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, 2022

ICON plc
(Registrant's name)


333-08704
(Commission file number)


South County Business Park, Leopardstown, Dublin 18, D18 X5R3, Ireland
(Address of principal executive offices)


Brendan Brennan, CFO
South County Business Park, Leopardstown, Dublin 18, D18 X5R3, 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
99.3
















































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 17, 2022Brendan Brennan
Chief Financial Officer



Document
Exhibit 99.1

Notice of Annual General Meeting
to be held on 26 July 2022






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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.












17 June 2022
To: All ICON Shareholders

NOTICE OF ANNUAL GENERAL MEETING

Dear Shareholder

The Annual General Meeting of ICON plc will be held at 9.30am (Dublin time) on 26 July 2022 at ICON’s global headquarters in South County Business Park, Leopardstown, Dublin 18, Ireland (the AGM).

The purpose of this letter is to outline the background to and summarise 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 8 to 10 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 5 to 7 which sets out the matters to be considered at the AGM.

Re-election of Directors (ordinary resolutions 1.1 to 1.3)
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. Professor William Hall, an independent non-executive director, was eligible to stand for re-election to the Board but has decided not to stand for re-election and will instead retire from the Board at the AGM. Accordingly, the following directors will stand for re-election:

Dr. Steve Cutler - Chief Executive Officer and Director

Dr. John Climax - non-executive Director

Mr. Ronan Murphy –Lead Independent Director and non-executive Director

Dr. John Climax and Mr. Ronan Murphy are “independent” non-executive Directors (as that term is defined under the published listing requirements of NASDAQ). Dr. Steve Cutler, ICON’s Chief Executive Officer, is an executive officer.

Each of the Directors standing for 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. 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 and the details of current committee composition is set out on our website at https://investor.iconplc.com/corporate-governance/committee-composition.

In addition to the retirement of Professor William Hall (as mentioned above), the AGM will mark the retirement of Ms. Mary Pendergast and Professor Hugh Brady as directors as they have also decided to retire from the Board at the AGM. Professor William Hall has served as a non-executive director of ICON since February 2013, Ms. Mary Pendergast has served as a non-executive director of ICON since February 2014 and Professor Hugh Brady has served as a non-executive director of ICON since April 2014. On behalf of everyone at ICON and, in particular, my fellow Board members, I would like to thank Professor Hall, Ms. Pendergast and Professor Brady for their significant contribution to the ICON Board and we wish them all the best for the future.

ICON’s 2021 Accounts (ordinary resolution 2)
This resolution is to review the Company's affairs and consider ICON’s 2021 accounts which have been audited by KPMG, ICON’s independent auditors.

Remuneration of Auditors (ordinary resolution 3)
This resolution authorises the Directors to fix the remuneration of the auditors.

Authority to issue shares up to 20% of share capital (ordinary resolution 4)
This resolution authorises the Directors to issue shares until the earlier of the next Annual General Meeting of the Company or 25 January 2024 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
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ICON plc – Notice of Annual General Meeting 2022



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 5 and special resolution 6)
Resolution 5 authorises the Directors to issue shares for cash, subject to resolution 4, until the earlier of the next Annual General Meeting of the Company or 25 January 2024 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 6 authorises the Directors to issue an additional 5% of the share capital for cash, again subject to Resolution 4, 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 25 January 2024.

The caps on resolutions 4, 5 and 6 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 7)
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 25 January 2024.

Authority to reissue shares held as treasury shares (special resolution 8)
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.

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 2021 are available in the Annual Report and Form 20-F for 2021 which are available at https://investor.iconplc.com/financials-filings/annual-reports.
Approval of Resolutions
Resolutions 1.1 to 1.3, 2, 3 and 4 are ordinary resolutions which require approval of a simple majority of the votes cast in person or by proxy and resolutions 5 to 8 are special resolutions which require approval of 75% of the votes cast in person or by proxy.
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ICON plc – Notice of Annual General Meeting 2022




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 6 June 2022, the Directors held 566,540 ordinary shares representing approximately 0.69% 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 2022




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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 26
JULY, 2022
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 26 July 2022 at 9.30am (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:

1.1Dr. Steve Cutler
1.2Dr. John Climax
1.3Mr. Ronan Murphy

2.To review the Company's affairs and consider the accounts for the year ended 31st December 2021 and the reports of the Directors and auditors thereon.

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

SPECIAL BUSINESS

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

4.“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 securities (within the meaning of Section 1021 of the Companies Act 2014) up to an aggregate nominal amount of €978,059.15 representing approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as at 6 June 2022 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 25 January 2024, 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.

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

5.“That, subject to the passing of Resolution 4, 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
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ICON plc – Notice of Annual General Meeting 2022



of sub-section (1) of the said Section 1022 did not apply to any such allotment up to an aggregate nominal amount of €244,514.79 representing approximately 5% of the aggregate nominal value of the issued ordinary share capital of the Company as at 6 June 2022 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 25 January 2024, 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.”

6.“That subject to the passing of Resolution 4, the Directors be and they are hereby authorised in addition to any authority granted under Resolution 5, 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 €244,514.79 representing approximately 5% of the nominal value of the issued share capital as at 6 June 2022.

The authority conferred by this resolution shall expire on the earlier of the date of the next Annual General Meeting of the Company or 25 January 2024, 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 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 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 25 January 2024 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.”

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ICON plc – Notice of Annual General Meeting 2022



8.    “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.”

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

Dublin, Ireland
Dated: 17 June, 2022
The AGM will be held in accordance with prevailing Government COVID-19 related restrictions and public health guidance, if any. In the event that a change of meeting arrangements becomes necessary due to such restrictions or guidance, ICON will promptly communicate this to shareholders by an announcement in a press release and on the investor relations page of https://investor.iconplc.com/ and a filing with the SEC. ICON advises shareholders to monitor the page regularly, as circumstances may change on short notice.

























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ICON plc – Notice of Annual General Meeting 2022




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 6 June 2022.

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 6 June 2022 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 6 June 2022.

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
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 25 July 2022 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.
Alternatively, provided it is received by 11.59pm ET on 24 July 2022 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.

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ICON plc – Notice of Annual General Meeting 2022



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 6 June 2022, 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 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 - COVID-19 Notice

The AGM will be held in accordance with prevailing Government COVID-19 related restrictions and public health guidance, if any. In the event that a change of meeting arrangements becomes necessary due to such restrictions or guidance, 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 SEC. ICON advises shareholders to monitor the page regularly, as circumstances may change on short notice.

4.     How many votes do you have?
The total number of issued ordinary shares on the record date, 6 June 2022, was 81,504,929. 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 09.30am Dublin time on 26 July 2022 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 Diarmaid Cunningham, 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
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ICON plc – Notice of Annual General Meeting 2022



Annual General Meeting at 09.30am Dublin time on 26 July 2022 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.
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ICON plc – Notice of Annual General Meeting 2022

iconplc_prxyxgt20xp76983
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. D87904-P76983 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 or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on Sunday 24th July 2022. 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 24th July 2022. 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 (Diarmaid Cunningham, 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 25th July 2022. 1.1 Dr. Steve Cutler 1.2 Dr. John Climax 1.3 Mr. Ronan Murphy 1. Election of Directors 4. To authorise the Company to allot shares 7. To authorise the Company to make market purchases of shares 5. To disapply the statutory pre-emption rights 8. 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: 6. 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. SCAN TO VIEW MATERIALS & VOTEw The Board of Directors recommends you vote FOR proposals 2 through 8: 2. To review the Company's affairs and consider the Accounts and Reports 3. To authorise the fixing of the Auditors' Remuneration ! !! ! !! ! !! ! !! ! !! ! !! Exhibit 99.2


 
D87905-P76983 ICON plc Annual General Meeting of Shareholders Tuesday, July 26, 2022 9:30 AM, 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 26, 2022 9:30 AM 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 9:30 AM, Dublin Time on July 26, 2022, 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 Directors' 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 2021



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)
Colin Shannon (Scottish - Non-Executive)
Dr. Linda Grais (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
32 Old Slip
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 2021.

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 2021 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 151 to 154 of this annual report.

Principal activities, business review and future developments

ICON is a clinical research organisation (“CRO”), founded in Dublin, Ireland in 1990. Since then we have grown significantly to become a leading global provider of outsourced development and commercialisation services to pharmaceutical, biotechnology, medical device and government and public health organisations. Our mission is to improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative solutions.

We are a public limited company in Ireland and operate under the Irish Companies Act 2014, as amended (the "Companies Act"). Our 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 2912000. Our website is www.iconplc.com.

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. Our service offering includes clinical development, functional outsourcing and laboratory services. Our clinical development services include all phases of development (Phases I-IV), peri and post approval, data solutions and site and patient access services. Our laboratory services include a range of high value testing services, including bionanalytical, biomarker, vaccine, good manufacturing practice ('GMP') and central laboratory services. We also offer full-service and functional service partnerships to our customers. The Group’s vision is to be the healthcare intelligence partner of choice by delivering industry leading solutions and best in class performance in clinical development.

Since ICON was founded, the Company has expanded through organic growth, together with a number of strategic acquisitions to enhance its expertise and capabilities in certain areas of the clinical development process and to broaden the service portfolio and add scale to existing services. On 1 July 2021, the Company completed the Acquisition of PRA Health Sciences, Inc. ("PRA") by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA, the parent of the PRA Health Sciences Group ("the Acquisition" and "the Merger"). Upon completion of the Acquisition, PRA and its subsidiaries became wholly owned subsidiaries within the ICON Group. The financial statements presented herein reflect the results of the combined Company for the six month period since the Merger completion on 1 July 2021. The results of PRA in the period prior to 1 July 2021 are not reflected in these financial statements, other than where clearly stated and required by IFRS.

The acquisition of PRA has transformed the scale and capabilities of the Company. The combined Company leverages its enhanced operations to transform clinical trials and accelerate biopharma customers’ commercial success through the development of much needed medicines and medical devices. The new ICON has a renewed focus on leveraging data, applying technology and accessing diverse patient populations to speed up drug development.

