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Document

FORM 6-K
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 under
the Securities Exchange Act of 1934


For
the month ended June, 2021

ICON plc
(Registrant's name)


333-08704
(Commission file number)


South County Business Park, Leopardstown, Dublin 18, Ireland
(Address of principal executive offices)


Brendan Brennan, CFO
South County Business Park, Leopardstown, Dublin 18, Ireland
Brendan.Brennan@iconplc.com
+353-1-291-2000
(Name, telephone number, email and/or facsimile number and address of Company contact person)


Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F___X___
Form 40-F______
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes______
No___X___
Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes______
No___X___
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule12g3-2(b) under the Securities Exchange Act of 1934.
Yes______
No___X___
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82 N/A

















EXHIBIT LIST
ExhibitDescription
99.1
99.2
















































SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ICON plc
/s/Brendan Brennan 
Date:June 16, 2021Brendan Brennan
Chief Financial Officer



Document
Exhibit 99.1

Notice of Annual General Meeting
to be held on 20 July 2021






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ICON plc
(the “Company” or “ICON”)














THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in any doubt as to the action to be taken, you should consult with your independent financial adviser who, if you are taking advice in the Republic of Ireland, is authorised or exempted under the European Communities (Markets in Financial Instruments) Regulations 2017 or the Investment Intermediaries Act, 1995.

If you have sold or transferred your entire holding of ordinary shares in ICON, please pass this document, together with the attached proxy form, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale was effected, for transmission to the purchaser or transferee as soon as possible.



16 June, 2021
To: All ICON Shareholders

NOTICE OF ANNUAL GENERAL MEETING

Dear Shareholder

The Annual General Meeting of ICON plc will be held at 12.00pm (Dublin time) on 20 July 2021 at ICON’s global headquarters in South County Business Park, Leopardstown, Dublin 18, Ireland (the AGM).

This letter provides an update on the progress of the previously announced PRA Health Sciences, Inc. acquisition and outlines the background to and summarises the resolutions to be proposed at the AGM. Please refer to the form of proxy for the AGM (which is separately enclosed) and the notes on pages 10 to 13 for details on how to vote your shares and return your form of proxy. Your attention is also drawn to the notice of the AGM on pages 6 to 9 which sets out the matters to be considered at the AGM.

Please ensure that you have read the important notice regarding the measures and procedures we have put in place for the AGM in relation to the COVID-19 pandemic which is contained at the bottom of the notice of the AGM on page 9 and in the notes on pages 10 to 13.

Update on the PRA Acquisition

As announced on February 24, 2021, ICON agreed to acquire PRA Health Sciences, Inc. (PRA) (the Acquisition). ICON expects the Acquisition to close on July 1, 2021. We have received all required regulatory approvals and, on June 15, 2021, the ICON shareholders and PRA stockholders both passed the necessary resolutions to approve the Acquisition.

As provided for in the terms of the Acquisition, the Board of Directors (the Board) have appointed Mr. Colin Shannon (current PRA Chairman and Chief Executive Officer) and Dr. Linda Grais (current PRA non-executive Director) as members of the Board subject to, conditional upon and effective from the completion of the Acquisition.

Election/ Re-election of Directors (ordinary resolutions 1.1 to 1.3 and 2.1 to 2.2)

In accordance with our Constitution (by-laws), one third of the members of the Board who are subject to retirement by rotation shall retire from office and may stand for re-election at the AGM. Accordingly, the following directors will stand for re-election:

Mr. Ciaran Murray – Chair;

Ms. Joan Garahy – non-executive Director; and

Mr. Eugene McCague – non-executive Director.

In addition, Mr. Colin Shannon and Dr. Linda Grais, whose appointments as non-executive directors of ICON are subject to, conditional upon and effective from the completion of the Acquisition will offer themselves for election if they have been appointed to the Board prior to the AGM. Resolutions 2.1 and 2.2 are only capable of being validly passed, and therefore will only be put to a vote of shareholders, if completion of the Acquisition has occurred before the start of the AGM. If completion of the Acquisition has not occurred before the start of the AGM, the Chair of the AGM will not put Resolutions 2.1 and 2.2 to a vote of the shareholders.
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Mr. Ciaran Murray, Ms. Joan Garahy, Dr. Linda Grais and Mr. Eugene McCague are “independent” non-executive Directors (as that term is defined under the published listing requirements of NASDAQ).

Each of the Directors standing for election or re-election demonstrates the necessary commitment to the role and provides valuable skills, knowledge and experience and makes important contributions to the working of the Board or, for the former directors of PRA, have made an important contribution in their previous roles on the board of PRA. Further information on the experience, qualifications and industry knowledge of the current Directors is available from the Annual Report and/or Form 20-F at https://investor.iconplc.com/financials-filings/annual-reports, the biographies of the incoming directors are set out below and the details of current committee composition is set out on our website at https://investor.iconplc.com/corporate-governance/committee-composition.

Incoming Directors’ Biographies

Colin Shannon

On January 1, 2010, Mr. Shannon was named PRA’s President and Chief Executive Officer and as a director of the PRA. He is currently the Chairman of PRA. Mr. Shannon joined PRA in 2007, serving first as President and Chief Operating Officer. Prior to joining PRA, he was Executive Vice President, Global Clinical Operations at Pharmaceutical Product Development, Inc. (now known as PPD, Inc.), or PPD. During his 12 year tenure with PPD, he held various leadership roles, including Chief Operating Officer for its European division and Chief Financial and Administration Officer for Europe and the Pacific Rim. Prior to joining PPD, Mr. Shannon had more than 15 years of experience in a variety of financial and accounting positions in the utility and multimedia industries. Mr. Shannon earned his M.B.A. from London’s City University and is a fellow member of the Chartered Association of Certified Accountants.

Linda S. Grais, M.D.
A director of PRA since October 2015, Dr. Grais served as a member of the board of directors of Ocera Therapeutics, Inc. from January 2008 through December 2017 and as President and Chief Executive Officer of Ocera Therapeutics, Inc., a biopharmaceutical company, from June 2012 to December 2017. Prior to her employment by Ocera Therapeutics, Dr. Grais served as a managing member at InterWest Partners, a venture capital firm from May 2005 until February 2011. From July 1998 to July 2003, Dr. Grais was a founder and executive vice president of SGX Pharmaceuticals Inc., a drug discovery company focusing on new treatments for cancer. Prior to that, she was a corporate attorney at Wilson Sonsini Goodrich & Rosati, where she practiced in such areas as venture financings, public offerings and strategic partnerships. Before practicing law, Dr. Grais worked as an assistant clinical professor of Internal Medicine and Critical Care at the University of California, San Francisco. She currently serves on the boards of directors of Corvus Pharmaceuticals, Inc., Zosano Pharma Corporation and Arca Biopharma, Inc.. She sits on the audit committees of Corvus Pharmaceuticals, Inc., Zosano Pharma Corporation and Arca Biopharma, Inc. and on the compensation committee of Arca Biopharma, Inc. Dr. Grais received a B.A. from Yale University, an M.D. from Yale Medical School and a J.D. from Stanford Law School.

ICON’s 2020 Accounts (ordinary resolution 3)
This resolution is to review the Company's affairs and consider ICON’s 2020 accounts which have been audited by KPMG, ICON’s independent auditors.

Remuneration of Auditors (ordinary resolution 4)
This resolution authorises the Directors to fix the remuneration of the auditors.

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ICON plc – Notice of Annual General Meeting 2021





Authority to issue shares up to 20% of share capital (ordinary resolution 5)
This resolution authorises the Directors to issue shares until the earlier of the next Annual General Meeting of the Company or 19 January 2023 up to an aggregate of 20% of the share capital of the Company without further shareholder approval. This resolution is required under Irish law as the Company is an Irish incorporated company. The 20% cap on this resolution aligns the resolution with the NASDAQ rules which provide that up to 20% of share capital can be issued without shareholder approval.


Authority to issue shares up to 5% of share capital without offering to existing shareholders, with an additional 5% for funding capital investment or acquisitions (special resolution 6 and special resolution 7)
Resolution 6 authorises the Directors to issue shares for cash, subject to resolution 5, until the earlier of the next Annual General Meeting of the Company or 19 January 2023 up to an aggregate of 5% of the share capital of the Company without having to offer the shares to existing shareholders on a pro rata basis. Resolution 7 authorises the Directors to issue an additional 5% of the share capital for cash, again subject to Resolution 5, on a non pre-emptive basis provided that the proceeds of any such share issuance are to be used only for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction) an acquisition or other capital investment.

A resolution authorising the issuance of shares for cash without such offer round is a requirement of Irish law and there is no such requirement under the applicable U.S. Securities and Exchange Commission (the SEC) rules and NASDAQ rules. As above, this year the authorities under these resolutions expire on the earlier of the next Annual General Meeting of the Company or 19 January 2023.

The caps on resolutions 5, 6 and 7 are different but complementary and they provide our shareholders with significant anti-dilution protection far in excess of similar protections provided to the shareholders of many other NASDAQ-listed companies. Every year since the Company was listed (apart from 2014 as resolutions with 5 year authority were passed in 2013), the Directors have put resolutions to authorise the issuance of shares and to disapply offer round to the shareholders and each such resolution has been passed.


Authority to buy back shares up to 10% of share capital (special resolution 8)
This resolution authorises the Company to purchase in the market (buy-back) up to 10% of the outstanding share capital of the Company. It is important both for the Company and shareholders that the Company has this flexibility to implement a buy-back (without having to seek further shareholder approval) if the market conditions favour a buy-back. It should also be noted that while the applicable SEC rules and NASDAQ rules do not require shareholder approval prior to a share buy-back, this resolution is required as the Company is an Irish incorporated company and Irish law requires shareholders to pass such a resolution to give Directors the authority to put a buy-back in place. The authority under this resolution expires on the earlier of the next Annual General Meeting and 19 January 2023.


Authority to reissue shares held as treasury shares (special resolution 9)
This resolution authorises the price range at which the Company can reissue shares that it holds as treasury shares. Any share buy-back activity by the Company will result in ordinary shares either being cancelled or reissued as treasury shares. We may reissue treasury shares that we acquire through our proposed share buy-back activities including in connection with our executive compensation programme, our employee restricted share unit programme and our other compensation programmes. As a result of using this authority in this way, ICON would avoid the need to issue new shares (and the resulting shareholder dilution) when the vesting of equity awards triggers the requirement to issue shares.
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ICON plc – Notice of Annual General Meeting 2021





The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be reissued are 95% and 120%, respectively, of the average closing price per ordinary share of the Company, as reported by NASDAQ, for the thirty (30) trading days immediately preceding the proposed date of reissuance. Any reissuance of treasury shares will be at price levels that the Board considers in the best interests of our shareholders.

There is no resolution dealing with executive compensation as ICON, being a foreign private issuer, is not obliged to provide a “say on pay” shareholder resolution on executive compensation. Details of ICON’s executive officers compensation for 2020 are available in the Annual Report and Form 20-F for 2020 which are available at https://investor.iconplc.com/financials-filings/annual-reports.

Approval of Resolutions
Resolutions 1.1 to 1.3, 2.1 to 2.2, 3, 4 and 5 are ordinary resolutions which require approval of a simple majority of the votes cast in person or by proxy and resolutions 6 to 9 are special resolutions which require approval of 75% of the votes cast in person or by proxy.

Recommendation of Directors
Your Board believes that the resolutions to be proposed at the AGM are in the best interests of the Company and its shareholders. Accordingly, your Directors unanimously recommend that you vote in favour of all resolutions as they intend to do in respect of the shares held by them. On 10 June 2021, the Directors held 620,640 ordinary shares representing approximately 1.2% of the issued ordinary share capital of the Company.





Yours sincerely,

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Ciaran Murray
Chair














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ICON plc – Notice of Annual General Meeting 2021





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ICON plc
South County Business Park,
Leopardstown,
Dublin 18, Ireland
+353-1-291-2000
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON 20 JULY, 2021
To the Shareholders of ICON plc:

NOTICE is hereby given that the Annual General Meeting of the Company will be held at ICON’s global headquarters in South County Business Park, Leopardstown, Dublin 18, Ireland on 20 July 2021 at 12.00pm (Dublin time) (the AGM).

ORDINARY BUSINESS

To consider and, if thought fit, pass the following ordinary resolutions:

1.To re-elect, by separate resolutions, the following individuals who retire as Directors in accordance with the Constitution of the Company and, being eligible, offer themselves for re-election:

1.1 Mr. Ciaran Murray;
1.2 Ms. Joan Garahy; and
1.3 Mr. Eugene McCague.

2.Subject to and conditional upon completion of the acquisition by ICON of PRA Health Sciences, Inc. having occurred before the start of the AGM, to elect, by separate resolutions, the following individuals who retire as Directors in accordance with the Constitution of the Company and, being eligible, offer themselves for re-election:

2.1 Mr. Colin Shannon; and
2.2 Dr. Linda Grais.
    
3.To review the Company's affairs and consider the accounts for the year ended 31st December 2020 and the reports of the Directors and auditors thereon.

4.To authorise the Directors to fix the remuneration of the auditors.

SPECIAL BUSINESS

To consider and, if thought fit, pass the following ordinary resolution:

5.“That the Directors be and are hereby generally and unconditionally authorised, pursuant to Section 1021 of the Companies Act 2014, to exercise all the powers of the Company to allot relevant
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ICON plc – Notice of Annual General Meeting 2021




securities (within the meaning of Section 1021 of the Companies Act 2014) up to an aggregate nominal amount of €635,496.76 representing approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as at 10 June 2021 and the authority conferred by this resolution shall (a) expire on the earlier of the date of the next Annual General Meeting of the Company or 19 January 2023, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of the authority conferred by this resolution, which would or might require any such securities to be allotted after the authority conferred by this resolution has expired and, in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired and (b) be without prejudice and in addition to the authority under the said Section 1021 granted to the Directors pursuant to an ordinary resolution passed at an extraordinary meeting of ICON held on 15 June 2021.”

To consider and, if thought fit, pass the following special resolutions:

6.“That, subject to the passing of Resolution 5, the Directors be and are hereby empowered pursuant to Section 1022 and Section 1023(3) of the Companies Act 2014, to allot equity securities (as defined in Section 1023 of the Companies Act 2014) for cash as if the provisions of sub-section (1) of the said Section 1022 did not apply to any such allotment up to an aggregate nominal amount of €158,874.19 representing approximately 5% of the aggregate nominal value of the issued ordinary share capital of the Company as at 10 June 2021 and the authority conferred by this Resolution shall expire on the earlier of the date of the next Annual General Meeting of the Company or 19 January 2023, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of the authority conferred by this resolution, which would or might require any such securities to be allotted after the authority conferred by this resolution has expired and, in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”

7.“That subject to the passing of Resolution 5, the Directors be and they are hereby authorised in addition to any authority granted under Resolution 6, to allot equity securities (as defined in Section 1023 of the Companies Act 2014) for cash as if the provisions of sub-section (1) of the said Section 1022 did not apply to any such allotment provided that:

(i)The proceeds of any such allotment are to be used for the purposes of financing (or refinancing, if the authority is to be used within six months after the original transaction) an acquisition or other capital investment; and

(ii)The nominal value of all equity securities allotted pursuant to this authority together with the nominal value of all treasury shares (as defined in Section 106 of the Companies Act 2014) reissued pursuant to Resolution 8 not exceed €158,874.19 representing approximately 5% of the nominal value of the issued share capital as at 10 June 2021.

The authority conferred by this resolution shall expire on the earlier of the date of the next Annual General Meeting of the Company or 19 January 2023, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of the authority conferred by this resolution, which would or might require any such securities to be allotted after the authority conferred by this resolution has expired and, in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”

8.“That the Company and/or any subsidiary (as such expression is defined by Section 7 of the Companies Act 2014) of the Company be and they are hereby generally authorised to make overseas
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market purchases (as defined by Section 1072(2) of the Companies Act 2014) of shares of any class of the Company on such terms and conditions and in such manner as the Directors or, as the case may be, the Directors of such subsidiary, may from time to time determine in accordance with and subject to the provisions of the Companies Act 2014 and the following restrictions and provisions:

(i)The maximum aggregate number of shares authorised to be acquired pursuant to this resolution shall not exceed 10% of the aggregate number of shares issued by the Company at close of business on the date of passing of this resolution;

(ii)The minimum price (exclusive of expenses) which may be paid for any such share shall be an amount equal to the nominal value thereof; and

(iii)The maximum price (exclusive of expenses) to be paid for any ordinary share shall be an amount equal to 115% of the NASDAQ Official Close Price (the “NOCP”) (as reported by NASDAQ) of the Company’s ordinary shares on the trading day preceding the day on which the relevant shares are purchased by the Company.

