Irish Continental Group Annual Report 2021

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FY2021 Annual Report · Irish Continental Group

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2021 Annual Report
and Financial Statements

Contents

Strategic
Report

Corporate
Governance

The Group

Financial Highlights

Our Group at a Glance

Five Year Summary

Chairman’s Statement

Chief Executive’s Review

Business Model and Strategy

Key Performance Indicators and Summary of 2021 Results

The Ferries Division

The Container and Terminal Division

Financial Review

Sustainability and ESG

Risk Management

Our Fleet

Executive Management Team

The Board

Corporate Governance Statement

Report of the Audit Committee

Report of the Nomination Committee

Report of the Remuneration Committee

Report of the Directors

Directors’ Responsibility Statement

100

102

115

121

124

132

133

134

135

137

138

208

210

Financial
Statements

Independent Auditor’s Report

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Investor
and Other
Information

Investor Information

Other Information

Irish Continental Group1

Irish Continental Group (ICG) is the leading Irish-
based maritime transport group. We carry passengers
and cars, Roll on Roll off freight and Container Lift
on Lift off 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 efforts 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 profitable growth for the
benefit of all our stakeholders.

2021 Annual Report and Financial Statements2

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
significant to Irish Continental Group and its subsidiaries when
viewed as a whole.

Irish Continental Group3

Strategic
Report

The Group

Financial Highlights

Our Group at a Glance

Five Year Summary

Chairman’s Statement

Chief Executive’s Review

Business Model and Strategy

Key Performance Indicators and Summary of 2021 Results

The Ferries Division

The Container and Terminal Division

Financial Review

Sustainability and ESG

Risk Management

Our Fleet

Executive Management Team

Strategic Report2021 Annual Report and Financial Statements4

The Group

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.

Ferries
Division

• Modern fleet 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 and
Terminal Division

• Container shipping services between Ireland and

Continental Europe, operating a modern vessel fleet
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.

Revenue
€334.5m

52%

Capital Employed
€377.4m

19%

EBITDA
€52.3m

56%

48%

81%

44%

Ferries

Container & Terminal

EstoniaLatviaLithuaniaDenmarkSwedenNorwayRomaniaBulgariaSerbiaCroatiaItalySloveniaHungaryAustriaSlovakiaSwitzerlandBelgiumCzech Rep.PolandGermanyFranceUnited KingdomNetherlandsM50M1M2M3M4M7M50M50M50M50M50M50M50M11Dublin Ferryport Inland DepotDublin PortCherbourgRotterdamAntwerpHolyheadHolyheadAntwerpRotterdamPembrokeDoverCherbourgCalaisDublinRosslareBelfastCorkIrish Ferries Ropax and Cruise Ferry ServicesIrish Ferries High Speed FerryPorts Served By Ferries: Dublin, Rosslare, Holyhead, Pembroke, Cherbourg, Dover, CalaisGroup Geographical CoverageEucon RoutesDublin Ferryport TerminalsDublin Ferryport Inland DepotBelfast Container TerminalPorts Served By Container Ships: Belfast, Dublin, Cork, Antwerp, RotterdamIrish Continental Group5

Financial Highlights

Revenue
€334.5m

2020: €277.1m

2021

2020

+20.7%

EBITDA (pre non-trading items)*
€52.3m

+24.2%

2020: €42.1m

€334.5m

€277.1m

2021

2020

EBIT (including non-trading items)*
€(0.2)m

+98.1%

Basic earnings per share
(2.6)c

+74.5%

2020: €(10.4)m

2020: (10.2)c

2021

2020

€(0.2)m

2021

€(10.4)m

2020

€52.3m

€42.1m

(2.6)c

(10.2)c

Adjusted basic earnings per share*
(2.7)c

+37.2%

2020: (4.3)c

2021

2020

Net debt*
€(142.2)m

2020: €(88.5)m

-60.7%

(2.7)c

(4.3)c

2021

2020

€(142.2)m

€(88.5)m

Return on average capital employed*
(0.1%)

The Group uses alternative performance measures “APMs” which are
non-IFRS measures to monitor Group performance. Definitions and
reconciliation to IFRS measures are set out on pages 20 to 21.

2020: 0.2%

2021

2020

(0.1%)

0.2%

Irish Continental GroupOur Group at a Glance

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.

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.

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.

Key contributor to regional tourism in all
countries we offer 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.

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.

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.

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-fi services.

Strategic Report2021 Annual Report and Financial Statements8

Five Year Summary

Summary extract of Income Statement

2021

€m

2020

€m

20193

€m

2018

€m

2017

€m

Revenue

334.5

277.1

357.4

330.2

335.1

Operating expenses and employee
benefits expense

Depreciation, impairment and
amortisation

Non-trading items 1

Interest (net)

(Loss) / profit before taxation

Taxation

(Loss) / profit for the year

(282.2)

(235.0)

(270.6)

(261.8)

(254.1)

(52.5)

(0.2)

(3.9)

(4.1)

(0.8)

(4.9)

(41.3)

0.8

(11.2)

(7.6)

(18.0)

(1.0)

(19.0)

(36.8)

50.0

14.9

(3.4)

61.5

(1.3)

60.2

(22.1)

46.3

13.7

(0.8)

59.2

(1.4)

57.8

(20.7)

60.3

28.7

(1.3)

87.7

(4.4)

83.3

EBITDA

52.3

42.1

86.8

68.4

81.0

Per share information:

Earnings per share

-Basic

-Adjusted basic2

Dividend per share

Shares in issue at year end:

-At year end

-Average during the year

€cent

(2.6)

(2.7)

182.8

186.7

(10.2)

(4.3)

187.0

31.7

23.8

30.4

23.1

44.1

31.0

4.42

12.77

12.16

187.4

189.8

190.3

190.0

189.9

188.8

Irish Continental Group9

Summary extract of Statement of Financial Position

2021

€m

2020

€m

20193

€m

2018

€m

2017

€m

Property, plant and equipment, right-of-
use and intangible assets

Retirement benefit surplus

Other assets

Total assets

Equity capital and reserves

Retirement benefit obligation

Other non-current liabilities

Current liabilities

Total equity and liabilities

Summary extract of Consolidated
Statement of Cash Flows

Net cash inflow from operating activities

Net cash (outflow) / inflow from investing
activities

Net cash (outflow) / inflow from financing
activities

Cash and cash equivalents at the
beginning of the year

Effect of foreign exchange rate changes

Closing cash and cash equivalents

Net (debt) / cash

Net debt / EBITDA

387.3

6.7

117.9

511.9

249.7

1.4

154.8

106.0

511.9

56.8

(52.7)

353.0

1.0

224.9

578.9

265.9

2.2

141.6

169.2

578.9

46.1

7.8

353.5

12.5

225.8

591.8

287.9

3.7

229.3

70.9

591.8

308.1

2.5

203.7

514.3

252.9

4.2

205.7

51.5

514.3

84.8

61.5

(52.3)

(158.8)

250.0

8.1

135.2

393.3

223.8

3.4

51.5

114.6

393.3

71.8

27.7

(116.4)

(14.4)

(46.5)

131.4

(51.3)

150.4

0.4

38.5

€m

(142.2)

Times

2.6x

110.9

150.4

€m

(88.5)

Times

2.1x

124.7

0.2

110.9

€m

(129.0)

Times

1.5x

90.3

0.3

124.7

€m

(80.3)

Times

1.2x

42.2

(0.1)

90.3

€m

39.6

Times

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.

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

3 The figures for years prior to 2019 have not been restated for the effects of IFRS 16 which was adopted with effect 1 January 2019. The effect on the
Consolidated Income Statement for financial 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 profit after tax of €0.2 million. The effect 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.

Strategic Report2021 Annual Report and Financial Statements
10

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 significant 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 difficulties in our market caused by the pandemic
related travel restrictions.

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 fleet. 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 electrification 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 difficulties 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 profitability. Ferries Division RoRo revenues
recovered from a difficult start to the year following
the end of the transition period between the European
Union and the United Kingdom. The flexibility of the
Ferries Division fleet allowed Irish Ferries to quickly
adjust to changing trade flows in the first 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.

Irish Continental Group11

Financial Outcome

The overall financial 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 profit). 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 offset 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 diversified 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 difficulties, 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 significant 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 significant 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 efforts to create value
in a sustainable manner, based on a set of topics which
we have identified 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 offered will be further expanded by the planned
introduction of the Isle of Inisheer in the first 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 offer 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 efficient mode
of operation. Following the successful deployment of
these environmentally friendly electric rubber-tyred
gantries, DFT placed an order for an additional five 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.

Strategic Report2021 Annual Report and Financial Statements12

Chairman’s Statement
Continued

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 final
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 flows have
decreased between Ireland and Britain, our customers
have gained more experience with custom formalities
and many are returning to the more efficient and
reliable short sea services. The change in trade flows
and volumes throughout the year has been managed
by having a flexible fleet 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 field 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 satisfied
that the Board operates effectively to ensure the long-
term success of the Group and that each Director is
contributing effectively and demonstrating commitment
to their role.

Dividend and share buyback

On 1 July 2020, the Group announced that due to the
effect of Covid-19, the Directors considered it prudent
not to proceed with the 2019 final dividend previously
announced. With the continuation of travel restrictions
throughout 2020 and the consequential effects on
the Group’s financial 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).

Irish Continental Group13

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 effect they may have on travel
patterns. Also of concern is the conflict 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 effect of the conflict on economic growth is
uncertain. Nevertheless, with our significant investment
in a flexible modern fleet and in our container terminal
footprint combined with our strong balance sheet, this
places us in a very good position to benefit from any
continued growth in all our markets.

John B. McGuckian,

Chairman
9 March 2022

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 significant 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%.

Strategic Report2021 Annual Report and Financial Statements14

Chief Executive’s Review

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 off the island of
Ireland through operating its conventional ferries. The Group
utilised its flexible shipping fleet to ensure it could adjust and
service the short-term changes to trade flows following the
end of the Brexit transition period.

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: profit
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 difficult backdrop in our markets. These include
significant 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 significant cost containment
measures that ensured it remained profitable 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).

Irish Continental Group15

Key Financial Highlights

Financial Position

EBITDA (pre non-trading items)
€52.3m

+24.2%

2020: €42.1m

EBIT (pre non-trading items)
€(0.2)m

2020: €0.8m

Return on average capital
(0.1%)

-0.3pts

2020: 0.2%

Adjusted earnings per share
(2.7)c

+37.2%

2020: (4.3)c

Free cash flow before strategic
capital expenditure
€43.3m

+22.7%

2020: €35.3

The Group ended the year in a strong position
financially 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 definitions. 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 profitable and sustainable growth of the Group.
I’m happy to report that on a strategic level significant
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 first 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

Strategic Report2021 Annual Report and Financial Statements16

Chief Executive’s Review
Continued

of our container operations in the Port area that we
have been selected as the first 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 significant
investments in installing exhaust gas cleaning systems
(EGCS) and the ongoing program of electrification of
heavy plant at our container terminals. Both of these
investments, while reducing harmful emissions, also
bring health and safety benefits to our operatives and
align with the strategic objective of delivering sustained
and profitable growth. This investment continued in
2021, including the order of five 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 first 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
effect 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 effect 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
flexibility of our fleet, 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 flows are returning to the
more efficient and weather reliable short sea services.

Following the end of the transition period, Duty
Free sales on our sailings into Britain recommenced,

Irish Continental Group17

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
firmly 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 Officer
9 March 2022

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 difficult to judge how beneficial 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 difficult 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
efficiencies and quality. We appreciate the co-operation
and flexibility 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 off the island
were maintained.

Strategic Report2021 Annual Report and Financial Statements18

Business Model and Strategy

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 affecting 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.

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

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 five strategic pillars

Quality service

People and culture

Financial
management

Safety

Sustainability

The key resources supporting delivery of this strategy include

A modern ferry
fleet

Long term
leasehold
interests and
operating
agreements

Access to
strategically
located ports
and slot times

Experienced
qualified staff

Recognised
brand names

Access to
financial
resources

Irish Continental Group19

Strategic Report2021 Annual Report and Financial Statements20

Key Performance Indicators and Summary of
2021 Results

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 defined below.

Certain financial measures used are not defined 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 financial information, allows for a more meaningful understanding
of the underlying financial and operating performance of the Group. These non-IFRS measures should not be
considered as an alternative to financial measures as defined under IFRS. Descriptions of the APMs included in this
report are disclosed below.

Description

Benefit of APM

EBITDA represents earnings before
interest, tax, depreciation, impairment,
amortisation and non-trading items.

Eliminates the effects of financing and
accounting decisions to allow assessment
of the profitability and performance of the
Group.

EBIT represents earnings before interest,
tax and non-trading items.

Measures the Group’s earnings from
ongoing operations.

APM

EBITDA

EBIT

Free cash
flow before
strategic capital
expenditure

Net debt

Free cash flow comprises operating
cash flow 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 efficiency of
operations.

Net debt comprises total borrowings
plus lease liabilities less cash and cash
equivalents.

Adjusted Basic
Earnings Per
Share (EPS)

EPS is adjusted to exclude the non-
trading items and net interest (income) /
cost on defined benefit obligations.

ROACE

Pre-IFRS 16

ROACE represents return on average
capital employed. Operating profit
(before non-trading items) expressed as a
percentage of average capital employed
(consolidated net assets, excluding net
(debt) / cash, retirement benefit surplus /
(obligation) and asset under construction
net of related liabilities.

Use of the term Pre-IFRS 16 denotes
that the APM or IFRS measure has been
adjusted to remove the effects of the
application of IFRS 16: Leases.

Assesses the availability to the Group of
funds for reinvestment or for return to
shareholders.

Measures the Group’s ability to repay its
debts if they were to fall due immediately.

Directors consider Adjusted Basic EPS to
be a key indicator of long-term financial
performance and value creation of a
public listed company.

Measures the Group’s profitability and
the efficiency with which its capital is
employed.

Measurement of covenants for bank
facility purposes

Irish Continental Group21

APM

Non-Financial
KPI

Schedule
integrity

Description

Benefit of APM

Benefit of non-financial KPI

Schedule integrity (the number of sailings
completed versus scheduled sailings).

Schedule integrity is an important
measure for Irish Ferries’ vessels as it
reflects 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 final destination.

The following table sets forth the reconciliation from the Group’s operating loss (EBIT) for the financial year to
EBITDA, free cash flow and net debt. See note 12 to the Consolidated Financial Statements for the calculation of
Basic and Adjusted Basic EPS.

Cash Flow

Operating loss (EBIT)

Non-trading items (note 10)

Net depreciation, impairment and amortisation (note 9)

EBITDA

Working capital movements (note 34)

Pension service costs less payments (note 34)

Share based payments expense

Other

Cash generated from operations

Interest paid

Tax paid

Maintenance capital expenditure

Free cash flow before strategic capital expenditure

Strategic capital expenditure

Repayment of vessel contract deposit

Free cash flow after strategic capital expenditure

Proceeds on disposal of property, plant and equipment

Buyback of equity

Proceeds on issue of ordinary share capital

Net cash flows

Opening net debt

Recognition of right-of-use asset lease obligations

Translation / other

Closing net debt

2021
€m

(0.2)

52.5

52.3

11.7

0.6

0.3

1.1

66.0

(8.4)

(0.8)

(13.5)

43.3

(41.7)

1.6

2.8

(19.8)

0.7

(14.7)

(88.5)

(38.5)

(0.5)

(142.2)

2020
€m

(10.4)

11.2

41.3

42.1

10.6

(1.1)

0.2

(0.6)

51.2

(3.7)

(1.4)

(10.8)

35.3

(19.3)

33.0

49.0

4.9

(1.7)

0.2

52.4

(129.0)

(12.5)

0.6

(88.5)

Strategic Report2021 Annual Report and Financial Statements
22

Key Performance Indicators and Summary of
2021 Results
Continued

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

ROACE

Equity

Net debt

Asset under construction (including prepayment deposits)

Retirement benefit obligations

Retirement benefit surplus

Capital employed

Average capital employed

Operating (loss) / profit (before non-trading items)

ROACE

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

Net debt

Cash and cash equivalents (note 19)

Non-current borrowings (note 22)

Current borrowings (note 22)

Non-current lease obligations (note 23)

Current lease obligations (note 23)

Net debt

2021
€m

249.7

142.2

(9.2)

1.4

384.1

(6.7)

377.4

364.9

(0.2)

(0.1%)

2021
€m

38.5

(115.8)

(7.3)

(37.5)

(20.1)

(142.2)

2020
€m

265.9

88.5

(3.3)

2.2

353.3

(1.0)

352.3

358.3

0.8

0.2%

2020
€m

150.4

(113.1)

(87.3)

(27.8)

(10.7)

(88.5)

The calculation and performance of KPIs and a summary of the key financial 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.

Irish Continental Group23

2020

€m

277.1

42.1

Ferries

Container & Terminal

Inter- Segment

Group

2021

€m

175.5

23.2

2020

€m

141.4

22.3

2021

€m

2020

€m

2021

€m

2020

€m

2021

€m

174.0

146.5

(15.0)

(10.8)

334.5

29.1

19.8

52.3

(40.6)

(34.6)

(11.9)

(17.4)

(12.3)

17.2

(2.0)

(11.2)

(6.4)

0.2

(19.4)

(29.7)

(2.0)

0.1

15.3

(6.7)

13.1

(1.4)

11.7

(52.5)

(41.3)

(0.2)

(4.0)

0.1

0.8

(11.2)

(7.8)

0.2

(4.1)

(18.0)

Comment

Revenue

EBITDA

Depreciation, impairment and
amortisation

Operating (loss) / profit (EBIT)

Non-trading item (note 10)

Finance costs (note 7)

Finance income (note 6)

(Loss) / profit before tax

(5.9)% (4.2)% 25.5% 21.0%

(0.1)%

0.2%

(2.6)c

(10.2)c

(2.7)c

(4.3)c

43.3

35.3

ROACE

EPS: (note 12)

EPS Basic

EPS Adjusted Basic

Free cash flow

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 defined benefit obligations) was (2.7) cent compared with (4.3) cent in 2020.

5. Free cash flow before strategic capital expenditure: The Group’s free cash flow before strategic capital

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

Strategic Report2021 Annual Report and Financial Statements24

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 fleet of
seven vessels, five 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 fleet, 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

Ulysses

Isle of Inishmore

Isle of Innisfree

Blue Star 1 (chartered-in)

Type

Cruise ferry

Employment

Dublin – Holyhead

Dover – Calais

Rosslare - Pembroke

Epsilon (chartered-in)

Ropax

Dublin – Holyhead / Cherbourg

Dublin Swift

W.B. Yeats

High speed ferry

Dublin – Holyhead

Cruise ferry

Dublin – Holyhead / Cherbourg

Isle of Inisheer (acq’d Jan 2022)

Ropax

Dover – Calais

Chartered out by Ferries Division

Vessel

Ranger

Elbfeeder

Elbtrader

Thetis D

CT Daniel

CT Rotterdam

Elbcarrier

Type

Employment

LoLo container vessel

Charter – 3rd Party

LoLo container vessel

Charter – Inter-Group

LoLo container vessel

Charter – Inter-Group

LoLo container vessel

Charter – 3rd Party

LoLo container vessel

Charter – 3rd Party

LoLo container vessel

Charter – Inter-Group

LoLo container vessel

Charter – Inter-Group

Irish Ferries Ropax and

Cruise Ferry Services

Irish Ferries High Speed Ferry

M50

Dublin Port

M50

Holyhead

M50

M11

Dublin

Rosslare

Holyhead

United Kingdom

Pembroke

Dover

Calais

Cherbourg

France

Irish Continental Group25

M50

Dublin Port

M50

Holyhead

Irish Ferries Ropax and
Cruise Ferry Services

Irish Ferries High Speed Ferry

M50

M11

Dublin

Rosslare

Holyhead

United Kingdom

Pembroke

Dover

Calais

Cherbourg

France

Strategic Report2021 Annual Report and Financial Statements26

The Ferries Division
Continued

2021 Overall Ferries Division
Performance

Revenue
€175.5m

2020: €141.4m

+24.1%

EBITDA
€23.2m

2020: €22.3m

+4.0%

EBIT
€(17.4)m

2020: €(12.3)m

-41.5%

Non-trading item
-

2020: €(11.2)m

+100.0%

ROACE
(5.9%)

2020: (4.2%)

-1.7pts

Revenue in the division was 24.1% higher than the
previous year at €175.5 million (2020: €141.4 million).
Revenue in the first 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 market1, 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
first half of the year, Irish Ferries’ passenger volumes
fell by 43.2% and in the second half of the year, which is
seasonally more significant, 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

Irish Continental Group27

Strategic Report2021 Annual Report and Financial Statements28

The Ferries Division
Continued

the safety for all passengers, all designed to give greater
customer confidence. 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 flexible 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 service2.

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 flow on the IrishFerries.com website. AI
enabled automated web chat was introduced in the
last quarter to handle routine passenger enquiries more
efficiently, 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 final quarter of the year,
we participated in a collaborative “press the green
button” campaign with Tourism Ireland to encourage
tourists to return to Ireland.