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 2021, the Group had approximately 38,330 employees, in 142 locations in 53 countries, creating one of the world's most advanced healthcare intelligence and clinical research organisations. During the year ended 31 December 2021, the Group derived approximately 47.0%, 46.5% and 6.5% of its revenue in the United States, Europe and Rest of World, respectively.

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Directors’ Report (continued)
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 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.

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.

Delivery of our mission and strategy is focused on our four strategic pillars, being (i) Patient Access & Engagement (ii) Career Development & Employer of Choice (iii) Enduring Customer Partnerships and (iv) Healthcare Intelligence & Applied Innovation.
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Directors’ Report (continued)
Our strategy is focused on the following areas:

Patient Access & Engagement

ICON has a focused patient, site and data strategy, which is helping us to improve site identification, study placement and patient recruitment and retention.

Accellacare is ICON's global clinical research network offering customers a wide range of stand-alone and integrated solutions at the site or in patients' homes as part of decentralised trials. Our patient centric approach accelerates study start-up and increases patient recruitment and retention for pharmaceutical, biotechnology and medical device industries.

The Accellacare Site Network encompasses more than 150 sites across 8 countries and incorporates PMG Research in the US and MeDiNova Research in EMEA. Accellacare offers a quality focused clinical research infrastructure delivering value and benefits to sponsors. Accellacare supports customers with faster start-up - site selected to site initiation visit is on average 30% faster and it achieves an average of 40% more patients per site when compared to other sites.

Accellacare In-Home Services takes study visits directly to patients where they live, work, study or play in all phases and therapeutic areas of clinical trials. By bringing trial visits directly to patients, we ease the burden of participating in clinical research to increase patient recruitment, retention and diversity. Accellacare In-Home Services has experience in more than 400 clinical trials, tailoring our services to fit each study's specific requirements across more than 55 countries. 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. This is also providing investigators with innovative treatments for their patients with a quality-focused clinical research infrastructure supported by experienced professionals globally.

In 2021, Accellacare entered new partnerships with six research sites across four countries, expanding its global footprint and capabilities. Through these new partnerships, Accellacare is also enhancing its capability in the central nervous system (CNS) and immune-inflammation therapeutic areas.

The expansion of the Accellacare Site Network increases access and engagement with investigative sites and its patients, with the goal of faster recruitment and reducing the overall time and cost associated with drug development for customers. Accellacare now has access to more than 9 million patients.

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 the use of our proprietary Firecrest technology which is used to train and support sites during the development process. Our Accellacare and Oncacare site network alliances enhances our ability to enroll patients onto the clinical studies we perform. We have also developed strategic alliances with investigator site groups and healthcare 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. One Search is delivering on enrolment performance, speed of start-up and quality, which supports better site selection.

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Directors’ Report (continued)
Career Development & Employer of choice

People have long been central to our mission to improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative solutions. We encourage our people to bring flexibility, innovation, and determination to every situation. By doing so, our people can build exciting and rewarding careers, and deliver results to bring life-changing medicines to market and to maintain our success as an industry leader.

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.

We aim to be an industry leader: a company where talented people come to do important work, a place where our employees can shape the future of healthcare, grow their careers, and reach their full potential. We have long held a deep commitment to cultivating strong people practices. This includes competitive total rewards packages along with a focus on continuous learning. We nurture a culture of development and aim to boost engagement by supporting our people’s growth, both personally and professionally. We are dedicated to finding opportunities for our employees to grow and develop.

Our success depends on the knowledge, capabilities, and quality of our people. To improve their skills, we are committed to providing continuous learning. This commitment is underpinned by clearly defined competencies, which offer employees a clear path along which to develop skills and advance their careers.

To support employees at every stage of their career journeys, training and development programmes are aimed at advancing scientific, technical, and business knowledge. Programmes include tailored Clinical Research Associate (CRA) academies and a range of project management curricula, therapeutic-focused programmes, and people leader development programmes.

Enduring Customer Partnerships

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 boost our capabilities through both organic service development and targeted acquisitions.
During the year, we continued to augment 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 and 2021, 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 numerous COVID-19 trials for both the private and government sectors.
ICON mobilised a large global team of therapeutic and operational specialists to partner on the implementation of Pfizer‘s and BioNTech’s strategic plan and framework for the monitoring of the COVID-19 vaccine trial, 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. The team combined the benefits of full service and functional service provider clinical operating models to increase efficiency and ensure rapid study start-up.
ICON worked with 153 sites in the US, Europe, South Africa and Latin America to ensure the recruitment of more than 44,000 trial participants over a four month period in late 2020. ICON provided site training, document management and operational support for patient Informed Consent Form review, coordinated eConsent in most countries, and assisted with clinical supply management services. ICON achieved unprecedented trial timelines, while maintaining high standards of quality, undertaken in response to the pandemic required collaboration and strong communication between the ICON and companies’ project teams.

We continue to target growth in under-penetrated CRO market segments. Penetration within medical device companies has lagged in comparison to 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 has further enhanced our value offering in this area.

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Directors’ Report (continued)
We also invested significantly in our site and patient network (Accellacare), and consider our expertise and offering in this area as one of our strategic pillars effective from 2021.

Healthcare Intelligence & Applied Innovation
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; ensuring 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.

Firecrest is ICON’s proprietary comprehensive site performance management system. It 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 behaviour 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. Firecrest is now integrated into the ICON Safety Reporting Solution and provides a new Site Question Management Tool.

ICON has also developed a patient engagement platform to support improved patient experience & enrolment in clinical trials. The web based patient engagement platform, provides patients with study specific information and connectivity with the nearest investigative site. The solution supplements patient recruitment outreach by sites and increases visibility of potential study participants for sponsors and sites. An easy to navigate, user friendly interface guides the patient to new and ongoing studies in their particular indication and a pre-qualification questionnaire helps to determine if the study is a right fit for them. If the patient decides to register interest, they are given the option to select their nearest investigative site. This establishes connection with the site and the patient can then choose to contact the site or ask to be contacted for pre-screening.

The completion of the Merger has significantly expanded ICON's data driven strategy with the addition of Symphony Health. Symphony Health is a trusted partner and leading enabler of integrated health data liquidity and analytics, delivered as a cloud-based solution.

We positively impact patients’ lives by understanding their journeys and how they can benefit from drugs currently in development and on the market. We do this by developing a holistic, global data environment across pharmaceutical/ biotech companies (development to commercial) that gives insights into patients, and how best to serve them.

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.

Operational Excellence, Quality and Delivery

Quality is the foundation of our success. The quality of our work is vital to our mission of bringing better medications to patients around the world. We are committed to maintaining, supporting, checking and improving our quality systems to meet or exceed the quality standards demanded by our clients, patients and regulatory authorities. We focus our innovation on the factors that are critical to our clients – reducing time to market, reducing cost and increasing quality – and our global team of experts has extensive experience in a broad range of therapeutic areas.

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 also deploy 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.


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

The principal activity of 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
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On 1 July 2021, the Company completed the Acquisition of PRA by means of a merger whereby Indigo Merger Sub, Inc., a Delaware corporation and subsidiary of ICON, merged with and into PRA Health Sciences, Inc., the parent of the PRA Health Sciences Group ("the Acquisition" and "the Merger"). Upon completion of the Acquisition, PRA became a wholly owned subsidiary within the ICON Group. ICON’s Acquisition of PRA has brought together two high-quality, innovative, growing organisations with similar cultures and values to create one of the world’s leading healthcare intelligence and clinical contract research organisations. The total value of the Merger consideration is $12.1 billion and has resulted in the recognition of goodwill of $8.2 billion, intangible assets of $4.9 billion and an associated deferred tax liability of $1.1 billion.

With approximately 38,330 employees across the globe, the new ICON has established relationships with a majority of the world’s top pharmaceutical and biotech companies. We believe the Company now has the expertise, technology, and data assets to lead the industry into a new paradigm for bringing clinical research to more patients and enabling expanded capabilities for customers. We believe the Merger will deliver a transformational effect on ICON through:

Scale: With a deeper clinical, commercialisation and consulting services portfolio, a broader geographic footprint, depth in therapeutic expertise, and data-driven healthcare technology, the Company can deliver enhanced globally scaled expertise & solutions for all customers and patients.

Focus: The Company will have a singular focus on clinical research and commercialisation, leveraging transformational technology and innovation to execute clinical trials from Phase 1 to post-approval studies with the highest quality, expertise and speed.

Speed to market: Our extensive services portfolio, digital and data technology capabilities, and enhanced access to more diverse patient populations, have been combined with flexible delivery approaches and partnership models – all with the aim of reducing development time and costs.

Flexible partnership models: ICON has partnerships with a majority of world’s top biopharma and biotech companies worldwide. ICON is a global leader in Functional Service Provision and a top global provider of full service clinical research.

Differentiated DCT platform, healthcare intelligence & technology: The new ICON can deliver differentiated decentralised and hybrid trial solutions through a suite of capabilities, including mobile health, commercial connected health platforms, real world data and information solutions, a global site network, home health services and wearables expertise.
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Directors’ Report (continued)
Access to patients: The new ICON offers customers enhanced access to a larger global pool of more diverse patients through its global site network (Accellacare), specialised oncology network (Oncacare), a paediatric site network, in-home clinical services and a network of six Phase I clinical research units across the United States and Europe.

On 3 September 2020, as part of an internal initiative, 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 operates as 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 a two and half year period, commencing 1 January 2023 and ICON also has the right to acquire the 51% majority voting share capital from 1 August 2025.

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 specialises 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.

On 24 September 2019, a subsidiary of the Company, ICON Clinical Research LLC, acquired a 100% interest in Clinical Research Networks ("CRN"). Founded in 2003 and operating from its headquarters in Illinois, USA and Gdansk, Poland, CRN 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. CRN will enhance 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 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 this right to take 100% ownership of MeDiNova. Effective from this date, the noncontrolling interest was derecognised. The company settled the amount due to the noncontrolling interest holder on 17 July 2020 for $43.9 million.

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).

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Directors’ Report (continued)
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 2022, 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 financial year and state of affairs of the Company are set out in the Consolidated Statement of Profit and Loss, the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Financial Position on pages 35, 36, and 37 respectively. The Directors do not propose the payment of a dividend for the year ended 31 December 2021.

