement benet schemes – continued

188

Irish Continental Group

vii) Amounts recognised in the Consolidated Income Statement

Amounts recognised in the Consolidated Income Statement in respect of the dened benet obligations are as

follows:

2021 2020

€m €m

Charges to employee benets expense

Current service cost 1.7 1.7

Settlement loss (notes 10 and 32(i)) - 9.3

Augmentation cost (notes 10 and 32(i)) - 1.1

1.7 12.1

2021 2020

€m €m

Recognised in nance income

Interest income on scheme assets (1.1) (3.2)

Interest on scheme liabilities 1.0 3.0

Net interest (income) / cost on dened benet obligations (notes 6 and 7) (0.1) (0.2)

The estimated amounts of employer contributions expected to be paid to the schemes during 2021 is €1.6 million

based on current funding agreements.

viii) Amounts recognised in the Consolidated Statement of Comprehensive Income

Amounts recognised in the Consolidated Statement of Comprehensive Income in respect of the dened benet

obligations are as follows:

2021 2020

€m €m

Actuarial gains and losses

Actual total return on scheme assets 16.6 8.4

Interest income on scheme assets (1.1) (3.2)

Return on scheme assets (excluding amounts included in net interest cost) 15.5 5.2

Remeasurement adjustments on scheme liabilities:

(Losses) arising from changes in demographic assumptions (8.6) -

Gains / (losses) arising from changes in nancial assumptions 0.1 (12.0)

Gains arising from experience adjustments 0.1 6.0

Actuarial gain / (loss) recognised in the Consolidated Statement of

Comprehensive Income 7.1 (0.8)

2021 2020

€m €m

Exchange movement

Exchange gain / (loss) on scheme assets 1.9 (1.5)

Exchange (loss) / gain on scheme liabilities (2.0) 1.4

Net exchange (loss) recognised in the Consolidated Statement of Comprehensive

Income (0.1) (0.1)

32. Retirement benet schemes – continued

189

Financial Statements

2021 Annual Report and Financial Statements

33. Related party transactions

During the nancial year, Group entities incurred costs of €0.2 million (2020: €1.0 million) through provision of

administration and accounting services to Irish Ferries Limited Pension Scheme and Irish Ferries (UK) Limited Pension

Scheme, related parties that are not members of the Group. These related parties provide pension benets to

employees of the Group.

Compensation of key management personnel

The Group’s key management comprise the Board of Directors and senior management having authority and

responsibility for planning, directing and controlling the activities of the Group.

The remuneration of key management, including Directors, during the nancial year was as follows:

2021 2020

€m €m

Short-term benets 3.2 2.5

Post-employment benets 0.3 0.3

Share-based payment expense 0.9 1.3

4.4 4.1

Short-term benets comprise salary, performance pay and other short-term employee benets.

Post-employment benets comprise the past and current service cost calculated in accordance with IAS 19 Employee

Benets.

Share-based payment expense represents the cost charged in respect of equity-settled share-based payments.

The remuneration of Directors and key management is determined by the Remuneration Committee having regard to

the performance of individuals, market trends and the performance of the Group and Company.

Details of the remuneration of the Group’s individual Directors, together with the number of ICG shares owned by

them and their outstanding share options are set out in the Report of the Remuneration Committee and the Report of

the Directors.

Dividends

As the Company did not pay any dividends during the years ended 31 December 2021 and 2020, no dividends were

received by key management, including Directors.

Share options

Share options exercised by the Company’s Directors are set out in the Report of the Remuneration Committee on

pages 105 to 106.

Other relationships

In the prior reporting period Catherine Duy, non-executive Director of the Company, was a partner at law rm

A&L Goodbody (ALG) until her retirement from the partnership on 31 December 2020. During the year ended 31

December 2020, expenses of €0.3 million of which €50,000 related to Catherine’s remuneration for her role as non-

executive Director were incurred for services received from ALG in their capacity as legal advisors to the Company

and Group. All services were provided on an arm’s length basis at the standard commercial terms of ALG.

Notes Forming Part of the

Consolidated Financial Statements

Continued

190

Irish Continental Group

34. Cash ow components

2021 2020

€m €m

Retirement benet scheme movements

Retirement benet obligations – current service cost 1.7 1.7

Retirement benet obligations – payments (1.1) (2.8)

Retirement benet obligations – settlement loss - 9.3

Retirement benet obligations – augmentation cost - 1.1

Total retirement benet scheme movements 0.6 9.3

Repayments of lease liabilities

Lease payments (note 23) (21.1) (10.3)

Interest element of lease payments (note 7 & 23) 1.3 1.1

Capital element of lease payments (19.8) (9.2)

Purchases of property, plant and equipment and intangible assets

Purchases of property, plant and equipment (note 13) (45.6) (34.6)