The authority hereby conferred shall expire on the earlier of the date of the next Annual General Meeting of the Company or 19 January 2023 or (if earlier) unless previously varied, revoked or renewed in accordance with the provisions of Section 1074 of the Companies Act 2014. The Company or any subsidiary may before such expiry make a contract for the purchase of shares which would or might be wholly or partly executed after such expiry and may make a purchase of shares pursuant to any such contract as if the authority hereby conferred had not expired.”

9.    “That the reissue price range at which any treasury shares held by the Company may be reissued off-market shall be as follows:

(i)    the maximum price at which such treasury share may be reissued off-market shall be an amount equal to 120% of the “market price”; and

(ii)    the minimum price at which a treasury share may be reissued off-market shall be the nominal value of the share where such a share is required to satisfy an obligation under an employee share plan operated by the Company or, in all other cases, an amount equal to 95% of the “market price”; and

(iii)    for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of the Company, as reported by NASDAQ, for the thirty (30) trading days immediately preceding the proposed date of reissuance.

The authority hereby conferred to reissue treasury shares shall expire eighteen months from the date of the passing of this resolution unless previously varied or renewed in accordance with the provisions of Section 1078 of the Companies Act 2014.”

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ICON plc – Notice of Annual General Meeting 2021





By Order of the Board of Directors,
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Diarmaid Cunningham
Company Secretary

Dublin, Ireland
Dated: 16 June, 2021
Your vote is important. ICON shareholders are requested to complete, date, sign and return the enclosed proxy in the envelope provided, or to submit their votes electronically through the Internet or by telephone.

In light of public health concerns related to COVID-19, ICON would like to emphasize that it considers the health of its shareholders, employees, attendees and other stakeholders a top priority and in this context is closely monitoring the evolving COVID-19 situation as regards attendance at the AGM. Shareholders are referred to the Notes section which sets out further detail on the public health situation in Ireland and current restrictions around in person attendance at the ICON offices. ICON therefore strongly encourages voting via mail, telephone and Internet over in person attendance at the AGM.


























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ICON plc – Notice of Annual General Meeting 2021




NOTES:

1.     Information and Documentation
Information regarding the Annual General Meeting is available on the Company’s website www.iconplc.com and from www.proxyvote.com. If you require a paper copy of the Form 20-F or Annual Report, please contact Investor Relations at 1-888-381-7923 or IR@iconplc.com.

2.     Who is eligible to vote and how?
The record date for the Annual General Meeting is 10 June 2021.

If your shares are registered in your name, you are a shareholder of record. Shareholders of record who are entered in the Register of Members of the Company on 10 June 2021 shall be entitled to attend, speak, ask questions and vote at the Annual General Meeting, or if relevant, any adjournment thereof. Changes in the Register of Members of the Company after that time will be disregarded in determining the right of any person to attend and/or vote at the Annual General Meeting.

For those shareholders whose shares are not held in their name, but rather in an account at a brokerage firm, bank, dealer or other similar organisation, who in turn hold through The Depository Trust Company (“DTC”), then their entitlement to vote is determined as at 10 June 2021.

Depending on whether your shares are registered in your name or whether your shares are held in a “street name” the arrangements are as follows:
Shareholder of Record: Shares Registered in Your Name
In light of public health concerns related to COVID-19, ICON would like to emphasize that it considers the health of its shareholders, employees, attendees and other stakeholders a top priority and in this context is closely monitoring the evolving COVID-19 situation as regards the AGM. Shareholders are referred to the section below entitled “Attending the AGM” which sets out further detail on the situation in Ireland and restrictions around in person attendance at the ICON offices. ICON therefore strongly encourages voting via mail, telephone and Internet over in person attendance at the ICON AGM.
As a shareholder of record, you may vote in person at the Annual General Meeting or vote by proxy. In the case of joint holders, the vote of the senior member who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other shareholder of record and, for this purpose, seniority shall be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding. The appointment of a proxy will not preclude a shareholder of record from attending, speaking, asking questions and voting at the Annual General Meeting should the shareholder subsequently wish to do so. A proxy need not be a member of the Company. If you wish to appoint more than one proxy or a person not listed on the form of proxy, please contact Investor Relations at 1-888-381-7923 or IR@iconplc.com.

A Form of Proxy is enclosed with this notice of Annual General Meeting for shareholders of record. To be effective, the Form of Proxy duly completed and executed, together with any authority under which it is executed, or a copy thereof certified, must be deposited at the registered office of the Company, so as to be received by 11.59pm ET on 19 July 2021 or if the Annual General Meeting is adjourned, on the day that falls before the day appointed for the adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the Annual General Meeting or adjourned meeting) the day before the taking of the poll at which it is to be used. Any alteration to the Form of Proxy must be initialled by the person who signs it.
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ICON plc – Notice of Annual General Meeting 2021




Alternatively, provided it is received by 11.59pm ET on 18 July 2021 or if the Annual General Meeting is adjourned, by 11.59pm ET on the day that falls 48 hours before the time appointed for the adjourned meeting or (in the case of a poll taken otherwise than at or on the same day as the Annual General Meeting or adjourned meeting) by 11.59pm ET on the day that falls 48 hours before the taking of the poll at which it is to be used, the appointment of a proxy may be submitted by telephone or electronically, subject to the applicable terms and conditions, using the phone number on the Form of Proxy and following the instructions provided or via the Internet by accessing Broadridge’s website www.proxyvote.com and following the instructions on the website. The information you need to appoint your proxy by telephone or electronically is included at the top of your Form of Proxy.

You need only vote in one way (so that, if you vote by Internet or by telephone, you need not return the Form of Proxy). In the case of a corporation, the Form of Proxy must be either executed under seal or signed on its behalf by a duly authorised officer or attorney.
Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If, as at 10 June 2021, your shares were not held in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organisation, who in turn hold through The Depository Trust Company (“DTC”), then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organisation, together with instructions as to voting. You will need to carefully follow the instructions from your broker, bank or other agent or contact your broker, bank or other agent if you have any queries.

As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account as per the instructions enclosed by your broker. You are also invited to attend the Annual General Meeting. However, since you are not the shareholder of record, you may not vote your shares in person at the Annual General Meeting unless you contact your broker and obtain a valid proxy card from your broker or other agent.

Therefore as a beneficial owner of shares registered in the name of your broker, bank or other agent, who in turn hold the shares through DTC, you should have received a voting instruction card and voting instructions with these proxy materials from that organisation rather than from us. Simply follow the instructions on the voting instruction card provided by your broker, bank or other agent to ensure that your vote is counted.
 
3.     Attending the AGM - Special Precautions Due to COVID-19 Concerns

You are entitled to attend the AGM only if you are a shareholder of record of ICON at the close of business on 10 June, 2021 (the record date for the AGM) or hold a proxy for such a shareholder. Shares held in “street name” may be voted in person by you only if you obtain a signed legal proxy from your bank, broker or other nominee giving you the right to vote the shares at the AGM.

In light of public health concerns related to COVID-19, ICON would like to emphasize that it considers the health of its shareholders, employees, attendees and other stakeholders a top priority, and in this context, is closely monitoring the evolving COVID-19 situation. ICON therefore strongly encourages voting via mail, telephone and Internet over in person attendance at the ICON AGM.


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ICON plc – Notice of Annual General Meeting 2021




Based on the latest available public health guidance, it is expected the AGM will proceed under very constrained circumstances given current restrictions on public gatherings in Ireland. Shareholders are strongly encouraged not to attend the meeting in person and instead to vote their shares by proxy as the preferred method of fully and safely exercising their rights. Personal attendance at the AGM may present a health risk to shareholders and others and entry may be refused. ICON advises that shareholders who are experiencing any COVID-19 symptoms or anyone who has been in contact with any person experiencing any COVID-19 symptoms should not attend the AGM in person.

ICON may take additional procedures or limitations applicable to meeting attendees, including restrictions on seating arrangements, health screening requirements and other reasonable or required measures in order to enter the building.

In the event that a change of venue becomes necessary due to public health recommendations regarding containment of COVID-19, which may include the closure of or restrictions on access to the meeting venue, ICON will promptly communicate this to shareholders by an announcement in a press release, on the investor relations page of https://investor.iconplc.com/ and a filing with the U.S. Securities and Exchange Commission. ICON advises shareholders to monitor the page regularly, as circumstances may change on short notice. We recommend that shareholders keep up-to-date with the latest public health guidance regarding travel, self-isolation and health and safety precautions.

4.     How many votes do you have?
The total number of issued ordinary shares on the record date, 10 June 2021, was 52,958,063. On a vote on a show of hands, every shareholder present in person and every proxy has one vote (but no individual shall have more than one vote). On a poll, every shareholder present in person and every proxy shall have one vote for every share carrying rights of which he is the holder or proxy. Ordinary resolutions are required to be passed by a simple majority of shareholders voting in person or by proxy. Special resolutions are required to be passed by a majority of 75 per cent of shareholders voting in person or by proxy.

5.    Broker Voting
If your shares are held by a broker on your behalf (that is, in “street name”), and you do not instruct the broker as to how to vote these shares, the broker may not exercise discretion to vote for or against any of the proposals. This would be a “broker non-vote” and these shares will not be counted as having been voted on the proposals. Please instruct your bank or broker so your vote can be counted.

6.    Can I change my vote after submitting my proxy?
Shareholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Annual General Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways: 
You may submit another properly completed proxy with a later date. Your revised proxy must be received before the commencement of the Annual General Meeting at 12.00pm Dublin time on 20 July 2021 or if the Annual General Meeting is adjourned, before the commencement of the adjourned meeting;

You may send a written notice that you are revoking your proxy to Erina Fox, Deputy Company Secretary, ICON plc at the registered office of the Company (being South County Business Park, Leopardstown, Dublin 18, Ireland) or by email to IR@iconplc.com. Your notice must be received before the commencement of the Annual General Meeting at
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ICON plc – Notice of Annual General Meeting 2021




12.00pm Dublin time on 20 July 2021 or if the Annual General Meeting is adjourned, before the commencement of the adjourned meeting; or

You may attend the Annual General Meeting and vote in person.

Beneficial Owner: Shares Registered in the Name of a Broker, Bank or Other Agent
If your shares are held by your broker, bank or other agent, you should follow the instructions provided by them. Please contact your broker, bank or other agent if you have any queries.

7.    What does it mean if I receive more than one set of materials?
If you receive more than one set of materials, your shares are registered in more than one name or are registered in different accounts. In order to vote all the shares you own, you must sign and return all of the proxy cards or follow the instructions for any alternative voting procedure on each of the proxy cards you receive.
13
ICON plc – Notice of Annual General Meeting 2021


iconplc_prxyxp59473xgt20
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D56716-P59473 For Against Abstain For Against Abstain For Against Abstain ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ICON PLC ICON PLC SOUTH COUNTY BUSINESS PARK LEOPARDSTOWN DUBLIN 18 IRELAND VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on Sunday 18th July 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on Sunday 18th July 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it to the registered office address of the company (Erina Fox, Deputy Company Secretary, ICON plc, South County Business Park, Leopardstown, Dublin 18, Ireland) so as to be received by 11:59 P.M. Eastern Time on Monday 19th July 2021. 1.1 Mr. Ciaran Murray 2.1 Mr. Colin Shannon 2.2 Dr. Linda Grais 1.2 Ms. Joan Garahy 1.3 Mr. Eugene McCague 1. Election of Directors 2. Subject to and conditional upon the completion of the Acquisition to elect: 3. To review the Company's affairs and consider the Accounts and Reports 4. To authorise the fixing of the Auditors' Remuneration 5. To authorise the Company to allot shares 8. To authorise the Company to make market purchases of shares 6. To disapply the statutory pre-emption rights 9. To authorise the price range at which the Company can reissue shares that it holds as treasury shares The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR proposals 3 through 9: 7. To disapply the statutory pre-emption rights for funding capital investment or acquisitions Nominees: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorised officer. Exhibit 99.2


 
D56717-P59473 ICON plc Annual General Meeting of Shareholders Tuesday, July 20, 2021 12:00 PM, Dublin Time ICON plc South County Business Park Leopardstown Dublin 18 Ireland If voting by mail, please date, sign and mail this proxy card as soon as possible. Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting: The Notice & Proxy Statement, Annual Report and 20F are available at www.proxyvote.com. ICON PLC Annual General Meeting of Shareholders July 20, 2021 12:00 PM This proxy is solicited by the Board of Directors The shareholder(s) of the Company hereby appoint(s) the Chairman of the Annual General Meeting, as the proxy of the shareholder(s) to attend, speak and vote for the shareholder(s) on behalf of the shareholder(s) as designated on the reverse side of this ballot, all of the Ordinary Shares of ICON plc that the shareholder(s) is/are entitled to vote at the Annual General Meeting to be held at 12:00 PM, Dublin Time on July 20, 2021, at the ICON plc Headquarters, South County Business Park, Leopardstown, Dublin 18, Ireland, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Note: This proxy may also be voted in accordance with the Board of Director's recommendations with respect to such other business as may properly come before the Annual General Meeting or any adjournment, postponement or continuation thereof. Continued and to be signed on reverse side


 
Document

            
EXHIBIT 99.3













ICON plc and Subsidiaries


Consolidated Financial Statements


Year ended 31 December 2020



Registered number    145835







Directors’ Report and Consolidated Financial Statements


ContentsPage
Directors’ and Other Information
Directors’ Report
Statement of Directors’ Responsibilities in respect of the Directors’ report and the financial statements
Independent Auditor’s Report to the members of ICON plc
Consolidated Statement of Profit and Loss
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Company Statement of Cash Flows
Notes to Company Financial Statements
Reconciliation from IFRS to US Accounting Polices
Appendix A: Risk Factors
1




Directors’ and Other Information
DirectorsCiaran Murray (Irish – Chair)
Dr. Steve Cutler (Australian – Chief Executive Officer)
Rónán Murphy (Irish – Non-Executive)
Prof. Hugh Brady (Irish – Non-Executive)
Dr. John Climax (Irish – Non-Executive)
Joan Garahy (Irish – Non-Executive)
Prof. William Hall (Irish – Non-Executive)
Eugene McCague (Irish – Non-Executive)
Julie O'Neill (Irish – Non-Executive)
Mary Pendergast (American – Non-Executive)
Company secretaryDiarmaid Cunningham
Registered officeSouth County Business Park
Leopardstown
Dublin 18
Auditor    
KPMG
1 Stokes Place
St. Stephen’s Green
Dublin 2
SolicitorsA & L Goodbody
International Financial Services Centre
North Wall Quay
Dublin 1
Cahill Gordon & Reindel LLP
80 Pine Street
New York
NY 10005
USA
RegistrarsComputershare Investor Services (Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
Bankers    
Citibank
Canada Square
Canary Wharf
London E14 5LB
United Kingdom
JP Morgan Chase Bank N.A.
4 New York Plaza
New York
NY 10004
USA
2




Directors’ Report
The Directors present their report and audited Consolidated and Company Financial Statements of ICON plc (“the Company”, “ICON”, "we", "our" or "us"), a public limited company incorporated in the Republic of Ireland, and its subsidiary undertakings (“the Subsidiaries”), with the Company and the Subsidiaries being together (“the Group”) for the year ended 31 December 2020.

The Company’s ordinary shares are traded on the NASDAQ market. The Company is considered a foreign private issuer in the US and accordingly it is not subject to the same ongoing regulatory requirements as a US registered company with a primary listing on the NASDAQ market.

These Consolidated and Company Financial Statements (together “the financial statements”) for the year ended 31 December 2020 are prepared in accordance with IFRS as adopted by the EU and meet the reporting requirements pursuant to Irish Company Law. In addition to the Consolidated Financial Statements contained in this annual report, we also prepare separate consolidated financial statements on Form 20-F pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") and in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The Form 20-F (under U.S. GAAP) is a separate document, a copy of which may be obtained from the Company’s website www.iconplc.com. IFRS differs in certain respects from U.S. GAAP, details of which are set out on pages 140 to 143 of this annual report.