The Company has commenced a multi year restructuring programme in 2021 as part of the integration of PRA into the Company. This programme is expected to last four years and deliver $150 million in synergies on completion. The programme will focus on alignment of people and processes and will involve a review of the Company's global office footprint.

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 2021Year ended 31 December 2020
Percentage change
 in period
As a percentage of revenue
Revenue100 %100 %95.6 %
Direct costs (excluding exceptional items)72.5 %70.8 %100.5 %
Other operating expenses (excluding exceptional items)16.4 %14.5 %120.8 %
Operating profit (excluding exceptional items)11.0 %14.7 %47.4 %
Transaction and integration related3.1 %— %N/M
Restructuring0.5 %0.7 %N/M
Operating profit (including exceptional items)7.4 %14.0 %2.8 %
N/M = Not Meaningful


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Directors’ Report (continued)
Twelve months ended 31 December 2021 compared to twelve months ended 31 December 2020

Revenue    
Year Ended
31 December
Change
(dollars in thousands)20212020$%
Revenue$5,472,826 $2,797,288 $2,675,538 95.6 %

Revenue for the year ended 31 December 2021 increased by $2,675.5 million, or 95.6%, to $5,472.8 million from $2,797.3 million for the year ended 31 December 2020. For the year ended 31 December 2021 we derived approximately 47.0%, 46.5% and 6.5% of our revenue in the United States, Europe and Rest of World, respectively. The increase in revenues in the year ended 31 December 2021 is due to the Merger and the impact of the continued recovery from 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 service providers to travel, and our ability to travel. The Company has earned revenue from clinical trials associated with COVID-19, most notably with the Pfizer BioNTech COVID-19 vaccine programme.

Revenues from our top five customers amounted to $1,730.6 million in the year ended 31 December 2021 compared to $1,092.8 million in the year ended 31 December 2020 or 31.6% and 39.1% respectively. The largest of these customers related to a strategic partnership with a large global pharmaceutical company.

Revenue in Ireland increased by $184.6 million in the year ended 31 December 2021, to $1,365.9 million, compared to $1,181.3 million for the year ended 31 December 2020. Revenue in Ireland during the year ended 31 December 2021 increased by 15.6% compared to an overall increase in Group revenue of 95.6%. Revenue in Ireland is principally a function of our global contracting model (see note 2 - Segmental information). Entities acquired as part of the Merger are currently being integrated into the global contracting model and this process remains ongoing at 31 December 2021.

Revenue in the Rest of Europe increased by $758.6 million or 182.0%, to $1,175.5 million, compared to $416.9 million for the year ended 31 December 2020. Revenue in the U.S. increased by $1,647.4 million or 178.0%, to $2,573.0 million, compared to $925.6 million for the year ended 31 December 2020. Revenue in our Rest of World (‘Other’) region increased by $84.8 million or 31.0%, to $358.4 million compared to $273.5 million for the year ended 31 December 2020. Revenue has increased across all regions principally reflecting the Merger completion and continued recovery from the COVID-19 global pandemic.

Direct costs    
Year Ended
31 December
(dollars in thousands)20212020Change
Direct costs (excluding exceptional items)$3,970,025 $1,980,369 $1,989,656 
% of revenue (excluding exceptional items)72.5 %70.8 %100.5 %
Direct costs (including exceptional items)$3,970,025 $1,989,256 $1,980,769 
% of revenue (including exceptional items)72.5 %71.1 %99.6 %

Direct costs for the year ended 31 December 2021 increased by $1,989.7 million or 100.5%, to $3,970.0 million from $1,980.4 million for the year ended 31 December 2020 (excluding exceptional items). Direct costs consist primarily of investigator and other reimbursable costs, compensation, associated fringe benefits and routine 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 $1,216.8 million, as a result of the Merger, combined with an increase in other direct project related costs of $19.4 million, an increase in laboratory costs of $17.2 million, an increase in third-party investigator and other reimbursable costs of $734.4 million and an increase in travel related costs of $1.8 million. As a percentage of gross revenue, direct costs have increased to 72.5% compared to 70.8% for the year ended 31 December 2020 (excluding exceptional items).

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Directors’ Report (continued)
Other Operating Expenses    
Year Ended
31 December
(dollars in thousands)20212020Change
Other operating expenses (excluding exceptional items)$898,288 $406,863 $491,425 
% of revenue (excluding exceptional items)16.4 %14.5 %120.8 %
Other operating expenses (including exceptional items)$1,100,007 $416,065 $683,942 
% of revenue (including exceptional items)20.1 %14.9 %164.4 %

Other operating expenses for the year ended 31 December 2021 increased by $491.4 million, or 120.8%, to $898.3 million compared to $406.9 million for the year ended 31 December 2020 (excluding exceptional items). Other operating costs are primarily comprised of compensation, related fringe benefits and routine 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 16.4% of revenue, compared to 14.5% of revenue for the year ended 31 December 2020 (excluding exceptional items). During the year, general overhead costs increased by $9.5 million, facilities related costs increased by $58.4 million, depreciation and amortisation increased by $248.9 million, personnel related costs increased by $188.2 million and there was an increase of $8.2 million in marketing fees. These increases were partly offset by a decrease of $20.1 million due to foreign exchange movements and other immaterial decreases.

Exceptional items - Restructuring, transaction and integration-related expenses associated with the Merger

Year Ended
31 December
(dollars in thousands)20212020Change
Transaction and integration related (including stock acceleration charges)$170,614 $(759)$171,373 
% of revenue3.1 %— %N/M
Restructuring$31,105 $18,089 $13,016 
% of revenue0.5 %0.7 %72.0 %
N/M = Not Meaningful

During the year ended 31 December 2021, the Company incurred $201.7 million for restructuring, transaction and integration-related expenses associated with the Merger. The charge includes transaction and integration costs of $170.6 million associated with investment banking, advisory costs, retention agreements with employees, accelerated share compensation charges and ongoing integration activities.

The Company has also undertaken a restructuring programme following the announcement of the Merger to review its global office footprint, optimise its locations to best fit the requirements of the Company and reorganise its workforce to drive future growth. This programme has resulted in a charge of $31.1 million in the year ended 31 December 2021. In the year ended 31 December 2020, a restructuring charge of $18.1 million was recognised under a restructuring plan adopted following a review of operations. The restructuring plan reflected resource rationalisation across the business to improve resource utilisation.

We expect to incur additional expenses associated with the Merger; however, the timing and the amount of these expenses depends on various factors such as, but not limited to, the execution of integration activities and the aggregate amount of synergies we achieve from these activities.


12





Directors’ Report (continued)
Operating profit
Year Ended
31 December
(dollars in thousands)20212020Change
Operating profit (excluding exceptional items)$604,513 $410,056 $194,457 
% of revenue (excluding exceptional items)11.0 %14.7 %47.4 %
Operating profit (including exceptional items)$402,794 $391,967 $10,827 
% of revenue (including exceptional items)7.4 %14.0 %2.8 %

Operating profit increased by $194.5 million, or 47.4%, to $604.5 million ($402.8 million including exceptional items) for the year ended 31 December 2021 from $410.1 million for the year ended 31 December 2020 ($392.0 million including exceptional items) . As a percentage of revenue, operating profit decreased to 11.0% (7.4% including exceptional items) of revenues for the year ended 31 December 2021 compared to 14.7% of revenues for the year ended 31 December 2020 (14.0% including exceptional items).

Financing income and expense
Year Ended
31 December
Change
(dollars in thousands)20212020$%
Financing income$574 $2,724 $(2,150)(78.9 %)
Financing expense (excluding exceptional items)$(111,145)$(12,147)$98,998 815.0 %
Financing expense (including exceptional items)$(186,536)$(12,147)$174,389 1,435.7 %

Financing expense for the period increased to $111.1 million ($186.5 million including exceptional items) for the year ended 31 December 2021 from $12.1 million for the year ended 31 December 2020 due to the draw down of debt facilities associated with the Merger and costs related to the extinguishment of previous debt facilities (see note 23 - Bank credit lines and loan facilities). No amounts were drawn down on revolving credit facilities during the year ended 31 December 2021 or the year ended 31 December 2020. Financing income for the year decreased to $0.6 million for the year ended 31 December 2021 from $2.7 million for the year ended 31 December 2020. This reflects reduced returns on cash and cash equivalents and a reduction in cash and cash equivalents.

Income tax expense
Year Ended
31 December
Change
(dollars in thousands)20212020$%
Income tax expense (excluding exceptional items)$51,061 $53,014 $(1,953)(3.7 %)
Income tax expense (including exceptional items)$40,219 $50,753 $(10,534)(20.8 %)
Effective income tax rate18.7 %13.3 %

Income tax expense for the period decreased to $40.2 million (including exceptional items) for the year ended 31 December 2021 from $50.8 million for the year ended 31 December 2020. The Group’s effective tax rate for the year ended 31 December 2021 was 18.7% (10.4% excluding the effect of exceptional items) compared with 13.3% for the year ended 31 December 2020. The Group’s effective tax rate remains principally a function of the distribution of pre-tax profits in the territories in which it operates and the tax treatment of costs related to the Merger.

Risks and uncertainties

Under Irish Company Law (Section 327 the Companies Act), the Directors are required to give a description of the principal risks and uncertainties which it faced at 31 December 2021. 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.
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Directors’ Report (continued)
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 to ensure the minimisation of financial risk at reasonable cost. The Group’s financial instruments comprise cash and cash equivalents, current asset investments, 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 ensure continued growth. The Group also occasionally uses derivative financial instruments to reduce exposure to fluctuations in foreign exchange rates. The principal financial risk facing the Group is foreign exchange risk and interest rate risk. Other financial risks include credit risk and liquidity risk. Further details 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

In conjunction with the completion of the Merger Agreement, on 1 July 2021, ICON entered into a credit agreement providing for a senior secured term loan facility of $5,515 million and a senior secured revolving loan facility in an initial aggregate principal amount of $300 million (the "Senior Secured Credit Facilities"). The proceeds of the senior secured term loan facility were used to repay in full (i) PRA’s existing credit facilities and (ii) the Company's private placement notes outstanding and fund, in part, the transaction. The senior secured term loan facility will mature in July 2028 and the revolving loan facility will mature in July 2026. No amounts have been drawn under the revolving loan facility as at 31 December 2021.

