Irish Continental Group Annual Report 2022

FY2022 Annual Report · Irish Continental Group

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2022 Annual Report &
Financial Statements

Irish Continental Group (ICG) is the leading Irish-based
maritime transport group. We carry passengers and
cars, Roll on Roll off freight (RoRo) and Container Lift
on Lift off freight (LoLo), 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.

view this report online
icg.annualreport22.com

STRATEGIC
REPORT

Our Group at a Glance
Financial Highlights
Five Year Summary
Chairman’s Statement
Chief Executive’s Review
How We Create Value
Key Performance Indicators and Summary of 2022 Results
The Ferries Division
The Container and Terminal Division
Financial Review
Sustainability and ESG
Risk Management
Our Fleet
Executive Management Team

04
06
07
08
12
16
18
22
28
32
36
60
70
72

76
The Board
78
Corporate Governance Report
91
Report of the Audit Committee
Report of the Nomination Committee
95
Report of the Remuneration Committee 98
109
Report of the Directors
113
Directors’ Responsibility Statement

CORPORATE
GOVERNANCE

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

116
124
125
126
127
129
130

Investor Information
Other Information

196
198

INVESTOR
AND OTHER
INFORMATION

Strategic Report2022 Annual Report and Financial Statements2

04
06
07
08
12
16
18
22
28
32
36
60
70
72

STRATEGIC
REPORT

Irish Continental Group3

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.

Strategic Report2022 Annual Report and Financial Statements4

Our 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.

The Group operates through two divisions

Ferries Division
Principal activities include the chartering of vessels both internally
and externally together with passenger and RoRo freight shipping
services under the Irish Ferries brand.

Container & Terminal Division
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, and following its
opening in January 2022 the Dublin Ferryport Inland Depot.

Strategic short sea RoRo routes
operated by Irish Ferries providing
seamless connections between Ireland,
Britain and Continental Europe for the
696,600 RoRo units carried in 2022.

Reliability underpinned by
major investment in tonnage
and maintenance of quality
assets ensuring the high levels of
schedule integrity demanded by
our customers.

Connected container transport
services provided by Eucon,
transporting 322,600 teu (twenty
foot equivalent) in 2022 between
Ireland and 20 countries throughout
Europe by sea, road, rail and barge.

Strategically located container terminals which handled
319,600 container units during 2022 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.

EstoniaLatviaLithuaniaDenmarkSwedenNorwayRomaniaBulgariaSerbiaCroatiaItalySloveniaHungaryAustriaSlovakiaSwitzerlandBelgiumCzech Rep.PolandGermanyFranceUnited KingdomIrelandNetherlandsRosslareHolyheadAntwerpRotterdamPembrokeDoverCherbourgCalaisDublinBelfastCorkIrish 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

Fastest crossing on the Irish sea on board the Irish Ferries Dublin
Swift fastcraft service with a sailing time of two hours between
Dublin and Holyhead at speeds of up to 65 kph.

Key contributor to regional
tourism in all countries we offer
services, Irish Ferries carried
2,315,000 passengers and 573,400
cars during 2022 with research
indicating that car tourists stay
longer and travel outside the main
urban centres.

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.

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.

Financial Highlights

Revenue
€584.9m +74.9%

2021: €334.5m

EBITDA*
€127.2m +143.2%

2021: €52.3m

Operating profit
€66.7m

2021: €(0.2)m

Basic earnings per share
33.6c

2021: (2.6)c

Adjusted basic earnings per share*
33.6c

2021: (2.7)c

Net debt*
€(171.1)m (20.3%)

2021: €(142.2)m

Return on average capital employed*
17.5%

2021: (0.1)%

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

€584.9m

€334.5m

€127.2m

€52.3m

€66.7m

€(0.2)m

33.6c

(2.6)c

33.6c

(2.7)c

€(171.1)m

€(142.2)m

17.5%

(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 18 to 20.

Irish Continental Group2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

€584.9m

€334.5m

€127.2m

€52.3m

€66.7m

€(0.2)m

33.6c

(2.6)c

33.6c

(2.7)c

€(171.1)m

€(142.2)m

17.5%

(0.1%)

Five Year Summary

Summary extract of Income Statement
Revenue
Operating expenses and employee benefits expense
Depreciation and amortisation

Non-trading items 1
Interest (net)
Profit / (loss) before taxation
Taxation
Profit / (loss) for the year

EBITDA

Per share information:
Earnings per share
-Basic
-Adjusted basic 2

2022

€m

2021

€m

2020

€m

20193

€m

2018

€m

584.9
(457.7)
(60.5)
66.7
-
(4.2)
62.5
(2.7)
59.8

334.5
(282.2)
(52.5)
(0.2)
-
(3.9)
(4.1)
(0.8)
(4.9)

277.1
(235.0)
(41.3)
0.8
(11.2)
(7.6)
(18.0)
(1.0)
(19.0)

357.4
(270.6)
(36.8)
50.0
14.9
(3.4)
61.5
(1.3)
60.2

330.2
(261.8)
(22.1)
46.3
13.7
(0.8)
59.2
(1.4)
57.8

127.2

52.3

42.1

86.8

68.4

€cent

33.6
33.6

(2.6)
(2.7)

(10.2)
(4.3)

31.7
23.8

30.4
23.1

Dividend per share (declared)

14.09

9.00

4.42

12.77

Shares in issue at year end:
-At year end
-Average during the year

Summary extract of Statement of Financial Position
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

Net debt / EBITDA

170.8
177.8

€m

405.6
33.6
134.7
573.9

260.8
0.4
195.8
116.9
573.9

126.3
(72.7)
(52.8)
38.5
(0.3)
39.0

€m

(171.1)

Times

1.2x

187.0
187.0

€m

353.0
1.0
224.9
578.9

265.9
2.2
141.6
169.2
578.9

46.1
7.8
(14.4)
110.9
-
150.4

182.8
186.7

€m

387.3
6.7
117.9
511.9

249.7
1.4
154.8
106.0
511.9

57.8
(52.7)
(117.4)
150.4
0.4
38.5

187.4
189.8

€m

353.5
12.5
225.8
591.8

287.9
3.7
229.3
70.9
591.8

84.8
(52.3)
(46.5)
124.7
0.2
110.9

€m

(142.2)

(88.5)

(129.0)

Times

2.6x

Times

2.1x

Times

1.5x

190.3
190.0

€m

308.1
2.5
203.7
514.3

252.9
4.2
205.7
51.5
514.3

61.5
(158.8)
131.4
90.3
0.3
124.7

€m

(80.3)

Times

1.2x

Gearing (net debt as a percentage of shareholders’ funds)

66%

57%

33%

45%

32%

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.

2.
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 Report2022 Annual Report and Financial Statements
8

Chairman’s Statement

INVESTING FOR
GROWTH AND
A SUSTAINABLE
FUTURE

2022 has been a year not just of
recovery, but of building for long-term
growth. With the Covid-19 pandemic
now behind us, we have turned our
full attention to maximising the
opportunities that have arisen for the
Group over the last two years. We come
out of the pandemic operations larger
than we had at its commencement,
and with a balance sheet that is as
strong as ever.

2022 saw the completion of our
planned fleet investment for the Dover
– Calais route. The entry to this route
has been a long-term objective for the
Group and the expansion to a three
ship operation in the first half of this
year allows us to compete effectively
on this route. The ending of pandemic
related travel restrictions alongside
the continued support of our freight
customers have driven revenues to a
record level.

We continued our investment in future
growth and sustainability throughout
2022. We acquired a further ferry, the
Isle of Inisheer, for the Dover – Calais
route bringing the total number of
vessels on the route to three. We also
added a further container vessel,
the CT Pachuca in March 2022. 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

Irish Continental GroupJohn B. McGuckian,
Chairman

the electrification of Dublin Ferryport
Terminal (DFT) took place, which will
lead to an achievable and material
reduction in emissions from the
container terminal based in Dublin
Port.

Alongside the recovery in our
passenger business during the year,
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 and
Tourism revenues both grew to record
levels driven primarily from the new
operation on the English Channel.

As in prior years, I would like to take this
opportunity to thank all our colleagues
who made these results possible. Our
colleagues, particularly those on the
front line, have ensured operations
continued throughout the Covid-19
pandemic. Those same colleagues
are essential to the strong recovery in
our business during the year and our
planned growth in the future.

Financial Outcome
The overall financial outcome for the
Group was a profit before tax of €62.5
million (2021: loss of €4.1 million) while
operating profit was €66.7 million
(2021: loss of €0.2 million). EBITDA
generated was €127.2 million (2021:
€52.3 million) from total revenues of
€584.9 million (2021: €334.5 million).

EBITDA grew strongly versus the prior
year in our Ferries Division where
EBITDA was €95.7 million (2021: €23.2
million). The division saw increased
revenues from the recovery in our
tourism markets, continued growth
in the freight market, increased
charter revenue and the introduction
of a third vessel on the Dover – Calais
service which allowed us to compete
effectively on the route.

Performance in our Container and
Terminal Division improved with an
EBITDA of €31.5 million (2021: €29.1
million) through a continued focus
on cost optimisation and increases in
revenue.

In the prior year, our diversified
revenue streams and cost containment
measures protected our strong balance
sheet and allowed us to begin 2022
from a position of strength. The ending
of travel restrictions and strong growth
in our markets allowed us to build
on that strength in the current year
allowing us to both further invest in the
business and make material returns
to shareholders. Cash generated from
operations of €132.0 million (2021:
€67.0 million) together with net debt
increase of €28.9 million was used
to fund strategic capital expenditure
of €57.4 million and returns to
shareholders of €73.4 million via a
combination of dividends and share
buybacks. Net debt at year end was
€171.1 million (2021 €142.2 million).

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.
We have rolled out a number of
further initiatives across the Group and
continued initiatives that commenced
in prior years. These are discussed
later in the Sustainability and ESG
Report at pages 36 to 59, highlights
of which include the significant
progress we have made in reducing
the emissions of our container terminal
operations. Continuing our expansion
and modernisation programme
at Dublin Port, 2022 was a year of
further material investment in this
business. 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 over the course
of the programme. With the progress
made to date and the expected future
investment, we expect to achieve
our target of net zero emissions in
our container terminal operations by
2030. We also continue to develop our
environmental reporting processes
in co-ordinating the collection of
relevant data and considering how

Strategic Report2022 Annual Report and Financial Statements10

Chairman’s Statement
Continued

best this can be harnessed to affect
behaviours in order to drive further
improvement. This also provides the
basis for increasing transparency over
our sustainability credentials as set out
in the Sustainability and ESG Report.
We continue to engage with our
stakeholders to understand their key
pressing and material issues which we
will evaluate and implement in our day
to day business when appropriate.

We continued the expansion of
our Dover – Calais service with the
addition of a third vessel, the Isle of
Inisheer, during April 2022. This service
commenced by Irish Ferries in June
2021 has been well received by both
passengers and freight customers. The
introduction of the third vessel is the
culmination of our planned investment
for the route. With Irish Ferries now
offering up to 30 sailings per day on
the Dover – Calais service, we now offer
a genuine alternative for all customers
on the Channel route.

During 2022, the Group continued
its investment in the modernisation
and expansion at DFT. It took delivery
of and commissioned a further five
remote control semi-automated
electric rubber-tyred gantry cranes
(RTGs) bringing the total of electrically
powered units at DFT to nine. Six of
these RTG’s have been commissioned
and are in use, with a further three
due to be commissioned in 2023.
This will increase the total number of
electric gantries in our Dublin Terminal
from six to nine by the end of 2023,
continuing our transition to this more
environmentally efficient mode of
operation. Following the successful
deployment of these environmentally
friendly electric rubber-tyred gantries
the Group has also ordered one new
electrically powered ship-to-shore
crane (STS) for delivery in 2023. The
deployment of these electric cranes
puts us on track to meet our emissions
reduction target of net zero emissions
by 2030. Furthermore, the delivery of
these cranes and the relocation of our

empty depot facility to the Dublin
Ferryport Inland Depot will increase
the capacity of DFT to meet the need
of the market.

Belfast Container Terminal (BCT)
operates the sole container terminal
at Belfast under a services concession
agreement with Belfast Harbour
Commissioners (BHC) at a 27 acre
site in Belfast Harbour. The £40
million re-investment project by
BHC commenced in 2020 and
continued into 2022. The project
included 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
completed following the deployment
of the final three RTGs in 2022.

The Group commenced operations at
the new Dublin Inland Port in January
2022, under a 20 year lease agreement
awarded following a public tender
process. Trading as Dublin Ferryport
Inland Depot (DFID), this 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.

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 compliance with
the 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 78 to 90.

During the year, I led the annual
evaluation of Board performance of
which further details are set out in
the Corporate Governance Report on
page 86. 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
Following the easing of travel

restrictions and the subsequent

increase in our tourism carryings, the

Directors declared and paid during

2022 a final dividend of 9.00 cent per

ordinary share for 2021 and an interim

dividend of 4.64 cent per ordinary share

for 2022. Dividends paid during the

year totalled €24.2 million. Payment of

dividends had been suspended during

2020 and 2021 due to the effects of

the Covid-19 travel restrictions on the

financial performance of the Group.

During the year, the Company bought

back a total of 12.0 million shares which

were cancelled. The total consideration

paid for these shares was €49.2 million

(2021: €19.8 million). The Directors are

proposing a final dividend in respect of

2022 of 9.45 cent per share subject to

shareholder approval at the AGM on 11

May 2023, which will be paid on 9 June

2023 to shareholders on the register at

close of business on 19 May 2023.

Outlook
We have experienced strong growth
in car and RoRo freight volumes in
2022, due partly to the unwinding
of Covid-19 restrictions and also due
to the expansion of our services on
the Dover – Calais route. Container
volumes were down slightly as they
are more impacted by the slowdown
in world growth and international
trade volumes.

Irish Continental Group11

While the Group acknowledges that
its operations have an inevitable
impact on the environment it does
so in the knowledge that it operates
essential services from the island of
Ireland, which was clearly evident
during the worst of the Covid-19
lockdowns. Our operations remain
the most environmentally sustainable
form of transport for facilitating trade
and movement of people on and off
the island. Nevertheless, reducing
our impact on the environment
is embedded in the Group’s DNA
through maximising the effectiveness
and efficiency in our operations while
continuing to invest in appropriate
technologies to reduce our impact
on the environment. We remain
committed to our decarbonisation
targets set out in the Sustainability and
ESG Report.

While there is some uncertainty
around economic growth rates, we
look forward to continued growth
during 2023 through the leveraging
of our recent investments and the
continued support of all customers.

John B. McGuckian,
Chairman
8 March 2023

In the period from 1 January 2023 to 4
March 2023, Irish Ferries carried 50,000
cars, an increase of 42.0% over the
same period in the prior year. While
these increases are encouraging, it is
over a seasonally less significant time
of the year for passenger travel. We
do see an opportunity for material
growth in our passenger business with
the expected return to pre-pandemic
levels.

RoRo volumes in the Ferries Division
have also started strongly in 2023.
Overall, Irish Ferries RoRo volumes
are up 21.1% on the same period in the
prior year to 111,900 RoRo units. We
expect that 2023 sees a continuation
of the trend of freight customers
returning to the landbridge and we are
hopeful that the Windsor Framework
will remove the distortion from the
non-implementation of the Northern
Ireland Protocol. We welcome recent
calls for the establishment of Green
lanes on ferry routes between the UK
and the Republic of Ireland, for traffic
destined for Northern Ireland. This will
ensure freight moves on and off the
island of Ireland in the most efficient,
timely and environmentally friendly
manner.

The Container and Terminal Division
has seen a reduction in containers
shipped in the period from 1 January
2023 to 4 March 2023 of 4.4%. The
number of terminal lifts has seen a
similar drop of 5.6% in the same period.
This is indicative of a slowdown in the
global economy and is not unexpected.
However, the recent and ongoing
investment in capacity expansion and
plant modernisation at our container
terminals will provide a platform
for both growth and more efficient
operations at our Dublin terminal. This
will be further aided by the operations
at our new Dublin Inland Port facility
which commenced during 2022.

We note the ever-increasing
expectations and regulatory
requirements to reduce the effects of
our operations on the environment.

Strategic Report2022 Annual Report and Financial Statements12

Chief Executive’s Review

A YEAR OF
PROGRESS
AND RECORD
GROWTH

Key Financial Highlights

EBITDA
€127.2m +143.2%

2021: €52.3m

Operating profit
€66.7m

2021: €(0.2)m

Return on average capital employed
17.5% +17.6pts

2021: (0.1)%

Adjusted basic earnings per share

33.6c

2021: (2.7)c

Free cash flow before strategic
capital expenditure
€108.0m +143.8%

2021: €44.3m

Irish Continental GroupEamonn Rothwell,
Chief Executive Officer

2022 Performance
2022 was a year of strong recovery in
our business and record growth. As we
exited the restrictions of the Covid-19
pandemic, we have benefited from
the investment decisions made over
the last two years. The investment
in the new Dover – Calais route have
allowed us to materially grow our
ferries business. Our investment in
container ships allowed us to benefit
from the strong container ship market
during 2022. We also continued
the modernisation and expansion
programme in our container terminals
which has allowed us to offer our
customers a more efficient and
sustainable service.

The Group made a profit before tax of
€62.5 million (2021: loss of €4.1 million).
Operations were cash generative at
€126.3 million (2021: €57.8 million) and
the Group maintained a strong balance
sheet.

The performance in the Ferries
Division saw a significant increase in
EBITDA to €95.7 million (2021: €23.2
million). Partially reflective of returning
passenger volumes following removal
of travel restrictions, the level of
underlying growth is encouraging and
justifies the decisions and investment
we have made to grow both our ferry
and chartering operations.

Performance in the Container and
Terminal Division again grew at an
impressive rate during the year.
EBITDA in this division increased
by 8.2% to €31.5 million (2021: €29.1
million). This was achieved despite a
reduction in volumes in both Eucon
and the Terminals. Revenue grew by
27.2% to €221.5 million (2021: €174.0
million).

Financial Position
The Group ended the year in a strong
position with equity attributable to
shareholders increasing by €11.1 million
to €260.8 million, which was after total
returns made to shareholders of €73.4
million. The strong recovery against
the previous two financial years saw
the resumption of dividend payments,
with €24.2 million paid. In addition,
the Group bought back 12.0 million
shares which were cancelled, for a total
consideration of €49.2 million.

Net debt at year end was €171.1 million
compared to net debt of €142.2 million
in the prior year. This represents a
net debt / EBITDA leverage of 1.2
times under banking covenant
definitions. The increase in net debt
together with cash generated from
operations, was used to fund strategic
capital expenditure of €57.4 million,
dividends paid of €24.2 million and
share buybacks of €49.2 million during
the year. Year end net debt of €171.1
million comprised gross borrowings
of €167.7 million (2021: €123.1 million),
lease obligations of €42.4 million
(2021: €57.6 million) less gross cash
balances of €39.0 million (2021: €38.5
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
2022 in building on the progress made
in 2021 and preparing the Group for
future long term growth opportunities.

The Group continued its investment in
the Dover – Calais service, which had
commenced in June 2021. The Isle of
Inisheer was introduced as the third
vessel on the route during April 2022.
The addition of a third ship onto the
route for Irish Ferries has strengthened
our position on the route and ensures
we are a viable alternative to the other
operators on the route.

Strategic Report2022 Annual Report and Financial Statements14

Chief Executive’s Review
Continued

Operations at our new inland container
depot commenced in January 2022.
This is an important development 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.
This allows for increased utilisation at
our terminal at Dublin Port facilitating
efficient imports and exports.

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. The Group
has continued with the significant
investments in installing exhaust gas
cleaning systems (EGCS). A further
EGCS unit was installed on one of our
container vessels while an EGCS was
also installed on the Isle of Inishmore
in early 2023. The programme for
the electrification of heavy plant at
our container terminals continued in
2022, including the commissioning
of two additional electric cranes at
Dublin Ferryport Terminal. Three
further electric cranes were also
delivered during 2022 and will be
commissioned during 2023. 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. Further details of our work in
this space during the year are detailed
in our Sustainability and ESG Report at
pages 36 to 59.

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, the Group collates
and harnesses this data as a tool to
promote environmental responsibility
within the workforce. While we
recognise there is and always will be
additional work to do in this space, we
consider the ongoing improvement
and progress together with the firm
foundation established from prior years
will enable the further development of
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

DOVER – CALAIS SERVICE WILL
GIVE US AN EXCELLENT PLATFORM
TO CONTINUE TO GROW

Irish Continental Group15

Outlook
I look forward in 2023 to a continuation
of the positive trends we saw
throughout the Group in 2022 that
saw both operational and financial
progress across all the divisions in the
Group. The work and the investment
over the last number of years gives
us an exciting platform for long-
term sustainable growth in all of our
divisions. As always, we will continue to
seek out improvement and investment
opportunities for our longer-term
success.

Eamonn Rothwell,
Chief Executive Officer
8 March 2023

equipment suppliers adopting the
latest technologies. As a small operator
in a global market, the Group will
only apply proven technologies and
we will recover the costs of same,
either by increased efficiencies or by
passing associated costs through to
customers. The International Maritime
Organisation and the European Union
decarbonisation goals for the Maritime
industry are set out and discussed in
our Sustainability and ESG Report on
pages 36 to 59.

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. Freight remains
the backbone of the local Irish and
European economies. Our efforts
in greening the maritime industry
is a vital part of moving the wider
European economy to a sustainable
footing in the face of the rising
challenge from climate change.

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 the 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. It is
their knowledge and dedication to
customer service that drives the future
success of the Group.

Strategic Report2022 Annual Report and Financial StatementsOUR
PURPOSE

How We Create Value

Revenue
€399.9m
64% of Group *

Capital Employed
€317.7m
83% of Group

EBITDA
€95.7m
75% of Group

*inclusive of inter-segment revenue

Ferries Division

Multipurpose ferry services carrying both passengers and
RoRo freight on strategic short sea routes.

Ireland

Britain

Ireland

Britain

France

Operating a fleet of eight ferries
(including two chartered-in)

Capacity to operate up to
47 sailings daily

8 LoLo chartered-out vessels

Customer type
Freight
+ Haulage

Leisure
Breaks

Key strategic developments
over the last 5 years

W.B. Yeats
The introduction of the WB Yeats in 2018 has
met our expectations both operationally and
financially. The flexibility, reliability and capacity
of the vessel has been critical in allowing
the Ferries Division to successfully navigate
constantly changing trade flows due to the twin
effects of the UK exit from the European Union
and the Covid-19 pandemic.

Irish Continental Group17

We will create value for our
stakeholders by anticipating our
customers’ needs and matching
their requirements with superior
services through constant
innovation and the rapid
application of technology.

Revenue
€221.5m
36% of Group *

Capital Employed
€66.9m
17% of Group

EBITDA
€31.5m
25% of Group

*inclusive of inter-segment revenue

Container &
Terminal Division

Direct container shipping services between Ireland
and Continental Europe together with the operation
of container terminals at both Dublin and Belfast.

Container fleet capacity
8,900 TEU

Strategically located
container terminals

Customer type
Freight
+ Haulage

Dover to Calais route
Commencement of the Irish Ferries
service on the Dover – Calais route in 2021.
Introduction of a third ship onto the route
in during 2022 allowing us to offer 30
sailings per day to our customers.

Dublin Ferryport Inland
Depot (DFID)
Opening of our new terminal in the
Dublin Ferryport Inland Depot in January
2022. The inland depot is strategically
located to allow easy access to Ireland’s
motorway system. This will allow ancillary
services to be provided outside of the
Dublin Port area, therefore increasing
capacity in the Dublin Ferryport Terminal.

Terminals Investment
Continued investment in decarbonisation of
Dublin and Belfast Terminals. During 2022,
the Group took delivery of a further five
electric RTGs, Of the total of nine electric
RTG’s, six are fully commissioned and in use,
with a further three to be commissioned in
2023. The Group has also ordered one new
electrically powered ship-to-shore crane for
delivery in 2023.

Strategic Report2022 Annual Report and Financial Statements18

Key Performance Indicators and Summary of 2022 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.

APM

EBITDA

EBIT

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.

Free cash
flow before
strategic capital
expenditure

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.

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

Net debt

Leverage

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

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

The debt leverage ratio is calculated per
the terms of our lending agreement and
is calculated as bank debt, excluding lease
liabilities, expressed as times EBITDA. The
calculation is set out at note 21 to the Financial
Statements.

Provides an indication of the Group’s borrowing
capacity.

Adjusted Basic
Earnings Per
Share (EPS)

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

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

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.

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

Measurement of covenants for bank facility
purposes

Non-Financial KPI

Description

Benefit of non-financial KPI

Schedule
integrity

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

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

Irish Continental Group19

The following table sets forth the reconciliation from the Group’s operating profit (EBIT) for the financial year to EBITDA, free
cash flow and net debt. See note 11 to the Consolidated Financial Statements for the calculation of Basic and Adjusted Basic
EPS.

Cash Flow

Operating profit / (loss) (EBIT)

Depreciation and amortisation (note 9)

EBITDA

Working capital movements (note 33)

Retirement benefit scheme movements (note 33)

Share-based payments expense (note 30)

Other

Cash generated from operations

Interest paid

Tax paid

Maintenance capital expenditure

Free cash flow before strategic capital expenditure

Strategic capital expenditure

Free cash flow after strategic capital expenditure

Proceeds on disposal of property, plant and equipment

Share buybacks

Dividends paid

Settlement of employee equity plans through market purchases

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

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 profit / (loss)

ROACE

2022
€m

66.7

60.5

127.2

1.2

1.1

3.0

(0.5)

132.0

(4.0)

(1.7)

(18.3)

108.0

(57.4)

50.6

3.0

(49.2)

(24.2)

(2.9)

0.1

(22.6)

(142.2)

(6.2)

(0.1)

2021
€m

(0.2)

52.5

52.3

11.7

0.6

1.3

1.1

67.0

(8.4)

(0.8)

(13.5)

44.3

(41.7)

2.6

2.8

(19.8)

(1.0)

0.7

(14.7)

(88.5)

(38.5)

(0.5)

(171.1)

(142.2)

2022
€m

260.8

171.1

(14.1)

0.4

418.2

(33.6)

384.6

381.0

66.7

17.5%

2021
€m

249.7

142.2

(9.2)

1.4

384.1

(6.7)

377.4

364.9

(0.2)

(0.1%)

Strategic Report2022 Annual Report and Financial Statements20

Key Performance Indicators and Summary of 2022 Results
Continued

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

Net debt

Cash and cash equivalents (note 18)

Non-current borrowings (note 21)

Current borrowings (note 21)

Non-current lease obligations (note 22)

Current lease obligations (note 22)

Net debt

2022
€m

39.0

(160.4)

(7.3)

(30.7)

(11.7)

(171.1)

2021
€m

38.5

(115.8)

(7.3)

(37.5)

(20.1)

(142.2)

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 22 to 30.

Ferries

Container & Terminal

Inter- Segment

Group

Comment

2022

€m

2021

€m

2022

€m

2021

€m

2022

€m

2021

€m

2022

€m

2021

€m

399.9

175.5

221.5

174.0

(36.5)

(15.0)

584.9

334.5

95.7

23.2

31.5

29.1

(49.3)

(40.6)

(11.2)

(11.9)

46.4

(17.4)

20.3

(3.1)

0.1

(2.0)

(1.2)

19.1

43.4

(19.4)

17.2

(2.0)

0.1

15.3

127.2

52.3

(60.5)

(52.5)

66.7

(4.3)

0.1

62.5

(0.2)

(4.0)

0.1

(4.1)

14.9%

(5.9)%

29.3%

25.5%

17.5%

(0.1)%

33.6

(2.6)c

(2.7)c

108.0

44.3

Revenue

EBITDA

Depreciation and amortisation

Operating profit / (loss) (EBIT)

Finance costs (note 7)

Finance income (note 6)

Profit / (loss) before tax

ROACE

EPS: (note 11)

EPS Basic

EPS Adjusted Basic

Free cash flow

Comment:
Financial KPIs

1. EBITDA: Group EBITDA for the year increased by 143.2%, to €127.2 million (2021: €52.3 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 312.5%, to €95.7 million, while the Container and Terminal Division increased by 8.2%, to €31.5 million.

2. EBIT: Group EBIT for the year increased to €66.7 million (2021: €(0.2) million). The Ferries Division increase in underlying

EBIT was €63.8 million, primarily due to a full year of trading without Covid-19 restrictions, while the Container and
Terminal Division was €3.1 million higher, as a result of higher revenues.

3. ROACE: The Group achieved a return on average capital employed of 17.5% (2021: (0.1)%). The Ferries Division achieved a

return on average capital employed of 14.9% (2021: (5.9)%) while the Container and Terminal Division achieved 29.3% (2021:
25.5%).

4. EPS: Basic EPS was 33.6 cent compared with (2.6) cent in 2021. Adjusted Basic EPS (before net interest (income) / cost on

defined benefit obligations) was 33.6 cent compared with (2.7) cent in 2021.

5. Free cash flow before strategic capital expenditure: The Group’s free cash flow before strategic capital expenditure was
€108.0 million (2021: €44.3 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 across all services during 2022 (2021: 96%).

Irish Continental Group21

Strategic Report2022 Annual Report and Financial Statements22

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 eight
vessels, six of which are owned and two
of which are chartered-in.

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 eight container
vessels, following the purchase of the
CT Pachuca during 2022, 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

Isle of Inisheer

High speed ferry

Dublin – Holyhead

Cruise ferry

Ropax

Dublin – Holyhead / Cherbourg

Dover – Calais

Chartered out by Ferries Division

Vessel

Ranger

Elbfeeder

Elbtrader

Thetis D

CT Daniel

CT Rotterdam

Elbcarrier

CT Pachuca

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

LoLo container vessel

Charter – Inter-Group

FranceUnited KingdomIrelandIrish Ferries Ropax and Cruise Ferry ServicesIrish Ferries High Speed FerryRosslareHolyheadPembrokeDoverCherbourgCalaisDublinIrish Continental Group

Best Ferry
or Fixed Link
Operator
in the Group Leisure &
Travel awards in the UK.

Dublin Port

Holyhead

Best Ferry
Company
awarded by the Irish Travel
Trade News Awards and Irish
Travel Agents Association.

FranceUnited KingdomIrelandIrish Ferries Ropax and Cruise Ferry ServicesIrish Ferries High Speed FerryRosslareHolyheadPembrokeDoverCherbourgCalaisDublinM50M1M2M3M4M7M50M50M50M50M50M50M50M11Strategic Report2022 Annual Report and Financial Statements24

The Ferries Division
Continued

2022 Overall Ferries Division
Performance

Revenue
€399.9m +127.9%

2021: €175.5m

EBITDA
€95.7m +312.5%

2021: €23.2m

Operating profit
€46.4m

2021: €(17.4)m

ROACE
14.9% +20.8pts

2021: (5.9%)

Revenue in the division was 127.9%
higher than the previous year at €399.9
million (2021: €175.5 million). Revenue
in the first half of the year increased
by 167.0% to €167.9 million (2021: €62.9
million), while in the second half
revenue increased by 106.0%, to €232.0
million (2021: €112.6 million). EBITDA
increased to €95.7 million (2021: €23.2
million) while EBIT was €46.4 million
compared with €(17.4) million in 2021.