Purchases of intangible assets (note 14) (1.0) (1.0)

(Increase) / decrease in capital asset prepayments (note 18) (8.6) 5.5

Total purchases of property, plant and equipment and intangible assets (55.2) (30.1)

Changes in working capital

(Increase) / decrease in inventories (1.9) 1.2

Decrease in receivables 2.5 1.6

Increase in payables 11.1 7.8

Total working capital movements 11.7 10.6

35. Change in nancing liabilities

The changes in liabilities arising from nancing activities during the year ended 31 December 2021 were as follows:

Bank loans Loan notes Origination fees Lease liabilities Total

€m €m €m €m €m

At 1 January 2021 151.3 50.0 (0.9) 38.5 238.9

Changes from cash ows

Repayment of borrowings (87.5) - - - (87.5)

Lease payments - - - (19.8) (19.8)

Loan Drawdown 10.0 - - - 10.0

Non-cash ow changes

Amortisation - - 0.2 - 0.2

Lease liabilities recognised - - - 38.5 38.5

Lease remeasurement - - - (0.3) (0.3)

Currency adjustment - - - 0.7 0.7

At 31 December 2021 73.8 50.0 (0.7) 5 7.6 180.7

Capital repayments on the bank loans drawn during 2018 commenced in 2020. The loan notes have bullet payment

terms with repayment due in 2024.

191

Financial Statements

2021 Annual Report and Financial Statements

36. Contingent liabilities

The Group has issued counter indemnities to Allied Irish Banks plc in relation to bonds required by regulatory

authorities and suppliers, amounting to €0.6 million (2020: €0.6 million). The Group regards these nancial

guarantee contracts as insurance contracts and accordingly the accounting treatment applied is that applicable to

insurance contracts. No claims have been notied to the Group in respect of these contracts, therefore no provision

is warranted.

The Group is a participating employer in the Merchant Navy Ocer Pension Fund (MNOPF), a multi-employer

dened benet pension scheme. The MNOPF is closed to future accrual. Under the rules of the fund, all employers

are jointly and severally liable for any past service decit of the fund. The last notication from the trustees

showed that the Group’s share of any decit would be 1.53%. Should other participating employers’ default on their

obligations, the Group will be required to absorb a larger share of the scheme decit. If the Group were to terminate

their obligations to the fund, voluntarily or otherwise, the Group may incur a statutory debt under Section 75 of the

United Kingdom Pensions Act 1995 amended by the Pensions Act 2004. The calculation of such statutory debt is

prescribed in legislation and is on a dierent basis from the current decit calculations. This would likely be a greater

amount than the net position included in these nancial statements and the Directors consider that this amount is not

quantiable unless and until such an event occurs.

In the ordinary course of business, the Group is exposed to legal proceedings from various sources including

employees, customers, suppliers and regulatory authorities. It is the opinion of the Directors that losses, if any, arising

in connection with these matters will not be materially in excess of provisions made in the nancial statements.

37. Events after the reporting period

The Board is proposing a nal dividend of 9.00 cent per ordinary share amounting to €16.5 million out of the

distributable reserves of the Company.

There have been no other material events aecting the Group since 31 December 2021.

Notes Forming Part of the

Consolidated Financial Statements

Continued

192

Irish Continental Group

2021 2020

Notes €m €m

Assets

Non-current assets

Property, plant and equipment 40 144.6 150.2

Intangible assets 41 0.4 0.3

Investments in subsidiaries 42 14.4 14.7

Retirement benet surplus 47 iv 1.1 0.7

160.5 165.9

Current assets

Trade and other receivables 43 5 7.8 107.5

Cash and cash equivalents 1.6 40.6

59.4 148.1

Total assets 219.9 314.0

Equity and liabilities

Equity

Share capital 44 11.9 12.2

Share premium 20.4 19.7

Other reserves 12.4 12.5

Retained earnings 140.3 153.7

Equity attributable to equity holders 185.0 198.1

Current liabilities

Trade and other payables 46 34.9 115.9

34.9 115.9

Total liabilities 34.9 115.9

Total equity and liabilities 219.9 314.0

The Company reported a prot for the nancial year ended 31 December 2021 of €5.3 million (2020: €15.2 million).