(Market figures source: Passenger Shipping Association and Cruise &
Ferry)

(Inclusion in an online nationally representative omnibus survey carried
out amongst all adults 16+ by a third party market research company)

Irish Continental Group29

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 staff. The
uniform was the culmination of a year-long design
project between Irish Ferries and Irish fashion designer
Deborah Veale and involved extensive staff research and
engagement. The new look reflects 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 staff a greater variety of styles from which to
choose from and are designed to fit and flatter 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 landfill.

Frontline Crew

The challenges required of the Covid-19 pandemic,
were a key focus for frontline staff 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)

Strategic Report2021 Annual Report and Financial Statements30

The Ferries Division
Continued

RoRo Freight

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 traffic
from the direct continental routes to the landbridge.

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 field 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 first 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 figures 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.

Irish Continental Group31

Strategic Report2021 Annual Report and Financial Statements32

The Container and Terminal Division

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 five 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 final
three RTGs. The final two rail mounted gantry cranes
will be phased out of operation during 2022.

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 fleet 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 offering 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 offering 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

M50

Dublin Ferryport Inland Depot

Dublin Port

M50

Rotterdam

Antwerp

M50

Norway

M50

M11

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

Belfast

Dublin

Cork

Sweden

Estonia

Latvia

Denmark

Lithuania

United Kingdom

Rotterdam

Poland

Netherlands

Antwerp

Belgium

Germany

Czech Rep.

Slovakia

France

Switzerland

Italy

Austria

Hungary

Slovenia

Croatia

Romania

Serbia

Bulgaria

Irish Continental Group33

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

M50

Dublin Ferryport Inland Depot

Dublin Port

M50

Rotterdam
Antwerp

M50

Norway

M50

M11

M50

Belfast

Dublin

Cork

Sweden

Estonia

Latvia

Denmark

Lithuania

United Kingdom

Rotterdam

Poland

Netherlands

Antwerp

Belgium

Germany

Czech Rep.

Slovakia

France

Switzerland

Italy

Austria

Hungary

Slovenia

Croatia

Romania

Serbia

Bulgaria

Strategic Report2021 Annual Report and Financial Statements34

The Container and Terminal Division
Continued

2021 Overall Container and Terminal
Performance

Revenue
€174.0m

2020: €146.5m

+18.8%

EBITDA
€29.1m

2020: €19.8m

EBIT
€17.2m

2020: €13.1m

ROACE
25.5%

2020: 21.0%

+47.0%

+31.3%

+4.5pts

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 flexible chartered fleet and slot charter
arrangements, Eucon was able to adjust capacity
and thereby continue to meet the requirements of
customers in a cost effective and efficient manner.

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 fleet in January 2021. The revenue gains
were offset 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 flexible 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 offset 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 efficiencies 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 five additional electric rubber-tyred gantries capable
of remote operation. These new environmentally
friendly machines will continue to deliver operational
efficiency 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.

Irish Continental Group35

Strategic Report2021 Annual Report and Financial Statements36

Financial Review

Results

Revenue for the year amounted to €334.5 million (2020:
€277.1 million) while operating profit before non-trading items
amounted to a loss of €(0.2) million compared with a profit
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
effect 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
defined benefit obligations and non-trading items) was
(2.7) cent compared with (4.3) cent in 2020.

Irish Continental Group37

Cash flow and investment

EBITDA for the year was €52.3 million (2020: €42.1
million). There was a net inflow of €11.7 million due to
positive working capital movements, pension funding
movements of €0.6 million and other net cash inflows
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 outflows 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 flows 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) offset 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 effects 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 final 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 final
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.

Pensions

The Group has four, separately funded, company-
sponsored defined benefit obligations covering
employees in Ireland, the UK and the Netherlands. The
Group also participates in the UK based industry-wide
scheme, the Merchant Navy Officers 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 defined benefit
pension schemes at 31 December 2021 was €5.3 million
in comparison to €1.2 million deficit at 31 December
2020.

On 9 December 2020, the Trustee of the Group’s
principal defined benefit 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 difference 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 benefits of certain members
resulting in an augmentation cost of €1.1 million being
the present value of the future benefit changes. The
Group’s subsidiary, Irish Ferries Limited, the sponsoring
employer of the scheme, underwrites the scheme’s

Strategic Report2021 Annual Report and Financial Statements38

Financial Review
Continued

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 financial 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 significant 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 Officer
9 March 2022

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 benefits into
the future.

Financial risk management

The principal objective of the Group’s treasury policy is
the minimisation of financial 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 financial instruments for speculative purposes.

Interest rate management

The interest rates on Group borrowings at 31 December
2021, comprising loan notes and finance lease
obligations have been fixed at a contracted rate at the
date of drawdown with the relevant lender, eliminating
exposure to interest rate risk on borrowings. The
average effective interest rate at 31 December 2021
was 1.60% (2020: 1.60%). Debt interest cover under our
banking covenants to operating cash flows 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 significant sterling and US dollar cash flows. The
Group’s principal policy is to minimise currency risk
by matching foreign currency assets and liabilities and
to match cash flows 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 significant
operational risk, partly as a result of historically
significant price fluctuations. In the Container and
Terminal Division bunker costs above a base level
are offset 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

Irish Continental Group39

Strategic Report2021 Annual Report and Financial Statements40

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 fleet

Early energy efficiency design index
certification for Ulysses and Isle of Inishmore

Improved machinery efficiency on board
Ulysses

Overhaul of electrical network at DFT

Use of 100 percent green electricity at BCT,
DFT and head office

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 flooring fitted in 1,100 new and
refurbished containers

Installation of solar panels on our DFT
engineering building

Investment in five additional electric cranes
at DFT to replace existing diesel units in 2022

Continued rollout of ballast water treatment
project across fleet

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
office locations to improve contributions to
the circular economy

Irish Continental Group41

Introduction

Over the past 12 months, we have placed a significant
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 efforts to create value
in a sustainable manner, based on a set of topics which
we have identified 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 first 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 reflect the changing landscape in
which we operate.

Social and Governance

63 percent reduction in overall Lost Time
Injury Frequency rate versus 2020

Facilitation of hybrid working arrangements
for office-based staff 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

Strategic Report2021 Annual Report and Financial Statements42

Sustainability and ESG
Continued

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 influence 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

effective.

• 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 influence 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 difficult 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.

Irish Continental GroupAligning 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 significant
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 five goals of the UN SDGs that we felt
we could most effectively contribute to in last year’s
annual report, we are also supporting SDG 9 through
our strategic focus on upgrade infrastructure and
retrofit projects with increased resource-use efficiency
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 benefits

Upgrade of infrastructure and
retrofit projects with increased
resource-use efficiency

Adoption of clean and
environmentally sound
technologies and processes

Implementing effective 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

Strategic Report2021 Annual Report and Financial Statements44

Sustainability and ESG
Continued

The Voyage Ahead

Operational Measures

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 five-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.

• 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 fleet 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 different operation modes,
including Eco-mode. In late 2021, installation
commenced onboard the W.B. Yeats which, if
successful, shall be expanded across the fleet.

• 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
efficiency.

• Use of experienced crews and port operations teams

to increase efficiency.

• Continuous improvement of vessel performance in

line with relevant Ship Energy Efficiency 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 fleet with

efficient ships incorporating latest technologies, in
line with vessel life cycles. Our W.B. Yeats vessel
is approximately 35 percent more efficient than its
predecessor Oscar Wilde.

Irish Continental Group45

• Increased utilisation of onshore power within the EU

enabled by FuelEU Maritime proposals.

• Compliance with ongoing design efficiency

requirements under IMO energy efficiency design
index for new (EEDI) and existing (EEXI) ships. In 2021,
we obtained early class certification that Ulysses and
Isle of Inishmore exceed the required EEXI applicable
to existing ships from 2023 and will seek certification
for the remaining fleet 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 efficient turbochargers

on board Ulysses in late 2021. This has resulted in
a significant lowering of exhaust temperatures,
reducing overall wear and tear and improving fuel
efficiency.

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

reduce resistance when moving through water.

• Use of energy efficient propeller blades to decrease

resistance and improve fuel efficiency.

We continually research and assess the feasibility of
retrofit projects to improve the emissions performance
of our fleet, ensuring innovative technologies that are
safe and proven effective can be introduced where
appropriate. This includes;

• Ongoing investment and assessment of suitable

technologies to improve existing fleet 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 efficiency, such as assessing
modifications 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
verification under both the EU Monitoring, Reporting
and Verification (MRV) Regulation for which Group
vessels have complied with since 2018, and the IMO
Fuel Oil Data Collection System (DCS) reporting which
came into effect in 2019.

Decarbonising our Terminal Operations

Whilst we are aligning with, and driving innovation to
go beyond, regulatory requirements for our fleet, 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 first 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 fleet with eight electrical RTG units
from 2019 to 2021. In 2022, DFT will commission five
additional electric RTGs; two additions to the fleet and
three replacements for end of life diesel cranes. This will
increase the overall DFT fleet to 75 percent electrically
powered. In making this transition, significant 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 staff 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 staff. LED
lighting is installed within our terminal buildings and flood
and mast lighting systems around the terminals. Since
mid-2020, the electricity supply for our DFT terminal and
Dublin offices is certified green, while our Belfast Terminal
has been powered by 100 percent green electricity for the
last several years.

Strategic Report2021 Annual Report and Financial Statements
46

Sustainability and ESG
Continued

Environmental Data

Shipping Operations

Topic

Relevant Metric

2021

2020

2019

Unit of measure

SASB Reference

399,796

336,535

381,261

Metric tons (t) CO2-e

TR-MT-110a.1

Greenhouse
gas emissions

Gross global Scope 1
shipping emissions

CO2 emissions per GT mile

• Ferries fleet

16.58

15.34

15.72

CO2 emissions per transport work

• Container fleet

40.08

43.96

44.98

Grams (g) CO2 / gross
ton-nautical mile

Grams (g) CO2 / cargo
ton-nautical mile

N/A

Total energy consumed

5,111,364

4,305,170

4,876,440 Gigajoules (GJ)

Percentage heavy fuel oil

75.97%

74.91%

75.28%

Percentage (%)

Average Energy Efficiency
Design Index (EEDI) for new
ships

18.5

Grams (g) of CO2 per
ton-nautical mile

TR-MT-110a.3

TR-MT-110a.4

Air quality

NOx (excluding N20)

7,882

7,393

8,377

Metric tons (t)

TR-MT-120a.1

Ecological
Impacts

Workforce
health and
safety

Business
ethics

SOx

Particulate Matter (PM10)

Shipping duration in marine
protected areas or areas
of protected conservation
status

Percentage of fleet
implementing ballast water
exchange

Percentage of fleet
implementing ballast water
treatment

Number of spills and
releases to the environment

Aggregate volume of
spills and releases to the
environment

Lost time incident rate from
seafaring operations

Number of calls at ports
in countries that have
the 20 lowest rankings in
Transparency International’s
Corruption Perception Index

Total amount of monetary
losses as a result of legal
proceedings associated
with bribery or corruption

623

396

Nil

525

341

Nil

2,767

Metric tons (t)

TR-MT-120a.1

562

Nil

Metric tons (t)

TR-MT-120a.1

Number of travel days TR-MT-160a.1

94.12%

92.31%

Percentage (%)

TR-MT-160a.2

29.41%

15.38%

7.69%

Percentage (%)

TR-MT-160a.2

Number

TR-MT-160a.3

0.01

0.201

0.02

Cubic meters (m3)

TR-MT-160a.3

1.0

4.7

4.6

Rate

TR-MT-320a.1

Nil

Number

TR-MT-510a.1

€Nil

Euro

TR-MT-510a.2

Irish Continental Group47

Topic

Relevant Metric

Accident
and safety
management

Activity

Number of marine
casualties

Percentage classified as
very serious

Number of port state
detentions

Number of shipboard
workers

Total distance travelled by
vessels

2021

Nil

501

2020

2019

Unit of measure

SASB Reference

Number

TR-MT-540a.1

100%

Percentage (%)

TR-MT-540a.1

Nil

412

Nil

Number

TR-MT-540a.3

455

Number

TR-MT-000.A

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 fleet

- Owned

- Chartered in

-Chartered out

Number of vessel port calls

6,423

Twenty-foot equivalent
(TEU) capacity (Container
fleet)

5,502

5,221

5,449

5,534

4,475

Number

TEU

TR-MT-000.E

TR-MT-000.F

TR.MT.000.G

Terminal Operations

Relevant Metric

Scope 1 emissions from Terminal operations

Scope 2 emissions from Terminal operations

2021

3,117

Nil

Total Scope 1 and 2 emissions from Terminal operations

3,117

2020

3,349

386

3,735

71,732

Unit of measure

Metric tons (t) CO2-e

Gigajoules (GJ)

26.77%

Percentage (%)

74,373

43.21%

Total energy consumed

Percentage renewable

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

468

Metric tons (t) CO2-e

Total Scope 1 and 2 emissions

402,995

340,270

Metric tons (t) CO2-e

Total fuel consumed

Total energy consumed

126,519

106,688

Metric tons (t)

5,187,201

4,738,369

Gigajoules (GJ)

Strategic Report2021 Annual Report and Financial Statements48

Sustainability and ESG
Continued

Key Terms, Definitions and Commentary

Terms

Definitions

Commentary

Scope 1
emissions

Direct GHG emissions from sources
that are controlled by the Group.

Scope 2
emissions

GHG emissions from the generation
of purchased electricity consumed
by the Group.

CO2-e

Carbon dioxide equivalent units.

CO2
emissions per
GT mile

Grams of CO2 per gross ton-
nautical mile

CO2
emissions
per transport
work

Grams of CO2 per cargo ton-
nautical mile

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
Efficiency Index (EEDI) for new ships”. Scope 1
emissions from land-based activities are calculated
in line with GHG Protocol calculation tools.

Scope 2 emissions are calculated in line with the
GHG Protocol. Where possible, the Group applies
supplier specific 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 includes direct CO2 emissions plus emissions
of other gases converted to CO2 based on their
equivalent global warming potential.

The Group considers this metric useful to viewing
the carbon intensity of its ferries fleet. Our ferries
are significantly heavier than our container fleet
and 2021 and 2020 assessments based on transport
work are not indicative of fleet efficiency or future
performance due to the impacts of Covid-19 on ferry
carryings and voyage management. An average
intensity for the overall ferries fleet is disclosed. The
increase in 2021 from 2020 reflects additions made
to our operating fleet and the entry on a new route
of shorter distance, impacting overall efficiency.
We are continuing to assess baseline performance
across all vessels and routes which should be
assisted by a return to pre-pandemic operating
conditions.

This is a widely adopted industry metric for
container vessels to assess environmental
performance. An average intensity for the overall
operated container fleet is disclosed. Carbon
intensity for the operated fleet improved by
approximately 9 percent versus 2020 and 10 percent
compared to 2019.

Irish Continental Group49

Terms

NOx

Definitions

Nitrogen Oxides

SOx

Sulphur Oxides

PM10

Particulate matter

Lost Time
Incident Rate

Lost time incidents per 1 million
hours worked

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.

Shipboard
workers

Those who work on aboard
operated vessels (including direct
employees and contractors)

Commentary

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 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 significantly reduced since the
installation of exhaust gas cleaning systems and
enhancement of sulphur emission regulations in
2020.

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.

A lost time incident is an incident that results in
absence from work beyond the date or shift when it
occurred.

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.

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 fleet 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 off-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.

Strategic Report2021 Annual Report and Financial Statements50

Sustainability and ESG
Continued

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 effort 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 certified 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) certificate 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 certification was in place as
required.

During the year, we reviewed and upgraded several
waste management contracts at our Group locations. At
our Dublin offices, 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 landfill. 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 effect,
we removed all single use plastics from our ships.

Plastics
removed
from 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 office department have designated
waste management champions. Their responsibilities
are to ensure vessels and office 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 different 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 significantly to BWT installation projects
across our fleet. 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
fleet 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 certified
sources and retain these supplies on-board in certified
sanitary conditions. Water stocks are regularly tested
in line with on-board policies to ensure it remains of

Irish Continental Group51

Certificate of plastic
offset through
Irish Ferries Tailoring

Proudly awarded to

Irish Ferries have prevented 150,000
plastic bottles from reaching landfill or our
oceans through 9000 tailored uniforms

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dvprofessionaluniforms.ie

Bamboo flooring is present on new and refurbished Eucon
containers. At 31 December 2021, 1,100, or approximately
25 percent of the Group’s container fleet include bamboo
flooring. 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 landfill 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 offers 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.

a high quality. Recognising that potable water is a
scarce resource we have integrated water conservation
measures including devices such as flow 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

Total municipal
solid waste

Total waste oil
and sludge

Total freshwater
consumption

2020

Unit of measure

2021

7,736

6,130

4,144

2,498

64,680

61,686

Cubic
metres (cm)

Increases in waste and consumption volumes in 2021
reflect the expansions made to our routes and operating
fleet, 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 office locations
and ports served to develop a consistent classification
of waste streams to enable enhanced reporting and
performance management going forward.

Strategic Report2021 Annual Report and Financial Statements

ICG
employees
and visitors

Key
contractors

LTIF on
land

LTIF at sea

Sustainability and ESG
Continued

Social: Employee Health and Safety and Diversity and Inclusion

Safety Data

2021

Incidents

Exposure
hours

Lost Time
Injury

Frequency Fatalities Incidents

2020

Exposure
hours

Lost Time
Injury

Frequency Fatalities Incidents

2019

Exposure
hours

Lost Time
Injury
Frequency

Fatalities

595,200

7 3,627,720

8 4,222,920

1.7

1.9

2021

4.6

1.0

595,200

14 2,090,676

14 2,685,876

6.7

5.2

2020

6.3

4.7

595,200

17 2,978,781

18 3,573,981

1.7

5.7

5.0

2019

6.3

4.6

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 staff, 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

Total number of employees

• Male

• Female

• % Female

• Full time

• Part time

• % Part Time Female

31 Dec 2021 31 Dec 2020

284

173

111

39%

260

83%

288

175

113

39%

260

86%

Board members

• Male

• Female

• % Female

Management staff

• Male

• Female

• % Female

Total number of new employee
hires

Total number of departures

Turnover rate

• Male

• Female

31 Dec 2021 31 Dec 2020

17%

21%

16%

19%

13%

17%

22%

11%

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 first Equality,
Diversity and Inclusion Policy, which is available on
our website. We are committed to creating a positive

Irish Continental Group
53

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
flourish 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 staff and
stakeholders.

3. Inclusion - we create a working culture where

differences 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 flexibility for a positive work life balance, while
continuing to ensure our needs as a business are
met. To this effect, we facilitated hybrid working
arrangements for our staff 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 significant 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 affairs. The actions and conduct
of our staff 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 effective 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
trafficking. 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
trafficking and labour exploitation. Appropriate
training and guidance is provided to all commercial
and procurement staff. Further details of our Modern
Slavery and Human Trafficking Policy can be found on
our website.

Strategic Report2021 Annual Report and Financial Statements54

Sustainability and ESG
Continued

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 difference. 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 staff 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 financial 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-confidence, 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.

Sunflower Lanyard

In our 2020 Annual Report we were pleased to announce
that in February 2020 Irish Ferries became the first Irish
travel operator to introduce the hidden disability Sunflower
Lanyard scheme across its entire fleet. 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 Sunflower 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 fishmonger based in the fishing town of Howth in
North County Dublin who supply locally sourced seafood
utilising sustainable fishing 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,

Irish Continental Group55

cheddar cheese and eggs are Origin Green certified,
meaning the farms and producers we source from are
independently monitored and verified 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 offer a wide variety of plant-based food and drink
options in all our cafés and restaurants. Our coffees are
provided by a Dublin-based roaster using the world’s
first purpose-built carbon neutral roastery in Dublin. All
coffees and teas served on board are fair trade certified.
We use local suppliers to service our new Dover-Calais
route, including our UK-based coffee 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
different 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 significant 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 financial 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 efforts. It is for this reason
we have made significant strides in detailing our
environmental impact over the past years while also
committing to reducing that impact, with data and
effective governance at the heart of those steps.

To gain a better understanding of how climate
change might impact our business, we reviewed
different scenarios occurring over the coming years.
These assessments looked at potential physical and
transitionary risks of a changing climate such as
flooding 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, fleet 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 financial 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.