Fuel costs were €104.6 million, an
increase of €61.5 million on the prior
year. The division achieved a return on
capital employed of 14.9% (2021: (5.9%)).

In total, Irish Ferries operated 13,642
sailings in 2022 (2021: 6,331), the
increase primarily due to increased
sailings on the Dover – Calais route.

Car and Passenger Markets
It is estimated that the overall car
market1, on the routes that we
operate (Republic of Ireland to UK/
France and the Dover Straits), grew
by approximately 147.2% in 2022 to
4,131,000 cars. While encouraging,
this level of car carryings is still 23.9%
behind 2019 levels.

Irish Ferries’ car carryings during the
year were increased over the previous
year by 181.6% to 573,400 cars (2021:
203,600 cars). The increase in carryings
versus 2021 levels is primarily due to the
lifting of Covid-19 travel restrictions and
the expansion to a three ship service
on the Dover – Calais route.

The total sea passenger market
(i.e. comprising car, coach and foot
passengers on the Republic of Ireland
to UK/France and the Dover Straits)

Irish Continental Group

increased by 95.5% on 2021 to a total
of 16.6 million passengers. Irish Ferries’
passenger numbers carried increased
by 246.7% at 2,315,000 (2021: 667,800).

The Ferries Division delivered 96% of
scheduled sailings in 2022 compared
with 96% in the previous year across all
services.

In 2022, with a return to more normal
travel patterns, Irish Ferries focused
its passenger messaging on its brand
platform “Sea Travel Differently” which
not only highlighted the service and
hospitality Irish Ferries offers, but also
the benefits of sea travel versus air
travel, in a year in which many airports
suffered significant security delays
and airline operators had high levels
of cancellations. The new Dover-Calais
route continued to be a key focus for
marketing and promotions activity in
2022, alongside support for our legacy

routes. There was increased use of
digital channels for our promotional
communication including paid
search, digital audio-visual and digital
audio including podcasts, in line
with consumer media consumption
evolution. In October 2022, market
research indicated that (in addition
to our ongoing brand strength in the
Irish market), for the British market 53%
of people were aware of Irish Ferries
services, and 14% would consider
using our Dover – Calais service in the
coming year2.

There was strong growth in the
number of visits to our website, as
well as in the corresponding number
of bookings transacted in the year.
Our social following increased across
all the main platforms including
Twitter, Facebook, and Instagram,
with fans and followers engaging with

our content and offers. AI enabled
automated web chat was maximised
to handle routine passenger enquiries
more efficiently, and towards the end
of the year was blended with live chat
for optimum customer service.

Irish Ferries continued to work
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). After
a two-year absence, Irish Ferries
returned as a headline sponsor of
the four-day programme for the St.
Patrick’s festival and the return of the
parade to the streets of Dublin was
important both in marking the kick-off
of the tourism season and the return
generally to routine tourism activities.
We participated in a collaborative
“press the green button” campaign
with Tourism Ireland in the British and
French markets as part of ongoing
efforts to encourage tourists to return
to Ireland, following the very restrictive
Covid-19 conditions in 2021.

1.
2.

(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)

Strategic Report2022 Annual Report and Financial Statements

The Ferries Division
Continued

Irish Ferries is proud to be selected
to receive multiple awards from
travel trade professionals in our key
Irish and UK markets. Our numerous
consecutive wins reflect our focus
on delivering excellence in customer
service and our warm welcome and
wonderful hospitality on-board. We
constantly build on this and actively
seek feedback from our customers
via social media and surveys to
continuously improve our service
offering and facilities on-board
our vessels. This commitment to
outstanding service was once again
recognised in 2022 with the following
awards which were a welcome
acknowledgement of the quality
experience we offer:

• Ireland:

- ‘Best Ferry Company’ awarded by

the Irish Travel Trade News Awards
for the 15th consecutive time.

- 'Best Ferry Company' awarded by
the Irish Travel Agents Association
for the 11th consecutive time.

• United Kingdom:

Our duty-free prices were competitive
at around 50% lower than high street
prices, and duty-free stores and their
ranges continue to be improved.

- ‘Best Ferry or Fixed Link Operator’

in the Group Leisure & Travel
awards for the 4th consecutive
year. This accolade was particularly
important as we extended our
Dover-Calais service to groups for
the first time in 2022.

RoRo Freight
The RoRo freight market* between
the Republic of Ireland to the UK
and France and the Dover Straits fell
slightly in 2022. The total number of
trucks and trailers decreased by 1.1%, to
approximately 4,389,700 units.

Duty Free Sales
With the introduction of duty-free
sales for services to/from the UK since
2021, expanding and promoting our
duty-free offering has been a key focus
on three routes (Dublin-Holyhead,
Rosslare-Pembroke and Dover-Calais),
as we returned to promoting travel.
For all on-board sales, passengers were
able to shop online and reserve items
for “click and collect” once on-board.

Irish Ferries’ freight carryings, at
696,600 freight units (2021: 290,000
freight units), increased by 140.2%
versus the prior year. The increased
carryings over market performance
was enabled through the additional
capacity of the three vessel service on
the Dover – Calais route.

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

Irish Continental Group

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.

years. We are confident that the trends
seen in tourism markets in 2022 will
continue in the current year and allow
us to reach and eventually overtake
pre-pandemic levels. With a full year
well established three ship operation
on our Dover – Calais route, we expect
continued growth in our freight
carryings on this route.

We are planning for a continued return
of traffic from the direct continental
routes to the landbridge and are
hopeful this will be helped with the
implementation of the Windsor
Framework.

Chartering
The Group continued to charter a
number of vessels to third parties
during 2022. Overall external charter
revenues were €17.2 million in 2022
(2021: €8.1 million). Of our eight
owned LoLo container vessels, five
are currently on year-long charters
to the Group’s container shipping
subsidiary Eucon on routes between
Ireland and the Continent whilst three
are chartered to third parties. The
Oscar Wilde continues on a bareboat
hire purchase agreement with MSC
Mediterranean Shipping Company SA.

Outlook
We look forward to further growth on
all of our routes and taking advantage
of the operational expansion
undetaken over the last number of

Strategic Report2022 Annual Report and Financial Statements

The Container and Terminal Division

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.

DFT now operates six electrically
operated rubber-tyred gantries
incorporating latest technologies to
allow for remote operation. Three more
of these cranes have been delivered
and will be commissioned in 2023.
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 continued on the building
of two new RTG stacks and a further
three RTGs are scheduled to be
commissioned in the second half of
2023.

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 4,600
owned and leased containers
(equivalent to 8,900 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 73
and 99 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
eleven rubber-tyred gantries (40 tonne
capacity) on a strategically located site
within three kilometres of Dublin city
centre and within one kilometre of the
Dublin Port Tunnel, providing direct
access to Ireland’s motorway network.

EstoniaLatviaLithuaniaDenmarkSwedenNorwayRomaniaBulgariaSerbiaCroatiaItalySloveniaHungaryAustriaSlovakiaSwitzerlandBelgiumCzech Rep.PolandGermanyFranceUnited KingdomIrelandNetherlandsAntwerpRotterdamDublinBelfastCorkEucon Geographical CoverageEucon RoutesDublin Ferryport TerminalsDublin Ferryport Inland DepotBelfast Container TerminalPorts Served by Container Ships: Belfast, Dublin, Cork, Antwerp, RotterdamIrish Continental Group29

Capex project €21m
(2022/23) including
the delivery of
five new electric
environmentally
friendly semi-
automated RTGs
and the order of one new ship-to-
shore (STS) crane to be delivered in
2023.

Dublin Ferryport
Inland Depot
became operational
in January 2022
It is located in North Dublin City
with direct access to the M50
Motorway (Dublin Ring Road)
and 15 minutes from Dublin Port
via the Port Tunnel.

Dublin Ferryport
Inland Depot

Dublin Port

Rotterdam
Antwerp

EstoniaLatviaLithuaniaDenmarkSwedenNorwayRomaniaBulgariaSerbiaCroatiaItalySloveniaHungaryAustriaSlovakiaSwitzerlandBelgiumCzech Rep.PolandGermanyFranceUnited KingdomIrelandNetherlandsAntwerpRotterdamDublinBelfastCorkEucon Geographical CoverageEucon RoutesDublin Ferryport TerminalsDublin Ferryport Inland DepotBelfast Container TerminalPorts Served by Container Ships: Belfast, Dublin, Cork, Antwerp, RotterdamM50M1M2M3M4M7M50M50M50M50M50M50M50M11Strategic Report2022 Annual Report and Financial Statements30

The Container and Terminal Division
Continued

2022 Overall Container and
Terminal Performance

Revenue
€221.5m +27.3%

2021: €174.0m

EBITDA
€31.5m +8.2%

2021: €29.1m

Operating profit
€20.3m +18.0%

2021: €17.2m

ROACE
29.3% +3.8pts

2021: 25.5%

Revenue in the division increased to
€221.5 million (2021: €174.0 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
74% (2021: 72%) 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.

Outlook
In Eucon, we have seen a reduction
in containers shipped of 4.4% in the
first 2 months of 2023 compared with
the prior year. This is indicative of the
slowdown in the global economy that
is not unexpected. In our container
business, we will continue with our
approach of matching capacity to
the demand requirements of our
customers. Port lifts in our container
terminals decreased by 5.6% in the first
2 months of 2023 compared with the
prior year and again is indicative of the
market situation.

We will commission a further three
electric rubber-tyred gantries capable
of remote operation during 2023
along with the delivery of a new ship-
to-shore crane. These investments
will continue to deliver operational
efficiency, increased capacity and with
these progressive investments in the
modernisation of our terminals we are
well placed when growth returns to the
market.

EBITDA in the division increased by
8.2% to €31.5 million (2021: €29.1 million)
while EBIT grew 18.0% to €20.3 million
(2021: €17.2 million).

In Eucon, overall container volumes
shipped were down 6.9% compared
with the previous year at 322,600
teu (2021: 346,600 teu). Despite the
reduction in volumes in Eucon and
strong increases in the cost base,
revenue and profitability increased
due to recovery 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 down 4.7% at 319,600 lifts
(2021: 335,500 lifts). DFT’s volumes
were down 4.5%, while BCT’s volumes
were down 5.1%. While the reduction
in volumes is disappointing, we are
encouraged by the continued revenue
growth in the terminals offsetting the
additional costs.

Irish Continental Group32

Financial Review

CONTINUATION
OF STRONG
PERFORMANCE

Results
Revenue for the year amounted to
€584.9 million (2021: €334.5 million)
while operating profit amounted to
of €66.7 million compared with a
loss of €(0.2) million in 2021. Principal
variations on the prior year relate to
the recovery in passenger volumes,
continued growth in our freight
volumes and revenue and an increase
in container charter ship rates.

Taxation
The tax charge is €2.7 million in 2022
compared with a charge of €0.8 million
in 2021. The corporation tax charge
of €2.7 million (2021: €0.7 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. A reconciliation of the tax
charge showing the effect of the
tonnage tax regime on the Group’s
tax charge is shown at note 8 to the
Financial Statements. The deferred tax
charge was €nil in 2022 compared to a
charge of €0.1 million in 2021.

Irish Continental GroupDavid Ledwidge,
Chief Financial Officer

Earnings per share
Basic EPS was 33.6 cent compared with
(2.6) cent in 2021. The primary reason
for the increase in Group profitability
versus the prior year.

Adjusted basic EPS (before the net
interest (income) / cost on defined
benefit obligations and non-trading
items) was 33.6 cent compared with
(2.7) cent in 2021.

Cash flow and investment
EBITDA for the year was €127.2
million (2021: €52.3 million). There
was a net inflow of €1.2 million due to
positive working capital movements,
pension funding movements of €1.1
million, yielding cash generated from
operations amounting to €132.0 million
(2021: €67.0 million).

Interest paid was €4.0 million (2021:
€8.4 million) while taxation paid was
€1.7 million (2021: €0.8 million).

Capital expenditure outflows
amounted to €75.7 million (2021: €55.2
million) which included €57.4 million of
strategic capital expenditure. Strategic
capital expenditure included the
purchase of an eighth container vessel
the CT Pachuca, the purchase of the
Isle of Inisheer and rubber-tyred gantry
cranes for Dublin Ferryport Terminal.

Total dividends of €24.2 million were
paid during the year (2021: €nil) and
€49.2 million (2021: €19.8 million) was
expended in buying back the Group’s
equity.

The above cash flows resulted in a
year-end net debt of €171.1 million
(2021: €142.2 million) net debt, which
comprised gross borrowings of €167.7
million (2021: €123.1 million), lease
obligations of €42.4 million (2021: €57.6
million) offset by cash balances of
€39.0 million (2021: €38.5 million). The
key net debt / EBITDA (pre non-trading
items) ratio was 1.2 times (2021: 2.6
times).

Dividend and share buybacks
Following the easing of travel
restrictions and the consequent
improvement in passenger revenues
together with the continuation of
strong performance in all other
revenue streams, the Board considered
it appropriate to recommence the
payment of dividends. The Company
paid a final dividend in respect of
financial year 2021 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. The
Company paid an interim dividend in
respect of financial year 2022 of 4.64c
per share. The total amount paid was
€24.2 million.

During the year, the Group bought
back 12.0 million shares which were
cancelled. The total consideration paid
for these shares was €49.2 million
(2021: €19.8 million).

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 €124.8 million (2021:
€145.8 million), while combined
pension liabilities were €91.6 million
(2021: €140.5 million). The total net
surplus of all defined benefit pension
schemes at 31 December 2022 was
€33.2 million in comparison to a €5.3
million surplus at 31 December 2021.

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.

Strategic Report2022 Annual Report and Financial StatementsCredit 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 2022 amounted to €67.4
million, comprising cash balances of
€39.0 million together with undrawn
committed facilities of €28.4 million
with average maturity of 1.4 years
(2021: 2.4 years). Total drawn facilities of
€168.2 million had a weighted average
maturity of 2.5 years (2021: 3.6 years)
over remaining terms of up to 8 years
(2021: 9 years).

David Ledwidge,
Chief Financial Officer
8 March 2023

Financial Review
Continued

Interest rate management
The interest rates on Group borrowings
at 31 December 2022, 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 2022 was 2.40% (2021: 1.60%).
Debt interest cover as defined under
our banking covenants to operating
cash flows for the year was 36.0 times
(2021: 12.6 times).

Currency management
The Group has determined that the
euro is the presenting 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 as far as possible.
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 sector,
changes in bunker costs are included
in the ticket price to the extent that
market conditions will allow. Bunker
consumption was 161,900 tonnes
in 2022 (2021: 129,400 tonnes). The
increase in consumption was primarily
due to increased activity levels on
the Ferries Division’s new service on
the English Channel following the
introduction of a third vessel. The
average cost per tonne of heavy fuel oil
(HFO) fuel in 2022 was 47% higher than
in 2021 while marine gas oil (MGO) was
107% higher than in 2021.

Irish Continental Group35

Strategic Report2022 Annual Report and Financial Statements36

Sustainability and ESG

CREATING
VALUE IN A
SUSTAINABLE
MANNER

€18.6m programme for the
electrification of our terminals

Single use
plastic free on
our ships

€1.8m investment in Ballast Water systems

Solar panels are now
online in our DFT
building

Irish Continental GroupIntroduction
As a business, we recognise the
importance of providing transparency
over our efforts to create value in
a sustainable manner. Operating
sustainably remains one of our strategic
pillars as we execute on our business
model and strategy in a manner that
minimises our impact on the planet
while achieving sustainable growth and
returns over time.

At ICG, stakeholder and environmental
focus have been key elements within
our longstanding mission statement.
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. We
have driven changes in our activities
through alignment of our reporting
with emerging frameworks as a means

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.

16% decrease in our LTIF statistics

of maximising our positive impact on
society. We are embedding best in
practice procedures and policies to
drive our focus and commitment going
forward. This puts ICG on the path to
achieve our shared commitments to
the IMO CO2 reduction targets of 40
percent carbon intensity by 2030 from
a 2008 baseline and towards helping to
achieve the UN SDGs for 2030.

Our approach is informed by a review
of best practice sustainability reporting
standards and frameworks including
guidelines and recommendations by
the:

• Global Reporting Initiative (GRI),

• the Sustainability Accounting

Standards Boards (SASB) Marine
Transportation

• the UN Sustainable Development

Goals (SDGs)

Gender balance
on our board
now 33%

1,000 new crew
garments incorporating
recycled plastics
equating to 42250
plastic bottles

Strategic Report2022 Annual Report and Financial Statements38

Sustainability and ESG
Continued

In December 2022, the Science based targets initiative
issued its guidance for the maritime industry. We are
carefully considering the recommendations and will look to
see where we can align our targets in line with the guidance
issued. We continue to integrate the requirements of the
Task Force on Climate-related Financial Disclosures (TCFD)
within our report.

Transport of goods remains the
backbone of the local Irish and
European economies. Our efforts in
greening the maritime industry are a
vital part of moving the wider European
economy to a sustainable footing in the
face of the rising challenge from climate
change.

2022 – A year of extremes
The recent report from the EU’s
Copernicus notes 2022 was a year of
climate extremes, with record high
temperatures and rising concentrations
of greenhouse gases. The trends are
stark. Climate.copernicus.eu

Regulators are acting, whether it is European union led,
globally at the IMO level or local governments, there
continues to be a deluge of additional legislation in the
pipelines with progressively stricter standards for emissions
and reporting requirements for our industry.

2008

2011

2013

2017

2018

2020

2008 is our IMO set base year
for shipping GHG emmission
reductions targets.

Marpol legislation Annex IV -
Adoption of energy efficient
legislation.

Innovative Green
Voyage Programme.

IMO2020

Start of our Terminal electrification
programme.

EEDI energy efficient standards
for new builds.

Delivery of the Yeats- estimated 35% more
capacity than its predecessor.

Irish Continental Group39

Action and New Solutions
At ICG we understand this need for
action. We are actively working to
achieve and surpass all standards for
emissions where-ever possible while
maintaining an economic return on
investment.

Our ambition is to have a
50 percent reduction of
all GHG from shipping
operations by 2050
versus 2008 in line with
our IMO obligations.

We set out below our industry’s
challenges on decarbonisation of the
of industry, primarily the reliance on
marine diesel fuel to power our ships
engines. Alternative fuel technologies
are in the process of being deployed
but these technologies are not
sufficiently mature to currently replace
diesel fuel engines as a power source at
a commercially viable cost. When these
technologies are optimised, we will
deploy them across our network.

In the meantime, we are making
the changes to achieve optimisation
of operations. We are looking at
alternative sources of fuels, e.g. bio
fuels trials for our Fast Craft Dublin
Swift, and we will commit when
sufficient reliable volumes become
available from suppliers at a cost
effective price. We are working with
our partner ports to ensure that
the necessary infrastructure, e.g.
deployment of shore power, is available
to support the maritime industry road
to decarbonisation.

2021

2023

2024

2026

2030

2050

Our first integregated
Sustainability report published.

Voluntary inclusion of EU
Taxonomy reporting.

Expansion of the EU Emmissons
Trading Systems (ETS) to include
Maritime- will be phased in from 2024.

CSRD regulations
- We will formally
report under the
CSRD regulations.

CII - New Legislation from the IMO, on
a Carbon Intensity Inidcator to promote
efficiencies. Vessels to have in place
an ‘Enhanced’ Ship Energy Efficiency
Management Plan (SEEMP), with the
integration of a Carbon Intensity
Indicator (CII) .

EEXI (Energy Efficiency Existing Ship Index)
is a measure introduced by the IMO to
reduce the greenhouse gas emissions of
ships. The EEXI is a measure related to the
technical design of a ship.

2023/2024
Finalisation of Terminal Electrification
programme.

Alternatively fueled Vessels are becoming
"ready for order" to the market.

Expected uptake in the next years with
maturation of the techniologies and the
supporting infrastructure.

Achieve - 2030 GHG Targets

40% reduction carbon intensity reduction
from our 2008 baseline.

FuelEU - From 1 January 2030 Passenger
ships and Container ships at berth in a
Member State shall connect to onshore
power supply and use it for all energy
needs while at berth. Alternatively, make
use of zero-emission technology.

UN SDG

2050 IMO
Targets - 50%
reduction
from our 2008
baseline

Strategic Report2022 Annual Report and Financial Statements40

Sustainability and ESG
Continued

Sustainable Development Goals

Aligning
operations
with our
contribution

ICG support the Sustainable
Development Goals by minimising
our effect on the environment. This
contributes to our customers efforts, to
transport and deliver their products in
a manner that is Sustainable into the
future.

The UN SDG’s and their respective
targets form the backbone of the 2030
agenda for Sustainable development.
The SDG’s define global priorities
that will put the world on a more
sustainable path, free of poverty,
environmental degradation and
inequalities.

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

Implementing effective waste
management systems throughout our
vessels

Being a leader in health and safety,
utilising a data driven approach

Adoption of clean and environmentally
sound technologies and processes

Flexible working policies as well as a
range of employment benefits

Expanding reporting and engagement
with external stakeholders

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

Enhancing pollution prevention
systems

Novel and market leading circular
economy programmes preventing
plastics from reaching the oceans

Irish Continental Group41

Engagement with our stakeholders
We regularly engage with our significant stakeholders, to understand their key pressing
issues and material topics. We incorporate these topics into the planning and execution
of our day-to-day business and output of the reporting of these issues. Our constant
engagement process provides a self-feeding loop of improvement and helps us to adapt to
emerging trends in real time.

A summary of our engagement and key topics covered:

How we engage?

Material items

Linkage to SDG’S

Employees

• One-to-one meetings

• Employee health, safety and wellbeing

• Team meetings

• Diversity, Inclusion and Belonging

• Performance review process

• Rewards and recognition

• Training and development

• Career development and opportunities

programmes

• Succession planning

• Business performance

• Strategic developments

Governments

• Engagement with government

• Policy updates/changes

and state authorities

• Industry associations

• Audits

• Economic growth

• Supply chain sustainability

• Environment and climate

• Ongoing global challenges

• Compliance and engagement

Shareholders

• AGM

• Results/ Performance and forecasts.

• Investor meetings

• Our strategy

• Update with our analysts

• Sustainability strategy

• Publications

• Managing risks (including climate change)

Customers

• Ongoing engagement through

• Co-creation and innovation

commercial teams

• Customer and industry
conferences and events

• Customer surveys

• Health and safety

• ESG platforms

• Company website

• Social media

• Consumer trends and behaviour

• Climate change and carbon footprint

• Product environmental and social impact

• Responsible sourcing including human

rights and traceability

Suppliers

• Commercial engagement

• Contingency supply arrangements

• Trade organisations

• Reliability

• Industry conferences

• Health and safety

• ESG supplier engagement

• Responsible sourcing

platforms

Community

• Ongoing dialogue with

• Impact of COVID-19

community organisations

• Charity events

• Volunteer groups

• Local economic development

• Diversity, Inclusion and Belonging

• Human Rights

• Climate change and environmental matters

Strategic Report2022 Annual Report and Financial Statements42

Sustainability and ESG
Continued

Environment

The Voyage Ahead
As an organisation, we recognise our
responsibility to reduce our emissions
in line with stakeholder interests and
relevant targets set for the industry. ICG
operates in a heavily regulated industry
and one that has been conscious of
its environmental footprint for a long
time.

We focus on achieving these objectives
in a two-fold manner, operationally
doing what we can be immediately
achieved in the short term and
technically that which requires the
development and deployment of new
technologies to achieve the required
reductions in GHG targets.

Decarbonising our Vessel
Operations
The International Maritime Organization
(IMO), a specialised agency of the
United Nations responsible for
regulating global 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 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.

Irish Continental Group43

Decarbonising Maritime transport-
the Challenges.

The primary power source of marine
transportation is the burning of
marine diesel in ship engines. The
industry’s reliance on heavy fuel oil
(“bunker fuel”) is of material concern
given its impact on the environment
and the volume of GHGs that it
emits. It continues to be the only
commercially viable source of
fuel for the vast bulk of maritime
transport for a number of reasons:

• Cost

• Technological feasibility

• Safety concerns & Safety

regulations of alternative fuel
sources

• Energy to volume density

• Sustainability of supply, (given the

volumes of fuel required)

• Supporting Infrastructure

These are challenging obstacles for
the industry as a whole to overcome.
Andrew Sheen, Managing Director
of the Ferries Division gives us
insight into our strategy and the
work we are doing to further
overcome these challenges.

On Decarbonising
our ships.

Andrew Sheen,
Managing Director,
Ferries Division

There are several alternative technologies/ strategies that are currently being
trialled by the shipping industry. These technologies are yet to mature and
become commercially viable for mass use. As an agile organisation, when the
benefits outweigh the risks, we will execute on these new opportunities to
refresh our fleet capacity with the latest environmentally friendly ships. In the
meantime, we will:

• continue to support R&D into specific activities where we see promise like

sustainable fuel trials and innovative energy systems controls;

• focus on operational measures to maximise our efficiencies and minimise
our environmental impact while complying with the evermore stringent
maritime regulations.

For shipping, the big leap in carbon emissions reduction will come from the
maturing technology advances in low carbon fuels but these are still likely a
decade away to be commercially viable for mass take up.

DNV (Maritime Classification Society) in their Maritime forecast – 2050 have
estimated that it will be several years before alternative technologies are
commercially available for mass market. It will then take a period of time for
the existing fleet to accept and take up these new technologies.

ICG will continue to monitor the latest shipping manufacturing developments
and adopt into our fleet renewal and upgrade program when these
technologies move to the sphere of being economically feasible.

Operational Measures

• Operation of green voyage

programme to optimise voyage
factors such as; port operations,
navigational routing and speed
management.

• Environmental performance

monitoring and advanced data
analytics using 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. Installation
has progressed 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.

• 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).

Strategic Report2022 Annual Report and Financial Statements44

Sustainability and ESG
Continued

• Ongoing research and trialling of

accessible alternative fuels, including
sustainable biofuels reduce emissions.
Our recent trials onboard the
Dublin Swift have been successful,
we are exploring options to source
reliable volumes of the biofuels at
commercially viable costs.

Technical Measures

• Long-term replacement of existing

fleet with efficient ships incorporating
latest technologies, in line with vessel
life cycles. Our most recent newbuild,
the W.B. Yeats vessel, delivered in
2018, is approximately 35 percent
more efficient than its predecessor,
the Oscar Wilde.

• Increased utilisation of onshore
power within the EU enabled by
FuelEU Maritime proposals. We have
up graded the infrastructure of the
Dublin Swift to connect to on shore
electric power during winter layup.

• Compliance with ongoing design

efficiency requirements under IMO
energy efficiency design index for
new (EEDI) and existing (EEXI) ships.
All our ships are EEXI compliant for
2022 and 2023.

• Investment in exhaust gas cleaning
systems on board certain vessels
that minimise sulphur emissions to
below levels mandated by existing
regulation and significantly reducing
particulate matter.

• Investment in upgraded, more

efficient turbochargers on board
Ulysses. This has resulted in a
significantly improved fuel efficiency,
lowering of exhaust temperatures,
reducing overall wear and tear
whilst also improving reliability to
customers and achieving a greater
volume of green voyages status.

• 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, we have
recently extended our ongoing
collaboration with a technology
provider to test the suitability of this
technology for our fleet.

• 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.

Strategy In Action: Green voyage program

Rob Mathieson, Irish Ferries’ Operations Manager sets out the background of the Green
Voyage initiative.

Impact
This program is making a real
impact on the efficiency of our
operations, in a manner that is
simple to operate but is based on
detailed analytics from our ships.

Background
As background, the green voyage
program is set up to identify and
encourage the most efficient
running of our sailings. It is a simple
mechanism that scores each sailing
on several key criteria including
timeliness, efficiency, minimised
engine use etc. The goal is to
provide a set of key criteria that can
be benchmarked across time and
specific conditions. These criteria
are then reported and analysed
with a feedback loop on the best
in practice being fed back to our
crews.

Operationally
This program is providing an extremely
useful set of data points to ensure
consistent improvement in our
operations over time. The benefits
being improved efficiencies and
resource use and customer satisfaction
through on-time scheduling. It is
through our investment into our data
analytics like individual engine output
that allows us to get the data required
to achieve this level of granularity into
our performance on a sailing-by-sailing
basis.

Irish Continental Group45

Heavy Asset
Recycling

Cranes
In our terminal operations,
when our cranes are at the
end of their life cycle they are
decommissioned by specialist
contractors who recycle over 98%
of materials from cranes.

Ship disposal
All our ships are EU registered
which ensures that at the end
of life they will be scrapped in
an environmentally sustainable
way in an accredited shipyard.
No ships were scrapped during
the year.

Decarbonising our Terminal
Operations
In our Terminal operations, we continue
to progress on our targets to achieve our
Net Zero goal for our terminal operations
by 2030. We have continued our
investment programme on our electric
crane gantries at our DFT terminal. Our
capital investments in previous years
are beginning to show reductions in
GHG emissions and will show further
reductions as we align our operations to
fully take advantage of the investment in
electrification in 2023.

Decarbonisation Investment
programme
An overview of key projects contributing
to the decarbonisation of our terminal
operations is set out below.

• Solar Panels on DFT office buildings:
commissioned in late September
2022, we have yet to see the full year
benefit of this investment. We expect
that in Summer 2023 our daily electric
generation for our DFT building will
exceed the buildings requirement and
the excess electricity produced will be
exported back to the grid.

• Electric RTGs: starting in 2017, we
have been electrifying our RTGs.
Our current investment program
will finalise in 2023 with the final
commissioning of three further RTGs.
In total we will have invested €26.5m
as part of this investment, achieving
electrification of 80% of our cranes
with €6.8m to be spent in 2023 which
has been included in our capital
commitments note 27.

• Each new electric RTG reduces our

diesel fuel consumption on average by
approx. 80,000 litres each year. These
new cranes are powered by green
electricity.

• DFT Terminal Electric network:
alongside our investment in electric
cranes, we have been investing in the
supporting infrastructure, with a €1.1m
number invested over the last number
of years.

• Our Terminal in BCT uses eight

completely electric RTGs following
investment by Belfast port over the
last number of years.

• 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.

• Company cars are being replaced
with electric and hybrid models in
line with replacement cycles. Six new
electric and hybrid cars were ordered
in 2022 to replace petrol and diesel
cars used by sales and operations
staff.

• Investment in our yard Tugs and
Tractors – over the last number of
years we have continued to invest
in upgrades to our yard Tug fleet.
While diesel powered, they are some
of the most efficient in class. These
new engines will reduce NOx and
Particulate matter by up to 93% from
earlier engine types.

Strategic Report2022 Annual Report and Financial Statements46

Sustainability and ESG
Continued

Responsible Resource
consumption
We are acutely aware that our
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.
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 illegal dumping of 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 a
specialised TBT free Marpol compliant
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 a thorough survey and
inspection during the year to ensure
IHM certification was in place as
required.

At our Dublin offices, 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 that is bought ashore
is incinerated ashore for biosecurity
purposes.

We have joined the UK Chamber
of Shipping pledge 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 have
removed all single use plastics from
our ships.

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.

Water
We aim to conserve water and improve
water efficiency as much as possible.

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. We have invested and
committed significantly to Ballast
Water Treatment Systems (BWTS)
across our fleet. The bulk of our fleet
have now been fitted with BWTS with
a further three to be fitted in 2023. The
Dublin Swift does not use ballast water
and therefore does not carry this risk.

We on-board 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 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-

Circular economy

The circular economy, while not
new, is swiftly becoming a feature
of European and Irish regulations.
The Irish government has
published its first every strategy
on the circular economy in early
2022.

The European circular economy
presents opportunities for
ICG, where we will be able to
reposition ourselves in the value
chain transporting recyclable
materials to significant recycling
facilities across Europe for their
repurposing and reuse.

Already, we transport significant
volumes of approx. 7,000 teu of
recyclable materials to cutting
edge recycling facilities on
the continent from Ireland
for repurposing and reuse.
We will continue to seek our
opportunities and develop our
role in the circular economy.

potable use, which is treated prior to
discharge back to sea.

In previous years, an innovative
container wash water recycling system
was installed at our new Dublin Inland
Port facility (our most intensive water
use location within the terminals
business), 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.

Irish Continental Group47

Supply Chain
We seek to build lasting relationships
with our key suppliers and contractors.
Of utmost importance is that our
suppliers are aligned with our own
ethical principles. 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.
In 2022, we have engaged with our
most significant suppliers in order
to confirm that their values aligned
with ICG. Operationally we are in
constant communication with our
principal contractors including our
port operators and ship managers
as we both work closely together to
develop and execute on our business
activities. This constant interaction
allows us both to be flexible and adapt
to evolving situations.

Waste
Increases in waste and consumption
volumes in 2022 reflect the expansions
made to our routes and operating fleet,
as well as increased passenger travel
following the removal of Covid 19 travel
restriction in early 2022. We continue
to have a focus on minimising waste,
recycling materials wherever possible.
We do this by constantly working
with our ship managers and waste
management partners across all our
office locations and ports served to
constantly implement best practice.

Bamboo flooring is present on new and
refurbished Eucon containers. On 31
December 2022, 1,240, 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 2022, ICG
purchased approx. 1,000 garments,
equating to 42,000 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.

Noise
We are acutely conscious of our impact
on the environment, including the
noisescape of the ports that we visit
as part of our transport network. To
minimise our impact on our local
communities, we ensure that latest
alarm technologies are fitted to our
operational vehicles, to ensure the
safety of our staff while minimising
disturbance of the wider community.
As part of our ongoing activities,
we periodically monitor our noise
emissions to ensure they are in line
with local environmental guidelines.
There have been no noise complaints
registered over the last 3 years
concerning our activities.

People

Our people are high achieving, and
customer centric focused. At ICG we
enjoy a working environment built
on trust and collaboration, where we
encourage our people to collaborate
up, down and across the organisation
and to challenge positively the norm to
deliver top class results.

Our people are passionate about their
work. Their strong commitment to
delivering high standards is one of
our strategic pillars that enables us to
execute on our strategy successfully.

Our culture
We offer our people a holistic culture
which incorporates safety, health,
wellbeing, development reward and
recognition.

Development
Through our Recruitment and Selection
practices we hire for potential and
ensure that our people reach their
potential through challenging and
meaningful work.

Strategic Report2022 Annual Report and Financial Statements48

Sustainability and ESG
Continued

As a “Learning Organisation”, we
actively support the growth mindset
of our people through our Learning
& Development Policy and also our
Talent Review Process. We have
fostered a culture of engagement
which nurtures and supports our
people to continually develop and
upskill.

Central to our success is leadership
and we have a bespoke Leadership
Programmes for those who we identify,
through succession planning, to
participate in these programmes as
they progress within the business.

Health & Wellbeing
The health and wellbeing of our people
is paramount to us and is supported
by flexible work practices and family
friendly policies. Events throughout
the year focus not only on the physical
health of our people but also their
mental health, which is equally as
important.

Reward and Recognition
Our people receive a competitive salary
with a variety of incentives to ensure
they are rewarded for their dedication
and high achievements within the
business.

Reward and recognition is not only
linked to our Talent Review Process but
is actively acknowledged throughout
the year.

Psychological Safety
We ensure that our people have a safe
environment to work in and encourage
a “speak up” culture, not only to
positively challenge the norm but to
speak up without fear of retribution.
Central to all our business practices
is dignity and respect. Our policies
on Bullying & Harassment, Equality,
Diversity & Inclusion, Dignity & Respect
and Whistleblowing ensure that
employees have a voice and a process
to speak up against inappropriate
behaviour or processes.

We believe a diverse workforce is a key
driver in supporting our competitive
edge within the industry and we are
fully committed to diversity, equality
and inclusion across the business.

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. In the current
year, with the refreshing of our Board,
and in line with our commitment to
improve our gender balance, we are
delighted to have improved our board
level female gender balance to 33% of
the Board.

Safety First
Safety remains one of our top priorities.

Physical risks to safety
We operate in a business where
there are significant risks that require
mitigation, whether it is managing
containers, loading/ unloading ships
or moving freight vehicles. Our
management team are focused on
ensuring all our staff and customers go
home safely. 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 the highest
standards of safety in delivering a
quality service for our customers. We
do this by:

• keeping our safety statements

updated yearly, to ensure they cover
all our policies and procedures.

• trainings for all staff in high-risk areas.

• specialised training deployed based

on the risk levels.

• Drills and exercises to test systems

practices and resilience of our
systems.

In 2022, we are part of the founding
members of Dublin Safe port, a Dublin
port wide safety initiative which is
designed to continually enhance safety
culture and practice for all workers in
Dublin Port. This initiative will include
safety awareness campaigns, trainings
and which will take place port-wide with
the objective enhancing port safety
culture and practice for the long-term.

On our ships, we actively follow all
aspects of the International Safety
Management System (ISM) code which
is the best practice in international
shipping.

One of the benefits of our RTG
electrification program, is that our
upgraded cranes are now driven
remotely from a safe and comfortable
office based control centre. This is
inherently safer, as staff are not required
to be in the yard. In addition, it opens
the role to staff who may not have been
considered previously due to physical
disabilities and the requirement to
climb the crane to reach the cabin. Our
workforce has become more inclusive as
a result.

Irish Continental Group49

In 2022, we upgraded our digital
booking system for our hauliers. Our
app-based system allows for virtual
orders and collections and importantly
“Just in Time arrivals” of our hauliers
to our terminals. It has reduced
congestion and idling times in the
port area considerably as all arrivals are
prebooked into the system improving
efficiency and safety for all parties.

LTIF statistics
Our LTIF statistics are set out on
page 58 and we are delighted to
report that our LTIF (Lost Time Injury
Frequency) which measures the
number of recordable workplace
incidents resulting in lost days over a
year per million hours worked saw a
16 percent decrease in LTIF, despite
a 50 percent increase in the Group’s
total exposure hours. These results are
within our previously set targets for
2022 of LTIF on land <5 and LTIF at sea
<3.5. Notwithstanding this statistic,
we remain acutely aware that our
workspaces are inherently high risk
and continually ensure that safety
awareness is always to the forefront of
how we operate.

All reported safety incidents are
investigated internally to ensure all
necessary steps are taken to improve
and to prevent reoccurrences. Where
required, we also report incidences to
external authorities and co-operate
fully with any inquiries.

Health
We comply with all health regulations
issued by regulatory authorities to
ensure minimum risk of illness to our
customers, employees and contractors.
We have implemented Hazard Analysis
& Critical Control Point (HACCP)
systems on board our vessels in all
food handling areas and are subject to
regular third-party inspections.

Diversity & Inclusion
We are committed to creating a
positive 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 bias, 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 facilitate hybrid
working arrangements for our staff.

Whistleblowing
ICG is committed to having the
highest standards of integrity
and transparency. As part of this
commitment, we have developed
a Protected Disclosure Policy to
encourage employees, board
members, shareholder and job
applicants or any person who has
worked for ICG to make a disclosure
where they may have a genuine
concern 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. No disclosures
under this policy were received by the
Group during 2022.

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. All forms
of bribery or business courtesies that
may create the appearance of a bribe
are strictly forbidden. Limits and pre-
approval requirements are imposed on
the quantum and frequency of business
courtesies received by staff.

In 2022, there were no investigations
from external parties into allegations of
bribery or corruption.

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 and Modern Slavery and Human
Trafficking Policy which applies to all
ICG employees, contractors, agents
and business partners, can be accessed

Strategic Report2022 Annual Report and Financial Statements
50

Sustainability and ESG
Continued

through our website. We have a zero-
tolerance policy to modern slavery,
human trafficking or the use of child
labour in our supply chain.

We take an open and transparent
approach, taking steps to identify
and tackle any instances of modern
slavery or human trafficking 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. The Group
requires a due diligence process to be
conducted prior to the appointment
of a contractor together with in-
contract reviews. Within its day-to-day
operations, the Group has in place
a range of measures to help ensure
modern slavery and human trafficking
are not taking place in its business or
its supply chains.

Measures adopted include:

• Provision of guidance to employees
to support immigration and border
agency initiatives to reduce human
trafficking, which augments general
observation for unusual behaviour
in our ports and on board our
vessels including signs of distress or
other cues that may highlight any
potential issue. Awareness of this
issue is promulgated across all Group
businesses.

• Working with other companies and
organisations to share knowledge,
learning and best practice and
co-operating with a series of law-
enforcement projects that help
to combat human trafficking
and modern slavery.

• Regular updates to management

and committees on modern
slavery so that Directors and key
individuals understand their role and
accountability for the prevention
of modern slavery occurring in
our businesses and supply chains.

• Actively monitoring our initiatives
in preventing modern slavery and
human trafficking by reference to
reports and alerts from staff, the
public and communication with law
enforcement agencies.

Society
Corporate Social Responsibility
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.

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
facilitate 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. We were delighted to
have the festival back after two years of
cancellations due to Covid restrictions, it
remains a great event for the family and
one of the highlights of our visitors trips
to Ireland.

Sunflower Lanyard
Irish Ferries has adopted the hidden
disability Sunflower Lanyard scheme

Better together: Our own Nora Costello (Consumer Marketing and Sales Director) and a task force
from Dublin, Wicklow Mountain Rescue Team, including Kai, Boomer and Maggie, the teams search
and rescue dogs.

Irish Continental Group51

across its entire fleet, being the
first Irish travel operator to do so.
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
Irish Ferries continued to work
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).

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 years ahead.

We love to showcase the best our
local artisan producers have to offer
and delight our customers in turn
with exquisite tastes in our onboard
restaurants whether it is our local
seafood supplier from Howth, Irish
beef and dairy or our breakfast meats
that are sourced in counties Kilkenny
and Cork. All are foods 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. We
support our local producers where-ever
possible.

We are a strong promotor of Irish
beverages, not only the larger brands
but also smaller producers of craft

beers and spirits. 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. We also offer a wide variety of
plant-based food and drink options in
all our cafés and restaurants.

Task Force on Climate-Related
Financial Disclosures (TCFD)

We set out our disclosures that
are aligned to the Task Force on
Climate-Related Financial Disclosures
framework.

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
54 of the Annual Report.

Governance
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. Management provides
regular updates to the board on
the wider sustainability agenda. We
continue to review the governance of
climate-related risks and opportunities
to ensure our frameworks evolves with
the demands of the outside world.

Strategy
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 have qualitatively 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.

Strategic Report2022 Annual Report and Financial Statements
52

Sustainability and ESG
Continued

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.

Risk management
Climate-related risk management
is integrated into our enterprise risk

management process, as detailed
extensively on pages 60 to 69. 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:

A summary of the main climate related risks are set out:

Type

Description

Potential financial impact

Metrics and Targets

Physical Risks

Increase in extreme weather
events

A rise in extreme weather events may lead to
decreased schedule integrity which may result
in less sailings, impacting revenues and costs,
it may damage assets, raise insurance rates,
damage cargoes, impact the efficiency of the
supply chain and impact the access to key
locations including ports.

Schedule
integrity
Gross margin

Physical Risks

Biodiversity loss within operating
regions

Increase cost of goods and natural resources
due to shortages

Gross margin

Transition
Risks

Introduction of carbon emission
allowances

Transition
Risks

Negative impact of meeting EEXI/
EEDI requirements

Transition
Risks

Failure of carbon reducing
investments and projects to
achieve desired efficiencies
or meet standards from our
regulators

Greater costs to maintain current levels of
service, for example the EU ETS scheme is to
be extended to the maritime industry with a
gradual phase in of verified emissions from
2024 to 100% in 2026.

Gross margin

Existing assets may lose value. As ever
tightening technical requirements become
mandatory, it may require additional capital
investment to achieve the standards.

EEXI Ratings

Increase costs relating to higher-than-
expected carbon intensity and larger
quantities of alternative fuels required to meet
operational demand

Gross margins

Transition
Risks

Poor ESG ratings from external
agencies

Increase financing costs due to limited debt
options

Achieved ESG
Rating

Transition
Risks

Unavailable debt financing for
capital projects due to operational
sustainability concerns

Increase financing costs due to limited debt
options

Interest cover

Opportunities

Investment in new more fuel-
efficient capital assets, will lead to
a reduction in costs and harmful
emissions.

As our fleet is renewed, we will expect greater
efficiencies and cost reduction as the most
advanced technologies available are deployed
as part of their build.

GHG Emissions
Gross margin

Irish Continental Group
53

Type

Description

Potential financial impact

Metrics and Targets

Opportunities

Being the leader in our market,
will allow us to benefit from
our market leading reputation,
while operational excellence
will improve profitability as we
maximise efficiencies.

Increased revenues and profits as capitalise
on our premium product and operations
excellence.

Gross margin

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 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.

Targets
Vessel operations
We have reconsidered our targets
disclosed from last year and simplified
our comments to be focused on
the IMO (International Maritime
Organisation, a UN body) specific
targets. Our guiding principle, when
we are setting out our ambitions
for our carbon reduction is to align
ourselves with the targets set by the
IMO and the actions they are requiring
of the industry, these targets are:

intensity target for 2030. We have set
the operational and technical measures
that we are employing to further
achieve these goals in the report above.

These will be challenging targets for us
to achieve considering our expansion
onto the Dover – Calais route which
significantly expands our business
footprint. We are confident as we
optimise our operations and new
technologies become available and
come online, we will achieve our targets
in due course.

Terminal operations
We have also set the following targets
for our terminal operations:

• 70 percent reduction in Scope 1 and 2

emissions by 2025.

• Net zero Scope 1 and 2 operations by

2030.

Baseline years data
Given the length of time since our
baseline years and the type of data

required, there are challenges to
estimate reliably our carbon metrics
from those years due to the availability
of data. We have made a best estimate
of our footprint from our baseline years
based on best available data.

Our Progress to date
For our vessel targets, we are
measuring our performance against
baseline targets using intensity metrics
that are based on using “RoRo units”
carried for the RoRo fleet (RoRo
Fleet: gC02/ RoRo Units/ NM) and
TEU's carried for the Container Fleet
(Container Fleet: gC02/ TEU's/ NM). Our
current progress is set out below.

On our 2050 absolute reduction
ambitions of 50% from our 2008
baseline, it will only be when our
propulsion technology changes that
we will achieve meaningful changes
on this metric, given the growth of our
business since 2008 and our expanded
GHG footprint.

• 40 percent reduction in carbon

Progress towards achievement of our targets

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.

The IMO’s strategy to achieve these
goals is to require ever greater levels of
efficiency standards from the global
fleet. As our starting point we aim to
be compliant with all these initiatives
over the coming years and will work
to achieve the ever-greater levels of
technical efficiency requirements
set in the years to come. We expect
these initiatives on their own will have
a significant impact on our carbon

Shipping

RoRo
Fleet

Cargo
Fleet

38%

53%

Terminals

26%

2030
Target

2025
Target

38%

Achieved

To achieve

62%

47%

100%

74%

62%

100%

Strategic Report2022 Annual Report and Financial Statements54

Sustainability and ESG
Continued

Terminals Decarbonisation plan progress
On our terminal 2025 reduction targets, we have achieved approx. 38% of the target required to date. We anticipate a
significant drop in 2023 carbon emissions compared to 2022, especially in the latter half of the year, as our electrified
cranes will come online and our existing diesel powered cranes are decommissioned. To achieve our 2025 goal, we are
investigating the use of biofuels with the major barrier being security of supply and cost. It is only as a last resort that we will
consider a carbon offsetting programme to achieve our target.

Task Force on Climate-Related Financial Disclosures Appendix

Governance

Strategy

Risk Management

Metrics and Targets

Disclose the
organisation’s
governance around
climate related risks and
opportunities.

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

Recommended Disclosures

Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.

(a) Describe the board’s
oversight of climate-
related risks and
opportunities.
Refer to pages 51, 63
and 81

(a) Describe the climate-related
risks and opportunities the
organisation has identified over
the short, medium, and long
term.
Refer to pages 51 to 53 and 63
and 64

(a) Describe the
organisation’s processes
for identifying and
assessing climate-related
risks
Refer to pages 52 to 53
and pages 63 to 64

(b) Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities.
Refer to pages 63 to
64

(b) Describe the impact
of climate related risks
and opportunities on the
organisation’s businesses,
strategy, and financial planning.
Refer to pages 51 to 53 and
pages 63 to 64

(b) Describe the
organisation’s processes
for managing climate-
related risks.
Refer to pages 63 to 64

Disclose the metrics and
targets used to assess
and manage relevant
climate-related risks and
opportunities where such
information is material.

(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 53, 56 to
57, 63 and 64

(b) Disclose Scope 1, Scope
2, and, if appropriate,
Scope 3 greenhouse gas
(GHG) emissions, and the
related risks.
Refer to page 52, 53 and
pages 56 to 57

(c) Describe the resilience of the
organisation’s strategy, taking
into consideration different
climate-related scenarios,
including a 2°C or lower scenario.
Refer to pages 51 to 53 and
pages 63 to 64

(c) Describe how processes
for identifying, assessing,
and managing climate-
related risks are integrated
into the organisation’s
overall risk management.
Refer to pages 60 to 69

(c) Describe the targets
used by the organisation
to manage climate-related
risks and opportunities
and performance against
targets.
Refer to page 53

EU Taxonomy

Background
The EU Taxonomy goal is to create
a “definition” of what is considered
environmentally sustainable for a
business. At its most basic form, the
taxonomy creates a list of economic
activities and then sets out a list of
criteria/ standards that each activity
must achieve to be taxonomy aligned
and be deemed to be environmentally
sustainable. Transport including
maritime transport has been included
in the list from the start, recognising its
importance to wider economy and its
potential impact on the environment.
The Group has voluntary applied the

requirements of the EU Taxonomy
Regulation and provided the necessary
disclosures. The legislation enacted
has set out 6 environmental objectives
and for our 2022 reporting season, we
are required to report on two of them,
climate change mitigation and climate
change adaption.

The process to calculate the disclosures
requires us to:

1. identify what activities are eligible

and non-eligible under the
taxonomy meaning whether our
businesses are included on the
taxonomy list or not.

2. assess whether the technical

criteria or standards set out in the
legislation for each activity is met
by the business for example one of
the key criteria of activity 6.10 ‘Sea
and coastal freight water transport,
vessels for port operations and
auxiliary activities’ is whether the
ships in use have Zero tail pipe
emissions.

3. assess the criteria for no significant

harm done to any of the other
objectives while also ensuring the
minimum safeguards are met.

Irish Continental Group55

CapEx KPI
The capital expenditures amount
to €74.4 million, comprising
strategic and maintenance capital
expenditures. The sum of the
additions that reflect investments in
Taxonomy-eligible activities forms
the numerator. As with our turnover,
0% of eligible CapEx is aligned.
Notwithstanding for example the
work carried out on electrification of
the terminals and the impact this has
had on reducing our carbon footprint,
our interpretation of the taxonomy
legislation this expenditure is not
eligible for inclusion.

EU Taxonomy Accounting
policies
The taxonomy KPIs are calculated as
followed:

• Taxonomy revenue KPI = Eligible

revenue / Total revenue

• Taxonomy opex KPI = Eligible opex

/ Total opex

• Taxonomy capex KPI = Eligible
capex (additions) / Total capex
(additions

Turnover
Turnover consists of total operating
revenues. See Consolidated Income
Statement on page 124 of our Annual
Report alongside note 4 for details of
the Group’s revenue generation. The
associated critical accounting policies
are set out in note 2 of our Annual
Report.

Capex
Capex consists of additions to
property, plant and equipment. See
note 12 of the Consolidated financial
statements.

Opex
Opex consists of total operating
expenses. See Consolidated Income
Statement on page 124 of our Annual
Report. The associated critical
accounting policies are set out on in
note 2 of our Annual Report.

As the reporting practice develops and expands, we will review and update the
reporting of taxonomy-eligible KPIs and related accounting policies accordingly.

Taxonomy Disclosures

Activity

6.10 Sea and coastal freight
including passenger
activity

Proportion
Taxonomy
eligible

Proportion
Taxonomy
non eligible

Proportion
Taxonomy
Aligned

Proportion
Taxonomy
Non Aligned

Total ‘M

Turnover

Capex

Op ex

584.9

74.4

518.2

100%

Turnover KPI
The total turnover of €584.9 million for
the financial year ending 31 December
2022 is the basis for the denominator
for the turnover KPI as presented in the
Consolidated Income Statement on
page 124.

Assessment of Eligible activities
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. As
a result, 100% of our operations are
deemed eligible.

Assessment of Aligned Activities
We have assessed the substantial
contribution criteria for both the
climate change mitigation criteria
and the adaptation criteria as set

out in the delegated acts. We have
found that none of the eligible
activities are aligned given the various
technical criteria tests. Given the age
of our vessels, notwithstanding the
significant investments made, for
example the installation of scrubbers
to improve their technical ability
minimising the output of sulphur and
other particulate matters, they do not
meet the technical criteria set out
in the delegated acts for mitigation
or adaption. From an adaption
perspective, we do not meet the
technical criteria associated with the
substantial contribution criteria, as a
business, we operate with a number of
key stakeholders and the development
of robust physical adaptation solutions
given the low-level nature of the ports
is challenging.

OpEx KPI
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. As with our turnover, 0% of
eligible OpEx is aligned.

Strategic Report2022 Annual Report and Financial Statements56

Sustainability and ESG
Continued

Metrics and tables

Environmental Data
Shipping Operations

Topic

Relevant Metric

2022

2021

2020

Unit of measure

SASB Reference

Greenhouse
gas emissions

Gross global Scope 1 shipping
emissions

519,082

399,796

336,535

CO2 emissions per GT mile

TR-MT-110a.1

Metric tons (t)
CO2-e

Grams (g) CO2
/ gross ton-
nautical mile

Conventional Ferries fleet
Fast craft

18.97
66.51

16.58
72.72

15.34
N/a

N/A

CO2 emissions per transport work

Container fleet

41.85

40.08

43.96

Total energy consumed

6,665,199 5,111,364

4,305,170

Percentage heavy fuel oil

62.99%

75.97%

74.91%

Grams (g) CO2
/ cargo ton-
nautical mile

Gigajoules
(GJ)

Percentage
(%)

N/A

TR-MT-110a.3

Average Energy Efficiency Design
Index (EEDI) for new ships

N/a

TR-MT-110a.4

Air quality

NOx (excluding N20)

10,614

7,882

7,393

Metric tons (t)

TR-MT-120a.1

Ecological
Impacts

SOx

Particulate Matter (PM10)

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

830

448

Nil

623

396

Nil

525

341

Nil

Percentage of fleet implementing
ballast water exchange

Percentage of fleet implementing
ballast water treatment

94.12%

92.31%

68.75%

29.41%

15.38%

Metric tons (t)

TR-MT-120a.1

Metric tons (t)

TR-MT-120a.1

Number of
travel days

Percentage
(%)

TR-MT-160a.1

TR-MT-160a.2

Number of spills and releases to
the environment

Aggregate volume of spills and
releases to the environment

Nil

Number

TR-MT-160a.3

0.01

0.201

Cubic meters
(m3)

TR-MT-160a.3

Workforce
health and
safety

Business
ethics

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

0.8

1.0

4.7

Rate

TR-MT-320a.1

Nil

Number

TR-MT-510a.1

€Nil

Euro

TR-MT-510a.2

Irish Continental Group57

Topic

Relevant Metric

Accident
and safety
management

Number of marine casualties

Percentage classified as very
serious

2022

Number of port state detentions

Activity

Number of shipboard workers

725

2021

Nil

501

2020

100%

Nil

412

Total distance travelled by vessels

996,292

824,132

642,945

Unit of measure

SASB Reference

Number

TR-MT-540a.1

Percentage
(%)

Number

Nautical miles
(nm)

TR-MT-540a.1

TR-MT-540a.3

TR-MT-000.A

TR-MT-000.B

Operating days

4,450

3,744

3,408

Days

TR-MT.000.C

Deadweight tonnage

121,039

100,485

95,819

Number of vessels in total
shipping fleet

Owned

• Chartered in

• Chartered out

Deadweight
tons

TR-MT-000.D

Number

TR-MT-000.E

Number

Number of vessel port calls

14,089

6,423

5,221

Number

TR-MT-000.F

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

5,462

5,502

5,449

TEU

TR.MT.000.G

Land Based Operations

Relevant Metric

Scope 1 emissions from land based operations

Scope 2 emissions from land based operations

2022

2,890

Nil

Total Scope 1 and 2 emissions from land based operations

2,890

2021

3,117

Nil

3,117

2020

3,349

386

3,735

Unit of measure

Metric tons (t) CO2-e

Total energy consumed

Percentage renewable

Overall Group

Relevant Metric

69,268

74,373

71,732

Gigajoules (GJ)

43.59%

43.21%

26.77%

Percentage (%)

2022

2021

2020

Unit of measure

Gross Global Scope 1 emissions

521,985

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

522,016

402,995

340,270

Metric tons (t) CO2-e

Total fuel consumed

Total energy consumed

Waste

Total municipal Solid waste

Total waste and oil sludge

163,410

126,519

106,688

Metric tons (t)

6,735,200

5,187,201

4,738,369

Gigajoules (GJ)

11,571

5,226

7,736

4,144

6,130

2,198

Cubic metres (Cm)

Total Freshwater consumption

107,374

64,680

61,686

Cubic metres (Cm)

Strategic Report2022 Annual Report and Financial Statements58

Sustainability and ESG
Continued

Social: Employee Health and Safety and Diversity and Inclusion
Safety Data

2022

2021

2020

Incidents

Exposure
hours

Lost Time
Injury

Frequency Fatalities Incidents

Exposure
hours

Lost Time
Injury

Frequency Fatalities Incidents

Exposure
hours

Lost Time
Injury

Frequency Fatalities

ICG
employees
and visitors

Key
contractors
Total

LTIF on land

LTIF at sea

0 595,200

1.76

5,684,380

10 6.279,580

1.59

2022

4.6

0.8

595,200

1.7

0 595,200

7 3,627,720

1.9

8 4,222,920

1.9

2021

4.6

1.0

14 2,090,676

6.7

14 2,685,876

5.2

2020

6.3

4.7

Employee Statistics

Total number of employees

Male

Female

% Female

Full time

Part time

% Part Time Female

Board members

Male

Female

% Female

31 Dec 2022 31 Dec 2021 31 Dec 2020

290

177

113

39%

271

83%

284

173

111

39%

260

83%

288

175

113

39%

260

86%

Management staff

Male

Female

% Female

Total number of new
employee hires

Total number of departures

Turnover rate

Male

Female

33%

17%

22%

21%

22%

16%

8.5%

13%

16%

19%

13%

11%

13%

10%

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.

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.

There are some locations which are leased and have bundling
arrangement on some costs, which means that activity-based data
are not always available. We expect data availability to improve in
the future.

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.

Irish Continental Group

Terms

CO2-e

CO2
emissions
per GT mile

CO2
emissions
per transport
work

Definitions

Commentary

Carbon dioxide equivalent units.

CO2-e includes direct CO2 emissions plus emissions of other
gases converted to CO2 based on their equivalent global warming
potential.

Grams of CO2 per gross ton-
nautical mile

The Group considers this metric useful to viewing the carbon
intensity of its ferries fleet.

Grams of CO2 per cargo ton-
nautical mile

This is a widely adopted industry metric for container vessels to
assess environmental performance. An average intensity for the
overall operated container fleet is disclosed.

NOx

Nitrogen Oxides

SOx

Sulphur Oxides

PM10

Particulate matter

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.

The mass of PM10 is calculated by means of an energy-based
emission factor depending on engine type, engine tier and type of
fuel consumed. Default emission factors proposed by the Fourth
IMO GHG Study July 2020 were applied.

Lost Time
Incident Rate

Lost time incidents per 1 million
hours worked

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

Marine
Casualties

Shipboard
workers

Operating
days

The reported marine casualty in 2022, related to damage to ship
doors from a driving accident on board. The incident was not
considered serious.

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.

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

The Group discloses an average number of shipboard workers
per vessel across operating vessels per year. Shipboard workers
increased by approximately 44% percent in 2022 due to increases to
the operating fleet and return to service of the Dublin Swift.

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 2022 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 Report2022 Annual Report and Financial Statements60

Risk Management

Overview
Exposure to risk is an inherent element
to carrying out the business activities
of the Group; the operation of vessels
and provision of related services.
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 the
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 91 to 94.

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

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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.

External
Audit

Regulator

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.

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, including 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.

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. Stakeholder
views with respect to climate and ESG
issues, are considered by the Board
in setting appropriate appetite levels.
Refer to pages 63 to 64 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.

The Group wide nature of the
risk assessment and monitoring
process, requires collaboration
across departments and divisions
within the Group. 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.

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.

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.

Risk Management Process -
Assessments and Monitoring
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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Scope, Context, Criteria

Risk Assessments

Risk Identiﬁcation

Risk Analysis

Risk Evaluation

Risk Treatment

Recording and Reporting

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Strategic Report2022 Annual Report and Financial Statements

Risk Management
Continued

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 local governments imposing
additional regulations over seafarer
working conditions and the illegal
invasion of Ukraine by Russia. We
continue to monitor the war in Eastern
Europe and its impact on supply
chains and fuel prices. Ongoing
trends that are a constant in our
industry and remain front of mind
are the greater environmental and
climate awareness driving increased
corporate responsibility and regulatory
requirements and long-term risks
and opportunities associated with
technological advancements.

Managing Cyber Security
As our business becomes increasingly
digitalised, we are faced with an ever-
increasing Cyber threat landscape. At
ICG, we are keenly aware of our
responsibility to protect our systems
and our customers information from
outside interference. Cyber Security
continues to be a top priority for
the board as it carries out its risk
management duties. The Board of ICG
manages Cyber Security risk in the
context of an overall Risk Management
Framework.

Given its strategic importance, the
board is informed on Cyber Security
topics through regular reporting from
our Information Technology team. In
2022, reports were received on cyber
security and related topics, covering
areas such as managed security
and breach detection, vulnerability
management, NISD Compliance,

Incident response planning and
business continuity.

Our Information Security Management
System (ISMS) is aligned with
recognised frameworks such as ISO
27001 and NIST. Cyber Security controls
are designed and implemented
based on thorough risk assessments
and to meet increasing compliance
requirements such as PCI-DSS, GDPR
and NISD. Cyber Security architecture
and controls are constantly reviewed
and improved to mitigate emerging
security risks as they develop across
the wider industry. Operationally, we
manage Cyber Security through a
blended model of inhouse expertise
and the use of best-in-class Managed
Security Services Providers (MSSPs)
which allows our organisation to
benefit from the scale and expertise
required to address the evolving threat
landscape.

We develop a culture of Cyber Security
awareness at ICG through continuous
training on relevant security topics. All
employees that use our systems are
required to complete regular security
awareness training which highlights
and reinforces their role in protecting
the organisation from phishing
and other cyber threats. Simulated
phishing campaigns are used to
gauge the effectiveness of our security
training program.

Irish Continental Group63

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.

3. Stakeholder Insights and Research
The interests and expectations
of stakeholders are important
considerations in the Group’s climate
risk management approach. In 2022,
the Group undertook a stakeholder
research program to gain insights
on ESG issues facing the Group. This
is helping facilitate an evaluation of
our core strategic, operational and
compliance processes concerning
the environment and climate change
expectations. Mapping of these
insights is helping align stakeholder
values to the Group’s strategic
objectives and core processes.

4. Risk Appetite Setting
Following the outcome of our
stakeholder engagement program, the
RMC is in the process of developing
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.

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;

• 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 52 to 53.

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

Strategic Report2022 Annual Report and Financial Statements64

Risk Management
Continued

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.

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.

High
Impact

Medium
Impact

Low
Impact

Transition Risk

Physical Risk

Short Term
(1 -3 years)

Medium Term
(3 -10 years)

Long Term
(>10 years)

Significant and Emerging Risk
Events
War in Eastern Europe
The Group is continuing to monitor
developments in Eastern Europe
following the illegal invasion of Ukraine
by Russia. A full organisational-wide
risk assessment was conducted as
geopolitical tensions escalated in
early 2022. The potential impacts
highlighted by this review included:

• 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;

• We are continuing to closely monitor
all developments as they evolve and
how they may impact the Group.

Increasing Regulations Over Seafarer
Working Conditions

The UK government declared an
intention to increase the obligations
of employers in the maritime sector,
including the imposition of a minimum
wage, over the current international
requirements by way of a bilateral
agreements. Authorities in France
have also made a similar statement of
intent. This could lead to a potentially
significant increase in operating
costs for the Ferries Division. We are
engaging with regional trade bodies
to ensure that our position is heard
and understood at Governmental and
European Union level.

Viability assessment
The principal risks identified through
the Group’s risk processes have been
considered by the Directors when
preparing the Viability Statement on
page 110, as part of their assessment of
the prospects for the Group.

6. Strategic Positioning and Roadmap
Following a full assessment of risks
and opportunities over separate
time horizons, the Group can assess
strategically its current position against
long-term goals. This stage allows
the Group to identify any changes
to its business model necessary for
long-term success, with a focus on
opportunity management. Further
climate change related controls and
projects are then agreed.

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.

Irish Continental Group65

Principal Risks and Uncertainties
Linkage to strategic pillars:

Quality Service

People and Culture

Financial
Management

Safety

Sustainability

Description and Impact

Risk Treatment

2022 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

Exposure to commercial and market
risks continues to increase as the Group
continues to invest and expand in the
Dover – Calais route with 2 ships newly
operational during the year. The route
remains increasingly competitive with
competitors introducing additional
capacity on existing markets served.

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.

The illegal invasion of Ukraine by Russia
has had a significant impact on the
wider European economy especially in
the areas of fuel and other supply chain
inflation.

The freight market continues to work
through the effect of Brexit and the
continuing implementation of the
Northern Ireland protocol.

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.

The Group continuously monitor
government guidance, the prevalence
of contagious illness in the wider
population and will continue to exercise
caution in how business activities are
conducted.

In 2022, the Group operated a full
service through most of the year and
importantly throughout the entire 2022
tourism season.

Strategic Report2022 Annual Report and Financial Statements66

Risk Management
Continued

Description and Impact

Risk Treatment

2022 Developments

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.

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.

Health and safety metrics for the year
are disclosed on page 58.

The Group continuously monitor
government guidance, the prevalence
of contagious illness in the wider
population including new waves of
Covid-19 and will continue to exercise
caution in how business activities are
conducted.

The rollout of vaccination programmes
throughout Europe helped to protect
staff, crew and customers from Covid-19
impacts and contributed to the safe
resumption of non-essential travel for
passengers. This has helped normalise
our trading patterns in 2022.

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.

Irish Continental Group67

Description and Impact

Risk Treatment

2022 Developments

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 52 to 53.

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.

The Group continues to place significant
focus on enhancing its approach to
ESG and sustainability. Refer to the
Sustainability section on pages 36 to 59
for further information on activities and
developments during the year.

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 36 to 59 for further details.

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.

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.

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.

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.

Cyber-attacks continue to grow in
volume and sophistication and have
particularly intensified since the
beginning of the Covid-19 pandemic.
The Group to remain vigilant and ensure
all efforts to protect its systems are
made.

For an overview of the Group’s cyber
security risk management process, see
page 62.

Strategic Report2022 Annual Report and Financial Statements68

Risk Management
Continued

Description and Impact

Risk Treatment

2022 Developments

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.

We continue to invest and improve
our analytics offerings to our
executive management to monitor
key operational statistics timely. This
allows us to act swiftly and decisively
to address any building trends against
established benchmarks.

Fuel prices were highly volatile in 2022,
but overall have increased substantially
over previous years, leading to an
increase in Group fuel costs.

The Group’s magnitude for exposure
to unfavourable Sterling movements
increased during the year, following
increased trade on the Dover-Calais
route.

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.

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.

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

In 2022, 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.

Irish Continental Group69

Description and Impact

Risk Treatment

2022 Developments

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.

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 reviewed 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 including 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 regulations particularly around
whether BEP’s Pillar 2 may affect
the group in future periods, through
increased tax obligations.

The Group is also monitoring
and assessing the financial and
administrative impact of the EU
emission trading scheme and a similar
scheme proposed by the United
Kingdom.

Strategic Report2022 Annual Report and Financial Statements70

Our Fleet

W.B. Yeats

Year Built

Acquired

Gross Tonnage

No. Engines

Speed

Lane Metres

Car Capacity

Passenger Capacity

Beds

2018

54,975

Ulysses

Year Built

Acquired

Gross Tonnage

No. Engines

2001

50,938

Isle of Inishmore

Year Built

Acquired

Gross Tonnage

No. Engines

22.5 knots

Speed

22 knots

Speed

2,800

1,216

1,885

1,706

Lane Metres

Car Capacity

Passenger Capacity

Beds

4,100

1,342

1,875

186

Lane Metres

Car Capacity

Passenger Capacity

Beds

1997

34,031

21.5 knots

2,100

855

2,200

208

Isle of Innisfree

Isle of Inisheer

Year Built

Acquired

Gross Tonnage

No. Engines

Speed

Lane Metres

Car Capacity

Passenger Capacity

Beds

1992

2021

28,833

Year Built

Acquired

Gross Tonnage

No. Engines

2000

2022

25,152

21.0 knots

Speed

22.5 knots

2,300

600

1,140

Lane Metres

Car Capacity

Passenger Capacity

Beds

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

35 knots

251

817

Epsilon (chartered in)

Blue Star 1 (chartered in)

Year Built

Acquired

Gross Tonnage

No. Engines

Speed

Lane Metres

Car Capacity

Passenger Capacity

Beds

2011

chartered-in

Year Built

Acquired

26,375

23 knots

2,800

150

500

272

Gross Tonnage

No. Engines

Speed

Lane Metres

Car Capacity

Passenger Capacity

Beds

2000

chartered-in

29,858

27 knots

1,718

700

1,500

192

Irish Continental Group71

Ranger

Year Built

Acquired

Gross Tonnage

Deadweight

Capacity

2005

2015

7,852

9,300

Elbfeeder

Year Built

Acquired

Gross Tonnage

Deadweight

2008

2015

8,246

11,157

Elbtrader

Year Built

Acquired

Gross Tonnage

Deadweight

803 TEU

Capacity

974 TEU

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

CT Pachuca

Year Built

Acquired

Gross Tonnage

Deadweight

Capacity

Mirror (chartered in)

2005

2022

6,901

9,235

750 TEU

Year Built

Acquired

Gross Tonnage

Deadweight

Capacity

2007

chartered-in

7,852

9,344

803 TEU

Strategic Report2022 Annual Report and Financial Statements72

Executive Management Team

Eamonn Rothwell
BComm, MBS, FCCA,
CFA UK
Chief Executive Officer

David Ledwidge
FCA, BSc (Mgmt)
Chief Financial Officer

Eamonn Rothwell, aged 67, has been a Director for
36 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, Fáilte Ireland (The Irish Tourist Board) and as
a financial journalist.

David Ledwidge, aged 43, 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.
Managing Director –
Ferries Division

Declan Freeman
FCA
Managing Director -
Container and Terminal
Division

Andrew Sheen, aged 51, 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 a Director of the International Chamber
of Shipping.

Declan Freeman, aged 47, 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 Group73

Strategic Report2022 Annual Report and Financial Statements74

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

76
78
91
95
98
109
113

CORPORATE
GOVERNANCE

Irish Continental Group75

Corporate Governance2022 Annual Report and Financial Statements76

The Board

The Group’s non-executive Directors are:

John B. McGuckian
BSc (Econ)
Chairman

Daniel Clague
Independent Director

John B. McGuckian, aged 83, has been a Director
for 35 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: Remuneration Committee,
Nomination Committee (Chair)

Dan Clague, aged 63, was appointed to the Board
in August 2021. Dan is a Senior Adviser with the
Transport Services and Infrastructure group of
Stephens Europe, an independent investment
bank for middle market companies. Dan has
over 25 years' experience in investment banking
and 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 (Chair), Nomination Committee

Éimear Moloney
FCA
Independent Director

Lesley Williams FCISI
Senior Independent
Director

Éimear Moloney, aged 52, was appointed to the
Board in August 2022. Éimear has over 20 years’
experience in capital markets and most recently
held a senior executive position with Zurich
Life Assurance (Ireland) plc, with responsibility
for managing asset allocation across various
geographic portfolios. Éimear holds non-executive
directorships at listed companies Kingspan
Group plc where she is a member of the Audit
Committee and Hostelworld Group plc where she
chairs the Audit Committee. She also holds a non-
executive directorship at privately owned Chanelle
Pharmaceuticals Group and was previously a
non-executive Director at Yew Grove Reit plc.
Éimear holds a B.A. Accounting and Finance
and MSc. Investment and Treasury from Dublin
City University and is a fellow of the Institute of
Chartered Accountants in Ireland. She is also a
member of the Institute of Directors in Ireland.

Lesley Williams, aged 57, 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 is a non-executive director
of Origin Enterprises plc where she is chair of
the ESG Committee. Lesley also 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 Chair
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 (Chair),
Remuneration Committee, Nomination Committee

Committee Membership: Audit Committee, Remuneration
Committee, Nomination Committee

Irish Continental Group77

The Group’s executive Directors are:

The Company Secretary is:

Eamonn Rothwell
BComm, MBS, FCCA,
CFA UK
Chief Executive Officer

Thomas Corcoran
BComm, FCA
Company Secretary

Thomas Corcoran, aged 58, 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.

Eamonn Rothwell, aged 67, has been a Director
for 36 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 Brewin
Dolphin. Prior to that, he worked with Allied Irish
Banks plc, Fáilte Ireland (The Irish Tourist Board)
and as a financial journalist.

Committee Membership: Nomination Committee

David Ledwidge FCA,
BSc (Mgmt)
Chief Financial Officer

David Ledwidge, aged 43, 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 Governance2022 Annual Report and Financial Statements78

Corporate Governance Report

regarding composition of the Board
and the Report of the Remuneration
Committee details the concern around
remuneration practices.

Corporate Governance Code
The Group has adopted the UK
Corporate Governance Code (2018)
(The Code) issued by the Financial
Reporting Council and the Irish
Corporate Governance Annex issued
by Euronext Dublin. Copies of these
are available at the respective
websites, www.frc.org.uk and
www.euronext.com.

The Group used the Code and Annex
as a framework for developing its
corporate governance processes.
The Corporate Governance Report
details how the Group has applied
the principles and complied with
the provisions set out in the Code. In
certain instances where compliance
with the provisions of the Code has
not been achieved in the specific
circumstances of the Group,
explanation has been provided.

The Corporate Governance Report
details on the following pages our
compliance with the Code, the
composition of the Board, its corporate
governance processes and activities
during the year, together with the
reports from each of the Board
committees.

Finally, I would like to thank all our
stakeholders for their continued
support and look forward to continued
constructive engagement through
2023.

John McGuckian
Chairman

8 March 2023

economics and strategy to drive
shareholder returns. Éimear also
serves on the Board of a number of
other listed companies. John Sheehan
resigned as a Director having served
terms in aggregate totalling nine years.
I express my gratitude to John for his
service and contributions to the Group
over his tenure. Subsequent to John’s
resignation, Éimear, in recognition
of her relevant qualifications and
experience, was appointed as Chair
of the Audit Committee. Other
changes in roles during 2022 was
the nomination of Lesley Williams as
Senior Independent Director and Dan
Clague as Chair of the Remuneration
Committee. As detailed in the
Corporate Governance Report, in
relation to my own tenure as Chairman
of the Board exceeding nine years, the
Nomination Committee has assessed
my performance and have reaffirmed
my continuing position as Chairman.

Engagement
We have progressed our engagement
with stakeholders on corporate
governance concerns, including
sustainability interests, to help us
understand which aspects of our
services and practices need to be
prioritised to ensure we continue to
align with their interests. We also
continue to improve our processes and
reporting in the area of sustainability
as set out in the Sustainability and
ESG Report on pages 36 to 59. On
employee engagement, we have
implemented a new talent review
programme as a means of further
engaging with employees and allowing
them to maximise their potential
within the organisation. We have also
commenced engagement with our
principal customers and suppliers
on ESG matters and have continual
engagement with our shareholders.
These engagement processes are
described in the Corporate Governance
Report.

At our AGM held on 11 May 2022, all
resolutions put to the meeting were
passed. Two resolutions received less
than 80% support and in accordance
with the requirements of the Code,
the Report of the Nominations
Committee details the concern raised

Dear Shareholder,

I have pleasure in introducing my 2022
Report on Corporate Governance.
2022 was an exciting year for the
Group, as we emerged from the
pandemic restrictions and welcomed
returning passengers onboard our
services. We continued our strategic
expansion programmes, increasing
capacity on our Dover – Calais service,
commenced during 2021, to three
vessels and made further progress on
our terminal expansion and renewal
project commissioning additional
environmentally friendly plant during
the year.

Philosophy
The Board is committed to maintaining
high standards of corporate
governance practices which support
the delivery of our strategy. The Board
believes that corporate governance is
not solely concerned with Boardroom
practices but must be intertwined with
all activity which the Group undertakes
affecting our employees, customers,
suppliers and all other stakeholders
including the wider society in which
the Group exists. The Board sets
the tone for corporate governance
practices across the Group through
engagement, communication and
policy formulation.

This Corporate Governance Report,
together with the Annual Report as a
whole, is presented with the objective
of providing an insight into the
corporate governance process at the
Group.

Board Changes
We continued our program of board
refreshment during 2022, with the
appointment of Éimear Moloney
on 25 August. Éimear has extensive
experience of capital markets, macro-

Irish Continental Group79

Application of the UK
Corporate Governance
Code During 2022

This Corporate Governance Report
presented in the context of the
full Annual Report and Financial
Statements for the year ended 31
December 2022 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 are
addressed. 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 84 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 pages 107 and 108 sets
out the reasoning for not establishing
set levels for post-employment
shareholdings given that the
existing arrangements under the
Remuneration Policy already provide
for contractual restrictions on share
disposals of up to five years post-
employment.

Provision 39 requires that notice or
contract periods should be one year or
less. The Report of the Remuneration
Committee at page 106 sets out why
in relation to one Director a notice
period of two years will apply in certain
circumstances.

Corporate Governance Framework

y
r
a
t
e
r
c
e
S
y
n
a
p
m
o
C

The Board

The Board is collectively responsible for the long-term sustainable success of
the Company through provision of leadership and setting the company’s
purpose, values and strategy within a framework of prudent and effective
controls which enables risk to be assessed and managed.

Committees

The Board has established various committees to assist it in meeting its
responsibilities. The Group has three standing committees with formal terms
of reference. The Committees report to the board on all work undertaken.

Audit
Committee

Nomination
Committee

Remuneration
Committee

Monitors the Group’s
ﬁnancial integrity through
oversight of the ﬁnancial
reporting process, including
the risk and control systems
which underlie that process.

Establishes the framework
for the development of an
inclusive and high
performing leadership team.

Sets the remuneration
policy and structures for
executive directors and
senior management.

Chief Executive Ofﬁcer

Chief Financial Ofﬁcer

Responsible for implementing
Board strategy and policy.

Responsible for managing the
ﬁnancial affairs of the Group and
optimising capital management.

*The Company secretary provides a support role to the Board and its Committees in managing information ﬂows and in supporting corporate
government processes.

Corporate Governance2022 Annual Report and Financial Statements
80

Corporate Governance Report
Continued

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. Directors must abstain on any vote regarding matters where
a conflict exists.

Group Strategy and Corporate Governance
On page 16 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.

Strategic pillar

Key activities during the period

Quality service

Investment in quality assets is essential
to ensure a reliable, timely and high-
quality service to our customers which
is essential to retaining the Group’s
pivotal position in international
logistics chain and to driving growth in
the Group’s business.

• The oversight and monitoring of performance of the fleet

• Evaluation and approval of ongoing expansion including:

- expansion of new ferry services between Dover and Calais.

- Increase in the operational ferry fleet from 7 to 8 vessels, through the

acquisition of the Isle of Inisheer

- Increase in the container vessel fleet from 7 to 8 vessels.

- Approval of the acquisition of a new ship to shore electrically powered

crane at Dublin Ferryport Terminals as part of the ongoing replacement
and expansion program.

- Vessel upgrade works involving customer facing and background

technical improvements.

- Commencement of operations at the Dublin Inland Port.

Irish Continental Group81

Strategic pillar

Key activities during the period

People and culture

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

• Overview of service quality reports.

• Monitoring of feedback from staff briefing sessions.

• Sponsoring of talent management programme.

• Review of whistleblowing procedures.

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.

• 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,

approving the resumption of dividend payments.

• Oversight of Group operational safety reviews.

• 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.

• Review of sustainability targets and roadmap

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

Corporate Governance2022 Annual Report and Financial Statements82

Corporate Governance Report
Continued

Stakeholder Engagement
At ICG, 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

Environm 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. The 2022 AGM provided
an opportunity to meet once
again with shareholders in-person
following the virtual AGMs in 2020
and 2021. We also engaged with
our shareholders and their advisers
prior to the 2022 AGM. Shareholders
were afforded an opportunity at
the 2022 AGM to vote on advisory
resolutions concerning the 2021
Annual Report which received
100% support and on the Report
of the Remuneration Committee
which received 74% support.
Further details on the matters
raised concerning remuneration are
detailed in this year’s report of the
Remuneration Committee at page
99. The re-election of Mr. McGuckian

as Director received 77% support
and further details on the matters
raised on Mr. McGuckian’s re-election
are discussed in the Report of the
Nomination Committee on page 96.

In addition to the AGM engagement,
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 and analysts
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. While supporting
the Group’s strategy, an increasing
area of interest to shareholders is
our sustainability credentials. Our
Sustainability and ESG Report at pages
36 to 59 explains our sustainability
policy and framework and how we are
increasingly embedding sustainability
practices into our everyday operations.

and are available on the Group’s
website. During 2022, these include,
the 2021 Annual Report and Financial
Statements, the 2022 Half-Yearly
Financial Report, Trading Updates
together with investor presentations.
ICG’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.

The 2023 Annual General Meeting
is scheduled for 11 May 2023.
Arrangements will be made for
the 2022 Annual Report and 2023
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 88 to 90.

Apart from the direct engagement
described above, regular formal
updates are provided to shareholders

Further investor relations information
is available on pages 196 and 197 of
this Annual Report.

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 the purpose
of which 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.

Irish Continental Group83

Workforce
We rely on our workforce to promote
our values and deliver on our
strategic objectives. 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, inclusion and realisation
of potential in a safe working
environment.

The Board notes the Code provision
5 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.

At peak season, the Group engages
in excess of 1,200 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. During 2022,
the Group introduced a new
talent review programme which
promotes the exchange of views and
encourages individuals to realise
their potential through agreed

development goals. 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.
Our workforce is a rich source of
information on how the Group
performs in both a customer facing
roles and operationally. Within the
processes described, executive
management report on workforce
matters to the Board which are
taken into consideration in further
developing the Group’s businesses.

The Company also facilitated Board
visits to Group vessels and port
operations during 2022, where the
Directors had an opportunity to meet
with members of the workforce.
These visits had been curtailed
during 2020 and 2021 in line with
Group safety protocols around
Covid-19.

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 page 63 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. We have to date
engaged with key customers and our
employees to identify those aspects
of the Group’s services which they
value most, including sustainability
initiatives.

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, which are outlined on
pages 50 and 51.

Corporate Governance2022 Annual Report and Financial Statements84

Corporate Governance Report
Continued

Division of Responsibilities

The Board is comprised 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 her
experience, appointed Lesley Wiliams
as the Senior Independent Director
effective from 14 November 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. John Sheehan served
as the Senior Independent Director
up to his retirement as Director on 11
November 2022.

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 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 2022, 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 91 to 108.

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. The
Nominations Committee reviews
on an annual basis the continuing
independence of the existing Directors
before recommending their going
forward for re-election at the AGM.

Mr. McGuckian, as Chairman of the
Board, is not considered independent
under the Code. Mr McGuckian was
assessed to have been independent at
the date of appointment as Chairman
in 2004. The Board has also noted
the Code’s requirements around
tenure, with Mr. McGuckian having
served on the Board for more than
nine years since his first appointment.
The Board, as advised by the
Nomination Committee, considered Mr.
McGuckian’s suitability to continue as
Chairman of the Board and Director of
the Company. The Board assessed Mr.
McGuckian to possess an independent
mindset with which he carries out his
role. The Board also considered the
knowledge, skills and experience that
he contributes and considered him to
be both independent in character and
judgement and to be of continued
significant benefit to the Board. 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 2023. Mr. McGuckian’s
extensive knowledge of the business
ensures appropriate challenge and
leadership of the Board during this time
of strategic expansion of activities.

Meetings: The Board agrees a schedule
of regular meetings each calendar year
and also meets on other occasions

Irish Continental Group85

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 2022 was as follows:

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 76 to 77.
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 Board changes that occurred
during 2022 further underpinned
that diversity of background and
refreshment of experience.

Member

J. B. McGuckian (Chair)

E. Rothwell

D. Ledwidge

J. Sheehan (resigned 11 November 2022)

Lesley Williams

Dan Clague

Éimear Moloney (appointed: 25 August 2022)

Tenure

35 years

36 years

7 years

9 years

2 years

1.5 years

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.

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.

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 reviews the size,
composition and board skillset at least
annually taking into consideration the
results of the Chairman led evaluation
process. The Nomination Committee
report is set out on pages 95 to 97.

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 Constitution 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.

Éimear Moloney was appointed
to the Board on 25 August 2022,
Éimear was deemed independent on
appointment. John Sheehan resigned
as a Director on 11 November 2022
having served nine years as a Director
of the Company. These Board changes
further underpinned the diversity of
background and the opportunity to
introduce fresh thinking to the Board
processes.

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

Corporate Governance2022 Annual Report and Financial Statements86

Corporate Governance Report
Continued

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, the most recent such
engagement relating to the 2021
evaluation.

The 2022 evaluation was led by
the Chairman. The Company
Secretary provided a briefing to the
Board outlining key focus areas for
consideration by the Directors against
key events addressed by the Board
during the year together with a review
of the matters for action emanating
from the previous evaluation.
The focus areas included Board
composition, Board agenda, Director
interaction, quality of information,
time allocation and decision making
processes. Following the briefing, the
Directors were invited to submit any
observations on Board processes and
performance to the Chairman. The
Chairman subsequently reviewed with
each Director their observations on
the items raised in the presentation.
Following the conclusion of the
Director engagement process, the
Chairman reported to the Board his
conclusion from the evaluation process
where he 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. The ongoing
progress on the matters noted in
the prior year was acknowledged, in
particular the resumption of site visits
and in-person presentations by senior
managers. No further matters for
action were added as a result of the
latest evaluation.

Separately, as part of the evaluation
process, the non-executive Directors,
led by the Senior Independent Director,
met initially with the Chairman
and then without his presence to
evaluate the Chairman’s performance.
The Senior Independent Director
subsequently reported to the Board
that the non-executive Directors had
concluded that the Chairman was
providing effective leadership of the
Board.

The results of the evaluation were
also considered by the Nominations
Committee in their review of Board
composition.

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.

Beyond the Board, of 51 individuals
holding a managerial position, 11 are
female and in relation to the total
workforce 39% are female. While
the Board acknowledges that these
ratios have been relatively static over
recent years and the imbalance of
this ratio compared to society at large,
it is reflective in part of the sector in
which the Group operates. While the
Board has not set any gender ratio
target, it is committed to improving
this ratio over time. In that regard the
Nomination Committee and Executive
Management Team, as appropriate,
actively seek out female candidates
when undertaking recruitment. To
ensure that this is being implemented
we have commenced the monitoring
of diversity and inclusion metrices
across the recruitment process.

Audit Risk and Internal
Control

The Board has described its business
model on pages 16 and 17 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.

Irish Continental Group87

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 19
and 20 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
2022 and 31 December 2021.

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 91 to 94. The risk management
framework and processes including
the principal risks and uncertainties
identified are set out on pages 60 to 69.

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 page 110.

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 98 to 108.

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 2022.

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 111; (ii) Share
Option Plans page 107; (iii) Long Term
Incentive Plan pages 104 to 105; (iv)
Service Contracts pages 106 to 107; and
(v) Share-based Payments pages 169 to
171; (vi) Borrowings pages 157 to 160; 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 170,823,142 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).

Corporate Governance2022 Annual Report and Financial Statements88

Corporate Governance Report
Continued

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

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).

In line with market practice, members
will be asked to renew these authorities
at the 2023 AGM.

General Meetings and
Shareholders Voting and other
Rights
Under the Constitution, the power to
manage the business of the Company
is generally delegated to the Directors.
However, the members retain the
power to pass resolutions at a General
Meeting of the Company which may
give directions to the Directors as to
the management of the Company.

The Company must hold an AGM each
year in addition to any other meetings
in that year and no more than 15
months may elapse between the date
of one AGM and that of the next. The
AGM will be held at such time and
place as the Directors determine. All
General Meetings, other than AGMs,
are called Extraordinary General
Meetings.

Extraordinary General Meetings shall
be convened by the Directors or on
the requisition of members holding,
at the date of the requisition, not
less than 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.

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 11 May
2022, 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; and

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.

Irish Continental Group89

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.

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 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.

Corporate Governance2022 Annual Report and Financial Statements7. 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.

Corporate Governance Report
Continued

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.

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

Irish Continental GroupReport of the Audit Committee

At 31 December 2022, 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 members’ biographies
are set out on pages 76 to 77. The
Board has determined that Éimear
Moloney has recent and relevant
financial experience. Éimear is a
qualified chartered accountant and
has experience of audit committee
membership at other listed companies.
The other members of the Committee
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 three scheduled meetings
during the year at which all the then
current members attended. In addition,
where requested, the Chief Executive
Officer, the Chief Financial Officer,
Board 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.

Dear shareholder,

I am pleased to present the Report of
the Audit Committee (the Committee)
for the year ended 31 December 2022.
I have served on the Committee since
August 2022 and was appointed as
Chair in November 2022. On behalf of
the Committee and the Board, I would
like to thank my predecessor, John
Sheehan, for his service as Chair of the
Audit Committee.

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

The Audit Committee membership
during the year is set out in the table
below which also details attendance
and tenure.

Member

E. Moloney (appointed Chair: 14 November 2022)
(appointed to Committee: 25 August 2022)

J. Sheehan (resigned, 11 November 2022)

L Williams

D. Clague

Tenure

0.5 years

9 years

1.7 years

1.5 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.

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, is fair, balanced and
understandable and provide
the information necessary for
shareholders to assess the Group and
Company’s position and performance,
business model and strategy.

• 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 2022, the
Preliminary Statement of Results
and Annual Report and Financial
Statements, for the financial year ended
31 December 2022 and the two Trading
Statements issued during the year.
These reviews considered;

Corporate Governance2022 Annual Report and Financial Statements92

Report of the Audit Committee
Continued

• Assessment of the effects of new

standards effective for reporting in
financial year 2022;

• 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 2022 are set out
below and also discussed on pages 140
to 142.

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 31 to the Financial
Statements. The size of the pension
obligations at €91.6 million (2021:
€140.5 million) are 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.

The Committee also noted that for
certain schemes, assets exceeded
liabilities resulting in a pension
surplus at 31 December 2022 of
€33.6 million (2021: €6.7 million).
The Committee made inquiries of
management to ensure that this
amount represented a fair estimate
of the unconditional right of a refund
the Group may expect in the future
either by way of a contribution
holiday or refund.

• 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.

The Committee noted that in respect
of one vessel which had reached
25 years from date of construction,
that management had reviewed the
remaining estimated useful life from
5 years (from an original estimate
of 30 years original useful life) to
10 years. While provision for this
revision to useful life is set out in the
accounting policy for property, plant
and equipment, the Committee
queried management on the
robustness of the reasoning for this
extension. Following explanation, the
Committee were satisfied with the
change in useful life.

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 noted that the
profitability of the Irish Ferries
branded operations had been
materially affected in financial years
2021 and 2020, due to the imposition
of government travel restrictions.
This decline in profitability had
been subsequently assessed as an
indication of impairment. Following
the lifting of all travel restrictions
in early 2022, passenger carryings
recovered but remained behind pre-
pandemic 2019 levels, which was in
line with management expectations
as previously modelled in the prior
year recoverability assessments.

The Committee discussed with
management their assessment
that the declining trends in market
charter rates in the second half of
2022 amounted to an indication
of impairment of the Group’s fleet.
While the Committee noted that
these charter rates remained higher
than average 2021 rates, they agreed
with management’s decision to
perform a recoverability assessment.

The Committee reviewed
management’s calculations of
the recoverable value estimates
which were prepared based on the
conditions and information available
at 31 December 2022. 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 also considered
management’s views on the likely
effect of environmental regulations
on premature obsolescence and
operating costs.

The Committee was satisfied that
the recoverability assessment
performed at the reporting date
was robust, comprehensive and
supported the carrying value of the

Irish Continental Group

ferry fleet as at 31 December 2022.
The Committee agreed that no
provision for impairment against the
carrying value of the Group’s fleet
was required at 31 December 2022.

• 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 with the
removal of travel restrictions in early
2022, that the profitability of ferry
operations had recovered and that
the overall Group was reporting a
profit attributable to equity holders
of €59.8 million, a level which had
exceeded budget expectations and
which compared to a loss of €4.9
million in 2021.

The Committee reviewed and
challenged management on their
going concern modelling including
assumptions and sensitivities in
a number of trading scenarios
including the possible effects of
reduced volumes over budget
levels and higher 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 142.

Viability Statement
The Committee reviewed and
challenged management’s
assumptions and scenarios together
with the calculations supporting the
Viability Statement set out on page
110. 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 the
2022 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 2022 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 2022 and
the Trading Statements issued during
2022.

Engagement with Regulators
The Committee oversaw
management’s engagement with
the Irish Auditing and Accounting
Supervisory Authority (IAASA)
regarding their inquiries into certain
aspects of the Annual Report and
Financial Statements for the year
ended 31 December 2021. While no
adverse findings were assessed, the
Company provided undertakings
regarding additional clarification on
certain sustainability metrics and
reconciliation of certain APM measures
in future financial statements. The
Committee believes that it has
addressed these undertakings in this
2022 Annual Report.

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 60. The
Committee, on behalf of the Board,
reviews the effectiveness of the Group’s
control environment including internal
controls and risk identification and
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 2022, two areas were being
actively monitored; the effect of the
war in eastern Europe and Increasing
Regulations Over Seafarer Working
Conditions. Further details on these are
set out in the Risk Management Report
at page 60.

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
2022 Internal Audit Plan.

Corporate Governance2022 Annual Report and Financial Statements

Report of the Audit Committee
Continued

The Committee undertook a review of
the RMC and Internal Audit activities.
The Committee noted that the
internal audit function had not been
resourced in the latter part of the
year due to management changes.
However, the Committee was satisfied
that management had rectified the
resourcing issue in early 2023. In the
intervening period, existing finance
personnel had been used to a limited
extent to address any ad-hoc matters
which arose. Notwithstanding the
internal audit matter, the Committee
was satisfied that all other risk
management and internal control
systems 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 (for part of the
year) were achieving their objectives
and that the Group control environment
remains appropriate and effective. This
assessment has been reported to the
Board.

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. The Committee
evaluates on an annual basis, at the
conclusion of the audit, the effectiveness
of the external audit process.

2022 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 2022.

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 2023 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 significant deficiencies
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 has
also considered feedback from
management involved in the audit
process regarding interaction with
and level of preparedness of the audit
team. The Committee also meet with
the audit team without the presence of
management.

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
2022 Financial Statements, KPMG were
effective, objective and independent.

Ethical Standards for Auditors (Ireland)
2020 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 (who
was appointed in 2021) has acted as lead
partner for the audit of the 2022 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 certain pension
scheme in respect of the 2022 financial
year. This approval was granted on
the basis of procedural efficiency. The
Committee must also give approval for
the employment of any person who was
previously employed by the external
auditor within the previous two years of
proposed employment by the Group.

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.

Based on consideration of the above the
Committee concluded that it was satisfied
with the performance, objectivity and
independence of the external auditor.

As auditor, KPMG confirmed to the
Company that they comply with the

Éimear Moloney
Chair of the Audit Committee

Irish Continental Group8 March 2023

a member of the Committee and Board on 11 November 2022. John had served
nine years as a non-executive Director of the Company and I extend our gratitude
to him for his service.

Committee Membership
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
76 to 77.

Member

J.B. McGuckian (Chair)

J. Sheehan* (resigned 11 November 2022)

L. Williams*

D. Clague*

E. Moloney* (appointed 25 August 2022)

E. Rothwell

Tenure

1.5 years

5 years

1.7 years

1.5 years

0.5 years

13 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 and overseeing the
development of a diverse pipeline for
succession.

The Committee’s effectiveness is
evaluated within the overall Board
evaluation process outlined on page
86. No matters of concern were
noted in relation to the Committee’s
effectiveness.

Board Composition and Renewal
The Committee considered the results
of the Board evaluation and the
changes to Board composition made
during 2022. 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

Report of the
Nomination
Committee

Dear shareholder,

I am pleased to present the Report
of the Nomination Committee (the
Committee) for the year ended 31
December 2022.

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. At Board level during
2022, the Committee continued its
focus on Board refreshment, with
one appointment 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, one Director
also stepped down during 2022. At the
time of writing, the Board is comprised
of four non-executive Directors and
two executive Directors.

With the Board changes which took
place during the year there were
consequent changes made to the
Committees. Newly appointed non-
executive Director Éimear Moloney
joined the Committee on 25 August
2022. John Sheehan stepped down as

Corporate Governance2022 Annual Report and Financial Statements96

Report of the Nomination Committee
Continued

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 induction process be provided
with comprehensive information on
the Group’s strategy, structure and
performance reporting. They will also
be afforded opportunity to meet senior
management and visit Group sites.

regard for the benefits of diversity. The
Committee appointed Éimear Moloney
as Director in August 2022 and Mr.
John Sheehan resigned as Director
in November 2022. The Board gender
diversity is currenting 33% female.

The Committee notes the Code’s
comments on non-executive Director
tenure and the tenure profile of the
existing non-executive Directors. The
average tenure of the non-executive
Directors, including the Chairman, is
9.7 years and 1.3 years excluding the
Chairman.

Appointments
The Committee continued a
comprehensive search process for
future potential candidates to ensure
orderly Board refreshment. A number
of potential candidates were identified
and screened based on an assessment
of their skill set and experience, against
the future requirements of the Board
with due regard to the Board’s diversity
policy. Following this process, the
Committee made a recommendation
to the Board for the appointment of
Éimear Moloney as a Director of the
Company. Éimear was appointed as
a non-executive Director effective
from 25 August 2022. No external
search agency was engaged for this
appointment.

All non-executive Directors receive
a letter of appointment setting
out the terms of the appointment,
responsibilities and expected time
commitments. Copies of these letters
are available for inspection at the
Annual General Meeting (AGM) and at
the Company’s registered office.

In compliance with the provisions
of the Code, any person co-opted to
the Board during the year will seek
re-election at the next AGM together
with all the Directors. All newly
appointed Directors will as part of

Engagement
The Committee noted the results on
the individual Director re-election
resolutions tabled at the 2022 Annual
General Meeting. The Committee
welcomed the strong voting result
in supporting the re-election of all
Directors. However, the Committee
noted that while the re-election of
John B. McGuckian was affirmed,
the resolution received 77% support
which is below the threshold set
in the Code. The Company had
engaged extensively with its major
shareholders in advance of the 2022
Annual General Meeting. The general
consensus was that, notwithstanding
Mr. McGuckian’s tenure, that
shareholders were supportive of Mr.
McGuckian continuing as a Director
and Chairman of the Board in the
circumstances where the Group
faced significant challenges relating
to Covid-19 and was undertaking
major strategic initiatives. In addition,
certain shareholders noted the
benefits of retaining Mr. McGuckian
as Chair during the period of Board
refreshment. The Committee was
aware that a minority of shareholders
had expressed a dissatisfaction with
the Board’s progress on achieving
greater gender diversity on the Board,
and voted against the re-election of Mr.
McGuckian in his role as Chair of the
Nominations Committee.

The Committee notes that the Board
was undergoing a period of renewal
and refreshment which was ongoing
at the time of the 2022 Annual General
Meeting. While the Board has not set
diversity targets, its policy is to select
candidates based on the required
competencies of the role with due

Director Independence
Outside of the newly appointed
Director, the Committee reviewed
and recommended to the Board the
re-appointment of the remaining
Directors at the Company’s AGM.
In considering the proposals for
the re-election, the Committee had
particular regard to 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 provisions 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
strategic expansion of the Group, 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.

Irish Continental Group97

The Committee did not identify any
issues that were likely to impair,
or could appear to impair the
independence of the non-executive
Directors, Lesley Williams, Dan Clague
and Éimear Moloney.

No Committee member voted on a
matter concerning their position as a
Director.

Inclusion and Diversity
The Committee reviewed the processes
agreed in respect of workforce
engagement described at page 83 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 discussed
on page 86. 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.

The Group’s gender diversity is set
out at page 86. Currently, the female
composition of the Board is 33% (2021:
14%), 22% (2021: 21%) among senior
managers and 39% (2021: 39%) across
the organisation as a whole. While this
indicates marginal progress year on
year, the Committee continues to focus
on improving these ratios. In relation
to future Board and senior manager
appointments the Committee will
actively seek out a greater pool of
female candidates for consideration.
The Committee has also requested
executive management to ensure this
requirement is followed for recruitment
across all levels of the organisation.

External search agencies independent
of the Group are engaged to assist
where appropriate and their mandates
include considerations of diversity.

Other
No recruitment for senior
management positions requiring the
input of the Committee took place
during the period.

John B. McGuckian
Chair of the Nomination Committee

8 March 2023

Corporate Governance2022 Annual Report and Financial Statements98

Report of the Remuneration Committee

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.

Within this framework the Committee
has formulated a Remuneration Policy
which was submitted 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 2022
and will be put to a shareholder vote as
an advisory resolution at the 2023 AGM.

The Committee ensures that the
remuneration structures and levels are
set to attract and retain high calibre
individuals necessary at executive
Director and senior manager level and
to motivate them to deliver strategy in
the interests of our shareholders and
wider stakeholders. The committee
believes that an approach to
remuneration grounded in pay for
performance with a bias to long term
remuneration delivered in equity is
the most effective way of aligning
management’s interests to those of our
stakeholders. Remuneration levels and
awards are based on an individual’s

Dear Shareholder,

I am pleased present the Directors’
Remuneration Report for year ended
31 December 2022. I have served on
the Committee since August 2021 and
was appointed as Chair in November
2022. On behalf of the Committee and
the Board, I would like to thank my
predecessor, John Sheehan, for his
service as Chair of the Remuneration
Committee.

The Remuneration Committee
The Remuneration Policy and
Framework is overseen by the
Remuneration Committee. Committee
membership during 2022 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 76 to 77.

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.

Member

D. Clague (Chair – appointed: 14 November 2022)

J. Sheehan (resigned: 11 November 2022)

L. Williams

E. Moloney (appointed: 25 August 2022)

Tenure

1.5 years

9 years

1.7 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.

The Committee met three times during the period with follow up contacts
between meetings. The Chairman provided an update to the Board on key
matters discussed.

contribution to the Company against
the background of underlying
Company financial performance
having regard to comparable
companies in both size and complexity.

Overview of Performance
2022 was a year where we welcomed a

return to growth having faced the twin

challenges of the Covid-19 pandemic

and Brexit over the prior years. The

Group is reporting an operating profit

of €66.7 million for 2022 compared to

the outturn (before non-trading items)

of a €0.2 million loss and €0.8 million

profit in 2021 and 2020 respectively.

This improvement in performance is

principally attributable to returning

passenger traffic post pandemic while

the Group has also leveraged its recent

investments on expanding its operations

in both divisions. The performance

improvement has also increased cash

generated from operations from €67.0

million in 2021 to €132.0 million in 2022.

This has been utilised in facilitating the

continued investment in our business

during 2022 with strategic capital

expenditure amount to €57.4 million

(2021: €41.7 million) and returns to

shareholders of € 73.4 million (2021: €19.8

million) by way of dividends and share

buybacks.

The Committee acknowledges the
strong contribution of the Executive
Directors and senior managers during
financial year 2022 in delivering the
above result, including the actions
taken in response to returning
passenger flows post pandemic,
delivering on the Group’s expansion
initiatives and embracing our ESG
goals. The level of performance
achieved, which exceeded budget
expectations, maintained the Group’s
strong financial position and provides a
platform for future growth.

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

Irish Continental Group99

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 strong recovery in
performance in FY2022 against
FY2021, FY2020 and FY2022 budget
expectations, the Committee
concluded that bonus payouts
approaching maximum opportunity
were appropriate for 2022 for certain
Directors and senior managers.
However, other than for the CEO who
has a contractual legacy arrangement,
the Committee considered it
appropriate to make downward
adjustments where it considered the
financial performance by which a
manger was assessed was affected

by external factors outside of the
manger’s direct control.

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.

Remuneration Policy and
Shareholder Engagement
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. The
full Remuneration Policy is available
at https://icg.ie/investors/general-
meetings/.

The Committee having reviewed
the Policy during 2022, taking into
account feedback on the 2021 Report
of the Remuneration Committee,
remain satisfied that it continues to be
appropriate to the business needs and
strategy of the Group. The Policy is next
scheduled to be put to an advisory vote
of shareholders at the 2025 AGM.

The 2021 Report of the Remuneration
Committee was put to an advisory vote
at the 2022 AGM and was supported
by 74% of voting shareholders. We had
engaged with major shareholders and
their voting advisors and we are aware
that some shareholders had raised
some or all of the following concerns;

Concern Raised

Committee Response

Terms and disclosure of metrics
around CEO Bonus arrangements and
potential for uncapped payouts

Level of salary increases to executive
Directors

While the terms of the CEO’s bonus are governed by a contractual agreement
from the early days of his appointment, we have since continued to design a
remuneration structure which responds to the specific needs of our business,
our strategy and the life cycle of our assets. Accepting that the CEO’s incentive
scheme is distinct compared to certain market peers, with disclosure of the
specific targets potentially impacting us commercially, it has been an effective
structure for motivational reward in alignment with the Group’s performance,
long-term strategy and shareholder interests.

Despite its specificities, the link between pay for performance for the CEO
has been demonstrated by the absence of pay-outs for 2020 and 2021
performance, while the EPS performance during the past fiscal year merited a
pay-out. We believe focusing on this one aspect of the remuneration policy – a
policy which applies to all senior management and not just the CEO – does not
recognise the efforts we have made to strengthen our incentive arrangements
over the past number of years and the broader impact of the incentive
framework on the business.

It is a one-off, legacy arrangement that will not apply to the next CEO.

Following the in-depth review, the Committee determined that, effective from
1 January 2022, it would increase the salaries of the CEO and CFO by 20% and
26%, respectively to ensure the remuneration arrangements of our executives
remain competitive, particularly as the business entered a crucial juncture,
in terms of the exiting of the pandemic and executing on the evolution of
our expansion 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.

In relation to the CEO, other than for inflationary increases, salary levels were
last adjusted in 2008.

Corporate Governance2022 Annual Report and Financial Statements100

Report of the Remuneration Committee
Continued

Concern Raised

Committee Response

Post-employment holding
requirements

The Company, while acknowledging that it has not set absolute holding
requirements for senior executives who depart the Company, notes its
remuneration structures by design since 2013 ensure that any senior
executive who leaves employment contractually retains an interest in equity
proportional to their variable remuneration awarded in the last five years of
employment. The effect of this policy as reported in the 2021 Report was that
the CEO and CFO at 31 December 2021 held 19.4 times and 2.4 times their base
salary in equity which was subject to a disposal restriction for a weight average
profile of 1.5 and 3.1 years respectively, over a period of one to five years. The 31
December 2022 metrics are reported later in this Report.

Also, any unvested LTIPS retained by an executive on good leaver terms remain
subject to the normal rules of the Performance Share Plan which may create
an additional alignment of up to 7 years post-employment.

The Committee notes that these post-employment requirements exceed
market norms and are part of an enforceable contractual rather than voluntary
arrangement.

The Committee believes that while not strictly complying with Provision 36
of the UK Corporate Governance Code, that these arrangements meet the
objective of the Code and exceed market norms.

While acknowledging the above
concerns, the Committee also
refers below to other aspects of the
Company’s Remuneration Policy which
create some of the most stringent
deferral and holding mechanisms in
the Irish and UK markets, including;

• 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.

• Up to a five-year deferral, continuing
to apply post-vesting, 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;
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.

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. 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 managing the return
of business post pandemic and the
expansion of the Group’s activities. 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
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 entered 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, effective from 1
January 2022.

The Committee reviewed these salary
levels at the end of 2022 in light of
financial performance of the Group’s
businesses and the market generally.
Acknowledging that the salary rates of
the CEO and CFO has been reset earlier
in 2022, the Committee considered it
appropriate that any salary increase
awarded in 2023 should be in line with
the increases awarded to the workforce
generally. In that respect, increases
of 2.5% were awarded to the CEO and
CFO effective from 1 January 2023.

Consideration of Discretion
The Committee reviewed the
outcomes of both the annual bonus
and long-term incentive plan and
considered the results both against the
relevant performance targets and the
wider internal and external context.
As set out earlier in this report, it was

Irish Continental Group101

noted that as travel restrictions were
lifted in early 2022, the return of pre-
pandemic passenger travel patterns
contributed to a strong financial
performance in the year.

In relation to the CEO, the formulaic
calculations based on Group
performance indicated that a bonus
would be payable under his legacy
arrangement. Noting that no bonus
had been payable in 2020 or 2021
under this arrangement which aligned
with overall financial performance of
those years, the Committee considered
that it would not be appropriate to
adjust the formulaic outcome of
the 2022 calculations. However, the
Committee did require that the full
award, rather than the minimum 50%,
be invested in equity through the
Group’s restricted share scheme which
creates a five year disposal restriction.

In relation to the CFO, whilst the
formulaic outcomes indicated a
full bonus opportunity had been
achieved, the Committee considered
it appropriate to exercise discretion
and reduced the formulaic outcome
by 26% to account for external factors
affecting financial performance not
within the control of the Group. Similar
downward discretion was exercised
in the case of other members of the
senior management team.

With regard to the vesting outcomes
under the long-term 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 recent 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. At this point in
our ESG maturity, we are focused on
developing frameworks, policies and
formally integrating ESG into decision
making in all aspects of our business.

Where ESG matters are part of a
reward structure they are currently
assessed in relation to progress in
these programmes. As the Group
moves through the ESG maturity cycle,
the Committee will seek to incorporate
measurable targets and outcomes into
performance remuneration.

Outlook
2022 has been one of recovery
following the disruption to our
passenger business during 2020
and 2021 due to the effects of travel
restrictions imposed to control the
spread of the Covid-19 pandemic.
2022 was also a year where the scale
of our operations was expanded
with the further development of our
Dover Calais service commenced
in 2021, an increase in the fleet
and continued expansion at our
terminals commissioning the latest
environmentally friendly equipment.
2023 will be a year where we further
build upon and leverage these
developments.

Remuneration Outcomes for
executive Directors in 2022
Total Directors’ single figure
remuneration for the year was
€4,476,000 compared with €1,722,000
in 2021 and details are set in the table
below:

Performance pay

Base salary

Restricted
shares

Cash

Benefits

Pension

Options /
PSP1

Fees

Total
2022

€’000

Executive Directors

E. Rothwell

D. Ledwidge

Total for executives

Non-executive Directors

J. B. McGuckian

J. Sheehan

L. Williams

D. Clague

E. Moloney

Total for non-executives

Total

700

400

1,100

1,380

444

1,824

1,100

1,824

814

335

1,149

2,929

1,261

4,190

125

286

125

286

4,476

1,149

67.5% of the options granted on 6 March 2020 under the PSP are expected to vest during 2023 based on performance to 31 December 2022, subject
to continued employment up to the vesting date. 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 2022.

Corporate Governance2022 Annual Report and Financial Statements102

Report of the Remuneration Committee
Continued

Details of Directors’ remuneration for the year ended 31 December 2021 are set out below:

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

Performance pay

Base salary

Restricted
shares

Cash

Benefits

Pension

Options /
PSP1

Fees

Total
2021

€’000

580

318

898

230

307

898

307

125

310

845

567

1,412

125

310

1,722

The value of options which vested during 2022 based on financial performance to 31 December 2021 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 a decrease to the previously reported benefit in respect of Eamonn Rothwell of €74,000 and in respect of David
Ledwidge €25,000.

Base Salary
The Committee reviewed the
salaries of the CEO and CFO against
market competitive levels for similar
sized ISEQ and FTSE companies
during 2021, taking into account the
performance of the executive Directors;
in particular their leadership of the
company through the challenges of
Brexit, the Covid-19 pandemic and
significant expansion of operations.
The Committee noted that these
challenges were successfully managed
without accessing cash from
shareholders, while at the same time
paying down debt and returning cash
to shareholders. It was also noted that
through this period, the Group had
positioned itself for further growth
underpinning 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 recent significant
strategic initiatives, 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
previous reassessment of the CEO
salary levels, other than inflationary
increases was in 2008.

The Committee also awarded a 26%
increase in annualised base salary to
David Ledwidge, CFO, for 2022. The
adjustment set the CFO salary level 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.

Director’s Pension Benefits
The aggregate pension benefits attributable to the executive Directors at 31 December 2022 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

Total
2022

€’000

Total
2021

€’000

Irish Continental Group103

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.

With regard to David Ledwidge, costs
incurred in relation to defined benefit
pension arrangements were €29,000
(2021: €20,000) with a further €31,000
(2021: €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.

Executive Directors participation in
Group sponsored pension schemes
is on similar terms as apply to Group
employees in Ireland.

Performance Related Pay
Eamonn Rothwell
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 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 the Group’s businesses
throughout another year of external
challenges. While the lifting of Covid-19
travel restrictions saw a return of
passenger volumes, significant
increased energy costs and other
inflationary pressures created cost
challenges to be passed through to
customers. The Committee also noted
the efforts in further developing and
expanding the Group’s strategically
significant Dover Calais service, first
launched during 2021. Against these
developments, the Company also
returned €73.4 million to shareholders
through a combination of dividends
and share buybacks.

The Committee assessed the
formulaic outcome from the long-
standing legacy arrangement and
did not consider it appropriate to
exercise discretion to adjust the
formulaic outcome. The Committee
considered that in each of 2020 and
2021, when performance of the Group
was negatively affected by external
factors outside of the control of the
CEO resulting in a nil payout, that
they had not exercised discretion
to overrule the formulaic outcome.
This consistent application of the
performance-related pay formula
was considered appropriate based
on the 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.
Based on the above considerations, the
Committee approved a performance
bonus of €1,380,000 be paid to the CEO
in line with the formulaic outcome,
of which the full amount, rather than
the required minimum of 50%, was
required to be invested in equity
through the Group’s restricted share
scheme, which is subject to a disposal
restriction of greater than 5 years.

David Ledwidge
The Committee assessed Mr.
Ledwidge’s performance in his role
over the period and concluded that
Mr. Ledwidge was performing in line
with expectations and contributing
positively to the longer term
development of the Group.

The Committee considered it
appropriate to retain for Mr. Ledwidge
the maximum annual bonus
opportunity of 150% current year
salary, as per the Remuneration Policy,
against the following parameters;

• 75% based on Group financial

outturn with the targets based off
2023 budget;

• 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 2022 financial outturns,
which exceeded budgeted levels
the Committee determined that a
full bonus amount of €450,000 was
eligible to be paid under the financial
outturn element. However, following
a holistic evaluation of Company
performance and in recognition that
certain external factors beyond the
direct control of the Group contributed
to the strong performance, the
Committee reduced the financial
portion of the bonus to €330,000.

The Committee also assessed the
personal objectives set and noted
Mr. Ledwidge’s significant effort
during the year in managing the
Group’s capital facilitating a return of
€73.4 million to shareholders 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
€150,000 accrued under these criteria.
However, the Committee again, in
consideration of the matters discussed
above determined it appropriate that
this be reduced by 24% to €114,000.

Corporate Governance2022 Annual Report and Financial Statements104

Report of the Remuneration Committee
Continued

The Committee in approving the aggregate bonus of €444,000 required that the full amount, rather the required minimum
of 50%, be invested in equity through the Group’s restricted share scheme, which is subject to a disposal restriction of greater
than 5 years.

Restricted Shares
In relation to Mr. Rothwell and Mr. Ledwidge, their full annual bonus award was applied towards the acquisition of 330,935
and 106,474 ICG units respectively which will be held in the employee trust for a period of five years.

Long Term Incentive
(i) Options expected to vest during 2023 based on performance to 31 December 2022
The Committee has considered the performance conditions attaching to the options granted under the PSP on 6 March
2020 which are tested against Group performance up to 31 December 2022. The 2022 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 align with the definitions per the Plan rules. The overall vesting rate is expected to be 67.5% (2021:
31.1%) and the table below details the expected vesting on each metric.

Performance Condition

Weighting

Threshold

Maximum

Actual

Outcome

Adjusted diluted earnings per share

Return on average capital employed

Free cash flow ratio

Total shareholder return

• Versus peer group

• Versus FTSE 250

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 2023. At 31 December 2022, there
were 1,054,536 outstanding options
granted on 6 March 2020, including
297,000 and 122,000 options in favour
of Mr. Rothwell and Mr. Ledwidge
respectively of which 200,475 and
82,350 are expected to vest during
2023 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 2022 has
been included in the total Director
remuneration table for year ended
31 December 2022, based on an
estimated share price of €4.13, being
the average closing price of an ICG
Unit between 1 October 2022 and 31
December 2022.

(ii) Options Vested during 2022
As reported in last year’s report, the
Committee determined, based on
performance up to 31 December 2021,
the vesting of the options granted
under the PSP on 8 March 2019 at an

25%

27.5c

13%

100%

33.4c

20%

130%

33.5c

6.7%

274%

25% out of 25%

0% out of 25%

25% out of 25%

12.5%

(30.0%)

(8.3%)

(5.1%)

12.5% out of 12.5%

12.5%

(9.2%)

21.3%

(5.1%)

5.0% out of 12.5%

exercise price of €0.065 at a vesting
rate of 31.1 per cent, vesting 230,859
options in total.

Mr. Rothwell held 70,286 of the
PSP vested options. Share option
remuneration of €230,000 based
on the market price at the vesting
date has been disclosed in the 2021
remuneration table (adjusting the
€304,000 previously disclosed last year
which was estimated based on average
prices in the last quarter of 2021). Under
the rules of the PSP, the 70,286 PSP
options which vested were exercised
and are subject to retention in trust for
a period of five years.

Mr. Ledwidge held 23,636 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 2021
remuneration table (adjusting the
€102,000 previously disclosed last year
which was estimated based on average
prices in the last quarter of 2021). Under
the rules of the PSP, the 23,636 PSP
options which vested were exercised
and 15,364 are subject to retention in
trust for a period of five years.

The share price at date of vesting was
€3.34.

(iii) Grants during 2022
The long term incentive scheme
applicable for the 2022 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 11 March 2022, the Committee granted
options over 1,552,500 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 €3.36 were
416,500 and 178,500 respectively.

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)

Irish Continental Group105

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

12%

13%

20%

100%

130%

Median

Top
Quartile

Adjusted diluted
earnings per
share

Return on
average capital
employed

Free cash flow
ratio

Total
shareholder
return

The Committee noted in setting the
above targets that EPSd for financial
year 2021 was negative, largely due to
the continuing effect of government
imposed travel restrictions. In

recognition of the continuing
uncertainty around the pattern of
returning passengers following the
removal of these restrictions and the
challenges in setting a base EPSd level,
the Committee agreed in relation to
the 2022 grants to set base EPSd at
0.1 cent per share. This was consistent
with the approach followed in the prior
year. 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
Group., Ryanair Group, 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 2022 and whether there were
circumstances which may create a
perception that participants benefitted
from ‘windfall gains’. The Committee
noted that in the period leading up to
the award date that there was political

uncertainty affecting financial markets
generally which was not specific to the
Company. The Committee further noted
that the price used was calculated as
per the rules of the scheme and that
the timing of the grants was consistent
with that of previous grant dates. The
Committee did not deem it appropriate
to adjust the award amounts having
considered these circumstances. 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 2022 PSP awards granted were
calculated based on a share price of
€3.36, the closing share price on the day
preceding the award date. In 2021, the
PSP awards granted were calculated
based on a share price of €4.26.

Options Held
Details of movements in share options
granted to Directors under the
Performance Share Plan and the legacy
Share Option Plan are set out in the
table below:

E. Rothwell

Option Type

Unvested

Date of
Grant

31-Dec-21

Granted

Exercised

Lapsed

31-Dec-22

Option
Price (€)

Earliest
Vesting Date

Latest
Expiry Date

Performance Share Plan 1

5-Mar-19

226,000

Performance Share Plan 2

6-Mar-20

297,000

Performance Share Plan 2

12-Mar-21

272,000

Performance Share Plan 2

11-Mar-22

- 416,500

Vested but not yet exercised 5-Mar-15

700,000

(70,286)

(155,714)

0.065

297,000

272,000

0.065 6-Mar-23

0.065 12-Mar-24

416,500

0.065 11-Mar-25

700,000

3.58

- 4-Mar-25

D. Ledwidge

Option Type

Unvested

1,495,000 416,500 (70,286)

(155,714) 1,685,500

Date of
Grant

31-Dec-21

Granted

Exercised

Lapsed

31-Dec-22

Option Price
(€)

Earliest
Vesting Date

Latest
Expiry Date

Performance Share Plan 1

05-Mar-
19

76,000

Performance Share Plan 2

6-Mar-20

122,000

Performance Share Plan 2

12-Mar-21

111,500

Performance Share Plan 2

11-Mar-22

178,500

Vested but not yet exercised 5-Mar-15

150,000

(23,636)

(52,364)

0.065

122,000

0.065 6-Mar-23

111,500

0.065 12-Mar-24

178,500

150,000

0.065 11-Mar-25

3.58

- 4-Mar-25

459,500 178,500 (23,636)

(52,364) 562,000

These are expected to vest during 2023 at a vesting rate of 67% based on performance to 31 December 2022 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.

Corporate Governance2022 Annual Report and Financial Statements106

Report of the Remuneration Committee
Continued

Remuneration for executive
Directors in 2023
The Committee will continue to apply
the existing Remuneration Policy,
approved by shareholders in May 2021,
during financial year 2023.

Base Salary
The Committee conducted a review of
the salaries of the CEO and CFO against
market competitive levels for similar
sized ISEQ and FTSE companies during
2021. Taking into account the results of
this review and the performance of the
executive Directors, salary levels were
reset effective from 1 January 2022.

The Committee noted the continuing
leadership in managing the Group’s
businesses post pandemic and the
continued expansion of operations.
Nevertheless, the Committee noted
that these factors had been considered
in last year’s review and that a further
in-depth review of salaries was not
warranted at this time. In recognition
of the general level of salary increases
awarded to the Group’s employees
based in Ireland, the Committee
awarded an increase in salaries of 2.5%
over existing levels to each of the CEO
and CFO. These increases are effective
from 1 January 2023.

Pension arrangements and other
benefits
Pension arrangements and other
benefits will be unchanged from 2022.

Annual Bonus
The Committee following review has
retained the long-standing legacy CEO
bonus arrangements for FY2023. The
Committee remains satisfied that the
outcomes reflect Group performance
under this arrangement, in line with its
straightforward alignment structure
between Group performance and
payouts, with a particular focus on EPS.

levels, 10% on ESG related measures
and 15% on personal objectives. The
Committee retains discretion to adjust
the formulaic outcome.

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
2022 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.

The market value of the holdings of
executive Directors and executive
management at 31 December 2022 as
a multiple of base salary at that date
are shown in the following table:

Salary multiple
held

Eamonn Rothwell

186.5 times

David Ledwidge

3.1 times

Other executive
management

7.2 times

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 2022, any
award of bonus is weighted 75% on the
Group achieving stretching financial
targets, benchmarked against budget

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. During 2022, the Committee

reviewed the level of fees payable to
non-executive Directors which were last
adjusted in January 2017. The Committee
considered the increase in scale of
the Group’s operation since then,
the increased responsibilities of non-
executive Directors and the fee level paid
by equivalent sized quoted companies.
Following this review, the Committee
submitted a recommendation to
increase the fee payable to the Board
Chairman from €125,000 to €150,000
per annum and other non-executive
Directors from €50,000 to €65,000.
These fee levels were approved by the
Board, effective from 1 January 2023.

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
2023 AGM.

Director’s Service contracts
Non-executive Directors have been
appointed under letters of appointment
for periods of three years subject to
annual re-election at the AGM.

In respect of Mr. Rothwell, CEO, there is
an agreement between the Company
and Mr. Rothwell that, for management
retention reasons, in the event of a
change in control of the Company
(where over 50% of the Company is
acquired by a party or parties acting
in concert, excluding Mr. Rothwell)
he will have the right to extend his
notice period to two years or to receive
remuneration in lieu thereof.