In addition to the Senior Secured Credit Facilities, on 1 July 2021, the Company, issued $500 million in aggregate principal amount of 2.875% senior secured notes in a private offering. The senior secured notes will mature on 15 July 2026 and will bear interest at a rate of 2.875%.

On 27 September 2021, the Company repaid $13.8 million of the senior secured term loan facility and made a quarterly interest payment of $40.4 million. On 29 December 2021, the Company repaid $500.0 million of the senior secured term loan facility and made a quarterly interest payment of $40.8 million.

On 8 December 2020, ICON Investments Five Unlimited Company issued senior notes ('2020 Senior Notes') for aggregate gross proceeds of $350.0 million in a private placement which was guaranteed by ICON plc. The 2020 Senior Notes were issued in two tranches; Series A Notes of $275.0 million maturing on 8 December 2023 and Series B Notes of $75.0 million maturing 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. Due to the conditions attached to the additional borrowings to fund the PRA Merger, the 2020 Senior Notes were repaid in full on 1 July 2021 inclusive of early repayment charges. The total repayment on 1 July 2021 was $364.0 million.

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 unamortised portion of this loss has been released in the period in line with the commitment to early settle the 2020 Senior Notes.

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 15 December 2020 and this debt was repaid in full.

Subsequent events

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

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Directors’ Report (continued)
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 2021:
NamePosition
Ciaran Murray (5)
Chair and Director
Dr. Steve Cutler (1)(6)
Chief Executive Officer and Director
Rónán Murphy (2)(3)(5)(6)
Lead Independent 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)(5)
Director
Julie O'Neill (5)
Director
Mary Pendergast (2)
Director
Colin ShannonDirector (appointed 1 July 2021)
Dr. Linda GraisDirector (appointed 1 July 2021)
(1)Executive Officer of the Company.
(2)Member of Compensation and Organisation Committee.
(3)Member of Audit Committee.
(4)Member of Nominating, Sustainability and Governance Committee.
(5)Member of Integration Committee.
(6)Member of Execution Committee.

As a result of the Merger, Mr. Colin Shannon and Dr. Linda Grais, who both served on the PRA Board, joined ICON’s Board of Directors with effect from 1 July 2021.

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

Directors’ remuneration

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

Directors’ power to purchase and allot company shares

Subject to the provisions of the Companies Act, 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, 21 July 2020 and 20 July 2021. 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 1,000,000 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. No ordinary shares were redeemed by the Company during the year ended 31 December 2021.

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Directors’ Report (continued)
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 2021. 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
A certain number 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 Senior Secured Credit Facilities, details of which are set out in note 23 to the Consolidated Financial Statements, provides that, upon the occurrence of a change of control, the obligations thereunder may be accelerated.

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.

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.

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Directors’ Report (continued)
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 Chief Administrative Officer and 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 2021, the Audit Committee was comprised of three independent Directors: Rónán Murphy (Chair), Professor Hugh Brady and Eugene McCague.

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 2021:
Name%Number of Shares
WCM Investment Management8.807,179,979
MFS Investment Management8.326,785,703
Wellington Management Company LLP6.325,154,597
All Directors and Officers as a group (1)
1.391,129,726

(1)Includes 430,451 ordinary shares issuable upon the exercise of stock options granted by the Company, 33,568 restricted stock units (“RSUs”) awarded by the Company to Directors, officers and other key employees and 92,866 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, the figure included is the maximum amount of PSUs that may be issued.

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.

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Directors’ Report (continued)
Going concern

The time period that the Directors have considered in evaluating the appropriateness of the going concern basis in preparing the 2021 Consolidated Financial Statements is a period of at least twelve months from the date of approval of these financial statements (the 'period of assessment').

The Group has considerable financial resources and a large number of customers across different geographic areas. Having assessed the relevant business risks (see Appendix A) the Directors believe that the Group is well placed to manage these risks successfully and they have a reasonable expectation that ICON plc, and the Group as a whole, has adequate financial and other resources to continue in operational existence for the period of assessment with no material uncertainties. For this reason, the Group continues to adopt the going concern basis in preparing the consolidated 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 South County Business Park, 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.

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 improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative solutions. 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. We are advancing clinical research while offering customers broader and deeper experience, scale, and focus, complemented by continuity of delivery and speed to market. The completion of our Acquisition of PRA Health Sciences in July 2021 marked the birth of the new ICON and the start of work to unify two global leaders in healthcare intelligence and clinical research. The new ICON remains committed to responsible and sustainable business practices. We believe that business should not only operate in compliance with applicable laws, rules, and regulations, but that our behaviours should also address underlying societal concerns.
Our business model is described in the ‘Principal activities, business review and future developments’ section of the Directors’ Report.
Our core values underpin our mission and drive a culture and mind-set of ownership at ICON. "Own It @ ICON" is a statement of values that has remained at the very heart of ICON’s culture, encouraging our people to seize the opportunity and bring flexibility, innovation, and determination to every situation. We believe our culture of ownership personifies who we are as a company — it also helps us apply our expertise, collaborate to get things done, and succeed at our mission. ICON is redefining the company values to take the best of both ICON and PRA values. The Board approved the new values in December 2021 with a roll out plan during 2022.
The ICON values during 2021 were:
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.    

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Directors’ Report (continued)
The refined ICON values being rolled out in 2022 are:
Integrity: We always do the right thing.
Collaboration: We are better together working as one team.
Agility: We are passionate about providing innovative solutions for customers.
Inclusion: We value diversity and care about the success of our people.
https://cdn.kscope.io/0d978eddbf8d0a832630d2e782e123ce-ourvalues2022a.jpg
Our values underpin how we work together to deliver on our mission to improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative solutions. These values and our Code of Ethical Conduct, which underpins these values, form the core of what we do and how we do it. It applies to all officers, directors, employees, consultants and agents globally. All employees and temporary workers are mandated to complete global ethics training.
ICON established an Environmental, Social, and Governance Committee ('ESG Committee') in 2019, which brought 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 and General Counsel (CAO), who is responsible for reporting to the ICON executive leadership team and Board on ESG matters. In February 2022, the Board delegated oversight responsibilities of the Company's strategies, activities and risks in respect to ESG matters to the Nominating, Sustainability and Governance Committee. Accordingly, the CAO will report to the Nominating, Sustainability and Governance Committee on ESG matters going forward whilst also providing periodic updates to the executive leadership team.

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 including representation from facilities, corporate communications, finance, legal, investor relations, procurement, commercial, marketing and human resources departments. The composition of the ESG Committee was revised following the Acquisition of PRA to include representatives that have joined from PRA. 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.
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Directors’ Report (continued)
We are committed to building and developing our ESG strategies and reporting. In 2020 we published our first annual ESG Report covering 2019 and in 2021 we published our ESG Report covering 2020, which provided an overview of both ICON and PRA's actions and results during 2020. It also summarises our current policies, priorities and commitments in respect to ESG matters. We also launched our ESG page in 2020 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/.

The global landscape in respect to regulatory and legislative requirements relating to ESG reporting and disclosure requirements is rapidly evolving and we are monitoring potential requirements so that we are in a position to adhere to any additional requirements in due course.

In 2021, as a testament to our commitment to managing ICON responsibly and sustainably, we became a participant in the United Nations Global Compact (UNGC), a set of Ten Principles covering the areas of human rights, labour, environment, and anti-corruption.

Building a sustainable future – our commitment to the United Nations Sustainable Development Goals

As a global company, we maintain an ethical and sustainable presence in hundreds of locations worldwide. At its core, ICON’s mission is to improve health and lives. We are also committed to contributing to the 2030 United Nations Sustainable Development Goals (SDGs), and are proud that our work contributes to their advancement.

Our research, our work with customers and patients and our on-the-ground efforts to meet the diverse needs across our communities align with the SDGs. These efforts, however, focus on a subset of themes where we have the greatest opportunity to effect change and further details are set out in our ESG Report.

Environmental matters

ICON is committed to delivering excellence in care to our communities. To improve our overall sustainability, this commitment means tracking and improving our environmental performance across all business activities. We achieve this by pursuing sustainability strategies that recognise the impact of our operations as a CRO on the environment, addressing greenhouse gas (GHG) emissions, energy use, waste generation and procurement-related activities. Our employees, directors, officers, contractors, and temporary workers are expected to support our sustainability objectives.
ICON Green is our programme for managing environmental sustainability initiatives, in accordance with our Global Environmental Management Policy and Environmental Management Plan. The implementation of the ICON Green programme is led by our facilities team, reporting to our Chief Administrative Officer and General Counsel (CAO). The CAO is responsible for reporting on the programme to the ICON executive leadership team and Nominating, Sustainability and Governance Committee and the Board.

ICON set environmental goals around the use of renewable energy and carbon emissions in 2019 and we are working towards achieving these goals which are as follows:

100% renewable electricity by 2025
20% reduction in kilowatt hours (kWh) of electricity by 2030
Net zero carbon emissions on Scope 1 & 2 by 2030

We have programmes in place to manage and minimise climate impacts of business activities. To continue to improve processes and reduce our environmental impact, we track, calculate, and report our GHG footprint. We follow the GHG Protocol Corporate Standard, which is the global corporate accounting and reporting standard for calculating carbon emissions. We work with Carbon Trust to verify emissions data.

In line with carbon reduction targets, ICON’s Scope 1 and 2 GHG emissions, relative to revenue and the number of employees, have fallen year on year since 2016. Since 2020, following the pandemic-related closure of many of our facilities and a reduction in business travel, GHG emissions across our operations declined significantly. As the recovery continues, and as we resume more normal operations we will reflect on opportunities to continue to reduce our carbon emissions across our combined organisation to develop and improve our environmental programme.

CDP (formerly the Carbon Disclosure Project) provides a globally recognised system that enables companies to measure and manage their environmental impacts. ICON continues to be committed to improving its current scoring of a C. Legacy PRA’s CDP improved from a D score to a C from 2019.