Strategic Report2021 Annual Report and Financial Statements56

Sustainability and ESG
Continued

Risk management

Disclose how the organisation identifies, 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:

Consequence (Negative
Scenario)

Revenue

Expenses

Assets

Liabilities

Capital and
Financing

Opportunity

Financial Statement Impact

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)

Risk - Introduction of carbon emission allowances

Increased costs to purchase
allowances, penalties for
non-compliance, increase in
fuel costs, difficulty to offset
costs over time through ticket
surcharges

Partial increase
(fuel surcharge
mechanism)

Increase
(purchase of
allowances,
increase in fuel
costs)

Risk - Negative impact of meeting EEXI/EEDI requirements

Increase
(provisions
for emissions
allowances
and potential
penalties)

Increase
(impairment
depreciation
penalties)

Decrease (poor
vessel ratings)

Increased
(capex needed
to meet design
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 inefficient
vessels

Decrease
(increased vessel
docking periods,
loss of trade
due to customer
concerns
or imposed
restrictions,
reduced charter
revenues)

Risk - Failure of carbon reducing investments and projects to achieve desired efficiencies

Increase
(potential
accidents and
hazards from
new fuels)

Increased
financing to
meet capex
project
requirements

Substantial capex investment
which fails to improve carbon
intensity, disproportionate fuel
cost reductions, leak, spillage,
fire 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)

Risk - Poor ESG ratings from external agencies

Loss of investor and financier
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
(financing costs
due to limited
debt options)

Increase in tourism around
operating region due to
warmer climate. Tourism
boost from conscientious
travellers looking to holiday
locally and using a more
efficient mode of travel than
by air

Amounts paid may
contribute to an industry
innovation fund that ICG
could seek to benefit from

Optimise vessel purchasing
and selling decisions to
consider future compliance
and further enhancement
costs

Reputational improvement
by operating fully compliant
vessels

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

Decrease (loss
of financier
interest)

Use agency feedback to
improve performance and
boost future ratings

Forge supply chain alliances
with customers if strong
ESG performance can be
demonstrated

Irish Continental Group57

Consequence (Negative
Scenario)

Revenue

Expenses

Assets

Liabilities

Capital and
Financing

Opportunity

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

Financial Statement Impact

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 flooding)

Increase (higher
cost of goods
and natural
resources due to
shortages)

Decrease (risk
to immobile
assets at coastal
locations)

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)

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

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 financing for capital projects due to operational sustainability concerns

Construction of suitable
vessels and/or undertaking
of certain transport activities
not meeting sustainable
finance criteria, lack of growth
opportunities

Decrease (lack
of growth
opportunities)

Increase
(financing costs
due to limited
debt options)

Decrease (loss
of financier
interest)

Identify sustainable projects
that will achieve funding
to grow the business and
ensure long-term viability

Risk - Poor fleet 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
efficiency requirements

Decrease
(commercial
impact of vessels
undertaking
reduced speed
passages)

Decrease
(Impairment of
vessels with poor
ratings)

Increased (capex
needed to
meet efficiency
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

Strategic Report2021 Annual Report and Financial Statements58

Sustainability and ESG
Continued

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 fleet. Studies have
shown that EGCS can remove 60 to 90 percent of
particulate matter (PM), including a portion of small and
ultrafine 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.

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 specific guidance for the transport
sector which is currently in development.

Irish Continental GroupDisclose the organisation’s
governance around
climate related risks and
opportunities.

Recommended Disclosures

(a) Describe the board’s
oversight of climate-related
risks and opportunities.

Refer to pages 55 and 65

Task Force on Climate-Related Financial Disclosures Appendix

Governance

Strategy

Risk Management

Metrics and Targets

Disclose the actual and
potential impacts of
climate-related risks
and opportunities on the
organisation’s businesses,
strategy, and financial
planning where such
information is material.

Disclose how the
organisation identifies,
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.

(a) Describe the
climate-related risks
and opportunities the
organisation has identified
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

(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 financial
planning.

(b) Describe the
organisation’s processes for
managing climate-related
risks.

Refer to pages 64 to 66

Refer to pages 56 to 57 and
page 65

(c) Describe the resilience of
the organisation’s strategy,
taking into consideration
different climate-related
scenarios, including a 2°C
or lower scenario.

(c) Describe how processes
for identifying, assessing,
and managing climate-
related risks are integrated
into the organisation’s
overall risk management.

Refer to pages 56 to 57 and
page 66

Refer to pages 62 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) 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 targets
used by the organisation
to manage climate-related
risks and opportunities and
performance against targets.

Refer to page 58

Strategic Report2021 Annual Report and Financial Statements60

Sustainability and ESG
Continued

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, first
published in 2020, is a classification 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 financing. 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
classification 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 offerings to customers.

The Group’s Consolidated Financial Statements
have been prepared for the financial 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 financial
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 financial year ending 31
December 2021 represents the numerator. The Group
has determined its revenue generating activities to be
fully eligible.

Irish Continental Group61

CapEx KPI

OpEx KPI

The CapEx KPI is calculated as the proportion of the
capital expenditure of an activity that is Taxonomy-
eligible.

The OpEx KPI is calculated as the proportion of the
operating expenditure associated with Taxonomy-
eligible activities.

CapEx KPI = 100%

Taxonomy-eligible
investment

Additions to tangible and
intangible assets

OpEx KPI = 100%

Taxonomy-eligible operating
expenses

Total OpEx as defined in the
EU-Taxonomy

The capital expenditures amount to €55.2 million,
comprising strategic and maintenance capital
expenditures. The sum of the additions that reflect
investments in Taxonomy-eligible activities forms the
numerator.

The amounts reflecting 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 effective
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.

Strategic Report2021 Annual Report and Financial Statements62

Risk Management

Overview

Risk Architecture, Strategy and Protocols

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. Effective 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.

The Group follows international standard ISO 31000
(2018) ‘Risk Management – Guidelines’ in designing its
risk architecture, strategy and protocols (RASP).

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Risk Strategy

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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.

Audit Committee / Board

Senior 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 first line of defence rests with
management acting through their staffs
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 first line activities.

The third line of defence consists
of the Group Internal Audit function,
which performs independent oversight
of the first two lines and reports
directly to the Audit Committee
on matters of internal control,
compliance and governance.

External
Audit

Regulator

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 significant matters relating to the development
of risk strategy and processes of the Group.

• Keeping under review the effectiveness 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 identified comprehensively and
assessed consistently across classified 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.

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a
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Scope, Context,
Criteria

Risk Assessments

Risk Identification

Risk Analysis

Risk Evaluation

Risk Treatment

Recording and Reporting

M
o
n
i
t
o
r
i
n
g
a
n
d
R
e
v
i
e
w

Risk Assessments and Monitoring

The Board sets the Group’s risk appetite for classified
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 identification and assessment is
carried out covering their sphere of responsibility. Risks
are identified through various means, including the use
of an identification 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.

Strategic Report2021 Annual Report and Financial Statements

Risk Management
Continued

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 significant 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 identification 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 identified 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, flagged to the
Board and corrective actions taken before impacts are
fully realised.

Emerging Risks

Risk monitoring is an ongoing process to reflect the
dynamic nature of the environment in which the Group
operates. The Group acknowledges three types of
emerging risks that can arise. The first type are new
risks that emerge in the Group’s external environment.
These are identified through the ongoing Group risk
identification process. The second type are previously
identified 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 identified
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
significant 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
identifies 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.

2.
Effective
Governance
Systems

8.
Operationalise
Metrics and
Targets

3.
Stakeholder
Insights and
Research

7.
Implementing
Mitigation
and Resilience
Plans

1. Climate Change
Risk Landscape

4.
Risk
Appetite
Setting

6.
Strategic
Positioning and
Roadmap

5.
Materiality
Assessment over
Alternative
Horizons

1. Climate Change Risk Landscape

The Group identifies 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; affect 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;

Irish Continental Group65

• Risks are assessed over three different 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 identified for

engagement on associated risks.

• Opportunities are identified for each risk to support

strategic positioning and resilience planning.

• Impacts are linked to financial statement areas.

A summary of the Group’s climate risks, impacts and
opportunities is disclosed on pages 56 to 57.

2. Effective 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 finance.
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.

4. Risk Appetite Setting

Following the outcome of the stakeholder engagement
program, the RMC will develop more specific 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 significant 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, significant physical impacts for the Group may
only be experienced over the long-term horizon.

High
Impact

Medium
Impact

Low
Impact

Transition Risk

Physical Risk

Short Term
(1 -3 years)

Medium Term
(3 -10 years)

Long Term
(>10 years)

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.

3. Stakeholder Insights and Research

6. Strategic Positioning and Roadmap

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.

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.

Strategic Report2021 Annual Report and Financial Statements66

Risk Management
Continued

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.

Significant and Emerging Risk Events

Covid-19 Pandemic

The Group responded promptly when the Covid-19
pandemic began to affect 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 financial viability of services
throughout cost-cutting, efficiencies and service
restrictions.

A specific 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 specific 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 traffic 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 effects 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, significant
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
efficiently a ship transports goods or passengers.

• The introduction of the Energy Efficiency Design Index

for existing ships (EEXI) which sets from 2023 a baseline
technical design efficiency 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
significant financial and operational impacts for the Group
and are currently being managed within the climate risk
framework. In mitigation of potential financial 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

Irish Continental Group67

the Isle of Inishmore and Ulysses in 2021, with further
studies and measures across the remainder of the fleet
scheduled in 2022. The W.B. Yeats is assessed as a new
vessel under the Energy Efficiency 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 inflation

• 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 identified 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.

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 profitability.

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.

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.

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.

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 traffic 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.

Strategic Report2021 Annual Report and Financial Statements68

Risk Management
Continued

Description and Impact

Risk Treatment

2021 Developments

Operational Risk - Business Continuity

The Group’s operations are
exposed to the risk of fire, flood,
storms, vessel incidents and loss
of critical supplies caused by
accident or by natural disaster.

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.

Minor disruptions can impact
revenues while major disruptive
events can result in the loss of
critical infrastructure causing
significant financial loss and
reputational damage.

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
affected operations can be resumed
promptly and safely.

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 staff,
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 defined 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, offices 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 staff to prevent spread of contagious
illnesses.

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.

Health and safety metrics for the year are
disclosed on page 52.

The rollout of vaccination programmes
throughout Europe in 2021 helped to
protect staff, 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.

Irish Continental Group69

Description and Impact

Risk Treatment

2021 Developments

Operational Risk - Operational Compliance

The Group’s activities are
governed by a range of IMO, flag
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 financial penalties.

Ongoing training is provided to operations
staff 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 effects 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.

Operational Risk - Human Capital

There is a risk of failure to
attract qualified and talented
individuals and additionally a risk
of losing key personnel. Staff
could become unmotivated or
dissatisfied with the working
environment. These risks can
ultimately lead to a poor standard
of customer service and decision
making, affecting the Group’s
market position, reputation and
stakeholder relationships.

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 significant 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.

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.

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.

Staff 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.

Strategic Report2021 Annual Report and Financial Statements70

Risk Management
Continued

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 fines 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 staff and key contractors.

Financial Risk - Financial Loss

The Group is at risk of losses
caused by ineffective or
inefficient financial policies or
practices, such as; inadequate
budgeting and planning,
insurance provisioning, project
management or credit control
techniques.

Financial Risk - Volatility

The Group is exposed to adverse
fluctuations in fuel prices and
exchange rates which can reduce
revenues, increase cost base and
reduce overall profitability.

The Group’s financial management
activities are performed by experienced and
knowledgeable personnel. Regular internal
management reporting ensures negative
variances and trends are identified 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.

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 fixed 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 offset against corresponding decreases
in translation of Sterling costs.

Cyber-attacks continue to grow in volume
and sophistication and have particularly
intensified since the beginning of the
Covid-19 pandemic.

Notably, in May 2021, a critical national
infrastructure provider in Ireland
experienced a significant 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 efforts to protect its
systems are made.

During the year, the Group successfully
implemented a new ferry booking system
and underwent fleet expansion to service
its new Dover-Calais route. The Group
continues to monitor performance
of these projects during and after
implementation.

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.

Irish Continental Group71

Description and Impact

Risk Treatment

2021 Developments

Financial Risk - Retirement Benefit Scheme

The Group’s pension liabilities
are exposed to risks arising
from changes in interest rates,
inflation, demographics and
market values of the underlying
investments, resulting in
increased scheme obligations or
decreased scheme assets.

Financial Risk - Fraud

A significant 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 affecting
ICG could result in financial
loss, reputational and cultural
damage.

A portion of the Group’s defined benefit
risks are transferred to a third-party
insurance company.

In 2021, the Group continued its de-
risking initiatives and active investment
management.

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.

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 confirmed
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 significant matters included instances
of fraud. This policy is available on our
website.

Financial Risk - Financial Compliance

As a public listed company
with operations in different
jurisdictions, the Group must
comply with multiple financial
and administrative regulations.
Any policy changes or instances
of non-compliance could result
in financial loss, penalties or
reputational damage.

The Group relies on its professional staff
to ensure necessary filings 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 financial and administrative
impact of proposals to include the
maritime industry in the EU ETS.

Strategic Report2021 Annual Report and Financial Statements72

Our Fleet

W.B. Yeats
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

2018
2018
54,975
4
22.5 knots
2,800
1,216
1,885
1,706

Ulysses
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

2001
2001
50,938
4
22 knots
4,100
1,342
1,875
186

Isle of Inishmore
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

1997
1997
34,031
4
21.5 knots
2,100
855
2,200
208

Isle of Innisfree
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

1992
2021
28,833
4
21.0 knots
2,300
600
1,140
78

Isle of Inisheer
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

2000
2022
25,152
4
22.5 knots
1,950
500
589
218

Dublin Swift
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

2001
2016
8,403
4
35 knots
-
251
817
-

Epsilon (chartered in)
2011
Year Built
chartered-in
Acquired
26,375
Gross Tonnage
2
No. Engines
23 knots
Speed
2,800
Lane Metres
150
Car Capacity
500
Passenger Capacity
272
Beds

Blue Star 1 (chartered in)
Year Built
Acquired
Gross Tonnage
No. Engines
Speed
Lane Metres
Car Capacity
Passenger Capacity
Beds

2000
chartered-in
29,858
4
27 knots
1,718
700
1,500
192

Irish Continental Group

Ranger
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2005
2015
7,852
9,300
803 TEU

Elbfeeder
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2008
2015
8,246
11,157
974 TEU

Elbtrader
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2008
2015
8,246
11,153
974 TEU

Elbcarrier
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2007
2015
8,246
11,166
974 TEU

Thetis D
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2009
2019
17,488
17,861
1,421 TEU

CT Rotterdam
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2009
2019
8,273
11,157
974 TEU

CT Daniel
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2006
2021
9,990
11,190
868 TEU

Music (chartered in)
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2007
chartered-in
7,852
9,300
803 TEU

Mirror (chartered in)
Year Built
Acquired
Gross Tonnage
Deadweight
Capacity

2007
chartered-in
7,852
9,344
803 TEU

Strategic Report2021 Annual Report and Financial Statements74

Executive Management Team

Eamonn Rothwell
BComm, MBS,
FCCA, CFA UK

David Ledwidge
FCA, BSc (Mgmt)

Chief Executive Officer
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 Officer in 1992. He is also a Director
of Interferry European Office 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).

Chief Financial Officer
David Ledwidge, aged 42, was appointed to the Board
in March 2016. David joined the Group in 2006 from
professional services firm Deloitte where he qualified
as a Chartered Accountant. He has held various
financial 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 Officer in May 2015.

Andrew Sheen
MSc, BEng(Hons),
CEng, FIMarEST,
FRINA.

Declan Freeman
FCA

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 firm Deloitte where he
qualified as a Chartered Accountant. He has worked in
a number of financial 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.

Irish Continental Group75

Strategic Report2021 Annual Report and Financial Statements76

Irish Continental Group77

Corporate
Governance

The Board

Corporate Governance Statement

Report of the Audit Committee

Report of the Nomination Committee

Report of the Remuneration Committee

Report of the Directors

Directors’ Responsibility Statement

100

102

115

121

Strategic Report2021 Annual Report and Financial Statements78

The Board

The Group’s non-executive Directors are:

John B. McGuckian
BSc (Econ)

Daniel Clague

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

John Sheehan
FCA

Lesley Williams

Senior Independent Director
John Sheehan, aged 56, was appointed to the Board
in October 2013. John is Chief Financial Officer
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 qualified 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 certificate in ESG investing and
is a Fellow of the Chartered Institute for Securities and
Investment.

Committee Membership: Audit Committee, Remuneration Committee,
Nomination Committee

Irish Continental Group79

The Group’s executive Directors are:

The company secretary is:

Eamonn Rothwell
BComm, MBS, FCCA,
CFA UK

Thomas Corcoran
BComm, FCA

Company Secretary
Thomas Corcoran, aged 57, joined the Company
in 1989 from the international professional
services firm PwC, where he qualified as a
Chartered Accountant. He has held a number
of financial positions within the Group and
is currently Group Financial Controller and
Company Secretary. He was appointed
Company Secretary in 2001.

Committee Membership: Nomination Committee

David Ledwidge
FCA, BSc (Mgmt)

Chief Financial Officer
David Ledwidge, aged 42, was appointed to the
Board in 2016. David joined the Group in 2006 from
professional services firm Deloitte where he qualified
as a Chartered Accountant. He has held various
financial 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 Officer in May 2015.

Corporate Governance2021 Annual Report and Financial Statements80

Corporate Governance Report

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 effective
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 effectively. 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 significant depth of expertise to
the Board. For the first 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 Duffy 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 benefits 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.

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 reflects 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 significant
efforts to review our impact on the environment and,
where possible, go above and beyond the significant
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 efforts, we have for the
first time set out a plan for net zero in our land-based
operations, with further details set out on page 45.

Enhancing Board effectiveness

Social distancing guidelines have resulted in significant
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 effective standard.
With the inability to meet physically, a comprehensive

Irish Continental Group81

Monitoring culture

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 specific
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

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 significant 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 reflects 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-financial data
being integrated into the same risk management and
KPI framework as its financial counterparts.

Corporate Governance2021 Annual Report and Financial Statements82

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
effective 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 specifically reserved to
it for decision, which covers key areas of the Group’s
business including approval of financial statements,
budgets (including capital expenditure), acquisitions
or disposals of significant 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 conflict 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 five strategic pillars,
consideration of which is interwoven throughout the
Board agenda for each meeting and throughout this
report.

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 satisfied 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 effective. Under Provision 19 of
the Code, the Chair should not remain in post beyond
nine years from the date of their first 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 five years post-employment.

Irish Continental Group83

Strategic pillar

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.

People and culture

Our customers’ experience is
directly affected through their
interaction with our employees and
third-party contractors.

Financial management

Pursuit of investment opportunities
within stringent risk and reward
hurdles, avoidance of speculative
financial positions and Capital
management.

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.

Sustainability

The Group seeks to minimise
the impact of its activities on the
environment through constant
innovation, efficiency and
awareness.

Key activities during the period

• The oversight and monitoring of performance of the fleet

• Evaluation and approval of ongoing expansion including:

- Commencement of new ferry services between Dover and Calais.

- Increase in the operational ferry fleet from 5 to 8 vessels, 2 of which

were purchased and 1 chartered.

- Increase in the container vessel fleet 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.

• Overview of service quality reports.

• Monitoring of feedback from staff briefing sessions.

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

the workforce.

• Review of whistleblowing procedures.

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

Group’s operations.

• Monitored the financial 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.

• Oversight of Group operational safety reviews.

• Review of arrangements introduced to protect customers, staff and

crew aboard our vessels against Covid-19.

• Attended briefings from the Risk Management Committee.

• Review of risk appetite statements.

• Reviewed effectiveness of the Group’s internal control and risk

management systems.

• Oversight of Group compliance with existing regulations and potential

effects 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.

Corporate Governance2021 Annual Report and Financial Statements84

Corporate Governance Report
Continued

Stakeholder Engagement

At Irish Continental Group, we believe success in our
business will deliver sustained and profitable growth
for the benefit 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.

S ociety

W o rkforce

Shareholders

s
r
e
pli
S up

Environ m e n t

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 financial 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 Officer
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 affected 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 effect 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 certification on an ongoing basis. The Group
has also entered into third-party labour contracts with
respect to its terminal operations.

Irish Continental Group85

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 briefing sessions to all
employees through the management chain. There are
also annual staff reviews which promote the exchange
of views. The Group has also formulated grievance
and whistleblowing procedures whereby employees
can report any concern in confidence. The Group
also has arrangements in place for the provision of
confidential 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 offering
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 benefit the way we can deliver our
services. Increasingly this involves initiatives with an
environmental benefit 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 flag
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 significant 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.

Corporate Governance2021 Annual Report and Financial Statements86

Corporate Governance Report
Continued

Company
Secretary

Chairman

Board of Directors

Audit
Committee

Remuneration
Committee

Nomination
Committee

Chief Executive

Executive Management Team

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 effectiveness 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 effectiveness 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 effective 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 effective 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 effective 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

Irish Continental Group87

reporting of performance. They satisfy themselves on
the integrity of financial information and that financial
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 flows 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 first 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
significant benefit 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, financial 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

J. B. McGuckian (Chair)

E. Rothwell

C. Duffy (resigned: 12 May
2021)

D. Ledwidge

B. O’Kelly (resigned: 17
December 2021)

J. Sheehan

Lesley Williams
(appt: 4 January 2021)

Dan Clague
(appt: 26 August 2021)

Tenure

34 years

35 years

9 years

6 years

9 years

8 years

1 year

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.