Principal activities, business review and future developments

The Group is a clinical research organisation (“CRO”), providing outsourced development services on a global basis to the pharmaceutical, biotechnology and medical device industries. The Group specialises in the strategic development, management and analysis of programmes that support all stages of the clinical development process from compound selection to Phase I-IV clinical studies. The Group’s mission is to accelerate the development of drugs and devices that save lives and improve the quality of life. Our vision is to be the Global CRO partner of choice in drug development by delivering best in class information, solutions and performance in clinical and outcomes research.

Headquartered in Dublin, Ireland, the Group began operations in 1990 and has expanded the business predominately through internal growth, together with a number of strategic acquisitions to enhance its capabilities and expertise in certain areas of the clinical development process. Its principal executive office is located at: South County Business Park, Leopardstown, Dublin 18, Republic of Ireland. The contact telephone number of this office is +353 1 291 2000.

The Group believes that it is one of a select number of CROs with the expertise and capability to conduct clinical trials in most major therapeutic areas on a global basis and has the operational flexibility to provide development services on a stand-alone basis or as part of an integrated “full service” solution. At 31 December 2020, the Group had approximately 15,730 employees, in 93 locations in 41 countries. During the year ended 31 December 2020, the Group derived approximately 33.1%, 57.1% and 9.8% of its revenue in the United States, Europe and Rest of World, respectively.

We have achieved strong growth since our foundation, as a global provider of outsourced development and commercialisation services to pharmaceutical, biotechnology, medical device and government and public health organisations. We focus our innovation on those factors that are critical to our clients - reducing time to market, reducing cost and increasing quality. Our global team has extensive experience in a broad range of therapeutic areas. ICON has been recognised as one of the world's leading Contract Research Organisations (''CROs") through a number of high-profile industry awards.

As our market has evolved, biopharmaceutical companies are tackling productivity challenges, increasing budget constraints and greater demands to demonstrate product value; all of which are placing increased pressure on their revenues and levels of profitability. However, these trends have generally been positive for CROs, as increased outsourcing has been adopted by these companies as they seek to create greater efficiencies in their development processes, convert previously fixed costs to variable, and accelerate time to market for new treatments.

One consequence of the drive to accelerate time to market will be increased emphasis on making existing drug development phases more seamless, through the use of techniques such as adaptive trial designs to filter the most promising compounds and test these in parallel in several therapeutic indications or with other drug combinations.

Regulatory and reimbursement pressures will increase the emphasis on late stage (post marketing) research, while increasing requirements to demonstrate the economic value of new treatments. As a result, outcomes and comparative effectiveness research will most likely be required in order to secure on-going product reimbursement. Furthermore, we believe advances in molecular biology and genetics will drive further growth in innovation in the long-term which in turn should create further growth opportunities for both biopharma companies and their outsource development partners.


3





Directors’ Report (continued)
We expect that continued outsourcing will be a core strategy of clients in the near term as they respond to the increased pressures on their revenues and profitability. Larger clients were the first to form strategic partnerships with global CROs in an effort to reduce the number of outsource partners with whom they engage and to reduce inefficiencies in their current drug development models. More recently we have seen the increasing adoption of this partner model with mid-tier pharmaceutical and biotechnology firms as they also seek to drive development efficiencies. As outsourcing penetration increases, we believe clients may seek a greater level of integration of service offerings from CROs, although some will continue to purchase services on a stand-alone basis. Creating greater connectivity and “seamlessness” between our services and the sharing of “real-time” clinical, operational and “real world” data with clients will therefore become increasingly important for CROs. ICON will seek to benefit from this increased outsourcing by clients to grow our business by increasing market share with our existing client base and adding new clients within the Phase I-IV outsourced development services market; the aim being to ensure we will be considered for all major Phase I-IV projects.

During the year, as a result of the global spread of COVID-19, the Company has experienced a net negative impact on its operations. At this point in time, there continues to be significant uncertainty relating to the long-term effects of COVID-19 on our business. We have experienced restrictions on our ability to ensure laboratory samples are collected and analysed on time, our ability to monitor our clinical trials, the ability of patients or other service providers to travel, and our ability to travel as a result of the outbreak.

However, ICON has mobilized its vaccine resources to address the COVID-19 global threat, including its ability to conduct home-based trials to minimize infection. In addition, the Company has seen some offsetting positive business impact from COVID-19 and is currently providing clinical monitoring and safety oversight on more than 100 COVID-19 trials for both the private and government sectors.

During the year ended 31 December 2020, ICON provided clinical trial services to the Pfizer and BioNTech SE investigational COVID-19 vaccine program. ICON worked with Pfizer and 153 sites in the US, Europe and Latin America to ensure over 44,000 patients were recruited within four months for phase 3 of the trial, during the global pandemic, in one of the largest and most expeditious clinical trials ever performed. Trial capabilities were key to enabling agility and speed in the global study, which included a high level of remote clinical monitoring and source data verification in addition to on-site monitoring, safeguarding data quality and integrity in the evolving pandemic environment.

Revenue for the year ended 31 December 2020 decreased by $8.6 million, or 0.3%, to $2,797.3 million from $2,805.8 million for the year ended 31 December 2019. The decrease in revenues in the year ended December 31, 2020 reflected the impact the COVID-19 global pandemic has had on operations including: our ability to ensure laboratory samples are collected and analysed on time, our ability to perform on-site monitoring of clinical trials, the ability of patients or other service providers to travel, and our ability to travel. This impact was most significant in late quarter one and quarter two, when the impact on sites was most pronounced. Certain cost saving measures were introduced in response to COVID-19 during this period. While the impact of COVID-19 and the resulting restrictions on travel and related operational activity continues, the Company has been involved in clinical monitoring and safety oversight on significant COVID-19 trials during the third and fourth quarters of 2020, which have offset in part the negative impact on activity experienced during the year. The Company has operated a task force during 2020 to lead our operational response to COVID-19. A key priority of the efforts of the task force has been to ensure the safety and well being of our people, supporting them in working from home and ensuring our people working at sites, and in labs are supported.

4





Directors’ Report (continued)
Delivery of our mission and strategy is focused on our four strategic pillars, being (i) Partnership & Customer Focused (ii) Operational Excellence & Quality (iii) Talent and People Development and (iv) Patient, Site and Data Solutions.
https://cdn.kscope.io/ddd30fc18cc5e9e207cb01805b946d0f-capture.jpg

Our strategy is focused on the following areas:

Partnerships and Customers Focused
We continue to focus on expanding and deepening our partnerships with existing customers, while also developing new customer relationships.
Strategic client relationships will increasingly manifest themselves in many different forms. Many of these relationships will require innovative forms of collaboration across ICON service areas and departments and will therefore require increased flexibility to offer services on both a standalone functional basis and as part of a fully integrated service solution. To support this objective, we continue to evolve our collaboration and delivery models, invest in technology that will enable closer data integration across our service areas and enhance our project and programme management capabilities.
To meet the evolving needs of both our existing and new clients we continue to enhance our capabilities through both organic service development and targeted acquisitions.
During the year, we continued to enhance our scientific and therapeutic expertise to support our customers in specific areas including oncology, orphan and rare diseases, CNS, dermatology, infectious disease and women's health. During 2020, ICON mobilised its vaccine resources to address the COVID-19 global threat, including its ability to conduct home-based trials to minimise infection. In addition, the Company is currently providing clinical monitoring and safety oversight on more than 100 COVID-19 trials for both the private and government sectors.
We continue to target growth in under-penetrated CRO market segments. Penetration within medical device companies has lagged that of bio-pharma firms but is beginning to accelerate. EU Regulatory reform enacted in 2017 is a further catalyst to growth in this segment as it included stricter requirements to perform clinical evaluations and post sale surveillance. In early 2020, the Group acquired MedPass which will further our value offering in this area.
We also invested significantly in our site and patient network and consider our expertise and offering in this area as one of our strategic pillars effective from 2021.






5





Directors’ Report (continued)
Operational Excellence and Quality

We continue to enhance our operating processes and delivery models to gain competitive advantage.

Finding and engaging suitable patients to conduct clinical trials is one of the biggest issues facing the drug development industry today. Less than 1% of the US population participates in clinical trials and the performance of investigative sites that do take part in research is uneven, hard to predict and many trials do not meet the initial recruitment goals. The current market challenge in patient enrolment creates an opportunity for ICON to differentiate its service offering and we are working to reduce patient recruitment times through enhanced site and investigator selection based on key performance metrics and through use of our proprietary Firecrest technology which is used to train and support sites during the development process. Our Accellacare, CRN Holdings, LLC (trading as Symphony Clinical Research ("Symphony")) and Oncacare Limited ("Oncacare") site network alliances enhances our ability to enrol patients onto the clinical studies we perform. We have also developed strategic alliances with investigator site groups and health care systems in all major global research markets. In partnership with others we are pioneering patient recruitment solutions that leverage cognitive computing to transform clinical trial matching and allow a data-driven approach to deliver the right patients for trials. One Search is our intuitive, integrated workflow and interrogation tool that enables access to multiple data sources and provides the visualisation and tools necessary for optimum site identification based on ICON and industry data of capability, experience and performance. Scoring on enrolment performance, speed of start-up and quality supports better site selection.

Our proprietary ICONIK platform, which integrates clinical data across multiple systems allows us to access clinical and real world data to enhance protocol design and profile match patients to trials. It also facilitates collection of real-time data during the trial process enabling better decision making and project execution. The platform uses data and evidence-based research to develop solutions that engage investigators and patients more effectively to improve patient recruitment and retention.

ADDPLAN is part of the ICONIK Informatics Hub. The software provides industry leading statistical design, simulation and analysis for adaptive clinical trials, from phase I to IV and helps our customers identify the most promising drug candidates earlier in the development process and in parallel test these across several therapeutic indications and with other drug combinations. ADDPLAN is used by regulatory agencies (FDA, EMA (Europe) and PMDA (Japan), top pharmaceuticals, medical device companies, and academia.

Quality project execution underpins all that we do and we have an ongoing focus on developing our people and processes to continue to enhance our service delivery. We are also deploying supporting technologies which we believe will enable faster and deeper insights into the quality of trial data.

We are focused on operational excellence across our support functions and we operate a global business support infrastructure across functions including finance, information technology, facilities, human resources and legal. This enables us to enhance the service levels across these support areas whilst driving down the costs of the service provision.

Talent and People Development

At the core of our strategy is our people. Within ICON we have highly qualified and experienced teams, the majority of whom have third level educational qualifications. The need to develop and retain this expertise and talent within the organisation is fundamental in enabling us to be the global CRO partner of choice for our customers.  We have invested in creating an innovative learning environment delivered through ICON’s training and development group, who have formed an industry leading collaboration with University College Dublin. This enables ICON to provide customised management and development programmes for global employees. These programmes are focused on leadership development for those people management roles and specific technical training in competencies that are core to our business, such as project and programme management and clinical research associate development. We continue to invest to refine and develop these programmes.

Our learning and development programmes are complemented by advanced people development practices which incorporate rigorous, analytics based screening in the hiring process, global career frameworks, pay for performance aligned to our strategy, and on-going talent review and succession planning.

Our leadership and talent programmes contribute to the enhanced retention of our employees, better project deliverables for our customers and the enhanced financial performance of the business.






6





Directors’ Report (continued)
Patient, Site and Data Solutions

ICON has a focused patient, site and data strategy, which is helping us to improve site identification, study placement and patient recruitment and retention. We continued to expand our site and patient recruitment capabilities during 2020 with the launch of Accellacare, a global clinical research network, enhancing on the acquisitions of MeDiNova Research ("MeDiNova") and Symphony in 2019 along with the 2018 expansion of the PMG Research network through a partnership with the DuPage Medical Group.

On 3 September 2020, ICON announced that it was launching Accellacare, a global clinical research network offering patients easier and faster access to innovative treatments and offering customers the option to deploy decentralised trials. The site network includes previously acquired PMG Research in the US and MeDiNova Research in EMEA.

Accellacare’s patient centric approach focuses on enhancing the patient experience either on site, or at home as part of integrated operations with Symphony, the leading global provider of at-home care and nursing for clinical trials owned by ICON. This cohesive approach is leading to higher patient recruitment and retention rates. Accellacare is also achieving faster study start-up for its customers through efficiencies gained in central process management including budget and contracting, which can otherwise be a source of delay. This combined with a finely tuned feasibility approach allows the network to identify and recruit more patients to studies, in a wide range of therapeutic areas, in a shorter time frame. Accellacare is an important part of the integrated patient, site and data strategy, helping us to improve patient recruitment and retention. Through Accellacare we are committed to delivering on the promise of patient centricity in clinical research. It is also proving investigators with innovative treatments for their patients with a quality-focused clinical research infrastructure supported by experienced professionals globally.

DuPage is the largest independent, multi-specialty physician group in the Chicagoland area with access to more than 700 physicians in over 50 clinical specialties ranging from primary to specialty care in areas such as cardiology and oncology. Through this agreement PMG assumed the research infrastructure at DuPage providing expanded investigator and patient access and bringing clinical research as a care option to the communities served.

Applied Innovation and Integrated Data

Innovation at ICON is focused on the factors that are critical to our clients. We develop integrated technologies to significantly enhance the efficiency and productivity of clients’ drug and device development programmes, providing true transparency across all areas of a study.

ICON is focused on applying innovation that can help our customers improve their development outcomes. We are focusing this innovation in three critical areas; improving clinical trial design and execution; faster and more predictable patient recruitment; and evolving clinical trials to be more patient centric which includes data collection and analysis directly from patient’s digital devices. Our approach to developing solutions to these challenges incorporates partnering with best in class technology providers but is also supported by a suite of differentiated ICON proprietary technologies.

We have continued to invest in building our capabilities in the gathering, analysis and application of real world patient data within both the clinical trial and post-trial observational study environments. Alongside expanding internal capabilities, we continue to develop innovative partnerships with providers of real world data including TriNetX. During 2018, we signed an agreement with Intel to deploy the Intel® Pharma Analytics Platform for use in clinical trials. The Intel platform is an artificial intelligence solution that enables remote monitoring and continuous capture of clinical data from study subjects using sensors and wearable devices and can apply machine learning techniques to objectively measure symptoms and quantify the impact of new therapies.

In addition to our ICONIK platform and ADDPLAN software, Firecrest; ICON’s proprietary comprehensive site performance management system, is a web-based solution which enables accurate study information, including protocol information, training manuals and case report forms, to be rolled out quickly and simultaneously to investigative sites. It allows site behavior to be tracked to ensure training is understood, procedures are being followed and that timelines and study parameters are met. It can significantly reduce the number of data queries originated from investigator sites. We have continued our development in 2020 and Firecrest is now integrated into the ICON Safety Reporting Solution and provides a new Site Question Management Tool.

Alongside the application of these technology solutions we are also focused on innovation through the redesign and where appropriate the automation of current clinical trial processes.

7





Directors’ Report (continued)
Principal activities of the Company and Group

The principal activity of ICON plc ("the Company") is to act as a holding Company. The Company also operates branch offices, ICON Italy in Milan, ICON Poland in Warsaw, ICON Latvia in Riga and ICON Lithuania in Vilnius. These branches provide contract research services to the pharmaceutical industry.

Acquisition activity
https://cdn.kscope.io/ddd30fc18cc5e9e207cb01805b946d0f-historyacquisitions2801202.jpg

On 3 September 2020, ICON announced that it was launching Accellacare, a global clinical research network offering patients easier and faster access to innovative treatments and offering customers the option to deploy decentralised trials. The site network includes previously acquired PMG Research in the US and MeDiNova Research in EMEA

On 24 July 2020 a subsidiary of the Company, ICON Clinical Research Limited, entered into an agreement to jointly establish a new company, Oncacare Limited ("Oncacare"), with a third-party. Oncacare will operate a specialised oncology site network in the US and EMEA regions. The new site network will focus on implementing a range of commercial models with specialist oncology healthcare providers in the US and EMEA to accelerate the recruitment and retention of patients into oncology trials. The oncology site network will operate as a joint venture between the Company and a third-party company which has extensive experience in developing and running a site network. The Company has invested $4.9 million to obtain a 49% interest in the voting share capital of Oncacare. The third-party to the joint venture has the right to sell the 51% majority voting share capital exclusively to the Company in an eighteen month period, commencing 1 January 2023 and ICON also has the right to acquire the 51% majority voting share capital from 1 August 2025.