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Directors’ Report (continued)
We are focused on reducing energy use across our global operations. For example, reducing energy use and shifting to renewable energy are components of our specific environmental goals. Waste reduction is embedded into our environmental policies and practices and is one of the objectives of ICON’s Environmental Management Policy. As we continue to combine the ICON and legacy PRA organisations, we will seek new opportunities to reduce waste by increasing recycling volumes, reducing consumption of primary materials, and decreasing use of disposable products in our offices and facilities.

The majority of our sites are leased and we work closely with our landlords and leasing agents to implement measures to ensure we operate in an environmentally sustainable manner. The Acquisition of PRA has expanded our global real estate footprint and our real estate group is working with other business leaders to understand the sustainability implications and opportunities of this new footprint, and find ways to continue to advance our collective sustainability goals. During 2021, we initiated a project to integrate offices and reduce our footprint. When selecting new locations for offices and planning building modifications, experts from our real estate team factor in environmental considerations. In addition, we have implemented a series of measures globally to reduce the local footprint of our offices, such as installing energy-efficient LED lighting, using motion detectors to reduce energy use, purchasing recycled office supplies, and reducing paper consumption by promoting paperless office processes, or where printing is necessary, enabling double-sided output.

Our office design has efficiency in mind, utilising space to provide the maximum number of desks and functional provisions while still providing comfortable, safe spaces for our employees. Our strategies include:

Perimeter glazing of meeting rooms, offices, and other spaces which allow in natural light.
Recycling areas built into business centers and kitchen/ canteens which reduce waste sent to landfills.
Planted green spaces which contribute to internal air quality, temperature, and humidity.
Building materials and vendors which we select for low environmental impact.

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.
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

Community Engagement
We are committed to making a positive impact on the communities in which we work and live and we have aligned our community efforts to a broader vision for social impact, including by aligning priorities with our organisational goals of diversity, inclusion, and belonging.
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.
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Directors’ Report (continued)
Supporting education & building closer ties between industry & academia
A core area of community support includes building ties between industry and academia to inspire the next generation of leaders in business and science.
Benefactor through the Centuries of Trinity College Dublin. ICON has been honoured by Trinity College Dublin as a Benefactor Through the Centuries. This award recognises our enduring support for Trinity, including:

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 signalling, 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.

Partnership with Junior Achievement to inspire schoolchildren. ICON supports our people who take time out of their working day to deliver Junior Achievement educational programmes. 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.

The PRA Veteran Leadership Training Programme (VLTP). The VLTP has been recruiting United States military veterans from all branches to join the Company in an operational capacity since 2016. Veterans are placed in roles across the organisation to help translate leadership skills learned during military service and apply them in civilian life and as members of the PRA team. Members of the VLTP also have hands-on learning and mentoring opportunities that will help ease the transition to corporate life and that connect them with team-based support system.

Improving the welfare of people in the communities in which we live
Through volunteering, donations and other charitable initiatives, our 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.
In July 2021, ICON contributed $0.2 million to support the purchase of 38,000 COVID-19 vaccines through the UNICEF COVID-19 vaccination programme, one to represent each employee in the new ICON - and became a founding member of UNICEF’s Corporate Vaccine Alliance in Ireland. The alliance supported UNICEF’s ambitious goal to deliver over two billion COVID-19 vaccines by the end of 2021.

Since 2012, ICON’s annual employee-nominated charity donation programme has supported over 70 charities. These organisations focus on a range of critical issues, from relieving poverty and homelessness, to improving child welfare through education, to enhancing the lives of patients who are living with a variety of diseases, including cancer, blindness, Alzheimer’s disease, autism, and neuromuscular diseases. Usually, ICON donates $10,000 to each of 10 charities around the world, selected from a list of staff nominations. In 2021, in lieu of formal holiday events, we expanded our programme and donated $10,000 each to 20 organisations around the world, instead of our normal practice of supporting 10 charities. The organisations were chosen to align with our ESG goals.

Under the PRA Cares initiative, PRA employees from around the world have supported community charity programmes. For more than five years, from donation drives to programming community events, PRA employees have donated time, money, and support to inspire kindness and empower action.


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Directors’ Report (continued)
Talent and People

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.

At the core of our strategy is our people

People have long been central to our mission to improve the lives of patients by accelerating the development of our customers’ drugs and devices through innovative solutions. We encourage our people to bring flexibility, innovation, and determination to every situation. By doing so, our people can build exciting and rewarding careers, and deliver results to bring life-changing medicines to market and to maintain our success as an industry leader. We call it: the potential of together.

The training and development of our staff is a key focus for us
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.
We aim to be an industry leader: a company where talented people come to do important work, a place where our employees can shape the future of healthcare, grow their careers, and reach their full potential. We have long held a deep commitment to cultivating strong people practices. This includes competitive total rewards packages along with a focus on continuous learning. We nurture a culture of development and aim to boost engagement by supporting our people’s growth, both personally and professionally. We are dedicated to finding opportunities for our employees to grow and develop.

Our success depends on the knowledge, capabilities, and quality of our people. To improve their skills, we are committed to providing continuous learning. This commitment is underpinned by clearly defined competencies, which offer employees a clear path along which to develop skills and advance their careers.

To support employees at every stage of their career journeys, training and development programmes are aimed at advancing scientific, technical, and business knowledge. Programmes include tailored CRA academies and a range of project management curricula, therapeutic-focused programmes, and people leader development programmes.

Our People Leader development programme focuses on providing our People Leaders with the relevant skills to effectively manage themselves, their team and their business, including psychometrics to raise their awareness of their behavioural preferences and the preference of others. ICON also invested in Harvard Manage Mentor, an online learning platform, providing People Leaders with access to learning that can be accessed at any time with topics ranging from Change Management, Diversity & Inclusion, Retaining Employees and Developing Employees.

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 industry leading CareerHub, ICON employees are encouraged to broaden their scientific, technical, leadership, and business knowledge. By tapping into development programmes and partnerships with leading academic institutions, team members can use the hub to develop competencies that advance their careers. We also collaborate with University College Dublin to deliver customised leadership development programmes for global employees.

During 2021, the PRA Academy was maintained for legacy PRA employees, which served as an umbrella for various training programmes, including the Clinical Research Associate (CRA) Bridge Programme, Speciality Bridge, Oncology University, and the CRA Internship Programme. Additionally, in 2020, two development programmes — PD STRIDES, which focused on Project Managers in Product Delivery, and Leadership Essentials and Development (LEAD), a comprehensive training programme for all PRA Functional Managers — moved from the pilot phase to full implementation. In addition to formal training, PRA also launched LinkedIn Learning globally, which provided unlimited access to more than 16,000 expert-led courses and video tutorials covering professional skills, business software and tools, project management, information technology, creative topics, and much more.

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Directors’ Report (continued)
As an organisation we are keen to hear directly from our employees
We recognise that, to attract and retain the best talent, it is essential that we listen to and respond to our people’s needs and we actively seek to understand our employees’ perspectives and amplify their voices. This begins with a focus on diversity, inclusion and belonging, and extends to every aspect of our work, from recruitment and onboarding, to training, engagement, enablement, and reward.

We pursue best-in-class approaches to building employee engagement and these include, among others:
Comprehensive global employee surveys, which measure how people feel about their work and whether they feel they have the tools to do their jobs well. Feedback from these studies informs detailed action plans at the group, function, and team level.
Pulse check surveys, which are smaller-scale studies designed to measure employee sentiment on specific topics and initiatives.
Stay interviews to help managers understand why staff stay and to uncover what might put them at risk to depart.
Skip-level meetings to develop trust and rapport between senior leaders and employees.

Our listening strategy also informs our efforts to reduce turnover, which we monitor closely through analytics. Qualitative information is collected through formal exit interviews and, where we believe they’ll make an impact, we intervene via retention plans and related efforts.

Employee well-being

At the heart of our well-being ethos is a commitment to support our employees’ ability to lead happy, healthy lives. We aim to ensure that all employees worldwide have equal and direct access to locally relevant information and resources to support them and their families across a broad range of needs. These include, but are not limited to, the physical, social, psychological, and environmental dimensions of well-being. Our Global Employee Assistance Programme ensures that all employees, and their families, have access to a range of different resources and experts to help them better manage their working life and personal life.

Health and safety

The welfare and safety of our employees, customers, and clinical trial patients remains our highest priority. We take guidance from global and regional health authorities and governments to protect the safety and welfare of employees, as well as abide by government directives. Our priority objectives are the safety of our staff, clinical trial patients, protecting the environment, maintaining business continuity, and ensuring ongoing protection of our data.

We are committed to providing a safe working environment for our people. We achieve this goal by working in ways that protect the safety, health, and welfare of all our employees, clinical trial patients, and visitors. We work to identify, mitigate, and monitor existing and emerging health or environmental risks that may be associated with our business activities.

In response to the pandemic, both PRA and ICON deployed a range of measures to protect employee safety, to ensure the continuity of customers’ research programmes, and to protect patient welfare. These were, and remain, our top priorities for all decisions we make relating to COVID-19. With pandemic conditions changing around the world during 2020 and 2021, the Company's COVID Pandemic Task Force worked through the Business Continuity (BC) office, Site Head network, and with other critical stakeholders to communicate and reopen offices as conditions permitted in accordance with recommendations from the CDC, WHO, and local governments.

Fostering diversity, inclusion and belonging

Diversity, inclusion and belonging are fundamental to our culture and values. Our rich diversity makes us more innovative and more creative, which helps us better serve our patients, our customers and our communities. We recognise the critical importance of diversity in clinical trials and also affirm that diversity of thought in an inclusive workplace is vital to innovative ideas, spur more fruitful collaboration and nurture a vibrant culture. We are committed to being a workplace where all employees feel included with a deep sense of belonging. To achieve this, we acknowledge and celebrate our differences in gender, ethnicity, culture and abilities. As a values-driven organisation, respect for diverse points is foundational to how we interact with each other, as well as with customers, patients, and suppliers.