Corporate Governance2021 Annual Report and Financial Statements88

Corporate Governance Report
Continued

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 indemnifies 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 effectively, 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 office during
normal office 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
Duffy 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
identification 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
effective 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 findings to the Chairman
together with observations thereon. The Chairman

Irish Continental Group89

used this report to lead a discussion with the Board on
overall effectiveness. 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 effectively for the long-term success
of the Group and that each Director was contributing
effectively 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 effective 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 confirms that there is a continuous process for
identifying, evaluating and managing the significant
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 identified 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-financial and diversity information by certain
large undertakings and Groups) Regulation 2017. The
promotion of a diverse Board makes prudent business
sense, promotes effective 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 reflecting
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 benefits 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.

Corporate Governance2021 Annual Report and Financial Statements90

Corporate Governance Report
Continued

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 reflective 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 defined 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 effected 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 certificate 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 certificated form are transferable upon
production to the Company’s Registrars of the original

Irish Continental Group91

share certificate and the usual form of stock transfer or
instrument duly executed by the holder of the shares.

In line with market practice, members will be asked to
renew these authorities at the 2022 AGM.

ICG Units held in uncertificated 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 (Uncertificated 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 fit
for the management of the Company’s affairs 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.

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 five 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 effect 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

Corporate Governance2021 Annual Report and Financial Statements92

Corporate Governance Report
Continued

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 (Uncertificated Securities)
Regulations 1996, specifies 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 financial 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 profits 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.

Irish Continental Group93

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 qualified
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 fill a casual vacancy or to
appoint an additional Director (within the maximum
number of Directors fixed by the Constitution of the
Company (as may be amended by the Company in
a General Meeting)) and any Director so appointed
holds office 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 office 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 office at each AGM on the
basis of the Directors who have been longest in office
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 disqualified from being a Director, and
their office 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 certificate 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 fixed term
an executive office in his/her capacity as a Director)
resigns his/her office 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 office; or

6. if s/he is removed from office by notice in writing
served upon him/her signed by all his/her co-
Directors; if s/he holds an appointment to an
executive office which thereby automatically
determines, such removal shall be deemed an act of
the Company and shall have effect 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 offence not being
an offence under the Road Traffic Act, 1961 or any
statutory provision in lieu or modification 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 office.

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.

Corporate Governance2021 Annual Report and Financial Statements94

Report of the Audit 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 significant 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
financial experience and that all members have wide
experience of corporate financial and risk matters.
Overall, the Committee is independent and possesses
the skills and knowledge to effectively 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 Officer, the Chief
Financial Officer 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 fulfilling its responsibilities
in relation to the integrity of the financial 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.

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 financial integrity for shareholders
through oversight of the financial reporting process,
including the risk and control systems which underlie
that process. This report sets out how the Committee
fulfilled 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 Duffy 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

J. Sheehan (Chair)

C. Duffy (resigned, 12 May 2021)

B. O’Kelly (resigned, 17 December
2021)

L Williams (appt’d. 8 April 2021)

D. Clague (appt’d. 26 August
2021)

Tenure

8 years

9 years

0.7 years

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.

Irish Continental Group95

• Overseeing the functioning of the internal audit

function.

• Monitor the effectiveness 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 financial year ended 31
December 2021 and the two Trading Statements issued
during the year. These reviews considered;

• Assessment of the effects of new standards effective

for reporting in financial 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 financial 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 financial
year ended 31 December 2021 are set out below and
also discussed on pages 149 to 152.

Key Estimates

• Post-employment benefits

The Group operates a number of Group sponsored
pension schemes and is also a participating employer
in the Merchant Navy Officers 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
satisfied 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 significant portion of total assets. Changes in
the useful lives may have a significant impact on
the annual depreciation and amortisation charge.
The Committee reviewed the useful life estimates
of significant assets including technological
developments, regulatory developments, operating
performance and industry scrapping cycles and were
satisfied 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 significant assets, the Committee made
inquiries of management to determine whether there
were any indications of impairment. The Committee
acknowledged the continuing effects 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 affected.

Corporate Governance2021 Annual Report and Financial Statements
96

Report of the Audit Committee
Continued

Based on the evidence provided by management
the Committee were satisfied that there were no
indicators of general declines in the market value
of the types of vessels included in the Group’s fleet.
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 profitability from its passenger operations
amounted to an indicator of impairment for its ferry
fleet at 31 December 2021 and on reassessment
also at 31 December 2020. The Group’s position as
previously reported in the 31 December 2020 financial
statements, was that the remaining useful lives of the
vessels were sufficiently 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 effect 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
satisfied 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 fleet 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 fleet as a single cash generating
unit, growth rates and the discount rate used in the
value in use calculations.

The Committee was satisfied that the recoverability
assessment performed at each reporting date was
robust, comprehensive and supported the carrying
value of the ferry fleet as at 31 December 2021 and
2020. The Committee agreed that no provision for
impairment against the carrying value of the Group’s
ferry fleet 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 effect on the Group’s financial
results. Notwithstanding the downturn in profitability
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
financial 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 effects of emerging
geopolitical issues on fuel prices. The Committee also
considered existing and future financial 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 satisfied that the Group will have adequate
financial 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 financial statements. The Going
Concern Statement is set out on page 116.

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 five year assessment time frame
and that the Group’s principal and emerging risks had
been appropriately considered. The Committee was
satisfied 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 effectiveness 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 financial 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
unified system of ongoing identification, 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 satisfied
that risk management and internal control system
had been in place throughout the financial 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 satisfied that the RMC and
Internal Audit were achieving their objectives and that
the Group control environment remains appropriate
and effective. This assessment has been reported to the
Board.

Corporate Governance2021 Annual Report and Financial Statements98

Report of the Audit Committee
Continued

The Committee also reviewed the effectiveness of
the arrangements and structures which the Company
has designed and put in place to secure material
compliance with its Relevant Obligations as defined
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 sufficient
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 financial
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 firms with the capability and

reputation to provide audit services to the Company
and Group

• Request for expressions of interest from a selection of

identified audit firms.

• Shortlisting of firms who were then invited to submit
audit proposals. As part of this process teams from
shortlisted firms 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 firms

• 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 financial 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 satisfied 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 findings to the
Committee in March 2022 prior to the finalisation of
the Financial Statements. This report, which included
a schedule of unadjusted errors and misstatements,
significant 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 findings 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 satisfied that in conducting the audit of
the 2021 Financial Statements KPMG were effective,
objective and independent.

Irish Continental Group99

As auditor, KPMG confirmed 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 firms are independent and their objectivity is
not compromised.

KPMG confirmed to the Company that the lead partner
will be rotated every five 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 satisfied that they do not conflict 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 financial year.
This approval was granted on the basis of procedural
efficiency.

The Audit Committee has considered all relationships
between the Company and the external audit firm,
KPMG, including the provision of non-audit services as
disclosed in note 9 to the financial 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

Corporate Governance2021 Annual Report and Financial Statements100

Report of the Nomination Committee

Composition

The Committee membership is set out in the table
below which also details attendance and tenure. All
Directors bring significant professional expertise to their
roles on this Committee as set out in their professional
biographies on pages 78 to 79.

Member

J.B. McGuckian* (Chair) (appt’d.
12 May 2021)

C. Duffy* (resigned 12 May
2021)

B. O’Kelly* (resigned 17
December 2021)

J. Sheehan*

L. Williams* (appt’d. 8 April
2021)

D. Clague* (appt’d 26 August
2021)

E. Rothwell

Tenure

0.5 years

9 years

5 years

0.7 years

0.5
years

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
significant 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.

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 fulfilled
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.
Reflecting 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
Duffy. 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 effectiveness at Board and
Committee level.

Irish Continental Group101

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
satisfied 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
effectively 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 confident 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 confident 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 profile 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 significant benefit 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 satisfied 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 satisfied that these arrangements
remain appropriate to the Group’s circumstances.

The Group values diversity and the benefits 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 identifies the set of skills and experience
required. Individuals are selected based on the required
competencies of the role with due regard for the
benefits 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

Corporate Governance2021 Annual Report and Financial Statements102

Report of the Remuneration Committee

The overall trading performance resulted in an operating
loss (before non-trading items) of €0.2 million compared
to an operating profit (before non-trading items) of €0.8
million in 2020. The Committee acknowledges that this
performance was negatively affected 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
significant Dover - Calais service. The reported result
belies a strong financial 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 financial 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 effects 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 satisfied 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 significant majority of shareholders agreed.

Dear Shareholder,

I am pleased to introduce the Directors’ Remuneration
Report for the first 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 significant
headwind on operations and financial performance,
with the safety of staff and customers remaining
our number one priority. Despite these challenges,
the Committee was satisfied that the business and
executives again performed strongly in terms of what
they could control. This included flexibility in terms of
freight, as well positive performance for periods during
the year when the pandemic and associated restrictions
had subsided.

Irish Continental Group103

Implementation of Policy

At the 2021 AGM, 87% of voting shareholders supported
our proposed remuneration policy, a level at which
the Committee is satisfied 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.
Specifically, 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 five-year deferral, continuing to apply post-

employment, for the entire portion of the awards
reinvested in equity under the annual bonus.

• A five-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 five
years of appointment.

These requirements create some of the most stringent
deferral and holding mechanisms in the Irish and UK
markets, locking in significant holdings with alignment
periods of between five 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 five 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 effectiveness 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 efforts 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 affecting 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 significant disruption. As the impact of the
pandemic hopefully subsides in periods ahead, the
Committee hopes to oversee further staff 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 fixed 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.

Corporate Governance2021 Annual Report and Financial Statements104

Report of the Remuneration Committee
Continued

Consideration of Discretion

Outlook

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
flow performance against the challenging business
backdrop, as well as the significant strategic
achievement of launching the Group’s first services
on the Dover-Calais cross-channel route during the
year, the world’s busiest route for ro-ro freight traffic,
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 financial 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 flexibility to restrict the
disposal of vested awards for up to five years.

Integrating ESG Measures

Over the past two years, there has been significant
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 significantly
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 reflected in the
reward structure for Executives and the wider employee
base in the period ahead.

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
significant professional expertise to their roles on this
Committee as set out in their professional biographies
on pages 78 to 79.

Member

J. Sheehan (Chair – appt’d : 26
August 2021)

B. O’ Kelly (resigned 17
December 2021)

C. Duffy (resigned 12 May 2021)

L. Williams (appt’d 8 April 2021)

D. Clague (appt’d 26 August
2021)

Tenure

8 years

9 years

5 years

1 years

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.

Irish Continental Group105

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 financial 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 figure remuneration for the year
was €1,821,000 compared with €1,608,000 in 2020 and
details are set in the table below:

Performance pay

Base salary

Restricted
shares

Cash

Benefits

Pension

Options /
PSP1

€’000

580

318

898

304

102

406

Executive Directors

E. Rothwell

D. Ledwidge

Total for executives

Non-executive Directors

J. B. McGuckian

C. Duffy

B. O’Kelly

J. Sheehan

L. Williams

D. Clague

Total for non-executives

Total

898

406

Fees

€’000

125

310

Total
2021

€’000

919

592

1,511

125

310

1,821

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 difference between the option subscription price and the average closing price of an ICG Unit between 1 October and 31
December 2021.

Corporate Governance2021 Annual Report and Financial Statements106

Report of the Remuneration Committee
Continued

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

Performance pay

Base salary

Restricted
shares

Cash

Benefits

Pension

Options /
PSP1

€’000

Executive Directors

E. Rothwell

D. Ledwidge

Total for executives

Non-executive Directors

J. B. McGuckian

C. Duffy

B. O’Kelly

J. Sheehan

Total for non-executives

Total

580

318

898

258

335

Fees

€’000

125

275

Total
2020

€’000

873

460

1,333

125

275

1,608

The value of options which vested during 2021 based on financial 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 benefit 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, reflecting 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 effective from 1 January 2021.

Director’s Pension Benefits

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

Increase in accumulated accrued annual benefits (excluding inflation) in
the period

Transfer value of the increase in accumulated accrued benefits
(excluding inflation) at year end*

Accumulated accrued annual benefits on leaving service at year end

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

D. Ledwidge

€’000

Total
2021

€’000

Total
2020

€’000

There were no pension benefits attributable to Eamonn Rothwell as he has reached normal retirement age under the
pension scheme rules and pension benefits have vested.

Irish Continental Group107

With regard to David Ledwidge, costs in relation to
defined benefit pension arrangements were €20,000
(2020: €20,000) with a further €23,000 (2020:
€23,000) related to the defined contribution pension
arrangements.

The Company also provides lump sum death in service
benefits 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

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 financial 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

Eamonn Rothwell has been with ICG since its inception
as a public company and flotation 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 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 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 effective 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 significant effort 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 significant Dover
Calais service. Despite the long standing legacy
arrangement regarding his annual performance award
being impacted significantly by factors outside of

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 financial outturn where, against
the background of continuing uncertainty attributable
to Covid-19 travel restrictions in early 2021, the
targets were set based off 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 financial outturns, the Committee
determined that a bonus amount was eligible to be paid
under the financial 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 financial 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
reflecting the experience of shareholders and wider
stakeholders, the Committee was satisfied that reducing
the financial portion of the bonus to nil was appropriate.

Corporate Governance2021 Annual Report and Financial Statements108

Report of the Remuneration Committee
Continued

The Committee also assessed the personal objectives
set and noted Mr. Ledwidge’s significant effort during
the year in protecting the Group’s finances and balance
sheet against significant 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 figure remuneration table for year
ended 31 December 2021. No annual bonus had been
awarded in relation to financial 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 five 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 effects of
the application of IFRS 16 Leases so that the diluted
earnings per share, return on average capital employed
and free cash flow 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

Return on average capital employed

Free cash flow ratio

Total shareholder return

25%

26.6c

32.3c

(2.6)c

0% out of 25%

13%

20%

5.5%

0% out of 25%

100%

130%

322.4%

25% out of 25%

• 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.

Irish Continental Group109

(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 five 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 five years.

The share price at date of vesting was €4.26.

(iii) Grants during 2021

The long term incentive scheme applicable for the 2021
financial 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

13%

100%

Median

12%

20%

130%

Top Quartile

EPSd

ROACE

FCFR

TSR

The Committee noted in setting the above targets that
EPS for financial year 2020 was negative, largely due
to the effect 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 first quarter of 2021 and whether there
were circumstances which may create a perception
that participants benefitted from ‘windfall gains’. The
Committee noted that the price used was reflective
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.

Corporate Governance2021 Annual Report and Financial Statements110

Report of the Remuneration Committee
Continued

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:

Date of
Grant

31-Dec-20

Granted

Exercised

Lapsed

31-Dec-21

Option Price
(€)

Earliest
Vesting Date

Latest Expiry
Date

E. Rothwell

Option Type

Unvested

Performance
Share Plan 1

Performance
Share Plan 2

D. Ledwidge

Option Type

Unvested

Performance
Share Plan 1

Performance
Share Plan 2

9-Mar-18

189,000

5-Mar-19

226,000

6-Mar-20

297,000

12-Mar-21

272,000

(64,260)

(124,740)

0.065

226,000

0.065 5-Mar-22

297,000

0.065 6-Mar-23

272,000

0.065 12-Mar-24

Vested but not
yet exercised

5-Mar-15

700,000

3.58

- 4-Mar-25

1,412,000

272,000 (64,260)

(124,740) 1,495,000

Date of
Grant

31-Dec-19

Granted

Exercised

Lapsed

31-Dec-20

Option Price
(€)

Earliest
Vesting Date

Latest Expiry
Date

9-Mar-18

56,500

05-Mar-
19

76,000

6-Mar-20

122,000

12-Mar-21

111,500

(19,210)

(37,290)

0.065

76,000

0.065 5-Mar-22

122,000

0.065 6-Mar-23

111,500

0.065 12-Mar-24

Vested but not
yet exercised

5-Mar-15

150,000

3.58

- 4-Mar-25

404,500

111,500

(19,210)

(37,290)

459,500

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 five
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 five years from the exercise date.

Irish Continental Group111

Remuneration for executive Directors in 2022

Pension arrangements and other benefits

The Committee will continue to apply the existing
Remuneration Policy, approved by shareholders in May
2021, during financial year 2022.

Pension arrangements and other benefits will be
unchanged from 2021.

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
significant 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
significant 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 reflects the CFO’s continued strong
contribution and individual performance in his role.

These changes are effective from 1 January 2022.

Annual Bonus

The Committee following review has retained the long-
standing legacy CEO bonus arrangements for FY2022.
The Committee remains satisfied that the outcomes
reflect Group performance, noting that no bonus was
awarded in financial 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
financial 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 flow 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 significant 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 five 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.

Corporate Governance2021 Annual Report and Financial Statements112

Report of the Remuneration Committee
Continued

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:

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.

Eamonn Rothwell

David Ledwidge

Salary multiple held*

235.6 times

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 figure 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 office 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.

The letters of appointment for other executive Directors
do not provide for any compensation for loss of office
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
identification 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 financial year ended 31 December 2021
is €478,000 (2020: €715,000).

Irish Continental Group113

Clawback Policy

Post-employment holdings

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 financial

results;

• a material breach of an executive’s contract of

employment;

• any wilful misconduct, recklessness, and / or fraud

resulting in serious injury to the financial 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 five 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.

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 five years. Executives are
restricted from disposing of those shares during this
five-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 significant 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 five
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 five 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 five years post-
employment, proportional to the amount of variable pay
awarded over the final five 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.

Eamonn Rothwell

David Ledwidge

Other executive management

No. shares*

2,484,434

167,828

758,325

Value
€m

11.2

0.8

3.4

Salary multiple
held

Release profile

19.4 times

1.5 years

2.4 times

3.1 years

4.1 times

2.9 years

Includes FY 2021 remuneration invested in equity in 2022 and included in the Director’s single figure remuneration table at 31 December 2021

Corporate Governance2021 Annual Report and Financial Statements114

Report of the Remuneration Committee
Continued

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 office 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 five years, together with the annual change in the ISEQ index and Company annual total
shareholder return were as follows;

Directors

FTE Employee

ISEQ

ICG TSR

2021

9.1%

19.9%

15.7%

0.6%

2020

(58.4%)

(16.4%)

4.0%

(7.0%)

2019

1.1%

5.7%

33.7%

17.2%

2018

(17.0%)

3.2%

(20.8%)

(24.6%)

2017

17.5%

(3.5%)

9.4%

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

Market price of shares

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.

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

Irish Continental GroupReport of the Directors

115

The Directors present their Report together with the
audited Financial Statements of the Group for the
financial year ended 31 December 2021.

Results for the year and Business
Developments

Details of the results for the financial 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 efficiency
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 financial
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 effects on
the financial performance of the Company, no dividends
have been paid during the years ended 31 December
2021 and 2020. The Company during financial 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 financial year for a
total consideration of €19.8 million (2020: €1.7 million).
Further details are contained at note 20 to the financial
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 office 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 offer 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 Duffy 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 finance function. The accounting
records of the Company are maintained at the
Company’s registered office, 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-
financial information in its Sustainability and ESG
Report contained at pages 40 to 61.

Corporate Governance2021 Annual Report and Financial Statements116

Report of the Directors
Continued

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 financial 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 effect on the Group’s financial
results. This was particularly concentrated on our
passenger business where international travel was
affected 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 significantly replaced with higher yielding
revenues on our direct services on Ireland – France
routes.

Notwithstanding the downturn in profitability 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 financial year 2021, with free
cash flow 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 financial 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 fleet and cash management
within the terms of the Group’s existing financing
arrangements. Based on this modelling, the Directors
believe the Group retains sufficient 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 five years which the Directors believe
reflects 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 financial 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 financial and operational
impacts, in severe but plausible scenarios, of the
principal risks and uncertainties and the likely degree of
effectiveness of current and available mitigating actions
as set out on pages 67 to 71. It was further assumed
that functioning financial 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.

Irish Continental Group117

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 five year
assessment period.

• 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 defined) and to
ensure that the Statutory Auditor is aware of such
information.

Directors’ Compliance Statement

International Financial Reporting Standards

The Directors acknowledge that they are responsible for
securing compliance by the Company with its Relevant
Obligations as defined by the Companies Act 2014 (the
Relevant Obligations).

The Directors confirm 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.

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 effective 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, financial 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.

The Directors further confirm 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 effectiveness of these arrangements and structures
during the financial 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 confirms
that;

• So far as they are aware, there is no relevant audit

information, as defined in the Companies Act 2014, of
which the Statutory Auditor is unaware; and

Corporate Governance2021 Annual Report and Financial Statements118

Report of the Directors
Continued

Substantial Shareholdings

The latest notifications 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:

Beneficial Holder as Notified

Eamonn Rothwell

Wellington Management Company, LLP

Kinney Asset Management, LLC

Ameriprise Financial Inc.