On 23 May 2019 a subsidiary of the Company, ICON Clinical Research (U.K.) Limited, acquired a majority shareholding in MeDiNova, a site network with research sites in key markets in Europe and Africa. The consideration to acquire the majority shareholding was cash of $54.1 million (excluding a working capital adjustment of $0.5 million). The contingent consideration was paid in October 2019. The acquisition further enhances ICON's patient recruitment capabilities in EMEA and complements ICON's existing site network in the USA, PMG Research. ICON had the right to acquire the remaining shares in the company and on 9 March 2020 ICON exercised its option to call the outstanding shares in the noncontrolling interest to take 100% ownership of MeDiNova. Effective from this date, the noncontrolling interest was derecognised. The company settled the amount to due to the noncontrolling interest holder on 17 July 2020 for $43.9 million.

On 22 January 2020 a subsidiary of the Company, ICON Investments Limited, acquired 100% of the equity share capital of MedPass International ("MedPass"). MedPass is the leading European medical device CRO, regulatory and reimbursement consultancy, that specializes in medical device development and market access. The acquisition of MedPass further enhances ICON’s Medical Device and Diagnostic Research services, through the addition of new regulatory and clinical capabilities in Europe. The integration of MedPass’s services brings noted expertise in complex class 3 medical devices, interventional cardiology and structural heart devices. The total consideration was $47.6 million.

8





Directors’ Report (continued)
On 24 September 2019, a subsidiary of the Company, ICON Clinical Research LLC, acquired a 100% interest in Symphony. Founded in 2003 and operating from its headquarters in Illinois, USA and Gdansk, Poland, Symphony is a leading provider of at-home trial services and site support services from study start-up to closeout for Phase I-IV global studies. Symphony will grow ICON's patient recruitment capabilities globally and complements ICON's site network in the USA, PMG Research and the recently acquired site network in EMEA, MeDiNova. The consideration to acquire the 100% interest was cash of $35.3 million and contingent consideration which was initially estimated at a fair value of $2.5 million. During 2020, the contingent consideration was settled at fair value in the amount of $0.5 million. The change in fair value has been recorded in the selling, general and administrative expense line of the Consolidated Statement of Operations.

On 25 January 2019, a subsidiary of the Company, ICON Laboratory Services, Inc., acquired 100% of the share capital of MolecularMD Corp. ("MMD"). The consideration was $42.2 million. MMD is a molecular diagnostic speciality laboratory that enables the development and commercialisation of precision medicines in oncology. It is a recognised leader in the analytical development and clinical validation of molecular diagnostic assays. It offers a comprehensive test menu in immuno-oncology development and services also include companion diagnostic development services. The acquisition enhances ICON’s laboratory offering in molecular diagnostic testing and brings to ICON expanded testing platforms, including next generation sequencing, and immunohistochemistry (IHC).

Future developments

Please see note 31 Subsequent events for details of events in the period from year-end to the approval of the financial statements.

In 2021, the Group looks forward to continuing to expand through organic growth, together with strategic acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process and to continue to deliver on the Company’s mission to accelerate the development of drugs and devices that save lives and improve the quality of life.

Results and dividends

The results for the year are as shown on page 31 of these financial statements. The Directors do not propose the payment of a dividend for the year ended 31 December 2020.

The following table sets forth for the periods indicated certain financial data as a percentage of revenue and the percentage change in these items compared to the prior period, being the key performance indicators used by management. The trends illustrated in the following table may not be indicative of future results.
Year ended 31 December 2020Year ended 31 December 2019
Percentage change
 in period
As a percentage of revenue
Revenue100 %100 %-0.3 %
Direct costs (excluding exceptional items)70.8 %70.3 %0.3 %
Other operating expenses (excluding exceptional items)14.5 %14.2 %2.7 %
Operating profit (excluding exceptional items)14.7 %15.5 %(6.0)%
Exceptional items (before taxation)0.7 %0.0 %(100.0)%
Operating profit (including exceptional items)14.0 %15.5 %-10.1 %
9





Directors’ Report (continued)
Twelve months ended 31 December 2020 compared to twelve months ended 31 December 2019

Revenue    
Year Ended
31 December
Change
(dollars in thousands)20202019$%
Revenue$2,797,288 $2,805,839 $(8,551)(0.3 %)

Revenue for the year ended 31 December 2020 decreased by $8.6 million, or 0.3%, to $2,797.3 million from $2,805.8 million for the year ended 31 December 2019. For the year ended 31 December 2020 we derived approximately 33.1%, 57.1% and 9.8% of our revenue in the United States, Europe and Rest of World, respectively. The decrease in revenues in the year ended 31 December 2020 reflected the impact the COVID-19 global pandemic has had on operations including; our ability to ensure laboratory samples are collected and analysed on time, our ability to perform on-site monitoring of clinical trials, the ability of patients or other service providers to travel, and our ability to travel. This impact was most significant in late quarter one and early quarter two when the impact on sites was most significant. While the impact of COVID-19 and the resulting restrictions on travel and related operational activity continues, the Company has been involved in clinical monitoring and safety oversight on significant COVID-19 trials during quarters three and four which have offset in part the negative impact on activity experienced during the year.

Direct costs    
Year Ended
31 December
(dollars in thousands)20202019Change
Direct costs (excluding exceptional items)$1,980,369 $1,973,621 $6,748 
% of revenue (excluding exceptional items)70.8 %70.3 %0.3 %
Direct costs (including exceptional items)$1,989,256 $1,973,621 $15,635 
% of revenue (including exceptional items)71.1 %70.3 %0.8 %

Direct costs for the year ended 31 December 2020 increased by $6.7 million or 0.3%, to $1,980.4 million from $1,973.6 million for the year ended 31 December 2019 (excluding exceptional items). Direct costs consist primarily of investigator and other reimbursable costs, compensation, associated fringe benefits and share-based compensation expense for project-related employees and other direct project driven costs. The increase in direct costs (excluding exceptional items) during the year arose due to an increase in headcount and a corresponding increase in personnel related expenditure of $81.7 million combined with an increase in other direct project related costs of $2.3 million, increases in laboratory costs of $12.5 million, partly offset by a decrease in third-party investigator and other reimbursable costs of $84.7 million and a decrease in travel related costs of $5.1 million. As a percentage of gross revenue, direct costs have increased to 70.8% compared to 70.3% for the year ended 31 December 2019 (excluding exceptional items).

10





Directors’ Report (continued)
Other Operating Expenses    
Year Ended
31 December
(dollars in thousands)20202019Change
Other operating expenses (excluding exceptional items)$406,863 $396,087 $10,776 
% of revenue (excluding exceptional items)14.5 %14.2 %2.7 %
Other operating expenses (including exceptional items)$416,065 $396,087 $19,978 
% of revenue (including exceptional items)14.9 %14.2 %5.0 %

Other operating expenses for the year ended 31 December 2020 increased by $10.8 million, or 2.7%, to $406.9 million compared to $396.1 million for the year ended 31 December 2019 (excluding exceptional items). Other operating costs are primarily comprised of compensation, related fringe benefits, share compensation expense for non project related employees, recruitment expenditures, professional service costs, advertising costs and all costs related to facilities and information systems. As a percentage of revenue, other operating expenses increased to 14.5% of revenue, compared to 14.2% of revenue for the year ended 31 December 2019 (excluding exceptional items). During the year, general overhead costs net of foreign exchange costs increased by $2.8 million, facilities related costs increased by $5.7 million, depreciation and amortisation increased by $4.6 million, personnel related costs increased by $1.2 million and professional fees increased by $0.5 million. These increases were partly offset by a decrease of $3.3 million in acquisition costs and a decrease of $0.7 million in marketing fees.

Restructuring

Year Ended
December 31,
(dollars in thousands)20202019Change
Restructuring$18,089 $— $18,089 
% of revenue0.7 %0.0 %100.0 %

During the year ended 31 December 2020, the Company implemented a restructuring plan to improve operating efficiencies resulting in recognition of a restructuring charge of $18.1 million. The restructuring plan reflected resource rationalisation across the business to improve resource utilisation. There was no restructuring charge during the year ended 31 December 2019 (see note 8 - Exceptional items to the consolidated financial statements).

Operating profit
Year Ended
31 December
(dollars in thousands)20202019Change
Operating profit (excluding exceptional items)$410,056 $436,131 $(26,075)
% of revenue (excluding exceptional items)14.7 %15.5 %(6.0 %)
Operating profit (including exceptional items)$391,967 $436,131 $(44,164)
% of revenue (including exceptional items)14.0 %15.5 %(10.1 %)

Operating profit decreased by $26.1 million, or 6.0%, to $410.1 million ($392.0 million including exceptional items) for the year ended 31 December 2020 from $436.1 million for the year ended 31 December 2019. As a percentage of revenue, operating profit decreased to 14.7% (14.0% including exceptional items) of revenues for the year ended 31 December 2020 compared to 15.5% of revenues for the year ended 31 December 2019.

11





Directors’ Report (continued)
Financing income and expense
Year Ended
31 December
Change
(dollars in thousands)20202019$%
Financing income$2,724 $6,859 $(4,135)(60.3 %)
Financing expense$(12,147)$(24,625)$12,478 (50.7 %)

Financing expense for the period decreased to $12.1 million for the year ended 31 December 2020 from $24.6 million for the year ended 31 December 2019. This is due largely to the remeasurement of the gross obligation under put option of $11.3 million. Financing income for the year decreased to $2.7 million for the year ended 31 December 2020 from $6.9 million for the year ended 31 December 2019. This reflects reduced returns on cash and cash equivalents.

Income tax expense
Year Ended
31 December
Change
(dollars in thousands)20202019$%
Income tax expense$50,753 $57,332 $(6,579)(11.5 %)
Effective income tax rate13.3 %13.7 %

Income tax expense for the period decreased to $50.8 million for the year ended 31 December 2020 from $57.3 million for the year ended 31 December 2019. The Group’s effective tax rate for the year ended 31 December 2020 was 13.3% (13.2% excluding the effect of exceptional items) compared with 13.7% for the year ended 31 December 2019. The Group’s effective tax rate is principally a function of the distribution of pre-tax profits in the territories in which it operates.

Risks and uncertainties

Under Irish Company Law (Section 327 of the Companies Act 2014 ‘the Companies Act’), the Directors are required to give a description of the principal risks and uncertainties which it faced at 31 December 2020. Details of the principal risks and uncertainties facing the Group are set out in Appendix A of this annual report and form an integral part of the Directors’ Report.

Financial risk management

Group financial risk management is governed by policies and guidelines which are reviewed and approved annually by the Board of Directors. These policies and guidelines primarily cover foreign exchange risk, credit risk, liquidity risk and interest rate risk. The principal objective of these policies and guidelines is the minimisation of financial risk at reasonable cost. The Group’s financial instruments comprise cash and cash equivalents, current asset investments, finance lease obligations and negotiated debt facilities. The main purpose of these financial instruments is to fund the working capital requirements of the Group, the cost of new acquisitions and continued growth. The Group also uses derivative financial instruments to reduce exposure to fluctuations in foreign exchange rates. The principal financial risk facing the Group is foreign exchange risk. Other financial risks include interest rate risk, credit risk and liquidity risk. Further details of which are set out in note 26 to the Consolidated Financial Statements and note 11 to the Company Financial Statements. The Group does not undertake any trading activity in financial instruments nor does it enter into any leveraged derivative transactions. The Group treasury function centrally manages the Group’s funding and liquidity requirements.

Financing

The Group maintains both committed and uncommitted credit lines with its relationship banks.

On 15 December 2015, the Company issued through its subsidiary ICON Investments Five Unlimited Company (the "Issuer") Senior Notes for aggregate gross proceeds of $350 million through a private placement ('2015 Senior Notes'). The interest rate on the 2015 Senior Notes was fixed at 3.64% and was payable semi-annually. The 2015 Senior Notes matured on December 15, 2020 and this debt was repaid in full.

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Directors’ Report (continued)
On 8 December 2020, ICON Investments Five Unlimited Company issued new senior notes ('2020 Senior Notes') for aggregate gross proceeds of $350.0 million in a private placement which was guaranteed by ICON plc and ICON Global Treasury Unlimited Company, a subsidiary of the Company. The 2020 Senior Notes were issued in two tranches; Series A Notes of $275.0 million which will mature on 8 December 2023 and Series B Notes of $75.0 million which will mature on 8 December 2025. Interest payable on the 2020 Senior Notes is fixed at 2.32% and 2.43% for Series A Notes and Series B Notes, respectively. The Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The Group entered into an interest rate hedge in respect of the planned issuance of the 2020 Senior Notes in June 2020 which matured on 9 July 2020 when the interest rates on the issue of the 2020 Senior Notes were fixed resulting in a realised loss of $0.9 million. The realised loss is amortised to the Consolidated Statement of Profit and Loss over the term of the hedge resulting in an increase to the interest payable expense on the notes. This interest rate hedge qualified for hedge accounting under IFRS 9 Financial Instruments. Further details on financing are set out in note 23 to the Consolidated Financial Statements.

We regularly evaluate our debt arrangements, as well as market conditions, and during the year we will explore the opportunity to modify our existing arrangements or pursue additional financing arrangements that may result in the issuance of new debt securities by us or our affiliates.

Subsequent events

Details of subsequent events are set out in note 31 to the Consolidated Financial Statements.

Directors and Secretary

The members of the Board of Directors during the year are included in note 9 to the Consolidated Financial Statements.

The following table sets forth information concerning the composition of the Company’s Board committees as of 31 December 2020:
NamePosition
Ciaran Murray
Chair and Director
Dr. Steve Cutler (1)(5)
Chief Executive Officer and Director
Rónán Murphy (2)(3)(5)
Director
Professor Hugh Brady (3)
Director
Dr. John Climax
Director
Joan Garahy (2)(4)
Director
Professor William Hall (2)(4)
Director
Eugene McCague (3)(4)
Director
Julie O'Neill
Director
Mary Pendergast (2)
Director
(1)Executive Officer of the Company.
(2)Member of Compensation and Organisation Committee.
(3)Member of Audit Committee.
(4)Member of Nominating and Governance Committee.
(5)Member of Execution Committee.

Details required by Companies Act 2014, section 329, of Directors’ interests in the Group’s shares are set out in note 9 to the Consolidated Financial Statements. All Directors served for the entire year.

Directors’ remuneration

Details of the Directors’ remuneration and interests are set out in notes 3 and 9 to the Consolidated Financial Statements.

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Directors’ Report (continued)
Directors’ power to purchase and allot company shares

Subject to the provisions of the Companies Act 2014, the Company may purchase any of its own shares. Every contract for the purchase of shares, or under which the Company may become entitled or obliged to purchase shares in the Company shall be authorised by a special resolution of the Company. The Company may cancel any shares so purchased or may hold them as treasury shares or re-issue them.

A resolution was passed at the Company’s Annual General Meeting (“AGM”) on 22 July 2016, which authorised the Directors to purchase (buyback) up to 10% of the outstanding shares in the Company. This authorisation was renewed at the Company's AGM on each of 25 July 2017, 24 July 2018, 23 July 2019 and 21 July 2020. On 3 October 2016, the Company commenced a share buyback programme of up to $400 million. The share buyback programme was completed during the year ended 31 December 2018 with a total of 4,026,576 ordinary shares redeemed for a total consideration of $372.1 million. On 8 January 2019, the Company commenced a further share buyback programme of up to 1.0 million ordinary shares which was completed during the year ended 31 December 2019. These shares were redeemed by the Company for a total consideration of $141.6 million. On 22 October 2019, the Company commenced a further share buyback programme. At 31 December 2019, 35,100 ordinary shares were redeemed by the Company under this programme for a total consideration of $5.3 million. During the year ended 31 December 2020 1,235,218 ordinary shares were redeemed by the Company under this buyback programme for a total consideration of $175.0 million.

All ordinary shares that are redeemed under the buyback programme will be cancelled in accordance with the constitutional documents of the Company and the nominal value of these shares transferred to an undenominated capital fund as required under Irish Company law.

Rights and Obligations attaching to the Company’s shares

The authorised share capital of the Company is €6,000,000 divided into 100,000,000 ordinary shares of €0.06 at 31 December 2020. Holders of ordinary shares will be entitled to receive such dividends as may be recommended by the Board of Directors of the Company and approved by the shareholders and/or such interim dividends as the Board of Directors of the Company may decide. On liquidation or a winding up of the Company, all assets available for distribution will be paid out to the holders of the Company's ordinary shares. Holders of ordinary shares have no conversion or redemption rights. On a show of hands, every holder of an ordinary share present in person or proxy at a general meeting of shareholders shall have one vote with no individual having more than one vote.