The nancial statements were approved by the Board of Directors on 9 March 2022 and signed on its behalf by:

Eamonn Rothwell David Ledwidge

Director Director

Company Statement of Financial Position

as at 31 December 2021

193

Financial Statements

2021 Annual Report and Financial Statements

Share

Share Share Capital Options Retained

Capital Premium Reserve Reserve Earnings Total

€m €m €m €m €m €m

Balance at 1 January 2021 12.2 19.7 7.4 5.1 153.7 198.1

Prot for the nancial year - - - - 5.3 5.3

Other comprehensive income - - - - 0.4 0.4

Total comprehensive income for

the nancial year 5.7 5.7

Share issue - 0.7 - - - 0.7

Share buyback (0.3) - 0.3 - (19.8) (19.8)

Employee share-based payments

expense - - - 0.6 - 0.6

Movement related to share

options granted to employees in

subsidiaries (note 42) - - - 0.7 - 0.7

Settlement of employee equity

plans through market purchase - - - - (1.0) (1.0)

Transferred to retained earnings on

exercise of share options - - - (1.7) 1.7 -

Movements in the year (0.3) 0.7 0.3 (0.4) (13.4) (13.1)

Balance at 31 December 2021 11.9 20.4 7.7 4.7 140.3 185.0

Company Statement of Changes in Equity

For the nancial year ended 31 December 2021

194

Irish Continental Group

Share

Share Share Capital Options Retained

Capital Premium Reserve Reserve Earnings Total

€m €m €m €m €m €m

Balance at 1 January 2020 12.2 19.5 7.4 5.9 139.4 184.4

Prot for the nancial year - - - - 15.2 15.2

Other comprehensive income - - - - (0.1) (0.1)

Total comprehensive income for

the nancial year - - - - 15.1 15.1

Share issue - 0.2 - - - 0.2

Share buyback - - - - (1.8) (1.8)

Employee share-based payments

expense - - - 0.9 - 0.9

Movement related to share

options granted to employees in

subsidiaries (note 42) - - - 1.0 - 1.0

Settlement of employee equity

plans through market purchase - - - - (1.7) (1.7)

Transferred to retained earnings on

exercise of share options - - - (2.7) 2.7 -

Movements in the year - 0.2 - (0.8) 14.3 13.7

Balance at 31 December 2020 12.2 19.7 7.4 5.1 153.7 198.1

Company Statement of Changes in Equity

For the nancial year ended 31 December 2020

195

Financial Statements

2021 Annual Report and Financial Statements

38. Company Statement of Accounting Policies

Basis of preparation

The Company Financial Statements of Irish Continental Group plc (the Company) were prepared under the historical

cost convention, in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).

In preparing these Financial Statements, the Company applies the recognition, measurement and presentation

requirements of International Financial Reporting Standards as adopted by the EU (Adopted IFRSs), but makes

amendments where necessary in order to comply with the Companies Act 2014 and has set out below where advantage

of the FRS 101 disclosure exemptions has been taken.

In these Financial Statements, the Company has applied the exemptions available under FRS 101 in respect of the

following disclosures:

• Presentation of Company Statement of Cash Flows;

• Disclosures in respect of capital management;

• The eects of new but not yet eective IFRSs; and

• Disclosures in respect of the compensation of key management personnel.

As the Consolidated Financial Statements of the Group are prepared in accordance with IFRS as adopted by the EU and

includethe equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the

following disclosures:

• Certain disclosures required by IFRS 2 Share-based Payments;

• Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial

Instruments:disclosures.

The accounting policies used in the preparation of the Company Financial Statements are consistent with the

accounting policies used in the preparation of the Consolidated Financial Statements set out in the Summary of

Accounting Policies at note 2 on pages 138 to 148. Unless otherwise stated, these have been applied consistently to all

periods presented in these Company Financial Statements. The Financial Statements have been prepared in euro and

are rounded to the nearest hundred thousand.

Accounting policies applying only to the Company Financial Statements

Investments in subsidiaries

Investments in subsidiaries held by the Company are carried at cost less any accumulated impairment losses. Equity-

settled share-based payments granted by the Company to employees of subsidiary companies are accounted for as an

increase or decrease in the carrying value of the investment in subsidiary companies and the share options reserve.

39. Company prot for the period

The prot attributable to equity shareholders dealt with in the Financial Statements of the Company was €5.3 million

(2020: €15.2 million). In accordance with Section 304 of the Companies Act 2014, the Company is availing of the

exemption from presenting its individual Income Statement to the Annual General Meeting and from ling it with the

Registrar of Companies.

Notes Forming Part of the

Company Financial Statements

Continued

196

Irish Continental Group

Disclosure of Directors’ remuneration paid in the reporting period ended 31 December 2021 and 2020 as required by

Section 305 of the Companies Act 2014, is set out below.

2021 2020

€’000 €’000

Directors remuneration:

Emoluments 1,379 1,237

Pension contributions – Dened benet 3 12

Pension contributions – Dened contribution 24 24

Gains from the exercise of options 335 774

1,741 2,047

There were no employees in the Company during the nancial year ended 31 December 2021 (2020: nil). Costs

of €2.3 million (2020: €2.4 million) were recharged to the Company from subsidiary companies in relation to

management services.