Marathon Asset Management, LLP

FMR, LLC

Brewin Dolphin Wealth Management

9 March 2022

31 December 2021

Number of Units % of Issued Units Number of Units % of Issued Units

29,922,604

16.3%

29,922,604

16.0%

18,714,065

13,469,752

12,712356

10,899,056

6,229,035

5,895,833

10.2%

18,666,332

7.3%

6.9%

5.9%

3.4%

3.2%

11,444,752

16,862,148

12,878,846

6,229,035

5,895,833

9.9%

6.1%

9.0%

6.8%

3.3%

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 beneficial, were as follows:

Director

John B. McGuckian

Eamonn Rothwell

David Ledwidge

John Sheehan

Lesley Williams

Dan Clague

Company Secretary

Thomas Corcoran

31/12/2021
ICG Units

01/01/2021
ICG Units

31/12/2021
Share Options

01/01/2021
Share Options

296,140

30,095,384

30,030,114

1,495,000

1,412,000

149,968

90,000

10,000

130,758

80,000

459,500

404,500

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 Duffy resigned
on 12 May 2021 and Brian O’Kelly resigned on 17 December 2021.

ICG Units are explained on page 208 of this report.

Irish Continental Group119

Auditors

Future Developments

As required under Section 381(1)(b) of the Companies
Act 2014, the AGM agenda will include a resolution
authorising the Directors to fix 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 financial
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.

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 traffic from the
direct continental routes to landbridge.

Despite another difficult 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 efficiencies and nurturing close
customer relationships.

The Group notes the ever increasing expectations
and regulatory requirements to reduce the effects of
its operational footprint on the environment. While
the Group acknowledges that its operations have an
inevitable effect on the environment, reducing this
effect is embedded within the Group’s strategy through
achievement of efficiencies and reflected in our capital
investment program.

Corporate Governance2021 Annual Report and Financial Statements120

Report of the Directors
Continued

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 financial 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 notified to shareholders in April 2022.

On behalf of the Board

Eamonn Rothwell,

David Ledwidge,

Director

9 March 2022

Registered Office: Ferryport, Alexandra Road, Dublin 1,
Ireland.

Irish Continental GroupDirectors’ Responsibility Statement

121

The Directors are responsible for preparing the
Annual Report and the Group and Company financial
statements, in accordance with applicable law and
regulations.

Company law requires the Directors to prepare
Group and Company financial statements for each
financial year. Under that law, the Directors are
required to prepare the Group financial 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 financial 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 financial statements unless they
are satisfied that they give a true and fair view of the
assets, liabilities and financial position of the Group and
Company and of the Group’s profit or loss for that year.
In preparing each of the Group and Company financial
statements, the Directors are required to:

• select suitable accounting policies and then apply

them consistently;

• make judgements and estimates that are reasonable

and prudent;

• state whether applicable Accounting Standards have
been followed, subject to any material departures
disclosed and explained in the financial 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, financial
position and profit or loss of the Company and which
enable them to ensure that the financial 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 financial 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 financial 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 financial information
included on the Group’s and Company’s website icg.
ie. Legislation in the Republic of Ireland concerning the
preparation and dissemination of financial statements
may differ 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, confirm
that, to the best of each person’s knowledge and belief:

• The Group financial statements, prepared in

accordance with IFRS as adopted by the European
Union and the Company financial statements
prepared in accordance with FRS 101 Reduced
Disclosure Framework, give a true and fair view of the
assets, liabilities, and financial position of the Group
and Company at 31 December 2021 and of the profit
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 financial 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,

David Ledwidge,

Director

Corporate Governance2021 Annual Report and Financial Statements122

Irish Continental Group

2021 Annual Report and Financial Statements

Financial Statements

123

Financial
Statements

Independent Auditor’s Report

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

124

132

133

134

135

137

138

124

Irish Continental Group

Independent Auditor’s Report to the Members of
Irish Continental Group plc

Report on the audit of the financial statements

Opinion

We have audited the financial 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 significant accounting
policies set out in note 2. The financial reporting
framework that has been applied in the preparation of
the Group financial 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 financial statements, Irish Law and FRS 101
Reduced Disclosure Framework issued in the United
Kingdom by the Financial Reporting Council.

In our opinion:

• the financial statements give a true and fair view of
the assets, liabilities and financial position of the
Group and Company as at 31 December 2021 and of
the Group’s loss for the year then ended;

• the Group financial statements have been properly

prepared in accordance with IFRS as adopted by the
European Union;

• the Company financial 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 financial statements have
been properly prepared in accordance with the
requirements of the Companies Act 2014 and, as
regards the Group financial 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 sufficient 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 first period as auditor. We
have fulfilled 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 financial statements, we have concluded
that the Director’s use of the going concern basis
of accounting in the preparation of the financial
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 flow 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 financial 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.

2021 Annual Report and Financial Statements

Financial Statements

125

Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may
cast significant 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 financial
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 financial
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.

Valuation of vessels – Group and Company

Key audit matters: our assessment of risks of
material misstatement

Key audit matters are those matters that, in our
professional judgment, were of most significance in
the audit of the financial statements and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These
matters were addressed in the context of our audit of
the financial 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 significance, were
as follows:

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 financial disclosures respectively)

The key audit matter

How the matter was addressed in our audit

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 financial 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.

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 identified 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 identification of the Group’s ferry
fleet 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.

126

Independent Auditor’s Report to the Members of
Irish Continental Group plc
Continued

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 identification of its ferry fleet 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 flow 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 flows by comparing them to past
performance and known contracted future cash flows, and performing
reasonability assessments on uncontracted future cash flows;

• Challenging the completeness of future cash outflows 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 flows with reference to the Group’s
cost of capital; and

• We performed sensitivity analysis over the Group’s assumptions with

regard to cash flows 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 identification of the Group’s ferry fleet 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.

Irish Continental Group127

Valuation of net defined benefit pension asset – Group only

Refer to note 2 (accounting policy), note 3 (Critical accounting judgements and key sources of estimation
uncertainty) and note 32 (financial disclosures)

Valuation of the net defined benefit pension asset of €5.3m consisting of pension assets of €6.7m and deficits of
€1.4m (2020 – net pension liability of €1.2m consisting of pension assets of €1.0m and deficits of €2.2m)

The key audit matter

How the matter was addressed in our audit

The Group operates a number of
defined benefit 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 defined benefit pension
assets includes estimation
uncertainty in relation to the key
assumptions used, in particular
the discount rate. In addition,
the valuation of the net defined
benefit pension asset is sensitive
to changes in those assumptions
applied.

We obtained and documented our understanding of the process in place
to value the defined benefit 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 defined benefit pension asset.

We challenged, with the support of our actuarial specialist, the key
actuarial assumptions applied in the calculation of the valuation of
the defined benefit pension asset, in particular the key discount rates
assumptions. We also assessed the inflation 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 defined benefit
pension asset to these assumptions.

We found the assumptions used in, and the resulting valuation of the
net defined benefit pension asset to be reasonable and the related
disclosures to be adequate.

Financial Statements2021 Annual Report and Financial Statements128

Independent Auditor’s Report to the Members of
Irish Continental Group plc
Continued

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 (financial 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
cashflows of such subsidiaries
is not sufficient 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 cashflows.

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
cashflows.

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 financial 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 financial statements relevant to
users in assessing the financial statements of the Group.

We report to the Audit Committee all corrected and
uncorrected audit misstatements we identified 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
significant risks and the procedures to be performed.

Materiality for the Company financial 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 finance function is such that certain
transactions and balances are accounted for by the
central Group finance 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 significant components.

Irish Continental Group129

• 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
qualifications 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

identified material inconsistencies between the
knowledge we acquired during our financial
statements audit and the Directors’ statement that
they 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 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 specified 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.

Other information

The Directors are responsible for the preparation of
the other information presented in the Annual Report
together with the financial 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 financial statements and our auditor’s report
thereon do not comprise part of the other information.
Our opinion on the financial 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 financial
statements audit work, the information therein is
materially misstated or inconsistent with the financial
statements or our audit knowledge. Based solely on that
work we have not identified 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 identified material misstatements in the

Directors’ report;

• in our opinion, the information given in the Directors’
report is consistent with the financial 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
financial 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’ confirmation 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

Financial Statements2021 Annual Report and Financial Statements130

Independent Auditor’s Report to the Members of
Irish Continental Group plc
Continued

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 financial 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 specified
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.

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 financial reporting process and
information relating to voting rights and other matters
required by the European Communities (Takeover
Bids (Directive 2004/EC) Regulations 2006 and
specified for our consideration, is consistent with
the financial 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 identified 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
2017.

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 unmodified

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 sufficient to permit the financial statements
to be readily and properly audited and the financial
statements are in agreement with the accounting
records.

Irish Continental Group131

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

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 financial statements including being
satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the
preparation of financial 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 financial 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 influence the
economic decisions of users taken on the basis of the
financial 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 affecting the financial statements.

Financial Statements2021 Annual Report and Financial Statements132

Consolidated Income Statement
for the year ended 31 December 2021

Revenue

Depreciation, impairment and amortisation

Employee benefits expense

Other operating expenses

Operating (loss) / profit before non-trading items

Non-trading items

Operating loss

Finance income

Finance costs

Loss before tax

Income tax expense

Loss for the financial year: all attributable to equity holders of the
parent

Earnings per share – expressed in euro cent per share

Basic

Diluted

Notes

2021

€m

334.5

(52.5)

(20.8)

(261.4)

(0.2)

0.1

(4.0)

(4.1)

2020

€m

277.1

(41.3)

(18.0)

(217.0)

0.8

(11.2)

(10.4)

0.2

(7.8)

(18.0)

(0.8)

(1.0)

(4.9)

(19.0)

(2.6c)

(10.2c)

Irish Continental GroupConsolidated Statement of Comprehensive Income
for the year ended 31 December 2021

133

Notes

2021

€m

2020

€m

Loss for the financial year

(4.9)

(19.0)

Items that may be reclassified subsequently to profit or loss:

Currency translation adjustment

1.3

(1.2)

Items that will not be reclassified subsequently to profit or loss:

Actuarial gain / (loss) on defined benefit obligations

Deferred tax on defined benefit obligations

32 viii

Other comprehensive income for the financial year

Total comprehensive income for the financial year: all attributable
to equity holders of the parent

7.1

(0.9)

7.5

(0.8)

0.3

(1.7)

2.6

(20.7)

Financial Statements2021 Annual Report and Financial Statements134

Consolidated Statement of Financial Position
as at 31 December 2021

Assets

Non-current assets

Property, plant and equipment

Intangible assets

Right-of-use assets

Retirement benefit surplus

Finance lease receivable

Deferred tax asset

Current assets

Inventories

Trade and other receivables

Cash and cash equivalents

Total assets

Equity and liabilities

Equity

Share capital

Share premium

Other reserves

Retained earnings

Equity attributable to equity holders of the parent

Non-current liabilities

Borrowings

Lease liabilities

Deferred tax liabilities

Provisions

Retirement benefit obligation

Current liabilities

Borrowings

Lease liabilities

Trade and other payables

Provisions

Total liabilities

Total equity and liabilities

Notes

32 iv

2021

€m

2020

€m

328.2

1.9

57.2

6.7

13.6

0.1

407.7

3.8

61.9

38.5

104.2

511.9

11.9

20.4

(8.1)

225.5

249.7

115.8

37.5

1.3

0.2

1.4

156.2

7.3

20.1

75.5

3.1

106.0

262.2

511.9

313.5

1.2

38.3

1.0

16.6

0.3

370.9

1.9

55.7

150.4

208.0

578.9

12.2

19.7

(9.3)

243.3

265.9

113.1

27.8

0.5

0.2

2.2

143.8

87.3

10.7

69.2

2.0

169.2

313.0

578.9

The Financial Statements were approved by the Board of Directors on 9 March 2022 and signed on its behalf by:

Eamonn Rothwell

David Ledwidge

Director

Irish Continental Group135

Total

€m

Consolidated Statement of Changes in Equity
For the year ended 31 December 2021

Undenominated

Capital

Options

Translation

Retained

Capital

Premium

Reserves

Reserve

Earnings

€m

Balance at 1 January 2021

12.2

19.7

Loss for the financial year

Other comprehensive income

Total comprehensive income
for the financial year

Employee share-based payments
expense

Share issue

Share buyback

Settlement of employee equity
plans through market purchase

Transferred to retained earnings
on exercise of share options

(0.3)

0.7

€m

7.5

0.3

Reserve movements in the year

(0.3)

0.7

0.3

€m

5.1

1.3

(1.7)

(0.4)

€m

(21.9)

243.3

265.9

1.3

(4.9)

6.2

(4.9)

7.5

1.3

2.6

1.3

0.7

(19.8)

(1.0)

1.7

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

Financial Statements2021 Annual Report and Financial Statements136

Consolidated Statement of Changes in Equity
For the year ended 31 December 2020

Undenominated

Capital

Options

Translation

Retained

Capital

Premium

Reserves

Reserve

Earnings

€m

Total

€m

Balance at 1 January 2020

12.2

19.5

7.5

5.9

(20.7)

263.5

287.9

Loss for the financial year

Other comprehensive income

Total comprehensive income
for the financial year

Employee share-based payments
expense

Share issue

Share buyback

Settlement of employee equity
plans through market purchase

Transferred to retained earnings
on exercise of share options

Reserve movements in the year

0.2

1.9

(2.7)

(0.8)

(1.2)

(19.0)

(0.5)

(19.0)

(1.7)

(1.2)

(19.5)

(20.7)

(1.7)

1.9

0.2

(1.7)

2.7

(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

Irish Continental Group
Consolidated Statement of Cash Flows
for the financial year ended 31 December 2021

137

Loss for the financial year

Adjustments for:

Finance costs (net)

Income tax expense

Retirement benefit scheme movements

Depreciation of property, plant and equipment

Amortisation of intangible assets

Depreciation of right-of-use assets

Impairment charges

Share-based payment expense less market purchase cost

Increase in provisions

Working capital movements

Cash generated from operations

Income taxes paid

Interest paid

Net cash inflow from operating activities

Cash flow from investing activities

Proceeds on disposal of property, plant and equipment

Lease inception costs

Return of vessel contract deposit

Purchases of property, plant and equipment and intangible assets

Net cash (outflow) / inflow from investing activities

Cash flow from financing activities

Share buyback

Repayments of leases liabilities

Repayments of bank loans

Drawdown of bank loans

Proceeds on issue of ordinary share capital

Net cash (outflow) from financing activities

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Effect of foreign exchange rate changes

Cash and cash equivalents at end of year

Notes

2021

€m

2020

€m

(4.9)

(19.0)

3.9

0.8

0.6

31.9

0.3

20.3

0.3

1.1

11.7

66.0

(0.8)

(8.4)

56.8

2.8

(0.3)

(55.2)

(52.7)

(19.8)

(87.5)

10.0

0.7

7.6

1.0

9.3

29.3

0.2

9.5

2.3

0.2

10.6

51.2

(1.4)

(3.7)

46.1

4.9

33.0

(30.1)

7.8

(1.7)

(9.2)

(3.7)

0.2

(116.4)

(14.4)

(112.3)

150.4

0.4

38.5

39.5

110.9

150.4

Financial Statements2021 Annual Report and Financial Statements138

Notes Forming Part of the Consolidated
Financial Statements
for the financial year ended 31 December 2021

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 office 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 financial 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 financial 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
modified by:

• measurement at fair value of share based payments at initial date of award;

• recognition of the defined benefit surplus as plan assets less the present value of the defined benefit obligation

All figures 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 financial 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 affect 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. Specifically, 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.

Irish Continental Group139

2. Summary of accounting policies – continued

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 effective dates.

Standards effective for the Group from 1 January 2021

Standard

Description

Effective 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 financial statements for the year ended 31
December 2021 but did not have any material impact on the results or financial position of the Group.

Standards effective for the Group from 1 January 2022 or later

Standard

IAS 1 (amendments)

Description

Effective date for periods commencing

Classification of liabilities as
current or non-current

1 January 2024 *

IAS 1 (amendments)

Disclosure of Accounting Policies

1 January 2023 *

IFRS 17

Insurance Contracts

IFRS 4 (amendments)

IAS 12 (amendment)

IAS 16 (amendments)

Annual Improvements to IFRS
Standards 2018–2020

IFRS 3 (amendments)

IAS 37 (amendments)

Extension of the Temporary
Exemption from Applying IFRS 9

Income Taxes – Deferred Tax
related to Assets and Liabilities
arising from a Single Transaction

Property, Plant and Equipment -
Proceeds before Intended Use

Reference to the Conceptual
Framework

Onerous Contracts - Cost of
Fulfilling a Contract

1 January 2023

1 January 2023 *

1 January 2022

IAS 8 (amendments)

Definition of Accounting Estimates

1 January 2023 *

* Not yet endorsed by the EU

Financial Statements2021 Annual Report and Financial Statements140

Notes Forming Part of the
Consolidated Financial Statements
Continued

2. Summary of accounting policies – continued

The above standards and amendments to standards have not been applied in the preparation of the financial
statements for the year ended 31 December 2021. They are not expected to have a material impact on the results or
financial position of the Group when applied in future periods.

Accounting policies applied in the preparation of the Financial Statements for the financial year ended 31 December
2021:

Revenue recognition

Revenue is measured based on the consideration specified 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

RoRo Freight

Onboard Sales

Retail Concessions

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 fixed 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 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 fixed 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.

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
identifiable obligation to transfer title with the price fixed at the time of transaction.

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 identifiable obligation. The price is variable being
based on a profit share model.

Irish Continental Group141

2. Summary of accounting policies – continued

Container and Terminal Division

Product or Service

Nature and satisfaction of performance obligation

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 effort expended on
each activity (collection, shipping and delivery) undertaken in fulfilment of the single
performance obligation being the provision of transport between the departure point and
destination point. The price is fixed at the time of booking.

Stevedoring revenue is recognised over time in line with the number of containers loaded
or discharged onto vessels in fulfilment 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 satisfied i.e. the loading or discharge of a vessel. The price is fixed 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.

Container Shipping

Stevedoring

Leasing

Identifying a lease

Where a contract conveys the right to control the use of an identified 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 financing 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.

Financial Statements2021 Annual Report and Financial Statements142

Notes Forming Part of the
Consolidated Financial Statements
Continued

2. Summary of accounting policies – continued

b) As Lessor

The Group treats bareboat hire purchase sale agreements in relation to the disposal of vessels as finance 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 finance lease receivable in the Statement of Financial Position. Loss allowances on the finance
lease receivables are estimated at an amount equal to lifetime expected credit losses. Following initial measurement
finance lease income is recognised in revenue and is allocated to accounting periods so as to reflect 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
finance 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 benefits 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.

Benefits 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 identified
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 effects.

Foreign currencies

The individual financial 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 financial 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 financial 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 differences arising on the settlements of monetary
items and on the retranslation of monetary items, are included in the Consolidated Income Statement for the
financial 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 fluctuate significantly during the
period, in which case the exchange rates at the date of transactions are used.

Irish Continental Group143

2. Summary of accounting policies – continued

Exchange differences 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 difference 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 differences 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 defined benefit pension scheme liabilities. All borrowing costs are recognised in the
Consolidated Income Statement under finance costs using the effective 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 specific 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 financial year in which they are incurred.

Finance Income

Finance income comprises interest income on bank deposits, interest earned on finance lease receivables, interest
on the net defined benefit pension scheme assets and interest on any other interest bearing financial assets. Interest
income is recognised in the Consolidated Income Statement under finance income using the effective interest
method.

Retirement benefit schemes

Defined benefit obligations

For defined benefit obligations, the cost of providing the benefits 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 qualified 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
reflected 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 defined benefit obligations has been recorded in the Consolidated Income Statement
under finance income. Net interest is calculated by applying the discount rate at the beginning of the period to the
net defined benefit liability or asset.

In addition to the pension schemes operated by the Group, certain former employees are members of the Merchant
Navy Officers 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 defined benefit obligation and its liability
recognised accordingly. The Group’s share of the MNOPF deficit as advised by the trustees is included with the other
Group schemes.

The retirement benefit obligation recognised in the Consolidated Statement of Financial Position represents the
deficit or surplus in the Group’s defined benefit 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.

Financial Statements2021 Annual Report and Financial Statements144

Notes Forming Part of the
Consolidated Financial Statements
Continued

2. Summary of accounting policies – continued

Defined contribution pension schemes

Payments to defined 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 benefits 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 benefit is
recognised at the earlier of when an entity can no longer withdraw the offer of the termination benefit 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 effect 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 effect 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 effects 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 profit for the year. Taxable profit differs from profit 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 outflow 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 profits fall within the charge to tonnage tax, under which regime taxable profits 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 differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the statement of financial position liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary difference 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
affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except
where the Group is able to control the reversal of the temporary differences and it is probable that the temporary
difference 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 sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Irish Continental Group145

2. Summary of accounting policies – continued

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
financial 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 offset when there is a legally enforceable right to set off 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 off 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 financial 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

• Fast ferries

• LoLo

Hotel and Catering

30 - 35 years

15 - 25 years

25 years

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 certificate 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 certificate
renewal. Costs and accumulated depreciation relating to expired certificates are treated as disposals. The estimated
useful lives for drydock assets are as follows:

Passenger vessels

Container vessels

1 year

1 – 5 years

Estimations of economic life and residual values are reassessed at each reporting date. Any change in estimates are
accounted for prospectively.