Change of control

Certain of the Group’s customer contracts allow the customer to terminate the contract in the event of a change in control of the Company.
The Group has negotiated a banking facility with a number of financial institutions, details of which are set out in note 23 to the Consolidated Financial Statements. This facility requires repayment in the event that the Company becomes controlled by any person or persons acting in concert by whom it was not controlled at the date the facility was entered into.

Furthermore, certain Group companies have entered capital grant agreements with the Irish government agency, Enterprise Ireland, whereby the Group covenants that the controlling interest in the Company will not change without Enterprise Ireland’s prior written consent, which will not be unreasonably withheld.

Additionally, the Company's share option and restricted share unit plans contain change in control provisions which provide for the acceleration of the vesting and exercisability of outstanding options and awards of restricted share units in the event that a change in control occurs with respect to the Company.

Corporate Governance

The Company is listed on the NASDAQ Global Select Market. The Company complies with the corporate governance listing requirements under the NASDAQ marketplace rules. NASDAQ may provide exemptions from certain NASDAQ corporate governance standards to a foreign private issuer in certain circumstances provided that the foreign private issuer properly notifies NASDAQ and makes the required disclosure except to the extent that such exemptions would be contrary to United States federal securities laws.

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Directors’ Report (continued)
The exemptions that the Company relies on, and the practices the Company adheres to, are as follows:

The Company is exempt from provisions set forth in NASDAQ Rule 5620(c), which requires each issuer (other than limited partnerships) to provide for a quorum in its by-laws for any meeting of the holders of common stock, which shall in no case be less than 33.33% of the outstanding shares of the issuer’s common voting stock. The Company’s Constitution requires that only 3 members be present, in person or by proxy, at a shareholder meeting to constitute a quorum. This quorum requirement is in accordance with Irish law and generally accepted business practices in Ireland.

The Company is exempt from provisions set forth in NASDAQ Rule 5635(c) which requires (other than for certain specified exceptions) shareholder approval prior to the establishment or material amendment of a stock option or purchase plan or other equity compensation arrangement made or materially amended, pursuant to which stock may be acquired by officers, Directors, employees or consultants. Irish law does not require shareholder approval with respect to equity compensation arrangements. Accordingly, the 2019 Consultants and Directors Restricted Share Unit Plan, the 2013 Employees Restricted Share Unit Plan and the amendments to the Employee Share Option Plan 2008 and Consultants Share Option Plan 2008 were adopted by the Board of Directors without shareholder approval.

The Company is exempt from provisions set forth in NASDAQ Rule 5605(b)(2), which requires independent Directors to hold regularly scheduled meetings at which only independent Directors are present.  Irish law does not require independent Directors to hold regularly scheduled meetings at which only independent Directors are present.  The Company holds regularly scheduled meetings which all of the Directors may attend and the Lead Independent Director may call meetings of the independent Directors and non-employee Directors of the Board, as appropriate, in accordance with the Lead Independent Director Charter. 

The Company's practices with regard to these requirements are not prohibited by Irish law.

Audit Committee

The Audit Committee meets a minimum of four times a year. It reviews the quarterly and annual financial statements, the effectiveness of the system of internal control (including the arrangement for the Company’s employees to raise concerns in confidence about financial inappropriateness) and recommends the appointment and removal of the external auditors. It monitors the adequacy of internal accounting practices and addresses all issues raised and recommendations made by the external auditors. The Audit Committee pre-approves all audit and non-audit services provided to the Company by its external auditors on a quarterly basis. The Audit Committee, on a case by case basis, may approve additional services not covered by the quarterly pre-approval, as the need for such services arises. The Audit Committee reviews all services which are provided by the external auditor to review the independence and objectivity of the external auditor, taking into consideration relevant professional and regulatory requirements. The Chief Financial Officer, the Head of Internal Audit, the General Counsel and the external auditors normally attend all meetings of the Audit Committee and have direct access to the Committee Chair at all times. At 31 December 2020, the Audit Committee was comprised of three independent Directors: Rónán Murphy (Chair), Professor Hugh Brady and Eugene McCague.

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Directors’ Report (continued)
Significant shareholdings

The Company has been notified of the following shareholdings in excess of 3% of the issued share capital of the Company as at 31 December 2020:
Name%Number of Shares
Wellington Management Company LLP7.563,989,007
WCM Investment Management7.533,976,550
Comgest S.A.4.602,429,517
Renaissance Technologies LLC4.432,336,376
MFS Investment Management3.932,073,465
Acadian Asset Management LLC3.922,069,370
ClearBridge Investments, LLC3.781,993,372
J O Hambro Capital Management Limited3.631,915,922
AllianceBernstein LP3.071,619,739
Wasatch Global Investors Inc.3.011,590,071
All Directors and Officers as a group (1)
2.181,152,168

(1)Includes 390,100 ordinary shares issuable upon the exercise of stock options granted by the Company, 39,425 restricted stock units (“RSUs”) awarded by the Company to Directors, officers and other key employees and 105,776 performance share units (“PSUs”) awarded by the Company to Directors, officers and other key employees. Of the issued PSUs, performance conditions will determine how many of them vest and, if performance targets are exceeded, additional PSUs will be issued and vest in accordance with the terms of the relevant PSU award. 

Subsidiary undertakings

The information required by the Companies Act in relation to subsidiary undertakings is presented in note 32 Subsidiary undertakings to the Consolidated Financial Statements.

Political donations

The Group made no disclosable political donations in the period.

Going concern

The Directors have a reasonable expectation that the Group has adequate resources to continue in operation for the foreseeable future. For this reason, the Group continues to adopt the going concern basis in preparing the financial statements.

Accounting records

The Directors are responsible for ensuring that adequate accounting records as outlined in Section 281-285 of the Companies Act, are kept by the Company. The Directors are also responsible for the preparation of the Annual Report. The Directors have appointed professionally qualified accounting personnel with appropriate expertise and have provided adequate resources to the finance function in order to ensure that those requirements are met. The accounting records of the Company are maintained at the Group’s principal executive offices at its registered office at Leopardstown, Dublin 18.

Statement of relevant audit information

The Directors believe that they have taken all steps necessary to make themselves aware of any relevant audit information and have established that the Company's statutory auditors are aware of that information. In so far as they are aware, there is no relevant audit information of which the Company's statutory auditors are unaware.

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Directors’ Report (continued)
Disclosure of non-financial information
The European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 require disclosure of certain non-financial information by certain large undertakings and groups.
We have sought to address the requirements of the legislation in the sections following.
Business Model
Our mission is to help our customers accelerate the development of drugs and devices that save lives and improve the quality of life. We help our customers deliver life-changing medicines by being innovative in our solutions, collaborative in how we work as teams, accountable for the results we achieve and committed to doing the right thing for our customers and the patients they serve.
Our business model is described in the ‘Principal activities, business review and future developments’ section of the Directors’ Report.
https://cdn.kscope.io/ddd30fc18cc5e9e207cb01805b946d0f-culturevaluesslideexternal.jpg
Our core values underpin our mission and drive a culture and mind-set of ownership at ICON. “Own it @ ICON” is how we define our culture. Our culture of ownership connects us to the core values at the heart of the Company and helps us differentiate how we work with our customers to achieve their goals.
Our values are:
Accountability & delivery: We take pride in what we do
Collaboration: We are one team
Partnership: We partner with our customers
Integrity: We do the right thing

Our values underpin how we work together to deliver on our mission to help our customers accelerate the development of drugs and devices that save lives and improve the quality of life. These values and our Code of Ethical Conduct, which underpins these values, form the core of everything we do. It applies to all officers, Directors, employees, consultants and agents globally. All employees and temporary workers are mandated to complete global ethics training.
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Directors’ Report (continued)

During 2019, ICON established an Environmental, Social, and Governance Committee ('ESG Committee') in order to bring together all of our existing initiatives and efforts under one umbrella to ensure consistency, enhance monitoring, reveal areas for development and facilitate reporting to the Board. The ESG Committee is chaired by the Chief Administrative Officer ('CAO'), who is responsible for reporting to the ICON executive leadership team and Board on ESG matters.
The ESG Committee is focused on developing our strategy and initiatives relating to the environment, social matters, health and safety, community engagement, corporate governance, sustainability and other public policy matters relevant to the Company. The ESG Committee is a cross-functional management committee of the Company with representation from facilities, corporate communications, finance, legal, investor relations and human resources departments. The Committee assists and supports executive management and the Board of the Company in:

• determining and setting the strategy relating to ESG matters;
• developing, implementing and monitoring initiatives and policies based on that strategy; and
• communicating our strategies and initiatives and their results.

We are committed to building and developing our ESG strategies and reporting. During 2020 we published our first annual ESG Report which provides an overview of our ESG priorities and commitments, summarises our current policies in respect to ESG matters and provides an update as to our actions and results during 2019. We also launched our ESG page on the ICON website and have an internal ESG page on our MyICON portal to engage with our employees and provide information and updates relating to ESG matters and our commitment to sustainability. The ESG page is available at https://www.iconplc.com/about/esg/.

Environmental matters

ICON is committed to delivering excellence and care to the communities in which we operate
ICON is committed to delivering excellence and care to the communities in which we operate. This includes conducting our business in an environmentally sustainable manner as set out in our Global Code of Ethical Conduct. We achieve this by managing and improving our environmental performance across all business activities. Our employees, Directors, officers, contractors, and temporary workers are expected to support our sustainability objectives.

As a Clinical Research Organisation, we recognise the impact of how we operate on the environment in the following key areas:
energy use;
waste generation;
emissions to air/water;
water use;
transport; and
procurement.

Our Global Environmental Management Policy and Environmental Management Plan were approved during 2018. Our Environmental Management Plan and Performance Statement sets out the environmental actions and targets to ensure compliance with our Global Environmental Management Policy and to engage our employees in supporting our objectives for continued improvement. Our Environmental Performance Statement is available to employees and to our customers. The plan sets out our commitment to conducting our business in an environmentally sustainable manner by managing and improving our environmental performance across all business activities. Our plan sets out our initiatives and goals.
Responsibilities for the implementation of our objectives and co-ordination of our sustainability efforts and reporting on progress to the executive leadership is led by our facilities team, reporting to our CAO with input from our procurement, legal, corporate communications and human resources teams through our ESG Committee.
We have more than 80 facilities globally which operate in office buildings, where the primary energy consumption is electricity for light and heating, ventilation and air conditioning systems. Our central laboratories also operate laboratory instruments. Where we have direct control over the buildings we operate, we ensure energy efficient lighting solutions. Where we do not have direct control over our facilities, we work with our landlords and other stakeholders to encourage energy efficient lighting solutions. We also work hard to extend the useful life of our equipment and ensure appropriate disposal of assets when decommissioned. In 2019 our electricity consumption was 24,006 MWh. which was sourced 19% from renewables.
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Directors’ Report (continued)
In response to the global pandemic, many of our facilities were closed or operated at reduced capacity for extended periods during 2020. During this time we continued to focus on managing our electricity consumption and sourcing energy from renewables, ensuring appropriate waste management activities and monitoring our carbon footprint. As offices re-open, we renew our efforts in each of these areas.
Waste reduction is one of the objectives of our Environmental Management Policy and we are committed to reducing waste through increasing recycling facilities and continue to engage in waste reduction activities including removing single use cups and using technologies such as secure printing, electronic documents and electronic signatures. Aged IT systems such as laptops and desktops, which are not broken but have exceeded their useful commercial life, are donated to various schools and charity organisations where possible. During 2018 we commenced the development of a global waste management system, which has been maintained during 2019 and 2020.
We track, calculate and report our carbon footprint and use the information available to continue to improve our processes and reduce our impact. As a result of our efforts, our gross Greenhouse Gas (GHG) emissions year on year have consistently decreased since 2016. We follow the GHG Protocol Corporate Standard, which is the global corporate accounting and reporting standard for calculating carbon emissions and we work with Carbon Trust to verify our emissions data. The Carbon Disclosure Project (CDP) provides a globally recognised disclosure system that enables companies to measure and manage their environmental impacts. For CDP 2020, (based on 2019 data) ICON disclosed emissions and environmental data which had been verified by Carbon Trust and based on the data submitted to the CDP, ICON was awarded a C score.
We also require our suppliers to abide by our Global Supplier Code of Conduct which includes a commitment to comply with applicable environmental laws and regulations, our expectations around waste management and sustainable use of resources.
Principal risks
Although the risks associated with environmental matters are actively monitored, ICON does not believe these risks meet the threshold of a principal risk for our business.
Social and Employee matters

Our community engagement initiatives are aligned with ICON’s values
ICON supports a variety of community engagement programmes. Our programmes aim to make a positive difference to the communities in which we work and live and also recognise the enthusiasm and creativity of our people in their efforts to give something back to their communities.
Our community engagement activities are focused on two core areas:
Supporting education & building closer ties between industry & academia; and
Improving the welfare of people in the communities in which we live.

Supporting education & building closer ties between industry & academia
ICON is a strong supporter of bridging the ties between industry and academia and inspiring the next generation of business and scientific leaders.
Benefactor through the Centuries of Trinity College Dublin. In February 2020, ICON was recognised as a benefactor of Trinity College Dublin in recognition of its support for Trinity, which includes:

The creation of the ICON-McKeon Research Fellowship in Motor Neuron Disease ('MND') in recognition of Mr. Declan McKeon, former Board member, acting Chair, Lead Independent Director and Chair of the ICON Audit committee. The ICON-McKeon Research Fellow in MND will carry out research in the areas of machine-learning and artificial intelligence to derive insights from multimodal clinical, imaging neuro-electric signaling, in the context of the neurodegenerative disease of ALS.

Partnership with Trinity Centre for People with Intellectual Disabilities ('TCPID') - In 2019, we entered into a partnership with the TCPID. The TCPID situated within the School of Education, Trinity College Dublin, aims to promote the inclusion of people with intellectual disabilities in education and society. The Centre provides people who have intellectual disabilities with the opportunity to participate in a higher education programme designed to enhance their capacity to fully participate in society as independent adults. The 2-year education programme includes work placements and internships to enable students to experience and participate in the work environment.

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Directors’ Report (continued)
Scholarships supporting female GAA players. ICON has a partnership with the Women’s Gaelic Players Association, whereby we provide ICON-GPA Life Sciences Scholarships to inter-county football and camogie players engaged in undergraduate and post-graduate life sciences courses. ICON also provides mentoring to players to guide and help them as they set-out on their career journeys.

Partnership with Junior Achievement to inspire schoolchildren. ICON supports our people who take time out of their working day to deliver Junior Achievement educational programs. Junior Achievement encourages young people to remain in education and teaches them the skills they need to succeed in a changing world. Our volunteers teach primary and secondary level students valuable business, STEM and entrepreneurship skills that will stand them in good stead as they progress through education and beyond.

Science Gallery Founding Partner. ICON has been a lead corporate supporter of the Science Gallery at Trinity College Dublin since its inception in 2008. Science Gallery aims to inspire and transform curious minds through engagement with science. In 2020, we delivered a new 'Living with....' healthcare event series with the Science Gallery, which explores healthcare, the human experience and the future of disease treatment. 2020 events included a focus on cystic fibrosis, IBD and MND.

Improving the welfare of people in the communities in which we live
ICON employees across the world are making a positive difference to their communities. We support causes that are important to our employees and have a number of programmes that support the welfare of people in our local communities. These include:
Corporate donations to employee-nominated charities. In 2020, we continued our corporate donation programme to employee-nominated charities, by providing substantial donations to 10 charities across the world. In 2020, we supported charities focused on building a more inclusive society, which is aligned with our commitment to Diversity & Inclusion. Charities included those focused on providing sport and work opportunities for people with physical and intellectual disabilities, empowerment of underprivileged youth and women in minority groups through education, healthcare and livelihood programmes and support for LGBTQ communities. Over the last six years, ICON has supported over 70 charities across the world.

Donations in support of employee fundraising. ICON employees raise significant amounts for a variety of charities each year through in-house fundraising events. ICON continues to recognise the enormous effort and creativity of our employees who fundraise for causes that are important to them by supplementing monies raised through ICON’s Charitable Donation Programme.

At the core of our strategy is our people
As set-out above, one of our four strategic pillars is 'Talent, Leadership Development and Culture'. Within ICON we have highly qualified and experienced teams, the majority of whom have third level educational qualifications. The need to develop and retain this expertise and talent within the organisation is fundamental in enabling us to be the global CRO partner of choice for our customers.