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Directors’ Report (continued)
We established a Diversity, Inclusion & Belonging Steering Committee in 2019 which was updated in 2021, following the Acquisition, to comprise of leaders from both the legacy ICON and PRA organisations to guide us in our journey to become a more inclusive workplace where all employees feel they can be themselves and deliver their best work. We believe in a workplace culture that embraces diverse perspectives and empowers our team members to grow at work, at home and in their communities. The key areas of focus for our diversity, inclusion, and belonging agenda include talent management, country-level inclusion policies, rewards, training, and communications.

The new ICON brings together two diverse organisations, made great by the talented and ambitious people whose varied skills, perspectives, and backgrounds will continue to be vital to our success. As a global operation, we deliberately structure teams to be international, so that we can support the delivery of our customers’ clinical development programmes across multiple geographies.

ICON has Diversity, Inclusion & Belonging advocates from the global employee population to better understand local needs, build local presence and awareness, and to give a voice to every corner of the world. These Diversity, Inclusion & Belonging Advocates play a key role in supporting the Diversity, Inclusion & Belonging Steering Committee, aligning activities across the organisation which led to the creation of community groups which are broadly aligned with groups that were already in place in PRA:
NOW@ICON: Networking Organisation for Women at ICON is committed to inspiring and connecting current and potential leaders through an inclusive environment of targeted initiatives and supportive mentorship.
SPACE: Supporting Parents and Carers Everywhere to create a workplace where stepping out of careers due to personal commitments for a period is wholly accepted and not career limiting, and where stepping back into their career is an organic and positive process.
PRIDE: Supporting LGBTQ+ colleagues and allies, ensuring that no matter where employees are in the world, our offices are a safe space where they are welcomed, respected, and valued.
DAWN: The Disability Awareness Network is a community group striving to develop and foster a mindset towards creating an inclusive workplace and working environment where everyone is treated equally with respect and dignity, irrespective of any visible or hidden disabilities.
EmbRACE: Supporting all race and ethnic backgrounds in creating an inclusive workplace culture.

ICON is focused on building an inclusive culture where employees feel supported by a fair system supporting pay equity. We have a long track record of developing talent and filling vacancies through internal hires. Using best-in-class analysis, we conduct regular reviews of salary ranges to ensure fair pay, irrespective of gender, race, or ethnicity.

We monitor and seek to maintain pay equity for our employees and, as such, strive to structure our pay principles to ensure that individual differences are not a factor in how we deliver rewards. We have made significant investments in organisation design structures, tools, and communications which underpin our pay principles. This information is hosted through core technology, giving managers direct access to resources to support and inform pay-related decisions.

As we are integrating the ICON and PRA legacy organisations, we are performing reviews to identify and close any pay equity gaps and we will continue to expand pay equity analytics and provide actionable guidance to leaders and managers. To support enterprise planning, we will continue to track company-wide metrics and report on progress to the Board.

We are also committed to ensuring fair employment practices. For every jurisdiction in which we operate, we act in compliance with relevant laws relating to labour rights and labour relations as well as market competitive benefits. We believe in fair and equal treatment for all our people, without regard to gender, race, ethnicity, sexual orientation, marital status, physical or mental disability, age, pregnancy, veteran status, nationality, religion, or any other legally-protected status. We do not tolerate our employees being subjected to physical, sexual, racial, psychological, verbal, or any other form of harassment. We encourage our employees to report any issues of harassment or discrimination. We prohibit retaliation against any employee who rejects, protests, or complains about unlawful discrimination or harassment.

For further details on risks relating to employee matters refer to Appendix A: Risk Factors on page 155.
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Directors’ Report (continued)
Human rights

ICON is committed to human rights and the adoption and pursuit of compliance with the United Nations Guiding Principles on Human Rights and we maintain policies and practices to uphold human rights globally and within our communities around the world. Our business model and our policies, including our Global Code of Ethical Conduct and Global Supplier Code of Conduct, are intended to fully comply with applicable human rights legislation in the countries where we operate. Indeed, our zero-tolerance policy on forced labour, slavery, and human trafficking is defined clearly in these policies, which are available to employees, suppliers, customers, and the public.
We are completely opposed to forced labour, slavery, and human trafficking. We will not knowingly support or conduct business with any organisation involved in such activities. We do not employ anyone below the minimum employment age in the jurisdictions in which we operate.

Our Global Supplier Code of Conduct incorporates the Pharmaceutical Supply Chain Initiative (PSCI) principles for Responsible Supply Chain Management, including for labour. Before doing business with any supplier, we require suppliers to certify that they will comply with the ICON Global Supplier Code of Conduct or to their own materially equivalent internal code, which includes human rights. We perform pre-engagement due diligence on all of our suppliers, including in relation to labour issues, which we support through periodic re-screening. We hold our suppliers accountable for meeting their contractual obligations. Contract non-compliance can result in termination of the business relationship with the supplier and exclusion from future business.

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's core values (as detailed on page 18) are infused 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. Our focus on acting ethically is reflected in our policies and codes of conduct, including our Global Code of Ethical Conduct. This Code addresses the core values expected of our people in our internal interactions with each other as well as in external dealings with patients, customers, healthcare professionals, regulators, investors, vendors and other third parties.

Our Ethics and Compliance Programme is foundational to our culture and will continue to define expectations and guide behaviour across ICON. The Legal Compliance and Ethics Team has oversight of day-to-day management of the programme. The team is independent of the business and reports to the Chief Administrative Officer and General Counsel (CAO). The CAO is responsible to report on the programme to our executive leadership team and the Board. The programme supports all functional areas globally and is dedicated to the implementation of standardised global policies, procedures, training, guidance, communications, monitoring, investigations, issue management, assessing compliance-related risk and mitigations, and reporting to ensure the overall compliance programme is effectively functioning.

ICON has incorporated a third-party system for employees and third parties to report ethics and compliance questions, as well as concerns, and to track reports through follow-up and resolution. These tools also provide visibility into our risks while highlighting opportunities to address them. ICON’s combined compliance and ethics programmes will continue to grow and evolve in response to changes in our business and in the global business climate.

All employees are required to complete mandatory training in key areas which support our values and our ways of working. The training incorporates the key principles of our policies and codes and includes interactive scenarios where applicable.

During 2021 we introduced the Speak Up Policy, ICON’s open door policy which replaces the former Ethics Line Charter. The Speak Up Policy promotes a culture that encourages compliance, openness, and accountability without retaliation. The Speak Up Policy aims to support our culture and values and seeks to encourage the prompt reporting or surfacing of concerns or violations. Reported ethics concerns and other ethics and compliance-related data are reported to the Board as appropriate.

For further details on risks relating to ethics and compliance refer to Appendix A: Risk Factors on page 155.

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Directors’ Report (continued)
Anti-bribery and Corruption
ICON is guided by the foundational principle that we do not tolerate bribery or any other form of corruption or fraud. Our anti-bribery/ anti-corruption (ABAC) programme is a key element of our Ethics and Compliance Programme. ICON and all ICON directors, employees, consultants, agents and all third parties acting on ICON's behalf 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.

ICON's internal audit teams conduct ABAC Programme audits. Internal Audit focuses 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.

For further details on risks relating to anti-corruption refer to Appendix A: Risk Factors on page 155.
Information Security and Privacy
We understand that data privacy and information security are fundamental to business and key to retaining customers, building investor trust, protecting patients, and complying with global and regional regulations. We recognise and respect that our customers, employees, patients, and all those who do business with us expect that we will protect their personal information in accordance with our legal obligations and the promises we make. Our cybersecurity strategy and program protect our systems and data against changing threats. The cybersecurity program has the support of executive leadership and the Board, and we have invested heavily in cybersecurity technologies to protect our environment. Our cybersecurity program is independently assessed on a regular basis. We have embedded security in our processes to maintain the security of our data and our customers’ data. We understand that cyber threats move at machine speed and accordingly we have invested in cybersecurity automation to detect and respond to vulnerabilities and threats rapidly.

Our processes and range of information security policies are certified to ISO27001 and are independently audited twice annually. We also have the Cyber Essentials certification. During an acquisition process, we conduct security and privacy due diligence and risk assessments, implement policies, deliver employee training, and securely integrate IT systems.

Our Global Data Protection Policy regulates the processing of personal data in accordance with the applicable data protection laws of the countries where we operate, including Europe’s General Data Protection Regulation (GDPR) framework. COVID-19 raised new privacy and data issues, for example, verifying remotely sourced data became a new priority that will likely endure beyond the pandemic.

Our people and partners 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 that they understand their responsibilities with respect to data security and privacy.

For further details on risks relating to information security and privacy refer to Appendix A: Risk Factors on page 155.

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Directors’ Report (continued)
Sustainable procurement

ICON maintains policies and practices to support responsible, sustainable and ethical business practices and is committed to working with only those suppliers who embrace high standards of behaviour. We manage our suppliers through our Global Procurement department. The onboarding of new suppliers is completed through a centrally managed due diligence process. Environmental sustainability, bribery, and corruption risks are a focus of our collective third-party diligence and management process. We require our suppliers to abide by our Global Supplier Code of Conduct.

ICON performs pre-engagement due diligence on all of our suppliers, this includes screening of sanctions lists, debarment, and adverse media. Suppliers are periodically re-screened to ensure any potential new findings are captured and addressed. As part of this process, suppliers are subject to a risk assessment, with suppliers deemed higher risk subject to enhanced due diligence which may include periodic training, auditing, and assessments. We hold our suppliers accountable for meeting their contractual obligations, including commitments relating to our Global Supplier Code of Conduct and regulatory compliance. Contract noncompliance can result in termination of the business relationship and exclusion from future business our company.

For further details on risks relating to sustainable procurement refer to Appendix A: Risk Factors on page 155.

Directors’ compliance statement

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

Auditor

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

On behalf of the Board




Steve Cutler
Rónán Murphy
17 June 2022
Chief Executive Officer
Director
28




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.
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. They are responsible for such internal controls as they determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have a general responsibility 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.
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
29





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 2021, set out on pages 35 to 150, 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 the Company as at 31 December 2021 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 entity’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 Group’s or the Company’s ability to continue as a going concern for a period of at least twelve months from the date when the financial statements are authorised for issue.