Financial Statements2021 Annual Report and Financial Statements146

Notes Forming Part of the
Consolidated Financial Statements
Continued

2. Summary of accounting policies – continued

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 significant 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 off the cost over the estimated economic useful lives, using the straight-line method, on the
following bases:

Buildings

Plant, equipment and vehicles

Plant superstructure

10 – 150 years

4 – 25 years

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 difference 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 fulfilled.

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
benefits that are attributable to these assets will flow to the Group and the cost of these assets can be measured
reliably. Computer software costs recognised as assets are written off on a straight-line basis over their estimated
useful lives, which is normally five 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 affect 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 affected assets have
actually suffered an impairment loss. Where an asset does not generate cash flows 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 flows are discounted to their present value using a pre-tax discount rate that reflects the
current market assessments of the time value of money and the risks specific to the asset for which the estimates of
future cash flows 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.

Irish Continental Group147

2. Summary of accounting policies – continued

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 first in, first 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 classified 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 financial 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 effective interest rate method.

The Group applies the simplified 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 profiles of sales and the corresponding historical credit
loss experience. The historical loss rates are adjusted to reflect current and forward economic factors if there
is evidence to suggest these factors will affect 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 off 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 flows 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.

Financial Statements2021 Annual Report and Financial Statements148

Notes Forming Part of the
Consolidated Financial Statements
Continued

2. Summary of accounting policies – continued

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified 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 specific financial
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 off against cash balances in accordance with the contractual terms of any set off agreement. Finance charges,
including premiums payable on settlement or redemption and direct issue costs, are expensed in the Consolidated
Income Statement using the effective interest rate method and any unamortised costs at the reporting date are
deducted from the carrying amount of the instrument. Bank borrowings are classified as financial liabilities and are
measured subsequently at amortised cost using the effective interest rate method.

Trade payables

Trade payables are classified as other financial liabilities, are initially measured at fair value, and are subsequently
measured at amortised cost, using the effective 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 outflow of resources embodying economic benefits 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 financial position date and are discounted to present
value where the effect is material.

Financial guarantee contracts

Where the Group enters into financial 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 benefits will flow to the Group and the amount of revenue can be measured reliably). Dividends
received from fellow subsidiaries are eliminated on consolidation.

Operating profit

Operating profit is stated after non-trading items arising from continuing operations.

Irish Continental Group149

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 differ 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 benefits

The Group’s and Company’s total obligation in respect of defined benefit pension obligations is calculated by
independent, qualified 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 inflation, benefit 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 Officer Pension Fund (MNOPF), a multi-
employer defined benefit 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 deficit. The deficit included
in the financial statements for the Group and Company represents an apportionment of the overall scheme deficit
based on the most recent notification received from the trustees dated May 2013 and which was 1.53% for the Group
and 0.51% for the Company, less any deficit 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 deficit 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 significant 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 reflect 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 significant
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.

Financial Statements2021 Annual Report and Financial Statements150

Notes Forming Part of the
Consolidated Financial Statements
Continued

3. Critical accounting judgements and key sources of estimation uncertainty – continued

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 offer services.
These restrictions, first introduced in March 2020, continued in various forms up to January 2022, and have
materially affected the profitability outcome from our Irish Ferries branded operations for financial years 2021 and
2020. The impact of Covid related restrictions has had a significant impact on Passenger traffic 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 fleet 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 significantly 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 profitability from its passenger operations amounted to an indicator of impairment
for its ferry fleet at 31 December 2021 and on reassessment also at 31 December 2020. The Group’s position as
previously reported in the 31 December 2020 financial statements, was that the remaining useful lives of the vessels
were sufficiently 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 fleet 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 fleet of six (2020: five) 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 fleet 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 fleet 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 fleet. The Group was satisfied that the carrying value of the ferry fleet 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 fleet
by value is bespoke to its requirements and true value can only be assessed if offered 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 flows 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 cashflows 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 inflation was assumed. Other key assumptions include those relating to capital expenditure, fuel costs and other
operating costs. The cashflow projections for years 1 to 5 were consistent with the base scenario used for the viability
assessment.

Irish Continental Group151

3. Critical accounting judgements and key sources of estimation uncertainty – continued

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, flexing the discount rate and terminal
values. The Directors are satisfied that the value in use projections robustly supported the broker valuations and
consequently the carrying value of the fleet 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 identification 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 fleet 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 fleet 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 financial 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 effect on the Group’s financial results. This was particularly concentrated on our passenger business where
international travel was affected 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
significantly replaced with higher yielding revenues on our direct services to France.

Notwithstanding the downturn in profitability 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 financial year 2021, with free cash flow 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 financial statements.

Financial Statements2021 Annual Report and Financial Statements152

Notes Forming Part of the
Consolidated Financial Statements
Continued

3. Critical accounting judgements and key sources of estimation uncertainty – continued

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 fleet 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 financing arrangements.
Based on this modelling the Directors believe the Group retains sufficient 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.

Revenue

2021

External revenue

Inter-segment revenue

Total

2020

External revenue

Inter-segment revenue

Total

Ferries

€m

Container &
Terminal

Inter- segment

€m

161.7

13.8

175.5

131.8

9.6

141.4

172.8

1.2

174.0

145.3

1.2

146.5

(15.0)

(10.8)

Total

€m

334.5

277.1

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 reflect how the nature, amount, timing and uncertainty of
revenue and cash flows are affected 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 flows.

Irish Continental Group153

4. Segmental information – continued

Revenue

Passenger

Freight

Chartering

Total

Ferries

Container & Terminal

2021

€m

59.0

94.6

8.1

161.7

2020

€m

33.7

92.2

5.9

131.8

2021

€m

172.8

2020

€m

145.3

Total

2021

€m

59.0

267.4

8.1

334.5

2020

€m

33.7

237.5

5.9

277.1

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
financial 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.

Result

Operating (loss) / profit before non-
trading items

Finance income

Finance costs

Non-trading items

(Loss) / profit before tax

Income tax expense

(Loss) / profit for the financial
year

Statement of Financial Position

Assets

Segment assets

Cash and cash equivalents

Consolidated total assets

Liabilities

Segment liabilities

Borrowings and lease liabilities

Consolidated total liabilities

Consolidated net assets

Other segment information

Capital additions

Right-of-use asset additions

Depreciation, impairment and
amortisation

Ferries

Container & Terminal

2021

€m

(17.4)

(2.0)

(19.4)

(0.1)

2020

€m

(12.3)

0.2

(6.4)

(11.2)

(29.7)

(0.3)

2021

€m

17.2

0.1

(2.0)

15.3

(0.7)

2020

€m

13.1

(1.4)

11.7

(0.7)

Total

2021

€m

(0.2)

0.1

(4.0)

(4.1)

(0.8)

2020

€m

0.8

0.2

(7.8)

(11.2)

(18.0)

(1.0)

(19.5)

(30.0)

14.6

11.0

(4.9)

(19.0)

367.0

29.9

396.9

49.8

140.0

189.8

207.1

44.0

22.0

40.6

341.4

117.2

458.6

48.2

190.7

238.9

219.7

30.8

7.2

34.6

106.4

8.6

115.0

31.7

40.7

72.4

42.6

2.6

16.8

11.9

87.1

33.2

120.3

25.9

48.2

74.1

46.2

4.8

5.3

6.7

473.4

38.5

511.9

81.5

180.7

262.2

249.7

46.6

38.8

52.5

428.5

150.4

578.9

74.1

238.9

313.0

265.9

35.6

12.5

41.3

Financial Statements2021 Annual Report and Financial Statements154

Notes Forming Part of the
Consolidated Financial Statements
Continued

4. Segmental information – continued

Ferries

Container & Terminal

Other operating expenses

Fuel

Labour

Port costs

Haulage

Other

Inter-segment

2021

€m

43.1

28.7

44.0

20.7

(1.2)

2020

€m

23.8

22.9

38.9

20.4

(1.2)

Total other operating expenses

135.3

104.8

Geographic analysis of revenue by origin of booking

2021

€m

12.0

9.7

33.7

50.0

34.5

(13.8)

126.1

2020

€m

9.0

8.4

29.5

43.9

31.0

(9.6)

112.2

Revenue

Ireland

United Kingdom

Netherlands

Belgium

France

Other

Total

Geographic location of non-current assets

At Sea and in transit

Vessels

Containers

On Shore

Ireland

Other

Total

2021

€m

55.1

38.4

77.7

50.0

55.2

(15.0)

261.4

2021

€m

135.6

64.1

73.7

36.7

4.5

19.9

334.5

2021

€m

315.8

9.9

325.7

51.6

10.0

61.6

2020

€m

32.8

31.3

68.4

43.9

51.4

(10.8)

217.0

2020

€m

116.2

55.1

58.6

31.7

1.3

14.2

277.1

2020

€m

288.3

7.8

296.1

45.7

11.2

56.9

Carrying amount at 31 December

387.3

353.0

Non-current assets exclude financial assets, retirement benefit assets and deferred tax assets. Due to the mobile
nature of certain assets in property, plant and equipment, their geographic location is not always fixed.

Irish Continental Group155

5. Employee benefits expense

The average number of employees during the financial year was as follows:

Ferries

Container and Terminal

The number of employees at financial year-end was

Aggregate costs of employee benefits were as follows:

Wages and salaries

Covid-19 government subsidies

Social insurance costs

Defined benefit obligations – current service cost (note 32 vii)

Defined benefit obligations – settlement loss (note 32 vii)

Defined benefit obligations – augmentation cost

Defined contribution pension scheme – pension cost (note 32)

Share-based payment expense (note 31)

Total employee benefit costs incurred

Amounts recognised as non-trading item (note 10)

Total employee benefits expense before non-trading items

2021

197

283

284

2021

€m

17.2

(1.4)

1.7

0.3

1.3

20.8

2020

203

291

288

2020

€m

14.4

(1.7)

1.3

1.7

9.3

1.1

0.4

1.9

28.4

(10.4)

18.0

There were no staff costs capitalised during the financial 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 defined benefit scheme settlement losses and augmentation costs were
included as part of the reported non-trading item (note 10).

6. Finance income

Net interest income on defined benefit assets (note 32 vii)

Total finance income

2021

€m

0.1

2020

€m

0.2

Financial Statements2021 Annual Report and Financial Statements156

Notes Forming Part of the
Consolidated Financial Statements
Continued

7. Finance costs

Interest on bank overdrafts and loans

Interest on lease obligations

Total finance costs

8. Income tax expense

Current tax

Deferred tax (note 25)

Total income tax expense for the financial year

2021

€m

2.7

1.3

4.0

2021

€m

0.7

0.1

0.8

2020

€m

6.7

1.1

7.8

2020

€m

1.2

(0.2)

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 profit on eligible activities is calculated on a specified notional profit per day
related to the tonnage of the vessels utilised. In accordance with the IFRIC clarification 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 profit 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 financial year is reconciled to the accounting profit as follows:

Loss before tax

2021

€m

(4.1)

2020

€m

(18.0)

Tax at the domestic income tax rate of 12.5% (2020: 12.5%)

Losses not eligible for surrender under loss provisions

Effect of tonnage relief

Difference in effective tax rates

Items for which no tax deduction is available

Other items

Income tax expense recognised in the Consolidated Income Statement

2.4

(2.2)

0.8

(0.2)

0.8

1.9

(1.6)

(0.3)

0.8

0.2

1.0

Irish Continental Group157

2021

€m

31.9

0.3

20.3

52.5

55.1

37.2

77.7

50.0

41.4

261.4

2020

€m

29.3

0.2

2.3

9.5

41.3

32.8

30.2

68.4

43.9

41.7

217.0

9. Loss for the year

Loss for the year arrived at after charging:

Depreciation of property, plant and equipment (note 13)

Amortisation of intangible assets (note 14)

Impairment of property, plant and equipment (note 13)

Depreciation of right-of-use assets (note 15)

Net depreciation, amortisation and impairment costs

Fuel

Labour

Port costs

Haulage

Other

Other operating expenses

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

Variable lease payments

Group Auditor’s remuneration:

The audit of the Group financial statements

Other assurance services

Tax advisory services

Other non-audit services

2.2

2.1

4.0

1.3

KPMG Ireland

Deloitte Ireland

€’000

260.0

40.0

45.0

345.0

€’000

222.0

28.0

35.0

4.0

289.0

The portion of the above audit fees attributable to the Company financial statements payable to KPMG was €75,000.

Financial Statements2021 Annual Report and Financial Statements158

Notes Forming Part of the
Consolidated Financial Statements
Continued

10. Non-trading items

Non-trading expense

2021

€m

2020

€m

(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 defined benefit 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 difference 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 benefits of certain members resulting in
an augmentation cost of €1.1 million being the present value of the future benefit 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

Final dividend of 0c per ICG Unit RE: financial year ended 31 December 2020 (2020:
nil)

Interim dividend of 0c per ICG Unit RE: the financial year ended 31 December 2021
(2020: nil)

2021

€m

2020

€m

The Board is proposing a final 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

Weighted average number of ordinary shares for the purposes of basic earnings per
share

Effect of dilutive potential ordinary shares: Share options

Weighted average number of ordinary shares for the purpose of diluted earnings per
share

2021

’000

2020

’000

186,715

186,981

186,715

186,981

The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted to
reflect shares issued and acquired from the market during the year (note 20).

Irish Continental Group159

12. Earnings per share – continued

The earnings used in both the adjusted basic and adjusted diluted earnings per share are adjusted to take into
account the net interest on defined benefit obligations (note 32) and the effect 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:

Earnings

Earnings for the purposes of basic and diluted earnings per share -

Loss for the financial year attributable to equity holders of the parent

Non-trading item after tax (note 10)

Net interest income on defined benefit assets (note 32 vii)

2021

€m

(4.9)

(0.1)

2020

€m

(19.0)

11.2

(0.2)

Earnings for the purposes of adjusted basic and adjusted diluted earnings per
share

(5.0)

(8.0)

Basic earnings per share

Diluted earnings per share

Adjusted basic earnings per share

Adjusted diluted earnings per share

Diluted earnings per ordinary share

2021

Cent

(2.6)

(2.7)

2020

Cent

(10.2)

(4.3)

Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares
outstanding for the dilutive effect 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
effect. 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 satisfied the required performance conditions for vesting.

Financial Statements2021 Annual Report and Financial Statements160

Notes Forming Part of the
Consolidated Financial Statements
Continued

13. Property, plant and equipment

Cost

At 1 January 2020

Additions

Reclassification

Disposals

Impairment

Currency adjustment

At 31 December 2020

Additions

Reclassification

Disposals

Impairment

Currency adjustment

At 31 December 2021

Accumulated depreciation

At 1 January 2020

Depreciation charge for the financial year

Eliminated on disposals

Currency adjustment

At 31 December 2020

Depreciation charge for the financial year

Eliminated on disposals

Currency adjustment

At 31 December 2021

Carrying amount

At 31 December 2021

At 31 December 2020

Assets under
Construction

€m

6.9

1.6

(0.1)

(5.4)

(2.3)

0.7

0.5

(0.6)

Vessels

€m

429.1

27.4

0.1

(11.0)

(1.4)

444.2

42.7

0.6

(7.6)

1.4

0.6

481.3

0.6

0.7

152.1

25.7

(11.0)

(0.3)

166.5

27.8

(7.6)

0.5

187.2

294.1

277.7

Plant, Equipment
and Vehicles

Land and
Buildings

€m

Total

€m

522.4

34.6

(17.5)

(2.3)

(1.5)

535.7

45.6

(13.2)

1.6

26.0

0.2

26.2

569.7

9.3

0.4

9.7

0.7

205.3

29.3

(12.1)

(0.3)

222.2

31.9

(13.2)

0.6

10.4

241.5

15.8

328.2

16.3

313.5

60.4

5.6

(1.1)

(0.1)

64.8

2.2

(5.6)

0.2

61.6

43.9

3.2

(1.1)

46.0

3.4

(5.6)

0.1

43.9

17.7

18.8

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 significant change in depreciation charges.

Irish Continental Group161

13. Property, plant and equipment – continued

Estimations of economic life of vessels are a key judgemental estimate in the financial 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 staff 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

Cost

At 1 January

Additions

At 31 December

Amortisation

At 1 January

Charge for the financial year

At 31 December

Carrying amount

At 31 December

At 1 January

2021

€m

11.5

1.0

12.5

10.3

0.3

10.6

1.9

1.2

2020

€m

10.5

1.0

11.5

10.1

0.2

10.3

1.2

0.4

The intangible assets included above, all computer software, have finite useful lives of five years over which the
assets are amortised. Amortisation is on a straight-line basis.

Financial Statements2021 Annual Report and Financial Statements162

Notes Forming Part of the
Consolidated Financial Statements
Continued

15. Right-of-use assets

Cost

At 1 January 2020

Additions

Derecognition on lease expiry

Currency adjustment

At 31 December 2020

Additions

Lease remeasurement

Derecognition on lease expiry

Currency adjustment

At 31 December 2021

Accumulated depreciation

At 1 January 2020

Charge for the period

Derecognition on lease expiry

At 31 December 2020

Charge for period

Derecognition on lease expiry

Currency adjustment

At 31 December 2021

Carrying amount

At 31 December 2021

At 31 December 2020

Vessels

€m

Plant and
Equipment

Land and
Buildings

€m

10.9

10.1

21.0

28.5

(0.3)

49.2

5.7

5.6

11.3

16.2

27.5

21.7

9.7

8.2

2.4

(2.6)

8.0

5.0

(0.9)

12.1

4.7

1.9

(2.6)

4.0

1.9

(0.9)

5.0

7.1

4.0

29.5

(0.7)

28.8

5.3

1.0

35.1

2.2

2.0

4.2

2.2

0.3

6.7

28.4

24.6

Total

€m

48.6

12.5

(2.6)

(0.7)

57.8

38.8

(0.3)

(0.9)

1.0

96.4

12.6

9.5

(2.6)

19.5

20.3

(0.9)

0.3

39.2

57.2

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 fleet 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.

Irish Continental Group163

2021

€m

19.4

(3.6)

0.8

16.6

2020

€m

22.1

(3.6)

0.9

19.4

16. Finance lease receivable

At 1 January

Amounts received

Net benefit recognised in revenue

At 31 December

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 final instalment. The deferred consideration has been treated as
a finance lease receivable at an amount equivalent to the net investment in the lease.

Amounts received less the net benefit 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:

Within one year

Between one and two years

Between two and three years

Between three and four years

Between four and five years

Greater than five years

Undiscounted payments receivable

Unearned income

Present value of payments receivable / Net investment in the lease

Analysed as:

Current finance lease receivable

Non-current finance lease receivable

2021

€m

3.6

7.3

18.1

(1.5)

16.6

3.0

13.6

16.6

2020

€m

3.6

7.3

21.7

(2.3)

19.4

2.8

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 significant, because of the existence of a secondary market in
vessels.

The Directors of the Company estimate the loss allowance on the finance lease receivable at 31 December at an
amount equal to lifetime expected credit losses. None of the finance lease receivable at 31 December 2021 was past
due. Taking into account the historical payment experience up to the date of approval of these financial 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.

Financial Statements2021 Annual Report and Financial Statements164

Notes Forming Part of the
Consolidated Financial Statements
Continued

17. Inventories

Fuel and lubricating oil

Catering and other stocks

2021

€m

3.5

0.3

3.8

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 financial year (2020: €36.7 million).

18. Trade and other receivables

Trade receivables

Allowance for expected credit losses

Prepayments

Deposit on vessel

Deposits relating to other property, plant and equipment

Other prepayments

Finance lease receivable (note 16)

Other receivables

2021

€m

47.3

(1.8)

45.5

3.2

5.4

2.5

3.0

2.3

61.9

2020

€m

1.7

0.2

1.9

2020

€m

45.8

(1.7)

44.1

2.6

4.0

2.8

2.2

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:

Not past due

Within terms

Past due

Within 3 months

After 3 months

Gross value

Expected credit
losses

Net value

Gross value

Expected credit
losses

Net value

2021

€m

42.6

4.4

0.3

47.3

2021

€m

(1.0)

(0.5)

(0.3)

(1.8)

2021

€m

41.6

3.9

45.5

2020

€m

42.6

2.6

0.6

45.8

2020

€m

(1.1)

(0.4)

(0.2)

(1.7)

2020

€m

41.5

2.2

0.4

44.1

Irish Continental Group165

18. Trade and other receivables – continued

Expected credit losses

The Group has applied the IFRS 9 simplified model of recognising lifetime expected credit losses for all trade
receivables as these items do not have a significant financing 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 influenced by the past rate of actual credit losses. Trade receivables are written off
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.

Movement in the allowance for expected credit losses

Balance at beginning of the financial year

Increase in allowance during the financial year

Balance at end of the financial year

2021

€m

1.7

0.1

1.8

2020

€m

1.5

0.2

1.7

In relation to the amounts paid as deposits on capital works, significant progress on these works had been completed
by the financial 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 offsetting 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:

Cash and cash equivalents

2021

€m

38.5

2020

€m

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:

Ireland

United Kingdom

Europe

Total

2021

€m

32.5

3.3

2.7

38.5

2020

€m

131.1

0.2

19.1

150.4

The cash and cash equivalents figure 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 deficit funding agreement concluded with the Trustee on behalf of the
Irish Ferries Limited Pension Scheme.