The training and development of our staff is a key focus for us
We have a comprehensive curriculum in place to support our people in their roles. We have invested in creating an innovative learning environment delivered through ICON’s training and development group.
We provide our people with a personalised and flexible learning experience, delivered through a combination of in-person and technology-driven programmes that suit their learning styles and can flex to suit their schedules. Through our CareerHub portal, internally developed professional development programmes and partnerships with leading academic institutions, employees are encouraged to broaden their scientific, technical and business knowledge. They also have access to tools that will help them develop the competencies to support their career ambitions. We also collaborate with University College Dublin to deliver customised leadership development programs for global employees.

All of our people are required to complete mandatory training in key areas which support our values and our way of working. They include (but are not limited to) the following areas:
global ethics compliance;
data protection and procedures;
IT security;
confidentiality and maintaining communications; and
social media usage.

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Directors’ Report (continued)
We have a well-established Graduate Development Programme for our clinical teams, which now runs in the US, China, Japan, South Korea, India and also Australia where we take recent graduates and prepare them for careers in clinical monitoring and data management.

Our learning and development programme is complemented by advanced people development practices which incorporate rigorous analytics based screening in the hiring process, global career frameworks, pay for performance aligned to our strategy, and on-going talent review and succession planning.

Our leadership and talent programme contribute to the enhanced retention of our employees, better project deliverables for our customers and the enhanced financial performance of the business.

ICON is proud of this investment in our people. This investment translated to approximately four days training for each
person during 2020. We are also committed to supporting the career aspirations of our people. Approximately 30% of all roles are filled internally.
As an organisation we are keen to hear directly from our employees
Listening to the views of our employees in areas including recruitment and on-boarding, training, engagement, enablement, reward, diversity and inclusion is an ongoing activity in ICON. Our listening strategy feeds into the development of initiatives to address turnover, which we closely monitor. We listen using a variety of channels, ranging from formal global employee surveys to more targeted focus groups. Our most recent survey was conducted in October 2018 and had an 88% response rate. There are two key measures which we track closely. The first is Employee Engagement which scored well at 70%, and was on par with the General Industry benchmark. The second is Employee Enablement, which also scored at 70%, 3% above the General Industry benchmark. The feedback we receive through our listening strategy feeds into the ongoing development of our People Leader and employee programmes and initiatives and also influences action planning at a service line and/or regional level. Examples of improvements made which were a direct result of feedback from our listening strategy include enhanced onboarding, greater transparency around organisational performance and how it impacts annual bonus potential, and a range of enablement initiatives delivered through our IT systems.

Difference drives innovative thinking and is critical to our success
We believe difference drives innovative thinking, which is critical to our customers, and as a global company with approximately 15,730 employees in 41 countries, we encourage diversity of all kinds. We have grown rapidly, increasing our headcount by more than fifty percent over the past 7 years. As a truly global operation, we are deliberately structured as international teams so that we can support the delivery of our customers' clinical development programmes across multiple geographies. Recruitment, selection and promotion decisions are merit-based and in line with the principles of reaching a wider talent pool and equal opportunity.

Building an inclusive workplace

We believe that difference drives innovative thinking and therefore is critical to our success. During 2019 we established the ICON Diversity & Inclusion Steering Group. This Steering Group is comprised of six members of our Group executive team. The executive leaders are supported by senior members of our human resources group, as well as 39 Diversity & Inclusion Advocates from across our service lines and geographies.

21





Directors’ Report (continued)
At ICON, our leadership team sees diversity and inclusion in the workplace as at the core of how we work. We recognise the importance of ensuring it is built into every aspect of the talent and employee life cycle. The team have defined the importance of diversity and inclusion at ICON under three headings as follows:

It aligns with our Values. We value difference of gender, ethnicity, culture, ability and experience. We believe diversity of thought is what drives high performing teams to create better solutions and deliver better outcomes for our customers. Diversity & inclusion is embedded in our values, most notably in our Integrity value. We appreciate differences and value diversity. It is part of our heritage and will drive our organisation forward to success.

It matters to our People. Employees do not see inclusion as a 'nice to have' - they expect it. Organizations that have a clear Diversity & Inclusion strategy and are visibly active in driving this agenda are more likely to attract and retain talent. We ensure all employees are treated fairly and equitably with no barriers to career opportunities. We are committed to equal opportunities for all employees and reflect this in our policies and practices. In November 2019, we engaged Willis Towers Watson to undertake an external audit of our gender pay equity position across our top 10 markets (78% of global population), which found that ICON continues to maintain gender pay equity. We continue to perform pay equity reviews annually with the objective of monitoring and closing any gaps identified.
It benefits our Business. Diversity of thinking drives innovation and mitigates against group think which means we develop better solutions for our customers.

The Executive leadership group defined three clear ambitions for our Diversity & Inclusion agenda, based on feedback from employee focus groups run during 2020. These ambitions define the goals against which success will be measured. The plans evolve each year, with the Diversity & Inclusion advocates co-creating the plan with the Executive leadership group. Our three ambitions are as follows:
    
To build an inclusive workplace culture: To foster a workplace culture that is inclusive, collaborative and accountable and supports the talent and diversity of our people.

To build a diverse workforce: To recruit, develop and retain a diverse workforce that is reflective of the communities in which we operate.

To contribute to society: Foster community engagement partnerships with a Diversity & Inclusion lens. Promote diversity within the clinical trials so that all communities have access to new treatments.
These ambitions are supported by key areas of focus are around talent management, country level inclusion policies, reward, training, communications and a renewed focus on culture.

Talent - We recognise that more diversity in senior leadership increases organisational performance. In 2019 we launched our global Senior Director Leadership Programme in addition to our Vice President High Potential programme for those people who have been identified as High Performing & High Potential Leaders. These programs focus on core organisational skills that will enable these individuals to increase their readiness for promotion, as well as create a strong internal network of senior leaders who feel empowered to take hold of their careers. These programmes help build and support our development of a diverse and inclusive group of future leaders from within and complements existing senior level programs already in existence in the organisation.

Training and Development - Under our Diversity and Inclusion Program, we train all our people leaders to understand unconscious bias and similarity bias and also how to encourage diversity of thought and foster inclusion in their teams. Our diversity and inclusion initiatives were launched at our Company wide Wake up to Culture day during 2019. The fundamentals will be embedded into all people leader programmes, and reflect the values upon which we assess performance behaviours.

Recruitment and progression - We continue to strive to source the best talent in our industry from across the world to fill the highly specialised roles required to help bring new drugs to market. Our most senior roles are truly global in nature. Since 2018, we mandated gender balanced short lists for senior leadership appointments across the organisation in all markets in which we are located.

Retention - We offer flexible working arrangements that help our people achieve balance. Prior to the global pandemic experienced in 2020, many of our employees worked remotely. Employees were supported to work remotely during 2020. We also support and facilitate part time working arrangements. Approximately 16% of our people work part-time. We have an employee bonus programme linked to individual and company performance and also operate a global recognition programme where peer to peer recognition and awards take place for employees who go the extra mile. We also recognise and reward employees who reach significant service milestones within the company.
22





Directors’ Report (continued)

Reward - we pay our employees equally for the same or equivalent work. We have worked hard to structure our pay principles to ensure that individual differences are not a factor in how we deliver rewards. We are committed to global pay equity for our employees worldwide and use best-in-class analysis on an ongoing basis to ensure fair pay irrespective of gender, race or ethnicity. The information relating to pay decisions is hosted through core technology, enabling our people leaders and employees direct access to information which informs and supports equitable and consistent decision making.

Principal risks
For further details on risks relating to employee matters refer to Appendix A: Risk Factors on page 155.
Human rights

ICON is committed to acting ethically and with integrity in all our business dealings
We are committed to human rights and the adoption and pursuit of compliance with the United Nations Guiding Principles on Human Rights. Our business model and our policies are intended to fully comply with applicable human rights legislation in the countries in which we operate. ICON’s Global Supplier Code of Conduct also addresses our zero tolerance stance to slavery and human trafficking. ICON is completely opposed to slavery and human trafficking and will not knowingly support or conduct business with any organisation involved in such activities. ICON does not employ anyone below the minimum employment age in the jurisdictions in which we operate.
In our Anti-Slavery and Human Trafficking Statement, we set out the measures we are taking to prevent modern slavery in our supply chains, in addition to our own operations. A copy of our Anti-Slavery and Human Trafficking Statement is available on our website at https://investor.iconplc.com.
Principal Risks
The risks associated with human rights abuses are actively monitored, however, we do not believe these risks meet the threshold of a principal risk for our business.
Ethics and Compliance

ICON is committed to our core values of Accountability & Delivery, Collaboration, Partnership and Integrity in everything we do. Meeting these values requires us all to work to the highest ethical standards and demonstrate a commitment to honesty, transparency and quality. This is embedded in our Global Code of Ethical Conduct which addresses the core principles underpinning the behaviour required of ICON and our people in our internal interactions with each other and our external dealings with patients, customers, health care professionals, regulators, investors, vendors and other third parties.

ICON’s Ethics and Compliance Programme is fundamental to ICON’s culture of ownership and commitment to its legal and contractual obligations and its design is built around three core areas – Prevention, Detection and Correction. The Ethics and Compliance Programme includes:

setting standards of conduct in written and accessible company policies and procedures;
raising awareness through training and regular internal and external communications;
conducting or monitoring investigations of reported noncompliance in the risk areas under its oversight; and
enhancement of monitoring and auditing areas of compliance risk.

There are a number of policies and codes that make up the Ethics and Compliance Programme including the Global Code of Ethical Conduct, the Global Anti-Corruption Compliance Policy, the Ethics Line Charter and the Global Supplier Code of Conduct (together “the Codes”). The Codes are available on our website at https://investor.iconplc.com. All ICON employees are required to complete ICON’s annual Ethics online training, which incorporates the key principles of each of the Codes. Violations of the Codes may result in a variety of corrective actions and in some cases may result in disciplinary action up to and including termination of employment.

Suspected violations of the Codes may be reported on a confidential (or anonymous, where permitted) basis in accordance with our Ethics Line Charter through ICON’s Ethics Line. ICON has open door, anti-retaliation policies in place to encourage and protect individuals who raise a concern. Ethics line reports are reported to the Board of ICON plc as appropriate.

Principal risks

For further details on risks relating to ethics and compliance refer to Appendix A: Risk Factors on page 159.
23





Directors’ Report (continued)
Anti-bribery and Corruption
Our anti-bribery/anti-corruption programme ('ABAC Programme') is a key element of our Ethics and Compliance Programme, with principles and requirements based on the underlying principal that we do not tolerate bribery or any other form of corruption or fraud. ICON and all ICON directors, employees, consultants and agents (“Covered Persons”) must act in compliance with international laws and regulations relating to bribery, corruption and illicit payments including, the US Foreign Corrupt Practices Act and the UK Bribery Act 2010.
ICON has the ISO 37001:2016 certification for its Anti-Bribery Management System having established, implemented, maintained, reviewed and improved an Anti-Bribery Management System that can prevent, detect and mitigate the risk of bribery. Our programme is designed to ensure our compliance with anti-corruption laws, including due diligence, training, policies, procedures, and internal controls.

Bribery and corruption remains a business risk as we conduct our business across the globe and enter into partnerships and collaborations. There is no certainty that all employees and third-party business partners (including our vendors, suppliers, agents, contractors, and other partners) will comply with anti-bribery laws. When working with third parties, we are committed to working with only those who embrace high standards of ethical behaviour consistent with our own. Bribery and corruption risks are a focus of our third-party diligence and management process. We hold our suppliers accountable for meeting their contractual obligations with ICON, including commitments that are made with regard to our Global Supplier Code of Conduct and regulatory compliance. Contract non-compliance can result in termination of the business relationship with the supplier and exclusion from future business with ICON.

The Internal Audit team conducts ABAC Programme audits. Internal Audits focus on testing for compliance and design effectiveness of the overall ABAC Programme, Internal Audit incorporates an assessment of ABAC measures in all audits, as appropriate. In this approach, bribery and corruption risks are incorporated into the risk assessment and scoping process of each audit.

Principal risks

For further details on risks relating to anti-corruption refer to Appendix A: Risk Factors on page 154.
Information Security and Privacy
We understand that information security and privacy are fundamental to ICON’s business and key to retaining customers, building investor trust, protecting patients and ensuring that we are compliant with global and regional regulations. Our cybersecurity strategy and programme protects our systems and data against the changing threat landscape and it is independently assessed regularly. ICON’s processes and range of information security policies are certified to ISO 27001 and independently audited twice annually as part of surveillance audits and we also have the Cyber Essentials certification.

Our people and partners also play a critical role in safeguarding data. ICON has training in place for all employees and contingent workers on information security and privacy practices so they understand their role in terms of information security and privacy and are clear on how to report incidents.

Principal risks
For further details on risks relating to information security and privacy refer to Appendix A: Risk Factors on page 147.
Directors’ compliance statement

The Directors, in accordance with Section 225(2) of the Companies Act 2014, acknowledge that they are responsible for securing the Company’s compliance with its relevant obligations as defined within the Companies Act, 2014 (hereinafter called the relevant obligations).

The Directors confirm that:

a compliance policy statement has been drawn up setting out the Company’s policies with regard to such compliance;
appropriate arrangements and structures that, in their opinion, are designed to secure material compliance with the Company’s relevant obligations, have been put in place; and
a review has been conducted, during the financial year, of the arrangements and structures that have been put in place to secure the Company’s compliance with the relevant obligations.


24





Directors’ Report (continued)
Auditor

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

On behalf of the Board




Steve Cutler
Rónán Murphy
27 April 2021
Chief Executive Officer
Director
25




Statement of Directors’ Responsibilities in respect of the Directors’ report and the financial statements
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 the Group and Company financial statements for each financial year. The directors have elected to prepare the Group and Company financial statements in accordance with IFRS as adopted by the EU and as applied in accordance with 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 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 responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the assets, liabilities, financial position of the Group and Company and profit or loss of the Group and which enable them to ensure that the financial statements comply with the provision of the Companies Act 2014. 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 Company and 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 Company's website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.














On behalf of the Board

Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
26





Independent Auditor’s Report to the members of ICON plc
Report on the audit of the financial statements
Opinion    
We have audited the financial statements of ICON plc (‘the Company’) and subsidiaries (together, “the Group”) for the year ended 31 December 2020, set out on pages 31 to 139, which comprise the Consolidated Statement of Profit and Loss, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, Company Statement of Financial Position, Company Statement of Changes in Equity, Company Statement of Cash Flows and related notes, including the summary of significant accounting policies set out in note 1.The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting Standards (IFRS) as adopted by the European Union.

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 2020 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.


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 for the audit of the financial statements section of our report. We have fulfilled our ethical responsibilities under, and we remained independent of the Group in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entities.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 ability to continue to adopt the going concern basis of accounting included:
agreeing the underlying cash flow projections to management approved forecasts, assessing how these forecasts are compiled, and assessing the accuracy of management’s forecasts;

evaluating the key assumptions within management’s forecasts;

considering liquidity and available financial resources;

assessing whether the stress testing performed by management appropriately considered the principal risks facing the business; and

evaluating the feasibility of management’s mitigating actions in the stress testing scenarios.
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 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.

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


27





Independent Auditor’s Report to the members of ICON plc (continued)


In arriving at our audit opinion above, the key audit matter was as follows:

Revenue recognition for clinical trial service contracts

As discussed in Note 33 to the consolidated financial statements, the Group recognised revenue of US$2,797.3 million for the year ended 31 December 2020, a significant portion of which relates to clinical trial service revenue. As discussed in Note 1 to the consolidated financial statements, clinical trial service revenue is recognised over time, using an input measure, being total project costs (inclusive of third party costs) incurred to date relative to total forecast project costs, to measure progress towards satisfying the Group’s performance obligation. The transaction price is based on the contract or latest change order value, adjusted to reflect the estimated realisable contract value.

The key audit matter

We identified revenue recognition for clinical trial services contracts as a key audit matter. Complex and subjective auditor judgment was required to evaluate the Group’s estimate of total forecast project costs and realisable contract values.

How the matter was addressed in our audit
Our audit procedures included, amongst others:
We evaluated the design and tested the operating effectiveness of certain internal controls related to the revenue process, including controls over total forecast project costs and estimated realisable contract values.