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







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


Key audit matters: our assessment of risks of material misstatement

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

In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance, were as follows:

Group Key Audit Matters

Valuation of customer relationship intangible asset acquired in a business combination

As discussed in Note 14 to the consolidated financial statements, the Company completed its merger (the “Merger”) with PRA Health Sciences, Inc. ("PRA") on 1 July 2021. The Company estimated the preliminary fair value of the customer relationship intangible asset to be $3,915.0 million as of the date of the Acquisition.

The key audit matter

We identified the evaluation of the preliminary fair value of the customer relationship intangible asset acquired as a key audit matter. Complex and subjective auditor judgement was required to assess the forecasts of the acquiree’s cash flows, which include forecasted revenue growth, operating income margins and the customer attrition rate, as well as the discount rate based on an analysis of the acquiree’s weighted average cost of capital. In addition, specialised skills and knowledge were needed to test the significant assumptions listed above and used in the discounted cash flow model.

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 business combinations process, including controls over the valuation of the customer relationship intangible asset. This included controls related to the significant assumptions used in the development of the discounted cash flow model, including forecasted revenue growth, operating income margins, customer attrition rate and the discount rate. We also tested management's controls over the completeness and accuracy of the data used in the fair value estimate.

We assessed the reasonableness of the Company’s estimated forecasted revenue growth and operating income margins by comparing forecasted revenue growth and operating income margins to the acquiree’s historical results and publicly available industry data. To assess the Company’s customer attrition rates, we compared them to historic customer attrition rates of the acquiree.

We also involved a valuation professional with specialised skills and knowledge who assisted in:

evaluating the discount rate by comparing it against discount rates that were independently developed using publicly available market data of comparable entities

assessing the fair value of the customer relationship intangible asset acquired using (1) the Company’s forecasted cash flows and (2) our independently developed discount rates.

Our procedures in respect of this risk were performed as planned. We found that the estimates and judgements used in determining the preliminary fair value of the customer relationship intangible asset were appropriate.

Revenue recognition for clinical trial service contracts

As discussed in Note 21 to the consolidated financial statements, the Company recognised revenue of US$5,472.8 million for the year ended 31 December 2021, 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 Company’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 the evaluation of revenue recognition for clinical trial service revenue as a key audit matter. Complex and subjective auditor judgment was required to evaluate the Company’s estimate of total forecast project costs and the estimated realisable contract values.

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


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 selection 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 selected 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 Company and the customer for the selected contracts as part of our evaluation of contract progress;

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

The reasonableness of the Company’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 Company’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 a selection of 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 Companys 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$30.0 million (2020: US$17.5 million). Materiality for the Company Financial Statements was set at US$70.0 million (2020: US$10.7 million).

For the Group, materiality has been calculated as 6% (2020: 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 adjusted for exceptional items), which we have determined in our professional judgement, to be one of the principal benchmarks within the financial statements relevant to members of the Company in assessing the financial performance of the Group. For the Parent Company, materiality has been calculated based on 1% (2020:1%) 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$1.5 million (Group) and US$3.5 million (Company), in addition to other audit misstatements below that threshold that we believe warranted reporting on qualitative grounds.

We performed comprehensive audit procedures, including those in relation to the significant risks set out above, on those transactions accounted for at Group level. Our audit covered 100% (2020:96%) of total Group revenue and 96% (2020: 98%) of total Group assets, including 100% of the Parent Company’s revenue and total assets.

We identified 3 components in the scope of our audit. We subjected 2 components to full scope audits for group purposes and 1 component to specified risk-focused audit procedures. The component full scope audits were conducted by component auditors for which a lower materiality level had been set by the group audit team.



32





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


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:

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 2020 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 29, the directors are responsible for: the preparation of the financial statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material 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.






33





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


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                                         17 June 2022
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
Ireland

34




Consolidated Statement of Profit and Loss
for the year ended 31 December 2021
31 December
2021
31 December
2021
31 December
2021
31 December
2020
Excluding
Exceptional items
(Note 8)
Exceptional items
Including
Exceptional items
Including
Exceptional items
Continuing OperationsNote$’000$’000$’000$’000
Revenue5,472,826  5,472,826 2,797,288 
Direct costs(3,970,025) (3,970,025)(1,989,256)
Other operating expenses(898,288)(201,719)(1,100,007)(416,065)
Operating profit604,513 (201,719)402,794 391,967 
Share of equity method investments net of tax18(2,161) (2,161)(366)
Financing income4574  574 2,724 
Financing expense5(111,145)(75,391)(186,536)(12,147)
Profit before taxation3491,781 (277,110)214,671 382,178 
Income tax expense6(51,061)10,842 (40,219)(50,753)
Profit for the financial year440,720 (266,268)174,452 331,425 
Profit for the financial year is attributable to:
Owners of the Company25440,720 (266,268)174,452 330,792 
Noncontrolling interest25    633 
Profit for the financial year attributable to the Group440,720 (266,268)174,452 331,425 
Earnings per ordinary share
Basic72.60 6.27 
Diluted72.57 6.22 

On behalf of the Board

Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
35




Consolidated Statement of Comprehensive Income
for the year ended 31 December 2021
Note31 December
2021
31 December
2020
$’000$’000
Other Comprehensive Income/ (Loss)
Items that will not be reclassified to profit or loss:
Re-measurement of defined benefit liability104,175 (3,730)
Total items that will not be reclassified to profit or loss4,175 (3,730)
Items that are or may be reclassified subsequently to profit or loss, net of tax:
Currency translation differences25(61,130)48,129 
Currency impact on long-term funding25(525)(1,603)
Unrealised capital loss on investments25 (231)
Amortisation of interest rate hedge25113 (910)
Settlement of interest rate hedge *25778 (905)
* recycled through profit and loss in 2021
Total items that are or may be reclassified to profit or loss(60,764)44,480 
Other comprehensive loss for the year, net of tax(56,589)40,750 
Profit for the financial year174,452 331,425 
Total comprehensive income for the financial year117,863 372,175 
Attributable to:
Equity holders of the Company117,863 371,542 
Noncontrolling interest 633 
Total comprehensive income for the financial year117,863 372,175 

On behalf of the Board


Steve Cutler
Rónán Murphy
Chief Executive Officer
Director














36




Consolidated Statement of Financial Position
as at 31 December 2021
Note31 December
2021
31 December
2020
ASSETS$’000$’000
Non-current assets
Property, plant and equipment12194,912 109,830 
Right-of-use assets27197,716 83,079 
Goodwill139,090,061 950,267 
Intangible assets 134,852,369 130,972 
Other non-current assets1776,800 26,902 
Equity method investments 18 2,373 4,534 
Financial assets18 22,592 15,765 
Deferred tax assets6102,954 30,370 
Total non-current assets14,539,777 1,351,719 
Current assets
Inventories155,772 4,806 
Trade receivables161,342,770 715,271 
Unbilled revenue (contract assets)16623,121 428,684 
Other current assets17159,068 77,937 
Current taxes receivable66,884 45,348 
Current asset investments181,712 1,729 
Cash and cash equivalents19752,213 840,305 
Total current assets2,951,540 2,114,080 
Total assets17,491,317 3,465,799 
EQUITY
Share capital246,640 4,580 
Share premium436,916 318,404 
Other undenominated capital251,134 1,134 
Share based payment reserve25420,973 179,569 
Other reserves2512,438 11,966 
Foreign currency translation reserve25(86,621)(24,966)
Merger reserve255,656,195 — 
Retained earnings251,730,190 1,389,982 
Total equity attributable to the owners of the Company8,177,865 1,880,669 
LIABILITIES
Non-current liabilities
Non-current bank credit lines and loan facilities235,381,162 348,477 
Non-current lease liabilities27161,096 60,801 
Non-current other liabilities2035,221 23,675 
Non-current provisions87,377 3,529 
Deferred tax liabilities61,085,742 10,166 
Total non-current liabilities6,670,598 446,648 
Current liabilities
Accounts payable90,764 51,113 
Unearned revenue16 1,315,961 660,883 
Accrued and other liabilities20946,503 392,550 
Provisions82,934 7,219 
Current tax payable231,542 26,717 
Bank credit lines and loan facilities23 55,150 — 
Total current liabilities2,642,854 1,138,482 
Total liabilities9,313,452 1,585,130 
Total equity and liabilities attributable to the owners of the company17,491,317 3,465,799 

On behalf of the Board
Steve Cutler
Rónán Murphy
Chief Executive Officer
Director
37




Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Number
of shares
Share
Capital
Merger ReserveShare
Premium
Other
Undenominated
Capital
Share-based
Payment Reserve
Other
Reserves
Currency
Reserve
Retained
Earnings
Total
$’000$’000$’000$’000$’000$’000$’000$’000$’000
Balance at 1 January 202152,788,093 4,580  318,404 1,134 179,569 11,966 (24,966)1,389,982 1,880,669 
Profit for the year attributable to the Group— — — — — — — — 174,452 174,452 
Other Comprehensive Income:
Foreign currency translation— — — — — — — (61,130)— (61,130)
Currency impact on long-term funding— — — — — — — (525)— (525)
Re-measurement of defined benefit liability— — — — — — — — 4,175 4,175 
Tax benefit on defined benefit pension contributions— — — — — — — — — — 
Amortisation of interest rate hedge— — — — — — 113 — — 113 
Settlement of interest rate hedge (recycled through profit and loss)— — — — — — 778 — — 778 
Total other comprehensive income— — — — — — 891 (61,655)4,175 (56,589)
Total comprehensive income for the year— — — — — — 891 (61,655)178,627 117,863 
Transactions with owners, recorded directly in equity
Issue of shares associated with a business combination27,372,427 1,960 5,656,195 — — — — — — 5,658,155 
Replacement share-based awards issued to acquiree
employees
— — — — — 267,607 — — — 267,607 
Share-based payment— — — — — 105,488 — — — 105,488 
Exercise of share options1,065,529 77 — 118,512 — — — — — 118,589 
Transfer of exercised and expired  share–based awards— — — — — (162,015)— — 162,015 — 
Issue of restricted share units/ performance share units328,634 23 — — — — — — — 23 
Share issue costs— — — — — — — — (853)(853)
Tax benefit excess on exercise of options— — — — — 22,515 — — — 22,515 
Deferred tax movement on unexercised options— — — — — 7,809 — — — 7,809 
Non-distributable reserves— — — — — — (419)— 419 — 
Total contributions by and distributions to owners28,766,590 2,060 5,656,195 118,512 — 241,404 (419)— 161,581 6,179,333 
Balance at 31 December 202181,554,683 6,640 5,656,195 436,916 1,134 420,973 12,438 (86,621)1,730,190 8,177,865 
Further details of the reserves above are detailed in note 25
38





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)
Cash flow hedge— — — — — — — — — — — — — 
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 
Further details of the reserves above are detailed in note 25
39




Consolidated Statement of Cash Flows
for the year ended 31 December 2021
NoteYear Ended 31 December
2021
Year ended 31 December
2020
$’000$’000
Profit for the financial year174,452 331,425 
Adjustments to reconcile net income to net cash generated from operating activities
Depreciation of property, plant and equipment1233,654 18,360 
Depreciation of right-of-use assets2745,247 28,947 
Impairment of long lived assets820,037 5,411 
Amortisation of intangible assets13281,333 47,766 
Loss on equity method investments
2,161 366 
Settlement and amortisation of interest rate hedge5891 (910)
Amortisation of deferred financing costs512,890 523 
Share-based payment11105,859 26,597 
Loss on extinguishment of debt574,613 — 
Financing income4(574)(2,724)
Financing expense594,029 13,406 
Defined benefit costs10561 321 
Income tax expense640,219 50,753 
Unrealised foreign exchange(6,054)5,980 
Other non cash items3,589 (3,511)
Operating cash inflow before changes in working capital882,907 522,710 
Accounts receivable113,513 (175,040)
Unbilled revenue(17,656)(5,748)
Unearned revenue(61,121)291,844 
Other net assets105,389 (2,325)
Cash provided by operations1,023,032 631,441 
Income taxes paid(55,105)(27,604)
Employer contribution defined benefit pension scheme10(354)(214)
Interest received574 2,495 
Interest paid(91,202)(11,394)
Net cash inflow from operating activities876,945 594,724 
Investing activities
Purchase of property, plant and equipment(29,126)(19,308)
Purchase of intangible assets(64,624)(31,747)
Purchase of subsidiary undertakings(5,914,475)(37,761)
Loan to equity method investment(10,000)— 
Investment in equity method investments(2,450)(2,450)
Sale/maturity of current asset investments497 47,902 
Purchase of current asset investments(480)— 
Purchase of financial assets(3,577)(3,212)
Net cash used in investing activities(6,024,235)(46,576)
Financing activities
Financing costs(31,056)(1,554)
Drawdown of bank credit lines and loan facilities5,905,100 350,000 
Repayment of bank credit lines and loan facilities(877,780)(350,000)
Purchase of noncontrolling interest (43,923)
Repayments of obligations under lease liabilities(54,884)(30,504)
Tax benefit from the exercise of share options7,809 3,815 
Proceeds from exercise of share options, RSUs and PSUs118,589 13,203 
Share issuance costs(853)(14)
Repurchase of ordinary shares (175,000)
Share repurchase costs (140)
Loss on settlement of interest rate hedge (905)
Net cash used in financing activities5,066,925 (235,022)
Net increase in cash and cash equivalents(80,365)313,126 
Effect of exchange rate changes(7,727)6,870 
Cash and cash equivalents at start of year840,305 520,309 
Cash and cash equivalents at end of year752,213 840,305 
40




Notes to Consolidated Financial Statements
for the year ended 31 December 2021

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 2021, and with those parts of the Companies Act 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 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 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 standards and interpretations

The following standards and interpretations became effective for the Group during the financial year but do not have a material effect on the results or financial position of the Group:

a.Amendments to IFRS 16 Leases: COVID 19 Related Rent Concessions
b.Amendments to IFRS 9, IAS 39 and IFRS 7 IBOR Reform Phase II

The following standards and interpretations are not yet effective for the Group and are not expected to have a material effect on the results or financial position of the Group:

a.Amendments to IAS 16 Property, Plant and Equipment (PPE): Proceeds before Intended Use (Effective date: 1 January 2022)
b.Amendments to IAS 1 Classification of Liabilities as Current or Non-current and Disclosure of Accounting Policies (Effective date: 1 January 2023)
c.Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets: Costs to Fulfil a Contract (Effective date: 1 January 2022)
d.Amendments to IFRS 3 Business Combinations (Effective date: 1 January 2022)

Critical accounting judgements and key sources of estimation uncertainty

The preparation of consolidated financial statements requires management to make estimates and judgments 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.
 
We base our estimates and judgments on historical experience and on the other factors that we believe 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 following is a discussion of the accounting policies used by us, which we believe are critical in that they require estimates and judgements by management. The application of these critical accounting policies and estimates is discussed with the Audit Committee of the Board of Directors.

Revenue Recognition

Significant management judgments and estimates must be made and used in connection with the recognition of revenue in any accounting period. Material differences in the amount of revenue in any given period may result if these judgments or estimates prove to be incorrect or if management’s estimates change on the basis of development of the business or market conditions. To date there have been no material differences arising from these judgments and estimates.


41




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

We earn revenues by providing a number of different services to our clients. These services, which are integral elements of the clinical development process, include clinical trials management, contract staffing, consulting and laboratory services. Contracts range in duration from a number of months to several years. The criteria for revenue recognition is based on five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligation in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognise revenue when (or as) the entity satisfies the performance obligation.

Clinical trial services are a single performance obligation satisfied over time i.e. the full-service obligation in respect of a clinical trial (including those services performed by investigators and other parties) is considered a single performance obligation. Promises offered to the customer are not distinct within the context of the contract. We have concluded that ICON is the contract principal in respect of both direct services and in the use of third parties (principally investigator services) that support the clinical research project. The transaction price is determined by reference to the contract or change order value (total service revenue and pass-through/ reimbursable expenses) adjusted to reflect a realisable contract value. An assessment of the realisable contract value is judgmental in nature. The realisable value assessment is updated at each reporting period, having regard to (i) contract terms and (ii) customer experience.

Revenue is recognised on a percentage completion basis as the single performance obligation is satisfied. The progress towards completion for clinical service contracts is measured therefore based on an input measure being total project costs (inclusive of third party costs) at each reporting period. Measurement of the progress towards completion involves judgment and estimation. Assessment of completion requires an evaluation of labour and related time cost incurred at the reporting date and third party costs incurred at the reporting date. The assessment of third party costs incurred (principally investigator costs) requires a review of activity performed and recorded by the third party services providers. The timing of payments to third parties in respect of cost incurred reflect invoicing by third parties. The timing difference between the activity performed and receipt of invoices from third parties may result in significant accrued amounts at reporting periods.

The assessment of progress towards completion also requires an up to date evaluation of the forecast costs to complete in respect of these projects. Given the long-term nature of the clinical trials, and the complex nature of those trials, the forecast costs to complete (being internal direct costs and costs that will be incurred by third parties (principally investigators)) is judgmental. Forecast time (and related costs) is determined by reference to (i) contract terms and (ii) past experience. Forecast third party costs to complete are determined by project by reference to (i) contract terms and (ii) past experience.
The Company provides data services to customers based on agreed-upon specifications, including the timing of delivery, which is typically either weekly, monthly, or quarterly. If a customer requests more than one type of data report or series of data reports within a contract, each distinct type of data report is a separate performance obligation. The contracts provide for the Company to be compensated for the value of each deliverable. The transaction price is determined using list prices, discount agreements, if any, and negotiations with the customers, and generally includes any out-of-pocket expenses.

The Company enters into contracts with some of its larger data suppliers that involve non-monetary terms. The Company issues purchase credits to be used toward the data supplier's purchase of the Company's services based on the fair value of the data obtained. In exchange, the Company receives monetary discounts on the data received from the data suppliers. The fair value of the revenue earned from the customer purchases is recognised as services are delivered as described above. At the end of the contract year, any unused customer purchase credits may be forfeited or carried over to the next contract year based on the terms of the data supplier contract. The calculation of the fair value of certain non-monetary terms involves management judgement and estimation.

Intangible Assets acquired in a business combination
Significant management judgments and estimates must be made and used in connection with the recognition of intangible assets associated with a business combination. The cost of a business combination is measured as the aggregate of the fair values at the date of exchange of assets given, liabilities incurred or assumed and equity instruments issued in exchange for control. The assets, liabilities and contingent liabilities of businesses acquired are generally measured at their fair values at the date of acquisition. 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 goodwill in the reporting period in which the adjustments are determined.
Measurement of intangible assets involves the use of estimates for determining the fair value at the acquisition date. The determination of the fair values of assets and liabilities, as well as of the useful lives of the assets is based on management’s judgment. The valuation of intangible assets required management to develop discounted cash flow models which required the use of reasonable and supportable inputs such as customer attrition data, discount rates developed from various weighted average cost of capital assumptions, growth rates, margin forecasting and assessment of useful lives (see note 13 - Intangible assets - goodwill and other). Management utilised external valuation experts, where necessary, to ensure the valuation process was sufficiently detailed and robust to develop reliable valuations.
42




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

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.

43




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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 202131 December 202031 December 202131 December 2020
Euro 1:$
1.18861.13571.13701.2216
Pound Sterling 1:$
1.37881.28211.35321.3670

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.

44




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

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. As most of ICON's leases do not provide an implicit rate, the discount rate used is based on the Group's incremental borrowing rate derived from 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’.


45




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

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.

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 relationships7-23
Order backlog1-7
Tradenames3-5
Technology asset    5-8
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.

46




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

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.

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

(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 and 26 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.


47




Notes to Consolidated Financial Statements (continued)
for the year ended 31 December 2021

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

Accounts receivable factoring
Where the Company enters into an agreement to sell certain portfolios of its accounts receivable balances, the sale is accounted for in accordance with IFRS 9. Agreements which result in true sales of the transferred receivables, as defined in IFRS 9, which occur when receivables are transferred without recourse to ICON, are excluded from amounts reported in the Consolidated Balance Sheet. Cash proceeds received from such sales are included in operating cash flows. The associated finance costs are presented as interest expense.

(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; and
those to be measured subsequently at fair value through profit or loss.

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.