Financial Statements2021 Annual Report and Financial Statements166

Notes Forming Part of the
Consolidated Financial Statements
Continued

20. Share capital

Group and Company

Authorised

2021

Number

2021

€m

2020

Number

Ordinary shares of par value €0.065 each

450,000,000

29.3

450,000,000

Redeemable shares of par value

€0.00001 each

4,500,000,000

- 4,500,000,000

29.3

Allotted, called up and fully paid

Ordinary shares

2021

Number

2021

€m

2020

Number

At beginning of the financial year

186,980,390

12.2

187,419,390

Share issue

Share buyback

379,177

131,000

(4,565,000)

(0.3)

(570,000)

2020

€m

29.3

2020

€m

12.2

At end of the financial 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 fixed 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 profit 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.

Irish Continental Group167

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 differences 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

Bank loans

Private placement loan notes

Origination fees

On demand or within one year

In the second year

In the third year

In the fourth year

Fifth year and after

Less: Amount due for settlement within 12 months

Amount due for settlement after 12 months

2021

€m

73.8

50.0

(0.7)

123.1

7.3

67.4

7.5

33.6

123.1

(7.3)

115.8

2020

€m

151.3

50.0

(0.9)

200.4

87.3

7.3

57.4

41.1

200.4

(87.3)

113.1

Financial Statements2021 Annual Report and Financial Statements168

Notes Forming Part of the
Consolidated Financial Statements
Continued

22. Borrowings – continued

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 profile of the Group’s borrowings is set out in note 24 (iii).

Borrowing facilities

Overdraft and trade guarantee facilities

Amounts utilised – trade guarantee (note 36)

Amounts undrawn

Total committed overdraft facilities

Committed loan facilities

Amounts drawn

Amounts undrawn

Total committed loan facilities

Uncommitted facilities

2021

€m

0.6

15.4

16.0

123.8

65.0

188.8

242.8

2020

€m

0.6

15.4

16.0

201.3

75.0

276.3

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 fixed 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 floating 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 flow 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 fixed 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.

Irish Continental Group169

22. Borrowings – continued

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 financial year were as follows:

Bank overdrafts

Bank loans

2021

0.41%

1.61%

2020

0.52%

1.58%

The average interest rates reflect the terms of the refinancing 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 fixed at date of drawdown. The Group’s financing 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

At 1 January

Additions

Payments

Lease remeasurement

Lease interest expense recognised in period

Currency adjustment

At 31 December

Analysed as:

Current liabilities

Non-current liabilities

2021

€m

38.5

(21.1)

(0.3)

1.3

0.7

57.6

20.1

37.5

57.6

2020

€m

36.0

12.5

(10.3)

(0.1)

1.1

(0.7)

38.5

10.7

27.8

38.5

Financial Statements2021 Annual Report and Financial Statements170

Notes Forming Part of the
Consolidated Financial Statements
Continued

23. Lease liabilities – continued

The maturity profile of lease liabilities is set out below:

Committed lease obligations

Within one year

Between one and two years

Between two and three years

Between three and four years

Between four and five years

Between five and 10 years

Greater than 10 years

2021

€m

20.1

9.1

3.7

3.3

2.1

17.2

57.6

2020

€m

10.7

4.7

2.7

2.5

2.2

1.4

14.3

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
Inflation.

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 financial 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 financial derivatives, foreign currency forward
contracts, interest rate swaps and cash flow matching.

Irish Continental Group171

24. Financial instruments and risk management – continued

i) Categories of financial instruments

Financial assets and liabilities

2021

Finance lease receivable

Trade and other receivables

Cash and cash equivalents

Borrowings

Trade and other payables

2020

Finance lease receivable

Trade and other receivables

Cash and cash equivalents

Borrowings

Trade and other payables

Fair value hierarchy

Loans and
receivables at
amortised cost

Financial
liabilities at
amortised cost

Carrying value

Fair value

€m

16.6

58.9

38.5

€m

123.1

57.9

€m

16.6

58.9

38.5

123.1

57.9

€m

16.6

58.9

38.5

124.8

57.9

Loans and
receivables at
amortised cost

Financial
liabilities at
amortised cost

Carrying value

Fair value

€m

19.4

52.9

150.4

€m

200.4

52.3

€m

19.4

52.9

150.4

200.4

52.3

€m

19.4

52.9

150.4

208.4

52.3

The Group does not have any financial assets or financial 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 financial assets and
financial liabilities where fair value is required to be disclosed in the Notes to the Consolidated Financial Position,
these financial assets and financial liabilities are classified 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 financial 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 significant effect 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 significant effect on the recorded fair value that are not based on

observable market data.

The following are the significant methods and assumptions used to estimate fair values of financial assets and
financial 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 flows discounted at the rate implicit in the lease.

Financial Statements2021 Annual Report and Financial Statements172

Notes Forming Part of the
Consolidated Financial Statements
Continued

24. Financial instruments and risk management – continued

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 reflect 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 reflect
fair value.

Borrowings

The fair value of bank loans has been determined based on a discounted cash flow analysis with the most significant
input being the discount rate reflecting the Group’s own credit risk. For finance 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 financial instruments

There are no derivative financial 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 effective 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 fixed
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 fixed at the incremental borrowing rate at the later
of the IFRS 16 effective 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 fixed for the full remaining borrowing terms, the Group has not prepared
calculations to measure the estimated effect of changes in market interest rates on the Consolidated Income
Statement and Equity Review.

iii) Foreign currency risk management

The Group publishes its consolidated financial statements in euro and conducts business in different foreign
currencies. As a result, it is subject to foreign exchange risk due to exchange rate movements which will affect the
Group’s transaction costs and the translation of the results and underlying net assets of its foreign operations.

Sterling denominated profits are translated to euro at the average rate of exchange for the financial year. The average
rate at which sterling profits 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.

Irish Continental Group173

24. Financial instruments and risk management – continued

Sensitivity

The currency risk sensitivity analysis is set out below:

Under the assumptions; (i) a 10% strengthening in euro exchange rates against all currencies, profit before tax would
have increased by €4.8 million (2020: increase of €3.2 million) and equity (before tax effects) would have increased
by €3.2 million (2020: increase of €1.3 million); (ii) a 10% weakening in euro exchange rates against all currencies,
profit before tax would have decreased by €6.2 million (2020: decrease of €4.0 million) and equity (before tax
effects) would have decreased by €4.3 million (2020: decrease of €1.5 million).

The currency profile of the carrying amounts of the Group’s monetary assets and monetary liabilities at the reporting
date are as follows:

2021

Trade receivables (net)

Cash and cash equivalents

Total assets

Trade and other payables

Lease liabilities

Total liabilities

Net assets / (liabilities)

2020

Trade receivables (net)

Cash and cash equivalents

Total assets

Trade and other payables

Lease liabilities

Total liabilities

Net assets / (liabilities)

iv) Commodity price risk

Euro

€m

0.2

Euro

€m

Sterling

US Dollar

€m

3.4

6.0

9.4

11.3

(1.9)

€m

0.3

1.5

1.8

6.2

0.7

6.9

(5.1)

Sterling

US Dollar

€m

6.4

12.2

18.6

11.8

6.8

€m

1.0

2.0

3.4

0.2

3.6

(1.6)

Total

€m

3.7

7.7

11.4

17.5

0.7

18.2

(6.8)

Total

€m

7.4

13.2

20.6

15.2

0.2

15.4

5.2

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 specification of fuel oil which are introduced under international and EU law from
time to time.

Financial Statements2021 Annual Report and Financial Statements174

Notes Forming Part of the
Consolidated Financial Statements
Continued

24. Financial instruments and risk management – continued

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 offset 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 sufficient resources are available either from cash balances, cash flows
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 financing 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:

Cash and cash equivalents

Committed undrawn facilities

Liquidity reserve

2021

€m

38.5

80.4

118.9

2020

€m

150.4

90.4

240.8

Management monitors rolling cash flow 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 refinancing 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 financial liabilities into the relevant
maturity groupings based on the remaining period at the reporting date to the contractual maturity date:

Irish Continental Group175

24. Financial instruments and risk management – continued

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

3.6

27.1

75.5

123.1

57.6

256.2

75.5

130.3

101.5

307.3

75.5

9.1

22.0

9.1

9.4

106.6

18.5

85.1

11.4

96.5

27.0

5.5

32.5

53.2

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

4.6

39.1

69.2

200.4

38.5

308.1

69.2

216.3

82.9

69.2

96.1

11.3

9.1

5.9

368.4

176.6

15.0

76.0

9.6

85.6

35.1

4.7

39.8

51.4

Liquidity Table 2021

Liabilities

Trade and other payables

Bank loans

Lease liabilities

Total liabilities

Liquidity Table 2020

Liabilities

Trade and other payables

Bank loans

Lease liabilities

Total liabilities

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 significant 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 finance
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 confidence of all stakeholders. No changes were made in the
objectives, policies or processes for managing capital during the financial 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 offset 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 benefits of different 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.

Financial Statements2021 Annual Report and Financial Statements176

Notes Forming Part of the
Consolidated Financial Statements
Continued

24. Financial instruments and risk management – continued

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 financial 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 definitions 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 differences
have been incurred that are available for offset against future taxable profits. Deferred tax assets are recognised
to the extent that it is probable that future taxable profit 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 profits are not expected to arise. The Group estimates the probable
amount of future taxable profits, using assumptions consistent with those employed in the Group’s financial 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 differences applicable to investments in
subsidiaries on the basis that the Group can control the timing and realisation of these temporary differences and it is
probable that the temporary difference 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

At beginning of the financial year

Charge to the Statement of Consolidated Income

Charge to Statement of Other Comprehensive Income

At end of the financial year

Analysed as:

Non- current asset

Non-current liability

Accelerated tax
depreciation

Retirement
benefit
obligation

€m

0.4

0.1

0.5

€m

(0.2)

0.9

0.7

Total

€m

0.2

0.1

0.9

1.2

(0.1)

1.3

1.2

Irish Continental Group177

25. Deferred tax liabilities – continued

2020

At beginning of the financial year

Credit to the Statement of Consolidated Income

Credit to Statement of Other Comprehensive Income

At end of the financial year

Accelerated tax
depreciation

Retirement
benefit
obligation

€m

0.5

(0.1)

0.4

€m

0.2

(0.1)

(0.3)

(0.2)

Total

€m

0.7

(0.2)

(0.3)

0.2

Deferred tax is recognised in the Consolidated Statement of Comprehensive Income to the extent it arises on profits
or losses recognised in that statement.

26. Trade and other payables

Within one year

Trade and other payables

Accruals

Deferred revenue

Payroll taxes

Social insurance cost

Value-added tax

2021

€m

30.7

27.2

57.9

15.3

0.7

0.2

1.4

75.5

2020

€m

24.8

27.5

52.3

13.0

0.2

0.1

3.6

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:

At 1 January

Passenger revenue

Cash received

At 31 December

2021

€m

13.0

(59.0)

61.3

15.3

2020

€m

5.0

(33.7)

41.7

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 financial risk management policies in place to ensure that all payables are paid within the credit
timeframe.

Financial Statements2021 Annual Report and Financial Statements178

Notes Forming Part of the
Consolidated Financial Statements
Continued

27. Provisions

Claims provision

At beginning of the financial year

Utilisation of provision

Increase in provision

At end of the financial year

Analysed as follows:

Current liabilities

Non-current liabilities

The claims provision comprises;

2021

€m

2.2

1.1

3.3

3.1

0.2

3.3

2020

€m

2.0

(0.1)

0.3

2.2

2.0

0.2

2.2

(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 outflow is expected to occur.
The expected cash outflows 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

Commitments for the acquisition of property, plant and equipment – approved
and contracted for, but not accrued

Approved and contracted

Less accrued at 31 December

Approved and contracted for not accrued

29. Short-term vessel charter and container hire obligations

Within one year

2021

€m

42.0

(10.6)

31.4

2021

€m

2020

€m

5.9

(4.0)

1.9

2020

€m

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.

Irish Continental Group179

30. Operating lease income

The aggregate future minimum lease payments receivable under non-cancellable operating leases are as follows:

Within one year

Between one and two years

Between two and three years

2021

€m

17.2

13.2

3.7

34.1

2020

€m

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 flow 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:

Outstanding at 1 January

Granted during the year

Exercised during the year

Forfeited during the year

Outstanding at 31 December

Exercisable at 31 December

Weighted average share price at date of exercise of
options

Weighted average remaining contractual life of options
outstanding at year-end

2021

2020

Number of share
options

Weighted
average exercise
price

Number of share
options

Weighted
average exercise
price

5,756,140

1,042,500

(637,530)

(514,256)

5,646,854

2,790,000

€

1.59

5,871,785

0.065

1,120,500

(660,424)

(575,721)

5,756,140

2,296,500

1.25

0.065

1.47

2.94

4.35

€

1.61

0.065

0.62

0.065

1.59

2.50

3.48

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.

Financial Statements2021 Annual Report and Financial Statements180

Notes Forming Part of the
Consolidated Financial Statements
Continued

31. Share-based payments – continued

The exercise prices of options outstanding at 31 December are as follows:

Exercisable:

2009 Share Option Plan

Vested Options

Exercisable at 31 December

Not Exercisable:

2009 Share Option Plan

Second Tier Options

Performance Share Plan

Outstanding at 31 December

2021

Options

2020

Options

825,000

1,161,500

205,000

230,000

1,760,000

905,000

2,790,000

2,296,500

905,000

2,856,854

2,554,640

2,856,854

3,459,640

5,646,854

5,756,140

Price

€

1.57

2.97

3.58

0.065

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
effects 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

Share Plan

Fair value of option:

Options subject to market
performance conditions

Options subject to non-
market performance
conditions

2021

PSP

2020

PSP

2019

2015

2014

2012

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

€2.15

€0.96

€1.59 €0.4528 €0.5581 €0.2992 €0.4449 €0.3240 €0.3680

€3.63

€3.07

€4.18

Irish Continental Group181

31. Share-based payments – continued

The inputs into the valuation model in the respective years of grant were as follows:-

Year of Grant

2021

2020

2019

2015

Basic
Tier

2015

Second
Tier

2014

Basic
Tier

2014

Second
Tier

2012

Basic
Tier

2012

Second
Tier

At date of grant:

Weighted average share
price

Weighted average
exercise price

Expected volatility

Expected life

Risk free rate

€4.26

€3.77 €4.945 €3.580 €3.580 €2.970 €2.970

€1.570

€0.065 €0.065 €0.065 €3.580 €3.580 €2.970 €2.970

€1.570

43%

29%

27%

29%

31%

27%

30%

34%

33%

3 years

7 years 9 years

(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 classified in the Consolidated Income Statement as follows:

Employee benefits expense

2021

€m

1.3

2020

€m

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 benefit schemes

The Group operates defined contribution pension schemes in all of its main operating locations. The Group also has
defined benefit obligations as set out below. Scheme assets are held in separate trustee administered funds.

Defined Contribution Scheme

The Group operates a defined contribution pension scheme, which provides retirement and death benefits 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 defined contribution pension
scheme at rates specified in the rules of the scheme. There was €nil in outstanding contributions included in trade
and other payables at 31 December 2021 (2020: €nil).

Financial Statements2021 Annual Report and Financial Statements182

Notes Forming Part of the
Consolidated Financial Statements
Continued

32. Retirement benefit schemes – continued

Defined Benefit Obligations

i) Group sponsored schemes

The Group operates contributory defined benefit obligations, which provide retirement and death benefits for other
employees who are not members of the defined contribution pension scheme. The defined benefit obligations
provide benefits to members in the form of a guaranteed level of pension payable for life, the level of the benefits
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 profile. In
assessing the risk profile 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
qualified 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 financial conditions at this date. The
present value of the defined benefit 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 profile of membership across all schemes at 31 December was as follows;

Current employees

Members with deferred benefits

Pensioners

Total

Buyout transaction

2021

145

500

134

779

2020

157

536

109

802

On 9 December 2020, the Trustee of the Group’s principal defined benefit 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 difference 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 verification 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.

Irish Continental Group183

32. Retirement benefit schemes – continued

The Trustee, in agreement with the Company, also augmented pension benefits of certain members resulting in an
augmentation cost of €1.1 million being the present value of the future benefit 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 deficit funding agreement with
the trustee replacing the previous deficit funding agreement agreed in 2014. Under the new agreement, the Group
retained the obligation to make deficit payments to the scheme of €1.5 million per annum, adjusted for inflation, for
a projected period up to 2023, or until the deficit is eliminated if earlier. During 2021 the Trustee confirmed 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 deficit 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 defined benefit pension scheme for certain employees based in The Netherlands. All the
liabilities of this scheme are matched by insurance contracts other than for inflation adjustment to accrued benefits
for current employees.

ii) Merchant Navy Officers 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 financial statements at 31 December 2021 is based on the actuarial deficit contribution
demands notified to the Group and which remain outstanding at the reporting date. The last deficit demand received
by the Group was dated May 2013 and has been fully paid.

On this basis, the share of the overall deficit 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 defined benefit 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 deficit. IAS 19 Employee
Benefits provides that the discount rate used to value retirement benefits 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 defines 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.

Financial Statements2021 Annual Report and Financial Statements184

Notes Forming Part of the
Consolidated Financial Statements
Continued

32. Retirement benefit schemes – continued

Salary risk

The present value of the defined benefit liability is calculated by reference to the projected salaries of scheme
participants at retirement based on salary inflation assumptions. As such, any variation in salary versus assumption
will vary the schemes’ liabilities.

Life expectancy risk

The present value of the defined benefit 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.

Inflation risk

A significant proportion of the benefits under the plans are linked to inflation with higher inflation leading to higher
liabilities.

The Directors have taken independent actuarial advice on the key judgements used in the estimate of retirement
benefit scheme assets and liabilities.

The principal assumptions used for the purpose of the actuarial valuations were as follows:

Discount rate

Inflation rate

Sterling liabilities

Euro liabilities

2021

1.85%

3.60%

2020

1.30%

3.15%

2021

1.20%

2.00%

Rate of annual increase of pensions in payment

2.20% - 3.40%

3.05%

1.00%

Rate of increase of pensionable salaries

1.10%

0.95% 0.00% - 1.20%

2020

0.70%

1.20%

0.30% -
0.40%

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 effects of the UK GMP equalisation court decisions. The estimated effect was to
increase the obligations of the UK scheme by 0.1%.

Irish Continental Group185

32. Retirement benefit schemes – continued

The average life expectancy used in the principal Group schemes at age 60 is as follows:

Irish Schemes:

Current retirees

Future retirees

UK Schemes:

Current retirees

Future retirees

2021

Male

Female

2020

Male

Female

26.6 years

29.5 years

26.5 years

29.5 years

29.0 years

31.5 years

28.9 years

31.5 years

27.8 years

29.4 years

27.7 years

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 defined benefit obligations is calculated by independent, qualified
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: deficit 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 inflation assumption which impacts other inflation 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, inflation rates and mortality assumptions for scheme beneficiaries. 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 inflation*

0.5% increase in
price inflation

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

Financial Statements2021 Annual Report and Financial Statements186

Notes Forming Part of the
Consolidated Financial Statements
Continued

32. Retirement benefit schemes – continued

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 inflation*

0.5% increase in
price inflation

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 inflation 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 inflation 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 benefit assets and liabilities

The amount recognised in the Consolidated Statement of Financial Position in respect of the Group’s defined benefit
obligations is as follows:

Equities

Bonds

Property

Insurance contracts

Other

Fair value of scheme assets

Present value of scheme
liabilities

Surplus / (deficit) in
schemes

Scheme with liabilities in sterling

Schemes with liabilities in euro

Total

2021

€m

13.5

15.1

3.4

32.0

2020

€m

10.9

13.3

3.1

27.3

2021

€m

68.9

27.4

1.0

10.9

5.6

113.8

2020

€m

62.9

28.2

4.8

12.3

4.1

112.3

2021

€m

82.4

42.5

1.0

10.9

9.0

2020

€m

73.8

41.5

4.8

12.3

7.2

145.8

139.6

(28.3)

(28.0)

(112.2)

(112.8)

(140.5)

(140.8)

3.7

(0.7)

1.6

(0.5)

5.3

(1.2)

Three of the defined benefit 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 defined benefit
obligation schemes accounted for by the Group is in a net deficit position and is shown in non-current liabilities.

The overall weighted average duration of the Group’s defined benefit 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).