40. Property, plant and equipment

Company Plant, Land

Assets under Equipment and

Construction Vessels and Vehicles Buildings Tot al

€m €m €m €m €m

Cost

At 1 January 2020 6.4 160.0 3.3 0.1 169.8

Additions 1.3 1.2 - - 2.5

Impairment (2.3) - - - (2.3)

Disposals (5.4) - - - (5.4)

At 31 December 2020 - 161.2 3.3 0.1 164.6

Additions - - 0.3 - 0.3

At 31 December 2021 - 161.2 3.6 0.1 164.9

Accumulated depreciation

At 1 January 2020 - 5.5 3.0 0.1 8.6

Depreciation charge for the nancial year - 5.6 0.2 - 5.8

At 31 December 2020 - 11.1 3.2 0.1 14.4

Depreciation charge for the nancial year - 5.7 0.2 - 5.9

At 31 December 2021 - 16.8 3.4 0.1 20.3

Carrying amount

At 31 December 2021 - 144.4 0.2 - 144.6

At 31 December 2020 - 150.1 0.1 - 150.2

During the prior period, a contract the Company had entered into for the construction of a new vessel was cancelled

due to the inability of the shipyard to deliver the vessel. Previously paid contractual deposits were returned to the

Company by the deposit guarantor. An impairment charge of €2.3 million was recognised in the year ended 31

December 2020 against costs previously capitalised not related to the deposit guarantee.

39. Company prot for the period – continued

197

Financial Statements

2021 Annual Report and Financial Statements

41. Intangible assets

2021 2020

€m €m

Cost

At 1 January 10.2 10.0

Additions 0.2 0.2

At 31 December 10.4 10.2

Amortisation

At 1 January 9.9 9.8

Charge for the nancial year 0.1 0.1

At 31 December 10.0 9.9

Carrying amount

At 31 December 0.4 0.3

At 1 January 0.3 0.2

The intangible assets included above, all computer software, have nite useful lives of ve years, over which the

assets are amortised. Amortisation is on a straight-line basis.

42. Investment in subsidiaries

2021 2020

€m €m

Investment in subsidiaries at beginning of the nancial year 14.7 14.6

Movement related to share options allocated to employees in subsidiaries 0.7 1.0

Payments received on exercise of options (1.0) (0.9)

Investment in subsidiaries at end of the nancial year 14.4 14.7

Notes Forming Part of the

Company Financial Statements

Continued

198

Irish Continental Group

The Company’s principal subsidiaries at 31 December 2021 are as follows:

Name of subsidiary Country of incorporation and operation Principal activity

Irish Ferries Limited* Ireland Ferry operator

Eucon Shipping & Transport Limited* Ireland Container shipping services

Irish Continental Line Limited* Ireland Ship leasing

Irish Ferries Services Limited* Ireland Administration services

Belfast Container Terminal (BCT) Limited Northern Ireland Container handling

Irish Ferries (U.K.) Limited United Kingdom Shipping & forwarding agents

Eurofeeders Limited United Kingdom Shipping & forwarding agents

Irish Ferries (U.K.) Services Limited United Kingdom Administration services

Zatarga Limited Isle of Man Ship leasing

Contarga Limited* Ireland Ship leasing

Irish Ferries Finance DAC* Ireland Administration services

ICG Shipping (W. B. Yeats) Limited Ireland Non-trading

Irish Ferries International Limited* Ireland Ferry operator

*Companies availing of Companies Act 2014 exemption under S357

The Company in all instances owns 100 per cent of the issued ordinary share capital and voting rights attaching

thereto in respect of all subsidiary companies.

The registered oce for Irish Ferries Limited, Eucon Shipping & Transport Limited, Irish Continental Line Limited,

Contarga Limited, Irish Ferries Services Limited, Irish Ferries Finance DAC, ICG Shipping (W.B. Yeats) Limited, and

Irish Ferries International Limited is Ferryport, Alexandra Road, Dublin 1.

The registered oce for Belfast Container Terminal (BCT) Limited is 1 Lanyon Place, The Soloist Building, Belfast BT1

3LP, Northern Ireland. The registered oce for Irish Ferries (U.K.) Limited and Irish Ferries (U.K.) Services Limited is

The Plaza Suite 4D, 100 Old Hall Street, Liverpool L3 9QJ, England. The registered oce for Eurofeeders Limited is

Collins House, Rutland Square, Edinburgh, Midlothian EH1 2AA, Scotland. The registered oce for Zatarga Limited is

2nd Floor, St Mary’s Court, 20 Hill Street, Douglas, Isle of Man, IM1 1EU.

42. Investment in subsidiaries – continued

199

Financial Statements

2021 Annual Report and Financial Statements

43. Trade and other receivables

2021 2020

€m €m

Amounts due from subsidiary companies (note 48) 54.3 107.1

Prepayments – deposit on vessel 3.2 -

Other receivables 0.3 0.4

5 7.8 107.5

Amounts due from subsidiary companies are repayable on demand. The decrease in amounts due from subsidiary

companies of €52.8 million principally relates to repayment of amounts demanded to facilitate repayment of

nancing balances (note 48). The increase in prepayments relates to the deposits paid for a vessel for which

purchase was agreed prior to the reporting date with the balance due in early 2022. The Company has assessed

credit losses as if the receivable had been demanded at the statement of nancial position date. As all amounts are

due from subsidiaries which were in a net asset position at the reporting date, other than €0.4 million receivable from

a subsidiary in a net liability position, the Company concluded that no allowance for credit losses was required as it

would be immaterial.

44. Share capital

Details of the Company’s equity share capital are set out at note 20 to the Consolidated Financial Statements.

45. Deferred tax liabilities

There are no deferred tax liabilities and assets recognised by the Company during the current and prior reporting

periods. The Company’s taxable income was fully taxable within the Irish tonnage tax system.

The estimated value of deferred tax assets not recognised is €0.1 million (2020: €0.1 million). Deferred tax assets

are not recognised as it is not probable that taxable prots will be available against which deductible temporary

dierences can be utilised.

46. Trade and other payables

2021 2020

€m €m

Within 1 year

Amounts due to subsidiary companies (note 48) 31.2 112.7

Other payables 3.7 3.2

34.9 115.9

Other payables include provisions of €2.2 million at 31 December 2021 (€1.2 million at 31 December 2020).

Notes Forming Part of the

Company Financial Statements

Continued

200

Irish Continental Group

The amounts owed by the Company to its subsidiaries is represented as follows:

2021 2020

€m €m

Trading balances 7.2 1.5

Financing balances 24.0 111.2

31.2 112.7

Trading balances owed to subsidiary companies are subject to normal credit terms. The reduction in nancing

balances was due to repayment of loans to a subsidiary which were nanced through repayment of amounts owed to

the Company by other subsidiaries (Note 43).

Interest is payable on nancing balances at agreed xed rates comprising funding cost and a margin. The average

interest rate paid on borrowings advanced during the year was 1.80% (2020: 1.76%) and the average interest rate

payable on nancing balances outstanding at 31 December 2021 was 1.52% (2020: 1.79%).

47. Retirement benet schemes

i) Company sponsored / Group aliated schemes

Certain former employees of the Company were members of a dened benet scheme which is sponsored by

another Group Company, Irish Ferries Limited. The stated policy between the sponsoring entity and the Company

does not require the Company to recognise the net dened benet in its individual nancial statements. Detailed

information in respect of this scheme is given in note 32 to the Consolidated Financial Statements. Other former

employees were members of the Ex Merchant Navy Ocers Pension Fund (Ex MNOPF), of which the Company is the

sponsoring employer.

The contributory dened benet schemes sponsored by the Company and the Group companies provide retirement

and death benets for former employees. The dened benet schemes provide benets to members in the form of a

guaranteed level of pension payable for life, the level of the benets depend on the member’s length of service and

salary. The assets of these schemes are held separately from those of the Company and Group in schemes under the

control of trustees. The trustees are responsible for ensuring the schemes are run in accordance with the applicable

trust deeds and the pension laws of the relevant jurisdiction. The pensions charge and payments in respect of the

schemes are in accordance with the advice of professionally qualied actuaries.

The latest actuarial valuation report for the Ex MNOPF Scheme, which is not available for public inspection, is dated

29 June 2018. The valuation employed for disclosure purposes has been based on the most recent funding valuations

for the schemes adjusted by the independent actuaries to allow for the accrual of liabilities up to 31 December 2021

and to take account of nancial conditions at this date.

The present value of the dened benet obligation, and the related current service cost and past service credit, were

measured using the projected unit credit method and assets have been valued at bid value.

46. Trade and other payables – continued

201

Financial Statements

2021 Annual Report and Financial Statements

ii) Merchant Navy Ocers Pension Fund (MNOPF)

In addition to the pension schemes operated by the Company, certain former employees are members of the

MNOPF, an industry wide multi-employer scheme. The latest actuarial valuation of the scheme, which is available

for public inspection, is dated 31 March 2021 and disclosed a net past service surplus of £55.0 million, equivalent

to a gross funding level of 102% . The Company’s share of the MNOPF obligations, as most recently advised by the

trustees, is 0.51% (2020: 0.51%). The obligation valuation in these nancial statements at 31 December 2021 is based

on the actuarial decit contribution demands notied to the Company and which remain outstanding at the reporting

date. The last decit demand received by the Company was dated May 2013 which has been fully paid.

The share of the overall decit in the MNOPF apportioned to the Company is €nil at 31 December 2021 (2020: €nil).

During the year the Company made payments of €nil (2020: €nil) to the trustees.

iii) Principal risks and assumptions

The principal risks and assumptions used for the purpose of the actuarial valuations are set out in note 32 (iii) of the

Consolidated Financial Statements.

The Company’s total obligation in respect of the dened benet schemes is calculated by independent, qualied

actuaries, updated at least annually and totals €0.9 million at 31 December 2021 (2020: €1.0 million). At 31 December

2021, the Company also has scheme assets totalling €2.0 million (2020: €1.7 million) giving a net pension surplus of

€1.1 million (2020: €0.7 million). The size of the obligation is sensitive to actuarial assumptions.

iv) Retirement benet assets and liabilities

The amount recognised in the Statement of Financial Position in respect of the Company’s dened benet schemes,

is as follows:

2021 2020

€m €m

Equities 1.5 1.1

Bonds 0.3 0.4

Property 0.1 0.1

Other 0.1 0.1

Fair value of scheme assets 2.0 1.7

Present value of scheme liabilities (0.9) (1.0)

Surplus in schemes 1.1 0.7

The retirement benet scheme sponsored by the Company is in a net surplus position. In addition, the Company’s

share of the decit in the industry wide scheme, the MNOPF, based on the last actuarial valuation as at 31 March

2018 is €nil (2020: €nil). The total surplus of €1.1 million (2020: €0.7 million) is shown under non-current assets in the

Statement of Financial Position.

The Company is exposed to a number of actuarial risks, these include demographic assumptions covering mortality

and longevity, and economic assumptions covering price ination, benet and salary increases together with the

discount rate used. The size of the scheme assets is also sensitive to asset return levels and the level of contributions

from the Company.

Notes Forming Part of the

Company Financial Statements

Continued

47. Retirement benet schemes – continued

202

Irish Continental Group

v) Movement in retirement benet assets

Movements in the fair value of scheme assets in the nancial year were as follows:

€m

2021

At beginning of the nancial year 1.7

Actuarial gains 0.3

At end of the nancial year 2.0

2020

At beginning of the nancial year 1.7

Actuarial gains -

At end of the nancial year 1.7

vi) Movement in retirement benet liabilities

Movements in the present value of dened benet obligations in the nancial year were as follows:

€m

2021

At beginning of the nancial year 1.0

Actuarial gains (0.1)

At end of the nancial year 0.9

2020

At beginning of the nancial year 0.9

Actuarial losses 0.1

At end of the nancial year 1.0

The present value of scheme liabilities at the nancial year ended 31 December 2021 and 31 December 2020 relate to

wholly funded plans.

vii) Amounts recognised in the Company Income Statement

There were no amounts recognised in the Company Income Statement in respect of dened benet obligations in

the period (2020: €nil).

The estimated amounts of contributions expected to be paid by the Company to the schemes during 2022 is €nil

based on current funding agreements.

47. Retirement benet schemes – continued

203

Financial Statements

2021 Annual Report and Financial Statements

viii) Amounts recognised in the Company Statement of Comprehensive Income

Amounts recognised in the Company Statement of Comprehensive Income in respect of dened benet obligations

are as follows:

Actuarial gains and losses:

2021 2020

€m €m

Actual return on scheme assets - -

Interest income on scheme assets - -

Return on scheme assets (excluding amounts included in net interest cost) - -

Remeasurement adjustments on scheme liabilities:

Losses arising from changes in nancial assumptions 0.4 (0.1)

Actuarial gain / (loss) recognised in Statement of Comprehensive Income 0.4 (0.1)

48. Related party transactions

The Company’s prot for the year includes transactions with subsidiary companies comprising charter income of

€18.6 million (2020: €18.7 million), management charges of €0.7 million (2020: €0.7 million), dividends received of

€nil million (2020: €10.0 million) and interest payable of €3.8 million (2020: €0.6 million). Details of loan balances to

/ from subsidiaries are provided in the Company Statement of Financial Position on page 193, in note 46 ‘Trade and

other payables’, in note 43 ‘trade and other receivables’ and in the table below.

The Company has provided Letters of Financial Support for certain of its other subsidiaries.

At 31 December the following amounts were due to or from the Company by its subsidiaries:

2021 2020

€m €m

Amounts due from subsidiary companies (note 43) 54.3 1 07.1

Amounts due to subsidiary companies (note 46) (31.2) (112.7)

23.1 (5.6)

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.

Certain of the balances are trading balances and will be settled on normal credit terms. Other balances are repayable

on demand.

In the prior reporting period Catherine Duy, non-executive Director of the Company, was a partner at law rm

A&L Goodbody (ALG) until her retirement from the partnership on 31 December 2020. During the year ended 31

December 2020, expenses of €0.3 million of which €50,000 related to Catherine’s remuneration for her role as non-

executive Director were incurred for services received from ALG in their capacity as legal advisors to the Company

and Group. All services were provided on an arm’s length basis at the standard commercial terms of ALG.

Notes Forming Part of the

Company Financial Statements

Continued

47. Retirement benet schemes – continued

204

Irish Continental Group

49. Contingent liabilities

The Company is a participating employer in the Merchant Navy Ocer Pension Fund (MNOPF), a multi-employer

dened benet pension scheme. The MNOPF is closed to future accrual. Under the rules of the fund all employers

are jointly and severally liable for any past service decit of the fund. The last notication from the trustees showed

that the Company’s share of any decit would be 0.51%. Should other participating employers default on their

obligations, the Company will be required to absorb a larger share of the scheme decit. If the Company were to

terminate their obligations to the fund, voluntarily or otherwise, the Company may incur a statutory debt under

Section 75 of the United Kingdom Pensions Act 1995 amended by the Pensions Act 2004. The calculation of such

statutory debt is prescribed in legislation and is on a dierent basis from the current decit calculations. This would

likely be a greater amount than the net position included in these nancial statements and the Directors consider that

this amount is not quantiable unless and until such an event occurs.

In the ordinary course of business, the Company is exposed to legal proceedings from various sources including

employees, customers, suppliers and regulatory authorities. It is the opinion of the Directors that losses, if any, arising

in connection with these matters will not be materially in excess of provisions made in the nancial statements.

The Company acts as guarantor to lending arrangements concluded by certain of its subsidiaries. The Company

has also guaranteed the liabilities and commitments of certain of its Irish subsidiaries for the nancial year ended

31 December 2021 pursuant to the provision of Section 357 of the Companies Act 2014. The Company has treated

these guarantees as insurance arrangements and each contract is treated as a contingent liability until as such time

it becomes probable that the Company will be required to make a payment under the guarantee. The Company has

carried out a review based on the latest nancial information available regarding these subsidiaries, all of which are

in a net asset position, and assessed that as at 31 December 2021 it was not probable that the Company would be

required to make a payment under any of these guarantees. Details of the Group’s principal subsidiaries have been

included in note 42.

50. Events after the reporting period

The Board is proposing a nal dividend of 9.00 cent per ordinary share amounting to €16.5 million out of the

distributable reserves of the Company.

There have been no other material events aecting the Group since 31 December 2021.

51. Approval of nancial statements

The Financial Statements were approved by the Board of Directors and authorised for issue on 9 March 2022.

205

Financial Statements

2021 Annual Report and Financial Statements

Investor Information

206

Irish Continental Group

Investor

and Other

Information

Investor Information 208

Other Information 210

207

2021 Annual Report and Financial Statements

Investor and Other Information

ICG Units

An ICG Unit consists of one ordinary share and nil redeemable shares at 31 December 2021 and 31 December 2020.

The shares comprising a unit are not separable for sale or transfer purposes.

The number of redeemable shares comprised in an ICG Unit at any particular time will be displayed on the Irish

Continental Group plc. website www.icg.ie. The redemption of redeemable shares is solely at the discretion of the

Directors.

At 9 March 2022, an ICG Unit consisted of one ordinary share and nil redeemable shares.

Payments to shareholders

Shareholders are oered the option of having any distributions paid in euro or sterling and made by way of cheque

payment or electronic transfer. Shareholders should contact the Company’s Registrar for further information.

The Company is obliged to deduct Dividend Withholding Tax (DWT) at the standard rate of income tax in Ireland

(currently 20 per cent) from dividends paid to its shareholders, unless a shareholder is entitled to an exemption from

DWT and has returned a declaration form to the Company's Registrar claiming such entitlement.

ICG Unit price data (€)

High Low Year end

Year ended 31 December 2021 4.82 3.84 4.53

Year ended 31 December 2020 5.03 2.30 4.50

Share listings

ICG Units are quoted on the ocial lists of both Euronext Dublin and the UK Listing Authority.

ICG's ISIN code is IE00BLP58571.

ICG is a member of the CREST share settlement system. Shareholders may choose to hold paper share certicates or

hold their shares in electronic form.

Investor Relations

Please address investor enquiries to:

Irish Continental Group plc

Ferryport

Alexandra Road

Dublin 1

Telephone: +353 1 607 5628

Email: investorrelations@icg.ie

Investor Information

208

Irish Continental Group

Registrar

The Company’s Registrar deals with all administrative queries about the holding of ICG Units.

Shareholders should contact the Registrar in order to:

• Register to receive shareholder information electronically;

• Elect to receive any distributions from the Company by bank transfer; and

• Amalgamate accounts where shareholders have multiple accounts in their name, to avoid duplicate sets of

Company mailings being sent to one shareholder.