This amendment to Mr. Rothwell’s
contract of employment was agreed by
the Remuneration Committee a number
of years ago to retain and motivate
the CEO during a series of attempted
corporate takeover actions. No future
executive contracts will include similar
change of control provisions.

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

Irish Continental Group107

law, the maximum amount payable
upon termination is limited to 12
months equivalent.

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 2022, the total number of
options granted, net of options lapsed
amounted to 3.9% of the issued share
capital of the Company at 31 December
2022.

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 2022
is €1,149,000 (2021: €478,000).

Clawback Policy
The Committee recognises that there
could potentially be circumstances
in which performance related pay
(either annual bonuses, and / or longer
term incentive awards) is paid based
on misstated results or inappropriate
conduct resulting in material damage
to the Company. Whilst the Company
has robust management and internal
controls in place to minimise any
such risk, the Committee has in place
formal clawback arrangements for
the protection of the Company and its
investors. The clawback of performance
related pay comprising the annual
bonus and PSP awards would apply in
certain circumstances including;

• a material misstatement of the
Company’s 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.

Post-employment holdings
The Committee, in designing its
performance pay initiatives, as
explained below, has ensured that
executive Directors and senior
managers contractually retain an
appropriate level of shareholding post-
employment. For the past ten 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
from date of grant). 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 2022,
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 2023
and January 2028.

Corporate Governance2022 Annual Report and Financial Statements108

Report of the Remuneration Committee
Continued

Eamonn Rothwell

David Ledwidge

Other executive management

No. shares
Held in Trust

Value
€m

Salary multiple
held

Weighted
release profile

Release timeframe

1,682,753

255,259

1,136,247

7.2

1.1

4.9

10.3 times

2.1 years

Jan 2023 to Jan 2028

2.7 times

3.5 years

Jan 2023 to Jan 2028

4.6 times

3.5 years

Jan 2023 to Jan 2028

The Committee believes that while not setting an absolute post-employment
equity retention requirement, that the above arrangements achieve the objective
of Provision 36 of the UK Corporate Governance Code and is unique in that it is an
enforceable contractual commitment compared to general market practice.

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;

Eamonn Rothwell

David Ledwidge

John B. McGuckian

2022

2021

2020

2019

2018

168.6% (27.7%) (44.0%) 0.0% (74.3%)

76.9%

0.5% 18.0% 7.2% (57.0%)

0.0% 0.0%

0.0% 0.0% 0.0%

External Advisers
The Committee’s independent advisor
during the year was Ellason LLP, who
provide advice and external market
perspectives on remuneration for
the Executive Directors. During the
year, this included advice on general
remuneration developments 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 2022 to the date of this report.

Market price of shares
The closing price of an ICG Unit on
Euronext Dublin on 31 December
2022 was €4.28 and the range during
the year was €3.20 to €4.75, with an
average daily closing price of €4.03.

Non-Executive Directors

0.0% 0.0%

0.0% 0.0% 0.0%

FTE Employee

ISEQ

ICG TSR

4.2% 24.2% (4.2%)

2.0% (10.4%)

(15.8%)

14.5%

2.7% 31.1% (22.1%)

(2.1%) 0.6% (7.0%)

17.2% (24.6%)

Dan Clague
Chair of the Remuneration Committee
8 March 2023

The payments to Directors and employees include base salaries, overtime,
allowances, bonuses, pension costs, other benefits and Directors’ fees paid to or
on behalf of employees and Directors together with profits earned on the exercise
of share options but exclude employer costs expensed to the Income Statement
relating to social welfare contributions.

Irish Continental GroupReport of the Directors

109

The Directors present their Report
together with the audited Financial
Statements of the Group for the
financial year ended 31 December 2022.

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 124 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 73. 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 recommenced the
payment of dividends during financial
year 2022, returning €24.2 million to
shareholders. The Company is proposing
to pay a final dividend in respect of the
financial year ended 31 December 2022
of 9.45 cent per ICG Unit on 9 June 2023
to shareholders on the register at the
close of business on 14 May 2023. The
cumulative payment to all shareholders
in respect of this dividend is estimated at
€16.1 million. Irish dividend withholding
tax will be deducted where applicable.
Payment of this dividend is subject to
the approval of shareholders at the AGM
scheduled for 11 May 2023.

The Company has adopted a progressive
approach to returning cash to
shareholders, through a combination
of dividends and share buybacks. No
dividends were paid during the years
ended 31 December 2021 and 2020 due
to the effects of the Covid-19 pandemic
on the financial outturn. The Company
during financial year 2022 bought

back 12,006,403 (2021: 4,565,000) of
its shares, representing 6.5% (2021:
2.4%) of its issued share capital at the
beginning of the financial year for a
total consideration of €49.2 million
(2021: €19.8 million). Further details are
contained at note 19 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 2022, the Company’s
retained earnings amounted to €111.0
million, substantially 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 2023 AGM and offer themselves
for re-election. Biographical details of
the Directors are set out on pages 76
to 77 of this report and the result of the
annual board evaluation is set out on
page 86.

Éimear Moloney joined the Board on 25
August 2022 and John Sheehan retired
from the Board on 11 November 2022.

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 36 to 59.

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 2023,
the principal risks and uncertainties
facing the Group (pages 65 to 69), the
Group’s 2023 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 continued in various forms
throughout the period to January
2022 had a material effect on the
Group’s financial results in that period.
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. Following the
removal of the last of these restrictions
in January 2022, passenger volumes
have returned, though at levels less
than 2019, the last comparative full year
pre-pandemic.

The Group’s RoRo, LoLo, chartering
and port stevedoring services which
were not materially affected by the
pandemic effects have continued
to operate largely in line with
expectations. The Group generated
cash from operations of €132.0 million
(2021: €67.0 million) in financial
year 2022, with free cash flow after
maintenance capital expenditures of

Corporate Governance2022 Annual Report and Financial Statements110

Report of the Directors
Continued

€108.0 million (2021: €44.3 million).
The Group retained cash balances and
committed undrawn facilities at 31
December 2022 of €67.4 million. The
leverage covenant level at 31 December
2022 calculated in accordance with
the lending agreements, was 1.2 times
EBITDA, within maximum permitted
levels of 3 times.

In the period from 1 January 2023
up to the date of the approval of the
financial statements, trading has been
performing satisfactorily and largely
within expectation.

In making their going concern
assessment, the Directors have
considered a number of trading
scenarios including lower trading
activity in light of the current economic
uncertainty. This modelling assumed
maintenance of a full schedule of
services 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 2024.

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 65 to 69. 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.

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.

Directors’ Compliance Statement
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.

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 2022, 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

• 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.

International Financial Reporting
Standards
ICG presents its Financial Statements
in accordance with International
Financial Reporting Standards
(IFRS) as adopted by the European
Union. The Group has adopted all
of the new and revised Standards
and Interpretations issued by the
International Accounting Standards
Board (IASB) and the International
Financial Reporting Interpretations
Committee (IFRIC) of the IASB that are
relevant to its operations and effective
for accounting periods beginning on
1 January 2022 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 65
to 69.

Irish Continental Group
111

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 8 March 2023 and as at 31 December 2022 were as follows:

Beneficial Holder as Notified

Eamonn Rothwell

8 March 2023

31 December 2022

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

30,388,085

17.7%

30,388,085

Wellington Management Company, LLP

18,205,979

10.6%

18,816,956

Kinney Asset Management, LLC

11,606,002

6.7%

11,606,002

Marathon Asset Management, LLP

10,899,056

6.3%

10,899,056

Ameriprise Financial Inc.

FMR, LLC

Brewin Dolphin Wealth Management

6,517,249

6,229,035

5,895,833

3.8%

3.6%

3.4%

7,633,033

6,229,035

5,895,833

17.7%

11.0%

6.7%

6.3%

4.4%

3.6%

3.4%

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 2022 and 1 January 2022 all of which were beneficial, were as follows:

Director

John B. McGuckian

Eamonn Rothwell

David Ledwidge

John Sheehan (resigned: 11 November 2022)

Lesley Williams

Dan Clague

Éimear Moloney (appointed: 25 August 2022)

Company Secretary

Thomas Corcoran

ICG Units are explained on page 196 of this report.

31/12/2022
ICG Units

01/01/2022
ICG Units

31/12/2021
Share Options

01/01/2021
Share Options

296,140

30,496,605

30,095,384

1,685,500

1,495,000

261,757

149,968

562,000

459,500

90,000

10,000

388,623

272,780

350,500

506,000

Auditors
KPMG were appointed auditor by the
shareholders voting on an ordinary
resolution tabled at the AGM held
on 12 May 2021 and have expressed
their willingness to remain in office.
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 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 auditor.

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 78 to 90 and is incorporated
into this Report by cross reference.

The Group has established an Audit
Committee whose Report is included
at pages 91 to 94.

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 18 to 20 and are incorporated
into this report by cross reference.

Corporate Governance2022 Annual Report and Financial Statements112

Report of the Directors
Continued

during 2023 through the leveraging
of our recent investments and the
continued support of all customers.

Events after the Reporting Period
No events have occurred between
31 December 2022 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 2022 was
approved by the Directors on 8 March
2023. 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 2023, will be notified to
shareholders during April 2023.

On behalf of the Board

Eamonn Rothwell,
Director

David Ledwidge,
Director

8 March 2023

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

Future Developments
2022 was a year of progress with a
return to profitability following the
challenges presented in the two
previous years due to the effects
of the Covid-19 pandemic on our
passenger business. The improvement
of passenger markets through 2022
following the lifting of travel restrictions
earlier in the year has provided
momentum to an expected recovery to
pre-pandemic levels. We look forward
to the Ferries Division benefiting from
this passenger growth together with
the benefit of our increased scale
following the recent expansion of
services on the Dover – Calais route.

In our Container and Terminal
business, the recent and ongoing
investment in capacity expansion and
plant modernisation at our container
terminals will provide a platform
for both growth and more efficient
operations at our Dublin terminal. This
will be further aided by the operations
at our new Dublin Inland Port facility
which commenced during 2022.

We note the ever increasing
expectations and regulatory
requirements to reduce the effects of
our operations 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. We remain committed to our
decarbonization targets set out in the
Sustainability and ESG Report.

While geopolitical events have given
rise to inflationary pressures and
increased volatility in fuel prices, our
policy is to pass these through the
logistics chain in the form of increased
rates. While there is some uncertainty
around economic growth rates, we
look forward to continued growth

Irish Continental GroupDirectors’ Responsibility Statement

113

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 and in accordance with the
provisions of the 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.

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 76
and 77 of this Annual Report, confirm
that, to the best of each person’s
knowledge and belief:

• The Group financial statements,

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 www.icg.ie.
Legislation in the Republic of Ireland
concerning the preparation and
dissemination of financial statements
may differ from legislation in other
jurisdictions.

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 2022 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,
Director

David Ledwidge,
Director

Corporate Governance2022 Annual Report and Financial Statements114

116
124
125
126
127
129
130

FINANCIAL
STATEMENTS

Irish Continental Group115

Financial Statements2022 Annual Report and Financial Statements116

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 2022 set out on pages 124
to 193, contained within the reporting
package 635400FQKB6QXERQOC74-
2022-12-31-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 their
preparation 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,
as applied in accordance with the
provisions of the Companies Act 2014.

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
2022 and of the Group’s profit 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 IFRS as adopted
by the European Union, as applied
in accordance with the provisions of
the Companies Act 2014; 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.
The period of total uninterrupted
engagement is the year ended 31
December 2022. 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. 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:

• Understanding the Group’s

process around the going concern
assessment performed by
management;

• Agreeing the underlying cash flow
projections to Board approved
forecasts, understanding how these
forecasts are compiled;

• Testing of the clerical accuracy

of management’s going concern
model;

• 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;

• 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.

Irish Continental Group117

Secondly, the Group is subject to many
other laws and regulations where the
consequences of non-compliance
could have a material effect on
amounts or disclosures in the financial
statements, for instance through
the imposition of fines or litigation.
We identified the following areas as
those most likely to have such an
effect: health and safety, anti-bribery,
employment law, environmental
regulation, maritime law, liquidity and
certain aspects of company legislation.

Auditing standards limit the required
audit procedures to identify non-
compliance with these non-direct
laws and regulations to inquiry of the
directors and inspection of regulatory
and legal correspondence, if any. These
limited procedures did not identify
actual or suspected non-compliance.

We assessed events or conditions
that could indicate an incentive or
pressure to commit fraud or provide
an opportunity to commit fraud. As
required by auditing standards, we
performed procedures to address
the risk of management override of
controls and the risk of fraudulent
revenue recognition. We did not
identify any additional fraud risks.

• Inquiring of directors, the Audit
Committee and internal audit
as to the Group’s policies and
procedures to prevent and detect
fraud, including the internal audit
function, and the Group’s channel for
“whistleblowing”, as well as whether
they have knowledge of any actual,
suspected or alleged fraud;

• Inquiring of directors and the
Audit Committee regarding
their assessment of the risk that
the financial statements may
be materially misstated due to
irregularities, including fraud;

• Inspecting selected regulatory and

legal correspondence;

• Reading Board and Audit Committee

minutes;

• Considering remuneration incentive
schemes and performance targets
for management; and

• Performing planning analytical

procedures to identify any usual or
unexpected relationships.

We discussed identified laws and
regulations, fraud risk factors and the
need to remain alert among the audit
team.

Firstly, the Group is subject to laws
and regulations that directly affect
the financial statements including
companies and financial reporting
legislation, taxation legislation etc. We
assessed the extent of compliance with
these laws and regulations as part of
our procedures on the related financial
statement items, including assessing
the financial statement disclosures
and agreeing them to supporting
documentation when necessary.

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.

Our responsibilities and the
responsibilities of the directors with
respect to going concern are described
in the relevant sections of this report.

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.

Detecting irregularities including
fraud
We identified the areas of laws and
regulations that could reasonably be
expected to have a material effect on
the financial statements and risks of
material misstatement due to fraud,
using our understanding of the entity’s
industry, regulatory environment and
other external factors and inquiry
with the directors. In addition, our risk
assessment procedures included:

• Inquiring with the directors and
other management as to the
Group’s policies and procedures
regarding compliance with laws and
regulations, identifying, evaluating
and accounting for litigation and
claims, as well as whether they have
knowledge of non-compliance or
instances of litigation or claims;

Financial Statements2022 Annual Report and Financial Statements118

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

In response to the fraud risks, we also
performed procedures including:

• Identifying journal entries to test

based on risk criteria and comparing
the identified entries to supporting
documentation;

• Evaluating the business purpose of
significant unusual transactions;

• Assessing significant accounting

estimates for bias; and

• Assessing the disclosures in the

financial statements.

As the Group is regulated, our
assessment of risks involved
obtaining an understanding of the
legal and regulatory framework that
the Group operates and gaining
an understanding of the control
environment including the entity’s
procedures for complying with
regulatory requirements.

Owing to the inherent limitations
of an audit, there is an unavoidable
risk that we may not have detected
some material misstatements in the
financial statements, even though we
have properly planned and performed

our audit in accordance with auditing
standards. For example, the further
removed non-compliance with laws
and regulations (irregularities) is from
the events and transactions reflected
in the financial statements, the less
likely the inherently limited procedures
required by auditing standards would
identify it.

In addition, as with any audit, there
remains a higher risk of non-detection
of irregularities, as these may
involve collusion, forgery, intentional
omissions, misrepresentations, or the
override of internal controls. We are
not responsible for preventing non-
compliance and cannot be expected
to detect non-compliance with all laws
and regulations.

Key audit matters: our assessment of
risks of material misstatement
Key audit matters are those matters
that, in our professional judgement,
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 (unchanged from 2021):

Group key audit matters
Valuation of vessels – Group €320.3m
(2021: €294.1m) and Company €138.8m
(2021: €144.4m)

Refer to note 2 (accounting policy),
note 3 (Critical accounting judgements
and key sources of estimation
uncertainty) and notes 12 and 39
(Group and Company financial
disclosures respectively)

Irish Continental Group119

The key audit matter

How the matter was addressed in our audit

Property, plant and equipment
amounted to €362.3 million (Company:
€139.1 million) as of 31 December 2022,
of which €320.3 million (Company:
€138.8 million) related to owned
vessels. The vessel-related depreciation
charge for the year ended 31 December
2022 was €34.7 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 the
recoverable value of the Group’s
vessels as part of the impairment
review, including the selection of
key assumptions regarding future
revenue and future costs.

We obtained and documented an understanding of the Group’s process
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 1) 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 benchmarks relating to the lives of ships that were
scrapped during the financial year, and

• the estimated residual values of vessels to industry benchmarks relating to

the value of scrap metal.

In respect of part 2) 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.

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 vessels and the routes
they are used for, and the transferability of the vessels between routes;

• Assessing the reasonability of the key assumptions made by the Group

regarding future revenue and future costs, including in particular container
vessel charter rates and fuel 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 non key 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, including those relating to climate change
mitigation measures and other related regulations;

• 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.

Financial Statements2022 Annual Report and Financial Statements120

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 performed sensitivity analysis over the Group’s key assumptions with
regard to cash flows and discount rate, to assess the impact of changes to
those key assumptions on the Group’s determination of the recoverability of
vessels.

We inspected asset valuations obtained from experts engaged by the
Group and considered whether they supported the Group’s assessment of
impairment at 31 December 2022.

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 the recoverable value of vessels including key
assumptions regarding future revenue and future costs were reasonable. We
found the related disclosures to be appropriate.

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 31 (financial disclosures)

Valuation of the net defined benefit pension asset of €33.2m consisting of pension assets of €124.8m and liabilities of
€91.6m (2021 – net pension asset of €5.3m consisting of pension assets of €145.8m and liabilities of €140.5m)

The key audit matter

How the matter was addressed in our audit

The Group operates a number of
defined benefit pension schemes.

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.

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 key
assumptions applied.

We engaged internal KPMG actuarial specialists to inspect the valuation
assessments and key assumptions applied throughout the Group.

We made inquiries of management to understand the key assumptions made
in calculating the net defined benefit pension asset and we tested the design
and implementation of the relevant control in place.

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. The most significant judgements related to the evaluation
of the appropriateness of the discount rates assumptions. We also assessed
the inflation rates and mortality/life expectancies used. This included a
comparison of these assumptions against externally available benchmarks.
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.

Irish Continental Group121

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 €16.5m (2021: €14.4m)

Refer to note 37 (accounting policy) and note 41 (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 by
comparing the carrying value of investments in the Company’s Balance Sheet
to the net assets of the subsidiary financial statements and to the market
capitalisation of the Company.

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 and Company financial
statements as a whole was set at
€2.85m (2021: €2.5m) and €1.5m (2021:
€1.5m) respectively, determined with
reference to benchmarks of profit
before tax (2021: total revenue) for
the Group and total assets for the
Company (of which it represents 5%
of profit before tax (2021: 0.75% of
total revenue) and 0.9% (2021: 0.5%)
respectively.

In applying our judgement to
determine the most appropriate
benchmark, the factor, which had
the most significant impact was our
understanding that the principal item
on which the attention of the users
of the Group’s financial statements
tends to be focused on is, profit
before tax. Profit before tax is the
principal item used by Management

in assessing performance. In applying
our judgement in determining the
percentage to be applied to the
benchmark, we considered that the
Group has a high public profile and
operates in a regulated environment
and has debt arrangements which
include covenants linked to operating
results.

We consider profit before tax to be
the most appropriate benchmark for
2022 and the most representative
benchmark for the financial
performance of the Group. This
represents a change from the
prior year. We used total revenue
as the benchmark in 2021 due
to the impact of Covid-19 on the
Group’s performance. However,
as performance fluctuations and
associated uncertainties eased in 2022,
we reverted to profit before tax as
the most appropriate benchmark for
investors.

In applying our judgement in
determining the most appropriate
benchmark for Company materiality,
we considered the elements of the
financial statements and the nature
of the Company and the fact that the
Company is an investment holding
company for the Group.

In applying our judgement in
determining the percentage to
be applied to the benchmark, we
considered that the Company is listed
and has a high public profile.

Performance materiality for the Group
financial statements and Company
financial statements was set at 75%
(2021: 75%) of materiality for the
financial statements as a whole, which
equates to €2.1m (2021: €1.9m) and
€1.25m (2021: €1.25m) respectively.
We use performance materiality to
reduce to an appropriately low level
the probability that the aggregate
of uncorrected and undetected
misstatements exceeds overall

Financial Statements2022 Annual Report and Financial Statements122

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

materiality. In applying our judgement
in determining performance
materiality, we considered a number
of factors including; the low number
and value of misstatements detected
and the low number and severity
of deficiencies in control activities
identified in the prior year financial
statement audit.

We reported to the Audit Committee
any corrected or uncorrected identified
misstatements exceeding €150,000
(2021: €150,000), in addition to other
identified misstatements that
warranted reporting on qualitative
grounds.

Of the Group’s 12 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 €27,000 to €2.2 million.
The Group audit team were also
auditors to all of the Group’s significant
components.

Our audit was undertaken to
the materiality and performance
materiality level specified above
and was all performed by a single
engagement team in Dublin.

Other information
The directors are responsible for
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;

• in our opinion, the directors’ report
has been prepared in accordance
with the Companies Act 2014.

Corporate Governance Report
We have reviewed the directors’
statement in relation to going concern,
longer-term viability, that part of the
Corporate Governance Report 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 by the Listing Rules of
Euronext Dublin and the UK Listing
Authority.

Based on the work undertaken as
part of our audit, we have concluded
that each of the following elements of
the Corporate Governance Report is
materially consistent with the financial
statements and our knowledge
obtained during the audit:

• Directors' statement with regards

the appropriateness of adopting the
going concern basis of accounting
and any material uncertainties
identified set out on page 93;

• Directors’ explanation as to their

assessment of the Group's prospects,
the period this assessment covers
and why the period is appropriate set
out on page 93;

• Director’s statement on whether it
has a reasonable expectation that
the Group will be able to continue in
operation and meets its liabilities set
out on page 93;

• Directors' statement on fair,

balanced and understandable
and the information necessary for
shareholders to assess the Group's
position and performance, business
model and strategy set out on page
93;

• Board’s confirmation that it has

carried out a robust assessment of
the emerging and principal risks and
the disclosures in the annual report
that describe the principal risks and
the procedures in place to identify
emerging risks and explain how they
are being managed or mitigated set
out on page 62;

• Section of the annual report that

describes the review of effectiveness
of risk management and internal
control systems set out on page 86;
and;

• Section describing the work of the

Audit Committee set out on page 91.

The Listing Rules of Euronext Dublin
also requires us to review certain
elements of disclosures in the report to
shareholders by the Board of Directors’
remuneration committee.

We have nothing to report in this
regard.

Irish Continental Group123

In addition as required by the
Companies Act 2014, we report, in
relation to information given in the
Corporate Governance Report on
pages 78 to 90, that:

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:

if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
financial statements.

A fuller description of our
responsibilities is provided on IAASA’s
website at https://iaasa.ie/publications/
description-of-the-auditors-
responsibilities-for-the-audit-of-the-
financial-statements/.

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 this 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
D02 DE03

9 March 2023

• 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

Report 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 Report.

We also report that, based on
work undertaken for our audit,
the information required by the
Act is contained in the Corporate
Governance Report.

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 purposes 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.

• 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 2021.

We have nothing to report in this
regard.

Respective responsibilities and
restrictions on use
Responsibilities of directors for the
financial statements
As explained more fully in the directors’
responsibilities statement set out on
page 113, 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 for the audit
of the financial statements
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 an auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (Ireland) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material

Financial Statements2022 Annual Report and Financial Statements

124

Irish Continental Group

Consolidated Income Statement
for the year ended 31 December 2022

Revenue

Depreciation and amortisation

Employee beneﬁts expense

Other operating expenses

Operating proﬁt / (loss)

Finance income

Finance costs

Proﬁt / (loss) before tax

Income tax expense

Proﬁt / (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

2022

€m

584.9

(60.5)

(26.8)

(430.9)

66.7

0.1

(4.3)

62.5

(2.7)

2021

€m

334.5

(52.5)

(20.8)

(261.4)

(0.2)

0.1

(4.0)

(4.1)

(0.8)

59.8

(4.9)

33.6

33.2

(2.6)

2022 Annual Report and Financial Statements

Financial Statements

125

Consolidated Statement of Comprehensive Income
for the year ended 31 December 2022

Proﬁt / (loss) for the ﬁnancial year

Items that may be reclassiﬁed subsequently to proﬁt or loss:

Currency translation adjustment

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

Actuarial gain on deﬁned beneﬁt obligations

Deferred tax on deﬁned beneﬁt obligations

Other comprehensive income for the ﬁnancial year

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

Notes

31 viii

2022

€m

59.8

2021

€m

(4.9)

(2.5)

1.3

29.4

(2.4)

24.5

84.3

7.1

(0.9)

7.5

2.6

126

Irish Continental Group

Consolidated Statement of Financial Position
as at 31 December 2022

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

31 iv

2022

€m

2021

€m

362.3

328.2

1.9

41.4

33.6

10.5

0.1

1.9

57.2

6.7

13.6

0.1

449.8

407.7

5.2

79.9

39.0

124.1

573.9

11.1

20.5

(8.2)

237.4

260.8

160.4

30.7

3.6

1.1

0.4

196.2

7.3

11.7

96.2

1.7

116.9

313.1

573.9

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

The Financial Statements were approved by the Board of Directors on 8 March 2023 and signed on its behalf by:

Eamonn Rothwell
Director

David Ledwidge
Director

2022 Annual Report and Financial Statements

Financial Statements

127

Consolidated Statement of Changes in Equity
For the year ended 31 December 2022

Capital

€m

Undenominated

Capital

Options

Translation

Premium

Reserves

Reserve

Retained

Earnings

€m

Total

€m

Balance at 1 January 2022

11.9

20.4

Proﬁt for the ﬁnancial year

Other comprehensive income

Total comprehensive income for
the ﬁnancial year

Employee share-based payments
expense

Share issue

Dividends

Share buyback

Settlement of employee equity
plans through market purchase

Transferred to retained earnings on
exercise of share options

Reserve movements in the year

Balance at 31 December 2022

(0.8)

11.1

0.1

20.5

€m

7.8

0.8

8.6

€m

4.7

3.0

(1.4)

1.6

6.3

(20.6)

225.5

249.7

(2.5)

59.8

27.0

59.8

24.5

(2.5)

86.8

84.3

(2.5)

(24.2)

(49.2)

3.0

0.1

(24.2)

(49.2)

(2.9)

1.4

11.9

11.1

(23.1)

237.4

260.8

128

Irish Continental Group

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

Balance at 1 January 2021

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

Balance at 31 December 2021

Capital

€m

12.2

(0.3)

11.9

Undenominated

Capital

Options

Translation

Premium

Reserves

Reserve

Retained

Earnings

€m

19.7

0.7

20.4

€m

7.5

0.3

7.8

€m

5.1

1.3

(1.7)

(0.4)

€m

Total

€m

(21.9)

243.3

265.9

1.3

(4.9)

6.2

1.3

(4.9)

7.5

2.6

1.3

0.7

(19.8)

(1.0)

1.7

(1.0)

1.3

(17.8)

(16.2)

4.7

(20.6)

225.5

249.7

2022 Annual Report and Financial Statements

Financial Statements

129

Consolidated Statement of Cash Flows
for the financial year ended 31 December 2022

Proﬁt / (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

Share-based payment expense

(Decrease) / 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

Purchases of property, plant and equipment and intangible assets

Net cash outﬂow from investing activities

Cash ﬂow from ﬁnancing activities

Share buyback

Dividends

Repayments of leases liabilities

Repayments of bank loans

Drawdown of bank loans

Settlement of employee equity plans through market purchases

Proceeds on issue of ordinary share capital

Net cash outﬂow from ﬁnancing activities

Net increase / (decrease) 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

2022

€m

59.8

4.2

2.7

1.1

38.5

0.4

21.6

3.0

(0.5)
1.2

132.0

(1.7)

(4.0)

126.3

3.0

(75.7)

(72.7)

(49.2)

(24.2)

(21.0)

(7.6)

52.0

(2.9)

0.1

2021

€m

(4.9)

3.9

0.8

0.6

31.9

0.3

20.3

1.3

1.1
11.7

67.0

(0.8)

(8.4)

57.8

2.8

(0.3)

(55.2)

(52.7)

(19.8)

(87.5)

10.0

(1.0)

0.7

(52.8)

(117.4)

0.8

38.5
(0.3)

39.0

(112.3)

150.4

0.4

38.5

130

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
for the financial year ended 31 December 2022

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;
•
• has the ability to use its power to affect its return.

is exposed, or has rights, to variable return from its involvement with the investee; and

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.

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.

2022 Annual Report and Financial Statements

Financial Statements

131

2. Summary of accounting policies (continued)

Standards effective for the Group from 1 January 2022

Standard

Description

Effective date for periods commencing

IFRS 16 (amendment)

IAS 37 (amendments)

Annual Improvements to IFRS
Standards 2018–2020

IAS 16 (amendments)

Covid-19 related rent concessions
beyond 30 June 2021

1 April 2021

Onerous Contracts - Cost of Fulﬁlling a
Contract

1 January 2022

Property, Plant and Equipment -
Proceeds before Intended Use

1 January 2022

IFRS 3 (amendments)

Reference to the Conceptual Framework 1 January 2022

The above amended standards have been applied in the preparation of the ﬁnancial statements for the year ended 31
December 2022 but did not have any material impact on the results or ﬁnancial position of the Group.

Standards effective for the Group from 1 January 2023 or later

Standard

Description

Effective date for periods commencing

IAS 1 (amendments)

IFRS 17

Classiﬁcation of liabilities as current or
non-current

1 January 2023 *

Disclosure of Accounting Policies

1 January 2023

Non-current Liabilities with Covenants

1 January 2023 *

Insurance Contracts

1 January 2023

IAS 8 (amendments)

Deﬁnition of Accounting Estimates

1 January 2023

IAS 12 (amendments)

Deferred Tax related to assets and
liabilities arising from a single
transaction

1 January 2023

IFRS 16 (amendments)

Lease Liability in a Sale and Leaseback

1 January 2023 *

IFRS 10 Consolidated Financial
Statements and IAS 28 Investments in
Associates and Joint Ventures
(amendments)

* Not yet endorsed by the EU

Sale or Contribution of Assets between
an Investor and its Associate or Joint
Venture

TBD *

The above standards and amendments to standards have not been applied in the preparation of the ﬁnancial statements
for the year ended 31 December 2022. 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 2022:

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.

132

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

2. Summary of accounting policies (continued)

The principal activities from which the Group generates its revenue are set out below.

Ferries Division

Product or

Nature and satisfaction of performance obligation

Service

Passenger
Transport

Passenger revenue is recognised over time as services are provided. Contracts are concluded during the
booking process with a high degree of probability of collection of the sales proceeds. Sales proceeds are
recognised as deferred revenue where 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 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.

Onboard
Sales

Revenue from sales in bars and restaurants is recognised at the time of sale. The Group recognises a single
contract for all goods and services in a transaction basket at the time of transaction with payment received
at the same time. There is a single identiﬁable obligation to transfer title with the price ﬁxed at the time of
transaction.

Retail
Concessions

Revenues earned from retail concessions is recognised over time based on declarations received up to the
reporting date. For each concession the Group recognises a single contract involving the grant of a licence
or creation of a right to provide services onboard vessels creating a single identiﬁable obligation. The price is
variable being based on a proﬁt share model.

Container and Terminal Division

Product or

Nature and satisfaction of performance obligation

Service

Container
Shipping

LoLo container shipping revenue is recognised over time as services are provided. Contracts are concluded
during the booking process with a high degree of probability of collection of the sales proceeds. Sales
proceeds are recognised as deferred revenue which are subsequently released to revenue over the time
based on 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 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.

2022 Annual Report and Financial Statements

Financial Statements

133

2. Summary of accounting policies (continued)

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.

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 recognise that element of a contract as a lease in the Statement of Financial Position 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.

134

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

2. Summary of accounting policies (continued)

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.

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.

2022 Annual Report and Financial Statements

Financial Statements

135

2. Summary of accounting policies (continued)

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.

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.

136

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

2. Summary of accounting policies (continued)

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.

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.

2022 Annual Report and Financial Statements

Financial Statements

137

2. Summary of accounting policies (continued)

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 – 2 years

1 – 5 years

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

Other assets
Property, plant and equipment, other than 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 – 100 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.

138

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

2. Summary of accounting policies (continued)

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.

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.

2022 Annual Report and Financial Statements

Financial Statements

139

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 initially 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.

140

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

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 31. 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 1.04% for the Group and 0.33% 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 12.

In relation to one vessel which had reached 25 years from date of construction, the remaining useful life was increased from
ﬁve years to ten years. This decision was taken following a rigorous review which considered the record and condition of the
vessel, expected future regulation including environmental regulations, recent capital expenditure and the result of the
ﬂeet impairment review. The effect of the increase in useful life was to reduce the depreciation charge in the reporting
period by €1.5 million.

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 IAS36: 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 including environmental regulation, shipbuilding costs and carrying value versus market capitalisation of
the Group.

During 2020 and 2021, the Group experienced a 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 were
fully removed in January 2022. The proﬁtability of the Irish Ferries branded operations was materially affected in ﬁnancial
years 2021 and 2020, which was subsequently assessed as an indication of impairment. Having completed a recoverability
assessment at 31 December 2021 and 2020, no impairment charges were recognised.

2022 Annual Report and Financial Statements

Financial Statements

141

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

Following the lifting of all travel restrictions in early 2022, passenger carryings recovered but remained behind pre-
pandemic 2019 levels, which was in line with management expectations as previously modelled in the prior year
recoverability assessments.

The Group revenues are generated from passenger trafﬁc, including tourism, and freight movements between Ireland and
Britain, Ireland and continental Europe and Britain and Continental Europe. The performance of these markets are in turn
dependent to a signiﬁcant degree on macro-economic factors including economic growth both local and global, inﬂation,
interest rates and exchange rates. These same factors feed into our input costs. Current geo-political issues including the
war in Ukraine and post-pandemic recovery have resulted in a signiﬁcant increase in energy costs, leading to higher general
inﬂation, with policy makers increasing interest rates in response. The Group also notes the progress of negotiations
concerning the Northern Ireland Protocol and trade negotiations between the United Kingdom and the European Union.
These have created uncertainty around the short-term economic growth rates in the markets in which the Group operates
and hence the likely growth rates to be achieved in our businesses. While the Group acknowledges that it cannot control
macro-economic factors, it has demonstrated as part of its business model its capacity to pass increased costs through the
logistics chain. Unlike the circumstances of the Covid-19 pandemic, the Group views the current uncertainty as a more
normal part of conducting business.

The Directors also considered known and expected environmental regulation expected over the remaining life of its
existing ﬂeet. While the Group has mapped known requirements against the current status of its ﬂeet, it is not in a position
to cost compliance as in many cases technological solutions are currently not commercially available or developed. Given
the current low rate of renewal of global ﬂeets, partially related to the absence of proven pathways to compliance with new
regulation, the Directors consider that the additional regulation will not lead to accelerated obsolescence of its ﬂeet but
may result in increased costs. The most signiﬁcant item in the short term is the introduction by the EU of an Emissions
Trading System applicable to vessel operators, with a similar scheme expected to be endorsed by the United Kingdom. The
EU system will be effective for CO2 emissions from 1 January 2024, which will require the payment of a levy based on the
volume of emissions. Similar to the actions taken in relation to the IMO2020 regulations which required the consumption of
more expensive fuel oils, the maritime sector has been signalling to the market that the costs of the Emission Trading
Systems will be passed through to customers. Given the experience of the Group with the previous IMO2020 levies, the
Group will be passing through the increased cost of these regulations to our customers.

In the ﬁrst half of 2022, the container vessel charter market performed strongly with charter rates continuing the rise
experienced throughout 2021. However, in the second half of the year, rates plateaued before declining in the last quarter, a
trend which has continued into early 2023. This has created uncertainty around future renewal rates and consequently
likely future market value of vessels.

The Group has undertaken an impairment test to assess the recoverable value of its ﬂeet assets based on the conditions
and information available at the reporting date.

The Group engaged independent shipbroker Simsonship AB and Ernst Russ Shipbrokers GMBH & Co KG to provide
valuations on its ﬂeet. 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 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 ﬂeet was strongly supported by the FVLCOD estimate at 31 December 2022.

Notwithstanding the headroom over carrying value indicated by the FVLCOD estimate, the Group acknowledges the
potential shortcoming limitations of such valuation estimates where there are limited transactions and certain vessels in
the Group’s ﬂeet are 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. Due to the inter-dependence of ferries across routes and transferability of vessels between routes, the Group
considers its ferries to comprise a single cash generation unit. Such inter-dependence is not as evident in respect of the
container vessels due to contractual arrangements and these vessels were individually assessed.

142

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

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

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. Vessels were assigned a terminal value at the end of the
projection period based on the unexpired portion of the year end broker valuations based on a straight line write down of
those valuations over the remaining useful life of the vessel. The starting position for projecting cashﬂows was to use the
2023 budget, as approved by the Board. For 2024 and subsequent years, the passenger revenues and freight revenues were
projected to increase based on market growth assumptions and expected strategic positioning of the Group. Energy costs
were based of crude oil prices of $88 per barrel over the projection period. Fuel price movements are mitigated through
surcharge mechanisms which are included in certain contracts. Charter revenues at next renewal were estimated at rates
below indicative charter rates at 31 December 2022. The cash ﬂows included an allowance for maintenance capital
principally comprising estimated drydock costs based on each vessel’s maintenance plan. The cashﬂow projections for
years 1 to 5 were consistent with the base scenario used in the viability assessment.

Sensitivity on this base scenario was performed for a number of downside scenarios ﬂexing the revenue growth rates, fuel
costs, the discount rate and terminal values. The Directors have concluded that any reasonably possible movement in the
assumptions used in the impairment test at 31 December 2022 would not result in the identiﬁcation of an impairment.

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 2022. The Directors have reviewed the methodology, key assumptions and the
results of the impairment testing as described above.

Consequently, the Directors concluded that the recoverability assessment described above, supported the carrying value of
the Group’s ﬂeet assets and that no provision for impairment was required at 31 December 2022.

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 at the reporting date, the principal risks and uncertainties facing the Group (pages 65 to 69),
the Group’s 2023 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 materially affected the Group’s ﬁnancial results for both years ended 31 December 2021 and 2022. 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. In early 2022, these restrictions were removed and
passenger carrying increased signiﬁcantly over the prior year, broadly in line with the Directors post-recovery expectations.
Other revenue streams from the Group’s RoRo, LoLo, chartering and port stevedoring services had been largely unaffected
by the Covid-19 measures.

The Group generated cash from operations of €132.0 million (2021: €67.0 million) in ﬁnancial year 2022, with free cash ﬂow of
€108.0 million (2021: €44.3 million) after maintenance capital expenditure. The Group retained cash balances and
committed undrawn facilities at 31 December 2022 of €67.4 million. The leverage covenant level at 31 December 2022
calculated in accordance with the lending agreements, was 1.2 times EBITDA, within maximum permitted levels of 3.0
times.

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 assume no re-emergence of community borne infections
resulting in imposition of travel restrictions. Taking into consideration current macro-economic uncertainty around growth
rates in the economies in which we provide services and continuing inﬂationary pressures, the downside has considered
lower activity levels across our businesses. Notwithstanding this lower activity, the downside modelling assumed a full
schedule of services being maintained by the Group. The modelling further assumed that there were no changes to the
Group’s existing contractual ﬁnancing arrangements, with earliest maturities occurring in late 2024. Based on this
modelling, the Directors believe the Group retains sufﬁcient liquidity to operate for at least the period up to March 2024.

2022 Annual Report and Financial Statements

Financial Statements

143

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
2022

External revenue

Inter-segment revenue

Total

2021

External revenue

Inter-segment revenue

Total

Ferries

€m

Container &
Terminal

Inter- segment

€m

364.6

35.3

399.9

161.7

13.8

175.5

220.3

1.2

221.5

172.8

1.2

174.0

(36.5)

(15.0)

Total

€m

584.9

334.5

Inter-segment revenue is at best estimates of prevailing market prices. The inter-segment revenue in the Ferries Division in
2022 of €35.3 million (2021: €13.8 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.

Revenue

Passenger

Freight

Chartering

Total

Ferries

2022

€m

162.7

184.7

17.2

364.6

2021

€m

59.0

94.6

8.1

161.7

Container & Terminal

2022

€m

220.3

2021

€m

172.8

Total

2022

€m

162.7

405.0

17.2

584.9

2021

€m

59.0

267.4

8.1

334.5

For the year ended 31 December 2022, €553.3 million was recognised over time (2021: €323.6 million) and €31.6 million was
recognised at a point in time (2021: €10.9 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 €584.9 million (2021: €334.5 million),
€16.6 million (2021: €7.4 million), all of which relates to the Ferries Division, is recognised under IFRS 16 with the remainder
being recognised as revenue under IFRS 15.

144

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

4. Segmental information (continued)

Ferries

Container & Terminal

Result
Operating proﬁt / (loss)

Finance income

Finance costs

Proﬁt / (loss) before tax

Income tax expense

Proﬁt / (loss) 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 and amortisation

Other operating expenses

Fuel

Labour

Port costs

Haulage

Other

Inter-segment

2022

€m

46.4

0.1

(3.1)

43.4

(1.3)

42.1

422.5

34.5

457.0

66.7

174.6

241.3

215.7

68.1

3.0

49.3

2021

€m

(17.4)

(2.0)

(19.4)

(0.1)

(19.5)

367.0

29.9

396.9

49.8

140.0

189.8

207.1

44.0

22.0

40.6

2022

€m

20.3

(1.2)

19.1

(1.4)

17.7

112.4

4.5

116.9

36.3

35.5

71.8

45.1

6.7

3.2

11.2

2021

€m

17.2

0.1

(2.0)

15.3

(0.7)

14.6

106.4

8.6

115.0

31.7

40.7

72.4

42.6

2.6

16.8

11.9

Ferries

Container & Terminal

2022

€m

104.6

48.3

69.0

61.3

(1.2)

2021

€m

43.1

28.7

44.0

20.7

(1.2)

2022

€m

19.4

12.6

35.2

56.6

60.4

(35.3)

148.9

2021

€m

12.0

9.7

33.7

50.0

34.5

(13.8)

126.1

Total

2022

€m

66.7

0.1

(4.3)

62.5

(2.7)

59.8

534.9

39.0

573.9

103.0

210.1

313.1

260.8

74.8

6.2

60.5

Total

2022

€m

124.0

60.9

104.2

56.6

121.7

(36.5)

430.9

2021

€m

(0.2)

0.1

(4.0)

(4.1)

(0.8)

(4.9)

473.4

38.5

511.9

81.5

180.7

262.2

249.7

46.6

38.8

52.5

2021

€m

55.1

38.4

77.7

50.0

55.2

(15.0)

261.4

Total other operating expenses

282.0

135.3

2022 Annual Report and Financial Statements

Financial Statements

145

4. Segmental information (continued)

Geographic analysis of revenue by origin of booking

Revenue

Ireland

United Kingdom

Netherlands

Belgium
France

Poland

Austria

Other

Total

2022

€m

202.4

142.2

99.7

47.7

20.2

18.8

10.8

43.1

2021

€m

135.6

64.1

73.7

36.7

4.5

0.8

14.6

584.9

334.5

For the year ended 31 December 2022, the ‘other’ revenue balance of €43.1 million did not contain revenue attributable to
any single country in excess of €10.8 million.

Geographic location of non-current assets

At Sea and in transit

Vessels

Containers

On Shore

Ireland

Other

2022

€m

327.9

9.9

337.8

60.2

7.6

67.8

2021

€m

315.8

9.9

325.7

51.6

10.0

61.6

Carrying amount at 31 December

405.6

387.3

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.

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

2022

202

288

2021

197

283

284

146

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

5. Employee beneﬁts expense (continued)

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 31 vii)

Deﬁned contribution pension scheme – pension cost (note 31)
Share-based payment expense (note 30)

2022

€m

19.7

2.0

1.7

0.4
3.0

2021

€m

17.2

(1.4)

1.7

0.3
1.3

Total employee beneﬁt costs incurred

26.8

20.8

There were no staff costs capitalised during the ﬁnancial year (2021: €nil) in relation to management and supervision of the
contracts for the construction of new vessels.

6. Finance income

Net interest income on deﬁned beneﬁt assets (note 31 vii)

Total ﬁnance income

7. Finance costs

Interest on bank overdrafts and loans

Interest on lease obligations

Total ﬁnance costs

2022

€m

0.1

2022

€m

3.0

1.3

4.3

2021

€m

0.1

2021

€m

2.7

1.3

4.0

2022 Annual Report and Financial Statements

Financial Statements

147

8. Income tax expense

Current tax

Deferred tax (note 24)

Total income tax expense for the ﬁnancial year

2022

€m

2.7

2021

€m

0.7

0.1

0.8

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 €2.7 million (2021: €0.7 million) and a
deferred tax charge of €nil (2021: €0.1 million).

The total tax expense for the ﬁnancial year is reconciled to the accounting proﬁt as follows:

Proﬁt / (loss) before tax

Tax at the domestic income tax rate of 12.5% (2021: 12.5%)

Losses not eligible for surrender under loss provisions

Effect of tonnage relief

Difference in effective tax rates

Other items

Income tax expense recognised in the Consolidated Income Statement

2022

€m

62.5

7.8

(6.6)

0.3

1.2

2.7

2021

€m

(4.1)

2.4

(2.2)

0.8

(0.2)

0.8

148

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

9. Proﬁt / (loss) for the year

Proﬁt / (loss) for the year arrived at after charging:

Depreciation of property, plant and equipment (note 12)

Amortisation of intangible assets (note 13)

Depreciation of right-of-use assets (note 14)

Net depreciation and amortisation costs

Fuel

Labour

Port costs

Haulage

Other

Other operating expenses

Foreign exchange losses / (gains)

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 and compliance

2022

€m

38.5

0.4

21.6

60.5

124.0

60.9

104.2

56.6

85.2

430.9

1.9

0.9

2.4

€’000

275.0

40.0

105.0

420.0

2021

€m

31.9

0.3

20.3

52.5

55.1

37.2

77.7

50.0

41.4

261.4

(0.5)

2.2

2.1

€’000

260.0

40.0

45.0

345.0

The portion of the above audit fees attributable to the Company ﬁnancial statements payable to KPMG was €79,000 (2021:
€75,000).

10. Dividends

Final dividend of 9c per ICG Unit RE: ﬁnancial year ended 31 December 2021 (2020: nil)

Interim dividend of 4.64c per ICG Unit RE: the ﬁnancial year ended 31 December 2022 (2021:
nil)

2022

€m

16.1

8.1

24.2

2021

€m

The Board is proposing a ﬁnal dividend of 9.45 cent per ordinary share amounting to €16.1 million out of the distributable
reserves of the Company.

2022 Annual Report and Financial Statements

Financial Statements

149

11. Earnings per share

Shares in issue at the beginning of the year

Effect of shares issued during the year

Effect of share buybacks and cancellation in the year

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

Dilutive effect of employee equity plans where vesting conditions not met

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

Denominator for earnings and diluted earnings per share calculations

2022

’000

2021

’000

182,795

186,980

(5,044)

177,774

2,363

180,137

134

(398)

186,716

Equity awards under the ICG Performance Share Plan are treated initially as contingently issued shares because any shares
which may in future be issued are contingent on the satisfaction of performance conditions set at the date of grant, in
addition to the passage of time. Where the performance conditions have been met at the end of the performance period
and the awards remain unexercised, they are no longer treated as contingently issuable and are treated as issued shares
from the end of the performance period and included in the weighted average number of ordinary shares for the purpose
of basic earnings per share.

Those contingently issuable shares for which the performance period has not yet expired, are included in the weighted
average number of ordinary shares for the purposes of diluted earnings per share unless the performance conditions
governing their exercisability have not been met at the reporting date.

A total of 664,484 (2021: 3,646,828) unvested share options outstanding at the reporting date have been excluded from the
weighted average number of ordinary shares for the purposes of diluted earnings per share as they were either antidilutive
or had not met the performance conditions governing their exercisability.

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 and the effect of non-trading items after tax. The calculation of the basic and
diluted earnings per share attributable to ordinary equity holders of the parent is based on the following data:

Earnings

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

Proﬁt / (loss) for the ﬁnancial year attributable to equity holders of the parent

Net interest income on deﬁned beneﬁt assets (note 31 vii)

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

Basic earnings per share

Diluted earnings per share

Adjusted basic earnings per share

Adjusted diluted earnings per share

2022

€m

59.8

(0.1)

59.7

2022

Cent

33.6

33.2

33.6

33.1

2021

€m

(4.9)

(0.1)

(5.0)

2021

Cent

(2.6)

(2.7)

150

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

12. Property, plant and equipment

Assets under
Construction

Cost
At 1 January 2021

Additions

Reclassiﬁcation

Disposals

Currency adjustment

At 31 December 2021

Additions

Reclassiﬁcation

Disposals

Currency adjustment

At 31 December 2022

Accumulated depreciation

At 1 January 2021

Depreciation charge for the ﬁnancial year

Eliminated on disposals

Currency adjustment

At 31 December 2021

Depreciation charge for the ﬁnancial year

Eliminated on disposals

Currency adjustment

At 31 December 2022

Carrying amount
At 31 December 2022

At 31 December 2021

€m

0.7

0.5

(0.6)

0.6

4.5

(0.5)

4.6

0.6

Vessels

€m

444.2

42.7

0.6

(7.6)

1.4

481.3

62.6

(7.4)

(2.4)

534.1

166.5

27.8

(7.6)

0.5

187.2

34.7

(7.4)

(0.7)

213.8

320.3

294.1

Plant, Equipment
and Vehicles

€m

64.8

2.2

(5.6)

0.2

61.6

5.2

0.5

(1.6)

(0.2)

65.5

46.0

3.4

(5.6)

0.1

43.9

3.3

(1.6)

(0.1)

45.5

20.0

17.7

Land and
Buildings

€m

26.0

0.2

26.2

2.1

Total

€m

535.7

45.6

(13.2)

1.6

569.7

74.4

(9.0)

(2.6)

28.3

632.5

9.7

0.7

10.4

0.5

222.2

31.9

(13.2)

0.6

241.5

38.5

(9.0)

(0.8)

10.9

270.2

17.4

15.8

362.3

328.2

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.

2022 Annual Report and Financial Statements

Financial Statements

151

12. 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 €2.1 million (2021: €1.6 million) decrease/ €2.7 million (2021: €2.0 million) increase in depreciation in the Consolidated
Income Statement, and a €2.1 million (2021: €1.6 million) increase/ €2.7 million (2021: €2.0 million) decrease on the carrying
value of property, plant and equipment in the Statement of Financial Position.

In relation to one vessel which had reached 25 years from date of construction, the remaining useful life was increased from
ﬁve years to ten years. The effect of the increase in useful life was to reduce the depreciation charge in the reporting period
by €1.5 million.

During the years ended 31 December 2022 and 2021, no staff costs or interest costs were included in additions. Assets under
construction at 31 December 2022 of €4.6 million (2021: €0.6 million) relate to construction completed on assets not in
operation at the year end.

13. 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

2022

€m

12.5

0.4

12.9

10.6

0.4

11.0

1.9

2021

€m

11.5

1.0

12.5

10.3

0.3

10.6

1.9

1.2

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.

152

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

14. Right-of-use assets

Cost

At 1 January 2021

Additions

Lease remeasurement
Derecognition on lease expiry

Currency adjustment

At 31 December 2021

Additions

Lease remeasurement

Derecognition on lease expiry

Currency adjustment

At 31 December 2022

Accumulated depreciation
At 1 January 2021

Charge for the period

Derecognition on lease expiry

Currency adjustment

At 31 December 2021

Charge for period

Derecognition on lease expiry

Currency adjustment

At 31 December 2022

Carrying amount
At 31 December 2022

At 31 December 2021

Vessels

€m

Plant and
Equipment

Land and
Buildings

€m

21.0

28.5

(0.3)
-

49.2

2.8

(2.8)

49.2

11.3

16.2

27.5

17.0

(2.8)

41.7

7.5

21.7

8.0

5.0

(0.9)

12.1

3.2

(0.1)

15.2

4.0

1.9

(0.9)

5.0

2.2

(0.1)

7.1

8.1

7.1

28.8

5.3

1.0

35.1

0.2

(0.4)

(0.8)

34.1

4.2

2.2

0.3

6.7

2.4

(0.4)

8.3

25.8

28.4

Total

€m

57.8

38.8

(0.3)
(0.9)

1.0

96.4

6.2

(3.3)

(0.8)

98.5

19.5

20.3

(0.9)

0.3

39.2

21.6

(3.3)

(0.4)

57.1

41.4

57.2

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 €nil (2021: €0.3 million).

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 2.8 years (2021: 3.9 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 92 years
(2021: 93 years); (ii) a concession agreement at Belfast Harbour from which the Group operates a container terminal where
the average remaining lease term was 3.7 years (2021: 4.7 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 19.0 years (2021: 20.0 years).

Related lease liabilities of €42.4 million (2021: €57.6 million) are disclosed in note 22 to the Consolidated Financial
Statements.

2022 Annual Report and Financial Statements

Financial Statements

153

15. Finance lease receivable

At 1 January

Amounts received

Net beneﬁt recognised in revenue

At 31 December

2022

€m

16.6

(3.6)

0.6

13.6

2021

€m

19.4

(3.6)

0.8

16.6

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 €3.0 million (2021: €2.8 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

2022

€m

3.6

7.3

14.5

(0.9)

13.6

3.1

10.5

13.6

2021

€m

3.6

7.3

18.1

(1.5)

16.6

3.0

13.6

16.6

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 2022 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.

154

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

16. Inventories

Fuel and lubricating oil

Catering and other stocks

2022

€m

4.7

0.5

5.2

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 €135.1 million during the
ﬁnancial year (2021: €60.4 million).

17. 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 15)

Other receivables

2022

€m

65.0

(2.6)

62.4

9.5

3.1

1.8

79.9

2021

€m

47.3

(1.8)

45.5

3.2

5.4

2.5

3.0

2.3

61.9

The Group and Company extend credit to certain trade customers after conducting a credit risk assessment. Year-end trade
receivables represent 41 days sales at 31 December 2022 (2021: 52 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

2022

€m

57.9

6.2

0.9

65.0

2022

€m

(1.4)

(0.6)

(2.6)

2022

€m

56.5

5.6

0.3

62.4

2021

€m

42.6

4.4

0.3

47.3

2021

€m

(1.0)

(0.5)

(0.3)

(1.8)

Net value

2021

€m

41.6

3.9

45.5

2022 Annual Report and Financial Statements

Financial Statements

155

17. 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

2022

€m

1.8

0.8

2.6

2021

€m

1.7

0.1

1.8

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.

18. 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

2022

€m

39.0

2021

€m

38.5

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

2022

€m

36.8

1.4

0.8

39.0

2021

€m

32.5

3.3

2.7

38.5

The cash and cash equivalents ﬁgure of €39.0 million (2021: €38.5 million) at 31 December 2022 includes a deposit of €3.5
million (2021: €3.5 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.

156

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

19. Share capital

Group and Company

Authorised

2022

Number

2022

€m

2021

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

Allotted, called up and fully paid

Ordinary shares

At beginning of the ﬁnancial year

Share issue

Share buyback

At end of the ﬁnancial year

4,500,000,000

- 4,500,000,000

2022

Number

182,794,567

34,978

(12,006,403)

170,823,142

29.3

2022

€m

2021

Number

11.9

186,980,390

379,177

(0.8)

(4,565,000)

11.1

182,794,567

2021

€m

29.3

2021

€m

12.2

(0.3)

11.9

There were no redeemable shares in issue at 31 December 2022 or 31 December 2021.

The Company has one class of share unit, an ICG Unit, which at 31 December 2022 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 34,978 (2021: 379,177) and total consideration received amounted to
€0.1 million (2021: €0.7 million). These ICG Units were issued under the Group’s and Company’s share option plans.

During the year, the Company bought back 12,006,403 (2021: 4,565,000) ICG Units on the market at prices ranging between
€3.50 and €4.27 and at a weighted average price of €4.05 per ICG Unit. Total consideration paid of €49.2 million (2021: €19.8
million) was charged against retained earnings. The nominal value of the shares cancelled of €780,000 (2021: €297,000) 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.

2022 Annual Report and Financial Statements

Financial Statements

157

20. 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 2022, the reserve balance was
€0.1 million. The balance is unchanged from 31 December 2021, 1 January 2022 and 1 January 2021.

The undenominated capital redemption reserve represents the nominal value of share capital repurchased. During the
year, €0.8 million was transferred from retained earnings representing the nominal value of shares cancelled. At 31
December 2022, the reserve balance stands at €8.5 million (2021: €7.7 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.

21. 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

2022

€m

118.2

50.0

(0.5)

167.7

7.3

119.4

7.4

7.5

26.1

167.7

(7.3)

160.4

2021

€m

73.8

50.0

(0.7)

123.1

7.3

67.4

7.5

33.6

123.1

(7.3)

115.8

158

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

21. 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 23 (iii).

Borrowing facilities

Overdraft and trade guarantee facilities

Amounts utilised – trade guarantee (note 35)

Amounts undrawn

Total committed overdraft facilities

Committed loan facilities

Amounts drawn

Amounts undrawn

Total committed loan facilities

Uncommitted facilities

2022

€m

0.6

15.4

16.0

168.2

13.0

181.2

258.0

2021

€m

0.6

15.4

16.0

123.8

65.0

188.8

242.8

At 31 December 2022, the Group had total committed loan and overdraft facilities of €197.2 million (2021: €204.8 million)
which comprised of amounts utilised (including trade guarantees of €0.6 million (2021: €0.6 million)) of €168.8 million (2021:
€124.4 million) and amounts undrawn of €28.4 million (2021: €80.4 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 2022 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 2022, €0.6
million (2021: €0.6 million) was utilised on this facility by way of trade guarantees and €nil (2021: €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 2022, €62.0 million (2021: €10.0 million)
was drawn under this facility. Interest rates are arranged at ﬂoating rates for an interest period of up to six months,
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 €56.2 million (2021: €63.8 million) made available by the European Investment
Bank to fund the construction of a new cruise ferries one of which was delivered in December 2018. This facility had been
drawn in full and is 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 a rate of 1.724%.

2022 Annual Report and Financial Statements

Financial Statements

159

21. Borrowings (continued)

iv) Multicurrency private placement loan note shelf agreements agreed with a number of investors with a potential drawing
amount of €258.0 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 €208.0 million total is available for drawing at
the discretion of investors up to 6 October 2023. 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

2022

1.05%

1.80%

2021

0.41%

1.61%

The average interest rates reﬂect the terms of the reﬁnancing arrangements concluded in prior periods. There was €52.0
million (2021: €10.0 million) worth of bank loans drawn during 2022 from an existing loan facility. Interest rates on all bank
loans drawn in prior periods were ﬁxed at date of drawdown with resetting occurring every three to six months. 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.

The borrowing agreements contain a range of undertakings and negative pledges including conduct of business in
compliance with laws and regulations, maintenance of assets, insurance and take-on of additional borrowing facilities. In
certain circumstances, proceeds from the disposal of key assets must be applied towards repayment of borrowings. 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 2022.

The two key ﬁnancial covenants cover leverage which is borrowings expressed as times EBITDA and interest cover which is
EBITDA expressed as times interest on borrowings. The calculation of these ratios and reconciliation to IFRS measures is set
out below.

EBITDA for covenant purposes

Operating proﬁt / (loss)

Depreciation and amortisation

EBITDA

Movement in lease receivable (note 15)

Lease payments (note 22)

EBITDA for covenant purposes

Net debt for covenant purposes

Cash (note 18)

Bank deposits subject to lien (note 18)

Borrowings (note 21)

Origination fees (note 21)

Trade guarantees (note 35)

Net debt for covenant purposes

2022

€m

66.7

60.5

127.2

3.0

(22.3)

107.9

2022

€m

(39.0)

3.5

167.7

0.5

0.6

133.3

2021

€m

(0.2)

52.5

52.3

2.8

(21.1)

34.0

2021

€m

(38.5)

3.5

123.1

0.6

89.4

160

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

21. Borrowings (continued)

Bank loan interest expense

Finance income

Finance costs

Net ﬁnance costs

Interest income on deﬁned beneﬁt assets (note 6)

Interest expense on lease liabilities (note 7)

Bank loan interest expense

Covenant

Leverage ratio

Interest service ratio

Covenant Level

Max 3.0x (2021: 4.0x)

Min 4.0x

2022

€m

(0.1)

4.3

4.2

0.1

(1.3)

3.0

2021

€m

(0.1)

4.0

3.9

0.1

(1.3)

2.7

Times

1.2x

36.0x

2.6x

12.6x

For ﬁnancial covenant testing dates falling during calendar year 2021, a temporary increase in covenant leverage levels from
3.0x to 4.0x had been agreed with the Company’s lenders.

22. 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

2022

€m

57.6

6.2

(22.3)

1.3

(0.4)

42.4

11.7

30.7

42.4

2021

€m

38.5

(21.1)

(0.3)

1.3

0.7

57.6

20.1

37.5

57.6

2022 Annual Report and Financial Statements

Financial Statements

161

22. 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

2022

€m

11.7

4.1

3.7

2.5

1.0

2.5

16.9

42.4

2021

€m

20.1

9.1

3.7

3.3

2.1

17.2

57.6

Outstanding lease terms vary from one month to eight years except in the case of leasehold land where the terms vary
between 19 and 99 years. At 31 December 2022, the average incremental borrowing rate applying to lease liabilities was 3.2%
(2021: 2.5%) for periods of between 3 months and 99 years. These rates were based on the incremental borrowing rate which
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 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 €41.4 million (2021: €57.2 million) are disclosed in note 14 to the Consolidated Financial
Statements. Expenses of €3.3 million (2021: €4.3 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.

162

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

23. 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.

i) Categories of ﬁnancial instruments
Financial assets and liabilities

2022

Finance lease receivable

Trade and other receivables

Cash and cash equivalents

Borrowings

Trade and other payables

2021

Finance lease receivable

Trade and other receivables

Cash and cash equivalents

Borrowings

Trade and other payables

Loans and
receivables at
amortised cost

Financial liabilities
at amortised cost

Carrying value

Fair value

€m

13.6

76.8

39.0

€m

167.7

79.7

€m

13.6

76.8

39.0

167.7

79.7

€m

13.6

76.8

39.0

169.0

79.7

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

Fair value hierarchy
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 2022 and 31 December 2021. 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 (2021: 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.

2022 Annual Report and Financial Statements

Financial Statements

163

23. Financial instruments and risk management (continued)

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.

Trade and other receivables / payables
For trade receivables and trade payables, with average settlement periods of 41 days (2021: 50 days) and 67 days (2021: 81
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 2022 and 31 December 2021 and none were
entered into in either 2021 or 2022.

ii) Interest rate risk
At 31 December 2022, interest rates on short-term bank deposits were contracted for terms of less than three months at
average effective rates of 0.3% (2021: (0.3%)).

The interest rates on all Group borrowings at 31 December 2022 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 2022 was 2.40% (2021: 1.60%) for remaining terms of between 1.8 and 7.5 years.

The interest rates on all lease liabilities at 31 December 2022 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.

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:£0.8528 (2021: €1:£0.8596).

Exchange rate exposures are managed within approved policy parameters. The Group did not utilise forward foreign
exchange contracts during the year ended 31 December 2022 or 31 December 2021.

164

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

23. 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 €5.2 million (2021: increase of €4.8 million) and equity (before tax effects) would have increased by €1.0 million
(2021: increase of €3.2 million); (ii) a 10% weakening in euro exchange rates against all currencies, proﬁt before tax would
have decreased by €6.3 million (2021: decrease of €6.2 million) and equity (before tax effects) would have decreased by €1.2
million (2021: decrease of €4.3 million).

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

2022

Trade receivables (net)

Cash and cash equivalents

Total assets

Trade and other payables

Lease liabilities

Total liabilities

Net assets / (liabilities)

2021

Trade receivables (net)

Cash and cash equivalents

Total assets

Trade and other payables

Lease liabilities

Total liabilities

Net assets / (liabilities)

Euro

€m

1.1

Euro

€m

0.2

-
-

0.2

Sterling

US Dollar

€m

3.7

12.3

16.0

14.0

2.0

€m

0.1

1.0

1.1

8.1

1.1

9.2

(8.1)

Sterling

US Dollar

€m

3.4

6.0

9.4

11.3
-

11.3

(1.9)

€m

0.3

1.5

1.8

6.2
0.7

6.9

(5.1)

Total

€m

3.8

14.4

18.2

22.1

1.1

23.2

(5.0)

Total

€m

3.7

7.7

11.4

17.5
0.7

18.2

(6.8)

iv) Commodity price risk
In terms of commodity price risk, the Group’s vessels consume heavy fuel oil (HFO), marine diesel / gas oil (MDO / MGO) and
lubricating oils, all of which continue to be subject to price volatility. The Group must also manage the risks inherent in
changes to the speciﬁcation of fuel oil which are introduced under international and EU law from time to time.

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.

2022 Annual Report and Financial Statements

Financial Statements

165

23. Financial instruments and risk management (continued)

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 2022 or 31 December 2021. 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;
•
• borrow the bulk of its debt needs under committed bank lines or other term ﬁnancing and by policy maintains a

limit maturity of cash balances; and

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

2022

€m

39.0

28.4

67.4

2021

€m

38.5

80.4

118.9

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:

Liquidity Table 2022

Liabilities

Trade and other payables

Bank loans

Lease liabilities

Total liabilities

Liquidity Table 2021

Liabilities

Trade and other payables
Bank loans

Lease liabilities

Total liabilities

Weighted
average
period until
maturity

Carrying
amount

Contractual
amount

Less than 1
year

Between 1 – 2
years

Between 2 – 5
years

Between 5 –
10 years

More
than
10
years

Years

€m

€m €m

2.5

35.6

84.2

167.7

42.4

84.2

178.4

86.8

84.2

11.9

12.8

294.3

349.4

108.9

123.3

5.1

128.4

24.0

9.5

33.5

19.2

5.9 53.5

25.1 53.5

Weighted
average
period until
maturity

Carrying
amount

Contractual
amount

Less than 1
year

Between 1 – 2
years

Between 2 – 5
years

Between 5-10
years

More
than
10
years

Years

€m

€m €m

-
3.6

27.1

60.2
123.1

57.6

60.2
130.3

101.5

240.9

292.0

60.2
9.1

22.0

91.3

-
9.1

9.4

18.5

-
85.1

11.4

96.5

-
27.0

-
-

5.5 53.2

32.5 53.2

166

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

23. Financial instruments and risk management (continued)

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
15. Credit risk in relation to trade and other receivables and cash and cash equivalents has been discussed in notes 17 and 18
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 2022 and 31 December 2021.

The capital structure of the Group consists of net debt (borrowings as detailed in note 21 offset by cash and cash
equivalents) and equity of the Group (comprising issued capital, reserves and retained earnings as detailed in notes 19 and
20). 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 12.0 million ICG units at a cost of €49.2 million. The Group increased bank
borrowings (net of repayments) by €44.4 million), lease liabilities decreased by €15.2 million and cash and cash equivalents
increased by €0.5 million.

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 reverted to 3 times for testing dates after 1 January 2022. At 31 December 2022, the
leverage ratio under covenant deﬁnitions was 1.2 times (2021: 2.6 times).

At 31 December 2022, the net debt position of the Group was €171.1 million (2021: net debt of €142.2 million) and total equity
balances amounted to €260.8 million (2021: €249.7 million).

24. 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 (2021: €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.

2022 Annual Report and Financial Statements

Financial Statements

167

24. Deferred tax liabilities (continued)

The following are the deferred tax liabilities and assets recognised by the Group, and the movements thereon, during the
current and prior reporting periods:

2022

At beginning of the ﬁnancial year

Charge to the Statement of Consolidated Income

Charge to Statement of Other Comprehensive Income

Currency translation adjustment

At end of the ﬁnancial year

Analysed as:

Non-current asset

Non-current liability

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

Accelerated tax
depreciation

Retirement
beneﬁt obligation

€m

0.5

€m

0.7

2.4

(0.1)

3.0

Accelerated tax
depreciation

Retirement
beneﬁt obligation

€m

0.4

0.1

0.5

€m

(0.2)

0.9

0.7

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

25. Trade and other payables

Within one year

Trade and other payables

Accruals

Deferred revenue

Payroll taxes

Social insurance cost

Corporation tax

Value-added tax

2022

€m

37.1

42.6

79.7

11.8

1.3

0.3

1.0

2.1

96.2

Total

€m

1.2

2.4

(0.1)

3.5

(0.1)

3.6

3.5

Total

€m

0.2

0.1

0.9

1.2

2021

€m

30.7

27.2

57.9

15.3

0.7

0.2

1.4

75.5

168

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

25. Trade and other payables (continued)

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 €11.8 million (2021: €15.3 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

2022

€m

15.3

(162.7)

159.2

11.8

2021

€m

13.0

(59.0)

61.3

15.3

The average trade credit period outstanding was 67 days at 31 December 2022 (2021: 81 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.

26. Provisions

Claims provision

At beginning of the ﬁnancial year

Utilisation of provision

(Decrease) / increase in provision

At end of the ﬁnancial year

Analysed as follows:

Current liabilities

Non-current liabilities

The claims provision comprises;

2022

€m

3.3

(0.3)

(0.2)

2.8

1.7

1.1

2.8

2021

€m

2.2

1.1

3.3

3.1

0.2

3.3

(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) provisions relate to claims lodged and expected to be lodged with the Group based on events which have occurred prior
to the reporting date, where a future cash ﬂow is expected to occur.

2022 Annual Report and Financial Statements

Financial Statements

169

27. 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

28. Short-term vessel charter and container hire obligations

Within one year

2022

€m

30.8

(18.4)

12.4

2022

€m

2021

€m

42.0

(10.6)

31.4

2021

€m

There were €nil outstanding commitments at 31 December 2022 (2021: €nil million) relating to short-term vessel charter
and container hire obligations. An expense of €3.3 million (2021: €4.3 million) was recognised in the period where the
related rights were not recognised as a right-of-use asset. The 2022 expense is analysed in note 9.

29. 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

2022

€m

13.2

3.7

16.9

2021

€m

17.2

13.2

3.7

34.1

The lease payments receivable relate to the charter of container vessels.

30. 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, 1,552,500 (2021: 1,042,500) 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.

170

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

30. Share-based payments (continued)

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

2022

2021

Number of share
options

Weighted average
exercise price

Number of share
options

Weighted average
exercise price

5,646,854

1,552,500

(1,060,856)

(608,962)

5,529,536

1,910,000

5,756,140

1,042,500

(637,530)

(514,256)

5,646,854

2,790,000

€

1.47

0.065

1.25
0.35

1.25

3.52

3.51

1.6 years

€

1.59

0.065

1.25
0.065

1.47

2.94

4.35

1.8 years

In settlement of the options exercised during the year, the Company issued 34,978 (2021: 379,177) new ICG units with the
balance of 1,025,878 (2021: 258,353) settled through market purchase.

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:

Performance Share Plan

Outstanding at 31 December

2022

Options

2021

Options

200,000

1,710,000

1,910,000

825,000

205,000

1,760,000

2,790,000

3,619,536

5,529,536

2,856,854

5,646,854

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.

2022 Annual Report and Financial Statements

Financial Statements

171

30. Share-based payments (continued)

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 1 September 2014, 5 March 2015, 6 March 2020, 12 March 2021 and 11 March 2022.
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

2022

PSP

2021

PSP

2020

2015

2014

PSP

2009 Plan

Basic Tier

Second Tier

Basic Tier

Second Tier

€1.29

€2.15

€0.96

€0.4528

€0.5581

€0.2992

€0.4449

€2.30

€3.63

€3.07

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

Year of Grant

At date of grant:

2022

2021

2020

2015

2014

Basic Tier

Second Tier

Basic Tier

Second Tier

Weighted average share price

€3.36

€4.26

€3.77

Weighted average exercise price

€0.065

Expected volatility

45%

43%

29%

€3.580

29%

Expected life

Risk free rate

3 years

7 years

(0.141%)

(0.562%)

(0.462%)

0.090%

Expected dividend yield

4.41%

2.15%

3.70%

5.16%

€3.580

31%

9 years

0.299%

4.72%

€2.970

27%

7 years

0.439%

5.83%

€2.970

30%

9 years

0.765%

4.89%

Expected volatility was determined by calculating the historical volatility of the Company’s share price.

In 2022, the share-based payment expense recognised in the Consolidated Income Statement was €3.0 million (2021: €1.3
million).

The share-based payment expense has been classiﬁed in the Consolidated Income Statement as follows:

Employee beneﬁts expense

2022

€m

3.0

2021

€m

1.3

Share-based payment expense of €1.1 million (2021: €0.5 million) relates to the Directors of the Company. The balance on
the share option reserve in the Consolidated Statement of Financial Position at 31 December 2022 is €6.3 million (2021: €4.7
million).

172

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

31. 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 €0.4 million (2021: €0.3 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 2022 (2021: €nil).

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 2021 and 31 October 2021. 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 2022 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 2022 amounted to €0.6 million (2021: €1.1 million) while the
current service cost charged to the Consolidated Income Statement amounted to €1.7 million (2021: €1.7 million).

The proﬁle of membership across all schemes at 31 December was as follows;

Current employees

Members with deferred beneﬁts

Pensioners

Total

2022

130

476

163

769

2021

145

500

134

779

Buyout transaction
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.

2022 Annual Report and Financial Statements

Financial Statements

173

31. 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 2022 was €3.5 million (note 18).

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 1.04% (2021: 1.53%). The obligation valuation in these
ﬁnancial statements at 31 December 2022 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 2022 is
€nil (2021: €nil). During the year, the Group made payments of €nil (2021: €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.

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.

174

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

31. Retirement beneﬁt schemes (continued)

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

Rate of annual increase
of pensions in payment

Rate of increase of
pensionable salaries

Sterling liabilities

Euro liabilities

2022

4.75%

2.90%

2021

1.85%

3.60%

2.20% - 3.30%

2.20% - 3.40%

2022

3.65%

2.50%

1.50%

2021

1.20%

2.00%

1.00%

1.15%

1.10%

0.00% - 1.40%

0.00% - 1.20%

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 2022, 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%.

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

2022

Male

26.7 years

29.1 years

27.7 years

29.2 years

Female

29.6 years

31.6 years

29.5 years

30.9 years

2021

Male

26.6 years

29.0 years

27.8 years

29.3 years

Female

29.5 years

31.5 years

29.4 years

30.9 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 €91.6 million at 31 December 2022 (2021: €140.5 million). At 31 December 2022, the
Group also has scheme assets totalling €124.8 million (2021: €145.8 million), giving a net pension surplus of €33.2 million
(2021: surplus of €5.3 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.

Rate of
inﬂation*

Rate of
mortality

2021

Rate of
inﬂation*

Rate of
mortality

2022 Annual Report and Financial Statements

Financial Statements

175

31. Retirement beneﬁt schemes (continued)

There has been no change from the prior year in the methods and assumptions used in preparing the sensitivity analyses
below.

2022

Assumption

Change in assumption

Impact on euro schemes

Impact on sterling scheme

Combined impact on

Discount rate 0.5% increase in discount rate

0.5% increase in price inﬂation

liabilities

9.5% decrease in
liabilities

8.5% increase in
liabilities

7.2% decrease in
liabilities

4.7% increase in
liabilities

9.1% decrease in
liabilities

7.8% increase in
liabilities

Members assumed to live one year
longer

3.0% increase in
liabilities

3.1% increase in liabilities 3.0% increase in

liabilities

Assumption

Change in assumption

Impact on euro schemes

Impact on sterling scheme

Combined impact on

liabilities

Discount rate 0.5% increase in discount rate

0.5% increase in price inﬂation

9.5% decrease in
liabilities

10.3% increase in
liabilities

8.4% decrease in
liabilities

6.0% increase in
liabilities

4.3% increase in
liabilities

9.3% decrease in
liabilities

9.4% increase in
liabilities

4.1% increase in
liabilities

Members assumed to live one year
longer

4.0% 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 in schemes

Scheme with liabilities in sterling

Schemes with liabilities in euro

Total

2022

€m

10.8

14.6

2.9

28.3

(16.5)

11.8

2021

€m

13.5

15.1

3.4

32.0

(28.3)

3.7

2022

€m

63.2

22.3

0.1

7.4

3.5

96.5

(75.1)

21.4

2021

€m

68.9

27.4

1.0

10.9

5.6

113.8

(112.2)

1.6

2022

€m

74.0

36.9

0.1

7.4

6.4

124.8

(91.6)

33.2

2021

€m

82.4

42.5

1.0

10.9

9.0

145.8

(140.5)

5.3

176

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

31. Retirement beneﬁt schemes (continued)

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 16.5 years (2021: 19.7 years). The weighted
average duration of euro scheme obligations was 17.0 years (2021: 20.1 years) and of sterling scheme obligations was 14.5
years (2021: 17.9 years).

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 in pension schemes

v) Movements in retirement beneﬁt assets
Movements in the fair value of scheme assets in the current year were as follows:

2022

At beginning of the ﬁnancial year

Interest income

Actuarial loss

Exchange difference
Employer contributions

Contributions from scheme members

Beneﬁts paid

At end of the ﬁnancial year

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

2022

€m

33.6

(0.4)

33.2

Schemes in
sterling

Schemes in euro

€m

32.0

0.5

(2.2)

(1.6)

0.3

0.1

(0.8)

28.3

€m

113.8

1.4

(16.5)

0.3

0.2

(2.7)

96.5

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

2021

€m

6.7

(1.4)

5.3

Total

€m

145.8

1.9

(18.7)

(1.6)

0.6

0.3

(3.5)

124.8

Total

€m

139.6

1.1

15.5

1.9
1.1

0.3

(8.5)

(5.2)

145.8

* The transfer of assets during 2021 relates to the premium paid relating to the buyout transaction concluded on 9
December 2020. Further details are provided at note 31(i) above.

2022 Annual Report and Financial Statements

Financial Statements

177

31. 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:

2022

At beginning of the ﬁnancial year

Service cost

Interest cost

Contributions from scheme members

Actuarial gain

Exchange difference

Beneﬁts paid

At end of the ﬁnancial year

2021

At beginning of the ﬁnancial year

Service cost

Interest cost

Contributions from scheme members
Actuarial (gain) / loss

Exchange difference

Transfer of liabilities *

Beneﬁts paid

At end of the ﬁnancial year

Schemes in
sterling

Schemes in euro

€m

28.3

0.4

0.5

0.1
(10.9)

(1.1)

(0.8)

16.5

€m

112.2

1.3

0.2
(37.2)

(2.7)

75.1

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)

112.2

Total

€m

140.5

1.7

1.8

0.3
(48.1)

(1.1)

(3.5)

91.6

Total

€m

140.8

1.7

1.0

0.3
8.4

2.0

(8.5)

(5.2)

140.5

* The transfer of liabilities during 2021 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 31(i) above.

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

2022

€m

1.7

2021

€m

1.7

178

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

31. Retirement beneﬁt schemes (continued)

Recognised in ﬁnance income

Interest income on scheme assets

Interest on scheme liabilities

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

2022

€m

(1.9)

1.8

(0.1)

2021

€m

(1.1)

1.0

(0.1)

The estimated amounts of employer contributions expected to be paid to the schemes during 2023 is €0.6 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 arising from changes in ﬁnancial assumptions

Gains arising from experience adjustments

Actuarial gain recognised in the Consolidated Statement of Comprehensive Income

Exchange movement

Exchange (loss) / gain on scheme assets
Exchange gain / (loss) on scheme liabilities

Net exchange loss recognised in the Consolidated Statement of Comprehensive
Income

2022

€m

(16.8)

(1.9)

(18.7)

46.9

1.2

29.4

2022

€m

(1.6)

1.1

(0.5)

2021

€m

16.6

(1.1)

15.5

(8.6)

0.1

7.1

2021

€m

1.9

(2.0)

(0.1)

2022 Annual Report and Financial Statements

Financial Statements

179

32. Related party transactions

During the ﬁnancial year, Group entities incurred costs of €0.2 million (2021: €0.2 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

2022

€m

6.1

0.3

2.2

8.6

2021

€m

3.2

0.3

0.9

4.4

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
The Company paid a ﬁnal dividend in respect of 2021 on 7 July 2022 and an interim dividend in respect of 2022 on 7 October
2022. The total amounts received by key management including Directors in respect of these dividend payments was €4.3
million. No dividends were paid in 2021.

Share options
Share options exercised by the Company’s Directors are set out in the Report of the Remuneration Committee on page 105.

180

Irish Continental Group

Notes Forming Part of the Consolidated Financial Statements
Continued

33. Cash ﬂow components

Retirement beneﬁt scheme movements

Retirement beneﬁt obligations – current service cost

Retirement beneﬁt obligations – payments

Total retirement beneﬁt scheme movements

Repayments of lease liabilities

Lease payments (note 22)

Interest element of lease payments (note 7 & 22)

Capital element of lease payments

Purchases of property, plant and equipment and intangible assets

Purchases of property, plant and equipment (note 12)

Purchases of intangible assets (note 13)

Increase in capital asset prepayments (note 17)

Total purchases of property, plant and equipment and intangible assets

Changes in working capital

Increase in inventories

(Increase) / decrease in receivables

Increase in payables

Total working capital movements

34. Change in ﬁnancing liabilities

2022

€m

1.7

(0.6)

1.1

(22.3)

1.3

(21.0)

(74.4)

(0.4)

(0.9)

(75.7)

(1.4)

(17.0)

19.6

1.2

The changes in liabilities arising from ﬁnancing activities during the year ended 31 December 2022 were as follows:

At 1 January 2022

Changes from cash ﬂows

Repayment of borrowings

Lease payments

Loan drawdown

Non-cash ﬂow changes

Amortisation

Lease liabilities recognised
Currency adjustment

At 31 December 2022

Bank loans

Loan notes

Origination fees

Lease liabilities

€m

73.8

(7.6)

52.0

-
-

€m

50.0

-
-

118.2

50.0

€m

(0.7)

0.2

-
-

(0.5)

€m

57.6

(21.0)

6.2
(0.4)

42.4

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

Total

€m

180.7

(7.6)

(21.0)

52.0

0.2

6.2
(0.4)

210.1

Capital repayments on the bank loans drawn during 2018 commenced in 2020. The loan notes have bullet payment terms
with repayment due in 2024.

2022 Annual Report and Financial Statements

Financial Statements

181

35. 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 (2021: €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 1.46%. 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.

36. Events after the reporting period

The Board is proposing a ﬁnal dividend of 9.45 cent per ordinary share amounting to €16.1 million out of the distributable
reserves of the Company.

There have been no other material events affecting the Group since 31 December 2022.

182

Company Statement of Financial Position
as at 31 December 2022

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

46 iv

2022

€m

139.1

0.3

16.5

1.0

2021

€m

144.6

0.4

14.4

1.1

156.9

160.5

1.4

4.7

6.1

163.0

11.1

20.5

14.8

111.0

157.4

5.6

163.0

57.8

1.6

59.4

219.9

11.9

20.4

12.4

140.3

185.0

34.9

219.9

The Company reported a profit for the financial year ended 31 December 2022 of €45.7 million (2021: €5.3 million).

The financial statements were approved by the Board of Directors on 8 March 2023 and signed on its behalf by:

Eamonn Rothwell
Director

David Ledwidge
Director

Irish Continental Group183

Total

€m

185.0

45.7

(0.1)

Company Statement of Changes in Equity
For the financial year ended 31 December 2022

Capital

Options

Retained

Capital

Premium

Reserve

Earnings

€m

11.9

€m

20.4

€m

7.7

€m

4.7

€m

140.3

Balance at 1 January 2022

Profit for the financial year

Other comprehensive income

Total comprehensive income for the financial
year

Share issue

Share buyback

Dividends

Employee share-based payments expense

Movement related to share options granted to
employees in subsidiaries (note 41)

Settlement of employee equity plans through
market purchase

Transferred to retained earnings on exercise of
share options

(0.8)

0.1

Movements in the year

(0.8)

0.1

Balance at 31 December 2022

11.1

20.5

0.8

8.5

0.1

2.9

45.7

(0.1)

45.6

(49.2)

(24.2)

0.1

(49.2)

(24.2)

0.1

2.9

(2.9)

(1.4)

1.4

1.6

(29.3)

(27.6)

6.3

111.0

157.4

Financial Statements2022 Annual Report and Financial Statements184

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

Capital

Options

Retained

Capital

Premium

Reserve

Earnings

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 41)

Settlement of employee equity plans through
market purchase

Transferred to retained earnings on exercise of
share options

€m

12.2

(0.3)

€m

19.7

0.7

€m

7.4

0.3

€m

5.1

0.6

0.7

€m

153.7

5.3

0.4

Total

€m

198.1

5.3

0.4

5.7

(19.8)

0.7

(19.8)

0.6

0.7

(1.0)

(1.7)

1.7

Movements in the year

(0.3)

0.7

0.3

(0.4)

(13.4)

(13.1)

Balance at 31 December 2021

11.9

20.4

7.7

4.7

140.3

185.0

Irish Continental GroupNotes Forming Part of the Company Financial Statements
Continued

185

37. 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 130 to 139. 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.

38. Company profit for the period

The profit attributable to equity shareholders dealt with in the Financial Statements of the Company was €45.7 million (2021:
€5.3 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.

Disclosure of Directors’ remuneration paid in the reporting period ended 31 December 2022 and 2021 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

2022

€’000

2021

€’000

3,307

1,379

307

3,674

335

1,757

There were no employees in the Company during the financial year ended 31 December 2022 (2021: nil). Costs of €4.6 million
(2021: €2.3 million) were recharged to the Company from subsidiary companies in relation to management services.

Financial Statements2022 Annual Report and Financial Statements186

Notes Forming Part of the Company Financial Statements
Continued

39. Property, plant and equipment

Company

Cost

At 1 January 2021

Additions

At 31 December 2021

Additions

At 31 December 2022

Accumulated depreciation

At 1 January 2021

Depreciation charge for the financial year

At 31 December 2021

Depreciation charge for the financial year

At 31 December 2022

Carrying amount

At 31 December 2022

At 31 December 2021

40. 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

Assets under

Plant,

Equipment

Land

and

Construction

Vessels

and Vehicles

Buildings

€m

161.2

0.1

161.3

11.1

5.7

16.8

5.7

22.5

138.8

144.4

3.3

0.3

3.6

0.4

4.0

3.2

0.2

3.4

0.3

3.7

0.3

0.2

0.1

2022

€m

10.4

10.0

0.1

10.1

0.3

0.4

Total

€m

164.6

0.3

164.9

0.5

165.4

14.4

5.9

20.3

6.0

26.3

139.1

144.6

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.

Irish Continental Group41. 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

The Company’s principal subsidiaries at 31 December 2022 are as follows:

187

2021

€m

14.7

0.7

(1.0)

14.4

2022

€m

14.4

2.9

(0.8)

16.5

Name of subsidiary

Country of incorporation and operation

Principal activity

Irish Ferries Limited*

Ireland

Ferry operator

Eucon Shipping & Transport Limited*

Ireland

Container shipping services

Irish Continental Line Limited*

Irish Ferries Services Limited*

Ireland

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

Non-trading

Irish Ferries (U.K.) Services Limited

United Kingdom

Administration services

Zatarga Limited

Isle of Man

Contarga Limited*

Irish Ferries Finance DAC*

Ireland

ICG Shipping (W. B. Yeats) Limited

Ireland

Irish Ferries International Limited*

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 Statements2022 Annual Report and Financial Statements188

Notes Forming Part of the Company Financial Statements
Continued

42. Trade and other receivables

Amounts due from subsidiary companies (note 47)

Prepayments – deposit on vessel

Other receivables

2022

€m

1.1

0.3

1.4

2021

€m

54.3

3.2

0.3

57.8

Amounts due from subsidiary companies are repayable on demand. 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, the Company concluded that no allowance for credit losses was required
as it would be immaterial.

43. Share capital

Details of the Company’s equity share capital are set out at note 19 to the Consolidated Financial Statements.

44. 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 (2021: €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.

45. Trade and other payables

Within 1 year

Amounts due to subsidiary companies (note 47)

Other payables

Other payables include provisions of €1.2 million at 31 December 2022 (€2.2 million at 31 December 2021).

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

Trading balances

Financing balances

2022

€m

3.4

2.2

5.6

2022

€m

3.4

2021

€m

31.2

3.7

34.9

2021

€m

7.2

24.0

31.2

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 42).

Irish Continental Group189

45. Trade and other payables – continued

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 1.83% (2021: 1.80%). There were no financing balances outstanding at
31 December 2022 (2021: €24.0 million at an interest rate of 1.52%).

46. 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 31 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 2021. 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 2022 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.

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 0.33% (2021: 0.51%).
The obligation valuation in these financial statements at 31 December 2022 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 2022 (2021: €nil). During
the year the Company made payments of €nil (2021: €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 31 (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 €0.7 million at 31 December 2022 (2021: €0.9 million). At 31 December 2022, the
Company also has scheme assets totalling €1.7 million (2021: €2.0 million) giving a net pension surplus of €1.0 million (2021:
€1.1 million). The size of the obligation is sensitive to actuarial assumptions.

Financial Statements2022 Annual Report and Financial Statements190

Notes Forming Part of the Company Financial Statements
Continued

46. Retirement benefit schemes – continued

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

2022

€m

1.2

0.3

0.1

1.7

(0.7)

1.0

2021

€m

1.5

0.3

0.1

2.0

(0.9)

1.1

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 2021 is €nil (2021:
€nil). The total surplus of €1.0 million (2021: €1.1 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.

v) Movement in retirement benefit assets
Movements in the fair value of scheme assets in the financial year were as follows:

2022

At beginning of the financial year

Actuarial losses

At end of the financial year

2021

At beginning of the financial year

Actuarial gains

At end of the financial year

€m

2.0

(0.3)

1.7

0.3

2.0

Irish Continental Group46. Retirement benefit schemes – continued

vi) Movement in retirement benefit liabilities
Movements in the present value of defined benefit obligations in the financial year were as follows:

2022

At beginning of the financial year

Actuarial gains

At end of the financial year

2021

At beginning of the financial year

Actuarial losses

At end of the financial year

191

€m

0.9

(0.2)

0.7

1.0

(0.1)

0.9

The present value of scheme liabilities at the financial year ended 31 December 2022 and 31 December 2021 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 (2021: €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.

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 experience adjustments

Gains arising from changes in financial assumptions

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

2022

€m

(0.3)

0.2

(0.1)

2021

€m

0.4

Financial Statements2022 Annual Report and Financial Statements192

Notes Forming Part of the Company Financial Statements
Continued

47. Related party transactions

The Company’s profit for the year includes transactions with subsidiary companies comprising principally comprising of
charter income of €18.6 million (2021: €18.6 million), dividends received of €38.0 million (2021: €nil million) and interest
payable of €0.1 million (2021: €3.8 million). Details of loan balances to / from subsidiaries are provided in the Company
Statement of Financial Position on page 182, in note 45 ‘Trade and other payables’, in note 42 ‘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 42)

Amounts due to subsidiary companies (note 45)

2022

€m

1.1

(3.4)

(2.3)

2021

€m

54.3

(31.2)

23.1

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.

48. 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 0.47%. 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
2022 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 2022 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 41.

Irish Continental Group193

49. Events after the reporting period

The Board is proposing a final dividend of 9.45 cent per ordinary share amounting to €16.1 million out of the distributable
reserves of the Company.

There have been no other material events affecting the Group since 31 December 2022.

50. Approval of financial statements

The Financial Statements were approved by the Board of Directors and authorised for issue on 8 March 2023.

Financial Statements2022 Annual Report and Financial Statements194

Investor Information
Other Information

196
198

INVESTOR
AND OTHER
INFORMATION

Irish Continental Group195

Financial Statements2022 Annual Report and Financial Statements196

Investor Information

ICG Units

An ICG Unit consists of one ordinary share and nil redeemable shares at 31 December 2022 and 31 December 2021. 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 8 March 2023, 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 a rate of 25% 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 2022

Year ended 31 December 2021

Share listings

High

4.75

4.82

Low

3.20

3.84

Year end

4.28

4.53

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 Group197

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 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 2023

Announcement of Preliminary Statement of Results to 31 December 2022

9 March 2023

Annual General Meeting

Half year results announcement

Travel discounts for shareholders

11 May 2023

24 August 2023

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 8 March 2023 are:

• 20% discount on passenger and car ferry services between Ireland and Britain, and Britain and France;

• 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.

Full details and terms and conditions are available at www.icg.ie. For further information please contact Irish Ferries
Customer Support in Dublin on + 353 1 607 5700 or email shareholders@irishferries.com.

Financial Statements2022 Annual Report and Financial Statements198

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

Website

Reuters

Bloomberg

ISE Xetra

Computershare Investor Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82

www.icg.ie

info@icg.ie

Euronext Dublin

London Stock Exchange

IR5B_u.I

IR5B

ICG_u.L

ICGC

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

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

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

Dublin Ferryport Terminals,
Container Terminal, Breakwater Road, Dublin 1, Ireland.
Tel: +353 1 607 5700
email:

info@dft.ie

Belfast Container Terminal,
Victoria Terminal 3, West Bank Road,
Belfast BT3 9JL, Northern Ireland.
Tel: +44 7901 825387
email:

info@bcterminal.com

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

200

Irish Continental Groupe

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.

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