Irish Continental Group187

2020

€m

1.0

(2.2)

(1.2)

Total

€m

139.6

1.1

15.5

1.9

1.1

0.3

(8.5)

(5.2)

Schemes in

sterling Schemes in euro

€m

27.3

0.3

3.1

1.9

0.3

0.1

(1.0)

32.0

€m

112.3

0.8

12.4

0.8

0.2

(8.5)

(4.2)

113.8

145.8

Schemes in

sterling Schemes in euro

€m

27.8

0.5

1.1

(1.5)

0.3

0.1

(1.0)

27.3

€m

270.6

5.2

2.7

4.1

2.5

0.3

(160.6)

(12.5)

112.3

Total

€m

298.4

5.2

3.2

5.2

(1.5)

2.8

0.4

(160.6)

(13.5)

139.6

32. Retirement benefit schemes – continued

The split between the amounts shown in each category is as follows:

Non-current assets – retirement benefit surplus

Non-current liabilities – retirement benefit obligation

Net surplus / (deficit) in pension schemes

v) Movements in retirement benefit assets

Movements in the fair value of scheme assets in the current year were as follows:

2021

€m

6.7

(1.4)

5.3

2021

At beginning of the financial year

Interest income

Actuarial gains

Exchange difference

Employer contributions

Contributions from scheme members

Transfer of assets

Benefits paid

At end of the financial year

2020

At beginning of the financial year

Presentational change

Interest income

Actuarial gains

Exchange difference

Employer contributions

Contributions from scheme members

Transfer of assets

Benefits paid

At end of the financial year

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.

Financial Statements2021 Annual Report and Financial Statements188

Notes Forming Part of the
Consolidated Financial Statements
Continued

32. Retirement benefit schemes – continued

vi) Movement in retirement benefit liabilities

Movements in the present value of defined benefit obligations in the year were as follows:

2021

At beginning of the financial year

Service cost

Interest cost

Contributions from scheme members

Actuarial (loss) / gain

Exchange difference

Transfer of liabilities

Benefits paid

At end of the financial year

2020

At beginning of the financial year

Presentational change

Service cost

Interest cost

Contributions from scheme members

Augmentation cost

Settlement loss

Actuarial gain

Exchange difference

Transfer of liabilities

Benefits paid

At end of the financial year

Schemes in

sterling Schemes in euro

€m

28.0

0.4

0.1

(1.6)

2.0

(1.0)

28.3

€m

112.8

1.3

0.6

0.2

10.0

(8.5)

(4.2)

Total

€m

140.8

1.7

1.0

0.3

8.4

2.0

(8.5)

(5.2)

112.2

140.5

Schemes in

sterling Schemes in euro

€m

26.2

€m

263.4

0.5

0.1

3.1

(1.4)

(1.0)

28.0

5.2

1.2

2.5

0.3

1.1

9.3

2.9

(160.6)

(12.5)

112.8

Total

€m

289.6

5.2

1.7

3.0

0.4

1.1

9.3

6.0

(1.4)

(160.6)

(13.5)

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.

Irish Continental Group189

32. Retirement benefit schemes – continued

vii) Amounts recognised in the Consolidated Income Statement

Amounts recognised in the Consolidated Income Statement in respect of the defined benefit obligations are as
follows:

Charges to employee benefits expense

Current service cost

Settlement loss (notes 10 and 32(i))

Augmentation cost (notes 10 and 32(i))

Recognised in finance income

Interest income on scheme assets

Interest on scheme liabilities

Net interest (income) / cost on defined benefit obligations (notes 6 and 7)

2021

€m

1.7

2021

€m

(1.1)

1.0

(0.1)

2020

€m

1.7

9.3

1.1

12.1

2020

€m

(3.2)

3.0

(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 defined benefit
obligations are as follows:

Actuarial gains and losses

Actual total 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 demographic assumptions

Gains / (losses) arising from changes in financial assumptions

Gains arising from experience adjustments

Actuarial gain / (loss) recognised in the Consolidated Statement of
Comprehensive Income

Exchange movement

Exchange gain / (loss) on scheme assets

Exchange (loss) / gain on scheme liabilities

Net exchange (loss) recognised in the Consolidated Statement of Comprehensive
Income

2021

€m

16.6

(1.1)

15.5

(8.6)

0.1

7.1

2021

€m

1.9

(2.0)

(0.1)

2020

€m

8.4

(3.2)

5.2

(12.0)

6.0

(0.8)

2020

€m

(1.5)

1.4

(0.1)

Financial Statements2021 Annual Report and Financial Statements190

Notes Forming Part of the
Consolidated Financial Statements
Continued

33. Related party transactions

During the financial 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 benefits 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 financial year was as follows:

Short-term benefits

Post-employment benefits

Share-based payment expense

2021

€m

3.2

0.3

0.9

4.4

2020

€m

2.5

0.3

1.3

4.1

Short-term benefits comprise salary, performance pay and other short-term employee benefits.

Post-employment benefits comprise the past and current service cost calculated in accordance with IAS 19 Employee
Benefits.

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 Duffy, non-executive Director of the Company, was a partner at law firm
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.

Irish Continental Group191

34. Cash flow components

Retirement benefit scheme movements

Retirement benefit obligations – current service cost

Retirement benefit obligations – payments

Retirement benefit obligations – settlement loss

Retirement benefit obligations – augmentation cost

Total retirement benefit scheme movements

Repayments of lease liabilities

Lease payments (note 23)

Interest element of lease payments (note 7 & 23)

Capital element of lease payments

Purchases of property, plant and equipment and intangible assets

Purchases of property, plant and equipment (note 13)

Purchases of intangible assets (note 14)

(Increase) / decrease in capital asset prepayments (note 18)

Total purchases of property, plant and equipment and intangible assets

Changes in working capital

(Increase) / decrease in inventories

Decrease in receivables

Increase in payables

Total working capital movements

35. Change in financing liabilities

2021

€m

1.7

(1.1)

0.6

(21.1)

1.3

(19.8)

(45.6)

(1.0)

(8.6)

(55.2)

(1.9)

2.5

11.1

11.7

2020

€m

1.7

(2.8)

9.3

1.1

9.3

(10.3)

1.1

(9.2)

(34.6)

(1.0)

5.5

(30.1)

1.2

1.6

7.8

10.6

The changes in liabilities arising from financing activities during the year ended 31 December 2021 were as follows:

At 1 January 2021

Changes from cash flows

Repayment of borrowings

Lease payments

Loan Drawdown

Non-cash flow changes

Amortisation

Lease liabilities recognised

Lease remeasurement

Currency adjustment

At 31 December 2021

Bank loans

Loan notes Origination fees

Lease liabilities

€m

151.3

(87.5)

10.0

€m

50.0

€m

(0.9)

0.2

73.8

50.0

(0.7)

€m

38.5

(19.8)

38.5

(0.3)

0.7

57.6

Total

€m

238.9

(87.5)

(19.8)

10.0

0.2

38.5

(0.3)

0.7

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.

Financial Statements2021 Annual Report and Financial Statements192

Notes Forming Part of the
Consolidated Financial Statements
Continued

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 financial
guarantee contracts as insurance contracts and accordingly the accounting treatment applied is that applicable to
insurance contracts. No claims have been notified to the Group in respect of these contracts, therefore no provision
is warranted.

The Group is a participating employer in the Merchant Navy Officer Pension Fund (MNOPF), a multi-employer
defined benefit 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 deficit of the fund. The last notification from the trustees
showed that the Group’s share of any deficit 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 deficit. 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 different basis from the current deficit calculations. This would likely be a greater
amount than the net position included in these financial statements and the Directors consider that this amount is not
quantifiable 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 financial statements.

37. Events after the reporting period

The Board is proposing a final 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 affecting the Group since 31 December 2021.

Irish Continental GroupCompany Statement of Financial Position
as at 31 December 2021

193

Assets

Non-current assets

Property, plant and equipment

Intangible assets

Investments in subsidiaries

Retirement benefit surplus

Current assets

Trade and other receivables

Cash and cash equivalents

Total assets

Equity and liabilities

Equity

Share capital

Share premium

Other reserves

Retained earnings

Equity attributable to equity holders

Current liabilities

Trade and other payables

Total liabilities

Total equity and liabilities

Notes

47 iv

2021

€m

2020

€m

144.6

150.2

0.4

14.4

1.1

0.3

14.7

0.7

160.5

165.9

57.8

1.6

59.4

219.9

11.9

20.4

12.4

140.3

185.0

34.9

219.9

107.5

40.6

148.1

314.0

12.2

19.7

12.5

153.7

198.1

115.9

314.0

The Company reported a profit for the financial year ended 31 December 2021 of €5.3 million (2020: €15.2 million).

The financial statements were approved by the Board of Directors on 9 March 2022 and signed on its behalf by:

Eamonn Rothwell

David Ledwidge

Director

Financial Statements2021 Annual Report and Financial Statements194

Company Statement of Changes in Equity
For the financial year ended 31 December 2021

Balance at 1 January 2021

Profit for the financial year

Other comprehensive income

Total comprehensive income for
the financial year

Share issue

Share buyback

Employee share-based payments
expense

Movement related to share
options granted to employees in
subsidiaries (note 42)

Settlement of employee equity
plans through market purchase

Transferred to retained earnings on
exercise of share options

Capital

Premium

€m

12.2

(0.3)

€m

19.7

0.7

Movements in the year

(0.3)

0.7

Balance at 31 December 2021

11.9

20.4

Capital

Reserve

€m

7.4

Options

Reserve

€m

5.1

Retained

Earnings

€m

153.7

5.3

0.4

Total

€m

198.1

5.3

0.4

5.7

(19.8)

(1.0)

1.7

0.7

(19.8)

0.6

0.7

(1.0)

0.6

0.7

(1.7)

(0.4)

(13.4)

(13.1)

4.7

140.3

185.0

0.3

7.7

Irish Continental GroupCompany Statement of Changes in Equity
For the financial year ended 31 December 2020

195

Capital

Premium

€m

12.2

€m

19.5

Capital

Reserve

€m

7.4

Options

Reserve

€m

5.9

Balance at 1 January 2020

Profit for the financial year

Other comprehensive income

Total comprehensive income for
the financial year

Share issue

Share buyback

Employee share-based payments
expense

Movement related to share
options granted to employees in
subsidiaries (note 42)

Settlement of employee equity
plans through market purchase

Transferred to retained earnings on
exercise of share options

Movements in the year

0.2

Retained

Earnings

€m

139.4

15.2

(0.1)

Total

€m

184.4

15.2

(0.1)

15.1

(1.8)

(1.7)

2.7

0.2

(1.8)

0.9

1.0

(1.7)

0.9

1.0

(2.7)

(0.8)

14.3

13.7

Balance at 31 December 2020

12.2

19.7

7.4

5.1

153.7

198.1

Financial Statements2021 Annual Report and Financial Statements196

Notes Forming Part of the
Company Financial Statements
Continued

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 effects of new but not yet effective 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 profit for the period

The profit 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 filing it with the
Registrar of Companies.

Irish Continental Group197

39. Company profit for the period – continued

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.

Directors remuneration:

Emoluments

Pension contributions – Defined benefit

Pension contributions – Defined contribution

Gains from the exercise of options

2021

€’000

1,379

335

1,741

There were no employees in the Company during the financial 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

Assets under

Plant,

Equipment

Land

and

Construction

Vessels

and Vehicles

Buildings

Cost

At 1 January 2020

Additions

Impairment

Disposals

At 31 December 2020

Additions

At 31 December 2021

Accumulated depreciation

At 1 January 2020

Depreciation charge for the financial year

At 31 December 2020

Depreciation charge for the financial year

At 31 December 2021

Carrying amount

At 31 December 2021

At 31 December 2020

€m

6.4

1.3

(2.3)

(5.4)

160.0

1.2

161.2

5.5

5.6

11.1

5.7

16.8

144.4

150.1

€m

3.3

0.3

3.6

3.0

0.2

3.2

0.2

3.4

0.2

0.1

€m

0.1

2020

€’000

1,237

774

2,047

Total

€m

169.8

2.5

(2.3)

(5.4)

164.6

0.3

164.9

8.6

5.8

14.4

5.9

20.3

144.6

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.

Financial Statements2021 Annual Report and Financial Statements198

Notes Forming Part of the
Company Financial Statements
Continued

41. Intangible assets

Cost

At 1 January

Additions

At 31 December

Amortisation

At 1 January

Charge for the financial year

At 31 December

Carrying amount

At 31 December

At 1 January

2021

€m

10.2

0.2

10.4

9.9

0.1

10.0

0.4

0.3

The intangible assets included above, all computer software, have finite useful lives of five years, over which the
assets are amortised. Amortisation is on a straight-line basis.

42. Investment in subsidiaries

Investment in subsidiaries at beginning of the financial year

Movement related to share options allocated to employees in subsidiaries

Payments received on exercise of options

Investment in subsidiaries at end of the financial year

2021

€m

14.7

0.7

(1.0)

14.4

2020

€m

10.0

0.2

10.2

9.8

0.1

9.9

0.3

0.2

2020

€m

14.6

1.0

(0.9)

14.7

Irish Continental Group199

42. Investment in subsidiaries – continued

The Company’s principal subsidiaries at 31 December 2021 are as follows:

Name of subsidiary

Irish Ferries Limited*

Eucon Shipping & Transport Limited*

Irish Continental Line Limited*

Irish Ferries Services Limited*

Country of incorporation and operation

Principal activity

Ireland

Ferry operator

Container shipping services

Ship leasing

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

Contarga Limited*

Irish Ferries Finance DAC*

ICG Shipping (W. B. Yeats) Limited

Irish Ferries International Limited*

Isle of Man

Ireland

*Companies availing of Companies Act 2014 exemption under S357

Ship leasing

Administration services

Non-trading

Ferry operator

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 office 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 office for Belfast Container Terminal (BCT) Limited is 1 Lanyon Place, The Soloist Building, Belfast BT1
3LP, Northern Ireland. The registered office 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 office for Eurofeeders Limited is
Collins House, Rutland Square, Edinburgh, Midlothian EH1 2AA, Scotland. The registered office for Zatarga Limited is
2nd Floor, St Mary’s Court, 20 Hill Street, Douglas, Isle of Man, IM1 1EU.

Financial Statements2021 Annual Report and Financial Statements200

Notes Forming Part of the
Company Financial Statements
Continued

43. Trade and other receivables

Amounts due from subsidiary companies (note 48)

Prepayments – deposit on vessel

Other receivables

2021

€m

54.3

3.2

0.3

57.8

2020

€m

107.1

0.4

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
financing 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 financial 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 profits will be available against which deductible temporary
differences can be utilised.

46. Trade and other payables

Within 1 year

Amounts due to subsidiary companies (note 48)

Other payables

2021

€m

31.2

3.7

34.9

2020

€m

112.7

3.2

115.9

Other payables include provisions of €2.2 million at 31 December 2021 (€1.2 million at 31 December 2020).

Irish Continental Group201

46. Trade and other payables – continued

The amounts owed by the Company to its subsidiaries is represented as follows:

Trading balances

Financing balances

2021

€m

7.2

24.0

31.2

2020

€m

1.5

111.2

112.7

Trading balances owed to subsidiary companies are subject to normal credit terms. The reduction in financing
balances was due to repayment of loans to a subsidiary which were financed through repayment of amounts owed to
the Company by other subsidiaries (Note 43).

Interest is payable on financing balances at agreed fixed 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 financing balances outstanding at 31 December 2021 was 1.52% (2020: 1.79%).

47. Retirement benefit schemes

i) Company sponsored / Group affiliated schemes

Certain former employees of the Company were members of a defined benefit 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 defined benefit in its individual financial 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 Officers Pension Fund (Ex MNOPF), of which the Company is the
sponsoring employer.

The contributory defined benefit schemes sponsored by the Company and the Group companies provide retirement
and death benefits for former employees. The defined benefit schemes provide benefits to members in the form of a
guaranteed level of pension payable for life, the level of the benefits 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 qualified 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 financial conditions at this date.

The present value of the defined benefit 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.

Financial Statements2021 Annual Report and Financial Statements202

Notes Forming Part of the
Company Financial Statements
Continued

47. Retirement benefit schemes – continued

ii) Merchant Navy Officers 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 financial statements at 31 December 2021 is based
on the actuarial deficit contribution demands notified to the Company and which remain outstanding at the reporting
date. The last deficit demand received by the Company was dated May 2013 which has been fully paid.

The share of the overall deficit 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 defined benefit schemes is calculated by independent, qualified
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 benefit assets and liabilities

The amount recognised in the Statement of Financial Position in respect of the Company’s defined benefit schemes,
is as follows:

Equities

Bonds

Property

Other

Fair value of scheme assets

Present value of scheme liabilities

Surplus in schemes

2021

€m

1.5

0.3

0.1

2.0

(0.9)

1.1

2020

€m

1.1

0.4

0.1

1.7

(1.0)

0.7

The retirement benefit scheme sponsored by the Company is in a net surplus position. In addition, the Company’s
share of the deficit 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 inflation, benefit 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.

Irish Continental Group203

€m

1.7

0.3

2.0

1.7

€m

1.0

(0.1)

0.9

0.1

1.0

47. Retirement benefit schemes – continued

v) Movement in retirement benefit assets

Movements in the fair value of scheme assets in the financial year were as follows:

2021

At beginning of the financial year

Actuarial gains

At end of the financial year

2020

At beginning of the financial year

Actuarial gains

At end of the financial year

vi) Movement in retirement benefit liabilities

Movements in the present value of defined benefit obligations in the financial year were as follows:

2021

At beginning of the financial year

Actuarial gains

At end of the financial year

2020

At beginning of the financial year

Actuarial losses

At end of the financial year

The present value of scheme liabilities at the financial 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 defined benefit 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.

Financial Statements2021 Annual Report and Financial Statements204

Notes Forming Part of the
Company Financial Statements
Continued

47. Retirement benefit schemes – continued

viii) Amounts recognised in the Company Statement of Comprehensive Income

Amounts recognised in the Company Statement of Comprehensive Income in respect of defined benefit obligations
are as follows:

Actuarial gains and losses:

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 financial assumptions

Actuarial gain / (loss) recognised in Statement of Comprehensive Income

2021

€m

0.4

2020

€m

(0.1)

48. Related party transactions

The Company’s profit 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:

Amounts due from subsidiary companies (note 43)

Amounts due to subsidiary companies (note 46)

2021

€m

54.3

(31.2)

23.1

2020

€m

107.1

(112.7)

(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.

Irish Continental Group205

49. Contingent liabilities

The Company is a participating employer in the Merchant Navy Officer Pension Fund (MNOPF), a multi-employer
defined benefit 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 deficit of the fund. The last notification from the trustees showed
that the Company’s share of any deficit 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 deficit. 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 different basis from the current deficit calculations. This would
likely be a greater amount than the net position included in these financial statements and the Directors consider that
this amount is not quantifiable 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 financial 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 financial 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 financial 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 final 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 affecting the Group since 31 December 2021.

51. Approval of financial statements

The Financial Statements were approved by the Board of Directors and authorised for issue on 9 March 2022.

Financial Statements2021 Annual Report and Financial Statements206

Irish Continental Group

Investor Information

2021 Annual Report and Financial Statements

Investor and Other Information

207

Investor
and Other
Information

Investor Information

Other Information

208

210

208

Investor 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 offered 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 (€)

Year ended 31 December 2021

Year ended 31 December 2020

Share listings

High

4.82

5.03

Low

3.84

2.30

Year end

4.53

4.50

ICG Units are quoted on the official 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 certificates 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

Irish Continental GroupInvestor and Other Information

209

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 offers 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

Half year results announcement

Travel discounts for shareholders

11 May 2022

25 August 2022

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.

2021 Annual Report and Financial Statements210

Investor Information
Continued

Other information

Registered office

Solicitors

Auditors

Ferryport
Alexandra Road
Dublin 1, Ireland.

A&L Goodbody, Dublin

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

info@icg.ie

Euronext Dublin

London Stock Exchange

Reuters

Bloomberg

ISE Xetra

IR5B_u.I

IR5B

ICG_u.L

ICGC

Irish Continental Group
211

Irish Continental Group plc,
Ferryport, Alexandra Road, Dublin 1, Ireland.
+353 1 607 5628
Tel:
info@icg.ie
email:
Website: www.icg.ie

Irish Ferries,
Ferryport, Alexandra Road, Dublin 1, Ireland.
+353 1 607 5700
Tel:
email:
info@irishferries.com
Website: www.irishferries.com

Eucon Shipping & Transport Ltd,
Irish Ferries head office, Breakwater Road South,
Ferryport, Alexandra Road, Dublin 1, Ireland.
+353 1 607 5555
Tel:
email:
info@eucon.ie
Website: www.eucon.ie

Dublin Ferryport Terminals,
Container Terminal, Breakwater Road, Dublin 1, Ireland.
Tel:
email:

+353 1 607 5700
info@dft.ie

Belfast Container Terminal,
Victoria Terminal 3, West Bank Road,
Belfast BT3 9JL, Northern Ireland.
Tel:
email:

+44 7901 825387
info@bcterminal.com

Dublin Ferryport Inland Depot
Cedar Drive, Dublin Airport Logistics Park,
Saint Margarets, Co Dublin, K67 Y6Y8.

Financial Statements2020 Annual Report and Financial Statements212

Irish Continental Group

Notes

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.

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Irish Continental Group plc , Ferryport
Alexandra Road, Dublin 1, Ireland, D01W2F5.