We tested the total forecast project costs and the realisable contract values for a sample of clinical trial service contracts, by evaluating:

Direct costs incurred, both during the year and cumulative over the life of the contracts. We tested the accuracy and completeness of the direct costs by agreeing to source data;

Third-party costs incurred, both during the year and cumulative over the life of the contracts. We tested the accuracy and completeness of the third-party costs incurred by agreeing to invoices received;

Findings from interviews with operational personnel of the Company to assess progress to date, the estimate of remaining costs to be incurred and factors impacting the amount of time and costs to complete the sampled contracts, including an understanding of the nature and complexity of the work to be performed;

Correspondence of amendments to the scope or contract value, if any, between the Group and the customer for the sampled contracts as part of our evaluation of contract progress;

Changes to estimated costs, including the amount and timing of the changes; and

The reasonableness of the Group’s adjustments from total contract value to arrive at realisable contract value. We confirmed total contract value with customers and compared the assumptions used to derive the adjustments from total contract value to realisable contract value to underlying records.

We also evaluated the Group’s methods, assumptions and data used to accurately estimate total forecast project costs and realisable contract values, by comparing historical estimates developed at contract inception to actual results for certain contracts.

Our procedures in respect of this risk were performed as planned. We found that the estimates and judgements used in determining the progress towards completion and realisable contract value related to revenue recognition for clinical trial services contracts were appropriate.

Parent Company key audit matters

Due to the nature of the Parent Company’s activities, there are no key audit matters that we are required to communicate in accordance with ISAs (Ireland).

Our application of materiality and an overview of the scope of our audit
Materiality for the Group Financial Statements as a whole was set at US$17.5 million (2019: US$20.0 million). Materiality for the Company Financial Statements was set at US$10.7 million (2019: US$9.5 million).

For the Group, materiality has been calculated as 5% of the benchmark of expected Group profit before tax (this estimated amount was based on earnings guidance available at the planning stage of the audit), which we have determined in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members of the
28





Independent Auditor’s Report to the members of ICON plc (continued)


Company in assessing the financial performance of the Group. For the Parent Company, materiality has been calculated based on 1% of the benchmark of total assets. We applied materiality to assist us determine what risks were significant risks and the procedures to be performed.

We report to the Audit Committee all corrected and uncorrected audit misstatements we identified through our audit in excess of US$0.9 million (Group) and US$0.5 million (Company), in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

The structure of the Group’s finance function is such that the majority of transactions and balances are accounted for by the central Group finance team. We performed comprehensive audit procedures, including those in relation to the significant risk set out above, on those transactions accounted for at Group level. Our audit covered 96% of total Group revenue and 98% of total Group assets, including 100% of the Parent Company’s revenue and total assets.

All audit procedures were undertaken by the Group audit team.

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 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 in those parts of the directors’ report specified for our consideration:

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.

Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of our audit.

In our opinion, the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited and the Company’s financial statements are in agreement with the accounting records.

We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion, the disclosures of directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made.

The Companies Act 2014 also requires us to report to you if, in our opinion, the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year ended 31 December 2019 as required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and groups) (amendment) Regulations 2018.

We have nothing to report in this regard.

Respective responsibilities and restrictions on use

Directors’ responsibilities
As explained more fully in their statement set out on page 26, 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 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 Company or to cease operations, or have no realistic alternative but to do so.
29





Independent Auditor’s Report to the members of ICON plc (continued)


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 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 http://www.iaasa.ie/Publications/Auditing-standards/International-Standards-on-Auditing-for-use-in-Ire/Description-of-the-auditor-s-responsibilities-for.

Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for our report, or for the opinions we have formed.

The purpose of our audit work and to whom we owe our responsibilities

Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for our report, or for the opinions we have formed.
                    


Sean O’Keefe                                         27 April 2021
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
Ireland

30




Consolidated Statement of Profit and Loss
for the year ended 31 December 2020
31 December
2020
31 December
2020
31 December
2020
31 December
2019
Excluding
Exceptional items
(Note 8)
Exceptional items
Including
Exceptional items
Including
Exceptional items
Continuing OperationsNote$’000$’000$’000$’000
Revenue2,797,288  2,797,288 2,805,839 
Direct costs(1,980,369)(8,887)(1,989,256)(1,973,621)
Other operating expenses
(406,863)(9,202)(416,065)(396,087)
Operating profit
410,056 (18,089)391,967 436,131 
Share of equity method investments net of tax18(366) (366)— 
Financing income42,724  2,724 6,859 
Financing expense5(12,147) (12,147)(24,625)
Profit before taxation3400,267 (18,089)382,178 418,365 
Income tax expense6(53,014)2,261 (50,753)(57,332)
Profit for the financial year347,253 (15,828)331,425 361,033 
Profit for the financial year is attributable to:
Owners of the Company
25
346,620 (15,828)330,792 359,163 
Noncontrolling interest25 633  633 1,870 
Profit for the financial year attributable to the Group347,253 (15,828)331,425 361,033 
Earnings per ordinary share
Basic76.27 6.70 
Diluted76.22 6.64 

On behalf of the Board

Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
31




Consolidated Statement of Comprehensive Income
for the year ended 31 December 2020
Note31 December
2020
31 December
2019
$’000$’000
Other Comprehensive Income/ (Loss)
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit liability10(3,730)(2,407)
Total items that will not be reclassified to profit or loss(3,730)(2,407)
Items that are or may be reclassified subsequently to profit or loss, net of tax:
Currency translation differences2548,129 (1,313)
Currency impact on long-term funding25(1,603)(2,710)
Unrealised capital (loss)/gain on investments25(231)681 
Amortisation of interest rate hedge25(910)(923)
Loss on interest rate hedge25(905)— 
Total items that are or may be reclassified to profit or loss44,480 (4,265)
Other comprehensive loss for the year, net of tax40,750 (6,672)
Profit for the financial year331,425 361,033 
Total comprehensive income for the financial year372,175 354,361 
Attributable to:
Equity holders of the Company371,542 352,491 
Noncontrolling interest633 1,870 
Total comprehensive income for the financial year372,175 354,361 

On behalf of the Board


Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
32




Consolidated Statement of Financial Position
as at 31 December 2020
Note31 December
2020
31 December
2019
ASSETS$’000$’000
Non-current assets
Property, plant and equipment12109,830 104,257 
Right-of-use assets27 83,079 103,962 
Intangible assets – goodwill and other131,081,239 1,025,903 
Other non-current assets1726,902 24,741 
Equity method investments18 4,534  
Financial assets18 15,765 10,053 
Deferred tax assets630,370 34,755 
Total non-current assets1,351,719 1,303,671 
Current assets
Inventories154,806 3,181 
Accounts receivable16715,271 527,708 
Unbilled revenue16428,684 422,769 
Other current assets1777,937 70,325 
Current taxes receivable45,348 40,989 
Current asset investments181,729 49,628 
Cash and cash equivalents19840,305 520,309 
Total current assets2,114,080 1,634,909 
Total assets3,465,799 2,938,580 
EQUITY
Share capital244,580 4,635 
Share premium 318,404 305,228 
Other undenominated capital251,134 1,052 
Share-based payment reserve25179,569 174,230 
Other reserves2511,966 10,874 
Foreign currency translation reserve25(24,966)(71,492)
Current asset investments - fair value reserve25 231 
Put option in noncontrolling interest shares25 (38,482)
Retained earnings251,389,982 1,220,871 
Total equity attributable to the owners of the Company1,880,669 1,607,147 
Noncontrolling interest25 34,462 
Total equity attributable to the owners of the Company and noncontrolling interest1,880,669 1,641,609 
LIABILITIES
Non-current liabilities
Non-current bank credit lines and loan facilities23348,477  
Non-current lease liabilities2760,801 76,593 
Non-current other liabilities2023,675 17,899 
Non-current provisions213,529 405 
Deferred tax liabilities610,166 9,296 
Total non-current liabilities446,648 104,193 
Current liabilities
Accounts payable51,113 24,050 
Unearned revenue16 660,883 366,988 
Accrued and other liabilities20392,550 422,036 
Provisions217,219 3,732 
Current tax payable26,717 26,332 
Current bank credit lines and loan facilities23  349,640 
Total current liabilities1,138,482 1,192,778 
Total liabilities1,585,130 1,296,971 
Total equity attributable to the owners of the company and noncontrolling interest and liabilities3,465,799 2,938,580 

On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
33




Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Number
of shares
Share
Capital
Share
Premium
Other
Undenominated
Capital
Share-based
Payment Reserve
Other
Reserves
Currency
Reserve
Financial assets at fair value through other comprehensive income reservePut option in noncontrolling interest sharesRetained
Earnings
Sub totalNoncontrolling interestTotal
$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000
Balance at 1 January 202053,622,206 4,635 305,228 1,052 174,230 10,874 (71,492)231 (38,482)1,220,871 1,607,147 34,462 1,641,609 
Profit for the year attributable to the Group— — — — — — — — — 330,792 330,792 — 330,792 
Profit for the year attributable to redeemable noncontrolling interest— — — — — — — — — — — 633 633 
Other Comprehensive Income:— 
Foreign currency translation— — — — — — 48,129 — — — 48,129 — 48,129 
Currency impact on long-term funding— — — — — — (1,603)— — — (1,603)— (1,603)
Unrealised fair value movements on investments— — — — — — — (231)— — (231)— (231)
Re-measurement of defined benefit liability— — — — — — — — — (3,730)(3,730)— (3,730)
Tax benefit on defined benefit pension contributions— — — — — — — — — — — — — 
Amortisation of interest rate hedge— — — — — (910)— — — — (910)— (910)
Loss on interest rate hedge— — — — — (905)— — — — (905)— (905)
Total other comprehensive income— — — — — (1,815)46,526 (231)— (3,730)40,750 — 40,750 
Total comprehensive income for the year— — — — — (1,815)46,526 (231)— 327,062 371,542 633 372,175 
Transactions with owners, recorded directly in equity— 
Share-based payment— — — — 26,307 — — — — — 26,307 — 26,307 
Exercise of share options193,417 13 13,176 — — — — — — — 13,189 — 13,189 
Transfer of exercised and expired  share–based awards  — — — — (23,497)— — — — 23,497 — — — 
Issue of restricted share units/ performance share units207,688 14 — — — — — — — — 14 — 14 
Share issue costs— — — — — — — — — (14)(14)— (14)
Repurchase of ordinary shares(1,235,218)(82)— 82 — — — — — (175,000)(175,000)— (175,000)
Share repurchase costs— — — — — — — — — (140)(140)— (140)
Tax benefit excess on exercise of options— — — — 3,815 — — — — — 3,815 — 3,815 
Deferred tax movement on unexercised options— — — — (1,286)— — — — — (1,286)— (1,286)
Settlement of acquisition of noncontrolling interest— — — — — — — — — 35,095 35,095 (35,095)— 
Settlement of put option on noncontrolling interest shares— — — — — — — — 38,482 (38,482)— — — 
Non-distributable reserves— — — — — 2,907 — — — (2,907)— — — 
Total contributions by and distributions to owners (834,113)(55)13,176 82 5,339 2,907 — — 38,482 (157,951)(98,020)(35,095)(133,115)
Balance at 31 December 202052,788,093 4,580 318,404 1,134 179,569 11,966 (24,966)— — 1,389,982 1,880,669 — 1,880,669 
34





Consolidated Statement of Changes in Equity
for the year ended 31 December 2019
Number
of shares
Share
Capital
Share
Premium
Other
Undenominated
Capital
Share-based
Payment Reserve
Other
Reserves
Currency
Reserve
Financial assets at fair value through other comprehensive income reservePut option in noncontrolling interest sharesRetained
Earnings
Sub totalNoncontrolling interestTotal
$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000$’000
Balance at 1 January 201953,971,706 4,658 283,629 983 173,326 11,868 (67,469)(450) 979,834 1,386,379  1,386,379 
Profit for the year attributable to the Group— — — — — — — — — 359,163 359,163 — 359,163 
Profit for the year attributable to redeemable noncontrolling interest— — — — — — — — — — — 1,870 1,870 
Other Comprehensive Income:— 
Foreign currency translation— — — — — — (1,313)— — — (1,313)— (1,313)
Currency impact on long-term funding— — — — — — (2,710)— — — (2,710)— (2,710)
Cash flow hedge— — — — — — — — — — — — — 
Unrealised fair value movements on investments— — — — — — — 681 — — 681 — 681 
Re-measurement of defined benefit liability— — — — — — — — — (2,407)(2,407)— (2,407)
Tax benefit on defined benefit pension contributions— — — — — — — — — — — — — 
Amortisation of interest rate hedge— — — — — (923)— — — — (923)— (923)
Total other comprehensive income— — — — — (923)(4,023)681 — (2,407)(6,672)— (6,672)
Total comprehensive income for the year— — — — — (923)(4,023)681 — 356,756 352,491 1,870 354,361 
Transactions with owners, recorded directly in equity— 
Share-based payment— — — — 25,800 — — — — — 25,800 — 25,800 
Exercise of share options329,870 22 21,599 — — — — — — — 21,621 — 21,621 
Transfer of exercised and expired  share–based awards  — — — — (31,261)— — — — 31,261 — — — 
Issue of restricted share units/ performance share units355,730 24 — — — — — — — — 24 — 24 
Share issue costs— — — — — — — — — (13)(13)— (13)
Repurchase of ordinary shares(1,035,100)(69)— 69 — — — — — (146,931)(146,931)— (146,931)
Share repurchase costs— — — — — — — — — (107)(107)— (107)
Tax benefit excess on exercise of options— — — — 7,046 — — — — — 7,046 — 7,046 
Deferred tax movement on unexercised options— — — — (681)— — — — — (681)— (681)
Acquisition of noncontrolling interest— — — — — — — — — — — 32,592 32,592 
Put option on noncontrolling interest shares— — — — — — — — (38,482)— (38,482)— (38,482)
Non-distributable reserves— — — — — (71)— — — 71 — — — 
Total contributions by and distributions to owners (349,500)(23)21,599 69 904 (71)— — (38,482)(115,719)(131,723)32,592 (99,131)
Balance at 31 December 201953,622,206 4,635 305,228 1,052 174,230 10,874 (71,492)231 (38,482)1,220,871 1,607,147 34,462 1,641,609 
Further details of the reserves above are detailed in note 25
35




Consolidated Statement of Cash Flows
for the year ended 31 December 2020
NoteYear Ended 31 December
2020
Year ended 31 December
2019
$’000$’000
Profit for the financial year331,425 361,033 
Adjustments to reconcile net income to net cash generated from operating activities
Loss on disposal of property, plant and equipment141 346 
Depreciation of property, plant and equipment1218,360 19,597 
Depreciation of right-of-use assets2728,947 31,387 
Impairment of right-of-use assets275,411 — 
Amortisation of intangible assets1347,766 41,953 
Amortisation of grants22(45)(44)
Interest on short term investments18— (1,065)
Realised gain on sale of current asset investments18(234)(55)
Loss on equity method investments
366 — 
Fair value movement on put option25(2,540)8,723 
Interest on lease liabilities51,668 2,626 
(Gain)/loss on re-measurement of long-term financial assets18(2,500)800 
Amortisation of gain on interest rate hedge5(910)(923)
Amortisation of deferred financing costs5523 540 
Share-based payment1126,597 25,886 
Financing income4(2,724)(6,859)
Financing expense513,406 13,659 
Defined benefit pension service costs10239 222 
Defined benefit pension finance costs10105 82 
Defined benefit past service cost10(23)— 
Income tax expense650,753 57,332 
Operating cash inflow before changes in working capital516,731 555,240 
Increase in accounts receivable(175,040)(101,545)
Increase in unbilled revenue(5,748)(55,790)
Increase in other current assets(6,669)(1)
Increase in other non current assets(3,225)(2,912)
Increase in inventory(1,626)(906)
Increase in accounts payable26,488 3,440 
Increase in unearned revenue291,844 86,567 
Decrease in accrued and other liabilities and provisions(11,662)(9,642)
Increase in non current other liabilities and provisions348 817 
Cash provided by operations631,441 475,268 
Income taxes paid(27,604)(29,836)
Employer contribution defined benefit pension scheme10(214)(237)
Interest received2,495 6,796 
Interest paid(11,394)(13,059)
Net cash inflow from operating activities594,724 438,932 
Investing activities
Purchase of property, plant and equipment(19,308)(19,330)
Purchase of intangible assets(31,747)(31,315)
Purchase of subsidiary undertakings(47,931)(131,272)
Cash acquired with subsidiary undertakings10,170 11,697 
Investment in equity method investments(2,450) 
Sale/maturity of current asset investments47,902 21,686 
Purchase of current asset investments— (9,603)
Purchase of investments in equity - long-term(3,212)(3,890)
Net cash used in investing activities(46,576)(162,027)
Financing activities
Financing costs(1,554)— 
Drawdown of bank credit lines and loan facilities350,000 — 
Repayment of bank credit lines and loan facilities(350,000)— 
Purchase of noncontrolling interest(43,923)— 
Payment of lease liabilities (30,504)(33,437)
Tax benefit from the exercise of share options3,815 7,046 
Proceeds from exercise of share options, RSUs and PSUs13,203 21,645 
Share issuance costs(14)(13)
Repurchase of ordinary shares(175,000)(146,931)
Share repurchase costs(140)(107)
Loss on settlement of interest rate hedge(905)— 
Net cash used in financing activities(235,022)(151,797)
Net increase in cash and cash equivalents313,126 125,108 
Effect of exchange rate changes6,870 (650)
Cash and cash equivalents at start of year520,309 395,851 
Cash and cash equivalents at end of year840,305 520,309 
36




Notes to Consolidated Financial Statements
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies
Statement of compliance

The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board (“IASB”) as adopted by the European Union ("EU") that are effective for financial year ending 31 December 2020, and with those parts of the Companies Act 2014 applicable to companies reporting under IFRS. The Company Financial Statements have been prepared in accordance with IFRS as adopted by the EU, as applied in accordance with the Companies Act 2014 applicable to companies reporting under IFRS. IFRS adopted by the EU differs in certain respects from IFRS issued by the IASB. Reference to the IFRS hereafter refers to IFRS adopted by the EU. A Company that publishes its Group and Company Financial Statements together, can take advantage of the exemption in Section 304 of the Companies Act 2014 from presenting to its members a Company Statement of Profit and Loss and Company Statement of Comprehensive Income and related notes.
Basis of preparation

The Group and Company Financial Statements are presented in United States dollars ("U.S. dollars") and all values are rounded to the nearest thousand ($‘000), except where otherwise indicated. They are prepared on the historical cost basis, except for the measurement at fair value on date of grant of share options, the pension plan assets, the put/call options over noncontrolling interest, other investments and financial assets. Other than the new and amended standards adopted by the group, accounting policies are applied consistently with the prior year.