The Registrar also oers a share dealing service to shareholders.

The Company’s Registrar is:

Computershare Investor Services (Ireland) Limited

3100 Lake Drive

Citywest Business Campus

Dublin 24

D24 AK82

Telephone: +353 1 447 5483

Fax: +353 1 447 5571

Email: webqueries@computershare.ie

Financial calendar 2022

Announcement of Preliminary Statement of Results to 31 December 2021 10 March 2022

Annual General Meeting 11 May 2022

Half year results announcement 25 August 2022

Travel discounts for shareholders

Registered shareholders of 1,000 or more ICG shares can avail of a discount when travelling with Irish Ferries. The

availability of the discount, the conditions applicable and the level of discount are subject to review and are varied

from time to time. The principal features of the scheme at 9 March 2022 are:

• 20% discount on passenger and car ferry services between Ireland and Britain;

• 10% discount on passenger and car ferry services between Ireland and France (direct sailings only); and

• 5% discount on Irish Ferries inclusive package holidays (incorporating travel with Irish Ferries).

To qualify for the discount the person travelling must be the registered holder of the shares, book online at www.

irishferries.com, and apply for the discount at the time of booking. The discount is not available in conjunction with

any other discount scheme.

For further information please contact Irish Ferries Customer Support in Dublin on + 353 1 607 5700 or email

shareholders@irishferries.com.

209

2021 Annual Report and Financial Statements

Investor and Other Information

Other information

Registered oce Ferryport

Alexandra Road

Dublin 1, Ireland.

Solicitors A&L Goodbody, Dublin

Auditors KPMG

Chartered Accountants, Statutory Audit Firm

1 Stokes Place, St. Stephen’s Green, Dublin 2

Principal bankers AIB Group plc, Dublin

Bank of Ireland Group plc, Dublin

Stockbrokers Goodbody Stockbrokers, Dublin

Registrars Computershare Investor Services (Ireland) Limited

3100 Lake Drive

Citywest Business Campus

Dublin 24

D24 AK82

Website www.icg.ie

Email info@icg.ie

Euronext Dublin London Stock Exchange

Reuters IR5B_u.I ICG_u.L

Bloomberg IR5B ICGC

ISE Xetra IR5B

Investor Information

Continued

210

Irish Continental Group

Irish Continental Group plc,

Ferryport, Alexandra Road, Dublin 1, Ireland.

Tel: +353 1 607 5628

email: info@icg.ie

Website: www.icg.ie

Irish Ferries,

Ferryport, Alexandra Road, Dublin 1, Ireland.

Tel: +353 1 607 5700

email: info@irishferries.com

Website: www.irishferries.com

Eucon Shipping & Transport Ltd,

Irish Ferries head oce, Breakwater Road South,

Ferryport, Alexandra Road, Dublin 1, Ireland.

Tel: +353 1 607 5555

email: info@eucon.ie

Website: www.eucon.ie

Dublin Ferryport Terminals,

Container Terminal, Breakwater Road, Dublin 1, Ireland.

Tel: +353 1 607 5700

email: info@dft.ie

Belfast Container Terminal,

Victoria Terminal 3, West Bank Road,

Belfast BT3 9JL, Northern Ireland.

Tel: +44 7901 825387

email: info@bcterminal.com

Dublin Ferryport Inland Depot

Cedar Drive, Dublin Airport Logistics Park,

Saint Margarets, Co Dublin, K67 Y6Y8.

211

Financial Statements

2020 Annual Report and Financial Statements

Notes

212

Irish Continental Group

www.sourcedesign.ie

Irish Continental Group plc , Ferryport

Alexandra Road, Dublin 1, Ireland, D01W2F5.

Operating loss

Loss before tax

Loss for the financial year: all attributable to equity holders of the parent

Earnings per share – expressed in euro cent per share

Items that may be reclassified subsequently to profit or loss:

Items that will not be reclassified subsequently to profit or loss:

Total comprehensive income for the financial year: all attributable to equity holders of the parent

Assets

Non-current assets

Current assets

Total assets

Equity and liabilities

Equity

Equity attributable to equity holders of the parent

Non-current liabilities

Current liabilities

Total liabilities

Total equity and liabilities

Balance at 1 January 2021

Total comprehensive income for the financial year

Reserve movements in the year

Balance at 31 December 2021

Balance at 1 January 2020

Total comprehensive income for the financial year

Reserve movements in the year

Balance at 31 December 2020

Loss for the financial year

Cash generated from operations

Net cash inflow from operating activities

Cash flow from investing activities

Net cash (outflow) / inflow from investing activities

Cash flow from financing activities

Net cash (outflow) from financing activities

Cash and cash equivalents at end of year

Eamonn Rothwell	David Ledwidge
Director	Director