New and amended standards adopted by the group

The Group has applied the following standards and amendments for the first time for the annual reporting period commencing 1 January 2020:

a.Amendments to IFRS 16 Leases: COVID 19 Related Rent Concessions
b.Amendments to IFRS 3 Business Combinations: Definition of a Business
c.Amendments to IAS 1 and IAS 8 Definition of material
d.Amendments to IFRS 9, IAS 39 and IFRS 7 IBOR Reform Phase I
e.Conceptual Framework Amendments to References to the Conceptual Framework in IFRS Standards

The amendments listed above did not have a material impact on amounts recognised in prior periods or the current period. See accounting policies section below for additional information.

New and amended standards and interpretations effective after 2020

Certain new accounting standards and interpretations applicable to the Group have been published that are not mandatory for 31 December 2020 reporting periods and have not been early adopted by the Group.
These include the following:

a.Amendments to IFRS 9, IAS 39 and IFRS 7 IBOR Reform Phase II
b.Annual Improvements to IFRS Standards 2018-2020
c.Amendments to IAS 16 Property, Plant and Equipment (PPE): Proceeds before Intended Use
d.Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Costs to Fulfil a Contract
e.Conceptual Framework Amendments References to the Conceptual Framework
f.Amendments to IAS 1 Classification of Liabilities as Current or Non-current

The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of Consolidated Financial Statements requires management to make estimates and judgements that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period.

37




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

Estimates and judgements are based on historical experience and on other factors that are reasonable under current circumstances. Actual results may differ from these estimates if these assumptions prove to be incorrect or if conditions develop other than as assumed for the purposes of such estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Critical judgements relate to the recognition of clinical trial and laboratory services revenue as set out in the revenue recognition accounting policy below. Key sources of estimation uncertainty that have the most significant effect on the amounts recognized in the financial statements include the projected EBITDA used in the impairment assessment of goodwill and the assessment of probable outcomes used in the valuation of contingent consideration associated with business combinations. See further details in the respective accounting policies for goodwill and business combinations below.

Accounting policies

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group’s Financial Statements.

Basis of consolidation

The Group’s Financial Statements consolidate the financial statements of ICON plc and its subsidiaries. Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Financial statements of subsidiaries are prepared for the same reporting year as the Company and where necessary, adjustments are made to the results of subsidiaries to bring their accounting policies into line with those used by the Group. The Group will continue to prepare the individual statutory financial statements of subsidiary companies under GAAP applicable in their country of incorporation but adjustments have been made to the results and financial position of such companies to bring their accounting policies into line with those of the Group.

All intercompany balances and transactions, including unrealised profits arising from inter-group transactions, have been eliminated in full. Unrealised losses are eliminated in the same manner as unrealised gains except to the extent that there is evidence of impairment.

Foreign currency translation

The presentation and functional currency of the Company is US dollars ($). The presentation currency of the Group is US dollars ($). The determination of the USD as the functional currency of the Company reflects consideration of the primary and secondary indicators as set out in IAS 21. The directors considered in particular the currency in which funds from financing activities are generated (debt and equity) and the currency in which receipts from operating activities are usually retained. This assessment is consistent with the assessment that the functional currencies of the main subsidiary trading entities are USD. The Company Financial Statements are presented in US dollars. Results and cash flows of non-dollar denominated undertakings are translated into dollars at the actual exchange rates at the transaction dates or average exchange rates for the year where this is a reasonable approximation.

The related statements of financial position are translated at the rates of exchange ruling at the reporting date. Goodwill and fair value adjustments arising on acquisition of a foreign operation are regarded as assets and liabilities of the foreign operation, are expressed in the functional currency of the foreign operation and are recorded at the exchange rate at the date of the transaction, and subsequently retranslated at the applicable closing rates. Adjustments arising on translation of the results of non-dollar undertakings at average rates, and on the restatement of the opening net assets at closing rates, are recorded in the translation reserve within equity.

Transactions in currencies different to the functional currencies of operations are recorded at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency at the rate of exchange at the reporting date. All translation differences, with the exception of translation differences on long-term intercompany balances in the Consolidated Financial Statements where repayment is not foreseen, are recorded in the Consolidated Statement of Profit and Loss. Translation differences on long-term intercompany balances, in the Consolidated Financial Statements, where repayment is not foreseen are recorded within other comprehensive income in the Statement of Comprehensive Income.

On disposal of a foreign operation, accumulated currency translation differences, together with any exchange differences on foreign currency borrowings that provide a hedge of the net investment are recognised in the Consolidated Statement of Profit and Loss as part of the overall gain or loss on disposal.

38




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

The principal exchange rates used for the translation of results, cash flows and statements of financial position into US dollars were as follows:
AverageYear end
31 December 202031 December 201931 December 202031 December 2019
Euro 1:$
1.13571.11831.22161.1213
Pound Sterling 1:$
1.28211.27351.36701.3257

Property, plant and equipment

Items of property, plant and equipment are stated at cost less accumulated depreciation and any provisions for impairment losses. Depreciation is calculated to write off the original cost of property, plant and equipment less its estimated residual value over its expected useful life on a straight line basis. Residual values and useful lives of property, plant and equipment are reviewed and adjusted if appropriate at each reporting date. At present it is estimated that all items of property, plant and equipment have no residual value. The estimated useful lives applied in determining the charge to depreciation are as follows:
Years
Buildings
40
Computer equipment
2-8
Office furniture and fixtures
8
Laboratory equipment
5
Motor vehicles
5
Leasehold improvements are amortised using the straight-line method over the estimated useful life of the asset or the lease term, whichever is shorter.

On disposal of property, plant and equipment the cost and related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Consolidated Statement of Profit and Loss.

The carrying amounts of the Group’s property, plant and equipment are reviewed at each reporting date to determine whether there is any indicator of impairment. Where such an indicator exists an impairment review is carried out. An impairment loss is recognised whenever the carrying amount of an asset or its cash generation unit exceeds its recoverable amount. Impairment losses are recognised in the Consolidated Statement of Profit and Loss.

Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the replaced item can be measured reliably. All other repair and maintenance costs are charged to the Consolidated Statement of Profit and Loss during the financial period in which they are incurred.

Right-of-use assets and lease liabilities

ICON determines if an arrangement is a lease at inception and recognises the rights and obligations resulting from virtually all leases on the Consolidated Statements of Financial Position as right-of-use (ROU) assets with corresponding lease liabilities.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, plus lease payments made at or before the commencement day and any initial direct costs, less any lease incentives received. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the lease term.

The right-of-use assets are presented as a separate line in the Consolidated Statement of Financial Position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ‘Property, Plant and Equipment’ policy.

Lease liabilities are recognised based on the present value of future minimum lease payments over the lease term at commencement date or date of transition with the interest element of the finance lease charged to financing expense.
39




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

As most of ICON's leases do not provide an implicit rate, the discount rate used is based on the rate of traded corporate bonds available at the commencement date adjusted for country risk, liquidity and lease term.

Current lease liabilities are included in accrued and other liabilities in the Consolidated Statement of Financial Position and non-current lease liabilities are presented as a separate line. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

Lease terms may also include options to extend or terminate. Such options are actively reviewed and adjustments to the ROU asset and lease liability are made when it is reasonably certain the option will be exercised.

Amendments to IFRS 16 were made by the IASB in 2020 allowing rent concessions directly related to the COVID-19 pandemic not to be accounted as lease modifications. Rental concessions directly related to the COVID-19 pandemic are recognised in the Consolidated Statement of Profit and Loss in the period they are received.

The Group accounts for lease and non-lease components separately with the exception of motor vehicle leases for which lease and non-lease components are accounted as a single lease component. Lease components are reflected in the Consolidated Statements of Financial Position and non-lease components expensed directly to the Consolidated Statements of Profit and Loss.

The Group has elected to account for short-term leases using the practical expedient. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in the Consolidated Statement of Profit and Loss on a straight-line basis over the lease term.

In some cases, ICON enters into sublease agreements and becomes both a lessee and a lessor for the same underlying asset. When the Group is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. Subleases are accounted for in the same way as other leases. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.

Business combinations

Business combinations are accounted for using the acquisition method when control is transferred to the Group. The consideration transferred is measured at fair value, as are the identifiable assets acquired and liabilities assumed. Where a business combination agreement provides for an adjustment to the cost of the acquisition which is contingent upon future events, the amount of the estimated adjustment is recognised on the acquisition date at the acquisition date fair value of this contingent consideration. The accounting treatment of any changes to this estimate in subsequent periods will depend on the classification of the contingent consideration. If the contingent consideration is classified as equity it shall not be re-measured and the settlement shall be accounted for within equity. If the contingent consideration is classified as a liability any adjustments to the assessment of contingent consideration determined as at acquisition date will be accounted for through the Consolidated Statement of Profit and Loss, as the liability is measured at fair value at each reporting date.

The assets, liabilities and contingent liabilities of businesses acquired are measured at their fair values at the date of acquisition. In the case of a business combination which is completed in stages, the fair values of the identifiable assets, liabilities and contingent liabilities are re-determined at the date of each transaction until control is obtained. When the initial accounting for a business combination is determined provisionally, any subsequent adjustments to the provisional values allocated to the identifiable assets, liabilities and contingent liabilities are made within twelve months of the acquisition date and presented as adjustments to the original acquisition accounting. Acquisition costs are expensed as incurred.

Goodwill

The Group measures goodwill at the acquisition date as the fair value of the consideration transferred plus the recognised amount of any non controlling interests in the acquiree, if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Goodwill on the acquisition of subsidiaries is included in ‘intangible assets – goodwill and other’.

At the acquisition date, any goodwill acquired is allocated to the cash-generating units expected to benefit from the combination's synergies. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the proportion of the cash-generating unit retained.

40




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

Intangible assets

Other intangible assets are stated at cost less accumulated amortisation and impairment losses. Useful lives of intangibles are reviewed and adjusted if appropriate at each reporting date. Amortisation is charged to the Consolidated Statement of Profit and Loss on a straight-line basis over the estimated useful lives of intangible assets, currently estimated as follows:
            
Years
Computer software2-8
Customer relationships7-16
Order backlog1-9
Brand5
Technology asset    8
Non-compete arrangements5
Patient database7

Impairment

The Group assessed at the end of each reporting period whether there was objective evidence that a financial asset or group of financial assets was impaired. A financial asset or a group of financial assets was impaired and impairment losses were incurred only if there was objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) had an impact on the estimated future cash flows of the financial asset or group of financial assets that could be reliably estimated.

Impairment losses in respect of other non-financial assets, other than goodwill, are reversed if there has been a change in the estimates used to determine recoverable amount. Impairment losses are reversed only to the extent that the carrying amount of the asset does not exceed the carrying value that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Impairment losses in respect of goodwill are not reversed.

Inventories

Inventories, which comprise laboratory inventories, are stated at the lower of cost and net realisable value. Cost is based on the first-in, first-out principle and includes all expenditure incurred in acquiring the inventories and bringing them to their present location and condition. Cost in the case of raw materials comprises the purchase price and attributable costs, less trade discounts. Net realisable value is the estimated selling price in the ordinary course of business, less selling expenses.

Accounts payable

Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

Government grants

Government grants received that compensate the Group for the cost of an asset are recognised in the Consolidated Statement of Financial Position initially as deferred income when there is reasonable assurance that it will be received and that the Group will comply with the conditions attaching to it. Such grants are recognised in the Consolidated Statement of Profit and Loss over the useful economic life of the asset which is consistent with the depreciation policy of the relevant asset.

Grants that compensate the Group for expenses incurred are recognised in the Consolidated Statement of Profit and Loss in the same periods in which the expenditure to which they relate is charged.

Under grant agreements amounts received may become repayable in full or in part should certain circumstances specified within the grant agreements occur, including downsizing by the Group, disposing of the related assets, ceasing to carry on its business or the appointment of a receiver over any of its assets. The Group has not recognised any such loss contingency having assessed as remote the likelihood of these events arising.
41




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

Provisions

A provision is recognised in the Consolidated Statement of Financial Position when the Group has a present or legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

Financial Instruments

The Group assesses the business models and contractual cash flows which apply to its financial assets and classified the assets into the appropriate IFRS 9 categories accordingly.
Financial asset categoryClassification and measurement under IFRS 9Classification test outcomes
Cash and cash equivalentsFinancial assets at fair value (initial recognition) followed by amortised cost net of impairments (subsequent measurement).Business model test result: hold to collect contractual cash flows. Cash flow characteristics test result: solely payments of principal and interest.
Trade receivables
Current asset investmentsShort-term financial assets at fair value (initial recognition) either through OCI or profit or lossSee details below
Non-current financial assetsLong-term financial assets at fair value through profit or lossSee details below
Contingent considerationFair value through profit or loss.Business model test result: hold to collect contractual cash flows. Cash flow characteristics test result: potential variability in future payments results in changes to fair value.

(a)    Cash and cash equivalents

Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less and are stated at fair value on initial recognition followed by amortised cost, which approximates fair value.

(b)    Trade receivables

The Group's financial assets measured at amortised cost, the most significant of which are trade receivables and unbilled receivables, are subject to IFRS 9's expected credit loss model.

For trade receivables and unbilled revenue, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables. See notes 16, 26 and 34 for further details. The expected credit losses on these financial assets are estimated based on the Group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current, as well as the forecast direction of conditions, at the reporting date.

The Group writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings. Financial assets written off may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss.

(c)    Current asset investments and non-current financial assets

The Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value through OCI
those to be measured subsequently at fair value through profit or loss and
those to be measured at amortised cost.
42




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

The classification depends on the entity's business model for managing financial assets and the contractual terms of the cash flows.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).

The Group reclassifies debt investments when and only when its business model for managing those assets changes.

Purchases or sales of financial assets are recognised on trade date, the date the Group commits to purchase or sell the asset. Financial assets are de-recognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.

Subsequent measurement of debt instruments depends on the Group's business model for managing the asset and the cash flow characteristics of the asset.

There are three measurement categories into which the Group classifies its financial instruments:

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses.

FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in finance income using the effective interest rate method.

FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss.

The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

(d)    Interest bearing loans and borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Subsequent to initial recognition, current and non-current interest bearing loans and borrowings are measured at amortised cost with any difference between cost and redemption value being recognised in the Consolidated Statement of Profit and Loss over the period of the borrowings on an effective interest rate basis. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until draw down will occur. Where there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Borrowings are removed from the Consolidated Statement of Financial Position when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.

43




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2020

1.    Basis of preparation and statement of accounting policies (continued)

(e)    Derivative financial instruments and hedging

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group designates certain derivatives as either: