Dalata Hotel Group PLC

Dalata Hotel Gr

oup PL

ANNUAL REP

ORT AND ACC

OUNT

S 2021

A time t

look f

ANNUAL REP

T AND ACC

OUNT

S 2021

AT A GLANCE

OUR REVENUE

(€

million)

€19

2.0

Revenue

►►

page 109

€63.2m

Adjusted EBITDA

►►

page

FREE CASHFLOW

(€

million)

€2

8.0m

Free cashflow

►►

page

€1.24bn

In hotel assets

►►

page

OUR HOTEL ASSETS

(Hotel Assets

€

llion)

10,20

Rooms

(Includes

4 partner

hotel rooms)

2,0

Pipeline rooms

OUR PEOPLE

(Full-time and part-

time)

4,230

Employees

44 owned & leas

ed hotels

3 partner hotels

100

200

300

400

500

2019

2020

2021

-50

100

150

2019

2020

2021

0.5

1.5

2019

2020

2021

1000

2000

3000

4000

5000

6000

2019

2020

2021

CONTENTS

OUR BRANDS

Strategic Report

Purpose, Culture and Val

ues

Chair’s Statement

Chief Executive’s Review

Strategy and Business Mode

Markets

Strategy

Business Model

KPIs

Sustainable Business Framework

Stakeholder Revi

Engagement

Employees

Customers & Guests

Suppliers

Shareholder

ban

ks & real estate investors

Planet & Society

Community

Financial Review

Risk Management

Sustainability and

Climate Change

Corporate Governanc

Chair’s Overview

Board of Directors

Executive Management Team

Corporate Governance

Report

Nomination Committee

Report

Audit and Risk Committee

Report

ESG Committee Report

Remuneration Committee Rep

ort

Directors’ Report

Financial Statements

100

Statement of Directors’

Responsibilitie

in respect of the An

nual Report and the

Financial Statements

101

Independent Aud

itor’s Report

102

Consolidated

Statement of Profit or Loss

And Other Comprehe

nsive Income

109

Consolidated

Statement of

Financial Positio

110

Consolidated

Statement of

Changes in Equi

111

Consolidated

Statement of Cash Flows

113

Notes to the Consol

idated

Financial Statements

114

Company Statement of Financial

Positio

183

Company Statement of Changes in

Equity

184

Company Statement of Cash Flo

185

Notes to the Company Fin

ancial

Statements

186

Supple

mentary Financial

Information

191

Alternative Performance Measu

res (“APM”)

191

Glossary

197

Advisor and Shareho

lder Contacts

198

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

Clayton Hotel

Cardiff

PURPOSE, CULTURE

& VALUES

To grow and evolve as an innovative and

sustainable

international hotel company, delive

ring excellence in

customer service, driven by ambitious people flourishing

within a culture of integrity, fairness and inclusion

Purpose, Cultur

e & Values

Clayton H

otel

Charlemont

A culture of integrity,

fairness and inclusion

Open, inclusive, ambitious, engaged and agile

place pe

ople

–

our employees and guests

–

at the heart of what we do.

Our Values

OUR PEOPLE

OUR INDIVIDUALITY

Dalata is the place where

you can do great

things

–

individu

ally and as a team. You will

have the opportun

ity to develop your talent,

be recognised and reward

ed for your

commitment and pursue

a fulfilling career.

Our people are as indiv

idual as our hotels.

They bring th

eir own personality, character

and enthusiasm, ensuring th

e experience we

provide is always warm,

welcoming, genuine

and friendly.

OUR FAIRNESS

OUR SERVICE

We pride ourselves on cre

ating an objective,

supportive and fai

r working environment for

our employees,

the people we deal with a

nd the

communities we work with

in.

We ensure our service

standar

ds are

consistently high

at every opportunity.

We strive for success,

are enthusiastic about

what we do and take resp

onsibility

for doing things righ

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

CHAIR’S

STATEMENT

A year of change

The recent

announcement

of our first step

into continental

Europe is a good

reflection of both

our ambition and

our business

values.

Welcome to the 2021 annual r

eport of

the Dalata Hotel G

roup.

The year 2021 was another chal

lenging

one for the ho

spitality industry in

general and

for Dalata in particular.

However, as I write, there

is an increasing

feeling of optimism

that the worst of the current pan

demic

is behind

us and that

better times lie ahe

ad.

Although our natural

tendency in

Dalata is to spend much more

time

looking to the

future than pondering

the past, it is useful o

ccasionally to

reflect on where we h

ave come from,

so that the present and

the future

can be seen in con

text.

Despite the ine

vitable upheavals of the

last

two

years, certain

priorities have

remained central to

the board

’s focus.

Among the most impo

rtant of these

are the attraction, retentio

and developmen

t of our outstanding

team, the maintenance an

enhancement o

f our culture, and

continued

focus on what we can

achieve in envi

ronmental, social

and governan

ce (ESG) matters. We

have also turned

our attention to the

careful refreshment of the exe

cutive

and non-executi

ve membership of

the board.

People

Our people

coped extremely well

with the challe

nges that continued into

2021 from 2020. They stayed e

ngaged

with the busine

ss when activity levels

were low, and many

of them used the time to

take

online trainin

g provided to them

by the group

They demonstrated exce

ptional

adaptability an

d resilience in the face

of the unprece

dented demands posed

by the pande

mic.

As a result, when we came to reo

pen,

we found that our co

re teams

remained ready, wil

ling and able to

return to what we do be

–

delivering

excellent servi

ce to our customers

in our properties. The

fact that we

were able to resume so

quickly

while adaptin

g to new ongoing

requirements is a great credi

t to all

of our people

–

tho

se planning what

we would do

, as well as those doing it.

Culture

Our culture remains cen

tral to what we

do and how we do i

t. We aspire to an

open and hon

est way of doing

business, with a focus on

how best to

serve our customers and n

urture our

people. We co

ntinue to offer training,

development and

career progression

opportuniti

es to our people while also

enhancing ou

r structures to allow

feedback to flo

w, uninhibited, from

all members of our team to

management and the b

oard. The

workforce engag

ement role on the

board is a key p

art of that aspect of our

business.

We continu

e to encourage our people

to take on respo

nsibility when they

are willing and ab

le to do so, and our

decentralised

management model

directly facilitates thi

s important part

of our culture.

ESG

We remain determin

ed to deliver real

change in our bu

siness practices, aimed

at achieving sub

stantial and measurable

improvements in o

ur impact on the

environment. Throu

gh the board

’s ESG

committee, establishe

d more than

two

years ago unde

r the leadership o

f E

lizabeth

McMeikan, and through

the active and

Chair’s State

ment

enthusiastic invo

lvement of our senior

executive team, we are en

suring that a

continuous, active focus i

s maintained in

this area, affecting everythi

ng we do.

We also remain co

mmitted to supporting

the communities withi

n which we operate

and to maintaini

ng the highest standards of

governance

across our business. Further

detail of ou

r work in these areas

is contained

in the report of the ESG

committee (

►►

page

), the stakeho

lder

review (from

►►

page

), and the repo

rt on

sustainability an

d climate change

(

►

page

Board refreshment

2021 saw significant chang

e in

board personn

el.

Because the orig

inal non-executive

members of the board were al

l appointed

together in 2014, i

t was clear from then

that care would nee

d to be taken when it

came to changin

g board membership.

It has always been impo

rtant to retain

the experien

ce and expertise of board

members, built up o

ver the years, while

also ensuring

that not all of those

experienced

directors leave the board

within a short peri

od of each other.

I am pleased that the pro

cess of orderly

refreshment of the non-execu

tive cohort is

well unde

r way. Alf Smiddy decided to

leave the bo

ard in 2021, and Robert Dix has

indicated his inte

ntion to do so with effect

from the 2022 AGM. Both of these

directors have con

tributed substantially

to the board and

the business, and I am

grateful for all of the

ir energeti

c input and

wise counsel o

ver the years. These

departures have all

owed us to introdu

Cathriona Hallah

an and Gervaise Slowey as

directors. Cathriona will

succeed Robert as

chair of the audit an

d risk committee, and

Gervaise has already assumed

the board

role of workforce e

ngagement. Both new

directors have also

joined other board

committees and are already c

ontributing

strongly to the bo

ard

’s work.

On the executive

side of the board, Pat

McCann’s retirement (as to which,

below), Dermot Crowley’s

appointment

as CEO and Stephen McNally’s retir

ement

have provided o

pportunities for others,

including Carol

Phelan and Des McCann, to

advance their caree

rs. Carol has been

appointed to the bo

ard as CFO, and she

brings excepti

onal skill and experi

ence

to that role. Des is alread

y bringing his

considerable

energy and ability to

the

position o

f COO.

All of this chang

e has brought a new

dynamic to the Board, whi

le protecting

the knowledge

and experience retained

continuing membe

rs of the Board. In this

regard, I am particularly grateful

for the

continued

support of Margaret Sweeney,

as Senior Indepe

ndent Director and

Chair of the remuneratio

n committee,

Elizabeth McMeikan, as c

ir of the ESG

committee, Dermot Crowle

y, our CEO, and

Shane Casserly, as executive d

irector with

responsibil

ity for acquisitions, develo

pment

and other matters. I am

also, very grateful to Seán McKeo

n, our

company secretary, and hi

s dedicated team

for all the suppo

rt they continue

to provide to

the Board.

I should also observe

, with no little

satisfaction, that our board, having

started

in 2014 with 14% female members

hip, will

have a majority (62.5%) of female

directors

following

our 2022 AGM.

Pat McCann

It would be remiss of me n

ot to say a few

words about our rece

ntly retired founde

and CEO, Pat McCann. Pat is the

father of

Dalata

–

he has often d

escribed it as his

baby

–

and the

growth, development and

success of the busin

ess to date are a direct

result of his visio

n, his value

s and his hard

work. Pat founded the

business and

instilled in i

t the culture that has given

rise

to its success. His leade

rship at all times,

but particularly du

ring the worst of the

global pande

mic, was always exemplary.

He has left a tremendo

us legacy to be

protected, nurtured

and developed

by those who fol

low in his formidable

footsteps. Pat is missed i

n the business and

will never b

e forgotten, but it is now the

job of Dermot and hi

s team to take Dalata

to even greater h

eights in the future. On

behalf of the Board, I wish

Pat the very best in hi

s retirement.

Looking ahead

The Dalata story so far is on

e of growth and

success, and our aim is to co

ntinue

on that path. The recent an

nouncement of

our first step into Contine

ntal Europe is a

good reflection o

f both our ambition and

our business val

ues. We have a continued

focus on profitabl

e growth, in the

interests

of the company, ou

r shareholders and

our people, who b

enefit from the

opportuniti

es that open up when w

expand. Howeve

r, we are also careful

and discipline

d when assessing possible

growth oppo

rtunities, and we apply strict

criteria in deci

ding whether to embark on

a new project. This app

roach has served us

well and will

continue as we progress with

the growth of the b

usiness.

Conclusion

Dalata has navigated turbul

ent waters over

the past two years, and the current

conflict

in Eastern Europe reminds us that s

tability

can never be take

n for granted. However,

am satisfied that, for our busin

ess, better

mes lie ahe

ad.

This is, therefore, a good time to

acknowledge tho

se who have supported us

during the difficul

t times and who contin

to believe in

our future. We are

enormously g

rateful to our people, who

continue to wo

rk tirelessly; our loyal

customers; the governments o

f Ireland and

the UK, who have provi

ded important

supports to many busin

esses, including

ours, during the

course of the pandemic;

our bankers; ou

r suppliers; and our

professional ad

visers.

To you, our shareho

lders, on behalf

of the boa

, may I express my

sincere appreci

ation of, and thanks

for, your continu

ed support of our

wonderful busi

ness.

John Hennessy

Non-executive Chair

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

CHIEF EXECUTIVE'S

REVIEW

A time to

look forward

At a time of

significant

change for

Dalata, the

outlook is

bright.

I am honoured to be the n

Chief Executive of Dalata and

am delighted to report th

despite the challenges

presented by Covid, I hav

thoroughly enjoyed

my first

four months in the positio

Executive Changes

It has been a time o

f significant change

within Dalata. Pat McCann reti

red as Chief

Executive at the end

of October last year. I

would like to take

this opportunity to thank

Pat for his guidance

and support over the

period that we have

worked together.

Stephen McNally retire

d from his positio

as Deputy Chief Executive i

n February of

this year, and I would

also like to thank him

for his significan

t contribution to Dalata

since it was founde

d in 2007.

I have spent the last n

umber of months

shaping my own

team. Carol Phelan was

appointed

Chief Financial Officer in July

of last year, Des McCann too

k up the ne

position o

f Chief Operating Officer on 1

January 2022, while Shane Casserly

’s role

was expanded to in

clude responsibility fo

innovation and i

nformation technology. I

have made othe

r changes to the way in

which the senio

r executive team works and

communicates to ensure

that we are be

placed to face the

challenges and avail of

the opportun

ities ahead.

Covid-

The impact of Covid-19 on al

l our lives

has been dramatic o

ver the last two years,

with its effects felt across all co

untries,

societies and i

ndustries. The impact on the

hospitality i

ndustry has been particul

arly

harsh. From the outset of

the pandemic i

n March 2020, we have

sought to beh

ave in a fair and ethical

manner. We have o

penly communicated

with all our stakeho

lders. We have

protected our p

eople, maintained strong

relationship

s with our customers and

banking club, e

nsured the safety of our

guests, enhance

d relationships with ou

landlords, supp

orted our suppliers and

were always available

to talk to our

shareholders. I wou

ld also like to

acknowledge the

support of the

governments in

both Ireland and the UK for

the various suppo

rts that allowed us

to protect our bu

siness during the perio

The outloo

k is now far brighter, with

restrictions largel

y lifted in the countries

in which we operate. Ho

wever, we are very

aware of the need to

remain agile as there

could well

be further surprises along the

road with new variants or o

ther Covid-

related challe

nges.

A New World

The world is constantl

y changing, and

companies must evo

lve to ensure they

survive and thrive

. However, the pace of

change from Covid-19 is e

xtraordinary. It

has changed the

way people work and the

way consumers buy. One of the

major

unknowns for the

hospitality sector is the

nature of corporate travel

post-pandemic.

The sector is also faced with

shortages o

labour due

to factors such as Brexit in the

UK and reduced immig

ration generally a

people stay closer to h

ome. In addition,

hospitality i

s seen as an industry where

employment is l

ess secure due to the

impact of lockdo

wns and restrictions.

Dalata will need

to be innovative in its

response to the ch

allenges. We will need

find new ways to ope

rate our hotels and

interact with our custome

rs. We will

outward-lookin

g in finding solutions and

create a culture where p

eople are

Chief

Execut

ive’s Revie

cou

com

ith

new i

as.

I a

ted

cha

eng

s and

ide

t th

e h

e t

am to

a co

mpeti

tiv

adv

tag

the

new

rld

Our People

Hospitality i

s all about people, and I am

delighted that we h

ave managed to

retain the vast majority of o

ur core

teams throughout the

last two years.

We have con

tinued to focus on training

and developmen

t, with over 115,000

online courses d

elivered during 2021.

We also recruite

d a record number of

people to ou

r graduate programme

when

talented

students join

us.

Our gender-balan

ced board is a signal

to all stakehol

ders that Dalata is ready

to lead on dive

rsity and inclusion

. As

chief executive, I wil

l continue our

commitment to creating an

inclusive

working en

vironment with equali

ty of

opportunity fo

r our highly diverse

workforce. And it is n

ot just a question

of gender. I have

a simple request of

everyone who

works in Dalata

–

treat

your colle

agues as you would hope

your son, daugh

ter, mother, father,

brother or sister woul

d be treated and

do so regardle

ss of their gender, age,

sexual orientatio

n, race, background,

disabilitie

s or beliefs.

Our Customers

and

Guests

As we move forward, I am ta

sking our

teams to understand the ch

anging

requirements of o

ur customers and

guests. With the pl

anned return of

business travel, we are e

ngaging

with our corporate c

ustomers to

understand what is impo

rtant to

them and adjust our p

roduct/

offering accordi

ngly.

Our Local Communities

Our hotels will

continue to benefit their

local communi

ties economically and

socially by eng

aging with the business

community to deve

lop the experience

economy, provi

ding local employment,

where we aim to be the

employer of

choice in hospi

tality, supporting local

suppliers; assisting co

mmunity

organisations an

d, extending the reach

of Dalata Digs Deep, our charity

programme.

Climate change

The environme

ntal crisis is the biggest

challenge that ou

r generation will face.

Our actions as a society o

ver the next

number of years will

have a profound

effect on the envi

ronment that future

generation

s will live with.

In Dalata, we take this responsibi

lity

seriously. We are co

mmitting to

specific 2026 targets and are cu

rrently

assessing various de

carbonisation

pathways in our op

erations and hotel

construction (see

►►

page

s 53 to 58

details). Conducted

in line with the

Science-Based Target Initiative crit

eria,

the assessment will be co

mpleted in

the coming mo

nths.

It will form the basis of ou

r medium-

term targets and long-term emissio

reduction ambi

tion.

r c

sto

d g

sts

asin

tel

spo

ro-

act

thr

t o

cli

hang

ten

eme

t a

tha

eco

et a

a c

eti

ngt

t i

s t

spo

nsibl

and

art

hin

Our Growth

Despite the chall

enges of Covid-

, we

have made substantial

progress in

building out ou

r pipeline over the last

12 months. We ope

ned the Maldron

Glasgow City in Aug

ust 2021, Clayton

Manchester City in January 2022 a

Maldron Manchester City in Feb

ruary

2022

. We will op

en four further hotels

in the UK and Irelan

d in the next six

months with a total of

902

rooms.

Beyond that, we have a secu

red

pipeline o

f five further hotels

across five cities that will o

pen

in 2023 and 2024.

We believe that Con

tinental Europe

represents a signi

ficant growth

opportunity fo

r us. I am delighted that

we were selected as the

new tenant for

Hotel Nikko

in Düsseldorf

–

our first

hotel in Contine

ntal Europe. Our focus

on enhancing

our relationships with

our fixed inco

me investors during

Covid-

helped us win thi

opportunity. It i

s a great example

of the benefits that accrue

from

stakeholder e

ngagement. I am very

hopeful that oth

er opportunities will

arise for us in Contine

ntal Europe.

Our Shareholders

Our shareholders h

ave supported us

throughou

t the last two years. The

cessation of divi

dends together with

the equity p

lacing in September 2020

represents a signi

ficant contribution.

We are determine

d to reward that

support as we strive to de

liver a stron

financial recove

ry from our existing

portfolio and

the pipeline properties as

they open.

I coach underag

e hurling teams here

in Ireland. I always ask the

players to

focus on the pro

cess

–

practising your

skills, working

with your teammates,

and playing fair

–

the resu

lt will then

take care of itself. Business is the

same.

If we focus on taking

care of our

people, engagin

g with our customers,

exceeding

the expectations of ou

guests, increasing o

ur focus on

sustainability, be

ing engaged with

our local co

mmunities, and partnering

with our supplie

rs of products, services

and funding

, then we will achieve our

ambition of a strong

financial reco

very.

Performance

Restrictions were imposed

on our

industry through

out 2021 to reduce

the impact of Covid-19 on so

ciety.

Government suppo

rts introduced i

both Ireland an

d the UK to mitigate the

impact of those restrictions were

appropriate and

welcome. These

supports, together with the i

ncredible

efforts of the teams at Central O

ffice

and each of ou

r hotels, enabled us to

deliver a ve

ry credible performance.

Despite suffering a lo

ss after tax, we

managed to ge

nerate a strong free

cashflow. We have pro

tected our

balance shee

t throughout the crisis and

are well place

d to pursue our strategic

priorities in

the future.

A time to look forward

It is too early to say the pan

demic is

over, but it feels to me

a time to

look forward. Covi

d-19 has changed

the world in many ways, and i

n Dalata,

we are focused on

delivering for all our

stakeholders. We

look forward to

facing the chall

enges and exploiting the

opportuniti

es that lie ahead. We will d

so with enthusiasm and, most

importantly, plenty o

f optimism.

Dermot Crowley

Chief Executive

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

STRATEGY AND BUSIN

ESS MODEL

Markets

Expanding our

reach to deliver

growth and value.

We op

erate

hotels in Ireland

the UK and Contine

ntal Europe.

Our strategy is to g

row further,

focus

ing

on key UK cities, Dublin

and Continen

tal Europe.

Our existin

g hotel network

provides us with the

foundation

of our growth strategy.

We de

liver exception

properties

under

our

Clayton and Maldron

brands.

More detail

s of our hotels an

our development p

ipeline

dalatahotelgro

up.com

DUBLIN

hotel

Pipel

ine: 3 hotels and

exten

sion.

Consol

idating our

market-leading po

sition

LONDON

3 hotel

Pipel

ine:

hotel.

Londo

n is a key growth city.

REGIONAL UK

9 hotel

Pipel

ine:

hotels and 1 exten

sion.

We aim to

be the four-star leader

our target markets.

REGIONAL IRELAND

13 hotel

Pipel

ine: none.

Market leade

r in Cork,

Limerick and Galway.

NORTHERN IRELAND

4 hotel

Pipel

ine: none.

Brand presen

ce in Northern Ire

land’s

leading busin

ess and tourist centres.

CONTINENTAL EUROPE

1 hotel

Pipel

ine: none.

First Europ

ean hotel, the

Hotel Nikko

Düsseldorf, opene

d February 2022.

Activel

y seeking similar opportuni

ties.

Strategy and B

usiness

Model

Strategy

Strategic

Growth

Ambition

Market-leading perfor

mance

at existing hotels

;

ambitiou

expansion in UK and

European markets.

►►

page 27

Growth

Drivers

ESG

Priorities

Energy powering our st

rategic ambition

Sustainable business model foundatio

OUR CULTURE

An entreprene

urial culture founded on i

ntegrity

and fairness with empathy for ou

r stakehol

ders

and the envi

ronment.

►►

page

Diversity and inclu

sion

►►

page

OUR PEOPLE

Empowered to take respo

nsibility, we reward the

energy, ambitio

n and achievemen

t of our people

and value the

contribution of each employe

►►

page

Learning and devel

opment

►►

page

Labour practices

►►

page

CUSTOMER FOCUS

Our brands evolve

with customer expectations to

create a guest expe

rience delive

red personally.

►►

page

Health, safety and security

►►

page

Data privacy

►►

page

INNOVATION

Challenging e

stablished norms, we foster and promote n

ideas to create valu

e across the stakehol

der experience.

►►

page

Carbon emissions

►►

page 31

Sustainable infrastructure

►►

page 32

Sustainable procure

ment

►►

page

GOVERNANCE

High-function

ing governance structures provide

oversight,

risk management and

ensure accountabil

ity.

►►

page 29

Information security

►►

page

FINANCIAL DISCIPLINE

Clear investment criteria an

d disciplined capital allo

cation.

►►

page

Transparency

►►

page

New mark

ets

Growing the pipeline

Deli

ering ou

r current pipeline

Our existing portfolio of established hot

els

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

STRATEGY AND

BUSINESS MODEL

Business Model

Inputs

Our purpose is to

grow and evolve as

innovative and

sustainable international

hotel company, delivering

excellence in customer

service, driven

by ambitious people

flourishing within a

culture of integrity,

fairness and inclusion.

PEOPLE

Their motivation, expertise

and experience

4,230

employees

RELATIONSHIPS

Suppliers of go

ods and services (inclu

ding finance); customers

Over 4,

300

active supplie

Almost 800

corporate contracted custo

mers

2021

2.27 million

Sleepers

2021

BRANDS

Hotel and an

cillary brands

Clayton Hotels and

Maldron Hotels

are our princip

al hotel brands

complemented

by our other hotel

and ancillary b

rands.

PURPOSE, CULTURE AND VALUES

►►

page 2

PROPERTY AND EQUIPME

Hotels (incl

uding 3 part

ner hotels)

►►

page 7

Our

eople

Our

fairness

Our

individuality

Our

Service

€1.24

billion

Property, plant and e

quipment

►►

page

€491.9

million

Right of use assets

►►

page 147

LOANS AND BORROWINGS

€

313.5 million

Loans and borrowi

ngs

►►

page

159

LEASE FINANCE

€

481.9 million

Lease liabili

ties

►►

page 148

Dalata Hotel

Group plc

Annual Re

port & Acco

unts 2021

Strategy and B

usiness

Model

What we do

SERVICE DELIVERY

Our purpose is to

deliver exce

llence in

customer service.

CAPITAL ALLOCATION

By partnering with ou

financial stakeho

lders, we

seek to grow o

ur hotel

portfolio and

provide returns

ahead of our co

st of capital.

ASSET MANAGEMENT

By investing i

n our capital

programmes, we seek to

maintain the valu

e of our

isting portfolio

and expand

our developmen

t pipeline.

PEOPLE

We place peop

le at the heart

of what we do through

our

open, inclusive

, ambitious and

agile cul

ture, our investment

in training and de

velopment,

and our commitments to

diversity and i

nclusion.

MARKETING

Using our sales chan

nels

and marketing campai

gns,

we seek to conn

ect with

customers and make it easy

for them to choose a

Maldron or Clayton

hotel.

HOTEL OPERATIONS

Our decentralise

d model

enables ou

r hotel teams to live

the value o

f individuality whilst

benefitting

from the expertise

of our central office

teams.

Outputs

Creating value for our stakeholders

BUSINESS

FINANCIAL

SOCIETAL

Employees

Aggregate Payrol

l Costs

€54.7m

►►

page

133

Shareholders

Adjusted EBITDA

€63.2m

►►

page

Communities

Contribution

s to our

charity partners in 2021

€168k

►►

page

Customers and guests

Guest satisfaction rating

86%

►►

page

Banks

Interest paid on ban

k loans,

including fee

€15.3m

►►

page

113

Society and Planet

Green Fund for projects

reducing e

missions

€

0.5m

►►

page

Suppliers

Food and Beverag

Purchases

€13.7m

Real estate investors

Rent paid

€33.

►►

pages 149 and 1

GOVERNANCE

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

STRATEGY AND BUSIN

ESS MODEL

KPIs

–

Financial

Revenue

Commentary

A k

ey top-line measure o

f the overall growth

and developmen

t of the business.

In 2021

Total revenue in

creased by 40.3

over

2020

Hotels reope

ned in May in the UK and June in

Ireland

enab

ling the business to rebu

ild.

Total Revenue (

€

milli

on)

►

page

109

Total Group Revenue

represents sales

(excluding VAT) of go

ods and services

net of discoun

ts provided in the normal

course of busin

ess and is recognised

when services have b

een rendered.

Margin

Commentary

EBITDAR is our key measure o

f operational

profitability. Focu

s on the margin allo

ws us

to monitor con

version of incremental

revenue to p

rofit.

In 2021

The group mitig

ated the financial impact

of the reduction

in occupancy through p

ro-

active cost reductio

ns and the utilisation of

government g

rants and assistance during

the Covid-19 pande

mic.

Segments EBITDAR Margin (

►►

page 126

Earnings before i

nterest and finance

costs, tax, depreciation, amorti

sation

and rent (EBITDAR) divide

d by revenue.

By excluding lease co

sts, leased and

owned prop

erties are comparable

Earnings

mmentary

A k

ey measure of the e

ffective delivery of

profitable gro

wth for our shareholders.

In 2021

The Adjusted EPS-Basic for 2021 w

4 cent/share.

The group

’s EPS for 202

recove

from the seve

re impact of the

pandemic in 2020, with th

e loss reduc

by 20.8 cents per share.

Adjusted EPS-Basic (cents/share)

►►

page 180

Profit for the year divid

ed by the number

of ordinary shares and ad

justed for the effect

of items that are not reflective

of normal trading activ

ities or distort

comparability ei

ther ‘year on year’

or with other similar bu

sinesses.

Cash

mmentary

The group is focu

sed on turning profit

into cash for re-investment an

dividend paymen

ts.

In 2021

The group returne

d to a positive cash

flow position

in 2021, though this remains

significantly b

elow 2019 levels. Free Cash Flow

was positive in 2021 as ho

tels reopened for the

second half o

f the year.

Free CashFlow (

€

milli

on)

►►

page

Net cash from operating activi

ties less

amounts paid for in

terest, finance costs,

fixed lease paymen

ts and refurbishment

capital expend

iture and after adding back the

cash paid in respe

ct of items that are

deemed one-off and thus no

t reflecting

normal trading activi

ties or distorting

comparability ei

ther year on year or with

other similar busin

esses. In 2020 and 2021

the positive

cashflow impact of deferral o

tax payments under Covid-19 go

vernment

initiatives has b

een excluded as it distorts

cash flow from trade.

352

393

429

137

192

42.4

42.6

21.1

39.1

38.3

42.8

-27.2

-6.4

71.7

86.6

100.6

-40.8

28.0

Strategy and B

usiness

Model

STRATEGY AND BUSIN

ESS MODEL

KPIs

–

Non-Financial

Carbon

mmentary

The group has targe

ted a 20% reduction in

energy-related

emissions by 2026, using 2019,

as the baseline

202

2021

(and

2020

) emissions p

er room let are

significantly h

igher because of the low

occupancy rates due

to the impact of the

Covid-19 pandemic.

Our energy-related emissi

ons

Measured as tCO2e per room le

Consumption o

f natural gas,

kerosene, di

esel, gas oil an

electricity (scope 1 an

d 2

energy related

emissions).

Water

mmentary

The group has targe

ted a 15% reduction in

water consumption per sle

eper by 2026, using

2019 as a baseline.

In 20

The higher l

evel of water consumption

per

sleeper in 2021 (and

2020) reflects the impact

of the pandemic o

n occupancy.

Our water consumption

Measured as litres per sle

eper.

Female

Leaders

Commentary

The group strives to h

ave a gender-balanced

management team, with balance

representation acro

ss the hotel and central

office senior manag

ement.

202

The group’s strategy de

livered a positive result

in 2021. Out of 95 senio

r managers, some 38

were female.

Female %

the senior

management team

A measure of gende

r diversity

among our ho

tel and central office

senior managers.

Gender Pay

Gap %

Commentary

The group is co

mmitted to equality in this area.

According to the

latest EU data (from 2019),

the average g

ender pay

p is 14.1%.

202

The gap increased

over 2020 due to

fluctuations in ou

r operational workforce

as hotels reope

ned.

The difference in the average hour

wage of men and women across

our

workforce

Our measurement is based o

average hou

rly pay rates, excluding

bonus and BIK.

0.012183

0.023353

0.017622

164.32

239.68

205.84

7.03

6.58

7.02

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

STRATEGY AND BUSIN

ESS MODEL

Sustainable Business Framework

We initiated a review

ESG priorities

with input from the board, management

and stakeholders.

Management assessed pri

orities based on alignmen

t with the group

’s strategy,

principal risks and impact on

stakeholders.

Material ESG themes

A management working

group

identified

24 material themes and

surveyed the bo

ard and over 30

senior managers an

d stakeholders to

assess the relative impo

rtance

of each theme to the

group

and stakehold

ers. This created

a working mode

l to identify

group priori

ties and (indirectly) those

of stakeholders.

Stakeholder input

Stakeholders survey d

ata was used to

replace the d

ata gathered indirectly

through manage

ment. Repeating the

survey period

ically will provide a

measure of changi

ng priorities and

the gap betwee

n stakeholder and

management perce

ption.

Strategic alignment

Management consi

dered the

probabili

ties associated with the

potential finan

cial and non-financial

impacts, on the group

and its

stakeholders, associated with

each

theme by reference

to the group’s

strategic objective

s and its princip

risks. It assessed impact ove

a three-year horizon

establish prio

rities.

Measuring progress

The group has establ

ished a

series of initiativ

es under each

eme, in several

cases establishing ke

performance indi

cators and in a

smaller number setting

performance

targets. This process will e

volve

through establ

ishing benchmarks

and monitorin

g progress.

Further information is inclu

ded in

our stakehold

er review from

►►

pages 17 to 3

Strategy and B

usiness

Model

Sustainable Business Framework

and ESG priorities

People

Planet

Society

Diversity and incl

usion

►►

page

Learning and devel

opment

►►

page

Health, safety & security

►►

page

Carbon emissions

►►

page

Sustainable infrastructure

►►

page

Data privacy

►►

page

Sustainable procure

ment

►►

page

Information security

►►

page 30

Governance

ESG Priorities

Strategy and B

usiness

Model

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

STRATEGY AND BUSIN

ESS MODEL

Sustainable Business Framework

Our priorities balance group and

stakeholder interests

People

Diversity and inclusi

►►

page 21

Employees

Learning and development

►►

page

Employees

Employee wellbeing

►►

page

Employees

Labour practices

►►

pag

Employees

Health

safety and security

►►

page

Customers

Employees

Planet

Carbon emissions

►►

page

Society

Water stewardship

►►

page

Society

Waste management

►►

pag

Society

Sustainable infra

structure

►►

page

Society

Shareholders

Biodiversity

►►

page

Society

Data privacy

►►

page

Customers

Employees

Sustainable procurement

►►

page

Suppliers

Customers

Employability

►►

page

Community

Society

Charity partnership

►►

page

Community

Employees

Governance

Anti-corruption

►►

page

Shareholders

Banks and real estate inve

stors

Transparency

►►

page

Shareholders

Banks and real estate inve

stors

Supply Chain Labour

►►

page

Suppliers

Shareholders

Information security

►►

page 30

Shareholders

Strategy and B

usiness

Model

2021 headlines

Diversity and inclusion

Dalata recently reache

d gender balance on

the board

where the majority i

s female. This, along with

the

launch of a ne

w group-wide

policy, supported with traini

ng, signals Dalata’s commitmen

t to lead on d

iversity and inclusion

Learning and development:

Investi

ng in

the support and development of our pe

ople ensures we h

ave a pipeline of talent to meet

our growth strategy and

sustain our culture. The Dalata Academy in

creased g

raduate intake by 72% in 2021 (over 2019).

Employee wellbeing:

Our Life Wor

ks Employee Assist Programme p

rovided sup

port and assistance by deliveri

ng 61 services to 34

employees i

n 2021

We also launched mental h

ealth first aid trainin

g for managers

; t

he rollout will continue in

to 2022.

Labour practices:

Employe

es and managers receive

extensive training and suppo

rt to ensure we maintain high labour practice

standards, including

training on the risks of expl

oitation through mod

ern slavery. We publish an annual modern slave

ry statement.

Hea

ety

cur

ty:

though

ovi

nag

ent

minat

d s

afe

ty ag

end

a i

n 202

ded

red

ail

che

s to

inc

orp

rat

eck

for

ide

nge

hea

lth

and

secu

s wi

each

el.

Carbon emissions

In 2021 we maintained ou

r B score with CDP and initiated

a review of our cli

mate change response. We

set

2026 carbon emission

s targe

and dramatically increased

the number of hotel

s achieving the Gree

n Tourism ‘Gold’ accreditation

Water stewardship:

Q2 2022, e

lectron

ic meters installed

at all of our hotels wil

l allow us to measure con

sumption accurately. W

have set a target to reduce

water consumption b

y 15% per sleeper by 2026 (2019 baseline

Waste management:

We are on tr

ack to achieve

100% diversion of waste from landfil

l in 2022 and have committed to reduci

ng food

waste by 15% per sleepe

r by 2026 (2019 baseli

ne).

Sustainable infra

structure:

At our newly constructed

Maldron Hotel

Glasgow, a change in d

esign specification yielded an esti

mated

carbon saving o

f 38%, to 35 kgCO2/m2 per annum co

mpared with the orig

inal specification.

Biodiversity:

While the

primary focus of our e

nvironmental resp

onse in 2021 was on carbon emissio

ns, water and waste, we built

biodiversity awareness throu

gh our suppo

rt for the All-Ireland Pollinator Plan.

Data Privacy:

During the

year we develo

ped and launched a mand

atory bespoke data protection train

ing module for all staff and

delivered

live, interactive data pro

tection training to 445 managers.

Sustainable procurement:

We hos

ted an onl

ine supplier sustainabil

ity conference in No

vember

2021

, presenting our supplier code of

conduct and have

set a 2024 target to coll

ect scope 1 and 2 carbon emissions d

ata from 100% of our tier 1 suppliers.

Employability:

In 2021, we de

monstrated our commitment to ma

rginali

sed groups as signatorie

s of the Valuable 500 p

ledge and

recruitment of 14 emplo

yees through emplo

yment support organisations.

14 employee

s through

our partnerships with e

mployment support organisatio

ns.

14 employee

s through

our partnerships with e

mployment support org

anisations..

Charity partnership:

Supporting

charities and commun

ity partnerships brin

gs economi

c and social benefits to society local

nationally and g

lobally.

Anti-corruption

Our intern

al control pro

cedures, segregation

of duties, payment processes and acco

unt reconcil

iations provide a

robust control e

nvironment to help ide

ntify any potential acts o

f bribery or corruption

. None were detected in

2021.

Transparency:

In this year

’

s ann

ual report we have

revised our app

roach to the presentation

of non-financial information to make it

more relevant and

accessible to a wider range

of stakeholders.

Supply chain labour:

Dalata has im

plemented

a supplier code of conduct prescribin

g compliance with in

ternationally recognise

standards and publi

shes a modern slavery statement annu

ally.

Information security:

In 2021, we

continue

d our investment in market-leading info

rmation systems. Our hotels and

central offic

operate on a mod

ern technology platform with proactive informatio

n securi

ty management proce

sses in place.

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

STAKEHOLDER REVIEW

Engagement

At Dalata we recognise that the

group

’s

success is based on creating value in all

of our stakeholder relationships

We recognise eight stakehold

er groups we believe are critical t

Dalata’s success

. These are grou

ped

into three categories: Bu

siness

–

those we engage with daily

in every corner of our operations

;

Financial

–

those who trust us to manage th

e business to prov

ide a return on t

heir investment

;

and Societal

–

those we impact thr

ough our business activities, and

the planet.

Stakeholder

Interests in 2021

Our engagement

Board considerations

Employees

►►

page

Given the ongoi

ng pandemic,

health & safety

well

being and

working arrange

ments remained

the key matters of importance

for

employees i

n 2021. Other

interests for employe

es included

training and deve

lopment, and

diversity and incl

usion (D&I

The board assigne

d responsibility

for workforce engag

ement to

Gervaise Slowey

►►

page 7

The

board meets emplo

yees

informally on h

otel visits where

board meeting

s are held.

Executive Directors eng

age

extensively with e

mployees

throughou

t the year.

A key consid

eration for the board

during 2021 was the he

alth and

safety of employee

s and their

working arrangeme

nts. The

board participated

in D&I

training. The board al

so provided

feedback on

the matters

raised in the e

mployee

engagemen

t survey.

BUSINESS

Customers

and

Guests

►►

page

Quality of service and p

roduct

offerings and effective h

ealth,

safety and security measures are

customers’ key priori

ties.

Customers are also seekin

g more

information on the

group’s approach

to climate-

related matters.

Customer and guest fee

dback

is direct and con

tinuous at

multiple le

vels and through

various media.

Central Office, includin

g senior

management, regularly

meet

large corporate cu

stomers

via one-

-on

e meetings

and sales conference

The board receive

s a breakdown

of customer satisfaction i

ndex

scores by hotel

at every meeting

as they continuo

usly seek

improvements in the

customer

experience KPIs.

Suppliers

►►

page

The impact of inflation

product prices and

the challenges

faced by the

global supply c

hain remained

the key prio

rities of 2021. There

was

increased focus on

ESG

matters followin

g the launch of

our sustainable p

rocurement

policy and the work

conducted in assessing

the risks

arising from modern slave

ry.

Supplier en

gagement is

ongoing and

managed by our

procurement team via o

ne-

one meetin

gs or attendance at

supplier co

nferences. Our

development team manage

the ongoing

relationships with

our construction p

roviders.

The CFO and Corporate

Development Dire

ctor update the

board at every meeti

on supplier-related matters.

The board consi

dered the

modern slavery risk assessment

findings and approve

d the

sustainable procureme

nt policy.

Stakeholde

r Review

Stakeholder

Interests in 2021

Our engagement

Board considerations

Shareholders

►►

page

Given the ongoi

ng pandemic,

business performance

and capital

allocation remai

ned the key

matters of importance in 2021.

Shareholders are also see

king

more information o

the group’s app

roach to climate

change and other ESG matters.

The company and the

board

maintain an ope

n dialogue with

shareholders and p

rospective

investors, led by the

CEO and the

CFO, with the support of the

investor relatio

ns manager. We

held

156

meetings in 2021.

The Annual Gen

eral Meeting

provides an o

pportunity for

private sharehold

ers to

question Directo

rs.

The board receive

s an

investor relatio

ns update

at each meeting, h

earing

shareholder p

riorities.

The remuneration co

mmittee

chair engaged with sh

areholders

on executive director

remuneration for 2022.

FINANCIAL

Banks

►►

page

Business performance, capi

tal

allocation, cash manag

ement and

covenants remained

the

key matters of importance in

2021. There is also increase

focus on our app

roach to ESG

by our banks.

The CEO and CFO lead the

relationship

with our banks.

The CEO and CFO update

the board at each meeti

on banking facil

ities and

covenants. In November 2021,

the board approved the

extension to the

maturity

of the group’s de

bt facilities.

Real Estate

Investors

►►

page

Business performance and

rent

deferrals remained the

key

matters of importance i

n 2021.

As we look forward, there

is a

greater focus on o

ur investment

plans and future p

artnerships.

Real estate investors are a key

partner supporting

our

sustainable bu

siness model. The

Corporate Developme

nt Director

leads the relatio

nship with real

estate investo

and oth

development partne

rs.

he Corporate Develop

ment

Director updates the bo

ard

at every meeting i

n relation

to existing o

r proposed

development pl

ans.

2021,

the board approved

partne

rship

with Art-Invest for the ope

rating

leasehold

interest in Hotel Nikko

Düsseldorf.

Stakeholder

Interests in 2021

Our engagement

Board considerations

SOCIETAL

Communities

►►

page 34

Sponsorships for lo

cal sports

clubs and charitie

s, provision of

free or low-cost meeting

spaces

to community partners and

requests for staff to volun

teer.

Our decentralised

business model

demands that the hote

l general

manager takes the le

ad in

developing

two-way relationships

with the local co

mmunity. Our

senior executi

ves are encouraged

to engage

at industry level.

The board receive

s updates on

community-related matters and

our Dalata Digs Deep initi

atives

led by group HR and

considers

the activities as part of the

group’s

overall ap

proach to ESG.

Planet

and

Society

►►

page

Climate change an

d its impacts

on the planet and

society came

to the fore in 2021.

Understanding o

ur societal and

environmental

responsibilities is

a key eleme

nt of our sustainable

business model

. The company

secretary is leading

the

group’s

approach to ESG matters.

The board receive

d and

considered p

resentations

from the company secretary

and

the group

’s

ESG advisor

on the group’s appro

ach to

ESG

and approved

the g

roup’s

ESG

framework.

Dalata Hotel

Group plc

Annual Re

port & Acco

unts

2021

AKEHOLDER REVIEW

Business

Employees

Our people drive our success, reflect our culture,

create our customer experience.

Our ESG materiality surv

ey recognised our employe

es as our most importan

t stakeholder group

Our business model depend

s on the developing skills and retainin

g an engaged workforce to meet

the expectations of our cu

stomers and other stakeh

olders.

OUR

PEOPLE

Our people are a

fundamental element in

Dalata’s strategy

and a key

asset in the continuing

success of the group.

As we continue to

grow our hotel

portfolio, our strategy o

f developing

our hotel leade

rship teams from within

becomes even

more important.

Over the past two years, we manag

to retain the vast majority of ou

r core

teams, largely due to

the continued

focus on training

and development

with the Dalata Academy and

the

graduate programme b

eing central

to our strategic ambitio

Our management deve

lopment

courses, delive

red in association

with external partners, also enab

les

our teams to avail of extern

qualification

s to benefit their

current and future rol

es.

We are also abl

e to embed our open,

inclusive, ambi

tious and agile culture

into our ne

w hotels by developing

our people i

nternally and having a

promising pi

peline of talent to fill

key positions.

Finally, our app

roach to diversity and

inclusion

enables us to attract and

retain a diverse p

ool of talent to drive

our growth strategy.

Promoting

from within

Growth brings oppor

tunities for all

our people, and success

ion

planning is

key to maintaining

our culture.

In 2021:



There were

393

internal

promotions.



74%

of manag

ement vacancies

were filled i

nternally.



66%

of manag

ement roles

for the new hotel

openings

in 2022 will be

internally

developed can

didates.

Filiz Smith,

General Man

ager, Clay

ton Hotel,

Manchester Cit

y pictur

ed with coll

eagues at

the hotel’s offici

al ope

nin

g in Februa

ry 2022.

% of the manag

ement t

eam on op

eni

day were i

nternal Dala

ta appoint

ments.

Stakeholde

r Review

CULTURE

Dalata has

an open,

inclusive, ambitiou

s and agile

culture that places peo

ple at

the heart of what we do,

whether that is employee

guests, su

ppliers or our

local communities.

We believe i

n opportunity for

everyone, and

our flat structure allows

us to remove barriers and

make it easy

to engage

and do business with us.

We are focused on

delivering

exceptional servi

ce and experience

for our customers and g

uests, along

with delive

ring a strong financial

performance and creatin

g value for our

shareholders. We

also aim to create

value for our stakeh

olders as

a growing, ethi

cal, responsible and

sustainable busin

ess.

Our decentralise

d model empowers

our hotel manag

ement teams to be

innovative in g

rowing their business

while maintain

ing the principles o

transparency and inte

grity.

Our core values o

f people, fairness,

individuality a

nd service underpin our

group culture

and inform all strategic

business deci

sions.

As we grow our ho

tel portfolio and

enter new markets, we wan

t our

people to gro

w with us.

We invest in the

learning and

development of o

ur people as they

are the gatekee

pers and the

champions of our cu

lture.

Growth brings opp

ortunities for all

employees, and

our succession

planning is ke

y to maintaining our

culture. In 2021 we promo

ted 393

internal candi

dates, and 74% of

management vacancie

s were filled

from within the organ

isation.

Equally, during

the turmoil of a global

pandemic, we prote

cted our people to

protect our busin

ess and our culture.

As a result, w

decided to retain

all of

our senior manag

ement teams and

central office teams with a vie

w to

post-pandemic and reb

uilding the

business while

maintaining the

group

’s culture.

Thankfully, we are see

ing the benefits

of that decision with

a sharp rise in

occupancy across ou

r hotels that could

only be possib

le due to our approach

of protecting o

ur people.

Fairness and indi

viduality are two of

our core value

s that are key to building

an inclusive

culture, one where

everyone can

contribute and thrive

in an open and

happy environment.

In the employee e

ngagement survey

conducted in 2021, 91% of our

colleagues believe

that people from

all backgro

unds are treated fairly, and

95% feel respected and

included by

their colle

agues.

Our survey results form an ac

tion

plan for General Man

agers and HR

Managers as part of their eng

agement

strategy. General Manage

rs' annual

bonus payments are re

lated to

performance in this reg

ard.

We have a three-step di

sciplinary

process that ensures the empl

oyee

is afforded fair due p

rocess. Our

approach to dealin

g with grievances

is designe

d to afford all parties and

fair proce

ss.

This year we are establish

ing a range of

new measures to hel

p us evaluate and

build our cultu

re. The Dalata culture is

people-centric, which facil

itates

innovation and g

rowth through the

principle

s of integrity

and fairness.

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

People at the h

eart of wha

t we do

–

Employe

Appreciation

Week at

Clayton Liffe

y Val

ley.

Stakeholde

r Review

DIVERSITY AND

INCLUSION

Dalata recently reached

gender balance on the

board, where the majority

is female. This, along with

the launch of a new group-

wide policy, supported with

training, signals Dalata’s

commitment to lead on

diversity and inclusion.

As a proud member of Val

uable 500,

Dalata

committed to putting

disability o

n the board

agenda.

In 2021, we launched o

ur diversity and

inclusion

policy to all employee

s, with

all general manage

rs and the central

office executive

management team

participating i

n an inclusive leade

rship

diversity and i

nclusion training course.

This programme will co

ntinue in 2022.

also intend to establi

sh an

employee fo

rum and launch a calendar

of cultural even

ts for employee

s to

celebrate with

their colle

agues.

We plan to i

ntroduce diversity KPIs

predominatel

y gender-focused in 2022,

with plans to expan

d these targets in

the coming ye

ars.

59%

Female participation

in learning and

development pro

grammes in 2021.

40%

of our senior l

eadership team is

female (2020: 37%).

36%

of our General Manag

ers are

female (2020: 30%).

7.0%

2021 gender pay

gap (EU

average 14.1%: 2019

LEARNING AND

DEVELOPMENT

Investing in the support and

development of our people

ensures we have a pipeline

of talent to meet our

growth strategy and sustain

our culture. The Dalata

Academy increased

graduate intake by 72%

in 2021 (over 2019).

As we rebuild the

business and bring in

new team members, we wil

l continue

to focus on skil

ls development,

ensuring o

ur new team members have

the appropriate sk

ills at an operational

level as many have

entered the

hospitality i

ndustry for the first time.

Our new Gateway Inductio

programme gives n

ew employees

a greater oppo

rtunity to succeed in

their roles. To bui

our succession

strategy, we welcomed

gradu

ates

onto our gradu

ate programme,

representing

72%

increase in

graduate intake

over

2019.

As we open ou

r new build hotels,

internally d

eveloped managers are

a key eleme

nt of our success; they

embed and pro

tect our culture, reduce

risk and ensure that o

ur customer

focus and standards

are embedded

in the new hotel.

We also unde

rtake comprehensive pre-

opening traini

ng programmes

for each

new

build hotel. This train

ing

takes place ei

ght weeks before the

opening date an

d ensures that the

culture of Dalata is embe

dded as we

recruit and eng

age the new team.

115,000

e-learning courses de

livered via

the Dalata Academy onl

ine training

portal in 2021.

47,000

Hours of live an

d on-the-job training

completed in

2021.

+72%

Increase i

graduate intak

e in 2021

over 2019.

Graduate Success

Head of Dalata A

cade

my, Aine

Doyle pictur

ed with M

aldron Hotel

Manches

ter Ci

ty managers

Anton Angelo

v, Guest Rel

ations and

Dan

iel Kri

stof, Food and

Beverage.

Anton and Dani

el both co

mpleted our

graduate programme

(class of 201

8).

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

LABOUR

PRACTICES

Employees and managers

receive extensive training

and support to ensure

we maintain high labour

practice standards,

including training on

the risks of exploitation

through modern slavery.

We publish an annual

modern slavery statement.

Maintaining h

igh standards in relation

to labour practice

s allows us to provide

our employees with a fair

and safe working e

nvironment.

Dalata adheres to all l

abour practices in

accordance with the rel

evant

gislation in the

jurisdictions that

we operate in. We

strive to act

ethically with i

ntegrity, honesty,

and professional

ism in all aspects

of our busine

ss.

We also expect o

ur suppliers and

partners within our supp

ly chains to

respect and adhe

re to employment law

and best practices.

We comply with mi

nimum wage

legislation in

the countries where

we operate. We pro

vide

comprehensive

onboarding

employment do

cumentation and

mandatory training to

ensure we

start off on the righ

t footing.

As part of their inductio

all employees co

mplete a training

module on

labour practices.

Employees are also

briefed on the

policies, guid

ance, and safeguards

in place on joi

ning the group.

Our three-step discipl

inary process is

designed

to be equitable and requires

managers uphol

d our core value of

fairness. The same approach app

lies to

deaing with e

mployee grievances.

We provide

guidance and safeguards

for employee

s to maintain a fair

working en

vironment.

Our employee

code of conduct will

be launched in

2022, which will

complement ou

r existing employe

policies. We will

also launch an

updated human rig

hts policy in

2022.

Our protected di

sclosures mechanism

allows our empl

oyees to speak up in

confidence

should an issue arise.

EMPLOYEE

WELLBEING

Our Life Works Employee

Assist Programme provided

support and assistance by

delivering 61 services to

34 employees in 2021.

We also launched mental

health first aid training for

managers; the rollout will

continue into 2022.

Supporting o

ur employees to lead

healthier, more activ

e lives brings

extensive human an

d organisational

benefits. At Dalata, employe

wellbeing is at the fo

refront of our

organisational

agenda.

The Covid-19 pande

mic continued

to be a chall

enge during 2021,

requiring the

group to take a

proactive appro

ach towards

health and wel

lbeing.

We surveyed all

our employees in

December 2021 on ph

ysical and mental

health wellb

eing. Some 89%

of employee

s participated in the

survey, scoring Dalata at 86% on th

ese

areas, which is 8% highe

than the bench

mark of similar

organisations.

Our focus for 2022 is to create

a healthy workpl

ace where all

employees can

enjoy coming to

work, achieve the

ir aspirations

and build meani

ngful social

connections with col

leagues in

a fun, collaborativ

e environment.

Over 600 tea

m member

s took part i

n this wel

lbeing

initiati

ve, inspired b

y our Clayton

Sligo tea

m , while ra

ising fund

s for our chari

ty partners.

Dalata

Hotel

Gro

plc

Annual R

eport & Acc

ounts 2021

AKEHOLDER REV

Business

Customers & Guests

Delivering excellence in customer service

is at the heart of

Dalata’s purpose

When we refer to customer

s we mean our guests a

nd also corporate customers, tour operators,

sporting organisations, cl

ubs, societies and many oth

er business to business

relationships. In Dalata

we aim to be easy to do b

usiness with and provide a positive experience

for all customers and gu

ests

through th

eir journey with us.

CUSTOMER

FOCUS

Delivering excellence in

customer service, creating

positive guest experiences

and continuing to develop

our brands as the leading

hotel operator in Ireland

with a growing presence

in the UK and Europe.

Customer and Guest Feedback

Our customers are at the ce

ntre of

everything we

do. We listen to what

they say to us. Our teams are train

to respond pro

mptly to guest issues or

use an industry-lead

ing online

reputation manage

ment tool (ORM) to

assess their satisfaction.

By working clo

sely with and listeni

to our customers and g

uests, we

consider thei

r changing requirements.

The data we get from our cu

stomer

feedback via the

ORM tool supports

our hotels i

n responding to guest

feedback. This he

lps inform decisions

around changes that may be req

uired

in terms of service and stand

ards.

Equally, the feedb

ack we receive

contributes sign

ificantly to decisio

around prioriti

sing our capital

expenditure spe

nd. Of relevance in the

past twelve months has bee

n a

growing in

terest with increased levels

of feedback from ou

r customers on

how we are performing

in public health

measures and sustainabil

ity practices.

With the ebb and flow o

f customer

volumes durin

g 2021 and the

challenges brou

ght about with the

changes nece

ssary to accommodate

varying restriction l

evels throughout

the year, we maintained o

ur year-

year guest satisfaction rating at 86

across the group.

Clayton Hotel

Liffey Vall

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Corporate Customers

With the plan

ned return of business

travel, our sales teams are eng

aging

with our corporate c

ustomers to

understand what is impo

rtant to

them and adjust our p

roduct

offering accordi

ngly.

Corporate customers prioritise

the safety and security o

f their staff

whilst present in

our hotels, the

provision o

f virtual and in-house

meeting and confere

ncing facilities

in our hotels and

, our commitment

to carbon reductio

ave

ope

d a

, w

2022.

We have con

tinued our investment

in video confe

rencing facilities in

our hotels.

We are committing to

2026 carbon

reduction targe

ts and are currently

assessing various de

carbonisation

pathways in our op

erations and hotel

construction. Further in

formation is

outlined on

►►

page

Our Decentralised Operating Model

Through our d

ecentralised operating

model, our lo

cal general managers and

their teams take responsi

bility for

managing the hotel

and meeting the

specific need

s of their customers

within their markets. They a

supported by an

experienced and

specialist central man

agement team.

DATA

PRIVACY

During the year w

developed and launched

mandatory bespoke data

protection training module

for all staff and delivered

live, interactive data

protection training to

445 manager

Management

At Dalata, we actively manag

compliance wi

th the General

Data Protection Regu

lation (GDPR).

Poliicy setting

and compliance are dealt

with centrally for the

group

including

subject access requests

incident manag

ement and querie

from customers and staff at ho

tels.

Membership of the manag

ement level

privacy committee, which

met three

times during 2021, is made

up of senio

managers responsibl

e for

personal data pro

cessing. The

committee’s objective

is to

continuously de

velop the maturity of

the group’s compl

iance p

rogramme.

The audit and risk co

mmittee oversees

compliance

►►

page

Awareness and Traini

We updated our empl

oyee awareness

and training p

rogrammes in this area,

with 3,676 employee

s completing

the training.

445

Managers completed

data protection traini

ng in 2021.

We also commence

d the rollout of

live manageme

nt training in data

protection and

privacy. To date, 445

managers, assistant managers and

supervisors have co

mpleted it. This

includes all ho

tel HR managers and

94% of hotel gene

ral manager

pub

ish

22.

Stakeholde

r Review

HEALTH,

SAFETY AND

SECURITY

Although

vid-

risk

management dominated

the health and safety

agenda in 2021, we

expanded our monitored

daily fire checks to

incorporate checkpoints

for a wider range of health,

safety and security risks

within each hotel.

84%

of hotels maintain

ed an average

compliance sco

re of over 90%

for daily fire, health

safety and

security controls.

Covid-

risk manageme

continued

to be the health and

safey priority in 2021.

evolved our K

eep

Safe Programme

in response to p

ublic health guidelines

in Ireland and

the UK to mitigate the risk

employees an

d guests and to

ensure buisn

ess continuity..

We updat

our Covid-

risk

assessments and devel

oped and

delivered

hotel specific Covid-

compliance o

fficer training. Each

hotel appointe

d a minimum of

three trained Covi

d-19 compliance

officers covering

all shifts.

We continu

ed the programme of audits

initiated in

2020 and carried

out by Bureau Veri

tas to provide

assurance of compliance

across

the portfolio

Fire, Health & Safety and

Security

In 2021, we expanded o

ur monitoring

compliance with fire, heal

th,

safety and security contro

across our hotels

Daily complian

ce scores are monitored

centrally using

the Firecloud365

application.

We also conti

nued to evolve our health

and safety standard operating

procedures, targeti

ng specific risk

areas, including

power outage plans

and adverse weather pl

ans

Our portable app

lication and fixed wire

testing and thermal imagi

ng process

resumed across the grou

p, as well as

continued

full compliance with

maintenance and

certification of

all life safety and securi

ty systems.

We develope

d a safety plan for lone

travellers with our sale

s and marketing

team, which will be p

ublished in 2022.

Food Safety

2021, we conducted

food safety

audits using an

independent auditor

across all our hote

ls.

86% of our hotels ach

ieved a score

above the

90%

target. Foll

ow up

visits and audits were co

nducted in the

hotels with scores bel

ow the

90% target.

2022 Focus

Our key health

, safety and security

focus areas for 2022 include



Completing n

ew health and safety

audits with Bureau Veri

tas



Revising fire evacuatio

n plans

at all hotels



Introducing new accessib

ility

safety plans



Integrating safety con

trols

our new hotels

Managing infection risk to

employees and

guests was th

e number on

e health and

safety priority in 2

021.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

AKEHOLDER REVIEW

Business

Suppliers

Healthy supplier relationships

matter for our guest experience

and customer satisfaction.

tender centrally for all major operational and ca

pital goods and services contracts, and many

of our suppler relationship

s have developed into long-term partn

erships. Our centralised order

and invoice matching and

payment processes are de

signed for transparency and efficiency.

SUSTAINABLE

PROCUREMENT

We hosted an online

supplier sustainability

conference in November

2021

, presenting our

supplier code of conduct

and

have

set a 2024 target

to collect scope 1 and 2

carbon emissions data from

100% of our tier 1 suppliers.

stainable Procur

ement Policy

We develope

d a sustainable

procurement poli

cy and a supplier

code of conduct which

we presented at

a supplier sustainab

ility conference in

November 2021, setting o

ut our

expectations to o

ur suppliers, including

their commitment to ou

environmental

and social values.

We demand cle

ar and precise technical

specifications usi

ng sustainability

factors

We also expect our sup

pliers to

secure their raw materials f

rom fully

traceable and sustain

able sources.

We prioritise

suppliers who have

embedded sustain

able and ethical

practices within thei

r organisation

and drive these

practices within their

supply chain

are committed to purchasin

g based

life cycle costs not just

the purchase price

Local Business

We are committed to supp

orting the

growth and deve

lopment of small

regional su

ppliers.

We always ensure there

is a selection

of suppliers avail

able to all hotels from

within their lo

cal area. Locally sourced

food and be

verage are displayed

prominently o

n all menus

Food Safety

We expect all o

ur suppliers to adhere

to the appropri

ate food safety

regulation

s and standards.

SUPPLY CHAIN

LABOUR

Supply Chain Labour

Our Modern Slavery Pol

icy mandates

zero-tolerance ap

proach to modern

slavery and human trafficki

ng.

We are committed to eng

aging with

our supplie

rs to mitigate the risk of

human rights vi

ations within o

supply chain.

Our modern slavery p

olicy and

statement is publishe

d annually

our website

dal

atahotelgroup.com

Dalata’s Executi

e Chef

Darina Bren

nan and Head

of procure

ment Tony

McGui

gan on

the farm sourci

ng pre

mium Irish

Porridg

e Oats served

for breakfa

st acros

s Clayton an

Maldron h

otels in Irela

nd.

Stakeholde

r Review

AKEHOLDER REVIEW

Financial

Shareholders

banks and

real estate investors

The support of our financial stakeholde

ensures Dalata is financially strong and

well placed for post-pandemic recovery.

The support of our financi

al stakeholders for the dur

ation

the Covid-

pan

demic, through the

investment of equity b

y shareholders, the extension of lendin

g facilities by our banks and continued

support for new projects from real e

state investors has ensured that the grou

p is financially strong

and well placed for post-pandemic recovery

OUR

GROWTH

AMBITION

Dalata’s

ambition is to

grow sustainable

shareholder value through

market-leading

performance at

our existing portfolio and

targeted expansion at

key city locations.

Existing Portfolio

Rebuilding the b

usiness at our

existing hotel

s to pre-pandemic

levels

one of our k

ey objectives.

Extensions

Clayton Hote

at Cardiff Lane (99 rooms), Charle

mont

(3 ), and

City of London (14).

We expect a return to mo

re normalised

levels of trade

between 2023 and 2025.

Delivering our current pipeli

Since Q2 2021 we open

three hotels:



Maldron Hotel,

Glasgow



Clayton Hotel,

Manchester City



Maldron Hotel,

Manchester City

In the coming mo

nths we will

open another four ho

tels:



Clayton Hotel, Bristol



The Samuel Hotel , Dub

lin



Maldron Hotel,

Merrion Road, Dubli



Clayton Hotel,

Glasgow City

Development

five ad

ditional sites is

in progress. These are sche

duled for

completion

between 2023 and 2025:



Maldron Hotel, Sho

reditch, London



Maldron Hotel, Brig

hton



Maldron Hotel, Live

rpool



Maldron Hotel

Victoria, Manchester



Maldron Hotel, Crok

e Park,

Dublin

37%

Expected expansion o

f room numbers

(3,335 new rooms) over four years

from 1 July 2021.

2,202 rooms

At eight new ho

tels between July 2021

and June 2022.

Pipeline growth strategy

Growth is focused on citi

es with a

strong mix of corporate an

d leisure

demand. We have

identified target

locations in

Regional UK, and London

remains a very attractive

city. We

have also identifie

d opportunities in

selected Europe

an cities that are

complementary to o

ur portfolio.

The group has pote

ntial

grow

acquisition, e

xtension

existing

properties, or by en

tering long-term

leases at new or already tradi

ng hotels

As an experience

d asset manager and

an excellen

t hotel operator with a

strong balance

sheet, we have the

platform to delive

r growth. We

continue to expand

our real estate

investor relationsh

ips, having already

partnered with Deka Immobi

lien,

Aberdeen Standard, M&G Real Esta

te,

Aviva, Union Investmen

t and most

recently Art-Invest.

Growing the pipeline sus

tainably

Our acquistions team is activel

seeking oppo

rtunities at locations

within our targe

t markets.

New markets

In February 2022 we commenced

operations at Hotel

Nikko Düsseldorf

our first hotel in

continental Europe.

This demonstrates the group

’s capacity

to enter new markets well

in advance of exh

austing its growth

potential i

n core markets.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

INNOVATION

In 2021, we identified

innovation as a driver of

strategic growth for Dalata

Underpinned by senior

management incentives

are finding new and

better ways of delivering

our services to our

customers and guests.

Our objective i

s not to go back to

what we were doing

pre-pandemic

but go back to

what we were doing

but better.

In the current inflatio

nary

environment, the

re is universal

pressure on costs, be that i

n the

development of ho

tels or the operation

of the propertie

s. This affects

construction costs, payrol

and utility co

sts, and the costs of doi

business with our supp

liers.

In the long

term, we expect RevPar

to follow in

flation movements.

However, this is no

t the case in the

short term, where RevPar mo

vement

can be entire

ly inconsistent with the

inflation indice

s. As the industry

reopens po

st Covid-

, we will

ende

avour to grow our revenu

channels as efficie

ntly as possible,

but we are conscio

us a return to pre-

Covid-

level

s will not be sufficient.

We will ne

ed to be more efficient,

more agile an

d more innovative.

We are assessing o

ur work practices,

customer service and o

fferings, hotel

design and

synergies across the group,

and conside

ring alternatives

to how we condu

ct our operations

and interact with the cu

stomers

and guests.

Our primary focus areas in 2022 ar



Work practices:

Consider altern

ative

ways to perform tasks such as

cleaning hote

l bedrooms and staffing

kitchens.



Our customer journey

- book

ing,

checking in an

d out: Consider how

technology can sup

port our staff and

our customers and gu

ests in thi

journey.



Service Offering

: Determine o

ptimal

food menus for ou

r hotels.



Synergies

: Identify synerg

ies across

our portfolio

of hotels and consider

functional exce

llence rather than

property allo

cation in areas such as

maintenance and

repairs.



Hotel Design:

Consider the d

esign of

our hotels i

n the future, enabling

higher standard o

f service for our

customers and guests and opti

mal

environmental

performance

see

►►

page 32

Our leadin

g technology pro

ides a pla

tform for i

nnovatio

n in custo

mer service

Januar

y 2022, Mal

dron Hot

el Belfast In

ternational

Airport wen

t live on t

he Opera

Cloud propert

y manage

ment sys

tem

the 43rd

and

nal hotel

to switch fro

m Opera V

Dalata

Hotel

Gro

plc

Annual R

eport & Acc

ounts 2021

FINANCIAL

DISCIPLINE

Pursuing our strategic

objectives requires us to

maintain relatively low

levels of financial risk in the

group.

At Dalata, we beli

eve that strong

financial disci

pline provides us with the

greatest opportun

ities to generate

value for our shareh

olders in the long

term and ensure we are be

st placed to

avail of commercial o

pportunities as

they arise.

The board consid

ers each project on its

own merit and en

sures it meets our

key financial

metrics. See the board

’s

principal respo

nsibilities on

►►

page

60.

Details of the

group

’s financial position

31 December 2021 are outlin

ed in

the Financial Revi

ew on

►►

pages

. A robust review of the

prospects of

the business for the

next three years is

outlined in the

Viability Statement on

►►

pages

and 5

OUR

GOVERNANCE

A responsible governance

framework is designed

to safeguard long term

shareholder value and

ensure the group

contributes to broader

society while protecting

the environment.

At Dalata, we have ado

pted a

framework that allows us

to respond

in a structured and pro

gressive way to

our responsibi

lities in society and our

impact on the en

vironment. Our

Corporate Governance

report is

►►

pages 65 to 7

The board is respon

sible for policy

development and

oversight, including

risk management as set out in

the

risk management repo

rt on

►►

pages

45 to 52

In the exercise o

f oversight,

the board prio

ritises those non-

financial matters essential

to the

growth and deve

lopment of a

sustainable bu

siness.

Dalata complies with the Eu

ropean

Union (Disclosure o

f Non-Financial and

Diversity Information by ce

rtain large

undertaking

s and groups) Regulations

2017. Further informatio

n on

compliance with

this regulation is

outlined on

►►

page

Since 2018, the grou

p has continued to

develop its gove

rnance structures by

standardising po

licies across the

business, devel

oping a code of

conduct, suppli

er code of conduct,

investing i

n its HR systems and

rolling out the

Dalata Academy

online trainin

g portal.

In 2021, the group, in

consultation with

internal and e

xternal stakeholders,

completed a material

ity assessment

where a wide rang

e of subject matters

were assessed against the

business

strategy to determine

those that

presented the mo

st significant risks

and opportunitie

s. As part of this

assessment, we also con

sidered the

impact of these key matters on

people

society and the

planet.

The findings o

f the materiality

assessments are set out o

►►

pages

to 16.

Deputy Gen

eral Manager,

Andrew

Hyland

(left)

General Man

ager, Alan

Deller a

nd collea

gues at Clayton

Hotel Leop

ardstown

welcome

reopening for

leisure gues

ts in June 2

021. Man

aging the e

ver evol

ving Covid-1

9 restriction

s over the p

ast two

years has been

a big chal

lenge

for manage

ment and staf

f acros

s all of o

ur hotels. Grea

t credit i

s due to our

teams for

maintain

ing busin

ess continui

ty and high

standards of cu

stomer

service in

spite of man

y difficulti

es.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

TRANSPARENCY

In this year

’

s annual report

we have revised our

approach to the

presentation of non-

financial information

to make it more relevant

and accessible to a wider

range of stakeholders.

Our success depend

s on building

relationship

s of trust with

stakeholders.

Our regular investo

r and market

updates reference b

oth positive

and negative

developments in our

industry and bu

siness and are available

on our website

. In 2021 we h

eld

156

investor meetin

gs.

In 2021, w

enhanced our rep

orting

framework, providing add

itional insight

to stakeholde

rs on our strategy and

performance. See our climate ch

ange

targets presented in li

ne with SASB

and TCFD requirements on

►►

page 56.

The quality o

f our annual reporting

has been recognise

d by Chartered

Accountants Ireland Pu

blished

Accounts Awards.

In 2021, the board appro

ved updated

market abuse poli

cies, procedures, and

structures to strengthe

n compliance

and provide

additional transparency in

this area.

INFORMATION

SECURITY

In 2021, we continued our

investment in market-

leading information

systems. Our hotels and

central office operate on

modern technology

platform with a proactive

information security

management processes

in place.

Information technol

ogy systems are

essential for maintaini

ng business

continuity, managi

ng performance and

risk and facilitating

innovation

These

are essential compo

nents of our

growth strategy

Our information securi

ty platform is

built on best practice

ISO standards,

and a range of secu

rity tools are

employed to

monitor and protec

our systems, users and d

ata.

Detailed informatio

n security policies

are in place, and

all employees that use

our systems complete ann

ual security

and awareness training

via the Dalata

Academy onli

ne training portal.

In 2021, the board and au

dit and risk

committee conside

red detailed

management and e

xternal expert

presentations across this e

ver-evolving

area.

ANTI-

BRIBERY &

CORRUPTION

Our internal control

procedures, segregation of

duties, payment processes

and account reconciliations

provide a robust control

environment to help

identify any potential acts

of bribery or corruption.

None were detected in

2021.

We have ado

pted an Anti-Bribery and

Corruption Pol

icy, part of our Code of

Conduct, which de

scribes our zero-

tolerance app

roach and provides

guidance to all e

mployees regarding

potential situati

ons involving bribery.

The policy i

s available on our website

dalatahotelg

roup.com.

The policy i

s provided to employees

as part of their inductio

n training and

anti-bribery and co

rruption training

can be comple

ted by employees via the

Dalata Academy.

Dalata does not make p

olitical

donations. We

make charitable

donations and

enter into sponsorship

agreements as part of our n

ormal

business activitie

We encourag

e our employees to raise

concerns throug

h the appropriate

channels if they b

elieve this poli

cy is

not being foll

owed.

Stakeholde

r Review

AKEHOLDER REVIEW

Societal

Planet and Society

recognise the connection between

realising our strategic objectives and

having a positive social impact.

We identify carb

on emissions and sustainable infrastr

ucture as ESG priorities

and have developed

water stewardship and

waste management progr

ammes to manage our envir

onmental impact. We

have committ

to specific carbon redu

ction targets by 2026 and

expanded our sustainabilit

y and

climate change reporting and

disclosures (see Sustainability

and Climate Change

►►

pages 53 to 58

CARBON

EMISSIONS

In 2021 we maintained our

B score with CDP and

initiated a review of our

climate change response.

We set

2026 carbon

emissions target and

dramatically increased the

number of hotels achieving

the Green Tourism ‘Gold’

accreditation.

For further information

on our response to

climate change see

the sustainability and

climate change section

of this report from

►►

page 53

In Dalata, we understand ou

r role in

energy transitio

n and are committed to

finding energ

y solutions to reduce

our

impact on the en

vironment.

By developing

key performance

indicators, setting o

bjectives and

monitoring p

rogress against these

objectives, we are con

tinually striving

to reduce ou

r consumption whilst

maintaining the

quality of the

customer experien

ce at our hotel

In 2020, Dalata, togethe

r with

Green Tourism commenced

accreditation pro

cess for its hotels.

Their gold/

silver/ bronze awards are

acknowledged wo

rldwide as indicators

of good enviro

nmental impact

management. In 2021, we were

awarded 35 gold an

eight

silver

accreditations. This proce

ss is

completed e

very year, with the

next audit in Dece

mber 2022.

In 2021, we allocated €500,

000 to

Green Fund, and in 2022 we

plan to

allocate €1,000,000

to it. The Gree

Fund was established fo

r investment in

carbon reduction

and energy-related

projects.

Those funded i

2021

included:



Building management systems

(BMS), upgrades



Electric vehicle ch

arging points

at selected hote



Upgrade of swimming poo

l covers

Over 1,600 employee

s have completed

our energy man

agement training

module.

Living Green is

Dalata’s

envi

ronmental

movement, launched

2020

One of

the highlig

hts of this movement was

Dalata’s participatio

n in Earth Week.

Each hotel profil

ed an energy, waste,

biodiversity or co

mmunity success

story during the

year. These stories

were publish

ed for our employees

and our gue

sts.

arg

Air

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

SUSTAINABLE

INFRASTRUCTURE

our newly constructed

Maldron Hotel Glasgow,

a change in design

specification yielded an

estimated carbon saving of

38%, to 35 kgCO2/m2 per

annum compared with the

original specification.

BREEAM Standard

Dalata works with property

development, financi

al, and

construction partners to b

ring high

quality, modern, en

ergy-efficient

Dalata Built hotels to p

rime locations in

leading citie

s in Ireland, the UK and

Continental Euro

pe.

Dalata Built hotels are co

nstructed in

line with a speci

fication agreed with

the develope

r and builder targeting

construction in line with

the BREEAM

Very Good rating

, placing them in the

top quartile o

f new UK non-domestic

buildings (advance

d good practice).

Dalata & AECOM Project

–

Maldron Glas

gow City

In 2021, we engaged

leading global

infrastructure consultants AECOM to

complete a study o

f Maldron Hotel

Glasgow, which ope

ned in August

021

The purpose was to ide

ntify

opportuniti

es to reduce both

embedded and li

fetime operational

carbon in future p

rojects through early

design changes an

d investment in

new technologi

es.

The study produce



n alternative ‘id

ealised’ scheme,

reduce the emb

odied carbon of the

hotel by

44%



An energy strategy to

reduce

operationa

rbon emissio

ns by

up to

68%

by remo

ving gas as an

energy source

and establishing an

alternative method

to meet the

hot water demand.

In 2022, we will buil

d on this initial

work and unde

rtake a more

comprehensive

early-stage pipeline

project review.

We will also co

mission a study to

develop a decarbo

nisation plan for four

of our current po

rtfolio properties. The

review will establ

ish costings for a

move to a low en

ergy and zero carbon

servicing strategy.

WATER

STEWARDSHIP

By Q2 2022, electronic

meters installed at all of

our hotels will allow us to

measure consumption

accurately. We have set

a target to reduce water

consumption by 15%

per sleeper by 2026

(2019 baseline).

By the end of 2021, 28 of our ho

tels

had complet

the Irish Water

accredited water stewardship traini

programme. This provide

hotel

management with the ski

lls and

knowledge to h

elp lower water

consumption, pro

tect the environment

and reduce co

sts.

2022, we will comple

te training in

our UK hotels and have

an accredited

water steward at each prop

erty.

Water Meter Installati

ons

We approved

the installation

electronic water mete

across all hotels, at a cost o

€95k, providing

enhanced

water usage reporting

The installation

project

commenced in No

vember

2021 and is expected to

completed by A

pril 2022.

Shower Aerators

We trialled n

ew shower aerators

in our Clayton

Manchester City

hotel, which ach

ieved a

40%

saving in water usag

e of each

shower (approx.4 litres).

A change in design specifi

cation yielded an estimat

ed carbon saving of

38%,

to 35 kgCO2/m2 per annum.

The design team adopted Air Sour

ce Heat Pumps (A

SHP) for space heating

and hot water generation

. The original des

ign proposed a CHP (Combined Heat

and Power) unit, which contribute

s 56.6 kgCO2/m2 per annum.

Maldron Hotel Glasgow

Dalata

Hotel

Gro

plc

Annual R

eport & Acc

ounts 2021

WASTE

MANAGEMENT

We are on track to achieve

100% diversion of waste

from landfill in 2022, and

have committed to reducing

food waste by

15% per sleeper by 2026

(2019 baseline).

In Dalata, we are committed to

tracking all waste g

eneration

focusing on renewabl

e destinations

and zero-

-land

fill. Our approach

focuses on reducing waste stream

s and

diverting waste to ren

ewable sources if

possible.

In consultation

with our waste

collection provi

ders, we developed

a waste management plan whi

ch forms

the basis of waste

management trainin

We continue

to reduce the amount of

waste we produce and

increase the

amount of recycled

waste. In 2021,

we completed a p

roject to separate

paper, glass, cardboards, ele

ctrical

items, ink, plastic and p

ackaging.

We also consul

with suppliers

to reduce cardbo

ard entering

each hotel.

All food waste is co

nverted to a

fertiliser dige

state using an an

aerobic

digestion

process through our

partnerships with FSM (Foo

d Surplus

Management) in Ireland

and RE-Food

in the UK.

BIODIVERSITY

While the primary focus of

our environmental response

in 2021 was on carbon

emissions, water and

waste, we

ilt biodiversity

awareness through our

support for the All-Ireland

Pollinator Plan.

Dalata impacts biodiversity d

irectly

through its op

erations and indirectly

via hotels con

struction and our

procurement activity.

As part of the

new

build

planning

process, we assess for sensi

tive

ecosystems to ensure the

y are

protected and e

nhanced.

GOVERNMENT

& REGULATORS

Governments and

regulators, including tax

authorities, regulators and

industry associations, are

key stakeholders.

These bodie

s oversee the regulatory

framework in which the gro

operates, covering a wid

e and varied

range of busin

ess areas. W

aim to

comply with all

r regulatory and

legal

obligations. Our g

overnance and

oversight structures provi

de us with

tools to achie

ve and monitor this

compliance, and we

maintain open

channels of co

mmunications with

any governmen

t or regulatory body.

We make signifi

cant financial payments

govern

ments in corporate taxes,

VAT and

employee-related

charges.

We also pay sub

stantial local

thority rate charges.

During the Covi

d-19 pandemic

availed of Irish an

d UK government

schemes relating to wag

e subsidie

s and

other grants, and we compli

ed with the

scheme conditions

2020 and 2021.

We also bene

fited from temporary VAT

reductions (in Irel

and and the UK)

reductions in

Employer PRSI rates (in

Ireland) and deferral o

f tax liabilities

and commercial rate waive

rs. These

supports assisted

us in keeping many

of our people in

employment durin

g the pandemic

and when ou

r hotels initially reopened

for business

Details on g

overnment

assistance received a

►►

pages

136

d 137

As normal trading and

economic

conditions return, we expe

ct to return

to meeting o

ur full tax and commercial

rates obligatio

ns. As we grow during

2022, we expect to further contrib

ute

through higher empl

oyment levels and

tax payments.

The

Bee Hotel

Maldron Parnell

Square, Dublin

There has been a sig

nificant decline

in the bee

population, with almost a

third of the po

pulation now

threatened with extin

ction.

In 2021, our hotels sup

ported

the All-Ireland Po

llinator Plan

planting pollinator frie

ndly flowers,

designating

pollinator friendly

areas, reducing the u

se of pesticides

and introducing

bee hotels.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

AKEHOLDER REVIEW

Societal

Community

Engagement with our

cal communities

is part of

Dalata’s

decentralised

management philosophy.

Our hotels led by the general manager

support their local communities from wh

ere we draw

most of our workforce a

s we aim to be the employer of choice in th

e hospitality

sector.

EMPLOYABILITY

2021

, we demonstrated

our commitment to

marginalised groups as

signatories of the Valuable

500 pledge and recruitment

of 14 employees through

employment support

organisations.

At Dalata, our approach to recrui

tment

is targeting dive

rse pools of talent,

enabling us to attract more pe

ople to

drive our gro

wth strategy and create

an inclusive

culture.

We recogni

se the unintended barriers to

employment faced by c

ertain individuals

and communitie

s, and

we aim to provide

them with equal

opportuniti

es where possible and

have a positive

impact on

youth emplo

yment and people

with disabili

ties.

We are members of Open

Doors

in Ireland, which

supports

marginalised in

dividuals with

pathways into emplo

yment.

As signatories of the V

aluable 500

pledge, we are committed to

putting disab

ility on the business

leadership agen

da.

In 2021, we partnered with 20

employment supp

ort organisations in

various communitie

s by sharing job

vacancies, provid

ing work experience

and attending

their open days.

Fourteen indi

viduals were hired through

these partnerships, five

of whom were

from partnerships with disabi

lity

organisations.

CHARITY

PARTNERSHIPS

Our charity and community

partnerships create positive

social impact and economic

opportunity at a local,

national and global level.

Pure Innovations

Clayton Manchester Airp

ort

We partenered with

Pure

Innovations, an ag

ency supporting

people with disab

ilities and

disadvantaged g

roups. The hotel

provided wo

rk experience to an

individual who

has since become

a full-time member of the fo

od and

beverage team

Stakeholde

r Review

At Dalata, we encou

rage our employees

to engage

with and support our flagship

charity partners and our lo

cal

communities.

Dalata has partnered with the Chi

ldren’s

Health Foundation (CHI) in the

Republic

of Ireland and Great Ormon

d Street

Hospital in the

UK for the past six years.

Since 2016, Dalata has raised

over

€1

million for vi

tal equipment and cancer

research for CHI at Crumlin.

In Northern Ireland, we al

so partnered

with Air Ambulance

NI for the past two

years, supporting the

ir life-saving service

across the region

Dalata Digs Deep is our e

mployee

fundraising in

itiative where the teams

at each of our ho

tels undertake

fundraising activi

ties that garner

mass participation from our

employee pop

ulation.

In 2021, our employe

es raised over

€121,000 and together with €47,00

contributed b

y the group, our three

flagship charity partne

rs received a

total of €168,000

At a global level

, Dalata became a

member of UNICEF’s Corporate Va

ccine

Alliance in 2021 to sup

port the provision

of Covid-19 vaccines to

low and middle-

income coun

tries. UNICEF plans to

deliver 4.1 bi

llion doses of the vaccine

2022, enabling

70% of the

world’s

population to b

e vaccinated by the end

of 2022.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

FINANCIAL REVIEW

Emerging strong

and d

Revenue up 40% to

€

192.0

million

Basic loss per s

hare

of (2.8) cents

(2019: Basic EPS of

42.4 cents)

Group RevPAR

of €40.02 in 2021

46%

2020

Strong liquidity

with cash and

undrawn facili

ties

€

298

milli

Property, plant and

equipment

of €1.2 billion

Conservative

gearing with Net

Debt to Value

ratio of 24%

Overview

Assuming the role

of CFO just after

restrictions were lifted to

allow the

business to re-open

fully was fortuitous

–

the only way was u

p in terms of

trading performance

. However, little

about the business

’

strong po

sition two

years into the pan

demic is down to

luck.

At Dalata, we have always be

lieved

in a strong financi

al discipline that

acknowledges the

inevitable ups

and downs the h

ospitality industry

periodically faces. Covi

d-19 may be

unprecede

nted in its scale and its

impact, but this discipl

ine has served us

well. We be

lieve in maintaining a

strong asset backing

on our balance

sheet and appro

priate levels of ge

aring

and make our in

vestment decisions

accordingly.

Ironi

cally, Dalata’s most valuabl

e assets

do not appear anywhe

re on

our balance she

et. Our people, how we

all work togeth

er and how we work

with all our stakeh

olders remains

beyond the abil

ity of accounting

standards to value. Yet it is the

very

core of how we perform and

grow

sustainably, how we ad

apt and thrive

no matter the circumstances.

I am very pleased with th

e way we

have managed the

business over

the last twelve months.

Like 2020, 2021 was a challen

ging year.

The first half of the year bo

re witnes

to severe lock

downs and restrictions,

while the succe

ss of vaccine rollouts

enabled the easin

g of restrictions

during the second

half of the year. The

-openin

g of hotels from this poi

showed enco

uraging signs of pent-

demand across the do

mestic leisure

markets, followed

by the return of

domestic corporates and pro

ject work

later in the year. As we e

xpected,

international

corporate and leisure

travel proved slo

wer to re-emerge

from the pandemic.

We have neve

r allowed short-term

challenges and crisi

s management to

distract us from our lo

ng-term

ambitions. All o

ur actions have been

taken with this in mi

nd.

Maintaining our co

re management

teams at the hotels and ce

ntral office

throughou

t the pandemic provided

stability which e

nabled us to scale up

qui

ckly to meet highe

r demands as

restrictions were relaxed

1 See endno

tes

►►

page 43

Financial R

eview

We continu

ed to pay our suppliers, our

landlords, service

our debt and engage

with all of our stakeh

olders. We have

kept the safety of ou

r people and our

customers at the forefron

t of our re-

opening strategie

In November, I was delig

hted that our

banking club e

xtended the maturity

of our debt facil

ities by twelve

months.

It was another strong vo

te of

confidence

from our lenders to have

extended the d

uration of our facilities

as a hotel company. W

e also agreed

to defer the testing

of our previous

covenants (Net Debt to EBITDA

and

Interest Cover) until June

2023. The

Net Debt to Value co

venant and

minimum liqui

dity restriction (where

either cash, remainin

g available

facilities or a co

mbination of both must

not fall bel

ow €50 million), remain in

place until

that date. This provides us

with the additio

nal financial flexibility

to manage the reco

very and our

ongoing g

rowth. Whilst we

confident in

our position, we remain in

uncertain times,

thi

s was a sensible

action to take and

highlights our

financial disci

pline.

Building lon

g-term, sustainable value

remains our key fo

cus. We continue

to make progress o

n our pipeline of

hotels. In Aug

ust 2021, we successfully

opened our first ho

tel in Glasgow City.

This hotel is pe

rforming well and

reached occup

ancy of over 70% in

November, supported

by the COP 26

UN Climate Change Confere

nce, which

took place

in the city. In 2022, we also

opened two new ho

tels in Manchester

City centre, and we ente

red

Continental Europ

e with a new

operating leaseho

ld interest in Ho

tel

Nikko, Düsseldo

rf.

We also conti

nued the rollout of

technology en

hancements at our

hotels. All o

f our 44 owned and leased

hotels are now o

n Opera Cloud and

MICROS Simphony F&B systems

including the

three hotels added in

early 2022.

Ove

rall

the

cau

sm,

ith

r key

nancia

tri

sin

acr

the

ard c

red

ould

not

ibl

e wit

hou

the

red

sac

and

upp

t o

f our

le,

sha

lde

rs and

the

nva

rib

the

sta

lde

rs su

upp

lan

dlord

d g

ver

nme

nts th

year

ind

d f

e s

tar

the

Covi

and

However, we unde

rstand we have

work to do to rebu

ild the business

to pre-pandemic l

evels, and this will

be one of our ke

y objectives in 2022.

The current inflatio

nary backdrop in a

time of recoverin

g demand will provide

new challenges. Ou

r decentralised

structure where our ho

tel teams are

responsible fo

r managing the earnings

of their hotel an

d the careful cost

management, which is p

art of our DNA,

means I am confident we wi

rise to this challe

nge. I am extremely

proud of what has bee

n achieved in

2021 and belie

ve it will serve us well

as we move forward.

Group Revenue

and Earnings

€milli

2021

2020

2019

Revenue

192.0

136.8

429.2

Adjusted

EBITDA

63.2

18.7

162.2

Group

EBITDA

68.5

(25.7)

163.8

(Loss)/profit

before tax

(11.4)

(111.5)

89.7

Basic EPS

(2.8)

(50.9)

42.4

2021 revenue showe

d an increase of

40.3% on 2020 as the hotel

s re-opened

fully to the pu

blic from May in the UK

and June in Irel

and, which allowed us

to rebuild the

business through the

second half o

f the year. While full-year

revenue remain

ed 55.3% behind 2019,

H2 2021 represented 67.1% o

f H2 2019

revenue le

vels.

2021 Adjusted EBITDA was €99 mill

ion

behind 2019 leve

ls (-61.0%). This is

despite the i

mpact of Covid-19 being

mitigated by supp

orts provided to the

hospitality i

ndustry by both the Irish

and UK governmen

ts and continued

cost control measures e

mployed acro

the group.

We disclose

Adjusted EBITDA to show

the underlying

operating performance

of the group, exclu

ding items which are

not reflective o

f normal trading

activities or di

stort comparability either

‘year on year’ or with oth

er similar

business.

Adjusting items this ye

ar were

comprised princi

pally of net

revaluation g

ains of €6.8 million

recorded throug

h profit

loss and

pre-

opening exp

enses of €1.9m as

we opened

a new hotel in 2021 and

prepared for the o

pening of six more in

2022. In 2020, adjusting items refle

cted

the initial i

mpact of Covid-19 and

related mainly to

net revaluation losses

(€30.8m), impairments of €1

1.8m a

the accountin

g loss on sale and

leaseback of €1.7m

Government grants

Given the level o

f restrictions placed on

the hospitality secto

r for much of the

year, substantial gove

rnment support

has been pro

vided to the sector. We

have utilise

d these supports to mitigate

the negative

trading impact of Covid-

restrictions and to maintain the

employment o

f our people. The

supports have been

essential in

protecting the

hospitality industry

through an u

nprecedented crisis,

and we are grateful for the

continued

support shown by b

oth the Irish and

UK governments.

During 2021, we receive

d support from

the Irish gove

rnment totalling €40.7

million acro

ss the various support

schemes, primarily the Emplo

yment

Wage Subsidy Sche

me (EWSS) and

Covid Restrictions Supp

ort Scheme

(CRSS) and also benefitted

from a

commercial ra

tes waiver of €7.3

million. We

received grants from the

UK government totall

ing £3.7 million

(

€4.2

million), primarily rel

ating to the

Coronavirus Job Reten

tion Scheme and

The

Large Tourism and Hosp

itality Business

Support Scheme, as well as bene

fitting

from a commercial rates waive

r of £3.7

million (€4.3 mill

ion

). See

►►

pages

136

and 137

1 See endno

tes

►►

page 43

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

GROUP SNAPSHOT

OF OWNED AND LEASED

PORTFO

LIO

AT 31 DECEMBER

2021

73%

77%

27%

23%

ASE

Owned

Leased

Depreciation and amortisation

€milli

2021

2020

2019

Depreciation

of property,

plant and

equipment

26.6

26.2

Depreciation

of right-

use assets

19.5

20.7

17.1

Amortisatio

of intangibl

assets

0.5

0.2

Total

depreciation

and

amortisatio

47.1

47.8

43.5

Depreciation o

f property, plant and

equipment i

ncreased marginally by

€0.4 million to €27.0 mi

llion

, driven

by the additi

onal charges on the new

conference ce

ntre at Clayton Cardiff

Lane, Dublin, the 44-bed

room

extension at Clayton

Hotel Birmingham

and foreign e

xchange movements.

These increases were offset by the

full-

year impact of the decrease

depreciation

arising

from the sale and le

aseback of Clayton

Hotel Charlemon

t, Dublin

in April 2020.

Under IFRS 16, the rig

ht-

-use assets

are depreciated

on a straight-line basis

to the end of the

ir useful life, most

typically the e

nd of the lease term.

Depreciation o

f right-

-use assets

decreased by €1.

mill

ion to €19.5

million due p

rincipally to the

impairment of right-

-use assets

in 2020 and remeasuremen

t of the

Ballsbridge H

otel lease liabili

ty which

subsequently matu

red at the end of

2021.

This was partially offset by th

full year impact of Clayton

Hotel

Charlemont, Dublin, which

was leased

from April 2020 and Maldro

n Hotel

Glasgow City, which was leased fro

July 2021.

Finance costs

€milli

2021

2020

2019

Interest

expense on

loans

8.9

9.1

Impact of

interest rate

swaps

2.6

2.0

1.2

Other

finance costs

2.3

1.8

1.5

Modification

(gain)/loss on

amended

debt facili

(2.7)

4.3

Net

exchange

(gain)/loss on

financing

activitie

(0.1)

0.1

0.4

Capitalised

interest

(2.6)

(1.7)

(0.5)

Interest on

lease

liabiliti

24.4

22.4

18.9

Finance costs

32.

38.0

30.6

Finance costs decreased

by €5.

2 million

versus 2020 primarily due to the

accounting i

mpact of the modifications

of debt facilitie

s in both years. As a

result of the extend

ed loan facility

agreement execu

ted on 2 November

2021, the group reco

rded a

modification g

ain of €2.7 million in

profit or loss duri

ng the year ended 31

December 2021, princip

ally due to the

impact of the extensio

n on the timing

of cash flows. In 2020, a modi

fication

loss of €4.3

million

was recorded due

to the impact of hig

her margins.

Interest on lease l

iabilities results from

the application o

f IFRS 16. The increase

in 2021 is driven

by the full year impact

of the lease on

Clayton Hotel

Charlemont, the ope

ning of Maldron

Hotel Glasgow City, an

d the full ye

impact of the Clayton Ho

tel

Birmingham extensio

n, which was

completed in

November 2

020.

In addition, h

igher margins on the

roup’s

bank lo

ans offset lower

amounts of average b

orrowings during

the year. The g

roup’s wei

ghted

average intere

st rate for the year

increased to 3.55% (2020: 2.

and 2.68% (2020: 1.

%) respectiv

ely.

Earnings per share

(cents)

2021

2020

2019

(Loss)/earnin

per share -

basic

(2.8)

(50.9)

42.4

(Loss)/earnin

per share -

diluted

(2.8)

(50.9)

42.0

Adjusted

(loss)/earning

per share

basic

.4)

(27.2)

42.0

Although the g

rou

p’s loss per

share for 2021 (2.8 cents) continue

d to

be impacted by th

e Covid-19 pandemic

restrictions, growing

revenue an

EBITDA combined with re

duced

charges associated with de

preciation

and finance co

sts as noted above

reduced the loss pe

r share versus

2020

As the group in

curred a loss in 2021,

a tax credit of €5.1 millio

was

recognised

in profit or loss. There is no

scope to carry back any l

osses incurred

during the ye

ar ended 31 December

2021 to earlier peri

ods. However, we

are confident that the

tax losses

incurred durin

g 2021, together with

the amounts carried forward f

rom

earlier years, will b

fully utili

sed in future periods.

1 See endno

tes

►►

page 43

Financial R

eview

Trading Review

by Segment

Dublin

RevPAR

in the Dubli

n market

increased by 26.4% on

2020 levels to

€34.92 in 2021, however, remaine

68.1% below 2019 RevPAR. Give

Dublin’s reliance

on international and

corporate travel as well

as large events,

occupancies were

slower to recover in

comparison to our o

ther markets

following

the initial easing of

government restrictio

ns from 2 June.

That said, we saw encou

raging signs in

the second hal

f of the year as people

felt more comfortable vi

siting the city

and

domestic corpo

rate business

returned. Q4 was

the Dublin

portfolio’s

best performing q

uarter

in terms of occupancy, d

espite the

impact from the emergence

of the

Omicron variant, which le

d to the re-

implementation

of some government

restrictions in Decemb

er. This led to

a large number o

f events, including

Christmas parties, bein

g cancell

or curtailed and a slo

w down in

transient leisure

bookings.

Food and be

verage revenue increased

by 7.3% to €17.2 millio

(67.6% behind

2019 levels

In the

second hal

f of

2021, the Dublin po

rtfolio generated

food

and be

verage revenue of €13.3

million, rep

resenting

.5%

the

equivalent peri

od in 2019 as the

reductions in

occupancy were

exacerbated by the

lack of conference

and banque

ting activity.

The Dublin po

rtfolio utilised

government g

rants and assistance

totalling €29.3 mil

lion for the year.

This, and the contin

uation of

the proactive co

st reductions,

reduced the i

mpact of lost

revenue on

EBITDAR.

2 See endno

tes

►►

page 43

3 See endno

tes

►►

page 43

Dublin

€million

2021

2020

2019

Room revenue

52.1

43.5

176.3

Food and beverage re

venue

17.2

16.0

53.0

Other revenue

5.7

16.1

Total revenue

75.0

65.2

245.4

EBITDAR

31.0

17.5

119.7

Hotel EBITDAR margi

n %

41.4%

26.8%

48.8%

Performance statistics

(like for like)

2021

2020

2019

Occupancy

37.8%

30.4%

87.7%

Average room rate (

€

)

92.29

90.76

124.79

RevPAR (

€

)

34.92

27.62

109.40

RevPAR change % (year on year)

26.4%

(74.8%)

Dublin owned and l

eased portfolio

2021

2020

2019

Hotels

Room numbers

4,091

4,488

4,482

• Dublin

• UK

• Regional

Ireland

2,949

1,86

4,09

ROOM

NUMBERS

HOTELS

33%

28%

39%

% OF

REVENUE

28%

31%

41%

% OF

EBITDA

€

100

€

120

€

140

€

160

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dublin recovery

–

ccupancy % and

2019 occupan

2020 occupan

2021 occupancy

2019 ARR

2020 ARR

2021 ARR

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

Regional Ireland

RevPAR

in Region

al Ireland increased

by 57.7% to €49.89 in 2021, outpac

ing

the recovery of the

Dublin market.

Regional Irel

and benefitted from strong

pent

-up staycation demand fol

lowing

the easing o

f restrictions

in Ireland from 2 June

. However,

RevPAR’s remain

ed 31.6% behin

d 2019

levels, hig

hlighting there is a

way to go to meet p

re-pandemic

performance leve

ls.

Q4 occupancy, which i

s typically a

lower demand p

eriod for the region

as its portfolio is d

riven by domestic

leisure de

mand, decreased to 54.0%,

following a hig

h of 76.2% in Q3. The

emergence o

f the Omicron variant and

associated gove

rnment restrictions in

December 2021 dampene

occupancies d

ue to reductions in event

attendance

and booking

cancellations.

Food and be

verage revenue increased

by 36.5% to

€15.1 million, h

owever,

remained 43.5% behi

nd 2019 levels. In

the second hal

f of the year, Regional

Ireland hotel

s generated food and

beverage reve

nue of €11.8 million,

81.1% of 2019 levels ove

r the

equivalent peri

od, as hotels benefitted

from pent-up staycation demand

The Regional

Ireland portfolio

utilised gove

rnment grants and

assistance totalling

€18.8 million

for the year. This, and the co

ntinuation

of the proactive co

st reductions,

reduced the i

mpact of lost revenue

on EBITDAR.

2 See endno

tes

►►

page 43

3 See endno

tes

►►

page 43

Regional Irel

and

€million

2021

2020

2019

Room revenue

34.0

21.6

49.7

Food and beverage re

venue

15.1

11.1

26.8

Other revenue

4.3

3.6

8.4

Total revenue

53.4

36.3

84.9

EBITDAR

23.4

8.0

24.5

Hotel EBITDAR margin %

43.7%

22.0%

28.9%

Performance statistics

(like for like)

2021

2020

2019

Occupancy

44.7%

36.4%

73.7%

Average room rate (€)

111.69

87.04

98.90

RevPAR (€)

49.89

31.64

72.93

RevPAR change % (year on year)

57.7%

(56.6%)

Regional Ireland owned and l

eased portfoli

2021

2020

2019

Hotels

Room numbers

1,867

€

100

€

120

€

140

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Regional Ireland

recovery

–

Occupancy %

and A

2019 occupan

2020 occupa

ncy

2021 occupa

ncy

2019 ARR

2020 ARR

2021 ARR

Financial R

eview

United Kingdom (local cur

rency)

At 31 December 2021, the

UK portfolio

comprised three h

otels in London and

ten hotels lo

cated in Regional UK and

Northern Ireland. Two more

hotels

were added in

early 2022.

RevPAR

increased by 73.8% to £39

.48

in 2021, albeit remain

ing 44.9% below

2019 levels. Howe

ver, our hotels in

Regional UK and

Northern Ireland

benefitted from strong

domestic

tourism followin

g the full re-opening of

hotels to the p

ublic from May, with

occupancy of

.1% in Q3 and

66.2% in

Q4. As expected, London

will take

longer to rec

over given its reliance on

international

visitors. The London

portfolio achi

eved its highest

occupancy in

Q4 despite the

emergence o

f Omicron.

UK food and beve

rage revenue

increased by 58.0% to £10.9 mil

lion,

remaining 38.8% beh

ind 2019.

However, in the seco

nd half of the

year, UK hotels gene

rated food and

beverage reve

nue of £8.7 million,

representing

92.6% of 2019 levels over

the equivalent p

eriod, as our hotels

capitalised o

n the uptick in demand

following

the substantial easing of

government restrictio

ns from 19 July.

The UK portfolio uti

lised government

assistance in the form of g

rants

amounting to £1.9 mil

lion and rates

waivers of £3.7 millio

n during the

year.

The group also

continued to utilise the

Coronavirus Job Reten

tion Scheme

(furlough), amounting to

£1.8 million,

allowing it to retain

and pay employees

who were not worki

ng in the business

using go

vernment support. However,

the number of emp

loyees on the

scheme reduced si

gnificantly during

the year, and the sche

me ultimately

ceased from 30 September 2021.

2 See endno

tes

►►

page 43

3 See endno

tes

►►

page 43

United Kingdo

£million

2021

2020

2019

Room revenue

40.3

21.7

62.8

Food and be

verage revenue

10.9

6.9

17.8

Other revenue

3.1

2.4

6.1

Total revenue

54.3

31.0

86.7

EBITDAR

17.5

2.9

33.8

Hotel EBITDAR margi

n %

32.2%

9.4%

39.0%

Performance statistics

(like for like)

2021

2020

2019

Occupancy

44.5%

30.3%

80.7%

Average room rate (£)

88.63

75.06

88.79

RevPAR (£)

39.48

22.72

71.66

RevPAR change % (year on year)

73.8%

(68.3%)

UK owned and leased portfol

2021

2020

2019

Hotels

Room numbers

2,949

2,644

2,600

£0

£10

£20

£30

£40

£50

£60

£70

£80

£90

£100

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

recovery

–

Occupancy % and

2019 occupan

2020 occupa

ncy

2021 occupa

ncy

2019 ARR

2020 ARR

2021 ARR

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

Central Costs

and Share-

Based Payments

Expense

€milli

2021

2020

2019

Central

costs

10.3

8.1

11.8

Share-

based

payments

expense

2.2

2.3

2.7

Central costs increased b

y 26.4% to

€10.3 million i

n 2021. The increase was

primarily driven

by salaries and wages

as cuts to pay and hou

rs (in place from

1 April 2020) were reversed fo

r staff

from 1 January 2021. Director pay

cuts

were not reversed u

ntil 1 April 2021.

This was partially offset by the €1.3

million rev

ersal of insurance provi

sions

in previou

s accounting periods

following

the impact of better claims

experience than

original estimates.

return to

positive free

cash flow

€million

2021

2020

2019

Net cash flow from operating

activities

90.6

22.8

155.0

Fixed lease paymen

(33.3)

(28.0)

(27.5)

Finance costs paid

(15.3)

(13.0)

(11.2)

Refurbishment capital e

xpenditure

(4.3)

(9.7)

(15.7)

37.7

(27.9)

100.6

Exclude adjusting

items with

cash impact:

Net impact of tax deferrals from

government

(12.8)

(13.5)

Debt facility fees

1.2

0.5

Pre

-openi

ng costs

1.9

Free cash flow

28.0

(40.8)

100.6

Weighted

average number of

shares (000’s)

222,831.0

197,751.6

184,601.2

Free Cash Flow per S

hare

(cents)

12.6

(20.6)

54.5

have returned to

a positive free

cash flow positio

n in 2021, albeit still

representing

a significant reduction on

2019 levels. Net cash

flow from

operating activi

ties increased by €67.

million, from

€22.8 milli

on in 2020

€90.

6 million in

2021

, driven by a €44.5

million increase i

n Adjusted EBITDA

and

€

12.8 millio

n net impact from

VAT and payroll

tax liabilities deferred

under government sup

port schemes

during the ye

ar. These are expected to

be pa

by early

2023

Fixed lease paymen

ts have increased

due to the ne

w lease relating to

Maldron Hotel

Glasgow City from

July 2021, the full ye

ar impact of

new leases in 2020 an

d timing

of payments.

Due to the prolo

nged impact of the

pandemic on

our business, we

continued

to reduce uncommitted

capital expend

iture in order to

preserve cash when the

business

was under restrictions.

1 See endno

tes

►►

page 43

See endno

tes

►►

page 43

Financial R

eview

Capital

Structure

Quality

long

term leases

Debt

Equity

Asset-backed

Balance Sheet

We are committed to main

taining an

set-backed balance she

et for a

number of reasons. Our rob

ust balance

sheet provide

s security and flexi

bility,

which was critical durin

g the Covid-

pandemic. It provi

des strong security

for the facilities p

rovided by our

banking club, as hi

ghlighted by our Net

Debt to Value

ratio of 24% at 31

December 2021.

Now, as we emerge from

the pandemic

and look forward, it is a great pl

atform

for further growth and o

pportunity.

Our strong covenan

t increases our

attractiveness amongst the real e

state

investor community a

nd gives access

to opportuni

ties for growth at

competitive yi

elds.

The value of o

ur property, plant and

equipment i

ncreased by €41.2 million

to €1,243.9 million at the

end of 2021

(

2020

: €1,

202.7 million

2019: €1,471.3

million). The in

crease is driven by net

revaluation upli

fts on property assets

of €21.2 million, fore

ign exchange

movements which in

creased the value

of sterling de

nominated assets by

€24.

million an

d additions of €20.4

million, partial

ly offset by the

depreciation

charge of €27.0 million.

Capital Structure

I would like to rei

terate the comments

made by Dermot last year on

the

importance of ou

r relationships with

our banking partne

rs, institutional

landlords and

shareholders and

acknowledge the

ir continued

support during

2021.

As we look forward, we remain

committed to carefully manag

ing our

capital structure to ensure

we have the

right mix of equi

ty, debt and leases to

continue on o

ur path of growth while

bearing in

mind the challenges of

operating i

n a cyclical industry.

Banking partners

We place g

reat value on the quality of

our relationshi

ps with our banking

partners and are grateful for the

continued

support during 2021 as we

operated under the p

rolonged effects

of Covid-19. In November, we ag

reed

an extension to

our debt facilities to

October 2025 and also d

eferred testing

of the Net Debt to EBITDA and Inte

rest

Cover covenants u

ntil June 2023. This

allows us to maintain

financial agility

given the unce

rtain trajectory of Covid-

19.

The undrawn loan

facilities at 31

December 2021 were €257.4

million

(31 December 2020: €247.9 mill

ion).

Real Estate Investors

We have strong p

artnerships with our

real estate investors, which

include

Deka Immobilien

, Aviva Investors,

Aberdeen Standard In

vestments, Union

Investment and Art-Invest Real Est

ate

and our reputatio

n as a strong, reliable

covenant has be

en enhanced through

our actions duri

ng the pandemic. We

are optimistic that

this will bring

more opportuniti

for growth.

Following

the adoption of IFRS 16 in

January 2019, lease liabi

lities on

the

balance shee

t amounted to €481.9

million at ye

ar-end (31 December

2020: €399.6 million). The

correspondin

g right-

-use assets were

€491.9 million at ye

-end (31

December 2020: €411.0 mil

lion).

We have always con

sidered leases as

another form of deb

t, with the

associated lease co

sts being a financial

commitment for the group. We

look

for a strong stabilised

rental cover

(e.g., typically 1.85x for UK leases

) for

all new lease

s we commit to. Due to

the continued i

mpact of Covid-19, our

hotels did

not meet the operating

levels requi

red to meet this target in

2021. However, we are confid

ent that

these propertie

s will deliver as the

hotel industry recove

rs.

Shareholders

Similar to 2020, we were

unfortunately

unable to p

ay dividends to our

shareholders in

2021 as we continue to

protect liqui

dity at this time. As a

management team, we greatly

appreciate the co

ntinued support

shown by our shareho

lders, and we are

confident and

committed to taking

advantage of the o

pportunities that

will arise as the world

recovers from

Covid-19.

1 See endno

tes

►►

page 43

Asset backed balance sheet provides

Strong covenant for real estate investors who are funding our growth

Security for our banking

partners

Optionality to sell an asset to

provide cash for protection or re

-investment

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

On 22 January 2022, the Irish

government li

fted almost all of its

Covid-19 restrictions, with no l

imit

on trading hours, capacity o

r social

distancing restrictio

ns, advice

surrounding

working from home

was also lifted, with peop

encouraged

to return to offices.

Similarly, all restriction

s have now

been removed

in the UK. These

relaxations give

great cause for

optimism for hotel

iers and for

society as

whole.

While January an

d February are

traditionally o

ur quietest months, trade

in January 2022 was disrupted by

restrictions and un

certainty

surrounding

the Omicron Covid-

variant. The lifting o

f restrictions in

both Ireland an

d the UK towards the

end of January resul

ted in a rise in

bookings and ‘li

ke for like’ group

occupancy in

creased from 38% in

January to

% in February.

Further to the easing

of government

restrictions, we, at Dalata, have mo

reasons for excitement an

d optimism

as we continue to

add hotels to the

Dalata portfolio.

Since the start of the year, we have

opened a Clayton h

otel and a Maldron

hotel in Manch

ester City centre. On

1 February, we also anno

unced the

roup’s

entry into Co

ntinental Europe

as we agreed with Art-Invest

Real

Estate to operate the le

asehold

interest at its Hotel Ni

kko Düsseldorf

Germany, which we then o

pened

to the publi

c on

February. This

is a testament to our success at

navigating the

Covid-19 crisis and

maintaining stron

g relationships

with the investor co

mmunity,

proving ourselve

s to be a strong

and reliable cove

nant.

We will open a furthe

r four new hotels

during the ye

ar located in Glasgow,

Bristol and Dubli

n (two hotels

We are

also motivated by the

challenge to

build our existin

g portfolio towards

pre-pandemic tradin

g levels.

As we look forward, and i

n the absence

of any further material

Covid-19 restrictions, we remain

optimistic abou

t our ability to recover.

There has been sig

nificant pent-

demand for travel fol

lowing the easing

of restrictions in previ

ous waves of

the pandemic, and

we expect this

to continue

as other segments of

demand return in a mean

ingful way.

As more and more compan

ies return to

their physical o

ffices, we expect

this to be a catalyst for increase

domestic corporate trave

l and the

return of internatio

nal corporate

travel and confere

nces.

Of course, we are all aware of the

challenging

headwinds facing the

sector at present, and while

we are

well positi

oned to face these at Dalata,

we are not immune to the

ir effects.

Inflationary pressures on

items such as

utilities, food

and beverage, linen

costs, supply chain pre

ssures and

labour shortage

s are industry-wide

challenges. Howe

ver, we believe that

our scale in Irel

and, our decentralised

and flexible

operating model with a

keen focus o

n cost control as well

as our strong relatio

nship with

suppliers will

help mitigate these

impacts, while our cul

ture, values

and developmen

t opportunities

will help

us recruit and retain staff

in the current e

nvironment.

At Dalata, we beli

eve it is time to look

forward. Whilst uncertainti

es around

the pandemic an

d the possibility of

further bumps along

the path to

recovery lin

ger, we continue to

proactively manag

e the business as we

always have. We are moni

toring the

current conflict in

Ukraine and its

potential wid

er global implications.

We are ready to take

on the challenges

and opportunitie

s that

will arise in 2022, and

we believe our

strong asset-backed balan

ce sheet,

agile operating

model and our stable

core teams give us a g

reat platform

to do so.

Carol Phelan

Chief Financial Office

Endnotes

See Supplemen

tary Financial

Information which con

tains definitions

and reconciliatio

ns of Alternative

Performance Measures ("APM"

) and

other defini

tions on

►►

pages 191 to 197.

Performance statistics inclu

de a

full-year performance o

f all hotels

regardless of when acq

uired. The

Dublin portfol

io excludes the

Ballsbridge H

otel as the hotel has

effectively not trade

d since early 2020.

The UK portfolio excl

udes Maldron

Hotel Glasgow, which

opened in August 2021.

Room numbers and h

otel numbers

reported for the g

roup’s owned and

leased portfol

io includes hotel

s that

are operational

at year-end, and

therefore exclud

es Clayton Hotel

Manchester City Centre, Mal

dron Hotel

Manchester City Centre and

Hotel

Nikko Düsseldo

rf, all of which opened

to the publi

c in early 2022,

and the Ballsbrid

ge Hotel as the le

ase

matured at the end o

f 2021.

Under IFRS 16, fixed le

ase payments

are represented b

y lease repayments

and interest on

the statement of

cash flows.

Outlook for the future

July 2021 to June 2022

12 months of growth

8 HOTELS

2,202 ROOMS

HOTEL NIKKO

Düsseldorf

February

2022

THE SAMUEL HOTEL

Dublin

April 2022

MALDRON HOTEL

Manchester City Centre

February 2022

CLAYTON HOTEL

Bristol City

March 2022

MALDRON HOTEL

Merrion Road, Dublin

June 2022

CLAYTON HOTEL

Glasgow City

June 2022

CLAYTON HOTEL

Manchester City Centre

January 2022

MALDRON HOTEL

Glasgow City

August 2021

July 2021 to

June 2022

Dalata

Hotel

Gro

plc

Annual Re

port & Acco

unts 2021

RISK MANAGEMENT

Adapting to a

changing risk

environment

Managing risk and a

ssessing

opportunities i

n uncertain times

The last two years have shown u

s the

value of our fle

xible and sound risk

management framework. Our

businesses have

experienced full

closure due

to government public

health restrictions, partial reo

pening,

new operating

rules once open and

evolving gu

est expectations. As a

result, we have had to

adapt and

consider a myriad o

f shifting risks

and opportunitie

s in a fast-moving and

changeable en

vironment for

our business.

The board is respon

sible for managing

risk in Dalata, and a risk manage

ment

policy is in place

The audit and risk co

mmittee assists

the board in thi

s task and in evaluating

our group-wide

risk governance

structures. We also have well-

established and

sound risk

management poli

cies and

structures in place.

This governance

and assuranc

framework allows us to for

mally

consider the g

roup's risks while also

supporting fle

xibility when assessing

emerging risks an

d opportunitie

Managing risk i

s embedded throughout

our business, our p

rocesses and

internal con

trols

Almost all function

s oversee risks in

some respects, whether asse

ssing risk

or implementin

g prescribed risk

mitigations de

veloped within the

group

In add

ition, there are business

functions whose pri

ncipal activity is

leading our respo

nses to risk and

evaluating e

merging risks.

Uncertainty also provi

des us with

potential oppo

rtunities, whether i

t be a

new hotel d

evelopment opportunity,

the enhance

ment of existing hotel

facilities or the p

otential to inve

st in

business techno

logies to create a

competitive advan

tage.

Our agile risk assessment structure

enables us to e

valuate and exploit

opportuniti

es that add value to

our business

Risk Governance Framework

We adopt the p

rinciples of the

“

three

lines of de

fence” risk management

model, which has in

tegrated yet

distinct structures.

Our risk governan

ce framework sets

out who oversee

s risk management

within the gro

up.

Risk Assurance Framework

Our risk governan

ce framework

highlights assessing

and monitoring

risks

an ongoin

g and

regular process.

OUR RISK GOVERNANCE FRAMEWORK

Board

Audit and Risk

Committee

Executive Risk

Committee

Executive Management

Risk Functions

BOARD

Has overall

responsibili

ty for risk management i

n Dalata

Reviews o

ur governa

nce and assurance f

ramework and

principal risk

assessment

Assesses t

he overall risk

environment and

principa

l risks

Makes the

major str

ategic decisions for t

he group

AUDIT & RISK

COMMITTEE

Supports the b

oard on risk

management m

atters

Considers prin

cipal risks, eme

rging risks and

the group ri

sk register at

each of its me

etings

Reviews mitigat

ions and rep

orts over risk a

reas and the ac

tivities of ris

k functions,

including intern

al audit

Invites discussi

on and challeng

e from ex

ternal expertis

e in areas including insuran

ce, cyber

, data & privac

y, tax,

compliance and f

inance

EXECUTIVE RISK

COMMITTEE

Chaired by the

CEO and me

ets in advanc

e of each audit

& risk co

mmittee meeting

Undertakes de

tailed analysis

and discussi

on of risks and

the emerging risk envi

ronment

Includes Risk, H

&S, IT, HR and

Operations

senior tea

Considers int

ernal reports

on risks, mitiga

tions and planned

developme

nts

Provides guidan

ce to executi

ve and hotel m

anagement

EXECUTIVE

MANAGEMENT

Includes Head of

Risk

Tasked with imple

menting risk

mitigations

and contr

ol systems

Oversees on-the-groun

d risk manag

ement pro

cesses

Guides central and h

otel manag

ement team

Considers det

ailed risk and

control repo

rts from th

e business

RISK FUNCTIONS

Undertake ongo

ing risk and

control assessmen

ts within th

e business

Outcomes report

ed to executiv

e managemen

t and executi

ve risk comm

ittee

Includes both

internal and extern

al assess

ments

Functions include

internal aud

it, health &

safety, food

safety, fin

ance, Group IT

Risk Man

agement

OUR RISK ASSURANCE FRAMEWORK

Risk Identification

Risk Assessment

Board Oversight

Assessment of controls,

mitigations and

action plans

Oversight by

Audit and Risk Committee

Internal monitori

ng by

Executive Risk Committee

FIRST LINE OF DEFENCE

Hotel and busine

ss management

SECOND LINE OF DEFENCE

Financial Control, He

alth and Safety Management

THIRD LINE OF DEFENCE

Internal Audit

Our Principal Ri

sks

Our principal risk

s and uncertainties

are those that we bel

ieve could have

the most significant i

mpact on our

business goi

ng forward.

Accordingl

y, we report these risks

on a gross-risk basis rather than a

net

-risk basis

This approach lets us con

sider how our

mitigations and

strategies manage

these princip

al risks.

Risk Movement & Commentar

In our 2020 annual rep

ort, our principal

risks were dominated

by the Covid-

pandemic, the pu

blic health

restrictions imposed

by governme

nts

and specific action

s taken to protect

our people, ou

r business and our

financial structure.

Currently, many pandemi

c restrictions

have eased, and we

operate in a period

of uncertainty con

cerning the

trajectory of the pande

mic and the

return of internatio

nal travel.

As a result, we are optimistic ab

out the

future but remain watchful abou

t how

events unfold

. At the time of writing,

there are also in

creasing external

geopolitical

risks.

We also note

the emergence of l

abour

and supply chain p

ressures and

economic and

geopolitical

uncertainties. Ag

ain, these are

reflected in o

ur principal risks.

To mitigate again

st this, we have

positioned the b

usiness on a

sound financi

al, strategic and

operational

platform.

In addition, our con

tinued investment

in enhanced standardise

d technology

platforms gives us be

tter and

timely information

to manage in

uncertain times.

We identify b

roader challenges to

Dalata and the hospi

tality industry,

including cl

imate change and

sustainability an

d meeting

expectations in a ch

anging

hospitality en

vironment.

Our ESG committee monito

rs our

environmental

risk programme and

mitigations as part of its remit,

and

details on thi

s strategy are set out

►►

pages

and 80

In January 2022, the CEO anno

unced a

new management rol

e relating to

innovation, reportin

g to the Corporate

Development Dire

ctor, which will

support our app

roach to our

changing indu

stry.

Our develop

ment strategy continues to

generate bo

th opportunities

and risks

In contrast, other risks are part-and

parcel of runnin

g a publicly quoted

hospitality b

usiness, including he

alth

and safety and informatio

n security.

The ongoing man

agement and

mitigation o

f these risks continue

to be a focus for the b

oard

and management.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Principal Risk Analysis

External

1. Living with the pand

emic

Throughout 2020 an

d 2021, we have acted

and reacted to chal

lenges arising from the

pandemic, protectin

g our

people and b

usiness. In early 2022,

many restrictions were eased

However, there remains un

certainty

around even

ts that could impact both

the hospitality a

nd international

travel markets.

As restrictions eased from mid-202

we have also see

n other related risks

emerge, inclu

ding supply chain and

cost inflationary pre

ssures.

Mitigation

The focus of the bo

ard and executive

management is on

assessing this risk on an

ongoing basi

We have expe

rience operating in this

uncertain envi

ronment, and we leverage

our business i

nformation and technol

ogy

advantages to forecast and i

dentify our

options. In add

ition, we monitor business

costs on an ong

oing basis.

We remain confid

ent that the group can

address risks associated with the

se "l

iving

with Covid" times.

Trend:

Increasing

2021 Commentary

Our central and ho

tel managemen

structures are sound, and ou

r key management

remains in place

. We successfully reopened o

hotels in

mid-2021 and embedde

d new or

updated proce

sses into our standard

operational

routines.

2022 Focus

Our focus remains on o

ur people, our busine

and our financi

al strength.

Accordingl

y, we have factored increased

business costs into

our forecasts, thou

the direction

of these risks is uncertain

at the time of writing.

Potential Impact

A lengthy retu

rn of strict restrictions

combined with su

stained increases in

our cost base, coul

d hinder our bu

siness

strategy and performance.

External

Geopolitical risks

At the time of writing, there

are increased

geopolitical risk

s outside the group

’

control that coul

d, nonetheless, affect

the group’s

future performance

Mitigation

This is a new risk for 2022

As with our oversigh

t of the risks

associated with the pan

demic (and

outlined above

), the board remains

focused on ho

w developments could affect

the group’s pe

rformance.

Our upgraded b

usiness systems provide us

with insight into

future business levels, and

cost management strategies are al

ready i

place.

Trend:

Increasing

2022 Focus

We continu

e to monitor events closel

and believe that o

ur systems and structures

will enable us to

act

effectively should

any negative

impact on our business

become evident.

Potential Impact

If tensions increase or simil

ar events arise,

there is a risk that

ere co

uld be material

economic effects in o

ur markets

along

with increased

unce

rtainty

international

travel, hospitality and to

urism markets.

Risk Man

agement

Maldron Ho

tel

Newcastle

Strategic

3. Recruitment, retention an

d development of resou

rces

A significant factor in the

success of our

hotel expansi

on strategy is developing o

managers and future le

aders from withi

Our hotels also req

uire well trained and

motivated teams to deli

ver the expected

service to our g

uests.

Mitigation

The group has i

nvested significantly in

its unique an

d industry-focused career

development pro

grammes, and this

strategic investment wil

l continue

We have identifie

d and supported

our next gene

ration of senior

hotel manage

ment.

We also provi

de specific training to all

our teams through o

ur Dalata Academy.

Specific strategies are in

place to attract

and retain people

at all levels in the gro

up.

Trend:

Increasin

2021 Commentary

Like many other b

usinesses, the group

operates in a chal

lenging market to find

and retain resources. As a resu

lt, the board

approved a rang

e of strategies

to attract and retain resources and

highlight Dalata as ou

r industry's employe

of choice.

2022 Foc

Our strategy of investing

in people

and offering caree

r development

opportuniti

es remains unchanged.

Potential Impact

In the current envi

ronment, there is a risk

that we are unable to

recruit and retain

sufficient resources to i

mplement our

development strategy and

effectively

operate our bu

siness.

Reputational

4. Information security

and data protection

As with all other b

usinesses, we recog

nise

the threats associated with cybe

r-crime,

information techno

logy risks, and the n

eed

to protect the data we h

old.

Mitigation

The security of our i

nformation techno

logy

platforms is of

crucial importance.

Our Information Security Manage

ment

System is based on ISO27001, an

d audits,

training and pol

icies support this security

framework. The group

's investment in a

modern, standardised tec

hnology

platform, along with o

ur trusted IT

partners, assists us in managi

these risks.

A data protection an

d management

structure is supported by p

olicies and

overseen by th

e privacy committee.

Trend:

creasing

2021 Commentary

The board and au

dit and risk committee

received in

ternal and external bri

efings

on technolog

y and data protection risks.

The group co

ntinued its investment to

enhance its tech

nology infrastructure.

We rolled

out data protection training

and awareness for teams and man

agers

across the group.

2022 Focus

As new information tech

nology risks

emerge or curren

t risks develop

, we

will review thi

s important area.

Potential Impact

In the event o

f a successful cyber

event, there is a risk o

f disruption to

our business o

perations.

A loss of confide

ntial or personal data

could harm the g

roup's reputation and

result in financi

al penalties.

Strategic

5. Expansion and development strategy

Our strategy is to expand o

ur hotel

business in targe

ted towns and cities

throughou

t the UK and Ireland. A

principal consid

eration is that any

new developmen

t adds value to Dalata

over the mediu

m and longer-term.

Mitigation

Before they commence, all

development

opportuniti

es are scrutinised, assessed,

and approved

by the board. In addition,

the board is up

dated regularly on the

progress of the de

velopment prog

ramme.

Specific acquisiti

ons and development

expertise is in p

lace to identify and assess

potential oppo

rtunities and associated

risks. Our financial streng

th and experie

nce

make us, we belie

ve, a preferred partner

for hotel deve

lopments.

Trend:

Increasin

2021 Commentary

In 2021 we opene

d a new Maldron hotel

in Glasgow and pro

gressed our new

build

programme, despite d

elays caused by

the pandemic.

2022 Focus

In February 2022, we acquired the

operating leaseho

ld interest in the Hotel

Nikko in Düssel

dorf, Germany, our first

hotel in Contine

ntal Europe. We also

opened two new Manchester ho

tels

early 2022 and expect to o

pen a further

four hotels by the e

nd of Q2 2022.

Potential Impact

As we grow our busi

ness, there is a risk

that a smaller number of vi

able and value-

adding oppo

rtunities are available

or that

riskier optio

ns are taken.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Principal Risk Analysis (continued)

Strategic

6. Our culture and valu

A key differenti

ator for us in Dalata is our

culture and val

ues, which we believe can

be a competitive

advantage and supports

us in achieving o

ur business objectives.

The rollout o

f our business model is

dependent on

the retention and growth of

our strong culture

Mitigation

Culture remains a prio

rity for the board

and executive man

agement. We have

defined val

ues and behaviours which we

strive to embed in

our group, senior

management and o

ur teams.

The ESG committee consid

ers culture

as part of its remit

Our culture is suppo

rted by policies and

procedures and

investment in learning an

development. We al

so engage regularly

with our emplo

yees

and stakehold

ers.

Our strategy is to appoi

nt senior hotel

management from within the

group.

Trend:

Stable

2021 Commentary

The ESG committee consi

dered

management presen

tations and

discussions on

our culture during

the

year. In addition

, we completed a

comprehensive

employee survey in

that will provid

e additional guid

ance to us

in this area. Indicators were al

so garnered

from our guest satisfacti

on results.

2022 Focus

The ESG Committee will co

nsider a

detailed assessment o

f learnings from

the employe

e survey in early 2022.

The board will retai

n its focus on this area.

Potential Impact

There is a risk that, as the g

roup expands,

our values and

culture become diluted,

and behaviours do

not reflect our

established n

orms.

Strategic

7. Climate change, sustainabilit

y and responsible busines

The group is keenl

y aware of the risks to

society associated with

climate change,

environmental

issues, and our business

responsibil

ities. However, we also see

that

these create opp

ortunities to benefit us as

a business and o

ur stakeholders.

We understand that e

nvironmental and

climate change are

factors for our guests,

customers, suppliers and shareho

lders

when choosi

ng to do business with us.

Mitigation

The area of climate chang

e, sustainabili

and responsible b

usiness is an area of

strategic focus for the bo

ard.

A board sub-committee o

n ESG

is in place, an

d its report is on

►►

pages

and 8

The group en

vironmental steering

committee, comprised o

f central and ho

tel

management, is tasked with de

veloping

appropriate strategie

s. Further details are

set out in the Sustainab

ility and Climate

Change

section on

►►

pages

to 58.

Trend:

Increasing

2021 Commentary

The ESG committee activel

y supports the

board in overseei

ng the development and

implementation

of the group's strategy i

this area.

The group en

vironment

steering

committee is leadi

ng environmental

initiatives, and man

y programmes are

underway at the ho

tels. In addition, Green

Tourism assessed ou

r environmen

t and

sustainability p

rogrammes, which resulted

in over 80% of ou

r hotels being awarded

"Gold" standard accre

ditation.

In 2021, the group carried

out a

strategic review of its ESG prioriti

covering enviro

nmental, social, and socie

themes.

2022 Focus

The board and e

xecutive management will

continue with our in

itiatives in

this area.

Potential impact

There is a risk that our envi

ronmental

sustainability an

d responsible bu

siness

programmes do no

t meet stakeholder

expectations or that the

opportuni

ties

these create are not take

Risk Man

agement

Maldron Ho

tel

Newcastle

Operational

8. Health and safety

As a large hotel

operator, we manage a

wide range o

f life safety, fire safety,

food safety and securi

ty risks

As a large

employer, we also

manage workplace-

related risks.

The effective manageme

nt and

mitigation o

f these risks remain high on

our risk agend

Mitigation

Our hotels, emplo

yees, and guests' health,

safety and security remain a cruc

ial priority for

us, and we continu

e to invest in maintain

ing

the hotels' H&

S environments

to a high standard.

Our new hotels are

built to high

health and safety standards, and

all

refurbishments include

health and

safety as a principal co

nsideration.

We have a well

-established health, safety

and security framework in o

ur hotels.

Central support is pro

vided to all hotels,

and local dedicated

H&S resources are

in place, supported b

y information

management systems. In additio

n, a

portion of the

group's capital budget

is reserved for heal

th and safety, and

identified

risks are remediated p

romptly.

The audit & risk co

mmittee also include

health and safety risks as part o

f its remit.

Trend:

Sta

ble

2021 Commentary

We standardised the

Covid-

hygiene requi

rements within our

operational

processes. An additional

experienced

internal resource was adde

to the central H&

S team to provide

additional

expertise in this area.

All preventativ

e maintenance, life

and fire safety system servicin

g, and

management oversi

ght of health and

safety remains in place

. In addition, we

restarted the external foo

d safety audi

programme, with good

results reported.

We continu

ed our Dalata Keep Safe

Programme, accredite

d by Bureau Veri

tas,

which complie

s fully with all Ireland and

UK public heal

th and

hygiene requi

rements.

2022 Focus

We continuously mon

itor the operation

of our health &

safety processes.

Investment in these areas co

ntinues

as a priority.

Potential Impact

There is a risk that we may not

comply with these req

uirements in

our business, resultin

g in injury, loss

of life or hote

l damage.

Strategic

9. Changing hospitality

market and customer behaviour

In the last two years, we have see

n the

broader impact of the p

andemic on the

hospitality market, in

ternational travel

and guest expe

ctations. We recognise

that changes in b

ehaviour are occurring

and that these chang

es, while providing

opportuniti

es for us, also carry risks

Mitigation

The board and e

xecutive management are

focused on wid

er market dynamics and the

changes that are occu

rring.

We have inve

sted in modern and standardised

technology pl

atforms that support new

customer initiative

s, such as online che

-in,

-room services and up

dated payment

options.

Our decentralise

d management expertise,

supported by th

e centre, identifies local

market and customer trends,

which we

can then action to

create a

competitive advan

tage.

Trend:

Increasing

2021 Commentary

We rolled

out the Opera cloud platform

to all our ho

tels and implemented new

technologie

s for payments. Our hotel

teams have researched the

ir markets

and guest expe

ctations, and the board

have reviewed

strategies supporting the

expectations.

2022 Focus

A new positio

n of Innovation Manager

has been establ

ished to support our

strategy in the chan

ging market. We

are aware of how hospi

tality is likely to

operate, at least in the

short term, and

are also conscio

us of longer-term trends,

particularly techno

logy, climate change

and sustainabili

ty.

Potential Impact

The risk is that our busi

ness does

not adapt to a chang

ing market

landscape or that it do

es no

implement strategie

s that meet

customer expectations.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

RISK MANAGEMENT

Viability

Statement

the pandemic recedes,

the group emerges in

strong financial position

with the business model

and growth plans

protected.

Confirmation of

viability

Following

consideration of the group's

prospects through o

ur strategic, risk

and financial plann

ing processes, the

directors have a reason

able

expectation that the co

mpany remains

viable, will b

e able to continue in

operation an

d will meet its liabilities as

they fall due o

ver the three years to

December 2024. This assessment i

made based on a co

mprehensive

analysis of the gro

up’s:

Strategy and busine

ss model

►►

pages 7 to 16

Robust assessment of the p

rincipal

risks and the mitig

ating factors

available

►►

pages

Resilience an

d financial position

►►

page

Current trading performance

►►

pages

Policies and

processes for capital

management, financial

risk

management obje

ctives, details of

its financial in

struments and

hedging activi

ties and exposures to

credit and liq

uidity risk

►►

pages

169

177

Contracted capital exp

enditure

►►

page 1

Profile of debt facil

ities



►►

pages

159

164

Future trading prosp

ects in

scenarios as set out be

low

Setting the scene

The successful vaccinatio

n rollout and

the evolution o

f the virus ha

allowed

recovery of the h

ospitality industry to

commence. The

group

’s financial

position remai

ns strong, and it has

significant finan

cial headroom with

cash and undrawn de

bt facilities o

€298 million at the

end of 2021.

Furthermore, the busine

ss is

generating

positive operating

cashflows since re-openi

ng with

H2 Free Cash Flow of

€

49.0m.

The revised bank

ing agreement from

November 2021 provid

es the group

with further security and fl

exibility as

trade recovers. The gro

up availed of a

twelve-month extensio

n to its debt

facilities, with a signi

ficant element of

the

€564 millio

n multicurrency facility

now available

until 26 October 2025.

The reinstatement of the p

revious

covenants (Net Debt to EBITDA

and

Interest Cover) was also de

ferred from

June 2022 to June 2023.

►►

page 159

The group is focu

sed on maximising

trading opportuni

ties and operational

performance give

n the lifting of

restrictions, and on i

ts future growth

including the

roup’s first step into

Continental Euro

pe in February 2022

The

gro

s al

so on

arg

o e

cute

the

forw

sal

e o

the

ide

ntial

vel

ed,

e b

uildi

Mal

ron

rio

Roa

tel

which will le

ad to a cash inflow of €42

million in

2022

The group

’

s response to

the Covid-19 pandemic is

clear evidence of its ability

to respond to challenges

while continuing to pursue

its strategy.

Assessment process

The directors assessed the p

rospects of

the group o

ver a three-year period as

in previou

s years

It aligns with the g

roup’s ris

assessment timelin

e of current

risks facing the gro

up; and

All current

committed pro

jects

are expected to be

substantially

completed du

ring this period, and

the risks associated with thi

s phase

of development are ful

considered.

Whilst all the

risks identified on

►►

pages 47 to

includi

ng climate

change, sustainabi

lity and responsible

business, could

have an impact on the

roup’s performance, the

specific

the

eat

est

the

nes

s m

utu

solvency and

liquidity are:

Risk 1:

The impacts of the pand

emic

continue to be fel

t both in regular

ongoing disruptio

n to travel

combined with su

stained increases

and in the e

conomic fallout, which

increases our cost base

and hinders

our business strategy and

performance

►►

page

Risk 3

Labour shortages resul

t in

difficulties recrui

ting and retaining

our people an

d consequentially

pushes pay rates hig

her

►►

page 48

Risk 9

do not ad

apt to changing

hospitality market an

d customer

behaviour

►►

page

The

her

sks ar

eme

imp

ortan

t, but

hes

ris

icul

l f

ens

ivi

ysi

s as

the

fin

ancia

l i

wou

ary

epe

ing

xtr

emi

the

ati

ver

e p

sib

act

thes

ris

t b

eli

ten

ria

ose

test

ena

rio

s, ei

the

div

lly

n c

tio

Bas

e cas

ile

pred

tin

the

ath

f Cov

id-19

s b

a d

ffic

t task

e d

ire

rs d

res

rth

r e

xte

siv

Cov

id-

str

ons

thi

the

suc

ss o

f th

vac

oll

and

the

tio

n o

rtu

all

str

ons

Ire

d t

UK. T

ase

ongo

ing

rec

ove

eve

d e

nin

gs a

t th

oup

’s

tel

ith

a re

e n

mal

sed

vel

s of

ade

tween

023

2025

ndi

tel lo

catio

n a

usi

ix.

ver

key

gem

appl

ied is

rio

d whe

n i

ntern

ion

tra

tic

arl

rpo

ave

enc

wil

l r

ssu

thi

mme

s g

dua

fro

the

end

Dalata

Hotel

Gro

plc

Annual R

eport & Acc

ounts 2021

Dalata’s strategic, ris

k and financial pl

anning processes

Strategic review

Risk assess

ment

Financial plann

ing process

Annual revie

w of the current plan led by the

corporate develop

ment director

Board Annual Strategy Days

►►

ge 69

Updates and approval fo

r new projects are

discussed at board mee

tings

►►

page 60

Robust assessment

of the princip

al risks

►►

pages 45 to 5

Preparation of a bud

get for the next financial ye

ar and

projections for the

following two financial ye

ars

Subjected to stress testing and

sensitivity anal

ysis and

regularly up

dated

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Maldron Ho

tel

Newcastle

Base case (continued)

Our base case reflects the fol

lowing

additional

key assumptions:

Forecasted capital spen

including on en

try to new

leases, of

€164

millio

n over

the three-year perio

€60

million

of spend was committed a

31 December

2021

Execute forward sale of

residential un

its for

€42 million in

2022

►►

page 15

Current pipeli

ne of 9 hotels open

in line with expectati

ons and take

three years to reach no

rmal

operating p

erformance

►►

page 27

€

26 million h

as been deferred

nder

the warehousing of tax

liabilities and

paid

at the end

of 2022

►►

page 137

The base case projectio

ns show that

the group can

comfortably meet all its

liabilities and

obligations as they fall

due and remain

s in compliance with its

debt covenan

ts.

Stress testing

Based on its risk assessmen

t, the group

has modelle

d severe but plausible

scenarios which co

uld affect the

viability o

f the group and has

considered i

ts proposed responses

over the next three

years. Under all

four scenarios, the group

can

comfortably meet all i

ts liabiliti

and obligatio

ns as they fall due

and remains in compl

iance with

its debt coven

ants.

The directors have al

so considered the

impact of a further decrease i

n the

group’s asset values an

d are

comfortable that the gro

up can remain

in complian

ce with its Net Debt to

Value covenant whi

ch is in place for

testing until Dece

mber 2022. At

current debt leve

ls, the group’s

property value

s would need to

decrease by ove

r 55% to breach

covenant levels.

►

page 159

Mitigating actions

Mitigating actio

ns are not necessary to

assure the ongoi

ng viability of the

group. R

urbishment capital

expenditure h

as been reduced in line

with the reductio

n in revenues which

align with ou

r banking covenants. If the

impact of risks materiali

sing did

require

mitigating actio

ns, there are a number

of actions availabl

e to the group as

demonstrated durin

g the Covid-

pandemic. These in

clude:

cre

all

end

ture

thro

ugh

the

intr

odu

n o

mpo

ts/

ced

ion

n a

sen

spe

mpo

raril

duc

fur

the

refu

hme

due

mod

d w

ell

ste

d p

rtf

oli

stp

ning

all

mmi

tte

vel

tal

end

ure

Exe

ale

set

ter

got

tio

s wi

king

rtn

ree

furt

her

upp

fle

bil

Rai

g e

from

reh

thd

win

g d

vid

Reverse Stress Test: Lockdown

The possibili

ty of new Covid-

variants

carr

ies

the risk of restrictions bein

imposed at differen

t intervals.

Management has conside

red a more

severe scenario that lo

oked at how

long the group

could survive a full

lockdown. Hotel

s remain closed to the

general publi

c indefinitely, resulting in

group occupancy o

from demand

from essential services and a qu

arterly

EBITDA loss of €3.6m with

ongo

ing

government supp

ort consistent with

that provided i

n Q1 2021.

e key

mitigating actio

ns taken include

reducing capital e

xpenditure to

committed and emerg

ency health and

safety spend

ing

only. The grou

p also

does not assume payme

nt of deferred

tax liabilitie

s of

€26

m to government as

currently projected

in December 2022.

Despite such a severe stress tes

t which

the directors do

not consider

reasonably po

ssible, the group would

be able to contin

ue operating until

the end of Q2 2024 but woul

d have

breached covenants from June

2023.

For the purposes o

f looking at the

group

’s liqu

idity, this stress test

assumes the ongo

ing consent

and support of ou

r banking club

to access available

debt facilities,

despite cove

nants being breached

In such circumstances, addition

options may be

available beyond

what is set out here.

Scenarios modelled

Principal risks

1. Seasonal restrict

ions to combat

surges of

Covid-

As we start

“living with t

he Pandemic”, tr

ade cont

inues to be disr

upted by seasonal

surges of Covid

-19 during the

winter

Assumptions and le

vel of sev

erity reviewed:

Restricti

ons in the for

m of social dist

ancing, reduced c

apacity at e

vents and limits t

o hospitality

trading hours

are re

introduc

ed in January eac

h year, with occupan

cy for the group

reducing t

o 3

. The impact on t

he group is

brief, with the

hotels perf

orming as expec

ted from Februa

ry onwards

. We assumed no gove

rnment suppo

rt in this scenario. G

roup

EBITDAR margin r

educes by

approximate

ly 80 bps.

(1) Living wi

Pandemic

2. Elevated inflat

ion in

recovering

demand environ

ment with l

abour shortage

The current

inflationary

backdrop continue

s for an exte

nded period of

time with limit

ed opportunit

y to recover thr

ough

pricing inc

reases in the n

ear term and is

compounded

by continue

d shortages in the

labour market.

Assumptions and le

vel of sev

erity reviewed:

In the immediat

e post-pandemic

recoveri

ng demand envir

onment, the

market is

slower to adjust

pricing to pas

s on rising

inflation. We al

so face

higher payroll costs

due to increase

s to pay rates across t

he board to

attract and re

tain staff. This

results in

margins being impai

red in the medi

um term. We assu

me our f

ocus on inno

vation does

not materialise in

increase

d efficiencies t

o offset this.

(1) Living wi

Pandemic

(3) Recr

uitment,

retention

and

development

resourc

3. Reduced levels of i

nternational

corporate t

ravel

Internati

onal corporate

travel does not r

eturn to pre-Covid le

vels during our fo

recast horizo

n as companies r

educe their

travel d

ue to climate cha

nge concer

ns or new ways o

f working post the

pandemic. We assume o

ur strat

egy to attrac

t a

greater sha

re of that int

ernational corpor

ate travel

through achieving pe

rformance le

vels in ESG, which make us a

preferred

partner, is not

achieved suffici

ently quickly t

o offset in t

he period tested.

Assumptions and le

vel of sev

erity reviewed

Considere

d the impact o

f a 20% reducti

on in corporate

travel, which conservat

ively is not r

eplaced with

demand from any

other se

gments or offse

t by declines

in competiti

on from weaker

competitors cl

osing.

(9) Changing

hospital

ity market

and custo

mer

behaviour

4. A combination of

scenarios 1-

–

Direc

tors believe thi

s is a severe

scenario and unl

ikely.

As above

Sustainabil

ity and Climate

Change

Clayton H

otel

Charlemont Dub

lin

Maldron Ho

tel

Newcastle

Clayton H

otel

Charlemont Dub

lin

SUSTAINABILITY AND C

LIMATE CHANGE

Alignment to the UN Sustainable Development Goals

We identified ten targets (from seven

of the goals)

aligned with our ESG initiatives.

The 17 Sustainable Development G

oals (SDGs) lie a

t the heart of the United Nations

2030

agenda for

sustainable development, which w

as adopted by all UN M

ember States in 20

15.

considered the

goal’s

169 targets to assess thos

e meaningfully aligned with our ESG pr

ogramme.

Pillars

Theme

Company Metric

Goal

Goal Target

People

Diversity

and

inclusion

Diversity acros

workforce (board,

management etc.)

8.5 |

By 2030, achie

ve full

and producti

ve employ

ment and decent

work for

all women and men, inc

luding for y

oung people

and persons

with disabi

lities, and equal

pay for work o

f equal value

Gender Pay Gap

8.5 |

By 2030, achie

ve full

and producti

ve employ

ment and decent

work for

all women and men, inc

luding for yo

ung people a

nd persons

with disabi

lities, and equal

pay for work o

f equal value

Diversity of

development

programmes

5.c |

Adopt and st

rengthen so

und polici

es and enforc

eable legislatio

for the

promotion of gende

r equality

and the empower

ment of all

women and girls

at all l

evels

Female promotion

5.2 |

Proporti

on of women i

n manageri

al positio

Learning

and

development

Development

programmes

4.3 |

By 2030, ensure

equal ac

cess for al

l women and men t

affordabl

e and quality t

echnical, vo

cational and ter

tiary educatio

including u

niversity

Planet

Carbon

emissions

Reducing

greenhouse gas

(GHG) emissions

13.2 |

Integrate c

limate change

measure

s into natio

nal policies,

strategie

s and planning

Waste

Management

Reducing

waste

12.3 |

By 2030, hal

ve per c

apita global f

ood waste

at the retail and

consumer l

evels and redu

ce food losses alo

ng production

and supply

chains, inc

luding post-harvest

losses

12.5

| By 2030, sub

stantial

ly reduce waste

generatio

n through

prevention, r

eduction, re

cycling and reuse

Sustainable

operations

Sustainable

infrastructure

Reducing

environmental

impact in operati

ons

and retrofitti

9.4 |

By 2030, up

grade infr

astructure and r

etrofit indus

tries to make

them sustai

nable, wit

h increased resourc

e-use efficiency a

nd greater

adoption

of clean and envi

ronmentally soun

d technologie

s and

industri

al processes, wit

h all countries taki

ng action in ac

cordance wit

their resp

ective capab

ilities

Society

Charity

Partnerships

Donations made /

Amounts raised

10.2 |

By 2030, empo

wer and pro

mote t

he social, e

conomic and

political i

nclusion of all, i

rrespecti

ve of age, sex, disabil

ity, race,

ethnicity

, origin, religion

or economic or o

ther status

Suppliers

Scope 1 & 2 carbon

emissions data

collection from Ti

1 suppliers

12.7 |

Promote

public p

rocurement pract

ices that are s

ustainable, in

accordanc

e with natio

nal policies and prio

rities

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Maldron Ho

tel

Newcastle

Non-financial information statement

European non-financial

reporting directive

Dalata complies with the Eur

opean Union (Disclosure of Non-Financial and Di

versity Information

by certain large un

dertakings and groups) Regulations 2017. In this

table, we set out th

group

’s

response to managing its

non-financial prior

ities and advise where further

information on compliance

may be found in this repo

rt.

Reporting requirement

Policies and stand

ards

Further information and r

isk management

Environmental matters

Environmental po

licy

Supplier Code

of Conduct

Sustainability and

Climate Change

Stakeholder Revi

ew - Suppliers

►►

page 56

►►

page

Employee Matters

Employee Handbook

Stakeholder Revi

Employees

►►

page

Health & safety po

licy

Stakeholder Revi

Customers and Gue

sts

►►

page

Safe work practices poli

Bullying and harassment-digni

in the workpl

ace policy

Equal oppo

rtunities policy

Whistleblo

wing

Statutory Training

Stakeholder Revi

ew | Employees

►►

page

Social matters

Food standards and traceabi

lity

Community support

Stakeholder Revi

Suppliers

Stakeholder Revie

Community

Stakeholder Revi

Customers and Guests

►►

page

►►

page

►►

page

Human Rights

Modern slavery statement

Data protection pol

icy

Supplier Code

of Conduct

Diversity & Inclusi

on Policy

Stakeholder Revi

ew | Employees

Stakeholder Revi

ew | Suppliers

►►

page

►►

page

Anti-bribery and

corruption

Anti-bribery & corrup

tion policy

Stakeholder Revi

ew | Shareholders, Banks

and Real Estate Investors

►►

page 27

Business Model

►►

page 9

Policies followed, due

diligence and outcome

Our Assurance Framework

►►

page

Risk Management in Practice

►►

page

Description of princip

risks and impact of

business activity

Principal Risk Summary and Analysi

►►

page

Non-financial key

performance indicator

Non-Financial KPIs

►►

page

Sustainabil

ity and Climate

Change

Clayton H

otel

Charlemont Dub

lin

Maldron Ho

tel

Newcastle

Clayton H

otel

Charlemont Dub

lin

SUSTAINABILITY AND C

LIMATE CHANGE

Sustainability Accounting Standards Board Disclosures

Standard for Hotels and Lodging (October

2018)

SASB helps companies to i

dentify th

e ESG

concerns most relevan

t to their financial per

formance using

the SASB materiality

finder and to disclose this information to

their investors.

Topic

Accounting Me

tric

Unit of Measure

Measure

SASB Code

Energy Manage

ment

Total ener

gy consumed

109

,975,227

-130a.1

Percentage G

rid Electri

city

100%

-130a.1

Percentage R

enewable

54%

-130a.1

Water Management

Total water

withdrawn

467

,493

-140a.1

Total water

consumed

467

,493

-140a.1

Percentage o

f each i

n regions with

High or

Extremely High B

aseline Wat

er Stre

6.3%

-140a.1

Ecological Impac

Number of l

odging facil

ities located in or

near areas

of protecte

d conservation

status or

endangered spe

cies habitat

Number

-160a.1

Ecological Impac

Descriptio

n of environment

management po

licies

and practices to

preserve

ecosystem servi

ces

Discussi

on &

Analysis

Note 1

-160a.2

Labo

ur Practi

ces

Voluntary

turnover rate

for lodging facil

ity

employees

64%

Note 2

-310a.1

Involuntar

y turnover rat

e for lodging

facility e

mployees

1.2%

-310a.1

Total amount o

f monetar

y losses as a

result of l

egal proceedi

ngs associated wit

labour law v

iolations

€

zero

-310a.2

Average hour

ly wage by re

gion

€

/ £

IRE:

€11.46

UK: £9.70

-310a.3

Percentage o

f lodging fac

ility employee

earning minimum

wage by regio

IRE: 1.37%

UK 1.43%

-310a.3

Descriptio

n of policies

and programs to

prevent wo

rker harassme

Discussi

on &

Analysis

Note 3

-310a.4

Climate Change Adaptat

ion

Number of l

odging facil

ities located in

100

-year floo

d zones

Number

-450a.1

Activity Metric

Category

Unit of Measure

Code

Number of a

vailable ro

om-nights

Quantitat

ive

Number

3,330,310

-000.A

Average occup

ancy rat

Quantitat

ive

Rate

40%

-000.B

Total area

of lodging facil

ities

Quantitat

ive

618,212

-000.C

Number of l

odging facil

ities

Quantitat

ive

Number

-000.D

Percentage o

f lodging fac

ilities that

are managed

Quantitat

ive

-000.D

Percentage o

f lodging fac

ilities that

are owned & l

eased

Quantitat

ive

94%

-000.D

Percentage o

f lodging fac

ilities that

are franc

hised

Quantitat

ive

-000.D

Board approved e

nvironmental policy

in place;

Green Tourism accreditation

promoting positive ac

tion and im

proved ratings: ov

er 80% achieved a Go

ld rating.

Turnover is driven by fl

uctuation in the numbe

r of part-

time employees, infl

uenced by seaso

nality, hotel location, busi

ness mix, and demand dynam

ics, including

room occupancy a

nd event business. Rete

ntion of managers a

nd ful

l-time staff exceeds 90%.

Dalata adheres to al

l labour practices in ac

cordance with the re

levant legislation in t

he jurisdictions t

hat we operate in

nd provides rob

ust guidance a

nd safeguards

for employees to main

tain a fair working e

nvironment. Our update

d code of conduct

will be launched in 2022

, complementi

ng existin

g policies such as

whistleblowing, anti-b

ullying and harassm

ent, anti-bribe

ry and corruption, heal

th & safety, d

iversity & inclusion

employ

ee handbook and o

ur modern slavery

statement. We will also la

unch an updated

human rights policy i

n 2022.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Maldron Ho

tel

Newcastle

Climate Change Strategy

In 2021

positioned climate change at

the heart of

the group’s business strategy.

Education, research and en

gagement with our stakeh

olders has shifted the focal point for our climate

change response from hot

el operations to the board

room.

In 2022, a portion of the e

xecutive

director annual bonu

s incentive will

be base`d on speci

fic objectives

designed

to support the achievement

of the group

’s 2026 envi

ronmental

targets and pave the way for

developing

a credible decarbonisation

pathway for the group.

We are currently assessing

various

decarbonisatio

n pathways in our

operations and

hotel construction (see

►►

page 32).

Condu

cted in line with

Science Based Target Initiative

criteria,

the assessment will be co

mpleted in

the coming mo

nths.

It will form the basis of ou

r medium-

term targets and long-term emissio

reduction ambi

tion.

Our 2026 environmen

tal target

include reducing en

ergy-related

emissions (scope I and 2) by 20%

per room let by 2026 from a

2019 baseline.

We recogni

se that the majority of

our carbon impact is with

in the value

chain. This year we carried

out a Scope

3 screening e

xercise to assess the

impact of all of ou

r indirect value chain

emissions.

This process invol

ved quantifying the

emissions from each o

f the fifteen

Greenhouse Gas Protoco

l Scope 3

categories id

entified as material.

Continuing our sup

plier engagement

on decarbonisation

, we aim to collect

Scope 1 & 2 carbon e

missions data

from 100% of Tier 1 suppl

iers by 2024.

We continu

ed our journey to provide

transparent environ

mental

disclosures with ou

r 2021 CDP

response and maintai

ned a B score

This exceeded the ave

rage of B- for the

bar, hotel and restaurant secto

We will con

tinue to work to improve

this score, align with

best practice

corporate climate actio

n, and further

develop our TCFD disclo

sure.

ENVIRONMENTAL TARGETS

Energy

Waste

Food Waste

Water

Supplier

Summary

Target

Reduce energ

y-related

emissions by 20% per roo

m let

by 2026 from a 2019 baseline.

100% waste

diverted from

landfill by 2022

Reduce food

waste 15% per

sleeper by 2026

from a

2019

baseline

Reduce water

consumption

per sleeper 15% by

2026 from a 2019

baseline

Collect carbon

emissions Scope 1

& 2 data from

100% of Tier 1

suppliers by 2024

Target

Coverage

Consumption o

f natural gas,

kerosene, di

esel, gas oil and

electricity (scope 1 &

2 energy-

related emission

All waste in

Ireland and the

All hotel

All Tier 1 Dalata

suppliers

Unit

Tonnes of carbon d

ioxide

equivalent (tCO2e) per

room

let

waste

diverted from

landfill

Tonnes per

sleeper

Litres per sleeper

% of Tier 1

suppliers who h

ave

given carbon

emissions data

Percentage

Reduction

20%

N/A

15%

N/A

Base Year

2019

N/A

2019

N/A

Target Year

2026

2022

2026

2024

2018

2019

2020

2021

B-

Sustainabil

ity and Climate

Change

Clayton H

otel

Charlemont Dub

lin

Maldron Ho

tel

Newcastle

Clayton H

otel

Charlemont Dub

lin

SUSTAINABILITY AND C

LIMATE CHANGE

Task Force on Climate-Related Financial Disclosures (TCFD)

Dalata supports the recommendations

of the TCFD

TCFD is a framework that requ

ires companies to disclose th

eir climate-related risks & opp

ortunities.

Dalata is committed to provid

ing consistent, accurate, and

comparable climate-related risk

information for all stakeh

olders. We curr

ently disclose climate-related risk an

d opportunity

information through

our CDP response. We will contin

ue to put a focus on climate-related risk

and are committed to developin

g our processes to

meet all the recommend

ed disclosures of

the TCFD framework.

Recommended Disclosures

Our Actions

Governance

Describe the board’s

oversight of c

limate

related risks and opp

ortunities.

escribe management’

s role in assessing

and managing climate-related risks

and opportunities.

The board of Dal

ata Hotel

Group take

s ov

erall re

sponsibility f

or the ove

rsight of

the

group

’s cli

mate

-relat

ed risks and o

pportuni

ties. It is sup

ported in

assessing and

managing the

se risks b

y the Senio

r Man

agement te

am, the ESG com

mittee, and

the

Environmenta

l Steering

Group.

As evide

nce of our board und

erstandi

ng an

d commitme

nt to this topi

c, in Nove

mber

2021, we hel

d a half-da

y workshop

for the

full board o

n the topi

of Climate

Change faci

litated

by externa

l consultant

Strategy

Describe the climate-related ri

sks and

opportunities identified

over the short,

medium, and long term.

Describe the impact on

business strategy

and financial planning.

Describe the resilience

of the organizat

ion’s

strategy using different climat

e-related

scenarios.

Climate change

is a key t

heme

in the Da

lata Ho

tel Group ES

G strateg

The Head of

Risk & Compli

ance, sup

ported

by the Senior

Manageme

nt team

ESG committe

e, and the

Environme

ntal Stee

ring Group, ha

s identi

fied both

physical

and transitional

climate

-related ri

sks and

opportunitie

s, including

physical, reg

ulation, te

chnology a

nd rep

utational

. A full list is i

ncluded in

our

public CDP re

sponse.

The busine

ss is workin

g toward

s a cleare

r understan

ding of these

risks and

to integrati

ng this informat

ion into

business

strategy and fi

nancial

planning.

Risk Management

Describe processes for

identifying and

assessing climate-related risks.

Describe processes for

managing cl

imate

related risks.

Describe how these p

rocesses are int

egrated

into the overall risk managem

ent pr

ocess of

the business.

We identi

fy and manage

climate-

related ri

sks and opport

unitie

s through

our existi

ng Risk Mana

gement pro

cess.

The process of

embed

ding climate-rel

ated

risks and opport

unitie

s into exi

sting system

s is led by the

Head of

Risk & Compl

iance.

Metrics & Targets

Disclose the climate-related metr

ics

Disclose Scope 1, Sc

ope 2, Scope 3

GHG emissions

Describe the climate-related targ

ets

that manage climate-related risks

and opportunities

The Dalata Hote

l Grou

p has been me

asuri

ng and reporti

ng its ca

rbon footprint

since

2017, Scope

2 and 3. We

are

currently in

the proce

ss of setting cl

imate tar

get

–

both short an

d long-term

–

and plan to

publ

ish these in

2022.

We are commi

tted to de

velopi

ng our ES

G disclosure

practice an

d are ali

gning to

best

practice repo

rting framewo

rks,

such as SA

SB. We are al

so clo

sely monitori

relevant

regulations, such a

the Corpo

rate Sustai

nability Re

porting

Directive

(CSRD), the EU

Taxonom

y, and gl

obal dev

elopments i

n this space

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Maldron Ho

tel

Newcastle

EU Taxonomy

Our taxonomy eligible activities

Under the Taxonomy regulati

on, we acknowledge the requ

irement to identify

business activities

that are Taxonomy-eligible and to dis

close the percent

age of Turnover, Capital (Cap

Ex), and

Operating Expenditur

e (OpEx) that is attributable to th

ese activities.

Taxonomy regulation

The EU Taxonomy regu

lation provides

a classification system for su

stainable

activities to hel

p direct investments

towards sustainable pro

jects and

activities. It is part of a wider E

sustainable finan

ce action plan to

reorient capital

flows towards a more

sustainable eco

nomy. It establishes a

list of sustainable e

conomic activities

which contribu

te substantially to six

environmental

objectives; climate

change mitig

ation; climate change

adaptation; prote

ction of water and

marine resources; transitio

n to a

circular econo

my; pollution prevention

and control; an

d protection of

healthy eco

systems.

Accounting principles

Under the Taxonomy reg

ulation

disclose the p

ercentage of Turnover,

Capital (CapEx), and Operating

Expenditure (OpEx) that is attrib

utable

to these activitie

s. A methodology for

calculating the

se percentages was

issued in a supp

lementing document

released by the

EU Commission and

adhered to by Dal

ata throughout the

process. Dalata acknowle

dges the

novelty of thi

s regulation and thus

have adopted a conse

rvative approach

in calculating the

se KPIs.

If any ambiguity arose

during the

process of iden

tifying the defini

tion

of relevant eli

gible activities, Dalata

utilised e

lements of the alignme

criteria to give cl

arity to the proce

ss.

Turnover

Dalata’s primary busine

ss activities,

hotel and acco

mmodation provision

and food and

beverage services are

currently not in

cluded within the

Taxonomy framework. For the 202

financial year, Dalata coul

d not

proportion an

y of its turnover to the

current list of busine

ss activities

outlined in the

regulation.

Capital expenditure

Given the nature o

f Dalata’s

operations, the co

nstruction and

buildings activi

ties were deemed

most

applicable in resp

ect of capital

expenditure. To cal

culate this, Dalata

divided the total taxon

omy eligible

capital expend

iture by the total

additions to non-current assets in

2021. For further information

our accountin

g policy for capital

expenditure, pl

ease see

►►

page

119

Operating Expenditure

Taxonomy elig

ible operating

expenditure rel

ates to assets or

processes associated with Taxon

omy

eligible e

conomic activities, including

training and o

ther human resources

adaptation nee

ds, and direct non-

capitalised co

sts that represent

research and deve

lopment. For this

reporting year, Dalata were u

nable to

identify any Taxon

omy eligible

activities that were reflected i

n our

operating e

xpenses.

Taxonomy eligible activities

Dalata conducted a hi

gh-level

analysis of busin

ess activities, and

the following were

identified as

Taxonomy eligi

ble:

7.1 Construction of Buil

dings

–

building

projects for company use

or resale.

7.2. Renovation of e

xisting buildings

–

construction and ren

ovation of Dalata’s

buildings and

facilities.

7.3 Installation, maintenan

ce and

repair of energ

y efficiency equip

ment

–

Includes windo

ws, doors, light sources,

and HVAC systems.

7.4 Installation, maintenan

ce and

repair of chargin

g stations for electric

vehicles in

buildings

7.5 Installation, maintenan

ce and

repair of instruments and

devices for

measuring, regul

ation and controlling

energy pe

rformance of buildings

–

Includes smart thermostats,

sensing

equipment, build

ing and energy

management systems (BEMS) and

smart meters.

7.6. Installation, mainten

ance and

repair of renewabl

e energy

technologie

s. (e.g. Solar panels)

–

Includes rene

wable energy

technologie

s, such as PV & thermal

solar panels and

energy storage un

its.

7.7 Acquisition

and ownership of

buildings

–

pro

cess by which Dalata

procures real estate and

exercises

ownership of that real

estate.

BREAKDOWN OF TAXONO

MY ELIGIBLE ECONOMIC ACTIVITIES FOR DALATA FOR 2021

Total

Taxonomy Eligible

Taxonomy Non-el

igible

€

000

€

000

€

000

Turnover

191,990

100

22,505

13,527

8,978

pEx

Not disclosed

Sustainabil

ity and Climate

Change

Clayton H

otel

Charlemont Dub

lin

CHAIR’S OVERVIEW

Corporate

Governance

Dear Shareholder,

On behalf of the b

oard, I am pleased

to present the Corp

orate Governance

Report for the year end

31 December 2021.

Corporate Governance Cod

The company adop

ts the principles and

provisions o

f the UK corporate

governance

code (the Code) and

the Irish annex on

a comply or

explain basis.

This year we complie

d with th

Code throughout the

year with the

following

exceptions:



Provision 11, board i

ndependen

between May and Octo

ber

please see the

nomination

committee report on

►►

page

for further details.



Provision 38, executive

director

pensions (we have b

een fully

compliant since

1 January 2022).



Provision 41, workforce e

ngagement

on executive

pay.

Please see the remune

ration

committee report

►►

pages 8

and 88

for explanatio

ns concerning

provisions 38 an

d 41.

Governance

Since the decl

aration of the Covid-

pandemic in 2020, the

board has

focused on the

impact of the pandemic

on all our sharehol

ders, employees,

suppliers, partners and

customers and

is committed to del

ivering strong

corporate gove

rnance to them

The board contin

ued to maintain a high

level of e

ngagement with the

management team in pro

viding

guidance and sup

port to them

during 2021.

Board meetings and

engagements with

management were he

ld virtually for

much of 2021 because o

f government

restrictions, with physical bo

ard

meetings resuming l

ater in the year

The recent return to ph

ysical meetings

has been very we

lcome and will be our

preference as we go

forward with

effective use of vid

eo conferencing

technology whe

re that adds value.

Board Composition

As set out in

revi

ew on

►►

page 3

, 2021 was a ye

ar of change for

our board in both i

ts executive and

non-executive

composition. The

recruitment process is set o

ut in

detail in the

nomination committee

report on

►►

page 71

The new board members, non

executives, Ca

rion

a Hallahan

and Gervaise Slowey and

executive

Carol Phelan, introd

uce new skills

and experien

ce we didn’t have on

the board befo

re, and this is

very welcome.

Board Effectiveness

In 2021, the board und

ertook an

internal bo

ard performance evalu

ation,

and I am happy to rep

ort that the

results of this self-evaluation

provided

evidence

of the effective performance

of the board and

its committees and

provided feedback

for improvement in

2022.

More information can b

e found

►►

page 69

Stakeholder Engagement

The board ensures o

ngoing

engagemen

t with stakeholders

throughou

t the year and acknowledge

the clear respon

sibility it has to

promote the lo

ng-term success of the

company for its stakehol

ders. This

long-term approach

defines how the

strategy

is set and allows the bo

ard to assess

risk and deli

ver sustainable value

to stakeholde

rs.

Further details of stakeho

lder

engagemen

t are outlined on

►►

pages 17 and

I am proud to serve as Chair o

f Dalata,

and we will co

ntinue to focus on

building on ou

r success and creating

long term value

for our stakeholders. If

any shareholde

r wishes to contact me

about the annu

al report's content,

please do so

through the company

secretary at the company's address.

John Hennessy

Non-executive Chair

See the UK Corporate

Governance Code on:

frc.org.uk

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Image placeholder

BOARD OVERVIEW

Principal respo

nsibilities include



Establishing the

group’s

strategy,

business obje

ctives and long-term

plans.



Review and appro

val of

acquisitions, capi

tal projects

and group fin

ancing



Overseeing the

business and affairs

of the group in li

ght of emerging

risks and oppo

rtunities.



Selecting and

maintaining a

succession plan fo

r key members

of management.



Review and appro

val of the

annual budget.

Board meetings and attendan

The board hel

d nine formal meetings in 2021 an

d met for additio

nal full-day sessions in

May, June and Novembe

r to receive presentatio

ns from members of the managemen

team, review strategy an

d for its annual traini

ng day.

Member

Attended

John Henne

ssy

12/12

Pat McCann*

8/10

Dermot Crowley

12/12

Stephen McNally

12/12

Share Casserly

12/12

Margaret Sweeney

12/12

Alf Smiddy**

3/3

Robert Dix

11/12

Elizabeth McMeikan

12/12

Cathriona Hallah

an***

2/2

Gervaise Slowey**

1/1

*Pat McCann retired f

rom the board on 31

October 2021

Alf Smiddy retired from

the board on

April 2021

***Cathriona Hallaha

n joined the board on

1 Novem

ber 2021

****Gervaise Slowey joi

ned the board on

1 December 2021

c b

erl

n H

hai

r),

t C

ecu

, M

arg

et S

zab

(

eta

ry)

ion

lah

Board of

Directors

Clayton H

otel

Charlemont Dub

lin

LEADERSHIP

Board of Directors

John Henne

ssy

Dermot Crowley

Shane Casserly

Non-Executive Chair

Chief Executive

Corporate Develop

ment Director

Nationality:

Irish

Expertise: John is a Cha

rtered Director

and a practising barris

ter. He is a fellow of

Chartered Accountan

ts Ireland and of the

Chartered Institute of

Arbitrators. He is als

o an

accredited mediator. He is a fo

rmer non-

executive chair of CPL Res

ources plc.

Principal Skills:

Inter

national business,

business leadership, gove

rnance,

finance, legal.

Nationality:

Irish

Expertise: Dermo

t worked with PwC, Proc

ter &

Gamble, Forte Hotels an

d Renault Ireland

before joining Jurys Doy

le Hotel Group p

lc in

2000 as head of develop

ment. He spent six

years with Ion Equity before

joining Dalata

2012 as Deputy Chief E

xecutive

–

busi

ness

development and fina

nce. He has been a

instrumental part of

the executive team

that

has overseen the grow

th of the Maldro

n and

Clayton brands in Irelan

d and the UK since

the

company floated in earl

y 2014. Dermot is a

graduate of University Col

lege Cork and a

chartered accountant.

Principal Skills:

Inter

national business, fina

nce,

industry, business leade

rship, M&A.

Nationality:

Irish

Expertise: Shane is a

graduate of U

niversity

College Cork and a char

tered accountant.

He joined Dalata in Marc

h 2014 as head of

strategy and develo

pment and has bee

instrumental in driving t

he company's

growth through acq

uisition and developm

ent

activity in Ireland and the

UK. Previously he

was head of develo

pment at Jurys Doyle Ho

tel

Group plc and also hel

d senior positions

with

Ion Equity, Microsoft Euro

pe and Mus

grave

Group.

Principal Skills:

Inter

national business, fina

nce,

industry, M&A.

Carol Phelan

Margaret Swee

ney

Elizabeth McMeik

Chief Financial Officer

Non-Executive Director and

Senior Independe

nt Director

Non-Executive Director

Nationality:

Irish

Appointed:

1 January

2022

Expertise:

Carol joi

ned the company in 20

and was appointed as

Group Head of Finan

cial

Reporting, Treasury an

d Tax in 2017. Carol

has

played a leading role wit

hin the finance te

am,

responsible for the deve

lopment of the

financial reporting func

tion during a period

rapid growth and expa

nsion. She also led t

refinancing of the gro

up's debt facilities in

2018 and has been cen

trally involved in

maintaining the group's fi

nancial strength and

liquidity during the Co

vid-19 pandemic.

Prior

to joining Dalata, Carol

held senior finance

positions in Ion Equity an

d KPMG. She is a

qualified Chartered Acc

ountan

Principal Skills:

Inter

national business, fina

nce,

industry, M&A.

Nationality:

Irish

Expertise:

Margare

t is CEO of I-

RES

Reit plc and previous

ly led DAA plc and

Postbank Ireland Limi

ted as CEO. Margaret

worked with KPMG for

15 years as a direct

or in

audit and advisory serv

ices. She is a chartered

accountant and chartere

d director.

Principal Skills:

Inter

national business,

business leadership, fina

nce, governance,

risk management, M&A,

senior executive

remuneration frame

work.

Nationality:

British

Expertise

: Elizabet

h is an experienced non

executive director a

nd was the former senior

independent direc

tor at J.D. Wethers

poon plc

and remuneration co

mmittee chair at Flyb

plc. She is the senior in

dependent director and

remuneration committee c

hair at Unite Gr

oup

plc, senior independen

t director at Custodia

Reit plc and non-exec

utive director a

remuneration commi

ttee chair at McBride plc.

She is also a non-e

xecutive director a

t the

private company Fresca

Group Ltd.

Principal Skills:

Inter

national business,

business leadership, gove

rnance, customer

people manageme

nt, change management

senior executive rem

uneration framework.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Data Privac

y & Cybersecu

rity

Information

Technology

Sustainability

International

Mkting & Me

dia

Legal

Risk Manage

ment

People Man

agement

Customer

Industry

M&A

Governance

Finance

International

Business

TENURE

< 3 years

8 years

AGE

40-45

46-55

56-65

>65

GENDER

Female

Male

Robert Dix

Cathriona Hallah

Gervaise Slowey

Non-Exécutive Director

Non-Executive Director

Nationality:

Irish

Expertise:

Robert

was a partner in KPMG

Ireland, where he hea

ded up the transactio

services division. He o

wns Sopal Limited, a

company providing advice o

n capital mark

ets,

corporate governance a

nd strategic planning.

A graduate of Trinity Colle

ge Dublin and

chartered accounta

nt, he is a non-

executive

director of Glenveagh P

roperties plc and

non-executive direc

tor of a number of

private companies.

Principal Skills:

ternational business, risk

management, finance,

governance, M&A.

Nationality:

Irish

Appointed:

November 2021

Expertise:

Cathrio

na was Managing Direc

tor of

Microsoft Ireland, drivin

g Microsoft’s

commercial business o

n the island of Ireland.

She sits on several

boards, including the U

Advisory Board, Trinity B

usiness School

Advisory Board, and Keeli

ngs. A member

of the

International Wome

n’s Forum, the Institute o

Directors, the Institute of

Accounting

Technicians (IATI), a fe

llow of ACCA, and a

fellow of the IMI. She

is also a qualified

Executive Coach.

Principal

Skills:

Inter

national business

leadership, governance, c

ustomer relation

ship

management, people ma

nagement, finance,

information technology

management, data

privacy

and cybersecurity.

Nationality:

Irish

Appointed:

1 Decem

ber 2021

Expertise:

Gervaise is a

non-execu

tive director

who serves on the

boards of

Molten Ventures plc, We

lls Fargo Bank

International, Eason Reta

il plc and u

ntil

recently, Ulster Bank Irela

nd. Previously sh

was CEO of Comm

unicorp (now Bauer Me

dia

Audio Ireland), Ireland

’s largest indepe

ndent

radio group, for four years

to the end of 20

16,

and before that held sen

ior roles in Ogilvy

Worldwide for 16 years

, most recently as

Global Client Director.

Principal Skills:

Inter

national business,

business leadership, gove

rnance, c

ustomer,

people manageme

nt, sustainability,

international marketing a

nd media,

and sustainability

BOARD MATRIX

*Independent on a

ppointment

Director

Committee memberships 2022

Other

current

Name

Age

Since

Independent

A&RCo

RemCo

NomCo

ESG

listed

boards

John Hennessy

2014

Member

Chair

Dermot Crowley

2014

Robert Dix

2014

Chair

Member

Margaret Sweeney

2014

Member

Chair

Member

Elizabeth McMeikan

2019

Member

Chair

Shane Casserly

2020

Member

Cathriona Hallahan

2021

Member

Gervaise Slowey

2021

Member

Carol Phelan

2022

PRINCIPAL SKILLS

BOARD DIVERSITY IN FIGURES

Seán McKeon

Company Secretary,

Head of Risk and Co

mpliance

Expertise:

Seán joined

Dalata after

several

years in seni

or finance

roles in re

tail and

FMCG, includi

ng Dunnes

Stores,

Keeling

Aer Rianta

Internationa

l and Diageo.

Seán is a fe

llow of

Chartered Accountan

Ireland and an

MBA gradua

te of the

UCD

Michael Smurfi

t Graduate

Busine

ss School.

Dalata Hot

el Group pl

c Annual Report & Acco

unts 2021

LEADERSHIP

Executive Management Team

Success backed

by people

“Dalata’s

experienced executive team

and hotel general managers are the

guardians of

Dalata’s

culture and values

”

Dermot Crowley

Chief Executive

Carol Phelan

Chief Financial Office

Shane Casserly

Corporate Develo

pment Director

Stephen Clarke

Group Financial Co

ntroller

Anthony Murray

Group IT Manager

Rachel Cafolla

Group Head of Fin

ancial Reporting

and Treasury

Niall Macklin

Head of Acqui

sitions

Niamh Carr

Group Head of Inve

stor Relations &

Strategic Forecasting

Paul Moloney

Head of Construction

& Capital Expenditure

Keith Rynhart

Group Financial Pl

anning and

Analysis Manager

Duncan Little

Group Capital and De

velopment Manager

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Des McCann

Chief Operations Officer

án McKeon

Company Secretary and

Head of Risk & Compl

iance

Conal O’Neill

Group General Manag

er,

Regional Irel

and and Partners

Emma Dalton

Head of Operatio

ns, UK

Dawn Wynne

Chief People

Officer

Philip O’Neill

Group General Manag

er, Dublin

Claire Oliver

Group HR Manager

Martha Mannion

Group Director of Rooms Reven

& Distribution Strategy

Aine Doyle

Head of Dalata Academy

Sharon O’Don

oghue

Head of Rooms Revenu

e, Ireland

Richard Noake

Head of Rooms Revenu

e, UK

& Northern Irell

and

Adrian Sherry

Head of Marketing

Development

Patrice Lenno

Group Director of Sales

Karen Halpin

Group Marketing

Communications Manage

Tony McGuigan

Head of Procuremen

Caitriona Conroy

Group Insurance, Risk,

Health and Safety Manage

Macarten McG

uigan

Group Internal Aud

itor

Michael McCan

Head of Ancil

lary Revenue

See full bios

of our Ex

ecutive

Management T

eam on:

dalatahot

elgroup.com

Dalata Hot

el Group pl

c Annual Report & Acco

unts 2021

CORPORATE

GOVERNANCE

REPORT

Our Governance Framework

The board oversee

s the group's

governance

framework, reviews

and approves the

strategy, monitors

management's performance ag

ainst

agreed targets and

ensures appropriate

controls are in p

lace

and operating

effectively.

The board ensure

s leadership

through effective

oversight and review.

Executive decisio

ns and

plementation of strategy are

delegated

to management.

The board fulfils a n

umber of its

responsibil

ities directly and others

through its committee

See the li

st of matters r

eserv

ed to

the board

on our websit

dalatahot

elgroup.com

OUR GOVERNANCE FRAMEWORK

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Board membership

As of this report's date, the

board comprises ni

ne members,

non-executive ch

air, five non-

executive di

rectors and three executive

directors.

The directors bel

ieve that the

composition o

f the board provides

the necessary skills, kn

owledge

and experien

ce, gained from a diverse

range of indu

stries and backgrounds,

required to manag

e the group.

The experience

of each director is

set out in thei

r biographies which

are detailed on

►►

pages 61 a

nd 62

and the board consid

ers that their

biographies reflect sui

table

breadth and de

pth of strategic

management experi

enc

Role of the

board

The board is primaril

y responsible

for the long-term success of the g

roup,

for setting the strategy for the

leadership an

d control of the group

and for providing app

ropriate

challenge to en

sure management

remains focused on

achieving the

strategic objective

s for delivering value

to the sharehold

ers and

other stakehol

ders.

The board defin

es the company’s

purpose and the

n sets a strategy to

deli

ver it, underpinned by th

e values

and behaviours that shape o

ur culture.

A sound understandin

g of how value is

created over time has b

een key in

steering strategie

s toward the level of

sustainable valu

e creation we have

delivered

. A cornerstone of

safeguarding o

ur long-term ambitions

has been a commitment to h

igh

standards of corporate go

vernance, as

well as a board of d

irectors with a

depth of expe

rience and expertise. In

making and i

mplementing actions, the

board aims to manage the

contrast

between short-term pressures and

the

long-term impacts of decisio

Information fl

ow at meetings

Prior to each board mee

ting, the

directors receive

their papers on

fully encrypted

electronic portal

system. Included in

these papers are

detailed mo

nthly accounts together

with reports from the chie

f executive,

chief financial

officer, the corporate

development di

rector and the chief

operating o

fficer.

The chief executi

ve, chief financial

officer and corporate d

evelopment

director ensure that the

board is

kept fully aware on

a timely basis of

business issues and pro

spects

throughou

t the group.

The executive manag

ement

team structure and the o

pen

communication ap

proach in the group

enable issue

s to be raised easily. Many

of these key i

ssues are brought to the

attention of the b

oard.

In consultation

with the chair and

chief executive

, the company secretary

manages the provi

sion of information

to the board for the

ir formal board

meetings and at o

ther appropriate

times.

The chair and chi

ef executive also

maintain regul

ar informal contact

with all directo

rs.

Engagement with stakehol

ders

The group active

ly engages with

stakeholders affected b

y the board’s

strategy and princi

pal decisions

including shareh

olders, employee

customers and guests, communitie

banks and landlord

s. We also engage

with suppliers, in

dustry peers,

government and

regulatory authorities.

Further details on o

ur engagement

with stakeholde

rs and how these

engagemen

ts inform our strategy and

decisions can

be found on

►►

pages

and 18

Whistleblowi

The g

roup’s whistleb

lowing

arrangements includ

e a dedicated

speak-up email ad

dress through which

all employees an

d third parties can

raise concerns in

confidence about any

possible wron

gdoings. All

whistleblowi

ng incidents are reviewed

and formally inve

stigated by the

relevant function

al heads.

2021

, the audit and

risk

committee conside

red the

roup’s whistlebl

owing policy

and arrangements, revie

wed the

whistleblowi

ng incidents and outcomes

and provided up

dates

to the board to assess the ad

equacy of

the whistleblo

wing arrangements and

to review the repo

rts arising

from its operations. T

board is

satisfied that the g

roup’s

whistleblowi

ng arrangements

are operating e

ffectively.

Division of

responsibilities

There is a clear divi

sion of

responsibil

ities between the leade

rship

of the board and

the executive l

eadership of the

company’s

business, with the

board retaining

control of strategic and

other significan

t decisions.

The board incl

udes an appropriate

combination o

f executive and non-

executive di

rectors, such that no

one individ

ual or small group of

individuals do

minates the boar

d’s

decision-makin

The chair leads the

board and

is responsible

for its overall

effectiveness in di

recting the company.

One of the critical ro

les for the chair in

doing so is demo

nstrating objective

judgement throu

ghout their tenure

and promoting

a culture of openness

and debate.

The chair also facili

tates constructive

board relation

s and the effective

contribution

of all non-executive

directors and en

sures that directors

receive accurate, timel

y and

precise information

The board has del

egated several

responsibil

ities to standing committees

of the board as detai

led below and also

to the executive

management team of

the group. The ch

air and the chief

executive's roles are se

parately held,

and the divi

sion of their responsibilitie

is established

and has been set out in

writing and app

roved by the board. A

summary of the formal role

s of the

board’s leadership

is set out on

►►

page

Corporate

Governance

Report

KEY ROLES IN OUR GOVERNANCE FRAMEWORK

CHAIR

Leads the board, sets each

meeting agenda and ensures the

board receives accurate,

timely and preci

se information to monito

r, challenge and gui

de and make sound decisions;

Promotes a culture of o

pen debate betwee

n the executive

and non-executive directors and

holds meetin

gs with the non-

ecutive directors without the e

xecutive directors prese

nt;

Regularly meets with the

chief executive and

other senior management to stay info

rmed;

Ensures effective communicatio

n with sharehol

ders and other stake

holders;

Promotes high standards o

f corporate governance

; and

Promotes and safeguards the i

nterest and reputatio

n of the company.

CHIEF

EXECUTIVE

Provides cohe

rent leadership of the company, i

ncluding representin

g the company to

customers, suppliers, go

vernments, shareho

lders, financial

institutions, employees, the

media, the communi

ty and the public an

d enhances the gro

up’s reputation;

Leads the executive

directors and senior manag

ement team in running the g

roup’s

business;

Develops and i

mplements group o

bjectives and strategy having

regard to shareholders and

other stakehol

ders;

Manages the grou

p’s risk profile and en

sures appropriate in

ternal controls are in place

;

and

Ensures compliance

with legal, regulatory, co

rporate govern

ance, social, ethical and

environmental

requirements.

SENIOR

INDEPENDENT

DIRECTOR

Works closely wi

th the chair, acting as a sounding

board and providing support;

Responsible fo

r conducting an annual performance

review of the chair;

Provides advice

and judgement to the chair as ne

cessary, serving as an intermed

iary to the

other directors when

necessary; and

Is available for shareh

olders who have con

cerns that cannot be ad

dressed through the

normal channel

s or chair or chief executive o

fficer.

NON-EXECUTIVE

DIRECTORS

Review the performance o

f executive managemen

Review group fi

nancial information and provi

de advice to manage

ment;

and

Assist in strategy de

velopment and ensure ap

propriate and effective i

nternal control

systems and risk management are i

n place.

COMPANY

SECRETARY

Ensures compliance

with board procedures and p

rovides support to the chair to en

sure

board effectivene

ss;

Ensures the board has hi

gh-quality information, ade

quate time and appropri

ate resources

to function effective

ly and efficiently;

Assists the chair by organ

ising induction and

training programmes and ensuring

that all

directors have full

and timely access to all rel

evant information;

Provides advice

and keeps the board upd

ated on corporate governan

ce developments; and

Facilitates the directo

rs’ induction programmes and assists

wit

h professional developmen

DESIGNATED NON-EXECUTIVE

DIRECTOR WITH RESPONSIBILITY

FOR WORKFORCE ENGAGEMENT

Monitors the effective

ness of engagement p

rogrammes established

for employee

;

Provides regul

ar updates to the board; and

Attends key empl

oyee events.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Time commitment

Under the terms of their app

ointment,

all directors agre

ed to the ‘Time

Commitment Schedule’, requ

iring them

to allocate sufficie

nt time to effectively

discharge thei

r responsibilities. As par

of the board eval

uation process

completed in

November 2021, each

non-executive

director confirmed that

they continu

e to allocate sufficient

time to discharge the

ir responsibili

ties

effectively. Also, any p

otential

appointment to the

board of another

company must be appro

ved by the

board.

Conflicts of interest

The board consi

ders potential conflicts

of interest as a standing

agenda item at

each board meeti

ng, and each director

is obliged to notify the

company in

advance of any i

nterest in any

transaction to be consi

dered by the

board.

In 2018, the company ann

ounced the

development of a ne

w hotel and

adjoining reside

ntial complex at

Merrion Road in Dub

lin and that Irish

Residential Prop

erties REIT plc had

contracted to purchase the

residential

development on co

mpletion. The

development of the

property is in

progress and is schedu

led to be

completed in

2022. Non-executive

Director Margaret Sweene

y is CEO and

an executive d

irector of Irish

Residential Prop

erties REIT plc.

The company appo

inted a firm of

reputable in

ternational property

agents and con

ducted a competitive

tender process to sel

l the residential

development. In advan

ce of each

meeting of the

board at which the

proposed transactio

n was due

for consideration

, Margaret Sweeney

declared he

r potential conflict of

interest. According

ly, she did not

receive bo

ard papers prepared relating

to the propo

sed transaction and was

excused from board mee

tings when

the proposed

transaction was

discussed and co

nsidered for approval.

This is a once-

off, arm’s le

ngth

transaction, and the board care

fully

applied good g

overnance procedures

to ensure the d

irector having a

potential co

nflict of interest played no

part in the deci

sion-making process.

Meetings and attendan

The board meets sufficien

tly regularly

to ensure that all i

ts duties are

discharged effective

ly. Board meetings

are intention

ally held at Dalata hotels

in different lo

cations to broaden the

board’s exposure to the

markets in

which the grou

p operates and to

provide oppo

rtunities to meet frontline

staff and other colle

agues.

Dur

, t

hel

nin

form

mee

tin

s an

e o

the

ll-d

mee

tings

rat

man

men

pre

ati

s a

day

cat

train

s o

att

anc

are

►►

page

Board committees

The principal

committees of the Board

in 2021 were the audi

t and risk

committee, the remuneratio

committee, the nominatio

n committee

and the envi

ronmental, social and

governance

committee

They support the o

peration of the

board through their focu

s on specific

areas of governance

. Reports on the

activities of the i

ndividual committee

are presented to the

board by the

respective committee

chair.

Further details on the

activities of each

committee can be fou

nd in their

respective repo

rts on:



Nomination Committee

►►

page



Audit and Risk Committee

►►

page 73



ESG Committee

►►

page 79



Remuneration Committee

►►

page

Independence

The independe

nce of each of the non-

executive di

rectors is considered upon

appointment an

d on an annual basis by

the board. The bo

ard has determined

all of the no

n-executive directors, save

for the chair who was ind

ependent on

appointment, to b

e independent within

the meaning o

f the term as defined in

the Code.

Robert Dix is a director of The

Quinn

Property Group and o

f Glenveagh

Properties plc, bo

ards on which the

former Chief Executive Pat McCann

also currently a n

on-executive director.

The Board gave con

sideration to

Robert Dix’s indepen

dence until Pat

McCann’s retirement from the b

oard in

October 2021 and con

cluded that

notwithstanding

this relationship,

Robert can apply u

nfettered and

independen

t judgement and act in

the best interest o

f the company.

The board also co

nsidered the

impact of Margaret Sweene

y’s position

as CEO of I-RES Reit on her

independen

ce in view of the Merrion

Road transaction agreed b

etween

Dalata and I-RES Reit in 2018 (see

Conflicts of Interest). The b

oard is

satisfied that there is no

ongoing

conflict of intere

st that impairs the

ability of Margaret Sweene

y to act as

an independe

nt non-executive director

of the company.

Following

Alf Smiddy’s retirement at

the conclusi

on of the 2021 Annual

General Meeting

, the board comprised

of eight membe

rs, a non-executive

chair, three non-executi

ve directors

and four executive

directors which

failed to compl

y with provision 11 of

the Code; requ

iring that at least half

the board, exclud

ing the chair, should

be non-execu

tive directors whom the

board conside

rs to be independent.

Board indepe

ndence was restored

following

the retirement of former

Chief Executive Pat McCann on

October 2021. For further details, s

the nominatio

n committee report on

►►

page 71

The board’s inde

ndence was

strengthened with

the appointment of

two new non-executi

ve directors who

joined the

board on 1 November 2021

and 1 December

2021

pec

Appointments to board

The nomination

committee is

responsible

for a formal, rigorous and

transparent procedure

for the

appointment o

f new directors. There

were two new appo

intments to the

board during

2021. Cathriona Hallahan

and Gervaise Slowey jo

ined the board

as non-executive d

irectors on 1

November 2021 and 1 Dece

mber 2021,

respectively.

Carol Phelan was appoi

nted Chief

Financial Officer on 1 July 2021

and

join

the board on 1 January 2022.

-election of di

rectors

In accordance with the

provisions of

the Code, the

comp

any’s director re

election poli

cy requires that all

directors should

retire at the 2022

Annual Gene

ral Meeting and offer

themselves for ele

ction.

Robert Dix will retire at the co

nclusio

of the 2022 Annual Gen

eral Meeting

and will no

t seek election.

Dalata Hot

el Group pl

c Annual Report & Accoun

ts 2021

New director inductions

Directors joining

the board undertake

an induction prog

ramme which covers

briefings on

the operation and

activities of the g

roup, the group’s

principal risks an

d uncertainties, the

role of the bo

ard and the matters

reserved to it, the respo

nsibilities of

the board committee

s, and the

strategic challen

ges and opportunitie

facing the grou

In late 2021, Cathriona Hal

lahan and

Gervaise Slowey joi

ned the board and

are currently compl

eting induction

programmes that

been tailo

red to

their individual

needs. The

programmes includ

e visits to hotels

meetings with seni

or management and

company advisors

Carol Ph

elan

’s

programme is design

ed to meet

her needs as a ne

w director with a

focus on regul

atory themes and

corporate gove

rnance.

Ongoing director training

and development

The board as a whole

engages in

development throug

h a series of

presentations with e

xperts on a range

of topics, includ

ing risk management,

corporate gove

rnance and strategy.

The board receive

d one full day of

presentations in May 2021 from

members of the managemen

t team

covering a varie

ty of topics related to

their areas of responsibi

lity.

In November 2021, the compan

secretary facilitated a d

irecto

rs’

training d

, which

was attended

by both execu

tive and non-

executive di

rectors.

Each director may obtain

independent

professional ad

vice at the company’s

expense in the

furtherance of their

duties as a director. Each co

mmittee is

supported by th

e company secretary

and his dep

uty. In addition, each

committee is able to

seek independen

professional ad

vice.

Board diversity

The board has adop

ted a Board

Diversity Policy whi

ch is reviewed

annually, most recen

tly in December

2021. The objective o

f the policy is to

help achieve the

optimum board

composition o

f skills and experience.

In accordance with the

policy, all board

appointments are made

on merit, i

the context of the ski

lls, experien

ce,

independen

ce and knowledge that the

board as a whole req

uires to be

effective.

The policy statemen

t also

acknowledges that an e

ffective board

will include an

d make good use of

differences in the

skills, regional

industry experie

nce, background, race,

gender and

other distinctions between

directors. These differen

ces will be

considered in d

etermining the

optimum compositi

on of the board

and, when possib

le, will be balanced

appropriately.

Further detail on

the application of the

policy is set o

ut in the nomination

committee report on

►►

page

Board evaluation

Following

the externally facilitated

evaluation in 2020, the ch

air, together

with the company secretary,

conducted an intern

ally facilitated

evaluation to

wards the end of 2021 to

assess its performance an

effectiveness durin

g the year, including

that of its committees, the

Chair and

individual di

rectors. The evaluation

process also foun

d that the board had

successfully imple

mented the

recommendations o

f the 2020 external

evaluation.

Led by the chai

r and company

secretary, the 2021 evaluatio

n was

conducted by way o

f questionnaire.

The design o

f the questionnaire

allowed di

rectors to comment on the

operations of the

board and its

committees and to id

entify areas for

improvement. The Chai

r also met with

each director in

dividually during the

year to discuss board e

ffectiveness and

composition. The

senior independent

director met with the o

ther directors to

evaluate the pe

rformance of the chair.

Feedback from the 2021

Board Evaluation

The review found

the company

achieved a ve

ry good result across all

areas, demonstrating that the b

oard is

performing well

. The board was

deemed well

-constituted to meet the

challenges ahead

and address key

strategic decisio

ns that need to be

made about the b

usiness.

The review hig

hlighted

recommendations that wou

ld further

lift the performance an

d effectiveness

of the board, inclu

ding:



Further consideratio

n of

board diversity to p

repare for

future appointmen

ts.



A review of roles an

responsibil

ities in the company

secretariat is suggested to

improve

board support.

These were discussed by the

board,

and the board ag

reed to take on the

following

recommendation as part of

its agenda for 2022:

Board Committees

Board committees were also rev

iewed

and overall were

considered to

function well i

n terms of their

effectiveness and deci

sion making

GOVERNANCE

IN ACTION

Outside its regul

ar meetings, the

board meets for full-day session

three times per year to h

ear from

members of the managemen

team, to review strategy, and fo

r a

training day to

hear from subject

matter experts on top

ics that are

relevant for the g

roup’s strategic

development or the

management

of its principal risk

May management presentati

ons



Hotel constructio

n project

management



Hotel refurbishment p

rocess



Managing en

vironmental impact

in our operation



Group procuremen

June Strategy Day



Medium-term projections



UK market update



Strategic growth alternative



European market analysi

November Training Day



Climate change work

shop

(half-day)



Analysis of Dalata’s informa

tion

security risks



Building an

inclusive culture

Dalata Hotel

Group plc

Annual Re

port & Acco

unts 2020

Risk management

►►

page

, we explain how the

board oversees risk manag

ement.

Internal controls

The board has responsi

bility for

maintaining so

und risk management

and internal co

ntrol systems and,

at least annually, revie

wing the

effectiveness of these systems.

These

internal con

trol systems are designed

to manage rather than e

liminate the

risk of failing

achieve a busi

ness objective.

They can therefore o

nly provide

reasonable an

d not absolute assurance

against material misstatemen

t or loss.

Assessment of the principal

risks

facing the group

The board and audi

t and risk

committee receive

d and reviewed

reports from group in

ternal audit to

help thei

r annual assessment of the

principal risks facin

g the group and the

controls in pl

ace to mitigate these

risks. The principal risks an

d the

mitigating factors are outli

ned on

►►

pages 47 to

Annual assess

ment of the

effectiveness of risk managemen

internal control and f

inancial

reporting systems

The board and au

dit and risk

committee receive

d and reviewed

reports from group in

ternal audit to

help with thei

r annual assessment of

the effectiveness o

f the group’s risk

management, internal

controls and

financial repo

rting systems, and are

satisfied that the systems have

been

operating e

ffectively throughout the

year to the date o

f the report.

AGM

The Annual Gene

ral Meeting will be

held on

April 2022, at Clayto

n Hotel,

Cardiff Lane, Dublin.

Formal notification wil

l be sent to

shareholders at le

ast 20 working

days before the mee

ting in accordance

with the provisi

ons of the Code. Other

general mee

tings may also be

convened fro

m time to time upon at

least 14

working d

ays’ notice or where

certain requireme

nts are met,

including pri

or approval

shareholders by way o

f a special

resolution, u

pon 14

days’ notic

accordance with the Co

de.

The Annual Gen

eral Meeting gives

shareholders an o

pportunity to he

about develop

ments of the business

and to ask questio

ns of the chair and,

through hi

m, the chairs of the various

committees and its committee

members. Shareholders attend

ing

the meeting are

informed of t

number of proxy vo

tes lodged for each

resolution.

Details of the meetin

g and resolutions

to be propo

sed are sent out in the

shareholders' Notice o

f Meeting.

The annual r

eport and

accounts

are also av

ailable on

dalatahotelg

roup.com

Meeting roo

m at the Cl

ayton

Hotel Burli

ngton Road

, Dublin

Dalata Hotel

Group plc

Annual Re

port & Acco

unts 2020

NOMINATION

COMMITTEE REPOR

At the end of a year

carefully planned

succession, we achieved

gender balance

on our board this year.

I am grateful to all who

have served over the years

and look forward to the

contributions of our

new members.

COMMITTEE MEETINGS A

ATTENDANCE

All members of the co

mmittee are

considered b

y the board to be

independen

t (the company chair being

independen

t on appointment)

Memb

Attendance

John Henness

6/6

Alf Smiddy*

2/2

Margaret S

weeney

Robert Dix**

Elizabeth McM

eikan**

4/4

Alf Smiddy

retired from

the boar

d on

29 April 20

Rob

ert Dix and El

izabeth McM

eikan

joined the

committe

e on 29 Ap

ril

2021

See the

Comm

ittee’s

terms of refer

ence on

dalatahotelg

roup.com

Dear Shareholder,

I am pleased to prese

nt the report

of the nominatio

n committee for 2021

a year of change an

d transition for the

board.

CEO and company found

er, Pat

McCann, retired at the end o

f October,

and his fello

w founding director

Deputy CEO Stephen McNally, step

ped

down at the end

of December. Dermot

Crowley was appoin

ted to succeed Pat

as CEO, and Carol Phelan

was

appointed

CFO to lead the finance

function and joine

d the board on 1

January 2022.

We advanced the

refreshment of the

non-executive

membership originally

signalled

in the 2019 annual report.

Our plan was a phased an

d orderly

replacement of the fo

ur non-

executives who were ap

pointed to the

board togethe

r in February 2014, prior

to the company’s IPO.

Alf Smiddy

stepped down

as a non-executive

during the ye

ar, and Robert Dix will

retire followi

ng our upcoming AGM.

welcomed Cathrion

a Hallahan and

Gervaise Slowey to the b

oard toward

the end of the ye

ar.

The committee also con

tinued its

engagemen

t with management on

executive successio

n and worked on

committee compositio

n as the board

members

hip

changed.

Executive director succession

The appointmen

t of Dermot Crowley as

Chief Executive was the culmin

ation of

several years of plan

ning work

undertaken by th

e committee and

board. The appointment was made

following

a process facilitated by

executive search con

sultants Korn

Ferry who identifie

d suitable external

candidates for the rol

e and assisted the

committee in its work to assess the

suitability o

f all potential candidates.

The committee was satisfied that

Dermot’s track record,

his leade

rship

qualities and his in-de

pth knowledge of

the group acro

ss all areas of the

group

’

ope

rations made him the ideal

candidate and were

happy to

recommend his app

ointment as Chief

Executive Designate in

March 2021.

A transition peri

od extending to the

end of October 2021 was ag

reed, and

on 1 November 2021, Dermot, who

has

been a member o

f the board sinc

2014

, took up the p

osition of C

hief

Executive.

Korn Ferry has no other co

nnection

with the company or any o

f its

directors other than the

provision of

recruitment services.

In April 2021, Carol Phel

an was

appointed

CFO designate and took up

the role on

1 July

2021

Carol joined

Dalata in November 2014

and, since 2017,

led

the group’s

financial repo

rting tax and treasury

teams. Her technical expe

rtise

corporate finance b

ackground and

deep knowled

ge of our business makes

her an excell

ent choice to

lead our finan

ce function.

Nomination

Committee Re

port

The committee recommend

ed that

Carol be appo

inted to the board, and

her appoin

tment commenced on 1

January 2022.

Board composition

and

non

-execu

tive

director appointments

Alf Smiddy

’s decision

to st

ep down

from the board in Ap

ril accelerated

the board’s plan to

refresh the

non-executive

membership of

the board and cu

lminated in the

appointment o

f two non-executive

directors, Cathríona Hallah

an and

Gervaise Slowey.

His departure also

meant that the

board’s compositio

no longer

compl

ied

with provi

sion 11 of the Code

concerning

independence. Between 2

April and 1 Nove

mber, excluding the

chair, the board was made up

of four

executives and

three non-execu

tives. This was

rectified upon

Cathri

ona’s 1 November

appointment.

The committee appo

inted Heidrich and

Struggles (an executive

search fi

with no othe

r connections

the

company or its dire

ctors) to assist

with the search process.

Each member of the board pro

vided

input to the anal

ysis of skills needed to

guide the recruitmen

t process. Short-

listed candid

ates were interviewed

by a

panel of two no

n-executive directors,

and successful candi

dates met with the

other non-execu

tive directors and the

incoming chief exe

cutive before the

appointment was con

firmed.

The committee is satisfied that

Cathríona and Gervaise b

ring distinctly

different skills and e

xperiences to the

board. They are warmly welco

med by

the board, and we l

ook forward to

working with the

Diversity

The committee

vie

wed the board

diversity pol

icy at its December 2021

meeting, taking

account of feedback

received throu

gh the board evaluation.

There were no po

licy changes

recommended. The b

oard recognises

the benefits o

f a diverse board and the

value it can bri

ng to its operations. In

accordance with the b

oard diversity

policy, the co

mmittee considers all

aspects of diversity, inclu

ding gender,

race, background

, skills, regional and

industry experie

nce, and other

distinctions whe

n reviewing board

composition an

d agreeing a job

specification for a n

ew non-executive

director appoi

ntment. All

appointments are made

on merit,

with due regard to

diversity. The board

considered dive

rsity in the recen

appointments o

f Cathriona Hallahan

and Gervaise Slowey a

s non-executive

dir

ectors as outlined above

Concerning

gender diversity, it is

noteworthy that the company n

ow has

a majority female board. Follo

wing the

upcoming 2022 AGM, the femal

e to

male ratio on the

board will be 5:3

(62.5% female).

The committee monito

rs the

management pip

eline and gender

diversity within i

t. The appointment of

Carol Phelan as CFO and to the b

oard is

evidence

of diversity in the pipelin

and the committee con

tinues to

monitor emergi

ng talent with future

leadership d

iversity in mind.

Board Evaluation

Details of the board e

valuation are set

out on

►►

page

Board committees

After Alf Smiddy le

ft the board at the

end of April

, the committee assess

committee structures and director

’

responsibili

ties

recommending that Liz

McMeikan join the

audit and risk

committee and that Margaret Swe

eney

and Robert Dix would jo

in this

committee.

Following the

appointments of

Cathriona Hallahan

and Gervaise

Slowey, the committee recommend

Cathri

ona’s appoin

tment to the

audit

and risk and ESG committe

with

effect from

1 January 2022

and Gervaise’s

appointment to the

Remuneration and

ESG committees with effect from

January 2022

. Following

Robert Dix’s

retirement at the end

of April,

Cathriona will chai

r the audit and risk

committee. When Al

f stepped down,

I assumed non-executive d

irector

responsibil

ity for engagement with

the workforce and passed

this

responsibil

ity to Gervaise from 1

January 2022. Finally, Shane Casser

replaced Stephe

n McNally on the ESG

committee from 1 January 2022.

I am grateful to all who have

served

over the years and l

ook forward to the

contribution

s of our new members

After a very active year of chan

ge, I

expect that we will all

ow the new

members on the bo

ard to settle into

their work, and this committee

will

refocus

the composition and

succession plan

ning needs for the years

ahead.

John Hennessy

Chair,

Nomination Committee

ROLE OF THE COMMITTEE



Reviewing the

structure, size and

composition o

f the board and

making recommend

ations to the

board with regard to any c

hanges.



Assessing the effective

ness and

performance of the bo

ard and

each of its committees, includ

ing

consideration

of the balance of

skills, experie

nce, independence

and knowledge

of the company on

the board, its dive

rsity, including

gender, ho

w the board works as a

unit, and othe

r factors relevant to

its effectiveness.



Considering

succession planning

for directors and membe

rs of the

executive manage

ment team.



Identifying an

d nominating new

members to the board.



Reviewing the

results of the board

performance evalu

ation process

that relate to the compo

sition of

the board.



Reviewing ann

ually time

input requi

red from non-

executive di

rectors.

Dalata Hotel

Group plc

Annual Re

port & Acco

unts 2020

AUDIT & RISK

COMMITTEE REPOR

During the year, the

committee continued to

complement and support

the board in overseeing

the management’s

response to the ongoing

Covid-19 pandemic.

COMMITTEE MEETINGS A

ATTENDANCE

The committee met five times

during 2021.

Member

Attendance

Robert Dix

5/5

Alf Smiddy*

Margaret S

weeney

5/5

Elizabeth Mc M

eikan**

Alf Smiddy retired fro

m the Board

on 29 April 2021

Eli

zabeth McM

eikan joined

the

committee on

29 April 2021

All members of the co

mmittee

are considered

by the board to

be independent.

The board consi

ders that the

committee chair has sufficie

nt recent

and relevant finan

cial experience

for

the role and that th

ere is sufficient

financial and co

mmercial experience

within the committee

as a whole.

See the Comm

ittee’s

terms of refer

ence on

dalatahotelg

roup.com

Dear Shareholder,

As chair of the audit an

d risk

committee, I am pleased to

present

this report setting o

ut the work of the

committee during

2021.

I am also delig

hted to welcome

Elizabeth McMeikan, who

joined the

committee in May 2021 and Cathri

ona

Hallahan, who jo

ined the committee

January 2022.

Alf Smiddy, who retired from the b

oard

in April 2021, served

on this committee

since 2014, and I would

like to thank

him

for his service

during that time.

During the year, the co

mmittee

continued

to complement and support

the board in o

verseeing

the management’s respon

se to the

ongoing Covid-19 pand

emic.

The committee suppo

rted the board in

assessing the princi

pal and emerging

risks facing the grou

p, including

reviewing the

roup’s risk management

and internal co

ntrol systems,

overseeing

the operation

of the Group Internal

Audit function,

assessing the key a

ccounting

judgements and e

stimates and

highlighting some o

f the other

important topics and the

mes

arising during

the year.

Key accounting judgements

At its May meeting, the co

mmittee

received a de

tailed presentation from

management setting o

ut the key

consideration

s for the interim financial

statements. Discussions focu

sed on the

going conce

rn basis of accounting, the

challenge of assessing the

carrying

value of goodwi

ll and right-

-use

assets and reliable p

roperty valuations

in light of the pre

vailing uncertainty.

The committee consi

dered the key

accounting judge

ments further at its

August meeting

and also received

commentary from the e

xternal

auditors on manag

ement’s approach.

This process was repeated i

n the lead

up to the full-ye

ar financial statements.

A detailed e

xplanation of the

assessment process concerni

ng these

items is given o

►►

pages

and

the committee’s report.

The other area of judg

ement that was

considered b

y the committee included

the assessment of the provi

sion for

self-insurance loss pro

visions (see note

to th

financial statements).

The committee is satisfied that

in all of these

matters, the accounting

treatment complies with rel

evant IFRS,

and none gave rise

to disagreement

between

management, the external

auditors or the co

mmittee.

Audit & Risk

Committee R

eport

Assessment of whether the annual

report, taken as a whole, is

fair,

balanced and understandabl

The committee receive

s copies of

the annual report and fi

nancial

statements during the d

rafting stage

and reviews the co

ntent, along with

results announce

ments and investor

presentations to b

e published by

the company.

The committee ensure

s that the

key messages communi

cated in

the annual report and the

other

publications accuratel

y reflect the

company’s performance and

the

strategy being p

ursued and that they

are consistent with each

other.

The committee is satisfied that al

l of

the key eve

nts reported to the board

by management in

the course of the

year, positive and

negative, are suitably

narrated in the ann

ual report.

Viability Statement

The committee receive

d and

considered the

draft viability

statement, reviewed and ch

allenged

the assumptions upo

n which the

scenario analysi

s was based and its

conclusion

s, and advised the board on

the adoptio

n of the statement.

Market Abuse Regulation

During 2021, the committee rev

iewed

the company’s compli

ance with the

Market Abuse Regulatio

ns and Market

Abuse training

plans. This was in

response to the fi

ndings issued by

the Central Bank of Irelan

d following i

Thematic Review of the co

mpany

in 2020.

Tax and Treasury Updates

During the year, the co

mmittee

received and

considered reports and

presentations from management o

the company’s tax and treasury

positions. The tax up

date provided an

overview of exi

sting and emerging

tax

risks facing the gro

up and the tax

strategy and priori

ties for the coming

years. The treasury update pro

vided an

overview of exi

sting hedging

arrangements, future hedg

ing strategy

and changes to the

group’s treasury

policy.

Further reporting

In the followi

ng pages, the committee

sets out, in more de

tail, how it fulfil

led

its role unde

r the headings of

significant accou

nting judgements and

key sources of esti

mation uncertainty,

external audit, in

ternal control and risk

management, internal

audit,

whistleblowi

ng, compliance

framework, health and safety and

insurance prog

rammes, information

security and data prote

ction

In conclusion

My thanks to my colle

agues on the

mmittee, the manageme

nt team,

external and in

ternal auditors and

advisors to the compan

y who assisted

the committee in i

ts work in 2021.

Robert Dix

Chair

Audit and Risk Committee

ROLE OF THE COMMITTEE



Monitor the in

tegrity of the

group’s financial

statements,

accounting pol

icies and key

judgements made in

the

financial statements.



Assess whether the annual

report,

taken as a whole, i

s fair, balanced

and understandab

le and provides

the information n

ecessary for the

shareholders to assess the

com

pany’s position

and

performance, business mode

and strategy.



Oversee the gro

up’s relationship

with our external audi

tor.



Review the effectiven

ess of the

group’s internal

control systems.



Monitor the gro

up’s

risk

management systems and the

identificatio

n of our principal risks.



Monitor the effective

ness of

the internal audi

t function.



Review the grou

p’s

compliance framework



Monitor health, safety and

operational

risks and the group’s

insurance prog

rams.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

SIGNIFICANT FINANCIAL JUDGEMENTS

AND KEY SOURCES

OF ESTIMATION UNCERTAINTY

Matter

Significant finan

cial judgements and key sources of estimation unce

rtainty

PROPERTY REVALUA

TIONS

In line with the

group's revaluation

policy for lan

d and buildings, valuations

are carried out by sui

tably qualified

professional val

uers at each

reporting pe

riod end.

The net carrying val

ue of land

and buildings at 31 Dece

mber 2021 was €1

,089 million (note

12,

pages 1

to 1

) (2020: €1,

059

million). The carryin

g value of land and bu

ildings is

determined u

sing fair value. The calcul

ation of fair value and

the allocation of fair value to

land

and building

s requires judgement.

The assumptions utili

sed by the valuatio

n specialists are disclosed

in note 12 to the group

consolidated

financial statements and incl

ude projected cash flows for future reven

ue and

costs, terminal valu

e multiples and discou

nt rates. Management has engaged

appropriately

qualified p

rofessional valuation specialists to d

etermine the val

ue attributable to land

and building

Management has reported

in detail to the committee

in relation to

the valuation approach, as

determined by sui

tably qualified professionals, o

f land and buildings at 31 December 2021.

The committee has discu

ssed the valuatio

n approach undertake

n with management.

Through discussi

on with management and co

nsidering the finding

s of the External Auditor, the

mittee is satisfied that the pro

perty valuatio

ns at 31 December 2021 are reasonab

le and

that the revaluation

movements have been

appropriately presen

ted in the group consolidated

financial statements.

CARRYING VALUE OF

RIGHT-

-USE ASSETS AND

GOODWILL

Detailed impairmen

t reviews are

undertaken to determin

e whether

the carrying valu

e of right-

-use

assets and goodwill

is impaired.

Right-

-use assets, representing the

group's righ

t to use underlying hotel assets, which are

operated under

lease

, amounted to €4

91.9

million at 31 Dece

mber 2021 (2020: €411.0

million). Goo

dwill amounted to €30.8 millio

n at 31 December 2021 (2020: €30.0 mil

lion).

The carrying value

s of hotel cash-generating

units (CGUs), which contain rig

ht-

use assets,

are reviewed whe

never events or chang

es in circumstances in

dicate that the carrying amoun

may not be recove

rable, whilst CGUs to which go

odwill h

as been allocated are required to b

tested at least annual

ly for impairment or al

so if there is an in

dication of impairment. As a

result of the ong

oing impact of Covid-19 on expected

trading, in particular, on near term

profitability, the

group tested e

ach CGU f

or impai

rment, deeming the impact to be a poten

tial

impairment indi

cator.

Impairment reversal asse

ssments are also carried ou

t on the group's CGUs where the

re has

been a previous i

mpairment of right-

-use assets and fixtures, fittings

and equ

ipment. When

the circumstances that caused the

impairment loss are favo

urably resolve

d, the impairment

loss is reversed immedi

ately in profit or loss.

The group app

lies IAS 36 Impairment of Assets to de

termine whether a cash-generating u

nit

with goodwi

ll and/or a right-

-use asset is impaired and accou

nts for any identi

fied

impairments through p

rofit or loss or to d

etermine whether any previous i

mpairment of right-

use assets and fixtures, fittin

gs and equipment sho

uld be reversed. On reversal, the

asset’s

carrying amount is i

ncreased, but not above the

amount that it would

have been without the

prior impairment lo

ss. Impairment losses on

goodwill are neve

r reversed. Each hotel

operating

business is dee

med to be a CGU as the cashflows g

enerated are in

dependent of other hotels i

the group.

Management unde

rtook detailed

impairment reviews on a hotel-

-hotel basis, taking

account of the val

uations prepared by quali

fied professional valuatio

n specialists and othe

factors. The assumptions uti

lised by management i

n conducting the

se analyses are disclosed

in note 10 to the

group consolidated financi

al statements and inclu

projected cash flows for

future revenue an

d costs, terminal value

multiples and disco

unt rates.

The committee has revie

wed the appro

ach taken by management, as outl

ined in

management's report to the co

mmittee, in

conducting these i

mpairment reviews and,

particular, the assumptions u

tilised by manag

ement. As part of their aud

it, the external

auditor assessed the g

roup's impairment cal

culations on a CGU-

-CGU basis.

Audit & Risk

Committee R

eport

Clayton H

otel

City of Lo

ndon

Discussions were unde

rtaken between

management and the

external auditor as to the

underlying assumptio

ns. Following discussions with

management and with the e

xternal

auditor, the committee

is satisfied that these are reaso

nable.

The recoverable

amounts of certain CGUs were

less than their pre-impairment review carryin

value during 2021 and

, in accordance with IAS 36, impairment charge

s for right-

-use assets

amounting to €0.3

mil

lion were recognised in p

rofit or loss for the ye

ar. No goodwill was

impaired in the

year ending 31 December 2021.

In line with IAS 36, reversals o

f previo

us impairments relating to o

ne of the group's Irish CGUs

were recogni

sed in profit or loss as a resul

t of improved pe

rformance forecasts. This resulted

in a reversal of pre

vious impairment charges o

f €0.4 million o

n right

-use assets (note 13)

and €0.1 millio

on fixtures, fittings and

equipment (note 12).

Accordingl

y, the committee has conclud

ed that the carrying value

of right-

-use assets and

goodwill is ap

propriately stated at 31 December 2021 and

that the disclosure

s included within

note 10, note 11 and

note 12 of the group

consolidated financial statemen

ts are adequate.

EXTERNAL AUDIT

Appointment

Our External Auditor is KPM

who were appoi

nted in 2014 and

reappointed

in 2016 when the

company became an

EU Public Interest

Entity (PIE) follo

wing its admission

the main markets

of Euronext Dublin

(formerly Irish Stock

Exchange) and the Lon

don Stock

Exchange.

The External Auditor is subje

ct to

mandatory rotation after ten ye

ars,

from the date that the company

became an EU PIE. The company has

no immediate p

lan to tender for

external audit service

s voluntarily.

Evaluation

During 2021, we evaluated

KPMG

based on thei

r work completed,

management feedb

ack and our

review of the do

cumentation

provided to

the committee.

The committee receive

d a detailed

presentation from KPMG in

November

2021, setting out its strateg

y and

priorities for the u

pcoming audit. This

allow

the committee

to provide

input and mon

itor progress against the

plan.

KPMG attend all o

f the committee’s

meetings and reg

ularly meets

the committee withou

management presen

The committee is satisfied that the

statutory audit process and

services

provided by KPMG were sati

sfactory

and effective.

Independence

The committee assessed the au

ditor’s

independen

ce by reviewing the

information and assurance

s given by

the auditor co

ncerning its

independen

ce and the procedures it

puts in place to

safeguard integrity,

independen

ce and objectivity

consideration

s relating to the provision

of non-audit service

and their fees.

The committee has impl

emented a

procedure to p

re-approve any non-

audit services provi

ded by KPMG to the

company. During 2021, KPMG p

rovided

non-audit service

s primarily in relation

to the review o

f the half-year financial

statements. KPMG fees for 2021

are

set out in note

3 to the financial

statements on

►►

page

131

Under t

fee

cap

rules, no

n-audit services are

not permitted to e

xceed a ratio of 70%

of the average an

nual audit fee for the

preceding

three year period, The actual

ratio in respect

2021 non-audi

t fees

was 6.9

The Company has adop

ted a policy in

relation to the

employment of former

employees o

f the external auditor.

Taking into acco

unt our findings in

relation to the

effectiveness of the

audit process and

the independence of

KPMG, the committee is satis

fied that

KPMG continue to be

independent and

free from any conflicting

interest with

the group.

Internal Control

and

Risk Management

The board has overal

l responsibility

for risk management, and it has

delegated

this task to the committee. A

consideration

of the g

roup’s risk

asis

on key risks and

changing risk

profiles, is a standin

g agenda item

for each meeting

The committee reviews d

ocumentation

prepared by manag

ement in this

regard. Additio

nal details on risk

management are set ou

t on

►►

pages

to 52.

The committee also has respon

sibility

for the oversigh

t of the internal

structures. These are revi

ewed on

an ongoing b

asis throughout the

year through the

consideration of

internal audi

t reports and other

relevant pape

rs.

In November 2021, the committee

also

considered a detaile

d analysis of the

roup’s internal

control and fraud

management envi

ronment.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

INTERNAL AUDIT

The committee is responsib

le for

overseeing

the scope, work and

effectiveness of the g

rou

p’s internal

audit function. Inte

rnal Audit operates

to formal terms of reference

. At each

meeting, the committee

considers the

findings no

ted in the internal audit

reviews and manage

ment’s responses

to matters noted.

On an annual b

asis, the Group Internal

Auditor sets out the p

lanned approach

and scope of work fo

r the following

year for consideratio

n by the

committee. This plan i

s reviewed on an

ongoing basi

s and updated at each

committee meeting

During 2021, the inte

rnal audit

team continued

to work remotely,

successfully leve

raging the company’s

technology to d

eliver a comprehensive

programme

of work. The internal au

dit team

also develope

d its data analytics

capabilitie

s during the year, which

has enabled

them to conduct

additional

audit work.

The committee meets with the

Group Internal Aud

itor after each

committee meeting

without

management presen

WHISTLEBLOWING

Policy

The board has approve

d a Confidential

Disclosure Policy

(Whistleblowing

Policy) which is revi

ewed annually. In

January 2021, the committee

approved

a revised proce

dure for the reporting

of wrongdoing withi

n the company.

The revised proce

dure provides a

communication l

ink for individuals to

contact the audit an

d risk committ

chair directly in

relation to a matter of

concern. No chan

ges were made to the

policy at its most recen

t review in

January 2022.

A copy of the Con

fidential Disclosure

Policy is incl

uded in the Employee

Handbook, which is p

rovided to all

employees.

Committee

Oversight

During 2021, the committee

considered the

roup’s whistleblowing

policy and arrangemen

ts, reviewed the

whistleblowi

ng incidents and outcomes

and assisted the

board in its assessment of the

adequacy of the

se arrangements.

There are no ou

tstanding matters

of concern raised b

y employees

using the whi

stleblowing arrange

ments

during 2021.

HEALTH AND SAFETY

AND INSURANCE

PROGRAMMES

The committee is respon

sible for

monitoring h

ealth and safety and

operational

risks and the group’s

insurance prog

rams.

Health and Safety

As the Covid-19 pande

mic continued in

2021, managing the h

ealth and safety

risk associated with it co

ntinued to be

a key health an

d safety priority for the

company. The committee rec

eived

reports and presen

tations from

management on the

approach to

managing this risk.

Insurance

The committee receive

s regular repo

rts

from management on the

operation of

the company’s publ

ic and employee

liability p

rogramme, which

incorporates a sig

nificant element of

self-insurance. The committee al

receives a compre

hensive annual

briefing from the co

mpany’s insurance

brokers on the

overall insurance

programme, covering

all insured

risks,

including pro

perty, business

nterruption, p

ublic and employer’s

liability, cyb

er, motor, travel, directors

and officers, computers and

engineering

(lifts).

The committee

is satisfied that

the company has

an appropriate

insurance

programme in

place and that

its operation is

satisfactory.

COMPLIANCE FRAMEWO

Compliance with

S225(2) Compani

Act 2014

The committee carries ou

t an annual

review of the comp

any’s compliance

framework and complian

ce with

certain obli

gations specified in section

225(2) of the Companie

s Act 2014

arising from the Compani

es Act 2014,

the Market Abuse (Directive

2003/6/EC) Regulation 2005, the

Prospectus (Directive 2003/

71/EC)

Regulation 2005, the

Transparency

(Directive 2004/109/EC) Regu

lation

2007 and Tax Laws.

This review is based o

n analysis

prepared by in

ternal audit of

compliance activ

ity during the year.

The committee carries ou

t an annual

review of the comp

ny’s risk

assessment and poli

cies in relation to:



Modern slavery



Anti-bribery and co

rruption poli



Anti-money laun

dering

Audit & Risk

Committee R

eport

MARKET ABUSE

REGULATION

In 2020, the Central Bank of Irelan

commenced a Market Abu

se Thematic

Review of all issue

rs with equity

financial instrumen

ts listed

on the Regul

ated Market and SME

Growth Market of Eurone

xt Dublin

to assess their complian

ce with the

requirements to recog

nise, manage

and publish insi

de information as

soon as possibl

As part of this Thematic Revi

ew, the

Central Bank of Ireland

selected the

company for a comprehe

nsive desk-

based review o

f its relevant market

abuse poli

cies and procedures, in

addition to virtual sup

ervisory

engagemen

ts with the company’s

representatives. The findi

ngs issued by

the Central Bank of Irelan

d resulting

from this review, the intern

al actions

required by th

e company in response

to these findin

gs, together with the

com

pany’s response to the

Central

Bank of Ireland, were con

sidered and

approved by th

e board during 2021.

In November 2021, the committee

reviewed the co

mpany’s compliance

with the Market Abuse Reg

ulations and

the Market Abuse traini

ng plans.

INFORMATION

SECURITY

The committee monito

rs the

management of info

rmation security

risks. In 2021, the committee

received

reports and presen

tations from

specialist adviso

rs retained by

management, who con

ducted network

vulnerability and

internal network

assessments and phishi

ng simulation

exercises.

In May 2021, the committee

reviewed

a report from management o

potential ransomware attacks an

considered the

company’s position on

this matter.

The g

roup’s IT department main

tains a

detailed information

system risk

eveloped a

comprehensive

suite of information

security poli

cies and training reso

urces

supporting the

se policies.

The company has a cybe

r liability

insurance po

licy and reviews the l

imits

and scope of thi

s cover annually.

The committee is aware of the

increased risk profi

le in this area and

is satisfied that the company, th

rough

its ongoing i

nvestment in informatio

technology, con

tinues to mitigate

its information security risk s

►►

page

In November 2021, at the board

training day, the Gro

up IT Manager and

external speciali

st advisor presented

the board with an

analysis of the gro

up’s information

security risks.

DATA

PROTECTION

The company has establ

ished a data

protection g

overnance structure with

oversight pro

vided by the committee

The governance

structure consists of

an executive-leve

l privacy committee

responsible

for coordinating poli

cy,

procedures and

compliance activities.

In April 2021, the comp

any appointed a

Risk, Compliance and

Privacy Manager

and also retain

the servi

ces of an

external speciali

st to support

compliance.

The committee receive

d a report from

the company’s compli

anc

e team in

November 2021, assessin

g t

company’s compliance

with GDPR and

setting out the

priorities for 2022. The

report provide

d a summary of the

group data incide

nt log and noted that

two incidents were rep

orted to the

relevant data protectio

n regulator in

2021

(from a total of 28 inci

den

recorded).

In 2021, the company

-lau

nched its

employee trai

ning course on data

protection vi

a the Dalata Online

training po

rtal and provided a series of

two

-hour training

sessions attended by

over 440 managers.

Clayton Hote

Burl

ington R

oad, Dubli

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

ESG

COMMITTEE REPOR

The commitment to

the ESG agenda from across

the business was

remarkable and evident in

all the hotels and in the

central office functions too.

COMMITTEE MEETINGS A

ATTENDANCE

The Committee met four times

during 2021.

Member

Attendance

Elizabeth McM

eikan

4/4

Robert Dix

4/4

Stephen Mc

Nally

4/4

See the Comm

ittee’s

terms of refer

ence on

dalatahotelg

roup.com

Dear Shareholder,

Despite the chall

enging backdrop of

Covid-19, the group

made great strides

in 2021 to further integ

rate ESG

priorities within the

strategic planning

process for the busi

ness.

The commitment to the ESG ag

enda

from across the busi

ness was

remarkable and e

vident in all the

hotels and i

n the central office

functions too. The focu

s in

the business at a more strateg

ic level

was on establishi

ng a baseline from

which to target and me

asure our

progress towards our medi

um-term

ESG objectives while the h

otels

continued

their focus on driving change

at a local leve

2020 had already see

n a bottom-up

approach to sustainabi

lity in our hotels,

with the formation of the

Environmental Steeri

ng Group,

comprising manag

ers across the

business, working

to reduce the hotels’

impact on the en

vironment.

2021 saw this excellent work

complemented

by two significant

external adviser app

ointments in order

to help the

business to structure and to

frame its approach to ESG across

the

business at large an

d additionally to

focus on unde

rstanding and measuring

our embodi

ed and operational carbon

footprint within

the developmen

t and running of

our hotels.

2021 also saw a continuatio

n of the

focus on social initiative

s, a core

strength of Dalata, with an eval

uation

of our strengths and weak

nesses and

ESG

Committ

ee Repo

the developmen

t of the four

pillars which wil

l go to making up

our social strategy.

Key Achievements in 2021

Green Tourism assessed

our hotels and

awarded Gold accredi

tation

to over 80% of the ho

tels (35

hotels), with the remainde

r achieving

a Silver accreditation

. This is a

significant impro

vement over the ini

tial

assessment in 2019, when 7 h

otels

achieved Sil

ver and the remainder

Bronze.

All hotel

s now have smart electricity

meters in place; g

as meters are also

place, with the exce

ption of Northern

Ireland, where compl

etion is due by

the end of Q1 2022. Water mete

rs are

being rolled

out across the estate; this

project is also sched

uled to complete

by the end of Q1 2022.

A target of 0% to landfil

l was achieve

in Ireland. It is anti

cipated that we shall

achieve 0% to lan

dfill in the UK by the

end of Q1 2022. Food l

oss and food

waste will then be

come the focus of

attention in o

rder to reduce the

overall le

vel of volumes being

sent

for processing.

Maintenance of o

ur CDP B rating

placing us in the

ir management band,

reflective of ou

r taking coordinated

action on climate issue

s. This places

Dalata in line with th

e Europe

average and ahe

ad of the peer average

of B- for the bars, hotels

and restaurants sector.

The introductio

n of a diversity and

inclusion

policy rolled out across the

business will u

nderpin the

company’s

commitment to provid

ing

a po

sitive,

fair and respectful place

to work,

where diversity i

s respected, and

inclusivity val

ued. The appointment of

a Social Impact Manager und

erscores

the priority acco

rded to this initiative.

The board

’s annual train

ing day

focussed on ESG matters; t

wo climate

workshops follo

wed by a focus on the

importance of the b

uilding of an

inclusive culture

Establishing the baseli

In July 2021, after a competitive

process, Clearstream Solutio

ns were

appointed

to help provide a structured

approach to ESG within the

business,

ensuring that ou

r ESG priorities were

well thoug

ht through and

complemented

the strategic business

objectives or p

layed a part in mitigating

key risks. The committee h

as been

updated on prog

ress

against the roadmap at each

of its

meetings and i

s pleased with the

impressive eng

agement from the

business at large.

Running in

parallel has been the work

being undertake

n with leading

infrastructure consultants AECOM,

alongside the Deve

lopment Team, to

establish a road map o

f whole lifecycle

carbon for our ho

tels. Their initi

al work

has been based

-depth analysis at

Maldron Hotel Glasg

ow (opened

August 2021), complemented

by a

study at the recently o

pened Clayton

Hotel Manchester. It has measured

the

embodied

carbon within the

development pro

cess and the

operational

carbon in the use and

maintenance o

f the building, alongside

the embodied carbo

n involved in end-

-life demolition. AECOM present

their finding

s to the committee in

October

2021,

and we loo

k forward to

further engage

ment during 2022.

The focus on a cle

ar social strategy that

capitalises on D

alata’s strong p

eople

credentials has resul

ted in the

articulation of fou

r key pillars to

provide the

backbone to future plans:

career develo

pment for all; diversity

and inclusion; h

ealth and well being;

and behaving i

n a fair and ethical

manner. These pillars wil

l form the

cornerstone of the

future focus for

activities, inclu

ding training and

development; pro

gress will be

measured and repo

rted on at

regular interval

Company purpose, culture

and values

The committee received

management

presentations to

assist its assessment of the compan

y’s

culture. Our in-depth d

iscussion

provide assurance that manag

ement is

committed to cultivating

a culture that

is well-aligned with i

ts values and

operating i

n the interests of i

stakeholders.

Priorities f

or 20

The management and

the committee

have continued to

build on establishing

their respective rol

es in working to

establish what we alread

y do well and

where we now ne

ed to focus our

efforts to gain maximum impac

t. 2021

has been a ye

ar of research, discover

and evaluation, and in

2022 the

business now wil

l focus on establishi

an ESG framework and struc

ture as an

integral part of the

mainstream

business.

As far as property is concerne

d, the

objective in

2022 will be to develop a

coherent strategy co

mpatible with

company and lan

dlord investment

goals, which pro

vides a reasonable

basis for setting future carbo

emissions in l

ine with expectations.

Once establishe

d, progress in achieving

these carbon emi

ssion targets will be

measured and repo

rted upon at

regular interval

For the business at large

, the

formulation of an ESG strateg

y that is

integral to the

business and the

articulation of cl

ear measures and

targets will be a pri

ority.

The committee loo

ks forward to an

exciting year o

f progress ahead, with

confidence

and optimism in the ESG

leadership an

d energy evident across

the business.

Elizabeth McMeikan

Chair

ESG

Committee

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

ROLE OF THE COMMITTEE



Consider and rec

ommend for

board approval the

sustainable

business framework incorpo

rating

materi

priorities and

implementation

roadma



Consider and rec

ommend for

board approval

environmental,

social and govern

ance policy

documents reserved fo

board approval



Agree and reco

mmend the

board approval

of the appropriate

ESG reporting framework

s an

standards to be appl

ied to

the company.



Review and recommen

d to the

board for approval

the company’s

purpose and val

ues.



Assess and monitor compan

culture to evalu

ate whether

policies, practices, and b

ehaviou

align with i

ts purpose, values

and strategy.



Oversee the setting

of the

company’s material envi

ronmental

and social ob

jectives, review the

company’s strategy to achieve

the

agreed go

als, and monitor the

extent to which they are i

ntegrated

within the compan

y’s business

strategy and risk managemen

process.



Receive and co

nsider internal and

external reports conce

rning agreed

metrics and targets and ke

performance indi

cators for

environmental

and social

programmes and revie

w progress

towards the achieveme

nt of such

targets and indicato

rs.



Review commitments by

the company to dive

rsity

and inclusion p

rogrammes;

learning and de

velopment;

human rights pol

icy development;

community programmes, and

charitable suppo

rt.

Dalata Hot

el Group plc

Annual Re

port & Acco

unts 2020

REMUNERATION

COMMITTEE REPOR

COMMITTEE MEETINGS A

ATTENDANCE

The committee met eight times du

ring

2021

Member

Attendance

Margaret S

weeney

8/8

John Henness

8/8

Elizabeth Mc M

eikan

8/8

All members of the committee

are

considered b

y the board to be

independen

t (the company chair being

independen

t on appointment). The

board conside

rs that the committee

chair has sufficient recen

t and relevant

experience fo

r the role and that there

is sufficient experie

nce within the

committee as a whole.

The report compli

es with the European

Union (Shareholde

rs’ Rights)

Regulations 2020 i

ntroduced in Ireland

in March 202

See the Comm

ittee’s

terms of refer

ence on

dalatahotelg

roup.com

Dear Shareholder

I am pleased to prese

nt the report of

the remuneration

committee of Dalata

Hotel Group p

lc for the year ended

December 2021.

We had a full agen

2021

, meeting

eight times duri

ng the year, as the

business continu

ed to deal with the

disruption o

f the pandemic, and we

managed the first lead

ership transition

the company’s

history as founder Pat

McCann an

fellow founding

director

Stephen McNally ann

ounced their

retirements.

The new leade

rship team led by Chief

Executive Dermot Crowley, wi

th Carol

Phelan appo

inted

Chief Financial

Officer and Corporate Devel

opment

Director

Shane Casserl

y assuming

expanded respo

nsibilities, has

transitioned ve

ry successfully

Guid

by this experie

nced team, the company

is well-positio

ned to deliver on its

strategic growth plan as it reb

uilds the

business

committee deliberated

at length

and consulted

with shareholders

before committing

to compensation

structures designed to rei

nforce the

experienced

and stable management

foundations the co

mpany needs.

Due to the pande

mic, the business has

been seriou

sly impacted over the last

two years

rebuilds an

d recovers,

our senior manag

ement team's deep

experience

market and organi

sational

knowledge

are re

cognised by the

board and ou

r shareholders as central

value creati

on through executing

our growth strategy.

2021 Performance Context

Although we

are now emerging from

the acute phase o

f the pandemi

thanks to widespread

vaccination,

significant di

sruption and uncertai

nty

continue. Since

the pandemic, the

company has carefully man

aged its

financial resource

s and hotel assets

which were well-inve

sted before the

crisis and

now well-positio

ned for

recovery. We lo

ok forward to taking

advantage of gro

wth opportunities in

line with ou

r strategic plans to

strengthen the b

usiness.

Business develo

pment

–

The company

has carefully plan

ned its next growth

phase. It expects to expand o

perations

by 37% over the ne

xt four years (from

1 July 2021 baselin

based on

published de

velopment commitments.

66% of the capacity growth (2,202

rooms at

eight

new hotels) has already

come on stream or will o

pen before

June 2022. We contin

ue to develop

ambitious growth targets an

d aim to

provide a fair and

competitive reward

for senior manageme

nt to ensure

retention, contin

uity and stability at a

time of significan

t change within the

company.

Market change and

risk

–

We are

conscious that there

has been a shif

towards hybrid workin

g and greater

awareness about the i

mpact of climate

change, which may i

nfluence business

travel as we emerge i

n a post-

pandemic world

. We remain confident

in Dalata’s resilience

and adaptability

to market changes as we l

ook to the

ture. The company i

s also continuin

to develop its ESG commitme

nts, and

we have link

ed 2022 incentive pay for

the executive d

irectors to specific

deliverable o

bjectives that will support

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

our 2026 environ

mental targets (see

►►

page

)

and pave

the way for

deve

ping a credible

decarbonisation

pathway

for the group.

Labour market disruptio

–

There

has been a flig

ht of experienced

ople

from our industry, particularly

those

with transferable skill

s in management,

sales, marketing, HR, fin

ance and

customer service. Dalata had a cor

objective to succe

ssfully retain most of

its key people across the g

roup,

particularly the co

re of the

management teams in ou

r hotels.

We remain focused

on rebuilding the

business from within, as evide

nced by

our management successio

n and our

priority of retainin

g and incentivising

our key talen

2021 compensation decis

ions

and outcomes

Salary

We implemen

ted 15% reductions for

executive di

rector salaries and non-

executive di

rector fees on 1 April 2020

These reverted to no

rmal levels on 1

April 2021. Pay reduction

s for

employees b

elow board level were

reversed on 1 Janu

ary 2021.

Incentive ou

tturns

Management has contin

ued

to demonstrate excep

tional

commitment over the last two

years to protecting the

interests

and value o

f the company, its

shareholders, and

other principal

stakeholders, in

cluding our emplo

yees,

customers, landlords

and provide

rs of debt finance

and suppliers.

Given the unce

rtainty concerning 2021

outcomes, the committee po

stpone

objective setting

until its July meeting.

Despite the re-openi

ng of the busine

Q2 as the severest

ndemic

restrictions were lifted, manage

ment

proposed that, in ligh

of the fir

-half results and

having

regard to the broad

er stakeholder

experience,

operation of the

2021

executive dire

ctors bonus

plan was suspended

Management managed wel

l through

the year as the emphasis shifted

from

time to time in respon

se to changing

pandem

-related market restriction

The team focused

priority a

reas

reflected in o

ur target setting process,

including the

health and safety of

staff and guests, business contin

uity,

key staff retention, new ho

tel

management team buil

ding, asset

management, and successful mark

eting

of the busine

on re-launch.

Due to the contin

ued impact of the

pandemic on

share price performance

and earning

s during 2021, the LTIP

awards granted in 2019 will

not vest.

No discretion was exerci

sed in relation

to these outcome

Wider workforce

consistently e

mphasise the

importance of retaini

ng key staff

(below board le

vel) as we rebuild the

business and p

repare for opening our

new propertie

The board and

management recogn

ise the importance

of providing comp

etitive rewards to

this wider group

of managers to ensure

that we have the righ

t people to

support the recove

ry of the business.

In December 2021, the committee

agreed to grant a spe

cial LTIP award to

below-board partici

pants in late

2021

. These awards will ve

st on 31

March 2023 subject to continu

ing

employment with the

group,

Management succession

During the year, the co

mpany

undertook its first senior managem

ent

transition since its fou

ndation in 2007.

Pat McCann retired from the board

group CEO

31 October 2021, and

Stephen McNally steppe

d down on 31

December

2021

Their retiremen

pay arrangements are explai

ned

►►

page

Dermot Crowley was app

ointed CEO

Designate in March 2021 and

succeeded Pat as Chief Executive

on 1

November 2021. Carol Phel

an was

appointed

CFO on 1 July 2021 and

joined the

board on 1 January 2022.

As part of the renewed e

xecutive

structure, Corporate Devel

opment

Director Shane Casserly has taken

significantly e

xpanded responsibili

for innovation

, maintenance capital

expenditure, an

d Group IT as part of

his

role as Corporate Develo

pment

Director.

will also b

e responsible for

establishing

the group’s

decarbonisatio

n pathway.

The recent appoi

ntments followe

careful succession pl

anning overseen

by the nomin

ation committee over

several years. The board i

s satisfied

that the appoin

tees bring a wealth of

experience an

d the qualities

needed to lead

the company

at this critical time.

I would like to take

this opportunity

to thank Pat and Stephe

n for their

excellent work

and contributions to the

group ove

r their tenure.

Remuneration in 2022

The committee has soug

ht to develop

proposals on

pay that provide a fair

and competitive

reward for senior

management.

To ensure retentio

n of the experienced

team

critical to rebui

lding the

business

coming

out

of two years of the pande

mic, we

recognised

that the salary levels of the

incumbent execu

tive directors were

positioned at the l

ower end of market

practice compared to Dalata’

s peer

companies of a simil

ar size and

complexity (

►►

page

for

further detail

on benchmarki

ng)

We were also aware of the

exodus

from the hospitali

ty sector arising from

the pandemic. Therefore

, we believe it

the interest of the compan

y and

shareholders that the salary l

evels of

the executive d

irectors be aligned at a

market-competitive le

vel.

line with

shareholder g

uidance, the committee

has decided

to implement these

increases on a ph

ased basis as the

executive di

rectors develop into their

new roles.

I consulted with shareho

lders

representing

over 50% of the issued

share capital on the

proposed

remuneration chan

ges. W

believe our

leading sharehol

ders understand the

strategy and underl

ying rationale and

support the propo

sed changes.

Dermot Crowley was appoi

nted with

a salary of €590,000, which is c3%

lower than his p

redecessor’s salary. His

salary will remain at €590,000 in 20

and it is inten

ded that his salary will

increase to €630,000 from

1 January 2023.

Remunerati

on Committee

Report

Carol Phelan was appo

inted to the

board

with a salary of €350,000

effective 1 January 2022, wi

th a further

increase to €400,000 pr

opo

sed from 1

January 2023.

Shane

Casserly’s

salary increase

to €350,000 on 1 January 2022

This recognises the

impact of his

strategic responsibi

lity for all aspe

cts of

capital spendi

ng, innovation

technology and

decarbonisation.

The committee propo

ses that his salary

would increase

to €400,00

on 1 January 2023.

The proposed

2023

ncreases for

all three execu

tive directors are subject

to the

performance and d

evelopment

in their respective

roles.

We align

all exe

cutive director

pension contribu

tions with the 5% rate

offered to the majority o

pension eligib

le Irish employee

The other ele

ments of remuneration

are set in line

with the current

remuneration po

licy.

For 2022, the annual bo

nus

opportunity re

mains at 125% of

base salary. The LTIP for the chie

exec

utive remains at 150% of base

salary, with other directo

rs being

awarded 125% of base salary. We

intend to keep thi

s under review next

year ahead of the 2023 p

olicy renewal.

Changes to performance metri

cs for

the FY21 and FY22 LTIP awards

LTIP awards were granted i

n 2021

in line with

Policy. As disclosed in l

ast

year’s Directors’ Remuneration

Report,

the targets for these awards

were

delayed due to u

ncertainty

with business forecastin

g and were

published in Se

ptember 2021,

incorporating

changes to the

performance metrics that we i

ntend to

also use for the FY22 awards.

The FY21 and FY22 awards will

based 50% on free cash flo

w per share

(previously EPS) and 50% on T

compared to a bespo

ke comparator

group of 20 li

sted peer companies

(previously STOXX Europe 600 Trav

and Leisure in

dex).

Free cash flow per share (FCFS)

–

committee is concerne

d that

EPS no longer accuratel

y represents

performance or ince

ntivises the

right behavi

ours.

There is a risk that contin

uing to use

EPS would penalise man

agement for

executing o

ur growth strategy of

developing

new leasehold hotels due

to the disprop

ortionate impact on EPS

in the early ye

ars of new leases. We

have, therefore, deci

ded that FCFS is a

clearer performance measure

and one

which is more ali

gned to the recovery

strategy of the busin

ess.

In our recent en

gagements, I noted

shareholders

’

reque

sts and a

committed to transparency in

calculating free

cash flow and

measuring performance

maintain the inte

grity of the

LTIP performance cond

ition.

TSR comparator group

–

We h

ave

decided to

move to a bespoke TSR

group of 20 le

isure and hospitality

competitors for close

r performance

alignment. There h

as been significant

volatility in

the previously used STOXX

Europe 600 Travel and Le

isure index

constituents. It

weighi

ng towards

the gaming i

ndustry makes it a poor

fit for Dalata.

The new comparator group

applies to

the 2021 and 2022 awards. Further

information on the

targets is set out on

►►

page

Shareholder engagement

I have referred to ou

r shareholder

engagemen

t earlier. In November, I

wrote to our top

shareho

lders

(owning over 70% of the i

ssued share

capital) to explain

our approach to

pay as set out in thi

s report

The majority of those co

ntacted (a

well some of the p

roxy advisors)

engaged with me, and I am g

rateful

for their feedback o

n our remuneration

proposals:

The princip

the

mes were:



Support for the detaile

d assessment

of remuneration in

light of the

company's challen

ges and

the retention

of key management

in the sector.



The need to e

xplain the rationale

for the proposal

light of the wider

stakeholder e

xperience and

market context.



Understanding o

f the need to align

fixed pay because o

f retention risk.



Support for the adop

tion of free cash

flow per share as an LTIP

performance measure with the

proviso that we provi

de transparency

in the method

of calculation.



Encouragement to use q

uantifiable

ESG metrics in incentive

pay

performance measures, which are

material to the company an

d aligned

to its strategy.

I remain open to

hearing from

shareholder

(ple

ase refer any queries

or requests for engage

ment to the

company secretary at

ata

hot

rou

p.c

)

and look forward to your

continuing support at the 2022 AG

Margaret Sweeney

Chair, Remuneration Committee

ROLE OF THE COMMITTEE



Review the ong

oing

appropriatene

ss and relevance

of the remuneration

policy,

having regard to

the pay and

employment co

ndition

across the group.



Consider and rec

ommend to

the board the g

roup framework for

the remuneration o

f the executive

directors.



Within the terms of the

agreed

policy, dete

rmine the total

individual remun

eration package o

the chair and e

ach executive

director, includ

ing salary benefits,

bonuses and ince

ntive payments.



Review the desig

n of all incenti

plans for approval

by the board

and sharehold

ers and, for each

such plan, recommend

whether

awards are made and, if so, th

overall amoun

t of such awards, the

individual awards to e

xecutive

directors, and the performance

targets to be used.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Directors’

Remuneration Policy

2020

–

2022

Approved by shareholders i

n 2020

Dalata’s Remuneration Po

licy was

approved by sh

areholders at the 2020

AGM. A summary of the Remun

eration

Policy table fo

r executive directors is

reproduced bel

ow for information

only. The

full Remuneration

Policy is set ou

on pages 80 to 85 o

f the 2019

Annual Report.

The remuneration co

mmittee

considered the

following principle

s as

recommended i

n the revised 2018 UK

Corporate Governance

Code (the Code)

in determini

ng the policy:

Clarity

–

The Remuneration

Policy is

designed

to allow our remuneration

arrangements to be structured

such

that they support, in a sustain

able way,

the ﬁnancial ob

jectives and the

strategic prioritie

s of the Company. The

remuneration co

mmittee remains

committed to reportin

g on

its remuneration practice

s in a

transparent, balanced, and

understandable

way.

Simplicity

–

The po

licy consists of three

main elements: ﬁxed p

ay (salary,

beneﬁts, and pensi

on), an annual

bonus award, and a lo

ng-term

incentive award. The

annual bonus

based on ﬁnanci

al measures and

individual strategi

c objectives tied to

our key strategic o

bjectives and risk

framework. The LTIP is base

d on

measures - relative TSR, EP

S (for

awards granted prior to 2021) and

FCFS

(for awards granted in

2021

and after), which provi

de a clear link

to the sharehold

er experience. The

committee will ke

ep under review

the measures used an

d may apply

diﬀerent measu

res for future years

to ensure they co

ntinue to be aligned

with strategy.

Risk

–

Remuneration p

olicies are in li

with our risk appe

tite. A robust malus

and clawback po

licy is in place, and the

committee has the discretio

n to reduce

variable pay o

utcomes where these are

not conside

red to represent overall

company performance o

r the

shareholder e

xperience. The post-

employment shareh

olding policy

further ensures executive d

irectors are

motivated to del

iver sustainable

performance that extends be

yond their

departure from the compan

Predictability

–

nual bonus and LTIP

awards levels are cappe

d as set out in

the policy.

The committee conside

rs the impact of

various performance outco

mes on

incentive leve

ls when determining

pay

levels. These can

be seen in the

scenario charts found i

n the full Policy.

Proportionali

–

A substantial portion

of the package

comprises

a performance-based reward link

to the achieve

ment of solid company

performance and the

delivery of

strategy. The committee uses

discretion, where req

uired, to

ensure that performance o

utcomes are

appropriate.

Alignment to cu

lture

–

In determining

executive remune

ration policies and

practices, the remuneration

committee

considers remune

ration structures and

opportuniti

es at other companies of a

similar size and co

mplexity as well as

our approach to remun

eration

internally to

ensure

that remuneration is ap

propriate

compared to these refere

nce points.

The committee also co

nsiders other

wider workforce theme

s as part

of its review, inclu

ding workforce

demographics, e

ngagement levels, and

diversity, to ensure e

xecutive

remuneration is ap

propriate from

a cultural perspe

ctive.

Policy Table for Executive Direc

tors

The g

roup’s pol

icy on executive directors’

remuneration is desi

gned to ensure that e

mployment and remuneration cond

itions support the

delivery o

f strategy and promote long-term sustainable success for al

l stakeholde

rs. The elements of the remuneratio

n package which may

apply to executi

ve directors are base salary, pensio

n and benefits, annual b

onus and the long term incentive plan

Element

Purpose, link

to strategy

and operation

Maximum opportunity

Performance Metrics

Base salary

An appropriate l

evel of ﬁxed

remuneration to reﬂect the

skills and

experience o

f the individual.

Salaries are normally revi

ewed

annually by the co

mmittee, taking

into account al

l relevant factors,

which may inclu

de the size and scope

of the role, the e

xperience and

performance of the in

dividual, and

appropriate market data.

There is no prescrib

ed maximum.

Salary increases are normally i

n line

with those of the wid

er workforce.

Salary increases may be abo

ve this

level in certain ci

rcumstances, such

as an increase in the

size or

complexity of the gro

up; an increase

in the size o

r responsibilities of the

role; change

s in the competitive

market place; or move

of salary

position closer to typ

ical market level

when a new executi

ve director has

been appointe

d to the board at a

lower than typical

market salary and

then gains e

xperience.

n/a

Pension

Contribution

s into the

company’s

deﬁned contrib

ution pension scheme

or an equivalen

t cash supplement.

Pension contrib

utions will be 5% for

the executive d

irectors

line with

the pensio

n contributions availabl

to the majority of the pen

sion eligible

Irish workforce.

n/a

Remunerati

on Committee

Report

Element

Purpose, link

to strategy

and operation

Maximum opportunity

Performance Metrics

For new Executive Directors

appointed

to the board, pension will

be set on appoin

tment, taking into

account best practice

, the pension

contribution

s or allowances available

to the wider pe

nsion eligible

workforce, and market practice

simil

-sized compani

es.

Benefits

To provide a marke

t competitive

beneﬁts package

The beneﬁts availab

le currently

comprise a company car and

fuel,

and beneﬁts und

er the group risk

beneﬁt scheme, which i

ncludes death

in service cove

r and disability beneﬁt.

The committee may determin

e that

other bene

ﬁts will apply where

appropriate.

Directors are eligi

ble to participate in

the Company’s Sharesave Scheme

the same basis as all othe

employees.

Directors may be reimbursed

for

reasonable b

usiness expenses (and

any associated tax liabi

lities).

Where an execu

tive director is

required to rel

ocate to perform

their role, appro

priate one-

oﬀ

or on-

going exp

atriate beneﬁts

may be provide

d (e.g. housing,

schooling, etc.).

The value of be

neﬁts is not capped as

it is determined

by the cost to the

company, which may vary.

Participation in Sharesave Sche

me up

to statutory limits.

n/a

Annual

Bonus

To drive and reward the

delivery of

business obje

ctives over the ﬁnancial

year.

The bonus is di

scretionary, and the

committee determine

s any pay-out

based on pe

rformance.

Targets are set and assessed

by the

committee each ye

ar.

At least 30% of the bonu

s will be

delivered

in the form of Dalata shares

deferred for at least three ye

ars. The

remainder is payab

le in cash

following

the year-end. This deferral

may be operated u

nder the terms of

a restricted share trust.

Malus and clawback p

rovisions apply.

The maximum opportuni

ty is:

Chief Executive: 125% of salary.

Other Executive Directors: 125

% of

salary.

Payment is determined

by reference

to performance assessed o

ver one

ﬁ

nancial year and wil

l normally be

measured against a co

mbination o

ﬁ

nancial and in

dividual strategic

performance targets.

The committee determin

es the

weighting

s of the performance

measures each year. The o

verall

framework will normall

y be weighted

towa

rds ﬁnancial measures of

performance.

The committee will co

nsider the

roup’s overall

performance befo

determining

ﬁnal bonus payment

levels and may ad

just the bonus

award if it considers that the

outcome doe

s not reﬂect the

underlying ﬁnanci

al or non

ﬁ

nancial

performance of the partici

pant or the

group ove

r the relevant period, or

that such payout le

vel is not

appropriate in

the context of

circumstances that were u

nexpected

or unforeseen

when the targets were

set.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Element

Purpose, link

to strategy

and operation

Maximum opportunity

Performance Metrics

Long-term

incentive

plan (LTIP)

To reward executive dire

ctors

for the delive

ry of long term

performance and ali

gn their interests

with shareholde

rs.

Awards are made under, and

subject to the terms of, the 2017 L

TIP

approved by sh

areholders

at the 2017 AGM.

Awards are in the form of cond

itional

share awards or nil-cost optio

ns (or

in such other form that the

committee determine

s has the same

economic eﬀect)

, which ve

st as soon

as reasonably practicabl

e after the

end of the pe

rformance period

subject to performance con

ditions.

Vested shares are subject to

additional

holding period of at least

two years. Shares subject to a

holding pe

riod may be placed in

a restricted share trust.

Malus/clawback and

dividend

equivalent provi

sions apply

(see notes).

The maximum annual award leve

l is

Chief Executive: 150% of salary.

Other Executive Directors: 125

of salary.

Performance targets are n

ormally

measured over three

ﬁnancial years,

using performance

measures aligned

with the strategy and shareh

older

value.

25% normally vests for threshol

performance.

The committee has the d

iscretion to

use diﬀere

nt or additional

performance measures to en

sure

that LTIP awards remain

appropriately al

igned to the business

strategy and objectiv

es.

The committee will co

nsider the

roup’s overall

performance befo

determining

the ﬁnal vesting level

and may adjust the vestin

g level if it

considers that the o

utcome does not

reﬂect the underlyi

ng ﬁnancial or

non-

ﬁnancial pe

rformance of the

participant or the gro

up over the

relevant perio

d, or that such payout

level is not appro

priate in the context

of circumstances that were

unexpected o

r unforeseen when the

targets were set. When makin

g this

judgment, the committee may tak

into account such

factors as the

committee consid

ers relevant.

Shareholding

guideline

To increase long

term alignment

between execu

tives and

shareholders.

Executive directors are req

uired to

build up and main

tain a beneficial

holding of at le

ast 200% of base

salary.

Unvested deferred b

onus shares and

vested LTIP shares within a hol

ding

period will

count towards the

guideline

(on a net of tax basis).

Individual

s who step down as an

executive di

rector after 1 January

2020 will normally b

e expected to

retain a sharehold

ing in the company

of half of their in-empl

oyment

shareholding req

uirement (or actual

shareholding i

f lower) for two years

after leaving.

n/a

Notes to the table

Dividend equivalents

- LTIP awards may

incorporate the right

to receive an amount e

qual to the value o

f dividends which woul

d have been paid o

n the

shares under an

award that vests

, up to the time of ves

ting (or where the awar

d is subject to a holdin

g peri

od, release)

Malus and clawback

The annual bo

nus and the LTIP con

tain malus and clawbac

k provisions. The cash an

d share elements of

the annual bonus may be c

lawe

d back

during the three years fol

lowing payment, and awar

ds under

the LTIP

may be cancelled

(prior to vesting), red

uced, or clawed b

ack for two years post ves

ting in the event

of a material misstate

ment of results or se

rious misconduct.

Remunerati

on Committee

Report

Policy table for

non

-executive dire

ctors

Element

Purpose, link

to strategy

and operation

Opportunity

Chair and Non-executi

Director (“NED”) Fees

To attract and retain n

-executive

directors with the requ

ired qualities, skills,

and experien

ce.

Fees for the chair are determin

ed by a

subcommittee of the bo

ard comprising the chief

executive and the

-executive directors but

excluding

the chair.

Fees for n

-executive dire

ctors other than the

chair are determine

d by a sub-committee

of the board compri

sing the chief executive

and the chair.

The chair receive

s a single fee. NED fees in

clude

a base fee and may i

nclude additional fees for

other board or co

mmittee duties.

The chair and n

-executi

ve directors do not

participate in any i

ncentive plan or pensio

arrangement. Where ap

propriate, ben

eﬁts

may be provide

Non-executive di

rectors may be reimbursed for

business expen

ses (and any associated tax

liabilities) incurre

d when travelli

ng in the

per

formance of duties. Addi

tional beneﬁts may

be introduced if co

nsidered appropriate.

There is no prescrib

ed maximum annual i

ncrease

or fee level

Fee levels are n

ormally reviewed every two

years, with reference to the time c

ommitment of

the role and marke

t levels (for example, in

companies of comparabl

e size and complexi

ty).

Fees are next due for revi

ew in 2023.

Service contracts/letters

of appointment

Service contracts for the executive

directors, Dermot Crowle

(commencing 3 Decembe

r 2012),

Shane Casserly (3 March 2014

and

Carol Phelan (

Novembe

r 2014), do

not have a fixed e

nd date but can be

terminated by servin

g notice. The

service contracts have a n

otice period

of six months. Other than entitle

ment

to notice and

payment of salary and

contractual bene

fits in lieu of noti

ce,

the executive d

irectors are not entitled

to compensation

on termination of

their respective co

ntracts. These terms

would normall

y apply to a service

contract for a new executive d

irector.

The non-executive

directors and chair

have been appo

inted under the terms

of letters of appoi

ntment commencing

as follows: John He

nnessy, Margaret

Sweeney, and Robert Dix o

n 27

February 2014; Elizabeth McMeik

an, 8

October 2019; Cathriona Hal

lahan, 1

November

2021

; and Gervaise

Slowey,

1 December 2021. The appo

intment is

renewed annu

ally, and, under the

company’s director’s

-ele

ction policy,

all Directors are subject to

annual re-

election by shareho

lders. Non-

executive

dire

ctor’s

appointment is

terminable by

either party

givi

ng one month’s

written notice.

Consideration of

shareholder views

The committee unde

rtook a

consultation e

xercise with major

shareholders in

respect of the

development of thi

s Remuneration

Policy, and the fe

edback received

was taken in

to accou

nt in ﬁnalising

the proposals.

During each ye

ar, the committee

considers shareho

lder feedback

received at the time

of the AGM, plus

any addition

al feedback received

through othe

r means of dialogue.

The committee also reg

ularly reviews

the policy in the

context of published

shareholder g

uidelines.

Consideration of

conditions els

ewhere

in the Company

When determin

ing remuneration

arrangements for executive d

irectors

the committee consi

ders the pay and

conditions of empl

oyees throughout

the group. In p

articular, the committee

considers the g

eneral level of salary

increases and ince

ntive

award outcomes within the

wider

workforce. While the

committee does

not directly co

nsult with employees as

part of the process of de

termining

executive pay, the n

on-executive

director design

ated responsible for

workforce engag

ement regularly

engages with e

mployees to understand

their views on a rang

e of issues,

including pay

and employment

conditions throug

hout the group. The

board takes such feedb

ack into

account when revi

ewing executive pay.

To the extent that emplo

yees are

shareholders, they c

an vote on

remuneration resol

utions at the AGM.

The committee and the

board

acknowledge that thi

s approach is not

consistent with

the FRC’

s February

2021 guidance

concerning

two

-way

dialogue with the wo

rkforce in relation

to remuneration (in the co

ntext of

compliance with pro

vision 41 of the

Code)

Following

the recent

appointment of Gervaise Slo

wey as the

non-executive

director with

responsibility fo

r workforce

engagemen

t, the board intends to

review methods of empl

oyee

engagemen

t that facilitate a

meaningful respo

nse to the

February 2021 guidan

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Annual Remuneration Report

This report will be

submitted as an advisory vote

to shareholders at the 2022 AGM. The repo

rt complies with the Euro

pean Union

(Shareholders’ Rights) Reg

ulations 2020 in

troduced in

Ireland in March 2020.

Statement of Implementation for

2022

This section summarises the remun

eration arrangements for the

Directors for the 2022 financial

year.

Base salaries

When consi

dering the package for the

appointee

s, we recognised that the

salary levels of the

incumbent

executive di

rectors were positioned at

the lower end

of market practice

compared to Dalata’s peer co

mpanies

of a similar size and co

mplexity

For benchmarking

purposes, we

examined base salary, maximum

bonus, maximum LTIP, pensio

n, total

fixed compensatio

n (salary + pension)

and total compen

sation (salary

pension + max bon

us + max LTIP) by

reference to four market reference

points: a) UK listed companie

s with

market capitalisation be

tween

€0.6

and

€1.4

(on a 12-month average

basis to the end o

f April 2021)

–

the

primary comparator group, b) UK li

sted

companies with market capi

talisation

between

€1.4 bn and

€2.3 bn,

c) a

sector comparator group

of FTSE 250

travel and lei

sure companies, and d) a

broadly based

group of Irish listed

companies.

We believe i

t is in the interest of the

company and shareho

lders that the

salary levels of the

incumbent

executive di

rectors be aligned at a

market-competitive le

vel.

The revised base salarie

s will remain

below the med

ian by reference to the

primary reference gro

up.

line with sh

areholder guidance, the

committee has decid

ed to implement

these increases on

a phased basis as

the executive d

irectors develop into

their new role

Dermot Crowley was appo

inted with a

salary of €590,000, c3% lower than

his

predecessor. His salary wil

l remain at

€590,000 in 202

2, and it is inten

ded

that his salary will increase

to €630,000

from 1 January 2023.

Carol Phelan was appoi

nted to the

board

with a salary of €350,000

effective 1 January 2022, wi

th a further

increase to €400

,000 from

1 January 2023.

Shane Casserly’s salary in

creased

to €350,000 on 1 January 2022

recognising the imp

act of his strategic

responsibil

ity for all aspects of capital

spending

, innovation, technology and

decarbonisatio

n. The committee

proposes that his salary wo

uld increase

to €400,000 on 1

January 2023.

In each case, the prop

osed

2023

increase will b

e subject to performance

and developmen

in the respective

roles.

Companies included in the pri

mary compa

rator group:

ank Group, Essentra

, MITIE Group, Ha

mmerson, Elemen

tis, Coats Group, Redde Nort

hgate, CLS Holdings,

NCC Group, Cairn Ener

gy, Greencore Group, XP Po

wer, Capita, Siri

us Real Estate, Morgan Si

ndall Group, 888 Hol

dings, Vectura G

roup, PureTech Hea

lth, Sabre

Insurance, Hilton Food G

roup, 4impr

int Group, PZ Cussons

, Just Group, Oxford I

nstruments, FirstGro

up, Mitchells & Butlers, Biff

a, Euromoney Inst

itutio

l Investor,

C&C Group, Playtech, O

xford Biomedica, H

ill & Smith Holdings

, Crest Nicholson Holdings, Vi

vo Energy, Premier F

oods, T

elec

om Plus, Chemring Gro

up, Avon Rubber,

Clarkson, Watches of S

witzerland, Morgan

Advanced Materials, FDM

Group Holdings, I

bstock, Petropavlovsk, Indivior

, Hochschild

Mining, St Modwen Pro

perties, TI

Fluid Systems, Cine

world Group, Genuit Gro

up.

following table shows the

base salaries effective 1 January 2022:

€’000

2022

Dermot Crowley

590.0

Carol Phelan

350.0

Shane Casserly

350.0

Pension

We adjusted executi

ve director

pension contribu

tions to 5% of salary,

line with the majority of pen

sion

eligible staff in Irel

and and the

remuneration policy. The co

mmittee

will keep

the pension contribution

under review i

n the context of any

changes in pensio

n provision across the

group.

The committee ackno

wledges that up

to the end o

2021

pension

contribution

s paid to some executive

directors were not ali

gned with the

wider pensio

n eligible workforce

and therefore di

d not comply with

provision 38 o

f the Code. The higher

payment rates arose from contr

actual

obligations. The matter was rectifie

with effect from 1 January 2022.

For future new Executive Dire

ctor

hires, the board will

take into account

best practice, the rate avail

able to

the wider pen

sion eligible workforce,

and market practice at similar

sized companie

s at the time

of appointmen

Remunerati

on Committee

Report

Annual

bonus

Each of the executive d

irectors will be

eligible fo

r a maximum bonus of 125%

of salary, unchanged

from 2021

e performance

measure for all

executive di

rectors will be weighted

70:30 between financi

al and non-

financial measures.

The financial metric wil

l be based on

EBIT (see definition

►►

page

194

The

non-financial me

asures are based on

ecified strategi

c objectives link

ed to

the individual

’s area of responsibility

including objective

s designed to

support the achie

vement

of the

company’s

2026 envi

ronmental

targets (see

►►

page

) and pave

the way for deve

ping a cre

dible

decarbonisatio

n pathway for

the group.

The committee will con

sider the

group’s overall

performance befo

determining

the final bonus outcome

and may adjust the bo

nus award if it

considers that the o

utcome does not

reflect the underl

ying financial or non-

financial performance

of the

participant or the g

roup over the

relevant perio

d. It will also consid

whether any prop

osed bonus

payment is approp

riate in the context

of its alignment with

the shareholder

experience o

ver the year and the

experience o

f other stakeholders.

At least 30% of the bonu

s will be

delivered

in the form of Dalata shares

deferred for at least three ye

ars. The

remainder is payab

le in cash following

the year-end. This deferral

may be

operated under the terms o

f a

restricted share trust.

Malus and clawback p

rovisions apply.

The followin

g table shows t

weighting of the bonus o

pportunity for all exe

cutive directors for 2022 (opportunity % base salary):

Category

Annual bon

us measur

All executiv

e directors % bas

e salar

Financial

EBIT

87.5

Non-financial

Individual

strategic busi

ness objectiv

Environmenta

l target

Total

125%

LTIP

Awards will be grante

d in 202

2 of 150% of salary for the chief e

xecutive and 125% of salary for the other Executi

ve Directors in lin

e with

the Remuneration Po

licy.

Awards will vest after a thre

e-year performance p

eriod based 50% o

n TSR and 50% on

Free Cash Flow per share (FCFS)

Vested shares wil

be subject to a mini

mum additional two-year post-vesting hold

ing period.

For the past few years, t

he STOXX E

urope 600 Travel and

Leisure index has been used as o

ur TSR comparator group

. However, there has

been significant vo

latility in the constituents of the g

roup, and it is now more focused on g

aming companies. Therefore, it has beco

evident that the mak

e-up of the STOXX 600 Travel and

Leisure inde

x is no longer a good fit for Dalata.

As committed in the

2021 Directors’

Remuneration Repo

rt, the committee h

as given careful thought

what group

would be more appro

priate to use going forward and

have

decided to

move to a bespoke TSR group

of 20 leisure and ho

spitality competitors for clo

ser performance

alignment.

A list of the compan

ies in the group is shown b

elow:

Company

Sub

-sector

Company

Sub

-sector

Marriot Interna

tional

Hotels and Mo

tels

Easyjet

Airlines

Hilton Wo

rldwide

Hotels and Mo

tels

TUI

Travel and To

urism

Ryanair

Airlines

Air France-K

Airlines

IHG

Hotels and Mo

tels

SSP Group

Restaurants

and Bars

Accor

Hotels and Mo

tels

Autogrill

Restaurants

and Bars

IAG.

Airlines

Melia Hotels

Hotels and Mo

tels

Hyatt

Hotels and Mo

tels

Finnair

Airlines

Whitbread

Hotels and Mo

tels

Scandic

Hotels and Mo

tels

Deutsche Luftha

nsa

Airlines

PPHE Hotel G

roup

Hotels and Mo

tels

Wizz Air

Airlines

On the Beach

Travel and To

urism

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

The LTIP awards have previo

usly been based

50% on EPS measures, whi

ch is now repl

aced by F

ree cash flow per share (FCFS

)

Due to the

way that Dalata

required to account fo

r leases under IFRS16, the committee is co

ncerned that EPS was no

t fully representative

of our

performance or ince

ntivising the right be

haviours. There is a risk that continui

ng to use EPS would penalise manageme

nt for executing o

growth strategy of deve

loping new leaseh

old hotels due to the

dis

proportionate impact on EPS in the early ye

ars of new leases.

committee

s, therefore, decide

d that FCFS is a clearer perfor

mance measure that is more aligne

d to the recovery strategy of th

business.

The committee beli

eves that TSR and FCFS provide a balance

between incentivi

sing long-term profit growth from the executi

of the strategy and reco

gnising performance delive

red for shareholders via share price

growth and di

vidend performance rel

ative

to sector peers.

Concerning

FCFS, shareholders in our recent consul

tation indicated they understood

the rationale for the change but stressed the

need for reportin

in relation to its calculatio

n. Historically we have adjusted EPS fo

r LTIP to exclude i

tems that are deem

one-off and

thus do not reflect no

rmal trading activities or d

istort comparability e

ither period on pe

riod or with other similar businesse

We intend to

take a similar approach with

FCFS to encou

rage the vigorous pursuit of opp

ortunities, and by excluding certain one-off items, we drive the

behaviours we se

ek from the executives and

encourage manageme

nt to invest for the lo

ng-

term interests of shareh

olders

The definition

of FCFS

set out in the Alternative Pe

rformance Measures, see

►►

The performance targets for 202

2 LTIP

awards are shown belo

€’000

TSR

(50% of awar

FCFS

(50% of awar

Deﬁnition

TSR performan

(compared with

bespo

ke group)

Basic FCFS a

chieved i

n the year e

nding

31 December

2024

Threshold v

esting (25%

of maximum

)

TSR at median

level

of the group

€

0.36

Maximum v

esting

TSR at upper q

uartile

level

of the group

€

0.48

Notes:

No vesting below thres

hold performance.

Straight-line vesting be

tween points

The company’s TSR pe

rformance will be calc

ulated by using a ranked a

pproach

against the

bespoke group.

TSR will be calcula

ted using a three-

month

average at the star

t and end of the perfor

mance period (1 Ja

nuary 2022 to 31 Decembe

r 2024).

Non-executive Director fees

Non-executive di

rector fees were last reviewed by th

e board in 2021, and it was agreed that no

increase would be appli

ed at the

time being

. Fees are typically reviewed every two ye

ars and are next set to be revie

wed in 2023.

The table belo

w shows non-executive director fees effective

1 January 2022 with comparative fig

ures for 2021.

Full normalised

fees are shown for

2021

. The 15% temporary red

uction effective be

tween 1 April 2020 and 31 March 2021 reduc

2021

pay by 3.75% from normalised

ees

€’000

2022

2021

Change %

Board Chair

150

Basic Non-ex

ecutive Di

rector

Chair Audit an

d Risk Comm

ittee

Chair Remunerat

ion

Committee

Chair ESG Co

mmittee

Non-executive

Directo

r designate

d responsibi

lity

for workforce

engageme

Remunerati

on Committee

Report

OUTCOMES IN RESPECT OF 20

Where indi

cated the disclosure has bee

n audited.

Directors’ remuneratio

n in 2021 was awarded in l

ine with the Remuneratio

n Policy, which was app

roved by sharehold

ers at the

2020

AGM.

Overall, the committee

is satisfied that the

policy has operated

as it was intended thi

s year. Due to the ongoing impact of the pandemic on

the company and

the wider hospitality sector, no an

nual bonus or long-term incentive awards were paid

to any o

f the executive directors

in respect of 2021.

Single total ﬁgure of remunera

tion (audited)

The followin

g table details

director’s

remuneration for the 2021

ﬁnanci

al year (with 20

comparative figu

res

€’000

Year

Base salar

fees

Pension

Beneﬁts

Bonus

LTIP

Total

Proportion of

fixed and

variable

pay

Fixed Remuneratio

Variable Remuneration

EXECUTIVE D

IRECTORS

Pat McCann

2021

100:0

2020

542

100:0

Stephen McNal

2021

100:0

2020

316

366

100:0

Dermot Crowl

2021

381

440

100:0

2020

316

375

100:0

Shane Casserl

2021

313

329

100:0

2020

288

303

100:0

NON-EXECUT

IVE DIRE

CTORS

John Hennes

2021

144

100:0

2020

133

100:0

Robert Dix

2021

100:0

2020

100:0

Alf Smi

ddy

2021

100:0

2020

100:0

Margaret Swee

ney

2021

100:0

2020

100:0

Elizabeth Mc

Meikan

2021

100:0

2020

100:0

Cathriona Hall

ahan

2021

100:0

2020

n/a

100:0

Gervaise Slo

wey

2021

100:0

2020

n/a

100:0

Notes:

Base salary/

fees represe

nt all amounts rec

eived in respect of t

he ﬁnancial year.

Pat McCann served as C

EO from 1 Januar

y until 31 October 20

21, when he stepped d

own from the

boar

His pay in the above

table represents time

in service up to

31 October 2021.

He remained in employ

ment fro

m 01 November to

31 Decemb

2021, during which t

ime

recei

ved €

102k

of compensation

, reflecting the

period of annual leave acc

rued through 20

20 and 2021 when d

ue to the exceptional c

ircumstances of the Co

vid

-19

pandemic, very little a

nnual leave was taken.

Dermot Crowley previous

ly served as Depu

ty CEO. He was ap

pointe

d CEO Designate i

n March 2021 and rema

ined on his previou

s salary of

€

355.5k (whic

h was

subject to a 15% reductio

n for the first three

months of the year

). He s

ucceeded Pat a

s CEO on 1 November 20

21 with a base sa

lary of

€

590k. His salary i

n 2021 has

been pro-rated acc

ordingly to reflect his ti

me in each role.

Pension represents

payments into the com

pany’s deﬁned contribut

ion pension plan. F

or 2021 (and 2020)

, the former Chief Exec

utive, Pat McCann, did

not

participate in the pensio

n plan. The Deput

y Chief E

xecutives received pensio

n contributions of

15% of salary

, and the Corpo

rate Developme

nt Director received

pension contributions of 5

% of salary. Dermot

was appointed CEO o

n 1 November 2021

with a pension contributio

n of 5% of sa

lar

y. Pre

viously as Dep

uty CEO, his

pension contributions

were 15% of sala

ry. His pensions figure

in 2021 has been pro

-r

ated accordingly.

Beneﬁts include a co

mpany car and fuel a

nd beneﬁts under

the

gro

up risk-

beneﬁt sc

heme, which includes

death in service cover

and disabili

ty beneﬁt.

Alf Smiddy received co

mpensation of

€

22k

for expenses i

ncurred travelling to an

d from board mee

tings (2020

zero), Elizabeth M

cMeikan received

similar

compensation

€1k (

2020 zero)

There was no bonus pa

yment made for 2021:

The 2021

executive directo

r bonus plan was suspe

nded in July

2021 following a mana

gement proposal

to the

remuneration committee

that, in ligh

t of the outcome for

the first half of t

he year and having regard to t

he wider shareholder e

xperience

, no bon

us should be paid

for 2021.

There will be no vesting o

f LTIP awards for

2021. Th

reflects the fi

nal vesting outcom

e of the 2019 LTIP awa

rd. Performance

was measured over the t

hree

-year

performance period fro

m 1 January 2019 t

o 31 December 2021. Vest

ing of the 2019

award was base

d 50% on TSR performa

nce compared to the STOXX

Europe 600

Travel and Leisure in

dex and 50% on EPS

performance achieve

d in FY21 (see

►►

for furt

her details). No disc

retion was exercised.

Cathriona Hallahan

was appointed non

-executive directo

r of t

he board o

n 1 November 202

1. Her fees for 2021 reﬂec

t her time in service d

uring the year.

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Gervaise Slowey was ap

pointed non-

ecutive director of

the board on 1 Dece

mber 2021. Her fees fo

r 2021 reﬂect her time i

n service during t

he year.

Annual bonus pl

an outcome for 2021 (audited)

The maximum bonus for 2021 was

125% of salary for all executive d

irectors. For the chief executive

and deputy chief execu

tives, this was

based

% on the achi

evement of stretching financi

al targets and

% on non-finan

cial targets. For the corporate develo

pment director,

the performance measure

s were weigh

ted equally (50/50) betwee

n financial and non-financial objectives.

It was intended that the finan

cial target would b

e divided in

two parts, based on EBI

T (divided be

tween the first and second half o

f the

year) and liqui

dity. The non-financial targets were intende

d to be divided betwee

n group strategic ob

jectives designed

to position the

company for

strong recove

ry in 2022 and the deve

lopment and implementatio

n of an integrated ESG strategy

Given the unce

rtainty concerning 2021 outco

mes, the committee post

poned obje

ctive setting until i

ts July meeting. At that meet

ing,

management propo

that,

light of the outcome for the first half of the ye

ar and having reg

ard to the

wider sharehold

er experience, no

bonus should be

paid for 2021. The committee agreed; no

discretion was applied.

LTIP

–

vesting outcome of the 201

9 award (audi

ted)

The 2019 LTIP award granted to ex

ecutive di

rectors on 6 March 2019 became eli

gible for vesting follo

wing the completion o

f the

Performance Period o

n 31 December 2021. Vesting of the award was su

bject to two performance crite

ria: 50% of the award is based o

TSR performance compared to

the STOXX Europe 600 Travel an

d Leisure ind

ex, and 50% is based on Adjusted Basic EPS performance for

the year ende

d 31 December 2021 (calculated under the

accounting treatment of leases per IAS 17; see alternativ

e performance measures

(APM) (xvii) on page 196.

Due to the contin

ued impact of the pandemic on

performance in 2021, the 2019 LTIP will not ve

st. The committee did not exe

rcise any

discretion in

relation to this outcome

The assessment of the TSR an

d EPS performance is sho

wn below.

Weighting

Threshold

(25% vesting)

Maximum

(100% vesting)

Actual

Vesting outcome

TSR

50%

Equal to inde

Equal to or greater

than 10% per annum

above the index

Below the ind

Adjusted Basi

c EPS

50%

€0.45

€0.55

(€0.

Overall Vesting

0% of maximum

TSR was calculated us

ing a 3-mo

nth average at the start

and end of t

he performance perio

d (1 January 2019 to

31 December 2021).

Share incentive plan interests awa

rded duri

ng 2021 (audited)

The table bel

ow provides detail

s of the LTIP awards made during the ye

ar to the executive directors.

Director

Type of award

Face value of the award

at grant

Number of

shares awarded

Vesting at threshold

(% of maximum)

Performance

period

Pat McCann

LTIP

150% of salary

219,895

25%

1 Jan 2021

31 Dec 2023

Dermot Crowl

LTIP

125% of salary

761

25%

1 Jan 2021

Dec 2023

Stephen McNal

LTIP

125% of salary

106,761

25%

1 Jan 2021

31 Dec 2023

Shane Casserl

LTIP

125% of salary

97,600

25%

1 Jan 2021

31 Dec 2023

Vesting is based on t

wo separate performa

nce criteria: 50% of t

he award is based on

TSR performance com

pared with the company

’s bespoke

TSR group.

A full list of the compan

ies in the group ca

n be found on page

Threshold vesti

ng occurs for TSR equal

to the me

dian TSR of th

e group and maximum ves

ting

where TSR is equal to o

r greater than the u

pper quartile TSR of the

group. The remain

ing 50% is based on Free Cas

h Flow p

share achieved in F

Y23 with threshol

vesting for FCFS eq

ual to €0.35 and maxim

um vest

ing if FCFS is equal to o

r greater than €0.47.

The number of shares a

warded was calcula

ted using the volume

ighted average sh

are price on 2 Marc

h 2021 (€4.162), the last trad

ing day prior to the da

of the grant.

The maximum awar

ds granted to Pat Mc

Cann an

d Stephen McNally

will be reduced o

n a pro-rata basis

in line with their

service during

the performance perio

Remunerati

on Committee

Report

As disclosed in

last year’s Directors’ Remuneratio

n Report, we delaye

d target

setting for the 2021 LTIP grant du

e to the uncertainty

with business forecastin

g. The targets for these awards were

published in

September, as set out bel

ow:

€’000

TSR

(50% of award)

FCFS

(50% of award)

Deﬁnition

TSR performance against

the bespoke

group

FCFS achieved in the

year ending

31 December 2023

Threshold v

esting (25%

of maxim

um)

TSR

at medi

an level o

f the group

€

0.35

Maximum v

esting

TSR

at upp

er quartile le

vel of

the bespoke

group

€

0.47

Notes:

No vesting below thres

hold performance.

Straight-line vesting be

tween points.

The company’s TSR pe

rformance will be calc

ulated by using a ranked a

pproach against the

bespoke group. TSR w

ill be calculated

using a three-

month average at the

start and end of the perfor

mance period (

1 January 2021 to 31 Decem

ber 2023).]

TSR comparator g

roup includes Marrio

tt, Hilton, Ryan Air, IHG, Acc

or, IAG, Hyatt, Whi

tbread, Deutsche L

ufthansa, Wizz Air, easy

Jet, Tui, Air

France-KLM, SS

P Group,

Autogrill, Melia Hotels, Fi

nnair, Scandic, PP

HE Ho

tel, On the Beach.

The company has been o

n the path to re

covery fro

m the impact of the

Covid-19

pandemic, and at t

he time when the 202

1 LTIP grant was ma

de, the share price

reflected some of this

recovery, which s

ignificantly mitigated

the risk of potential w

indfall gains. However, the com

mittee will continue

nitor this and is

prepared to exercise its

discretion at the e

nd of the performa

nce period to avoid suc

h windfall gains arisi

ng.

Leaving arrangements for Pat M

cCann and Stephen McNall

Pat McCann stepped d

own as Chief Executive and as a direc

tor o

f th

board on 31 October 2021. Pat remai

ned an employe

e of the

company until

the end of 2021, reflecting the

period of annual leave

accrued through 2020 and

2021 when due to the exceptional

circumstances of the Covid-19 pand

emic, very little an

nual leave was taken. He was paid

his

normal salary

of €102,000

in the perio

from 01 November to 31 Decembe

r 2021. No payment in li

eu of noti

ce or other termination p

ayment will be payable.

Pat was eligible

for an annual bonus in respe

ct of FY2021, however as

described o

n page 82

the

2021

executive director bonus pl

was suspended, and no

bonus was paid.

Pat was treated as a good

leaver in respect of hi

s outstanding LT

IP awards and unve

sted deferred bonus shares. An

y deferred bo

nus shares

will contin

ue to vest on the normal vestin

g date and be subject to

malus provision

s. Unvested LTIP awards will be

prorated fo

the time in

service and will

vest in line with the terms of the Plan Rules on

the normal vestin

g date subject to the

performance conditions be

ing

satisfied at the end o

f the performance pe

riod. They will be sub

ject to a holding period i

line with the terms of the scheme. Al

l LTIP

awards will remain subject to m

alu

s and clawback provi

sions, and he will not b

e eligible to receive

any future awards under the compan

y’s

long-term ince

ntive plan.

In line with the

company’s remuneration po

licy, Pat is sub

ject to a minimum sharehol

ding requiremen

t equivalent to half of the in-

employment shareh

olding requirements (i.e.100% of sal

ary) for a two-year holding peri

od from leaving employme

nt. This guideline only

applies to shares that vested

following the ap

proval of the 2020 Policy; however, the company's restricted

share trust is projected to retai

a minimum balance

of greater than 100% of salary througho

ut the two years after leaving

employment

Stephen McNally

step

ped

wn as a director of the board on 31 December 2021. He remai

in employment wi

the co

mpany until

February 2022. This was origi

nally desig

ned to reflect the period o

f annual leave accrued throug

h 2020 and 2021 when, due to the

exceptional

circumstances of the Covid-19 pande

mic, very little annual leave

was taken. However, following the

decision of Conal O

’

Neill

not to take up the

position of Chief Operating Officer (COO) (annou

nced on 3 No

vember 20

21)

, due to a change

in personal circumstances

Stephen agree

d to remain in position to suppo

rt the transition of Des McCann to the COO role. He was pai

d normal salary and ben

efits

until 28 February and rec

eived a payment in lieu

of annual leave upon termination. Under his service

contract, payment in lieu of annu

leave is no

t provided for. However, in the exceptional

circumstances, the committee

agreed to waive this provisio

n. No payment in lieu of

notice or o

ther termination payment was payable. From 1 March

2022, Stephen McNall

y will remain avai

lable to the company to

support

business ope

rations, particularly in relation to the

opening of new hotel

s and the new COO for a period

four months, during which

will receive

a fee of

€1,350

per day of work.

The board is g

rateful to have the bene

fit of Stephen’s

immens

experience for thi

s extended

period

Stephen

will no

t participate in the annual bonus in

respect of FY2022.

Stephen was treated as a goo

d leaver in respect o

f his outstan

ding LTIP awards and unvested deferred

bonus shares. Any deferred bo

nus

shares will continu

e to vest on the normal vesting

date and be subject to malus provisions. Unvested LTIP awards wil

l be prorated fo

r time

in service and wil

l vest in line with the terms of the

Plan Rules on the

normal vesting date subje

ct to the performance condi

tions being

satisfied at the end o

f the performance pe

riod. They will be subject to a holdi

ng period in line with the terms of the scheme. Al

l LTIP

awards will remain subject to mal

us and clawback p

rovisions, and h

e will not be eligibl

e to receive any future awards unde

r the Company’s

long-term ince

ntive plan.

line with the

company’s remuneration po

licy, Stephen wi

ll be subject to a minimum sharehold

ing requirement equi

valent to half of the

-employment shareho

lding requirements (i.e. 100% of salary)

for a two-year holding period from le

aving employmen

t. This guideline only

applies to shares that vested

following the ap

proval of the 2020 Policy; however, the company's restricted

share trust is proje

cted to retain

a minimum balance

of greater than 100% of salary through

out the two years after leavi

ng emplo

yment

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Additional Disclosures

Directors’ and Company Se

cretary’s share i

nterests

beneficially

owned as at 31

December 2020

beneficially

owned as at 31

December 2021

Option to

acquire shares

under Sharesave

Scheme

Conditional LTIP share a

wards subject

to performance con

ditions

2019 Award

(vesting after

31/12/21)

2020 Award

(vesting after

31/12/22)

2021 Award

(vesting after

31/12/23)

Total

Conditional LTIP

Awards

Pat McCann (note

1,673,319

7,894

150,121

250,334

73,298

473,753

Dermot Crowl

586,381

7,894

72,885

182,309

106,761

361,955

Stephen McNal

612,833

7,894

72,885

131,668

41,518

246,071

Shane Casserl

148,189

7,894

29,360

166,665

97,600

293,625

John Hennes

170,000

Robert Dix

87,465

Margaret Swee

ney

66,787

Alf Smi

ddy (note a)

76,646

Elizabeth Mc

Meikan

8,000

Cathriona Hall

ahan

n/a

Gervaise Slo

wey

n/a

án McKeon

175,139

7,894

29,372

73,468

43,023

145,863

The interests of Pat McCa

nn and Alf Smidd

y in

the co

lumn headed “Shares

beneficially owned

as at 31 December

2021” reflect their

retire

ment as directors on

October 2021 an

d 29 April 2021, respectiv

ely.

Shares beneﬁcially owned

include

those of co

nnected persons and include s

hares held in trust

which are subject to defe

rral or holding periods.

Total conditional LTIP a

wards include LTIP a

wards to Executive Direc

tors representing

the maximum number of

that may vest under 2019, 2

020, and 2021

LTIP awards based on

the performance co

nditions associated with eac

h award.

The 2

019 award will not ves

t because the performance c

riteria were not met

see

page

. The

number of awards f

or Pat Mc

Cann and Stephen Mc

Nally for

2020 and 2021 are red

uced on a

pro-rata basis i

n line with the le

ngth of the

service

during the performance pe

riod

There was no change

in the beneﬁcial inter

ests of the Directors

between the year

-en

d and the date of

this report.

Shareholding guideli

nes

Executive Directors

are required

to build up and

maintain a beneﬁcial hold

ing of at least 200% of base salary

. Based on the closi

share price on 31 De

cember 2021 of

€3.72

, the Executive Di

rectors

’

beneﬁcial h

oldings as a percen

tage of

their base salary (on that date)

were as follows:

Beneﬁcial

shareholding %

base sal

ary

Stephen McNal

Dermot Crowl

370

Shane Casserl

170

TSR performance summary and hi

storic remuneration outco

mes

The graph below co

mpares the TSR (re-based to 100) over the perio

d since listin

g to the performance of the

ISEQ Index and the

median of the STOXX Europe 600 T

ravel and Leisure

Index.

100

150

200

250

300

Mar 14

Jun 14

Sep 14

Dec 14

Mar 15

Jun

Sep 15

Dec 15

Mar 16

Jun 16

Sep 16

Dec 16

Mar 17

Jun 17

Sep 17

Dec 17

Mar 18

un 18

Sep 18

Dec 18

Mar 19

Jun 19

Sep 19

Dec 19

Mar 20

Jun 20

Sep

Dec 20

Mar 21

Jun 21

Sep

Dec 21

Dalata Hotel

Group

ISEQ

STOXX Eur

ope 600 Trave

l & Leisure In

dex

Remunerati

on Committee

Report

100

The

following

table shows the total remuneration fo

r the chief executive

for each ﬁnancial ye

ar over the same period.

2014

2015

2016

2017

2018

2019

2020

2021

Single ﬁgure (€

’000)

441

840

1,603

1,764

1,511

1,293

542

Annual bonus o

utcome

(% of

maximum)

67%

100%

90%

100%

62.5%

LTIP vestin

(% of maxi

mum)

N/A

100%

46%

67%

2014 inc

ludes remuneratio

n prior to IPO.

2019 s

ingle f-igure is resta

ted to reflect the vesting

outcome of LTIP awar

ds granted in 2017,

which vested in Marc

h 2020.

2021 s

ingle figure includes t

he outgoing CE

O’s pay until 31 October a

nd the new CEO’s pay fro

m 1 November u

ntil 31 December 2

021.

Relative spend on pay

The followin

g table shows the g

roup’s aggregate ac

tual s

pend on pay (for all empl

oyees) and di

vidends in respect of the current and

previous ﬁnancial

year. There were no share bu

ybacks in either year

2020

2021

Change

Dividend

€

0.0m

€

0.0m

Aggregate e

mployee re

munera

tion

€

49.2m

€

51.7m

The above figu

res are stated net of governme

nt grants of

€38.0 million (2020: €20.8 millio

n).

Percentage change in remunerati

The followin

g analysis

is presented in compl

iance with S1110N of the Compan

ies Act 2014: it summarises

the annual

change in

remuneration for e

ach individual director over five

years in comparison

to the annual

change in average employe

e remuneration.

2017 v. 2016

2018 v. 2017

2019 v. 2018

2020 v. 2019

2021 v. 2020

2021

€’000’s

Director’s Remuneration

Executive Directors

Pat McCann

10%

(14%)

(58%)

(10%)

486

Stephen McNal

(16%)

(52%)

Dermot Crowl

(16%)

(15%)

(51%)

17%

440

Shane Casserl

n/a

Non-executive Directors

John Hennes

(11%)

144

Margaret Swee

ney

(12%)

Alf Smi

ddy

(12%)

(

Robert Dix

(12%)

Elizabeth Mc

Meikan

n/a

400

Cathriona Hall

ahan

n/a

Gervaise Slo

wey

n/a

Company Pe

rforman

Profit (loss) before

tax

(224%)

90%

(11,436)

Average Re

muneration, o

n a Full-

time Equiv

alent Basi

s, of employee

s of the

group

Average group

FTE

(

)

Changes in Directors a

nd roles during the 202

1 financial year were as follo

ws:



Pat McCann stepped do

wn from the

board on 31

October 2021.



Dermot Crowley was

promoted to g

roup CEO effective

1 November 2021.

Cathriona Hallahan a

nd Gervaise Slowey w

ere appointed o

n 1 November

2021 and 1 Dec

ember 2021, res

pectively, and Alf S

middy retired on 29 A

pril 2021

101

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Payments to past Directors

Details of salary payments to Pat M

cCann in the pe

riod after he stepped down from the board o

n 31 October 2021 are set out on

►►

page

Payments for los

s of office

There were no payme

ts for loss of office during the year.

AGM voting

At last year’s Annual Gene

ral

Meeting, the foll

owing votes were recei

ved on the resolution

to receive and conside

r the

Director's Report on

Remuneration for the

year ended 31 Dece

mber 20

Votes

Votes For

,340,482

100

Votes Again

82,140

Total Votes

106,422,622

100%

Votes Withhel

The followin

g votes were received on the

resolution to appro

ve the Directors Remuneration Policy

at the 2020 AGM.

Votes

Votes For

131,980,613

99%

Votes Again

913,115

Total Votes

132,893,728

100%

Votes Withhel

The committee was pleased with

the le

vel of support received for o

ur Remuneration Repo

rt and Directors Remuneration

Policy.

As always, we are committed

to taking

into consideration the

views of our shareholders each year in

our approach to and disclosure

of remuneration.

Remuneration Committee

and advisors

The chief executi

ve and the company

secretary attended committee

meetings at the in

vitation of the

committee chair (but were no

t p

resent

for discussions on

their

own remuneration).

The c

ommittee’s indepe

ndent

advisor Deloi

tte LLP and the

Group HR

Manager also attende

some meetings.

The members of the committee ha

no ﬁnancial in

terest and no potential

conﬂicts of interest, othe

r th

an as

shareholders, in

the matters to be

decided and no

day-

-day

involvemen

t in the running

of the busine

ss.

In carrying out its d

uties, the

committee consid

ers any

relevant leg

al requirements, the

recommendations i

n the UK Corporate

Governance Code

and

the Listing Rules o

f the London Stock

Exchange or Eurone

xt Dublin and

associated guid

ance and investor

guideline

s on executive remuneration.

The board approve

s the remuneration

of the non-executi

directors.

During 202

1, the committee co

ntinued

to receive in

dependent advice from

Deloitte LLP, based

in London, in respe

ct of the

development of the

Remuneration Poli

cy.

Deloitte LLP is a member of the

Remuneration Consu

ltants Group

and adheres to i

ts code concerning

executive remune

ration consulting

Deloitte Ireland

also provided

unrelated corp

orate ﬁnance advisory

services during

the year.

It is the view of the commi

ttee

that the

Deloitte LLP engag

ement team that

provide remun

eration advice to the

committee do no

t have connections

with the Company

or its directors that may impair

their independ

ence.

The committee revie

wed the potential

for conflicts of intere

st and judged that

there were approp

riate safeguards

against such confli

cts.

The committee consi

ders that the

advice receive

d from the advisors is

independen

t, straightforward,

relevant, and app

ropriate and that it

has an appropriate l

evel of access

to them and

has confid

ence in

their advice.

Fees charged by Del

oitte LLP

during the ye

ar were

£33,700. These

fees were charged o

n a time and

materials basis.

behalf of the bo

ard

Margaret Sweeney

Chair

Remuneration Committ

28 February 2022

Remunerati

on Committee

Report

102

DIRECTORS’

REPORT

The directors presen

t their report and

the consolidated fi

nancial statements

of Dalata Hotel Group p

lc (“Dalata” or

the “company”) and its subsidi

aries

(the “group”) for the year end

31 December 2021.

Principal activities and

business review

Dalata Hotel Group p

lc is the large

hotel operator in the

Republic of

Ireland and o

perates 16 hotels in the

(includin

g one partner hote

l) and

one hotel in Germany

. Shareholders

are referred to the Chair’s S

tatement,

Chief

Executive’s Review and

the

Financial Review, which

contain a

review of ope

rations and the fin

ancial

performance of the g

roup for 2021, the

outlook fo

r 2022 and the key

performance indi

cators used to assess

the performance of the

group. These

are deemed to b

e incorporated in the

Directors' Report.

Results for the year

The consolid

ated statement of profit or

loss and othe

r comprehensive income

for the year ende

d 31 December 2021

and the conso

lidated statement of

financial po

sition at that date are set

out on

►►

pages 10

9 and 110

respectively.

Dividends

There were no di

vidends paid or

proposed b

y the company during

the year.

Future developments

A review of future de

velopments

of the busine

ss is included in the

Financial Review o

►►

pages

Directors and company secretar

The names of the dire

ctors and

company secretary and a bi

ographical

note on e

ach appear on

►►

pages 61 and

Changes made to the

board of

directors were as follo

ws:



Alf Smiddy retired from the board

on 29 April 2021.



Pat McCann and Stephe

n McNally

retired from the board on

31 October 2021 and 31 Decembe

2021

, respectively.



Cathriona Hallah

an and Gervaise

Slowey were appo

inted to the

board on 1 Nove

mber 2021 and

1 December 2021, respectively.



Carol Phelan was appo

inted to the

board on 1 January 2022.

In accordance with the

provisions

contained in the UK Corp

orate

Governance Code

, all directors will

voluntarily reti

re and be subject to

election by shareho

lders at the 2022

Annual Gene

ral Meeting. Robert Dix

will retire from the board at the

conclusion of the 2022 An

nual General

Meeting and wil

l not

seek re-electio

Directors’ and company

secretary’s interests

Details of the dire

ctors’ and company

secretary’s share intere

sts and

interests in unve

sted share awards of

the company and

group companies are

set out in the remun

eration committee

report on

►►

page

Audit committee

The group has e

stablished an audit and

risk committee comprisi

ng four

independen

t non-executive directors.

Details of the committee an

d its

activities are set ou

t on

►►

pages

Share capital

The issued share capi

tal of Dalata

consists of 222,865,363 ordinary

shares. Each share has a nominal val

of €0.01. All shares have eq

ual voting

and dividend rights.

The group has in place

a number of

employee share

schemes

Details of

these are set out in the

remuneration

committee Report and in No

7 to the

consolidated

financial statements.

Substantial holdi

ngs

As at

February 2022, the compa

has been no

tified of the following

interests of 3% or more in

its share

capital which are pre

sented in the

table at the bottom of the

page.

Principal risks and u

ncertainties

Under Irish company l

aw, the company

is required to g

ive a description of the

principal risks an

d uncertainties which

the group faces. The

se principal risks

and uncertainti

es form part of the Risk

Management Report on

►►

pages 45 to

. The Financial Risk Manage

ment

policies are set ou

t in Note

to the

consolidated

financial statements.

n-financial

reporting directive

Dalata aims to comply with the

requirements of the

Non-Financial

Reporting Directive

(S.I 360/2017), and

these requiremen

ts are addressed in

the Strategic Report. Informa

tion

pertaining to

each of the matters

addressed by the

se regulations is set

out on

►►

page

Additionally, no

n-financial concerns are

reflected in o

ur Strategy and Business

Model on

►►

pages 7 to

and in ou

Risk Management Report o

►►

pages

. The company uses

a number of non-financi

al metrics,

several of which are d

isclosed in

this report, includ

ing in our key

performance indi

cators on

►►

page 12

Accounting records

The directors bel

ieve that they h

ave

complied with th

e requirements of

Sections 281 to 285 of the Compani

Act 2014 with regard to adeq

uate

accounting rec

ords by employing

accounting person

nel with appropriate

expertise and by

providing ade

quate resources

to the financial

function.

The accounting

records of the company

are maintained at its reg

istered office:

4th Floor, Burton Court, Bu

rton Hall

Drive, Sandyford Industrial Es

tate,

Dublin 18.

lder

Number of

Ordinary Shares

% shares

in issue

Zahid Group H

olding (MENA) Ltd

21,757,250

9.76%

Ameriprise Financial

19,045,088

8.55%

Fidelity Investmen

18,822,984

8.45%

Franklin Templeto

n Investments

16,121,808

7.23%

Lazard

11,060,768

4.96%

J&E Davy Holding

s Ltd

9,963,606

4.47%

FIL Investment Internatio

nal

7,373,551

3.31%

The Vanguard Group

, Inc

7,103,715

3.19%

Norges Bank Investment Manag

ement

6,706,787

3.01%

103

Dalata Hotel

Group plc

Annual Repo

rt & Accoun

ts 2021

Takeover regulations 2006

For the purpose o

f Regulation 21

of Statutory Instrument

255/2006

‘European Communiti

(Takeover Bids Directive (200

4/25/EC))

Regulations 2006’,

the information g

iven in note

to the

consolidated

financial statements and

in the remuneratio

n committee report

on pages

n relation to the

Long-Term Incentive Plan

, employee

share schemes, directors'

service

contracts and appoi

ntment and

compensation for l

oss of office of

directors is deeme

d to be incorporated

in the Directors' Report.

Transparency regulations 2007

For the purposes o

f information

required by Statutory In

strument

277/2007 ‘Transparency (Directive

2004/109/EC) Regul

ations 2007’

concerning

the development and

performance of the g

roup, the

Sustainability and Cli

mate Change

section, set out on

pages

deemed to be

incorporated in this part

of the Directors' Report toge

ther with

details of earni

ngs per share in note

to the consol

idated financial

statements, employme

nt details in

note

and details of fin

ancial

struments in note

24.

Corporate governance regulati

ons

As required by c

ompany law, the

directors have pre

pared a Report on

Corporate Governance

which is set out

on pages

, and

which, for the

purposes of Section

1373 of the

Companies Act 2014, is dee

med to be

incorporated i

n this part of the

Directors' Report. Details o

f the capi

tal

structure and employe

e share schemes

are included

in notes

and

to the

consolidated

financial statements,

respectively.

Relevant audit information

The directors who he

ld office at the

date of approval o

f this Directors'

Report confirm that, so far as

they are

each aware, there is no

relevant audit

information of which

the company's

external auditor is u

naware; and each

director has taken al

l the steps that

they ough

t to have taken as a director

to make themselves aware o

f any

relevant audi

t information and to

establish that the co

mpany's external

auditor is aware of that info

rmation.

Compliance statement

The directors, in acco

rdance with

Section 225(2) of the Companie

s Act

2014, acknowledg

e that they are

responsible

for securing the company’s

compliance with

certain obligations

specified in

that section arising from

the Companies Act 2014, the Mark

Abuse (Directive 2003/6/

EC)

Regulations 2005, the

Prospectus

(Directive 2003/71/ EC) Regu

lations

2005, the Transparency (Directive

2004/109EC) Regulatio

ns 2007 and Tax

laws (‘relevant o

bligations’).

The directors confirm that:



a compliance poli

cy statement has

been drawn up

setting out the

company’s polici

es that

, in their

opinion, are appro

priate with regard

to such complian

ce;



appropriate arrange

ments and

structures have been p

ut in place

that are designe

d to provide

reasonable assurance o

f compliance

in all material respe

cts with those

relevant obl

igations, and a review

has been conducted

, during the

financial year, of tho

se arrangements

and structures.

Going concern

The group’s busi

ness activities in 2021

continued

to be impacted as a result of

government restrictio

ns arising from

the Covid-19 pande

mic. A detailed

assessment of going

concern is set out

in Note 1 of the Fin

ancial Statements

►►

pages 114 and

115

The current activities o

f the group and

those factors likel

y to affect its future

development, toge

ther with a

description o

f its financial position

are described i

n the Strategic Report.

Principal risks and u

ncertainties

affecting the grou

p and the steps taken

to mitigate these risk

s are described in

the Risk Management sectio

n of the

Strategic Report on

►►

pages

After the measures taken throu

gh 2020

and 2021 to protect the

position and

viability o

f the company and a robust

review of the pro

spects of the

business, the di

rectors have a

reasonable e

xpectation that the

company and the g

roup have adequate

resources to conti

nue in operational

existence for three years (in l

ine with

the Viability Statement on

►►

pages

and 52

In making this assessment, the

directors conside

red the going concern

status for a period of at least 12

months from the date of sig

ning this

Annual Report and

Accounts.

For this reason, they contin

ue to adopt

the going con

cern basis in preparing

the financial statements.

Political contribu

tions

There were no po

litical contributions

that required discl

osure under the

Electoral Act, 1997.

Independent auditors

KPMG, Chartered Accountants,

were

appointed

statutory auditor in 2014

and reappointed o

n 30 June 2016

and pursuant to sectio

n 383(2) of

the Companies Act 2014 wil

continue in office

Subsidiari

Information on the g

roup’s subsidiaries

is set out in note

to the

consolidated

financial statements.

Subsequent events

Details of subsequen

t events are s

out in note

to the consolidated

financial statements.

The Financial Statements were

approved by th

e board on

28 February

2022.

On behalf of the b

oard

John Hennessy

Non-executive Chair

Dermot Crowley

Chief Executive

28 February 2022

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Clayton Hotel B

elfast

Financial St

atements

100

Clayton H

otel

Charlemont

Financial

Statements

Financial Statements

100

-190

Statement of Directors’

Responsibilitie

s in respect

of the Annual Rep

ort and the Financial Statements

Independent Aud

itor’s

Report

Consolidated

statement of profit or loss

and other compre

hensive income

Consolidated

statement of financial position

Consolidated

statement of changes in equity

Consolidated

statement of cash flows

Notes to the conso

lidated financial statements

1 Significant accou

nting policies

2 Operating segme

nts

3 Statutory and other information

4 Other income

5 Finance costs

6 Personnel expe

nses

7 Share-based payments expense

Government grants and g

overnment assistance

Tax credit

Impairment

11 Intangible

assets and goodwill

12 Property, plant and eq

uipment

Leases

14 Contract fulfilment costs

Trade and other recei

vables

Inventories

Cash and cash equival

ents

Capital and reserves

Trade and other payabl

157

Provision for liabi

lities

Loans and borrowin

Derivatives

Deferred tax

Financial instrumen

ts and risk management

25 Commitments

Related party transactio

Subsequent even

Subsidiary undertaki

ngs

Earnings per share

Approval of the fi

nancial statements

Company statement of financi

al position

Company statement of chang

es in equity

Company statement of cash flows

Notes to the Company fin

ancial statements

Supplementary

Financial Information

Alternative Performance Measu

res (

‘

APM

’

)

Glossary

197

Advisor and Shareho

lder Contacts

reh

101

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Clayton Hotel

Manchester Ai

rport

FINANCIAL STATEMEN

Statement of Dir

ectors’ Responsibi

lities

in respect of the Annual

Report and the

Fina

ncial Statements

The Directors are responsib

le for preparin

g the annual repo

and the conso

lidated and Company financial statements, in

accordance with app

licable law and regulatio

ns.

mpany law requi

res the Directors to prep

are consolid

ated

and Company financi

al statements for each financi

al year.

Under that law, the Director

s are requi

red to prepare the

consolidated

financial statements in accordan

ce with IFRS as

adopted by th

e European Union and applicable law in

cluding

Article 4 of the IAS Regul

ation. The Directors have el

ected to

prepare the Company fin

ancial statements in acco

rdance with

IFRS as adopted by the

European Union

as applied in accordance

with the provisi

ons of Companie

s Act 2014.

Under company law, the Di

rectors must not app

rove the

financial statements unl

ess they are satisfied that they g

ive a

true and fair view o

f the assets, liabi

lities and fin

ancial position

of the Group and Co

mpany and of the Group’s profi

t or loss

for

that year. In preparing

each of the consoli

dated and Company

financial statements, the Directors

are require

d to:



select suitable

accounting policie

s and then apply

them consistently;



make judgemen

ts and estimates that are reasonabl

and prudent;



state whether applicab

le accounting standards have

been followed

, subject to any material d

epartures

disclosed an

d explained in the fin

ancial statements;



assess the Group’s and Company’s

ability to

continue

as a going conce

rn, disclosing, as appli

cable, matters

related to go

ing concern; and



use the going co

ncern basis of accounting u

nless they

either inten

d to liquidate the Group or Compan

y or to

cease operatio

ns, or have no realistic al

ternative but

to do so.

The Directors are also requ

ired by the Transparency (Directive

2004/109/EC) Regul

ations 2007 and the Transparen

cy Rules of

the Central Bank of Irelan

d to include a manag

ement report

containing

a fair review of the business and a de

scription of the

principal risks an

d uncertainties facing the

Group.

The Directors are responsib

le for keep

ing adequate accountin

records which discl

ose with reasonable accu

racy at any time the

assets, liabilitie

s, financial posi

tion and profit or loss of the

Company and which

enable them to ensure that the fin

ancial

statements of the Company compl

y with the provi

sions of the

Companies Act 2014. The Directors

are also respon

sible for

taking all reaso

nable steps to ensure such records are

kept by

the Company’s subsidiarie

s which enable the

m to ensure that

the financial statements of the

Group comply with

the

provisions o

f the Companies Act 2014 and Article

4 of the IAS

Regulation. The

y are responsible for such intern

al control as

they determine

is necessary to en

able the preparation of

financial statements that are fre

e from material misstate

ment,

whether due to fraud

or error, and have

general responsib

ility

for safeguarding the

assets of the Company and the

Group, and

hence for takin

g reasonable steps for the p

revention and

detection o

f fraud and other irregularities. The Directors are

also responsibl

e for preparing a Directo

rs’ Report that complies

with the require

ments of the Companie

s Act 2014.

The Directors are responsib

le for the mainte

nance and integri

of the corporate and

financial information inclu

ded on the

Group’s and Company’s website

www.dalatahotelg

roup.com.

Legislation in the

Republic of Ireland conce

rning the preparatio

and disseminatio

n of financial statements may differ

from

legislation in

other jurisdictions.

Responsibility statement as r

equired by the Transparency

Directive and UK Corporate Gov

ernance Code.

Each of the Directors, who

se names and functio

ns are listed o

pages

to 62 of this Ann

ual Report, confirm that, to the b

est

of each person’s kn

owledge and belief:



The consolid

ated financial statements, prepared in

accordance with IFRS as ado

pted by the European

Union, and the Co

mpany financial statements,

prepared in acco

rdance with IFRS as adopted by th

European Union

as applied in accordance

with the

provisions o

f Companies Act 2014, give a true and

fair

view of the assets, liabi

lities, and finan

cial position o

the Group and Co

mpany at 31 December 202

and of

the loss of the Group

for the year then e

nded;



The Directors’ Repo

rt contained in

the Annual Report

includes a fair rev

iew of the development and

performance of the bu

siness and the p

osition of the

Group and Company, to

gether with a description

the principal

risks and uncertainties that they face;

and



The Annual Repo

rt and financial statements, taken as

a whole, provid

es the information necessary to assess

the Group’s performance, bu

siness model an

strategy and is fair, balance

d and understandabl

e and

provides the i

nformation necessary for sharehol

ders

to assess the Company’s positio

n and performance

business model

and strategy.

On behalf of the Bo

ard

John Hennessy

Dermot Crowley

Chair

Director

28 February

202

Financial St

atements

102

Independent Auditor

’

s Report

to the members of Dalata Hotel

Group p

Report on the audit of the financial statements

Opinion

We have audi

ted the financial statements of Dalata Hotel

Group plc (‘the

Company’) and its consol

idated undertakin

gs (‘the Gr

oup’) for the

year ended 31 Dece

mber 2

021

contained within

the reporting package 635400L2CWET7ONOBJ04-

2021

-en.zip, whi

ch comprise the

consolidated

statement of profit or loss and oth

er comprehensi

ve income, the consolid

ated and Company statements of financial position,

the consolidated an

d Company statements of chang

es in equity, the consol

idated and Company statements of cash flo

ws and related

notes, includ

ing the summary of significant acco

unting poli

cies set out in note 1. The finan

cial reporting framework that has

been appl

ied

in their prep

aration is Irish Law, including the

Commission Deleg

ated Regulation 2019/815 regardi

ng the single electron

ic reporting format

(ESEF), and International Finan

cial Reporting Standards (IFRS) as adop

ted by the Europ

ean Union and, as regards the Co

mpany f

inancial

statements, as applie

d in accordance with the

provision

s of the Companies Act 2014.

In our opinion



the fi

nancial statements give

a true and fair vie

w of the assets, liabili

ties and financial

position of the Group and

Company as

31 December

2021 and of the Grou

p’s loss for the year the

n ended;



the co

nsolidated finan

cial statements have been p

roperly prepared in accordance with

IFRS as adopted by the Europe

an Union;



the Co

mpany financial statemen

ts have been prope

rly prepared in accordance with IFRS as adopted by the Euro

pean Union

, as

applied in acco

rdance with the provisions o

f the Companies Act 2014; and



the co

nsolidated and

Company financial statements have b

een properly prepared i

n accordance with the require

ments of the

Companies Act 2014 and, as regard

s the conso

lidated financial statements, Article

4 of the IAS Regulatio

Basis for opinion

We conducted

our audit in accordance with Internatio

nal Standards on Auditing

(Ireland) (ISAs (Ireland)) and ap

plicable law. Our

responsibil

ities under those standards are further describe

d in the

Auditor’s Responsibilities

section

of our report. We bel

ieve that the

audit evidence we

have obtained is a sufficient an

d appropriate b

asis for our opinio

n. Our audit opinion is consistent with our report to the

Audit and Risk Committee

We were appoi

nted as auditor by the directors on 30 June

2016. The period of total u

ninterrupted engagement is the

six years ended 31

December 2021. We have

fulfilled our eth

ical responsibili

ties under, and we remaine

d independent of the Group i

n accordance with,

ethical requi

rements applicable in Ireland, inclu

ding the Ethical Standard issued

by the Irish Audi

ting and Accounting Sup

ervisory Authority

(IAASA) as applied to p

ublic interest entities. No n

on-audit services prohibited by that standard we

re provided

Conclusion

s relating to going concern

In auditing the

financial statements, we have con

cluded that the directors’ use of the

going conce

rn basis of accounting in t

he preparation

of the financial statemen

ts is appropriate. In o

ur evaluation

of the directors’ assessment of the Group’s and Company’s abili

ty to continue

to adopt the g

oing concern basis of accountin

g we considered the

inherent risks to the Group’s and Co

mpany’s business mode

l a

analysed how tho

se risks might affect the Group

’s and Company’s financial reso

urces or abil

ity

to c

ontinue ope

rations over the going

concern peri

od.

The risks that we conside

red most likel

y to adversely affect the Group’s and Co

mpany’s available

financial resources ove

r thi

s period were

the impact from ongo

ing effects of the Co

vid-19 pandemic, including further variants, and

the extent of go

vernment restrictions on

the

hospitality secto

r and international travel.

We evaluated

the going concern assessment by carrying

out the foll

owing procedu

res among others:



con

sidering the cash and

undrawn bank loan facilities avail

able to the Group and the rel

ated covenants in the faciliti

agreement which are

applicable in the g

oing concern perio



anal

ysing the base-case an

d alternative downside

scenario cashflow projectio

ns prepared by man

agement showing forecast

available liqu

idity and considering

the reasonableness of the un

derlying assumptions; and



anal

ysing worst-case scenario cashf

low projectio

ns prepared by management ill

ustrating the length

of time that liquidity wou

be expected to

remain available for in the remote li

kelihood scenario of the impositi

on of indefinite

strict Covid-19 lockdown

restrictions, and examini

ng the reasonab

leness of manage

ment’s conclusion that li

quidity would be maintained

throughout the

going conce

rn period in this worst-case scenario.

103

Dalata Hot

el Group plc

Annual Report & Acco

unts

202

Independent Auditor

’

s Report

to the members of Dalata Hote

l Group p

lc (continued)

Based on the work we h

ave performed, we have

not identi

fied any material uncertai

nties relating to

events or conditions that, individually

or collectively, may cast sign

ificant doub

t on the Group or the Company’s abil

ity to continu

e as a going concern for

a period of at least

twelve months from the d

ate when the financi

al statements are authorised

for issue.

In relation to the

Group’s and the Company’s reportin

g on how they have appl

ied the UK Corporate Govern

ance Code, we have

not

ing

materi

al to add or draw attentio

n to in relation to the

directors’ statement in the

financial statements abou

t whether the dire

ctor

considered i

t appropriate to adop

t the going concern basis of acco

unting.

Our responsibil

ities and the responsibil

ities of the directors with respect to goi

ng concern are describ

ed in the relevant sections o

f this

report.

Key audit matters: our assessment of risks of material misstatement

Key audit matters are those mat

ters that, in ou

r professional ju

dgement, were of most significance in the audit of the fin

ancial statements

and include the mo

st significant assessed risks o

f material misstateme

nt (whether or not du

e to fraud) identifie

d by us, incl

uding those

which had the g

reatest effect on: the ove

rall audit strategy; the allocation of resou

rces in the audit; and directin

g the efforts of the

engagemen

t team. These matters were addre

ssed in the con

text of our audit of the finan

cial statements as a whole, and

in form

ing our

opinion there

on, and we do not provid

e a separate opinion on these matters.

In arriving at our au

dit opinion above, the k

ey audit matters, in decreasi

ng order o

f audit significance, were as follows (unchanged from

2020):

Group: Property valuation

–

carrying value of land

and buildings €

1,0

.8 million (20

: €

1,058.5 mi

llion)

Refer to pages

(Audit an

d Risk Committee Repor

t), Note 1(xii) to

the consolidated finan

cial statements (

accounting policy for

Property Plant and Eq

uipment), and Note 12 to t

he consolidated finan

cial statements (finan

cial

disclosures

–

Property, Plant and

Equipment).

The key audit ma

tter

The Group has a large

owned hotel property p

ortfolio and

under its accounting policies app

lies the revaluation mode

l to its l

and and

buildings in

cluded within property plant and

equipment. This gives rise to a significan

t risk of material misstatement if perio

dic

revaluations are n

ot performed on an app

ropriate basis or are n

ot accounted for in acco

rdance with relevant accounting

standa

rds. The

Group engages in

dependent external experts to perform pe

riodic hotel reval

uations, which are i

nclusive of fixtures, fittings and

equipment,

which the Group acco

unts for under the cost mod

el. Appropri

ate allocations of hotel val

uations must therefore be made

betwee

n land

and building

s, and fixtures and fittings and

equipment for accoun

ting purposes.

The valuation o

f land and buildings as at the prior ye

ar-

end, 31 Decem

ber 2020, was on the basis o

f material valu

ation uncertainty due

the impact of Covid-19 on the

hotel property marke

t at that time. While the

valuation of land and build

ings is a key source of estimatio

uncertainty in the

financial statements for the year en

ded 31 December 2021 (in relation to the sign

ificant assumptions used in

valuing the

properties), the level

of uncertainty has decreased rel

ative to the previou

s year, because of the avai

lability of relatively mo

re market

evidence

on which to base estimates of fair value, and

the valuation

s as at 31 December 2021 are not o

n the basis of material valuation

uncertainty.

How the matter was addressed

in our audit

Our audit proced

ures included among o

thers:



obtai

ning and documentin

g our understanding o

f the process for undertakin

g and accounting

for property valuations an

d testing

the

design and

implementation of the rele

vant controls therein;



eval

uating the approach an

d findings of the work performed

by the indepen

dent external experts eng

aged by the Group

in relati

on to

hotel valuations;



assessing

and challe

nging the significant assumptions in

the hotel valuation repo

rts,

as applied i

n the accompanying discou

nted cash

flow valuation cal

culations, in relation to, amon

g others, future recovery in

trading from the impact o

f Covid-19,

the relativitie

s of

discount rates and cap

italisation rates appli

ed in valuations of different hotels, and oth

er matters specific to p

articular hotels o

r the

markets in which they o

perate which impacted on

valuations;



testing

the mathematical accuracy o

f all discounted cash flo

w models used in the

valuations;



consi

dering the allo

cation of hotel valuations to land and buildi

ngs and fixtures fittings and equi

pment;



testing

the amounts of in

dividual property revaluatio

n movements and thei

r presentation ei

ther in other comprehensi

ve income

or in

profit or loss, as approp

riate; and



eval

uating the adequac

y of the Grou

p’s disclosures in

relation to property valuatio

ns.

Financial St

atements

Independent Auditor

’

s Report

to the members of Dalata Hote

l Group p

lc (continued)

Our audit proced

ures did not identify any material i

ssues with the assumpti

ons adopted

in the property valuations. We

found

the

allocation of valuatio

ns between land and b

uildings and fixtures, fittings and

equipment and the inclusion of net revaluatio

n gains in other

comprehensive

income (€14.4 million) and

net reversals of revalu

ation losses in profit o

r loss (€6.8 million) for the year to

be appropriate.

We also found

the disclosures in the finan

cial statements relating to property valuatio

ns to be adequate in provi

ding an understandin

g of

the basis of the val

uations.

Group: Impairment of hotel cash-g

enerating units

–

carrying values o

f ri

ght-

use assets €491.9 million (2020: €411.0 mil

lion),

goodwill

€30.8 million (

2020: €30.0 million), and f

ixtures fittings and equi

pment €76.0 million (2020: €82.3 mi

llion)

Refer to pages

(Audit and

Risk Committee Report

), Note 1(viii), (xii

) and (xiv) to the con

solidated financial

statements (accounting

policies for Leases, Property

Plant and Equip

ment, and Goodwill), Note 10 to the

consoli

dated financial statements (financial discl

osures

–

Impairment) and Note 11 to the co

nsolidated

financial statements (financi

al disclosure

–

Intangible Assets and Goodwi

ll).

The key audit ma

tter

Due to the ongoi

ng impact on trading of the Covi

d-19 pandemic, impairment reviews of all

hotel cash ge

nerating units (CGUs) were

required, in acco

rdance with IAS36

Impairment of Assets

as at 31 Decembe

r 2021. The Group has material

right-

-use assets, goodwill

and

fixtures fittings an

d equipment. There is a risk

that the carrying amoun

ts of these assets could b

e more than the e

stimated r

ecoverable

amount. The recoverabl

e amount of right-

-use assets, goodwil

l and fixtures fittings and eq

uipment is arrived at by forecasting

and

discounting

future cash flows to determine val

ue in use fo

r each CGU. These cash flows are inhe

rently judgemental an

d rely on certain

significant assumptio

ns including in particular:



future tradi

ng performance;



future l

ong-term growth rates; and



scount rates.

These impairment assessme

nts are subject to

estimation unce

rtainty due to the i

mpact of Covid-19 in particular on the forecasting o

future trading pe

rformance, and the carrying

values of right-

-use assets, goodwill and fixture

s fittings and equ

ipment were identified as a

significant aud

it risk.

How the matter was addressed

in our audit

Our audit proced

ures included among o

thers:



taining and documenti

ng our understanding o

f the impairment assessment process and testing the d

esign and imple

mentation of

the relevant con

trols therein;



eval

uating the meth

odology applied by manage

ment in determining

the CGUs and the estimates of the reco

verable amou

nts of right-

-use assets, goodwill and

fixtures fittings and equipment to determin

e if they are in

line with the requirements o

f the applicabl

financial repo

rting framework;



eval

uating significant assumptio

ns used, in particu

lar those relating

to future trading performance and the

profile o

f future

recovery

in trading from the i

mpact of Covid-19, future long-term growth rate

s and di

scount rates;



comparin

g the Group’s sig

nificant assumptions to externall

y derived data in rel

ation to key inpu

ts such as long

-t

erm growth rates and

discount rates, inclu

ding where relevant the data in sep

arately prepared indepe

ndent property valuations;



testin

g the mathematical accuracy o

f all discoun

ted cash flow models used in the

impairment assessment; and



eval

uating the adequ

acy of the Group’s disclosures i

n relation to impairme

nt.

We found the

resulting estimates of the recove

rable amounts o

f right-

-use assets, goodwil

l and fixtures fittings an

d equipme

nt to be

acceptable. Our aud

it procedures did not i

dentify any material issues with the

significant assumptio

ns adopted i

n th

e impairment reviews.

We found that the Gro

up’s conclusions were ap

propriate that for the ye

ar ended 31 Dece

mber 2021 (i) there was no i

mpairment o

goodwill and

(ii) there was a net reversal in

profit or loss of €0.2 mil

lion of previo

us impairment charge

s for right-

-use assets and fixtures

fittings and equ

ipment. We also found the d

isclosures in the finan

cial statements relating to impairment

to be ade

quate in pr

oviding an

understanding

of the basis of the impairment assessmen

ts.

105

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Independent Auditor

’

s Report

to the members of Dalata Hote

l Group p

lc (continued)

Company: Investments in s

ubsidiaries €866.4 mi

llion (2020: €864.7 mi

llion)

Refer to Note 1(i) to the Comp

any financial st

atements (accountin

g policy for Investments in Sub

sidiaries) and Not

2 to the Company

financial statements (fi

nancial discl

osures

–

Investments in S

ubsidiaries).

The key audit ma

tter

The investments in sub

diaries are carried in the

Company’s financial

statements at cost less any impair

ment. As the net assets of the

Group are separately sub

ject to property reval

uations and impairment rev

iews as noted abo

ve, the carrying val

ue of the investments in

subsidiaries is no

t separately considered to

give rise to a signi

ficant risk of material misstatement. Howe

ver, due to the material

ity

of the

investments in the co

ntext of the Company fin

ancial statements, this is con

sidered to be

the area that had the greatest focus of our overall

audit of the Compan

y financial statements.

How the matter was addressed

in our audit

Our audit proced

ures included among o

thers:



obtai

ning an understanding

of management’s approach to the

assessment of investments in sub

sidiaries for po

ential impairment;



consi

dering the audi

t work performed in the

current year in relation

to property valuation and i

mpairment of hotel cash-generating

units; and



comparin

g the carrying val

ue of the investments to the net assets o

f the subsidi

aries.

found manag

ement’s assessment of the carryi

ng value o

f investments in subsidiarie

s to be appropriate.

Our application o

f materiality and an overview of the s

cope of our audi

The materiality for the co

nsolidated financi

al statements as a whole was set

at €4.7 million

(2020: €4.4

millio

n).

This has been cal

culated with reference to a be

nchmark of consolidated ne

t assets at 31 December 2021. Materiali

ty represents

approximately 0.5% of this be

nchmark, which we con

sider to be one of the prin

cipal considerations for members of the Compan

y in

assessing the financi

al performance o

f the Group.

In the previou

s year, we calculated materiality o

n the basis of 4% of lo

ss before tax. Profit be

fore tax is the measure

typic

ally used to

calculate materiality fo

r listed groups which have

reached a mature stage i

n their development. The scale

of the loss be

fore tax in 2020 was

broadly similar to

the profit before

tax in 2019 and we considered

loss before tax to be a suitabl

e materiality be

nchmark for

2020.

The Grou

p’s reported lo

ss before tax for 2021 is signifi

cantly lower than fo

r 2020. The Group has a signi

ficant asset base and we

determined that ne

t assets was a more approp

riate benchmark for 2021 for materiali

ty purposes, and mo

re reflective of the scale of the

business than lo

ss before tax.

In using a ne

t assets benchmark, we applied a material

ity measure of 0.5% which i

s at the lower end o

f the 0.5%

-1.0% range typi

cally used

for a net assets benchmark,

where appli

cable, in public company a

udits. Our material

ity measure for 202

0, although

based on a loss

before tax measure, also had

regard to the le

vel of net assets and represen

ted 0.47% of net assets at 31 Dece

mber 2020.

We reported to the

Audit and Risk Committee an

y corrected and un

corrected misstatements we identified throug

h our audit exceeding

€0.235 million (2020: €0.2 mill

ion), in addi

tion to any other audit misstatements be

low that threshold

that warranted reporti

ng on

qualitative g

rounds.

We subjected all

of the Group’s reporting co

mponents to audits

for group repo

rting purposes. The work on all

components was performed

by the Group aud

it team.

Materiality for the Company fin

ancial statements as a whole

was set at €4.0 millio

(2020: €4.0 million

), determined with re

ference to a

benchmark of total assets, of which

it represents 0.46%

(2020: 0.46%).

We used materiali

ty to assist us to determine

what risks were significant risks an

d to determine

the audit procedure

s to be p

erformed

including tho

se discussed above.

Financial St

atements

106

Maldron Ho

tel Cork

Independent Auditor

’

s Report

to the members of Dalata Hotel

Group p

lc (continued)

Other informatio

The directors are respo

nsible for the preparatio

n of the other information

presented in the Annu

al Report together with the financial

statements. The othe

r information comprise

s the

information included in the Directo

rs’ Report, Chair’s Statement, Chie

f Executive’s

Review, Purpose and V

alues section, Strategy and Busin

ess Model, Stake

holder Review, Financial

Review, Risk Managemen

t sectio

Sustainability and

Climate Change section, C

hair’s Overview –

rporate Governance

section, Board of Directors sectio

n, Executive

Management Team section, Corp

orate Governance Rep

ort, Nomination Committee

Report, Audit and Ris

k Committee Repo

rt, ESG

Committee Report, Remun

eration Committee Rep

ort, and Supplementary Financial Info

rmation.

The financial statements and

our auditor’s repo

rt thereon do not co

mprise part of the othe

r information. Our opi

nion on the f

inancial

statements does not cove

r the other in

formation and, accordi

ngly, we do not e

xpres

s an audit opinion or, except as e

xplicitly stated be

low,

any form of assurance conclu

sion thereo

Our responsibil

ity is to read the other information

and, in doing so

, consider whether, based o

n our financial statements audit work, the

information therein

is materially misstated or incon

sistent with the financi

al statements or our audi

t knowledge. Based so

lely on that work

we have not id

entified material misstatements in the

other information

Based solely o

n our work on the other info

rmation undertake

n during the course of the audit, we repo

rt that, in those parts of the

directors’ report specifie

d for our consi

deration:



we h

ave not identifie

d material misstatements in the d

irectors’ repo

rt;



our opinion, the in

formation given in the

directors’ rep

ort is consistent with the financi

al statements; and



our opinion, the di

rectors’ report has been

prepared in accordan

ce with the Companies Act 2014.

Disclosures of p

rincipal risks and longer-term viability

Based on the kn

owledge we acquired d

uring our financial statements audi

t, we have nothing material to

add or draw attentio

n to in

relation to:



the Pri

ncipal Risks discl

osures describin

g these risks and explai

ning how they are being manag

ed and mitigated;



the d

irectors’ confirmation withi

n the Via

bility Statement on page

to 52 that they have carried ou

t a robust assessment of

the principal

risks facing the Group, incl

uding those that would threaten

its business mode

l, future performance, sol

vency an

liquidity; and



the

directors’ explanatio

n in the Viability Statement of ho

w they have assessed the pro

spects of the Grou

p, over what perio

they have do

ne so and why they considered that pe

riod to be appropriate, and thei

r statement as to whether the

y have a

reasonable expe

ctation that the Group will be abl

e to continue in operation and

meet its liabilitie

s as they fall due over the

period of the

ir assessment, including an

y related disclosures drawi

ng attention to any n

ecessary qualifications o

r assumption

Other corporate go

vernance disclosures

We are require

d to address the following i

tems and report to you

in the following circumstances:



Fair, bala

nced and understandable

: if we h

ave identifie

d material inconsistencies be

tween the knowledge we acqui

red during

our fi

nancial statements aud

it and the directors’ statement that

they conside

r that the Annual Report and fin

ancial statements

taken as a whole i

s fair, balanced and und

erstandable and provides the info

rmation necessary for shareho

lders to assess the

Group’s pos

ition an

d performance, business mode

l and strategy;



Audit an

d Risk Committee Repor

if the section of the Annu

al Report describing the

work of the Audit and Risk Committee does

not appropriatel

y address matters communicated

by us to the Audi

t a

nd Risk Committee;



Statement of

compliance with

UK Corporate Governan

ce Code:

if the di

rectors’ statement doe

s not properly discl

ose a departure

from provisions o

f the UK Corporate Gove

rnance Code specifie

d by the Listing Rules o

f Euronext Dublin and the UK Listing

Authority for our revi

ew;



if the

directors’ statement rel

ating to Going

Concern required unde

r the Listing Rules of Eurone

xt Dublin and the UK Listing

Authority set out o

n page 98 is materially inconsisten

t with our audit knowle

dge.

We have no

thing to report in these respects.

107

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Independent Auditor

’

s Report

to the members of Dalata Hote

l Group p

lc (continued)

In addition, as requi

red by the Companies Act 2014, we report, in

relation

to information given

in the Corporate Governance Statement o

pages

and

the

Directors’ Report, that:



based

on the work u

ndertaken for our audit, in o

ur opinion, the description o

f the main features of inte

rnal control and risk

management systems in relatio

n to the financi

al reporting proce

ss, and information relating to voting rights and

other matters

required by th

e European Communities (Takeover Bid

s (Directive 2004/EC) Regulatio

ns 2006 and specifie

d for our consi

deration,

is consistent with the

financial statements and h

as been prep

ared in accordance with the Act;



based

on our knowle

dge and understanding of the

Company and its environment o

btained in the course of our aud

it, we have

not identifi

ed any material misstatemen

ts in that information; and



the Di

rectors’ Report contains the i

nformation requi

red

by the European Union (Disclosure of Non-Financial an

d Diversity

Information by certain l

arge undertaking

s and groups) Regulation

s 2017.

We also report that, based

on work undertaken

for our audit, the information

required b

y the Act is contained i

n the

Corporate

Governance Statement.

Our opinion

s on other matters prescribed

by the Companies Act 2014 are u

nmodified

We have ob

tained all the information and

explanations which we co

nsider necessary for the pu

rpose of our audit.

In our opinion

, the accounting records of the Company were sufficie

nt to permit the finan

cial statements to be readi

ly and properly

audited and the

financial statements are in ag

reement with the accountin

g records.

We have nothing to

report on other matters on wh

ich we are requ

ired to report by exception

The Companies Act 2014 requ

ires us to report to yo

u if, in our o

pinion:



the d

isclosures of di

rectors’ remuneration and

transactions required

by Sections 305 to 312 of the Act are

not made;



the Co

mpany has not pro

vided the information required by Secti

on 1110N in relation to

its remuneration report for the fin

ancial

year ended 31 Dece

mber 2020;



the Co

mpany has not pro

vided the information requi

red by section 5(2) to (7) of the Europ

ean Union (Disclo

sure of Non-

Financial and Dive

rsity Information by certain l

arge undertaking

s and groups) Regulations 2017 for the ye

ar ended 31 Dece

mber

20 as required by th

e European Union (Disclosu

re of Non-Financial and Diversity Information b

y certain large u

ndertakings and

groups) (amendment) Reg

ulations 2018.

We have no

thing to report in this regard.

The Listing Rules o

f Euronext Dublin and

the UK Listing Autho

rity require us to revie



the Di

ctors’ Statements, set out

pages

relation to going concern and

longer-term viability;



the p

art of the Corporate Gove

rnance Statement on pages

rel

ating

to the Compan

y’s compliance with the pro

visions of

the UK Corporate Governan

ce Code and the

Irish Corporate Gove

rnance Annex specified for our review; and



certain

elements of di

sclosures in the repo

rt to shareholders by the Remune

ration Committee of the

oard of Directors.

We have no

thing to report in this regard.

Respective responsibilities and restrictions on use

Directors’ responsi

bilities

As explained mo

re fully in their statement set o

ut on page

101

, the directors are responsi

ble for: the pre

paration of the financial

statements includin

g being satisfied that they gi

ve a true and fair vie

w; such internal control

as they determine is necessar

y to enable

the

preparation of fin

ancial statements that are free

from material miss

tatement, whether d

ue to fraud or erro

r; assessing the Group’s and

Company’s ability to co

ntinue as a going co

ncern, disclosing

, as applicable, matters related to go

ing concern; and

using the

going concern

basis of accountin

g unless they either intend to

liquidate the Group or the Company o

r to cease ope

rations, or have no realistic alte

rnative

but to do so.

Financial St

atements

108

Maldron Ho

tel Cork

Independent Auditor

’

s Report

to the members of Dalata Hote

l Group p

lc (continued)

Auditor’s respon

sibilities

Our objectives are to o

btain reasonable assurance

about whether the

financial statements as a whole are free

from material missta

tement,

whether due to fraud

or error, and to issue

our opinion

in an auditor’s report. Reasonable

assurance is a high

level of assur

ance, but does

not guarantee that an

audit conducted in accord

ance with ISAs (Ireland) will always de

tect a material misstatement whe

n it exists.

Misstatements can arise from

fraud, othe

r irregularities o

r error and are conside

red material if, individually o

r in aggre

gate, they could

reasonably be

expected to influence the eco

nomic decisions of users taken

on the basis of the finan

cial statements. The risk

of not

detecting a material

misstatement resul

ting from fraud or othe

r irregularities i

s higher than fo

r one resul

ting from error, as they may

involve coll

usion, forgery, intenti

onal omissions, misrepresentation

s, or the override

of internal control and may in

volve an

y area of law

and regulation an

d not just those directly affectin

g the financial

statements.

A fuller

descriptio

n of our responsibili

ties is provided on IAASA’s webs

ite at http://www.iaasa.ie/

Publications/

Auditing

standards/International-Standards-

-Audi

ting-for-use-

-Ire/Description-

-the-auditor-s-responsibi

lities-for

The purpose of

our audit work and to whom we owe ou

r responsibilities

Our report is made sole

ly to the Company’s members

, as a body, in accordan

ce with Section 391 o

f the Companies Act 2014. Our

audit

work has been u

ndertaken so that we migh

t state to the Company’s membe

rs those matter

s we are required

to state to them in an

auditor’s report and fo

r no other purpose. To the

fullest extent pe

rmitted by law, we do n

ot accept or assume respo

nsibility

to a

nyone

other than the Compan

y and the Company’s members, as a b

ody, for our audi

t work,

for our report, or for the opinions we h

ave formed.

Patricia Carroll

for and on be

half of

KPMG

Chartered Accountants,

Statutory Audit Firm

1 Stokes Place

St. Stephen’s Green

Dublin 2

28 February

202

109

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Consolidated statement of profit or loss

and other comprehensive income

for the year ende

d 31 December 2021

Note

202

€’000

2020

€’000

Continuing operations

Revenue

191,990

136,821

Cost of sales

(61,285)

(52,282)

Gross profit

130,705

84,539

Administrative expe

nses

(109,918)

(158,542)

Other income

655

495

Operating profit/(loss)

21,442

(73,508)

Finance costs

(32,878)

(37,953)

Loss before tax

(11,436)

(111,461)

Tax credit

5,107

10,783

Loss for the year attributable to o

wners of the Compan

(6,329)

(100,678)

Other comprehensive income/(loss

)

Items that will not be recla

ssified to pro

fit or loss

Revaluation of p

roperty

14,382

(143,631)

Related deferred tax

(1,116

)

21,337

13,266

(122,294)

Items that are or may be recl

assified subsequently to profit or

loss

Exchange difference

on translating foreig

n operations

27,256

(23,313)

(Loss)/ gain on net inve

stment hedge

(20,726)

16,804

Fair value movemen

t on cash flow hedg

6,208

(6,511)

Cash flow hedge

–

reclassified to profit or loss

2,637

1,992

Related deferred tax

(565)

15,375

(11,593)

Other comprehensive income

oss) for the year, net of tax

28,641

(133,887)

Total comprehensive income

oss) for the year at

tributable to

owners of the Company

22,312

(234,565)

Earnings per share

Basic loss per share

(2.8)

cents

(50.9) cents

Diluted loss per share

(2.8)

cents

(50.9) cents

Financial St

atements

110

Maldron Ho

tel Cork

Consolidated statement of financial position

at 31 December 2021

Note

202

€’000

2020

€’000

Assets

Non-current assets

Intangible assets and

goodwill

31,994

31,733

Property, plant and e

quipment

1,243,902

1,202,743

Right-

-use assets

491,869

411,007

Investment property

2,078

2,089

Derivative assets

832

Deferred tax assets

20,161

12,344

Contract fulfilment costs

22,374

Other receivable

6,313

9,059

Total non-current assets

1,797,149

1,691,349

Current assets

Contract fulfilment costs

36,255

Trade and other rece

ivables

13,774

9,231

Inventories

1,665

1,258

Cash and cash equival

ents

41,112

50,197

Total current assets

92,806

60,686

Total assets

1,889,955

1,752,035

Equity

Share capital

2,229

2,227

Share premium

504,895

504,735

Capital contributi

25,724

Merger reserve

81,264

Share-based payment reserve

3,085

3,419

Hedging reserve

(197)

(9,042)

Revaluation reserve

212,572

199,306

Translation reserve

(6,572)

(13,102)

Retained earnin

134,413

138,249

Total equity

957,413

932,780

Liabilities

Non-current liabili

ties

Loans and borrowi

ngs

313,533

314,143

Lease liabili

ties

471,877

388,871

Deferred tax liabili

ties

42,896

39,404

Derivative liabi

lities

1,029

9,042

Provision for li

abilities

6,454

6,747

Other payables

1,896

Total non-current liabi

lities

837,685

758,207

Current liabili

ties

Lease liabili

ties

10,049

10,761

Trade and other payab

les

82,792

48,668

Current tax liabiliti

282

Provision for li

abilities

1,734

1,528

Total current liabi

lities

94,857

61,048

Total liabili

ties

932,542

819,255

Total equity and liabi

lities

1,889,955

1,752,035

On behalf of the Bo

ard:

John Hennessy

Chair

Dermot Crowley

Director

111

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Consolidated statement of changes in equity

for the year ended 31 De

cember 2021

Attributable to owners

of the Company

Share-

based

Capital

Merger

payment

Hedging

Revaluation

Translation

Retained

capital

premium

contribution

reserve

earnings

Total

€’000

At 1 January 2021

2,227

504,735

25,724

81,264

3,419

(9,042)

199,306

(13,102)

138,249

932,780

Comprehensive inco

me:

Loss for the year

(6,329)

Other comprehensive

income

Exchange difference on

translating foreign

operations

27,256

Loss on net investmen

hedge

(20,726)

Revaluation of pro

perties

(note 12)

14,382

Fair value movement on

cash flow hedges (no

22)

6,208

Cash flow hedges

–

reclassified to profit or

loss (note 22)

2,637

Related deferred tax (

note

23)

(1,116)

Total comprehensive

income for the year

8,845

13,266

6,530

(6,329)

22,312

Transactions with ow

ners

of the Company:

Equity-settled s

hare-

based payments (no

te 7)

2,159

Vesting of share a

wards

and options (note

160

(2,493)

2,493

162

Total transactions with

owners of the Compan

160

(334)

2,493

2,321

At 31 December 20

2,229

504,895

25,724

81,264

3,085

(197)

212,572

(6,572

)

134,413

957,413

Financial St

atements

112

Maldron Ho

tel Cork

Consolidated statement of changes in equity

for the year ende

d 31 December 20

Attributable to owners

of the Company

Share-

based

Capital

Merger

payment

Hedging

Revaluation

Translation

Retained

capital

premium

contribution

reserve

earnings

Total

€’000

At 1 January 20

1,851

504,488

25,724

(10,337)

4,900

(3,958)

351,869

(6,593)

204,897

1,072,841

Comprehensive

income:

Loss for the year

(100,678)

Other comprehensive

income

Exchange difference on

translating foreign

operations

(23,313)

Gain on net investme

hedge

16,804

Revaluation of

properties (note 12)

(143,631)

Transfer of revaluation

gain to retained

earnings on sale of

property (note 12)

(30,269)

30,269

Fair value movement

on cash flow hedges

(note 22)

(6,511)

Cash flow hedges

–

reclassified to

profit or

loss (note 22)

1,992

Related deferred tax

(note 23)

(565)

21,337

20,772

Total comprehensive

loss for the year

(5,084)

(152,563)

(6,509)

(70,409)

(234,565)

Transactions with

owners of the

Company:

Equity-settled s

hare-

based payments (no

2,280

Vesting of share a

wards

and options (note

247

(3,761)

3,761

253

Equity share placing

issuance (note

18)

370

93,980

94,350

Costs

share placing

(note 18)

(2,379)

Total transactions with

owners of the

Company

376

247

91,601

(1,481)

3,761

94,504

At 31 December 20

2,227

504,735

25,724

81,264

3,419

(9,042)

199,306

(13,102)

138,249

932,780

113

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Consolidated statement of cash flows

for the year ende

d 31 December 2021

Cash flows from op

erating activit

ies

202

€’000

2020

€’000

Loss for

the year

(6,329)

(100,678)

Adjustments f

or:

Depreci

ation of property

, plant and equipment

27,033

26,607

Depreci

ation of right-

-use asse

19,522

20,663

Amortisati

on of intangibl

e assets

539

558

Net rev

aluation movement

s through pro

fit or loss

(6,790)

30,836

(Net re

versal of previous

impairment charges

impair

ment charges o

f right-

-use assets

(39)

7,541

(Net re

versal of previous

impairment charges

impair

ment charges o

f fixtures, fitti

ngs and equipme

(120)

1,015

Impairment of goo

dwill

3,226

Remeasurement

gain on ri

ght-

-use assets

(277)

Loss on sal

e and leasebac

1,673

Share-based payment

s expense

2,159

2,280

Interest

on lease liabilit

ies

24,409

22,405

Other i

nterest and fi

nance costs

8,469

15,548

Tax credit

(5,107)

(10,783)

63,469

20,891

Increase/(de

crease) in trad

e and other payab

les and provi

sion for liabili

ties

31,888

(13,620)

(Increase)

/decrease in

current and non-current

receivable

(4,223)

12,707

(Increase)

/decrease in inve

ntories

(407)

650

Tax (paid)/ref

und

(148)

2,176

Net cash from operati

ng activit

ies

90,579

22,804

Cash flows from i

nvesting activit

ies

Purchase of

property, p

lant and equipment

(19,973)

(27,915)

Contract f

ulfilment cost

payments

(12,915)

(8,065)

Receipt

of capital grant

150

Costs paid

on entering ne

w leases and agree

ments for

leases

(3,221)

(7,178)

Proceeds f

rom sale of Clay

ton Hotel Charl

emont

64,190

Purchase of

intangible ass

ets

(47)

(547)

Net cash (used in)/fro

m investing act

iviti

(36,156)

20,635

Cash flows from fi

nancing activiti

Interest

paid on lease li

abilities

(24,409)

(22,405)

Other i

nterest and fi

nance costs paid

(15,285)

(12,956)

Receipt

of bank loans

13,000

61,486

Repayment o

f bank loans

(30,575)

(146,572)

Repayment o

f lease liabil

ities

(8,930)

(5,618)

Proceeds f

rom vesting of

share awards and

options

162

253

Proceeds f

rom share placi

94,350

Costs of s

hare placing pai

(2,379)

Net cash used in financi

ng activi

ties

(66,037)

(33,841)

Net (decrease)

/increase in cash and

cash equival

ents

(11,614)

9,598

Cash and cash equi

valents at th

e begi

nning of the year

50,197

40,586

Effect of move

ments in exc

hange rates

2,529

Cash and cash equi

valents at th

e end of the ye

41,112

50,197

Financial St

atements

114

Maldron Ho

tel Cork

Notes to the consolidated financial statements

forming part of the con

solidated financial

statements

1 Significant acco

unting policie

General informati

on and basis of preparation

Dalata Hotel Group p

lc (the ‘Company’) is a

Company domicil

in the Republic o

f Ireland. The Company’s registered o

ffice is 4

Floor, Burton Court, Burton

Hall Drive, Sandyford, Dub

lin 18.

The consolid

ated financial statements of the Compan

y for the

year ended 31 Dece

mber 2021 include the Co

mpany and its

subsidiaries (toge

ther referred to as the ‘Group

’). The financial

statements were autho

rised for issue by th

e Directors on

February

202

The consolid

ated financial statements have b

een prepared in

accordance with IFRS, as adopte

d by the EU. In the prep

aration

of these consol

idated financial statements the acco

unting

policies set out be

low have been appl

ied consistently by a

Group companie

The preparation o

f financial statements in acco

rdance with IFRS

as adopted by the

EU requires the Directors to make estimate

and assumptions that affect th

e reported amou

nts of assets and

liabilities, as well

as disclosure of co

ntingent assets and

liabilities, at the date o

f the financial statements, and the

reported amoun

ts of revenues and expen

ses during the

reporting ye

ar. Such estimates and judge

ments are based on

historical expe

rience and other factors, incl

uding expectatio

n of

future events, that are bel

ieved to be reason

able under the

circumstances and are subject to co

ntinued re-evaluation

Actual outcomes co

uld differ from those e

stimates.

In preparing the

se consolidated financial statements, the

key

judgements and e

stimates impacting these co

nsolidated

financial statements were as foll

ows:

Significant judg

ements



Carrying value of prope

rty measured at fair value (note 12).

Key sources of estimatio

n uncertainty



Carrying value of prope

rty measured at fair value (note 12);

and



Carrying value of goodwil

l and right-

-use assets including

assumptions underpi

nning value in use

(‘VIU’)

calculations in

the impairment tests (notes 10, 11,

13).

The value of the

Group’s property at 31 December 202

1 reflects

open market valu

ations carried out as at 31 December 2021 by

independen

t external valuers. As at the valuatio

n date of 3

December

2021

property markets

were mostly functio

ning

again, with transaction vo

lumes and other rele

vant evidence at

levels where an

adequate quantum of market evide

nce existed

upon which to

base opinions of value. Therefore, the valu

ations

as at 31 December

2021

have not be

ported by the value

on the basis o

f ‘material valuation uncertainty’, as set ou

t in VPS

3 and VPGA 10 of the RICS Valu

ation Global

Standards. The

valuations at 31 Decembe

r 2020 were repo

rted on the basis of

‘material valuation u

ncertainty’

due to the impact of Covi

pandemic at that time, when l

ess weigh

t could be attached to

previous market evi

dence to fully inform op

inions and

value as

at 31 December 2020

Measurement of fair values

A number of

the Group

’s accounting poli

cies and disclosures

require the measu

rement of assets and l

iabilities at fair value

When measuring

the fair value of an asset or l

iability, the Grou

uses observable

market data as far as possibl

e, with non-

financial assets being

measured on a hig

hest and best-use basis.

Fair values are catego

rised into di

fferent levels in a fair valu

hierarchy based o

n the inputs used in the

valuation techniques

as follows:

Level 1

: quoted price

s (unadjusted) in active marke

ts for

identical assets or l

iabilities.

Level 2

: inputs other than q

uoted prices incl

uded in Level 1 that

are observable fo

r the asset or liability, ei

ther directly (i.e. as

prices) or indire

ctly (i.e. derived

from prices).

Level 3:

inputs for the asset or li

ability that are not based o

observable marke

t data (unobservable i

nputs).

Further information abo

ut the assumptions made i

n measuring

fair values is incl

uded in note 24

–

Financial instruments and

risk

management (in relatio

n to financial assets and fin

ancial

liabilities) and no

te 12

–

Property, plant and

equipment.

(i) Going concern

2021 saw the Group commence i

ts recovery in e

arnest from the

impact of Covid-19. Governmen

t restrictions were in pl

ace to

varying extents for most of the

year, the most impactful

which were in H1 2021 whe

n the Group’s hotels were l

argely

closed to all

but essential services. However, the succe

ssful

rollout, in both the

UK and Ireland and more wide

ly, of the

vaccine prog

rammes and the evolution of the

virus itself has led

to the lifting

of most restrictions and a strong

recovery in

demand in the

hospitality sector. Group revenue

increased by

€55.2 million to €192.0 mi

llion on 2020. Leisure de

mand has

covered mo

st quickly with business travel, particu

larly

international

, recovering more slowly.

The impact of Covid-19 also i

mpacted other areas of the

business, howeve

r, to a lesser degre

e compared to 2020. These

are further detailed

in the Operating segments no

te 2,

Impairment note 10, Property, plan

t and eq

uipment note 12,

and Financial risk

management note 24.

The Group entere

d the Covid-19 pandemic in

2020 with a strong

balance shee

t and liquidity position and, de

spite the material

impact of Covid-

has

on the

Group’s financial

performance, the Group remai

ns in a strong po

sition with

significant finan

cial headroom. As at 31 December 2021,

the

Group had prop

erty, plant and equipment of €1,24

3.9 million

and cash and und

rawn facilities of €2

.5 million.

115

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(i) Going concern

(continu

ed)

The Group contin

ued to tightly manage its cash and

liquidity in

2021 including, but no

t limited to, postponemen

t of non-

committed, non-essential cap

ital expenditure, tight cost co

ntrol

measures and availi

ng of government support sche

mes (note 8

Furthermore, in Novembe

r 2021, the Group to

ok additional

action to provi

de enhanced flexibility and li

quidity of its debt

facilities. Firstly, the Group

extended the

maturity of its debt

facilities by 12 mon

ths. The Group also e

xtended the perio

d for

which amendments app

lied that provide

d flexibility during the

time of Covid-19 impacted tradin

g. Therefore, the temporary

suite of coven

ants including a Net Debt to Value co

venant and a

minimum liqui

dity restriction (where

by either cash, remaini

available facil

ities or a combinatio

n of both must not fall be

low

€50.0 million), will remai

n in place

for an additional 12 mon

period, unti

l 30 March 2023 (note 24)

The Group’s debt

facilit

ies now con

sist of a €200 million term loan faci

lity, with a

maturity date of 26 October 2025 a

nd a €364.4 milli

on revolving

credit facility (

‘

RCF

’): €304.9 mil

lion with a maturity date of 26

October 2025 and €59.5 mill

ion with a maturity date o

f 30

September 2023.

The Group is in ful

l compliance with its coven

ants as at 31

December 2021. The Group wil

l revert to the pre

vious

covenants comprisi

ng Net Debt to EBITDA and Interest Cover

covenants for testing at 30 Jun

e 2023. At 30 June 2023, the Net

Debt to EBITDA covenant li

mit is 4.0x and the In

terest Cover

minimum is 4.0x.

In 2020, other liqui

dity strengthening actio

ns were taken such

as the cancellatio

n of the 2019 final divi

dend originally

recommended b

y the Board, the sale and

leaseback of Clayton

Hote

l Charlemon

t for €64.2 million in Apri

l 2020 and an equity

raise in September 2020 raisi

ng net proce

eds of €92.0 milli

on.

The Group has successfull

y navigated the

unprecedented

circumstances followi

ng Covid-19 and the resumption o

recovery towards more normal l

evels of trade. The Grou

continues to mo

nitor the evolving trade forecasts and p

ursue

proactive and timel

y mitigating actions i

f necessary as it has

since the start of the pand

emic.

The Group has prepared

base case projections whi

ch assumes a

adual recovery in revenu

es and earnings at the Group’s hote

ls,

with a return to more no

rmalised levels of trade be

tween 2023

and 2025 depending

on location and business mix. The Gro

has also modell

ed severe but plau

sible scenarios taking in

account varying assumptio

ns around ongoing

Covid-19 impacts

on trading level

s, structurally reduced le

vels of international

travel and ele

vated inflation with labour sho

rtages. These have

been modelle

d individually and collectivel

y. Details on the

assumptions and the scen

arios are set out in

detail in the

viability statement on

page

51 to 52. Based on these

projections and

in all of the scenarios, the Group

is forecast to

be in compliance

with all covenants and have sufficie

nt liquidity

in the 12 month p

eriod from the signin

g of these consolidated

financial statements and i

ndeed longer than that. Cash and

undrawn facilitie

s is forecast to dip to

€

257.0 million

at a

minimum during

this period.

The Group has also scenario

tested Group asset values to test

covenant levels and

the Group is forecast to be in

compliance

with all coven

ants during this period. At current de

bt levels,

valuations on

each of the Group’s hotels would

need to

decrease by in

excess of 55% to breach coven

ant levels.

The Group has also p

repared a reverse stress test which

assumes a full lockd

own, like that experienced i

n the first

quarter of 2021 where ho

tels were closed to

the general public

and only bene

fitted from demand from essen

tial services.

Despite such a severe stress tes

t which the

directors do not

consider reasonab

ly plausible, not least because

of the success

of the vaccination

programme and the evo

lution of the virus,

the Group would h

ave sufficient liquidity to co

ntinue to the end

of quarter two

2024.

In such circu

mstances addition

al options

may be availabl

e to the Group beyond what is set ou

t above

including: (i) more severe

cost cutting and (ii

) arrangements to

defer or reduce ren

t payments to landlords (iii) sale of an asset.

The Directors have con

sidered all of the above

, with all available

information and the

current liquidity and cap

ital position of the

Group in assessing the

going concern of the Group

. The

extension of the

Group

’

s facilities and deferral of EBITDA related

covenant testing

, places the Group in

strong po

sition to be

able to avoid po

ssible breaches in coven

ants as a result of th

delayed reco

very from Covid-19. On the basis of these

judgements, the Directo

rs have prepared the

se consolidated

financial statements on a g

oing concern basis. Furthermo

re,

they do no

t believe there is any material unce

rtainty related to

events or cond

itions that may cast significant d

oubt on the

Group’s ability to co

ntinue as a going co

ncern.

(ii) Statement of compliance

The consolid

ated financial statements have b

een prepared in

accordance with Internatio

nal Financial Repo

rting Standards

(‘IFRS’) and

their interpretation

s issued b

y the International

Accounting Stand

ards Board (‘IASB’) as adopted by th

e EU and

those parts of the Compani

es Act 2014 applicabl

e to companies

reporting un

der IFRS and Article 4 of the IAS Regu

lation.

The followin

g standards and interpretations were effective

for

the Group for the first time f

rom 1 January 2021:



Interest Rate

Benchmark Reform

–

Phase 2 Amend

ments

to IFRS 9, IAS 39, IFRS 7, IFR

S 4 and IFRS 16



Amend

ments to IFRS 4

Insurance Contracts

–

deferral o

effective date of IFRS 9



Amend

ments to IFRS 16

Leases

: Covid

- Related Rent

Concessions be

yond 30 June 2021

The above standards, amend

ments and in

terpretations had no

material impact on the co

nsolidated results o

f the Group.

Financial St

atements

116

Maldron Ho

tel Cork

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting policie

(

continued

)

(ii) Statement of compliance

(co

ntinued)

While the Gro

up had a limited number o

f rent concessions

during the ye

ar ended 31 December 2021, the Group h

chosen not to avail o

f the IFRS 16

Leases

- Covid-19 Related Rent

Concessions du

ring the year ended 31 December 2021.

Additional accounti

ng policies

The accounting

policies applied in these co

nsolidated financi

statements are consi

stent with those appl

ied in the consoli

dated

financial statements as at and for t

he year ended 31 Decembe

2020

Accounting

policies for Interest Rate Benchma

rk Reform

–

Phase 2

–

Amendments to IFRS 9, I

AS 39, IFRS 7, IFRS 4 and IFRS

16 were applied

in the year ended 31 December 2021 as there

were new amendments which

were not effective in the

year

ended 31 Dece

mber 20

or previous perio

ds.

Following

a fundamental review and reform of major inte

rest

rate benchmarks unde

rtaken globally, the Group

replaced

LIBOR, the Group’s

Sterling

interest rate, with an alternativ

risk-free benchmark rate

, SONIA ’

Sterling

Overnight Index

Average’ plus an

agreed credit adjustment spread ‘

CAS spread

’

during the ye

ar ended 31 December 2021. The impact of the

IBOR reform is limited to the

Sterling variable

interest rate on

the Group’s loans an

d borrowing

s and

interest rate swaps.

There were two approache

s available to

determining the CAS

spread applicable o

n transition to SONIA. The Group elected to

use the ISDA (Internation

al Swaps and Deri

vatives Association)

historical medi

an approach as its preferred appro

ach

The

Group ensured that the

CAS spread applicable on the

loans and

borrowings match

in so far as po

ssible, the CAS spread on the

Group’s interest rate swaps.

In line with Phase 2

–

Amendments to IFRS 9, IAS 39, IFRS 7, I

FRS

4 and IFRS 16, the Group

s availed

of the practical expe

dient

which allows the

Group to update the effective

interest rate for

the transition to SONIA, withou

t havin

g to modify the loans an

borrowings and

therefore there was no resulting mod

ification

impact on profit or l

oss.

Under the amendmen

ts, hedge accounting

is not discontinued

solely be

cause of the IBOR reform. The Group has up

dated its

hedge documen

tation to reflect the change

s to the hedged

item, hedgin

g instrument and hedged

risk as a result of the IBOR

reform

The Group co

ntinues to apply he

dge accounting as at 31

December 2021 and all

hedges continue to b

e hedge effective

(notes 22,

24)

Standards issued but not ye

t effective

The followin

g amendments to standards have be

en endorsed by

the EU, are available for e

arly adoption an

d are effective from 1

January 2022 as indicated b

elow. The Group h

as not adopted

these amendments to standards e

arly, and instead i

ntends to

apply them from their e

ffective date as determine

d by the date

of EU endorsement. The po

tential impact of these amendments

to standards on the Group

is under review:



A nu

mber of narrow-scope amendmen

ts to IFRS 3, IAS 16 and

some annual imp

rovements on IFRS 1, IFRS 9, IAS 41 an

d IFRS 16

(issued May 2020).

effective date 1 January 2022.



IAS 37 one

rous contracts, clarificatio

n on cost of fulfil

ling

contracts.

effective date 1 January 2022.

The followin

g standards and interpretations are

not yet endo

rsed

by the EU. The potential

impact of these standards on

the Group

is under revie



Amend

ments to IAS 1

Presentation o

f Financial Statements

and

IFRS Practice Statement 2:

Disclos

ure of Accounting policie

(issued on 12 February 2021). IA

SB effective date 1 Janu

ary 2023.



Amend

ments to IAS 1

Presentation o

f Financial Statements:

Classification of Liabili

ties as Current or No

n-current

(issued on 23

January 2020). IASB effective d

ate 1 January 2023.



Amend

ments to IAS 8

Accounting Po

licies

Changes in Accounting

Estimates and Errors: De

finition of Accounting E

stimates

(issued

on 12 February 2021). IASB effectiv

e date 1 January 2023.



Amend

ments to IAS 12

Income Taxes

: Deferred Tax rel

ated to

Assets and Liabiliti

es arising from a Singl

e Transaction (issued o

7 May 2021). IASB effective date 1

January 2023.



Amend

ments to IFRS 17

Insurance Co

ntrac

: Initial Application

IFRS 17 and IFRS 9

–

Comparative

Information (issued on

December 2021). IASB effective

date 1 January 2023.

(iii) Functional

and presentation currency

These consoli

dated financial statements are prese

nted in Euro, be

ing

the functional cu

rrency of the Company and the

majority of

its subsidiaries. All

financial information p

resented in Euro has be

rounded to the

nearest thousand or millio

n and this is clearly set out

in the financi

al statements where appli

cable.

(iv) Basis of

consolidation

The consolid

ated financial statements inclu

de the financial

statements of the Company and al

l of its subsidi

ary undertaking

Business combination

The Group accounts for bu

siness combinations u

sing the acquisition

method when co

ntrol is transferred to the

Group. The consideration

transferred in the acqui

sition is g

enerally measured at fair value, as

are the identi

fiable net assets acquired. An

y goodwill that arises is

tested at least annually fo

r impairment. Any gai

n on a bargain

purchase is recog

nised in profit or loss immedi

ately. Transaction

costs are expensed as in

curred, except if related

to the issue of d

ebt

or equity secu

rities.

When an acqu

isition does not represent a busine

ss, it is accounted

for as a purchase of a grou

p of assets and liabi

lities, not as a bu

siness

combination. The

cost of the acquisition is all

ocated to the assets and

liabilities acqu

ired based on their relative

fair values, and no

goodwill

is recognise

d. Where the Group solely p

urchases the freeho

interest in a prop

erty, this is accounted for as an asset pu

rchase and

not as a business co

mbination on the basis that the asset(s)

purchased do not co

nstitute a business. Asset purchases are

accounted for as addi

tions to property, plant and e

quipment.

117

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(iv) Basis of

consolidation

(continued)

Subsidiari

Subsidiaries are en

tities controlled

by the Group. The Group

controls an en

tity when it is exposed to, or has rig

hts to,

variable returns from its invo

lvement with the

entity and has

the ability to

affect those returns through i

ts power over the

entity. The financi

al statements of subsidiarie

s are included in

the consolidated fi

nancial statements from the date that control

commences until

the date that control ceases. Intra-group

balances and transactio

ns, and any unrealised

income and

expenses arising

from intra-group transactions, are elimi

nated.

(v) Revenue recognition

Revenue represen

ts sales (excluding VAT) of good

s and services

net of discoun

ts provided in the normal course o

f business and

is recognise

d when services have been ren

dered.

Revenue is de

rived from hotel op

erations and includes the

rental of rooms, food an

d beverage sales, car park revenue

and

leisure cen

tre membership in leased and o

wned hotels operated

by the Group. Reven

ue is recognised when ro

oms are occupied

and food and

beverages are sold. Car park revenu

e is recognised

when the service i

s provided. Leisure centre membership

revenue is reco

gnised over the life of the memb

ership.

Revenue in resp

ect of

contract with

customer for sale of

residential p

roperty is based on when the

performance

obligations in

herent in the contract are comple

ted. This relates

to the contract to sell a re

sidential devel

opment which the

Group is devel

oping as part of the overall

development of a ne

hotel on the site o

f the former Tara Towers hotel

. The contract

for sale is assessed in li

ne with IFRS 15

Revenue from Contracts

with Customers

and revenue i

s recognised

when the

performance obl

igations inherent in the con

tract are met.

Management fees are earne

d from hotels manag

ed by the

Group. Management fee

s are normally a pe

rcentage of hotel

revenue and/o

r profit and are recognise

d when earned and

recoverable u

nder the terms of the managemen

t agreement.

Management fee in

come is included within o

ther income.

Rental income from in

vestment property is rec

ognised on a

straight-line basis ove

r the term of the lease an

d is included

within other inco

me.

(vi) Sales discounts

and allowances

The Group recogn

ises revenue on a gross reve

nue basis and

makes various ded

uctions to arrive at net reven

ue as reported

in profit or lo

ss. These adjustments are referred to as sale

discounts and al

lowances.

(vii) Government grants an

d government assistance

Government grants and go

vernment assistance represent the

transfers of resources to the

Group from the go

vernments in

Ireland and

the UK in return for past or future

compliance

with certain cond

itions

relating to the Group’s ope

rating

activities. Income-related g

overnment grants are recog

nised in

profit or loss on

a systematic basis ove

r the periods in whi

ch the

Group recogni

ses as expenses the related co

sts for which the

grants are intende

d to compensate. The Group accoun

ts for

these governmen

t grants in profit or loss via offset against the

related expen

diture.

Capital-related gove

rnment grants received b

y the Group

related to assets are presen

ted in the consolidated

statement of

financial po

sition by deducting the grant in arriving

at the

carrying amount of the

asset. The grant is recogn

ised in profit or

loss over the l

ife of the depreciable asset as a reduced

depreciation

expense.

Government assistance is actio

n by a gove

rnment which is

designed

to provide an economic benefit specifi

c to the Group

or subsidiaries who

qualify under certain criteria. Go

vernment

assistance received

by the Group includ

es a waiver of

commercial rates for cer

tain hotel prope

rties and also the

deferral of payment of payrol

l taxes and VAT liab

ilities and has

been disclosed

in these consolidated financial statements.

(viii) Leases

At inception

of a lease contract, the Group assesses wheth

er a

contract is, or contains, a le

ase. If the con

tract conveys the righ

to control the u

se of an identified asset for a peri

od of time in

exchange for con

sideration, it is recog

nised as a lease.

To assess the right to contro

l, the Group assesses whethe



the co

ntract involves the

use of an identifie

d asset;



the Grou

p has the right to o

btain substantially all

of the

economic benefi

ts from the use of the asset; and



the Grou

p has the right to d

irect the use of the asset.

A lease liabili

ty is initially measured at the pre

sent value of the

lease payments that are no

t paid at the commen

cement date,

discounted u

sing the interest rate implici

t in the lease or, if that

rate cannot be read

ily determined

, the Group’s incremental

borrowing rate. The Gro

up uses its incremen

tal borrowing

rate

as the discount rate, which

is defined as the estimated

rate of

interest that the lessee

would have to pay to

borrow, over a

similar term and with a similar secu

rity, the funds necessary to

obtain an asset of a similar val

ue to the right-

-use asset in a

similar economi

c environment. The incremental b

orrowing rate

is calculated for e

ach individual lease.

The estimated incremen

tal borrowing

rate for each leased asset

is derived from co

untry specific risk-free interest rates ove

r the

relevant lease term, adju

sted for the finance

margin attainable

by each lessee

and asset specific adjustments desig

ned to

reflect the unde

rlying asset’s location an

d condition.

Financial St

atements

118

Maldron Ho

tel Cork

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(viii) Leases

(conti

nued)

Lease payments inclu

ded in the measurement of the l

ease

liability comprise

the following:



fixed p

ayments (includin

g in-substance fixed payments)

less any lease i

ncentives receivabl



variabl

e lease costs that dep

end on an index or a rate,

initially me

asured using the index or rate as at the

commencement date;



amoun

ts expected to be p

ayable under a residual val

guarantee;



the e

xercise price u

nder a purchase optio

n that the

Group is reasonabl

y certain to exercise; and



nalties for early terminatio

n of a lease unle

ss the

Group is reasonabl

y certain not to terminate early.

Variable le

ase costs linked to future performance o

r use of an

underlying asset are e

xcluded from the measure

ment of the lease

liability a

nd the right-

-use asset. The related payments are

recognised

as an expense in the period in

which the event or

condition that trigg

ers those payments occurs and

are included in

administrative expen

ses in profit or l

oss.

The lease liab

ility is subsequently measured by i

ncreasing the

carrying amount to refle

ct interest on the l

ease liability (using

the effective inte

rest method) and by reducing

the carrying

amount to reflect lease

payments.

The Group remeasures the l

ease liability whe

re lease payments

change due to chan

ges in an index or rate, changes in

expected

lease term or where a l

ease contract is modifie

d. When the lease

liability i

s remeasured, a correspondin

g adjustment is made to the

carrying amount of the ri

ght-

-use asset or is recorded in

profit or

loss if the carrying amo

unt of the right-

-use asset has been

reduced to ze

ro.

While the Gro

up had a limited number o

f rent concessions

during the ye

ar ended 31 December 2021 and 31 December

2020

, the Group has chosen

not to avail of the IFRS 16 -

Covid-

19 Related Rent Concessio

during the year end

ed 31

December 2021 and 31 Decembe

r 2020. Conseque

ntly, any

adjustments to the terms of the

impacted leases have

been

treated as a reassessment.

The right-

-use asset is initially me

asured at cost, which compri

ses

the initial amo

unt of the lease liability adju

sted for any lease

payments made at or before

the commencemen

t date, plus any

initial di

rect costs incurred and

an estimate of

any costs to

dismantle and remo

ve the underlying asset o

r to restore the

underlying asset or the

site on which it is lo

cated, less any lease

incentives rece

ived.

The right-

-use asset is subsequentl

y depreciated using the

straight-line method

from the commencemen

t date to the earlie

of the end o

f the useful life of the right-

-use asset, or

component the

reof, or the end of the le

ase term. Right-

-use

assets are reviewed on

an annual basis or when

ever events or

changes in ci

rcumstances indicate that the carrying

amount may

not be recove

rable. The Group applies IAS 36

Impairment of A

ssets

to determine whe

ther a cash-generating unit with a rig

ht-

-use

asset is impaired and acco

unts for any ide

ntified impairments

through profi

t or loss. The right-

-use asset is periodicall

y reduced

by impairment lo

sses, if any, and adjusted for ce

rtain

remeasurements of the le

ase liability. The Group also ap

plies IAS

Impairment of Assets

to any cas

h-generating

units, which have

right-

-use assets which were pre

viously impai

red, to assess

whether previo

us impairments shoul

d be reversed. A re

versal of a

previous impai

rment charge is accounted fo

r through profit o

r loss

and only increases the

carrying amount of the

right-

-use asset to

a maximum of what it would

have been if the

original impairment

charges had no

t been recognised in the first place.

The Group appli

es the fair value model

in IAS 40

Investment

Property

to right-

-use assets that meet the

definitio

n of

investment prope

rty.

The Group has ele

cted not to recognise righ

use assets and

lease liabiliti

es for short-term leases of fixtures, fitting

s and

equipment that have

a lease term of 12 months or less and

leases of low-value assets. Assets a

re considered low valu

e if the

value of the asset when

new is less than

€5,000.

The Group

recognises the

lease payments associ

ated with these lease

s as

an expense o

n a straight-line basis over the

lease term.

A sale and lease

back occurs where there is a transfer of an asset

by the Group to a p

urchaser/lessor and the Grou

p enters into an

agreement with that purch

aser/lessor to le

ase the asset. The

Group applie

s the requirements of IFRS 15

Revenue

from

contracts with customers in assessi

ng whethe

r a sale has

occurred by de

termining whether a performance o

bligation has

been satisfied.

Where a sale and

leaseback of an asset has occurred, the

asset

is derecognised

and a lease liability and co

rresponding righ

use asset is recogni

sed. The Group measures the right-

-use

asset arising from the lease

back at the propo

rtion of the

previous carrying

amount of the asset that relates to the rig

ht-

-use retained by the Grou

p. Accordingly, the Grou

p recognises

only the amou

nt of any gain or loss that relates to the

rights

transferred to the purchaser/

lessor in pro

fit or loss as calculated

in accordance with

IFRS 16.

(

) Share-based payments

The grant date fair value

of equity-settled share-based payment

awards and options g

ranted to employee

s is recognised as an

expense, with a correspo

nding increase in e

quity, over the

vesting peri

od of the awards and options.

This incorporates the e

ffect of market-based condi

tions, where

applicable

, and the estimated fair value o

f equity-settled share-

based payment awards issued

with non-market performance

conditions.

119

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the consolidated

financial statements

(cont

inued)

1 Significant acco

unting pol

icies

(

continued

)

(

) Share-based payments

(continued

)

The amount recogn

ised as an expense is adjusted to refle

ct the

number of awards and op

tions for which the

related service and

any non-market performance

conditions are expe

cted to be

met, such that the amount ulti

mately reco

gnised is based on t

number of awards that met the

related service an

d non-market

performance condi

tions at the vesting date. The

amount

recognised

as an expense is not adjusted for market co

nditions

not being met.

On vesting of the

equity-settled share-based payment award

and options, the cumul

ative expense recog

nised in the share-

based payment reserve

is transferred di

rectly to retained

earnings. An in

crease in ordinary share capital and

premium, in the case whe

re the price p

aid per share is h

igher

than the cost per share, is recog

nised reflecting the

issuance of

shares as a result of the vesting

of the awards an

d options.

The dilutive

effect of outstanding awards is reflected

additional

share dilution in calculating

diluted earnings pe

share.

(x) Tax

Tax charge/credit comprise

s current and deferred

tax. Tax

charge/credit i

s recognised in profit or loss exce

pt to the extent

that it relates to a busine

ss combination o

r items recogni

sed

directly in o

ther comprehensive income or eq

uity.

Current tax is the expected tax pay

able/rece

ivable on the

taxable income/

loss for the year using tax rates en

acted or

substantively en

acted at the reporting date an

d any adjustment

to tax payable in resp

ect of previous years.

Deferred tax is recognise

d in respect of temporary differences

between the carryin

g amounts of assets and liabi

lities for

financial repo

rting purposes and amounts used

for taxation

purposes excep

t for the initial recognitio

n of goodwill and

other

assets that do not affect accountin

g profit or taxable

profit a

the date of recog

nition.

Deferred tax is measured

at the tax rates that are expected

be applied to the

temporary differences when the

y reverse,

based on the l

aws that have been enacted or substanti

vely

enacted by the reportin

g date.

Deferred tax assets and liabi

lities are offset if there is a l

egally

enforceable right to o

ffset current tax liab

ilities and

assets, and

they relate to in

come taxes levied by the same tax authori

ty on

the same taxable entity, o

r on different en

tities, but they i

ntend

to settle current tax liabi

lities and assets on a ne

t basis or their

tax assets and liabi

lities will be real

ised simultaneousl

Deferred tax liabili

ties are recogni

sed where the carrying val

of land and buil

dings for financial reporting

purposes is greater

than their tax cost base.

Deferred tax assets are recog

nised for unu

sed tax losses, unused

tax credits and dedu

ctible temporary difference

s to the extent

that it is probable

future taxable profits wil

l be availab

le against

which the temporary di

fference can be util

ised.

Deferred tax assets are reviewe

d at each rep

orting date and are

reduced to the

extent that it is no long

er probable that the

related tax benefit wil

l be realised. Such reductio

ns are reversed

when the prob

ability of future taxable p

rofits improves.

) Earnings per share (‘

EPS’)

Basic earnings per share

calculated based on the pro

fit/loss

for the year attributable

to owners of the Comp

any and the

basic weighted

average number of shares outstandin

g. Diluted

earnings per share

calculated based on the p

rofit/loss for the

year attributable to o

wners of the Company an

d the diluted

weighted ave

rage number of shares and po

tential shares

outstanding.

Shares are only treated as di

lutive if their dil

ution results in

decreased earnin

gs per share or increased loss pe

r share.

Dilutive effects arise from sha

re-based payments that are

settled in shares. Con

ditional share awards to empl

oyees have a

dilutive effect whe

n the average share price

during the

period

exceeds the exe

rcise price of the

awards and the market or non-

market conditio

ns of the awards are met, as if the current

period end were the

end of the vesting peri

od. When calculating

the dilutive

effect, the exercise price is adjusted

by the value of

future services that have ye

t to be receive

d related to the

awards.

ii) Property, plant and equipmen

Land and buildings are i

nitially stated at co

st, including dire

ctly

attributable transaction co

sts, (or fair value whe

n acquired

through busi

ness combinations) and subseque

ntly at fair value.

Assets under constructio

n include

sites where new hotels are

currently bein

g developed and significant d

evelopment proje

cts

at hotels which are cu

rrently operational. These sites an

d the

capital investment made

are recorded at co

st. Borrowing costs

incurred in the

construction of major assets or deve

lopment

projects which take a sub

stantial period

of time to complete

are

capitalised in

the financial period in which they are incu

rred.

Once construction

is complete and the hote

l is operating, the

assets will be transferre

d to land and bui

ldings and fixtures,

fittings and equ

ipment at cost, The land and b

uildings element

will subseque

ntly be measured at fair valu

e. Depreciation will

commence when the

assets are available for use.

Fixtures, fittings and

equipmen

t are stated at cost, less

accumulated dep

reciation and any impairment p

rovision.

Financial St

atements

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

ii) Property, plant and equipmen

(continued)

Cost includes e

xpenditure that is directly attributable to

the

acquisition o

f property, plant and equip

ment unless it is

acquired as part of a busi

ness combinatio

n under IFRS 3

Business Combinations

, where the

deemed

cost is its acquisitio

date fair value. In the ap

plication of th

e Group’s accountin

policy, judgemen

t is exercised by managemen

t in the

determination o

f fair value of land and building

s at each

reporting date, re

sidual values and useful l

ives.

Depreciation i

s charged through profit or lo

ss on the cost or

valuation le

ss residual value on a straight-line b

asis over the

estimated useful li

ves of the assets which are as fol

lows:

Buildings

50 years

Fixtures, fittings and

equipmen

–

15 years

Land is not dep

reciated.

Residual values an

d useful lives are reviewed

and adjusted if

appropriate at each rep

orting date.

Land and buildings are re

valued by quali

fied valuers on a

sufficiently regu

lar basis using open market valu

e (which reflects

a highest and

best use basis) so that the carrying valu

e of an

asset does not materiall

y differ from its fair value at the

reporting date. External

revaluations of the Group

’s land and

buildings have

been carried out in accordance with

the Royal

Institution of Chartered Surve

yors (RICS) Valuation Standards

and IFRS 13

Fair Value Measureme

Surpluses on reval

uation are recognised i

n other comprehensive

income and accu

mulated in equity in the reval

uation reserve,

except to the exten

t that they reverse impairmen

t losses

previously ch

arged to profit or loss, in

which case the reve

rsal is

recorded in p

rofit or loss. Decreases in value are charg

ed against

other comprehe

nsive income and the reval

uation reserve to the

extent that a previou

s gain has been reco

rded there, and

thereafter are charged thro

ugh profit or loss.

Fixtures, fittings and

equipment are reviewed fo

r impairment

when events o

r changes in circumstances in

dicate that the

carrying value may n

ot be recoverable

. Assets that do not

generate indepe

ndent cash flows are combine

d into cash-

generating

units. If carrying values excee

d estimate

recoverable amo

unts, the assets or cash-generating un

its are

written down to thei

r recoverable amount. Reco

verable amoun

is the greater of fair valu

e less costs to sell

and VIU. V

assessed based on e

stimated future cash flows disco

unted to

their present valu

e using a pre-tax discount rate that refle

cts

current market assessments of

the time valu

e of money and

risks specific to the asset.

The Group also app

lies IAS 36

Impairment of Assets

to any cash-

generating

units, with fixtures, fitting

s and equipment which

were previou

sly impaired and which are no

t revalued, to assess

whether previo

us impairments shoul

d be reversed. A re

versal of

a previous impai

rment charge is accounted

for through profit or

loss and onl

y increases the carrying amount of the

xtures,

fittings and equ

ipment to a maximum of what it would have

been

if the original impairment ch

arges had not be

recognised

in the first place.

(xiii) Investment property

Investment property i

s held eith

er to earn rental income, o

r for

capital appreciatio

n, or for both, but not for sale

in the ordinary

course of busin

ess.

Investment property i

s initially me

asured at cost, including

transaction costs, (or fair valu

e when

acquired through business

combinations) and sub

sequently revalued b

y professional

external valuers at thei

r respective fair value

s. The difference

between the fair val

ue of an investment pro

perty at the

reporting date an

d its carrying value prior to

the external

valuation is reco

gnised in profit or loss.

The Group’s investment pro

perties are value

d by qualified

valuers on an o

pen market value basis in acco

rdance with the

Royal Institution o

f Chartered Surveyors (RICS) Valuation

Standards and IFRS 13

Fair Value M

easurement

(xiv

)

Goodwill

Goodwill rep

resents the excess of the

fair value of the

consideration

for an acquisition o

ver the Group’s interest in the

net fair value o

f the identifiable assets, liab

ilities and

contingent

liabilities of the

acquiree. Goodwill is the future

economic

benefits arising fro

m other assets in a busin

ess combination that

are not individu

ally identified and separately re

cognised.

Goodwill i

s measured at its initial

carrying amount less

accumulated impairmen

t losses. The carrying amount of

goodwill is tested an

nually for impairment, or mo

re frequently i

events or chang

es in circumstances indicate that it mig

ht be

impaired. For the pu

rposes of impairment testing, assets a

grouped togeth

er into the smallest group

of assets that

generate cash in

flows from continuing u

se that are largely

independen

t of the cash inflows of other assets or g

roups of

assets (the ‘cash

generating

unit’).

The goodwi

ll acquired in a business combi

nation, for the

purpose of impai

rment testing, is allo

cated to cash-generating

units that are expected to

benefit from the syne

rgies of the

combination.

121

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(xiv) Goodwill

(con

tinued)

The recoverable

amount of a cash-generating

unit is the greater

of its VIU and its fair value le

ss costs to sell. In assessin

g VIU, the

estimated future cash flows are d

iscounted to their pre

sent

value using

a pre-tax discount rate that reflects a current

market

assessment of the time value

of mone

y and the risks specifi

c to

the asset.

An impairment loss i

s recognised in profit or l

oss if the carrying

amount of a cash-generating

unit exceeds its estimated

recoverable amo

unt. Impairment losses reco

gnised in

respect of

cash-generating u

nits are allocated first to reduce the carrying

amount of any go

odwill allocated to the uni

ts and then to

reduce the carryin

g amount of the other assets in

the units on a

pro-rata basis. Impairment lo

sses of goodwi

ll are not reversed

once recognise

The impairment testing p

rocess requires management to make

significant judg

ements and estimates regardin

g the future cash

flows expected to be

generated by the cash-generating

unit.

Management evalu

ates and updates the judg

ements and

estimates which unde

rpin this process on an o

ngoing basis.

The impairment methodo

logy and key assumption

s used by the

Group for testing go

odwill for impairment are outl

ined in notes

10 and 11.

The assumptions and co

nditions for determin

ing impairment o

goodwill reflects manag

ement’s best estimates and jud

gements,

but these items invo

lve significant inheren

t uncertainties, many

of which are not un

der the control of managemen

t. As a result,

accounting fo

r such items could result in d

ifferent estimates or

amounts if management u

sed different assumption

s or if

different conditio

ns occur in the future.

(xv) Intangible assets other than

goodwi

An intangible asset i

s only recognised where

the item lacks a

physical presen

ce, is identifiable

, non-monetary, controlled by

the Group and e

xpected to provide future eco

nomic benefits to

the Group.

Intangible assets are measu

red at cost (or fair value whe

acquired through b

usiness combinations), less accumu

lated

amortisation and impai

rment losses.

Intangible

assets are amortised over the perio

d of their

expected useful

lives by charging equal annual

instalments to

profit or loss. The use

ful life used to amortise i

ntangible assets

relates to the future pe

rformance of the asset and

management’s judge

ment as to the perio

d over which economic

benefits will b

e derived from the asset

The estimated total

useful life o

f the Group’s intangible assets is

5 years.

(

i) Inventori

Inventories are stated at the

lower of cost (using

the first-in,

first-out (FIFO) basis) and ne

t realisable valu

e. Inventories

represent assets that are sold

in the normal course o

f business

by the Group and

consumables.

(xvii

)

Contract fulfilment costs

Contract fulfilment costs are

stated at the l

ower of cost

recoverable amo

unt. Contract fulfilment co

sts represent assets

that are to be sold b

y the Group but do not form part of normal

trading. Costs capitali

sed as contract fulfilment co

sts include

costs incurred in ful

filling the speci

fic contract. The costs must

enhance the

asset, be used in order to satisfy the obl

igations

inherent in

the contractual arrangement and should

recoverable. Co

sts which are not recove

rable are written off to

profit or loss as incu

rred.

(xvi

)

Cash and cash equivalents

Cash and cash equival

ents comprise cash balance

s and call

deposits with maturities o

f three months o

r less, which are

carried at amortised cost.

) Trade and other receivables

Trade and other rece

ivables are stated in

itially at their fair value

and subsequen

tly at amortised cost, less any expe

cted credit

loss provisio

n. The Group applies the simplified ap

proach to

measuring expected

credit losses which use

s a lifetime expected

loss allowance

for all trade recei

vables. Bad debts are written

off to profit or loss on

identification.

)

Trade and other payables

Trade and other payab

les are initially recorded at fair val

ue,

which is usuall

y the original invoiced amoun

t. Fair value for the

initial recogni

tion of payroll tax liabiliti

es is the amount payable

stated on the payroll

submission filed with the tax authorities

Fair value for the initi

al recognition of VAT liabiliti

the net

amount of VAT payable to

, and recoverable from, the tax

authorities. Trade and o

ther payables are subsequentl

y carried

at amortised cost using

the effective inte

rest method. Liabil

ities

are derecogn

ised when the obligation und

er the liability is

discharged, cance

lled or expired

(xxi) Finance costs

Finance costs comprise i

nterest expense o

n borrowings and

related financial

instruments, commitment fees and

other costs

relating to finan

cing of the Group.

Interest expense on l

oans and borrowings is recog

nised using

the effective inte

rest method. The effective i

nterest rate of a

financial liabil

ity is calculated on initial recog

nition of a financial

liability. In

calculating interest expense, the e

ffective interest

rate is applied

to the amortised co

st of the liability.

Financial St

atements

122

Maldron Ho

tel Cork

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(xxi) Finance costs

(continu

ed)

If a financial liab

ility is deemed to

be non-substantially modified

(less than 10 percent di

fferent) (see pol

icy (xxvi

))

, the amortised

cost of the liabi

lity is recalculated by disco

unting the modifi

cash flows at the origi

nal effective interest rate and the

resulting modi

fication gain or loss is recognised

in finance costs

profit or loss. For floating-rate financial

liabilities, the o

riginal

effective interest rate is ad

justed to refle

ct the current market

terms at the time of the mo

dification.

Finance costs incurred

for qualifying assets, which take

substantial perio

d of time to construct, are added to the

cost of

the asset during the

period of time required

to complete and

prepare the asset for its inte

nded use or sale. The Gro

up uses

two capitalisation rates b

eing the weigh

ted average interest

rate after the impact of hedg

ing instruments for Sterli

borrowings which

is applied to UK qualifying assets and the

weighted ave

rage interest rate for Euro

borrowings whi

ch is

applied to

Republic of Ireland qualifying assets. Capitalisatio

commences on the

date on which the Group

undertakes

activities that are nece

ssary to prepare the asset for its in

tended

use. Capitalisation

of borrowing

costs ceases when the asset is

ready for its intend

ed use.

Finance costs also in

clude interest on l

ease liabilities.

(xx

) Foreign currency

Transactions in currencie

s other than the fun

ctional currency of

a Group entity are rec

orded at the rate of exchang

e prevailing

on the date o

f the transactions. Monetary assets and liabil

ities

denominated

in foreign currencies at the reportin

g date are

retranslated into the

respective functional cu

rrency at the

relevant rates of exchang

e ruling at the repo

rting date. Forei

exchange di

fferences arising on translatio

n are recognised in

profit or loss.

The assets and liabil

ities of foreign operatio

ns are translated

into Euro at the exch

ange rate ruling at the rep

orting date. The

income and e

xpenses of foreign operations are translated

into

Euro at rates approximatin

g the exchang

e rates at the dates of

e transactions.

Foreign exchan

ge differences arising on the

translation of

foreign operation

s are recognised in othe

r comprehensive

income, and are i

ncluded in the translation

reserve within

equity.

(xxiii) Provision

s and contingent liabili

ties

provision i

s recognised in the statement of fin

ancial position

when the Group h

as a present leg

al or constructive obligation as

a result of a past event, and

it is probable

that an outflow of

economic benefi

ts will be required to settle the

obligation. If the

effect is material, provision

s are determined b

y discounting the

expected future cash flo

ws at a pre-tax rate that reflects cur

rent

market assessments of the time val

ue of money and, where

appropriate, the risks spe

cific to the liab

ility.

The provision in respe

ct of self-insured risks inclu

des projected

settlements for known cl

aims and incurred

but not reporte

claims.

Where it is no

t probable that an outflow of eco

nomic bene

fits

will be required

, or the amount cannot be

estimated reliabl

the obligation

is disclosed as a contingen

t liability, unless the

probabili

ty of an outflow of economic bene

fits is remote.

Possible obl

igations, whose existence wil

l only be confirmed by

the occurrence

or non-occurrence of one o

r more future events,

are also disclose

d as contingent liabil

ities unless the prob

ability

of an outflow of e

conomic benefits is remote.

(xx

) Ordinary shares

Ordinary shares are classified

as equity. Incremental

costs

directly attributabl

e to the issuance of ordi

nary shares are

recognised

as a deduction from equity, net of an

y tax effects.

Merger relief is avai

led of by the Group where

possible.

(xxv

)

Loans and borrowings

Loans and borrowi

ngs are recognised initi

ally at the fair value of

the consideratio

n received, less di

rectly attributable transaction

costs. Subsequent to in

itial recognition, lo

ans and borrowings

are stated at amortised co

st with any di

fference between

cost

and redemption

value being recognised in

profit or loss over the

period of the

borrowings on an effective interest rate basi

Directly attributable transactio

n costs are amortise

d to profit or

loss on an effective

interest rate basis ove

r the term of the loan

and borrowing

s. This amortisation charge

is recognised within

finance costs. Commitment fees i

ncurred in connectio

n with

loans and bo

rrowings are expensed as incurred

to profit or loss.

(xxvi) Derecognition of fi

nancial liabili

ties

The Group removes a fin

ancial liability from its statemen

t of

financial po

sition when it is extinguished (whe

n its contractual

obligations are d

ischarged, cancelled, or expi

re).

The Group also de

recognises a financial li

ability when the terms

and the cash flows of a modi

fied liabili

ty are substantially

different. The terms are sub

stantially differen

t if the discounte

present value o

f the cash flows under the new terms,

discounted u

sing the original effective i

nterest rate, includi

any fees paid to l

enders net of any fees received

, is at least 10

percent different from the

discounted

present value of the

remaining cash flo

ws of the original finan

cial liability, discounted

at the origin

al effective interest rate

, the ‘10% test’.

In addi

tion,

a qualitative assessment i

s carried out of the n

ew terms in the

new facility agree

ment to determine whethe

r there is a

substantial modification

123

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the consolidated

financial statements

(continued)

1 Significant acco

unting pol

icies

(

continued

)

(xxvi) Derecognition of fi

nancial liabiliti

(continued)

If the financial li

ability is deemed substantially mo

dified, a new

financial liabil

ity based on the mod

ified terms is recognised

fair value. The differen

ce between the carryin

g amount of the

financial liabil

ity derecognised and consi

deration paid is

recognised

in profit or loss.

If the financial li

ability is deemed

non-s

ubstantially mod

ified,

the amortised cost of the

liabili

ty is recalculated by di

scounting

the modified

cash flows at the original e

ffective interest rate

and the resultin

g modification gain or loss is recog

nised in profit

or loss. Any costs and fe

es directly attributabl

e to the modi

fied

financial liabil

ity are recognised as an adjustment to the

carrying

amount of the modi

fied financial liabil

ity and amortised o

ver its

remaining term by re-compu

ting the effective inte

rest rate on

the instrument.

(xxv

) Derivative financial ins

truments

The Group’s borrowing

s expose it to the

financial risks of

changes in interest rates. The Grou

p uses derivative financial

instruments such as interest ra

te swap agreements to h

edge

these exposures.

Interest rate swaps conve

rt part of the Group

’s Sterling

denominated

borrowings from floating to

fixed interest rates.

The Group doe

s not use derivatives for trading o

r speculative

purposes.

Derivative financial i

nstruments are recogni

sed at fair value on

the date a derivati

ve contract is entered into

plus directly

attributable transaction co

sts and are subseque

ntly re-

measured at fair value. Derivati

ves are carried

as assets when

the fair value is p

ositive and as liabilities when

the fair value i

negative.

The full fair value

of a hedging derivative is cl

assified as a non-

current asset or non-current liab

ility if the remaining

maturity of

the hedging instrument i

s more than twel

ve months and as a

current asset or current liab

ility if the remain

ing maturity of the

hedging in

strument is less than twelve mo

nths.

The fair value of de

rivative instruments is d

etermined by u

sing

valuation techniqu

es. The Group uses its judge

ment to select

the most appropriate valu

ation methods and makes

assumptions that are mainly b

ased on ob

servable market

conditions (Level 2 fair val

ues) existin

g at the reporting

date.

The method of reco

gnising the resulting

gain or loss depends o

whether the deri

vative is designated as a hedging instrumen

and if so, the nature o

f the item being he

dged.

(

xxv

iii) Cash f

low hedge accounting

Cash flow hedge

accounting is applied in accordan

ce with IFRS 9

Financial Instruments

For those de

rivatives design

ated as cash

flow hedge

s and for which hedge accounting

is desired, the

hedging relationshi

p is documented at its incep

tion. This

documentation

identifies the hedging i

nstrument, the hedg

item or transaction, the nature

of the risk b

eing hedged and its

risk management ob

jectives and strategy for unde

rtaking the

hedging transaction

. The Group also documen

ts its assessment,

both at hedge

inception and on a semi-annual basis, of whether

the derivatives that are u

sed in hedging transactio

ns are highly

effective in offsetting

changes in cash flows of hedge

d items.

Where a derivati

ve financial instrument i

s designated as a he

dge

of the variabili

ty in cash flows of a recog

nised asset or liabil

ity,

the effective part of any g

ain or lo

ss on the derivative finan

cial

instrument is recogn

ised in other comprehensive i

ncome and

accumulated in e

quity in the hedging rese

rve. Any ineffective

portion is reco

gnised immediatel

y in profit or loss as finance

income/costs. The amo

unt accumulated in

equity is retained in

other comprehe

nsive income and reclassified to profit o

r loss in

the same period

or periods during

which the hedged i

tem

affects profit or loss.

Hedge accountin

g is discontinued when the

hedging instrument

expires or is sold

, terminated, exercised, o

r no longer qualifie

for hedge acco

unting or the designation is revo

ked. At that

point in time, an

y cumulative gain or loss o

the hedging instrument rec

ognised in e

quity remains in equi

and is recogn

ised when the forecast transaction is ulti

mately

recognised

in profit or loss. However, if a hed

ged transaction i

no longer antici

pated to occur, the net cumulative

gain or loss

accumulated in e

quity is reclassified to p

rofit or loss.

(xx

) Net investment hedges

Where relevan

t, the Group uses a net investment hed

ge,

whereby the forei

gn currency exposure arising

from a net

investment in a fore

ign operation is hed

ged using borrowing

held by a Grou

p entity that is denominated i

n the functional

currency of the forei

gn operation.

Foreign currency

differences arising on the retran

slation of a

financial liabil

ity designated as a hedge

of a net investment in a

foreign operation

are recognised directly i

n other

comprehensive

income in the foreign

currency translation

reserve, to the extent that the

hedge is effective

. To the extent

that the hedge

is ineffective, such difference

s are recognise

d in

profit or loss. Whe

n the hedged part of a net i

nvestment is

disposed o

f, the associated cumulative amoun

t in equity is

reclassified to pro

fit or loss.

Financial St

atements

Notes to the consolidated

financial statement

(continued)

1 Significant acco

unting policie

(

continued

)

(xxx) Adjusting items

Consistent with how b

usiness performance i

s measured and

managed intern

ally, the Group reports both statutory

measures prepared un

der IFRS and certain al

ternative

performance measures (‘AP

Ms’) that are no

t requir

ed under

IFRS. These APMs are someti

mes referred to

as ‘non

GAAP’

measures and inclu

de, amongst others, Adjusted EBI

TDA,

Adjusted Profit/ (Loss)

Free

Cash Flow per Share, and

Adjusted EPS.

The Group beli

eves that the presentation of these

APMs

provides useful

supplemental information which

, when

viewed in conjun

ction with the financial informatio

presented un

der IFRS, provides stakeh

olders with a more

meaningful u

nderstanding of the underlying fin

ancial and

operating p

erformance of the Group.

Adjusted measures of pro

fitability represe

nt the equivalen

IFRS measures adjusted to show th

e unde

rlying operating

performance of the Grou

p and exclude items whi

ch are not

reflective of no

rmal trading activities or di

stort

comparability ei

ther year on year or with other similar

businesses.

125

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated financial statements

(continued)

2 Operating segm

ents

The Group

’s segments

are reporte

d in acco

rdance with IFRS 8

Operating Segments

. The segment in

formation i

s reported in the same way

as it is reviewed an

d analysed internall

y by the chief ope

rating decision makers, primarily, the Executive Directors.

The Group segments i

ts leased and owned b

usiness by geographical

region within which the hotel

s operate being Dublin, Regional Ireland

and the UK

. These comprise the

Group’s three rep

ortable segme

nts.

Dublin, Regional

Ireland and UK segments

These segments are con

cerned with ho

tels that are either o

wned or leased by the Group

As at 31 December 2021, the Group owns 27

hotels (31 December 20

: 2

7 hotel

s) and has effective owne

rship of one further hote

l which it operates (31 December 20

: one hotel). It

also owns the majori

ty of one further hotel it operates (31 December

: one ho

tel). The Group also leases 13 hotel buil

dings from

property owners (31 Decembe

r 20

: 1

2 hotels) and is en

titled to the bene

fits and carries the risks associated with

operating the

se hotels.

Included in this fig

ure is the Clayton Hotel Man

chester City Centre lease which commence

d in December 2021. This hotel o

pened to the

public in January 2022. The Ballsbri

dge Hotel lease matured o

n 31 December 2021 and is not i

ncluded in the number of le

ased hotels

above at 31 December 2021

The Group’s revenue

from leased and o

wned hotels is primarily d

erived from room sales and fo

od and beverage

sales in restaura

nts,

bars and banque

ting. The main operating co

sts arising are payroll, co

st of goods for resale

, commissions paid to

online travel agents on

room sales and other o

perating costs.

Revenue

202

€’000

2020

€’000

Dublin

75,046

65,178

Regional Irel

and

53,429

36,301

63,515

35,342

Total

1,990

136,821

The Covid-19 pandemi

c has resulted in a material lo

ss of revenue for the year ended 31 December 2021 and

the year ended 31 Decembe

2020

, relative to the year en

ded 31 December 2019 which was un

affected by the

pandemic. Varying global restrictions on

travel and

numerous publ

ic health initiatives resulted i

n significantly redu

ced demand in the wider hospitality in

dustry.

Ireland

all

hotels except for one hotel remai

ned open

a limited capacity to provid

e for essential services bu

siness between January

2021 and May 2021. On 2 June 202

1, the hotel

s in Ireland re-opened to the public

All

of the Group’s UK hotel

s were open at limited

capacity between Jan

uary 2021 and May 2021. Hotels re-open

ed fully to the pub

lic in England and Wales on

17 May 2021 and in Northe

Ireland on 24 May 2021. From May

and June, there were

varying restrictions in p

lace for the hospitali

ty sector, including cap

acity

restrictions at indoo

r events, earlier closin

g times for restaurants and

physical di

stancing requirements. These were

steadil

y eased

however, in Dece

mber 2021, as a result o

f the spread of the Omicron variant, these and othe

r stricter measures were grad

ually re-

introduced to

Ireland and parts of the UK. For certain period

s in 2021, international travel

was largely restricted to essen

tial travel onl

y a

large events an

d public gatherings were also prohi

bited.

During the year en

ded 31 December 2020, the Group’s hotel

s were subject to

varying local and n

ational government restriction

in Ireland

and the UK from March 2020. This i

ncluded the temporary clo

sure of certain ho

tels between March and July 2020. In the seco

nd half of

2020, all hotels e

xcept for one ho

tel remained open, however, perio

dically were only open at a l

imited capacity to provi

de for essential

services busine

ss.

Financial St

atements

126

Notes to the consolidated

financial statements

(continued)

2 Operating segm

ents

(

continued

)

Segmental results - EBITDAR

202

€’000

2020

€’000

Dublin

31,034

17,462

Regional Irel

and

23,374

7,983

20,739

3,431

EBITDAR for reportable segmen

75,147

28,876

Segmental results

–

EBITDA

Dublin

31,034

17,250

Regional Irel

and

23,321

7,956

20,

662

3,399

EBITDA for reportable segments

75,017

28,605

Reconciliation to resul

ts for the year

Segmental results

–

EBITDA

75,017

28,605

Other income

655

495

Central costs

(10,276)

(8,128)

Share-based payments expen

(2,159)

(2,280)

Adjusted EBITDA

63,237

18,692

Adjusting items

Net property revalu

ation movements through p

rofit or loss

6,790

(30,836)

Impairment of good

will

(3,226)

Net reversal

previous impai

rment charges/(impairment charges) of rig

ht-

-use

assets

(7,541)

Net reversal

previous impai

rment charges/(impairment charges) of fi

xtures,

fittings and equ

ipment

120

(1,015)

Loss on sale and l

easeback

(1,673)

Remeasurement gain o

n right-

-use assets

277

Hotel pre-openi

ng expenses

(1,927)

(81)

Group EBITDA

68,

536

(25,680)

Depreciation o

f property, plant and equ

ipment

(27,033)

(26,607)

Depreciation o

f right-

-use assets

(19,522)

(20,663)

Amortisation of intang

ible assets

(539)

(558)

Interest on lease li

abilities

(24,409)

(22,405)

Other interest and fin

ance costs

(8,469)

(15,548)

Loss before tax

(11,436)

(111,461)

Tax credit

5,107

10,783

Loss for the year attributabl

e to owners of the Compan

(6,329)

(100,678)

127

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

2 Operating segm

ents

(

continued

)

Group EBITDA represents earni

ngs before in

terest on lease liabi

lities, other intere

st and finance costs, tax, depreci

ation of

property, plant

and equipment and

right-

-use assets and amortisation of intangibl

e assets.

Adjusted EBITDA is presente

d as an alternative p

erformance measure to show the

underlying ope

rating performance of the Group

excluding

items which are not reflective of normal tradi

ng activities o

r distort comparability

eit

her

year on year or with other similar

businesses. Conse

quently, Adjusted EBITDA represe

nts Group EBITDA

before:



Net pro

perty revaluatio

n movements through profi

t or loss (note 12);



tel pre-opening

expenses (note 3) which relate primarily to

payroll expenses, sales an

d marketing costs and

training costs of

new staff, and are incurre

d by the Group in advan

ce of new hotel opening



Impairmen

t of goodwil

l (notes 10,11);



Impairmen

ts and reversals of previ

ous impairment charges

fixtures, fittin

gs and equi

pment and right-

-use assets (notes

10,12,13);



The reme

asurement gain o

n right-

-use assets

(note

13)

; and



The acco

unting loss on

the sale and leaseback (notes

, 13).

The line ite

m ‘central costs’ includes costs of the Grou

p’s central functi

ons including

operations support, technolog

y, sales

and marketing,

human resources, finance

, corporate services an

d business de

velopment.

Also included

in central costs is the reversal of prior pe

riod

insurance provi

sions of €1.

million (note 20) (2020: €0.03 milli

on).

Share-based payments expe

nse is presente

d separately from central

costs as this expense relates to

emplo

yees across the Group.

‘Segmental results –

EBITDA’ for Du

blin

, Regional Irel

and and the UK

represents the ‘Adjusted

EBITDA’ for each

geographical

location

before central co

sts, share-based payments expense and o

ther income. It is the ne

t operational contrib

ution of leased and own

ed hotels in

each geographi

cal location.

‘Segmental results –

EBITDAR’ for

Dubli

n, Regional Ireland and

the UK

represents ‘Segmental

results –

EBITDA’ before

variable l

ease costs.

As a result of the amende

d and restated lo

an facility in November

202

1, the Group reco

gnised a modificatio

n gain o

f €

2.7 million

finance

costs in profit or loss (note 5) for th

e year ende

d 31 December 2021. Following the ame

nded and restated loan

facility in July 2020, a

modification l

oss of €4.3 million was recogn

ised in

finance costs in profit or loss for the year end

ed 31 December 2020. As these are no

reflective of no

rmal trading activity, it is presented as an Ad

justing item to arrive at Adjusted loss befo

re tax and Adjusted lo

ss after tax

(note

Financial St

atements

128

Notes to the consolidated

financial statements

ontinue

2 Operating segm

ents

(

continued

)

Disaggregated revenue infor

mation

Disaggregated rev

enue is reported in the

same way as it is reviewed and

analysed internall

y by the chief operating d

ecision m

akers,

primarily, the Executive Dire

ctors. The key compo

nents of revenue reviewed b

y the chief operatin

g decision makers are:



Room rev

enue which rel

ates to the rental of rooms in e

ach hotel. Revenue i

s recognised when the ho

tel room is occupied, and

the service is pro

vided;



Food

and beverage reve

nue which relates to sales of food and

beverages at the hote

l property. Revenue is recog

nised at the

point of sale; an



Other rev

enue include

s revenue from leisure ce

ntres, car parks, meetin

g room hire and othe

r revenue sources at the hotel

Leisure centre reve

nue is recognised over the

life of the membership whi

le the oth

er items are recognised when the

service is

provided.

Revenue review by segment

–

Dubl

202

2020

€’000

Room revenue

52,098

43,436

Food and be

verage revenue

17,186

16,012

Other revenue

5,762

5,730

Total revenue

75,046

65,178

Revenue review by segment

–

Regi

onal Ireland

202

2020

€’000

Room revenue

33,998

21,620

Food and be

verage revenue

15,131

11,084

Other revenue

4,300

3,597

Total revenue

53,429

36,301

Revenue review by segment

–

2021

2020

€’000

Room revenue

47,191

24,699

Food and be

verage revenue

12,716

7,922

Other revenue

3,60

2,721

Total revenue

63,515

35,342

129

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

2 Operating segm

ents

(

continued

)

Other geographical inf

ormation

202

2020

Republic

Ireland

Total

Republic

of Ireland

Total

€’000

Revenue

Owned hotel

99,179

40,765

139,944

74,099

24,617

98,716

Leased hotels

29,296

22,750

52,046

27,380

10,725

38,105

Total revenue

128,475

63,515

191,990

101,479

35,342

136,821

202

2020

Republic

of Ireland

Total

Republic

of Ireland

Total

€’000

EBITDAR

Owned hotel

44,335

13,562

57,897

20,528

2,491

23,019

Leased hotels

10,073

7,177

17,250

4,917

940

5,857

Total EBITDAR

54,408

20,739

75,147

25,445

3,431

28,876

202

2020

Republic

of Ireland

Total

Republic of

Ireland

Total

€’000

Other information

Variable lease

costs

130

239

271

Depreciation o

f property, plant and equipme

17,987

9,046

27,033

18,078

8,529

26,607

Depreciation o

f right-

-use assets

14,288

5,234

19,522

15,769

4,894

20,663

Interest on lease l

iabilities

15,282

9,127

24,409

14,804

7,601

22,405

Financial St

atements

130

Notes to the consolidated

financial statements

(continued)

2 Operating segm

ents

(

continued

)

Other geographical inf

ormation

(continue

Assets and liabil

ities

At 31 December 2021

At 31 December 20

Republic of

Ireland

Total

Republic of

Ireland

Total

€’000

Assets

Intangible assets and

goodwill

19,766

12,228

31,994

20,304

11,429

31,733

Property, plant and e

quipment

857,71

386,184

1,243,

902

850,797

351,946

1,202,743

Right-

-use assets

269,681

222,188

491,869

284,759

126,248

411,007

Investment property

1,575

503

2,078

1,575

514

2,089

Other non-current recei

vables

3,3

2,9

6,313

3,305

5,754

9,059

Contract fulfilment costs

36,255

22,374

Other current assets

21,605

946

56,551

20,059

40,627

60,686

Total assets excluding derivatives

and

deferred tax assets

209,956

9,006

1,868,

962

1,203,173

536,518

1,739,691

Derivative assets

832

Deferred tax assets

20,161

12,344

Total assets

1,889,955

1,752,035

Liabiliti

Loans and borrowi

ngs

313,533

14,376

299,767

314,143

Lease liabili

ties

261,993

219,933

481,926

271,549

128,083

399,632

Trade and other payab

les

67,040

17,648

84,688

40,650

8,018

48,668

Total liabili

ties excluding provisi

on for

liabilities,

derivatives and tax liabiliti

329,033

551,114

880,147

326,575

435,868

762,443

Provision for li

abilities

8,188

8,275

Derivative liabi

lities

1,029

9,042

Current tax liabiliti

282

Deferred tax liabiliti

42,896

39,404

Total liabili

ties

932,542

819,255

Revaluation reserve

194,574

17,998

212,572

186,343

12,963

199,306

The above in

formation on assets, liabiliti

es and revaluation reserve

is presented by country as it does not form part of the segmental

information routin

ely reviewed by the chi

ef operating deci

sion makers.

Loans and borrowi

ngs are categorised acco

rding to their underlyi

ng currency.

The amortised cost of lo

ans and borrowi

ngs

s €313.5

mil

lion at 31 Dece

mber 2021 (31 December 2020: €314.1 mil

lion).

Drawn loans and b

orrowings denominated in Sterli

ng of

£26

6.5 million

(€

317.2 mill

ion) are classified as li

abilities in the

(31 December 202

0: £269.5 million (€299.8 mill

ion)

. All of these Sterling

borrowings act

as a net investment he

dge as at 31 December

2021 (

31 Decembe

r 2020: £266.5 milli

on (€296.4 million

)

As at 31 December 2020, loan

and borrowing

s denominated in Euro

e classified as li

abilities in the Republ

ic of Ireland (no

te 21

There

re no Euro den

ominated

borrowings at 31 Decemb

er 2021.

Contract fulfilment costs are di

sclosed as current assets at 31 Decembe

r 2021 as they are receivabl

e within 12 months o

f this date and as

non-current assets at 31 Decembe

r 2020.

131

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

3 Statutory and

other informa

tion

202

2020

€’000

Depreciation o

f property, plant and equ

ipment

27,03

26,607

Depreciation o

f right-

-use assets

19,522

20,663

Variable lease

costs: Land and buildings

130

271

Hotel pre-openin

g expenses

1,927

Hotel pre-openin

g expenses relate to costs incurred

by the Group in

advance of opening

new hotels. In 2

021, this related to seven ho

tels

(of which one opened

in August 2021

one opened in

January 2022, one opened in February 2022 and

the remainder are schedul

ed to open

later

2022

). In 2020, pre-opening e

xpenses related to two ne

w hotels, one of which op

in 2021, with the second due to ope

n later

2022. These costs primarily rel

ate to payroll e

xpenses, sales and marketing co

sts and training costs of new staf

Variable le

ase costs relate to lease payments lin

ked to performance which

are excluded from the measur

ement of lease l

iabilities as they

are not related to an

index or rate or are not co

nsidered fixed

payments in substance.

Administrative expenses

In 2021, administrative expen

ses of

€1

09.9 million i

nclude depreciation of

€46.6

milli

as set out above, net reve

rsal of property

revaluations lo

sses

through profit or loss of €

6.8 million (note 12),

a re

versal of prior pe

riod insurance provisio

ns of €1.3 million

(note 20),

net reversal of previ

ous impairment charges o

f right-

-use assets and fixtures,

fittings and e

quipment

of €0.2 million

(notes

, 12,13), and

remeasurement gain

on right-

use assets of €0.

3 million (no

te 13).

2020

, administrative expenses o

€158.5 millio

n included depreci

ation of €47.3 million,

net property revalu

ation losses of

€30.8 million,

impairment of goo

dwill of €3.2 millio

n, impairment of

right-

use assets of €7.5 million

and of fixtures, fittings and

equipment of €1.0

million, and loss on

sal

e and leaseback of €1.7 milli

on.

Auditor’s remuneration

202

2020

€’000

Audit of Group, Compan

y and subsidiary financi

al statements

405

305

Other assurance services

Tax services

337

Auditor’s remuneration

for the audit of the Company fin

ancial

statements was

€15,000

(20

: €15,000).

Other assurance services primarily

relate to the revie

w of the interim conden

sed consolidated financi

al statements.

For the year en

ded 31 December 2020, tax services

primarily related to Irish

VAT advice.

Directors’ remuneration

202

2020

€’000

Salary and other emol

uments

1,623

1,525

Gains on vesting

of awards granted in 2018 unde

r the 2017 LTIP

Gains on vesting

of awards granted in 2017 unde

r the 2017 LTIP

612

Fees

438

433

Pension costs

–

defin

ed contribution

112

Compensation o

f former Director

102

2,2

2,682

Amounts disclosed are in

clusive of remuneration of

connected persons

as defined by Comp

anies Act 2014.

Gains associated with the shares w

hich issue

d on vesting of awards grante

d in 2018 and

201

7 under the 2017 Long Term Incenti

ve Plan

(

‘

LTIP

’

) represent the difference

between the q

uoted share pri

ce per ordinary share and the e

xercise price on the ve

sting da

te (note 7). The

shares granted to Directors in 2017

under the LTIP are held

in a restricted share trust and may n

ot be sold o

r dealt in any way fo

r a period

of five years and 30 days from the

vesting date. D

etail

s of the Directors’ remuneration

terests in conditio

nal share awards and

compensation o

f former Director are set out in the

Remuneration Committee repo

rt on pages

Financial St

atements

132

Notes to the consolidated

financial statements

(continued)

4 Other income

Rental income from inve

stment property relates to the fol

lowing properties:



Two commerci

al properties whi

ch are leased to thi

rd parties for lease terms of 25 and 30 years;



A sub-l

ease of part of Clayton Cardi

ff Hotel, UK which is leased to a third

party for

lease term of 20 years, with 11 years

remaining at 31 Dece

mber 2021; and



A sub-l

ease of part of Clayton Wh

ites Hotel, We

xford which is leased to a third party for

lease term of 1

0 years, which

commenc

in 2020.

Income from managed h

otels represents the fees and

other income

earned from services provid

ed in relation to p

artner hotels which are

not owned o

r leased by the Group. The fair

value of the i

nvestment prope

rties at 31 December 2021 is €2

.1 million (2020: €2.1 mil

lion).

Finance c

osts

202

2020

€’000

Interest on lease l

iabilities (note 13)

24,409

22,405

Interest expense on

bank loans and borrowin

8,9

9,097

Cash flow hedge

–

reclassified from other compreh

ensive income

2,637

1,992

Other finance costs

2,340

1,774

Modification (gain

)/loss on amended debt facil

ity

(2,704)

4,272

Net foreign exchan

ge (gain)/loss on financing

activities

(86)

Interest capitalised to

property, plant and eq

uipment (note 12)

(1,942)

(1,392)

Interest capitalised to

contract fulfilment costs (note 14)

(684)

(291)

32,878

37,953

The Group uses inte

rest rate swaps to conve

rt the interest rate on p

art of its debt from floating rate to fixed rate (note

22). The Sterling

variable rate on the

Group’s borrowings transitio

ned from LIBOR to S

ONIA during the ye

ar ended 31 December 2021 (no

, 24). The

cash flow hedge

amount reclassified from othe

r comprehensive

income is shown separately within finance costs and p

rimarily represents

the additio

nal interest the Group paid as a resul

t of the interest rate s

waps.

As a result of the amendment and

restatement of the loan facili

ty agreement executed o

n 2 November 2021, the Group assessed whether

the discounte

d cash flows under the amended facil

ity agreement discou

nted at the old effective

interest rate were substantiall

y different

from the discounted

cash flows under the

old facility agreeme

nt. The modified l

oans were deemed to be non-substantially modi

fied which

resulted in a mod

ification gain

of €

2.7 million b

eing recognised in p

rofit or loss during the year en

ded 31 December 2021 (note 21).

Following

the amended and restated loan faci

lity in July 2020, a modificatio

loss of €4.3 million was recognise

d in profit or loss for the

year ended 31 Dece

mber 2020 (note 21).

Other finance costs in

clude commitment fees and other bank

ing and professional fees. Net foreig

n exchange gains/loss

on financing

activities relate pri

ncipally to loan

s which did not form part of the net in

vestment hedge

(note 24

Interest on loans an

d borrowings amounti

ng to

€

1.9 million was capitalised to

assets under constructio

n on the basis that these costs were

directly attributabl

e to the construction o

f qualifying assets (note 12

)

(20

: €

1.4 mill

ion). Interest on lo

ans and borrowings amou

nting to

€

0.7 million was capi

talised to contract fulfilment co

sts on the basis th

at these costs were directly attributable

to the construction o

qualifying

assets (note 14

)

(20

: €0.

3 millio

n). The capitalisation rates appli

ed by the Group, which were reflectiv

e of the weigh

ted

average intere

st cost in respect of Euro de

nominated borrowing

s and Sterling deno

minated borrowings for the year, were 2.4% (20

8%) and 3.6% (20

3.1%) respectiv

ely.

202

2020

€’000

Rental income from in

vestment property

355

279

Income from managed h

otels

300

216

655

495

133

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

6 Personnel expe

nses

The average numb

er of persons (full-time equival

ents) employed by the Group

(including Executive

Directors), analysed by category, was

as follows:

202

2020

Administration

495

447

Other

2,010

1,487

2,505

1,934

Full-time equival

ents split by geographi

cal region was as follo

ws:

202

2020

Dublin (inclu

ding the Group’s central

functions)

1,1

944

Regional Irel

and

834

583

407

2,505

1,934

The aggregate p

ayroll costs of these perso

ns were as follows:

202

2020

€’000

Wages and salarie

48,159

45,540

Social welfare costs

2,973

4,242

Pension costs

–

defin

ed contribution

1,348

1,260

Share-based payments expen

2,159

2,280

Severance costs

54,718

53,405

Wages and salaries an

d social welfare cost

s for the year ended 31 De

cember 2020 have be

amended in these financial sta

tements

mount of €1.4 millio

PRSI credit received relating

Employme

nt Wage Subsidy Sc

heme has been reclassifie

d from wages and

salaries to social welfare costs.

€0.3 million

(20

: €0.

milli

on) of payroll co

sts relating to the Grou

p’s internal developme

nt employees were capitalised as these

costs are

directly related to

development, lease and othe

r construction work comple

ted during the year ended 31 December 2021.

For the year ende

d 31 December 2021, wages and

salaries amounting

to €48.2 million (2020:

€45.5 million)

are stated ne

t of wage

subsidies recei

ved by the Group from the Irish and

UK governments. During 2021, the Group avai

led of wage subsid

ies of

€36.0 million

(2020: €16.0 millio

) from the Irish gove

rnment and

€2.0 million (£1.8 milli

on) (2

020: €4.8 million (£4.3 mill

ion))

from the UK government

(note 8).

Financial St

atements

134

Notes to the consolidated

financial statements

(continued)

7 Share-based pay

ments expense

The total share-

based paymen

ts expense

for the Group’s emplo

yee share schemes charged to p

rofit or loss during the

year

€2.

million (20

: €2.

3 milli

on), analysed as follows:

202

2020

€’000

Long Term Incentive

Plans

1,681

1,238

Share Save schemes

478

1,042

2,159

2,280

Details of the schemes o

perated by the Group are se

t out below:

Long Term Incentive Plans

Awards granted

During the year en

ded 31 December 2021, the Board approved

two

ndition

al grants of ordinary shares pursuant to the terms and

conditions of the Grou

p’s 2017 Long Term Incentive

Plan (‘the 2017 LT

IP’).

In Mar

ch 2021, the g

rant of 1,361,145 ordinary sh

ares was made

to senior empl

oyees across the Group (106 in total). On 31 August 202

1, the Board, o

n the Remune

ration Committee’s recom

mendation

approved the performance

terms and cond

itions for this award which includes 50% of the

performance target be

ing based on total

shareholder return

‘TSR’

and 50% based on Free Cash Flow per Share

‘FC

S’

with varying thresho

lds. The performance p

eriod of this award

is 1 January 2021 to 31 December

2023. Threshold performance

for the TSR condi

tion is

performance measure again

st a bespoke

comparator group o

f 20 listed peer compani

es in the travel an

d leisure sector

, with 25% vesting if the Group’s TSR over the pe

rformance

period is rank

ed at the median compared to the TSR of the co

mparator group

, and if the Group’s TSR perfo

rmance is at or above

the upper

quartile compared

to the comparator group, the remai

ning 75% of the award will vest. Threshold p

erformance for the

FCFS

condition

which is a non-market-based

performance condi

tion, is based on the

achievement of FCFS

of €0.

, as disclosed in

the Group’s 202

audited con

solidated financial statements, with 100% ves

ting for FCFS

of €0.47 or greater.

These awards

will vest on a straig

ht-line basis for

performance betwee

n these points. FCFS targets may be amend

ed in restricted circumstances if an eve

nt occu

rs which causes the

Remuneration Committee to

determine an ame

nded or substituted p

erformance condi

tion would be more appro

priate and no

t materia

lly

more or less difficul

t to satisfy. Particip

ants are also entitl

ed to receive a divide

nd equivalent amount in respect of their awards. Further

details of the p

lans are set out in the Remune

ration Committee Repo

rt on pages 81 to

On 23 December 2021, a condi

tional grant of 255,700 ordinary shares

was made to senio

r employees o

f the Group (87 in total). This award

is conditional o

n employees being in employment as at 31 March 2023

. There are no o

ther conditions attaching to this award. Participan

are also entitle

d to receive a dividend eq

uivalent amount in resp

ect of their awards.

Awards vested

As a result of the impact of Covid-19 o

n the Group, the pe

rformance conditions,

TSR

and earni

ngs per share (‘EPS’),

under the 2018 LTIP

scheme, were not satisfied. In Janu

ary 2021,

the Board,

on the Remun

eration Committee’s reco

mmendation

, as permitted under the

deed

of grant, modified the

performance terms and co

nditions o

f the 2018 LTIP scheme, to recog

nise the ongoing commitmen

t by certa

in senior

employees o

f the Group. The modified

conditions set out were that the empl

oyee must have been

a beneficiary of the 2018 LTIP scheme,

who was in emplo

yment on 25 January 2021 and was neithe

r a Director nor Company Secretary. A di

scretionary award of 25% of the

conditional awards un

der the 2018 LTIP scheme relating

to these employee

s vested and the related e

xpense

€0.3 m

illion

was fully

accounted for in

the year ended 31 December 2021 as it was in

respect of employe

e service up to that date. The Group de

termined the fair

value on the

date of modification to be the p

ublicly available share price on 25 Jan

uary 2021 less the nomi

nal value.

The Company issued

93,172 shares on foo

t of the vesting of this di

scretionary award. Over the cou

rse of the three year performance

period, 39,316 share awards lapsed

due to ve

sting conditions which were not satisfie

d relating to the

Award granted in 2018. 628,524

shares lapsed unve

sted due to TSR and EPS performan

ce conditio

ns not satisfied. The weigh

ted average share price at the

date

of exercise

for awards exercised

during

the year was €4.22

135

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

7 Share-based pay

ments expense

(

conti

nued

)

Long Term Incentive Plans

(contin

ued)

Movements in the n

umber of share awards are as fo

llows:

202

2020

Awards

Outstanding at the b

eginning of the year

842,928

2,361,766

Granted during the

year

1,616,845

2,282,533

Dividend e

quivalents

42,006

Forfeited during

the year

(393,596)

(29,906)

Lapsed unvested d

uring the year

(628,524)

(264,092)

Exercised during

the year

(93,172)

(549,379)

Outstanding at the end of the

year

4,344,481

3,842,928

202

2020

Grant date

Awards

March 2018

728,288

March 2019

822,781

847,276

March 2020

2,081,588

2,267,364

March 2021

1,184,412

December 2021

255,700

Outstanding at the end of the

year

4,344,481

3,842,928

Measurement of fair values

The fair value, at the gran

t date, of the TSR-based cond

itional share awards was measured

using a Monte Carl

o simulation mod

el. Non-

market-based performance cond

itions attached to

the awards were not taken i

nto account in measurin

g fair value at the grant date. The

valuation and

key assumptions used in the me

asurement of the fair valu

es at the grant date were as fol

lows:

March 20

Fair value at grant date

€2.40

€

0.62

Share price at grant date

€3.84

€

2.32

Exercise price

€0.01

Expected volatili

52.01% p.a.

31.83% p.a.

Performance period

3 years

Dividend e

quivalents accrue on awards that vest up to the

time of vesting un

der the LTIP schemes, and therefore the d

ividend yield h

been set to zero

to reflect this. Such divi

dend equivalents wil

l be released to participants i

n the form of additio

nal shares o

n vesting subje

to the satisfaction of pe

rformance criteria

In the absen

ce of available market-implied and

observable volatility, the e

xpected vol

atility has

been estimated b

ased on the historic share price

over a three year period.

Awards granted from 2017 to

2020 inclu

de EPS performance conditions, whilst the March 2021 awards in

clude

FCFS-r

elated performance

conditions. Both of the

se performance cond

itions are non-market-based performance condi

tions and do not impact the fair value o

f the

award at the grant date, which e

quals the share pri

ce less exercise price. Instead, an e

stimate is made by th

e Group as to the n

umber of

shares which are expected

to vest based on

satisfaction of the EPS-related performance co

ndition or

FS-related performance

condition

where applicab

le, and this, together with the fair value of the award at

grant date, de

termines the accounting

charge to be spread ove

r the

vesting peri

od. The estimate of the numbe

r of shares which are expected

to vest over the ve

sting period of the award is reviewed in each

reporting pe

riod and the accounting charge is ad

justed accordingly.

Financial St

atements

136

Notes to the consolidated

financial statements

(continued)

7 Share-based pay

ments expense

(

continued

)

Share Save schemes

The Remuneration Committee

of the Board o

f Directors approved the gran

ting of share options under the UK and Ireland Share Save

schemes (the ‘Schemes’) fo

r all eligibl

e employees across the Gro

up from 2016 to 2020. During the

year ended 31 Dece

mber 2021

, there

was no new Scheme gran

ted (509 employee

s availed of the Schemes granted i

n 2020). E

ach Scheme is for thre

e years and employe

es may

choose to pu

rchase shares over the six month period

following the end of the three year pe

riod at the fixed disco

unted price set at the

start of the three year perio

d. The share price fo

r the Schemes has been set at a 25% discount for Rep

ublic of Irelan

d based employe

es and

20% for UK based empl

oyees in line with the maximu

m amount permi

tted under tax leg

islation in both jurisdiction

During the year en

ded 31 December 2021, the Company issue

d 39,291 shares on maturity of the share op

tions granted as part o

f the

Scheme granted in

2017. The weighted average

share price at the date of exerci

se for options e

xercised during the

year was €4

.53.

Movements in the n

umber of share opti

ons and the related wei

ghted

average exercise

price (

‘

WAEP

’

) are as follo

ws:

2021

2020

Options

WAEP

€ per share

Options

WAEP

€ per share

Outstanding at the b

eginning of the year

2,594,186

2.63

1,784,122

3.89

Granted during the

year

2,104,301

2.31

Forfeited during

the year

(695,586)

3.36

(1,211,336)

3.88

Exercised during

the year

(39,291)

4.09

(82,901)

2.98

Outstanding at the end of the

year

1,859,309

2.59

2,594,186

2.63

The weighted ave

rage remaining contractual li

fe for the share optio

ns outstanding at 31 December

202

1 is

5 years (31 December 20

3.2 years).

At 31 December 2021, 31,517 sha

res are exe

rcisable relating

to the Share Save schemes granted in 2018 which e

nded in September 2021

and employees have

a six month period to e

xercise their option. The

weighted average

exercise price of these optio

ns is €5.12

8 Government g

rants and governm

ent as

sistance

202

2020

€’000

Employment Wage Sub

sidy Scheme (Ireland)

36,018

9,687

Temporary Wage Subsid

y Scheme (Ireland

)

6,330

Coronavirus Job Reten

tion Scheme (UK)

2,011

4,753

Other governmen

t grants related to inco

6,917

1,492

Grants related to income

44,946

22,262

Capital government grants

150

Total government grants

44,946

22,412

Payroll-related government grants

As a result of the impact of the Covi

d-19 pandemic on

the Group, the Group availed o

f the Irish and UK government sche

mes in relation to

wage subsidie

s. The Employment Wage

Subsidy Scheme is avai

lable to employe

rs in Ireland who suffered significant reductions in

turnover

as a result of Covid-19 restrictions.

The Group availe

d of the EWSS for the full year en

ded 31 December 2021 (2020: 1 Septemb

er 2020 to

31 December 2020). The Grou

p availed o

f the Temporary Wage Subsi

dy Scheme in Ireland from 26 March

2020 to 31 August 2020. The

Coronavirus Job Reten

tion Scheme was available fo

r eligible e

mployees for the hours the e

mployees were on furlough. The Group availed

of this scheme in the

UK from 1 January 2021 to 30 September 2021, whe

n the scheme en

ded (2020: from 1 March 2020 to 31 Dece

mber

2020).

137

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

8 Government g

rants and governm

ent as

sistance

(continued)

Payroll-related government grants

(continued)

The Group was in compl

iance with all the co

nditions of the respectiv

e schemes during the year ended 31 December 2021 and 31 Decembe

2020

. The grant income rece

ived has been o

ffset against the related costs in co

st of sales and administrative

expenses in p

rofit

or loss. No

contingencies are

attached to any of these schemes as at 31 Decembe

r 2021. The Group contin

ues to avail of the Employment Wage

Subsidy Scheme in Ire

land in 2022.

Other government grants

During the year en

ded 31 December 2021, the Group availed o

number of other gran

ts schemes, including and

not limited to the Covid

Restrictions Support Scheme, Failte Ire

land Tourism Continu

ity Grant in Ireland and Large To

urism and Hospitality Business Support

Scheme in Northern Irel

and, introduced by the Irish an

d UK governments to support bu

sinesses during

the Covid-

pandemic and

contribute towards re-open

ing and other operatin

g costs. These grants

, which totalled €

6.9 million

, have been offset again

st the related

costs of €

6.9 million in

administrative expe

nses in profit or loss

(2020: €1.5 million

Of the grants received du

ring the year ende

d 31 December 2021, one

of the grants received from the UK Governme

nt, ERF Sector Specific

Support Fund, which is ai

med to support bu

siness survival and safeg

uarding jobs, included

a condition attached to it, that businesses are

expected to safeguard the

relevant jobs for a minimum o

f 12 months. Therefore, there is a co

ntingen

t liability in this resp

ect amounting to

£0.05 million (€0.06 mill

ion) as at 31 December 2021 (2020:

£Nil).

There were no capi

tal grants received duri

ng the year ended 31 December 2021. During the year end

ed 31 December 2020, the Group

received a g

rant amounting to €0.2 milli

on for capital costs incurred

in adapting premi

ses

for new public health

requirements arising from

the pandemic. The

grant was conditional o

n being utilised for el

igible expendi

ture. The grant has been presented

deduction in arriving

at the carrying amoun

t of the asset in the statement of fin

ancial position.

Government assis

tance

In addition, the

Group received financial assistance

by way of commercial rates waive

rs and deferrals of

tax liabili

ties from the I

rish and UK

governments.

Full year commercial rates waive

rs for the year end

ed 31 December 2021 were available to the

Group

the Repub

lic of Ireland, Northern

Ireland, Wales and

Scotland. In England, the full rates waiver was avail

able for the pe

riod from 1 January 2021 to 30 June 2021, and from 1

July 2021 to 31 December 2021, a 66% b

usiness rates relie

f was provided by the

UK Government.

In Ireland, the Group

benefitted from commercial rates

waivers

of €

7.3 million fo

r the year ended 31 December 202

1 (

for the period 27

March 2020 to 31 December 2020:

€

5.5 million

)

In the UK, the Group benefi

tted from commercial rates

waivers of £3.7

million (€

4.3

million) for the ye

ar ended 31 December 2021 (for the period

1 April 2020 to 31 December 2020: £3.3 mill

ion (

€

3.6 millio

In the Republi

c of Ireland, Northern Ireland

, Wales and Scotland rate

s waivers are in place until 31 March 2022 and in

England 66%

business rates relie

f is extended until 31 March 2022.

Under the warehousi

ng of tax liabilitie

s legislation in

troduced by the Financial Provi

sions (Covid-19) (No. 2) Act 2020 and Finance Act 2020

(Act 26 of 2020) and amended b

y the Finance (Covi

d-19 and Miscellaneous Provisi

ons) Act 2021, Irish VAT li

abilities o

€3.6 million

and

payroll tax liabi

lities of

€

.0 million relating to

the year ended 31 December 2021 have

been de

ferred. During 2021, the payment of Irish

VAT liabilitie

s and payroll tax liabilities relatin

g to 2020 were further de

ferred from 2021 to 2022. As at 3

1 Decembe

r 2021, tota

l Irish

deferred VAT liab

ilities of

€8.5 million

and payroll tax liab

ilities of

€17.8 million

, relatin

g to both

2020

and 2021, are payable duri

ng the year

ending 31 December 2022.

On 21 December 2021, the Irish Go

vernment anno

unced the extension o

f the Debt Warehousi

ng Scheme in principle

following the re-

introduction

of Covid-19 restrictions. Subsequent to the ye

ar-end it was confi

rmed that Irish VAT li

abilities o

f €8.3 million and

payroll tax

liabilities of €15.6 mil

lion deferred at 31 Dece

mber 2021 may be furth

er deferred

to 30 April 2023. Deferre

d Irish VAT liabi

ities of €0.2

million and payro

ll tax liabilitie

s of €2.2 million d

o not qualify for the extensio

n and remain payab

le during the year en

ded 31 December

2022.

In the UK, VAT liabili

ties of £0.4 millio

n (€0.5 million) and

payroll tax liabilities o

f £0.3 million (€0.3 million) were def

erred in 2020 and were

paid by in

stalments during 2021. There were no furthe

r deferrals of UK VAT or p

ayroll tax liabi

lities during 2021.

Financial St

atements

138

Notes to the consolidated

financial statements

(continued)

9 Tax credit

202

2020

€’000

Current tax

Irish corporation tax charge

278

Irish corporation tax

–

sses carried back to p

rior year

(1,535)

Foreign corpo

ration tax charge

120

Foreign corpo

ration tax

–

losses carried back to p

rior year

(808)

Under/(over) provision

in respect of prior years

(563)

334

(2,786)

Deferred tax credit (note 23)

(5,

441

)

(7,997)

(5,

107

)

(10,783)

The tax assessed for the ye

ar differs from the standard rate of co

rporation tax in Irel

and for the year. The difference

s are explained

below.

202

2020

€’000

Loss before tax

(11,436)

(111,461)

Tax on loss at standard Irish corpor

ation tax rate of 12.5%

(1,

430

)

(13,933)

Effects of:

Income taxed at a high

er rate

417

Expenses not ded

uctible for tax purposes

532

950

Impact of revaluation (gain

s)/losses not subject to tax

(693)

3,914

Foreign inco

losses) taxed at higher rate

(1,001)

Losses utilised at hi

gher rate

(63)

(

417

)

Under/(over) provisio

n in respect of current tax in pri

or periods

(

563

)

(Over)/u

nder

provision in

respect of deferred tax in prior periods

(127)

Impact of change in rate o

f tax on opening d

eferred tax balances

(1,327)

Impact of differing rates betwe

en current tax and

def

erred tax

(1,921)

(538)

Other differences

(

189

)

302

(5,

107

)

(10,783)

As the Group

incurred

a loss before tax in 2021, the Group

has recognised a tax credit o

f €5.

1 m

illion

for the year ended 31 Dece

mber

2021.

The deferred tax credit

for the ye

ar ended 31 Dece

mber 2021 of €5.4 millio

primarily relates to the net value of tax losses which are

available to u

tilise against future taxable

profits and the remeasu

rement of UK deferred tax a

ssets and liabil

ities which are forecasted to be

realised at the co

rporation tax rate of 25%.

During the year en

ded 31 December 2021, the UK go

vernment substantively enacted

an increase in the corporation tax rate from 19

% to

25%, with effect from 1 April 2023.

The UK deferred tax a

ssets and liabil

ities which are forecasted

to reverse after 1 April 2023 have been

remeasured at the 25% corpo

ration tax rate.

The current tax charge of €0

mill

ion relates to taxabl

e profits earned by Group compani

es that were not sheltered by tax lo

sses. For most

Group companie

s, there were sufficient tax losses carried

forward from earlier p

eriods and gene

rated in the current year, such that, no

other current tax charges

ose in

the year ended 31 Dece

mber 2021.

The current tax credit for the ye

ar ende

d 31 December 2020 of €2.8 mill

ion related primarily to

the carry back of tax losses

incurred in the

year ended 31 Dece

mber 2020 to the 2019 tax return peri

od. This resulted i

n corporation tax refunds on submissio

n of the 2019 tax

returns during the

year ended 31 Decembe

r 2020. There is no scope

to carry back any lo

sses incurred during the

year ended 31 December

2021 to earlier peri

ods.

139

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

9 Tax credit

(continued)

The Group is confid

ent that the tax losses in

curred during

2021 together with the amounts carried forwar

d from earlier years will be fully

utilised in

future periods (note 23).

The increase in the

effective income tax rate for the year ende

d 31 December 2021 relative

to the prior year relates main

ly to the

remeasurement of UK defer

red tax assets and li

abilities at the

25% rate. In addition, the impact of revaluation losses n

ot subject to tax

reduced the e

ffective income tax rate in the p

rior year, relative to the year en

ded 31 Decembe

r 2021.

Impairment

At 31 December 2021, as a result o

f the impact of Covi

d-19 on expected trading

, particularly on

near term profitability, and the carrying

amount of the net assets o

f the Group b

eing more than its market capi

talisation, the Grou

p tested each

cash generating unit (‘CGU’)

for

impairment as both were d

eemed to be

potential impairment i

ndicators. Im

pairmen

t arises where the carryin

g value of the CGU (which

includes, where

relevant, revalued propertie

s and/or right-

-use assets, allocated goodwill

fixtures, fittin

gs and equipmen

t) exceeds its

recoverable amo

unt on a value in use

(‘VIU’)

basis

31 December 2021, the marke

t capitalisation

of the Group

(€829.0 million)

was lower than the

net assets of the Group (market

capitalisation i

s calculated by multiplyin

g the share price on that d

ate by the number of shares in i

ssue). Market capitalisation can be

influenced by a nu

mber of different market factors and u

ncertainties, most evi

dently the impact of Covid-19 in 2020 and

202

1 and more

specifically, the tig

htening of government restriction

s during December 2021 as a result of the emergen

ce of the Omicron variant.

addition, share p

rices reflect a discount due

to lack of control rights. The Group as a whole i

s not considered to be a CGU for the purposes

of impairment testing an

d instead each hote

l operating unit is con

sidered as a CGU as it is the smalle

st identi

fiable group of assets that

generates cash infl

ows that are largely i

ndependent of the cash in

flows from other assets or group

of assets.

At 31 December

202

, the reco

verable amoun

ts of the Group’s CGUs were b

ased on

VIU, determined by discounti

ng the estimated future

cash flows generated

from the continui

ng use of these ho

tels.

VIU cash flow projections are p

repared for each

U and then compared

against the carrying

value of the assets, including

goodwill, propertie

s, fixtures

fittings and equipme

nt and right-

-use assets, in that CGU.

The VIU assumptions are detail

ed below. The VIU cash flows take i

nto account ch

anges in market conditions as a result of Covi

d-19.

The VIU estimates were based

on the foll

owing key assumptio

ns:



Cash flo

w projections are base

d on operating resu

lts and forecasts prepared by manageme

nt covering a ten year perio

d in

the case of freehol

d properties. This period was cho

sen due to the nature of the h

otel assets and is co

nsistent with the

valuation basi

s used by independent external pro

perty valuers when performing

their hotel

valuations

(note 12). For CGUs

with right-

-use assets, the lease term was used;



Reven

ue and EBITDA for 2022 and fu

ture years are based on

management

’s

best estimate proje

ctions as at 31 Dece

mber

202

Forecasted revenue

and EBITDA are based o

n expectations o

f future outcomes taking in

to account the current

earnings, impact of Covi

d-19, past experien

ce and adjusted for anticipated rev

enue and cost growth;



Cash flo

w projections assume a lo

ng-term compound ann

ual growth rate post 202

(2020: 2%) in EBITDA for CG

in the Republic o

f Ireland and 2.5% (2020: 2%)

the UK;



Cash flo

ws include an ave

rage annual capital outl

ay on maintenance for the ho

tels dependent on the

condition of the

hotel or typi

cally

of revenues but assume no en

hancements to any prope

rty;



In the

case of CGUs with freeho

ld properties, the VIU calculations also

include a terminal value

based on terminal (year

ten) capitalisation rate

s consistent with those u

sed by the extern

al property valuers which

incorporates a long-term

growth rate of

(2020: 2%) for Iri

sh and 2.5% (2020: 2%) for UK prop

erties

;



The cash flo

ws are discounted

using a risk adjusted di

scount rate specific to each p

roperty. Risk adjusted discou

nt rates of

7.75% to 9.75% for Dublin assets (

31 Decembe

r 2020: 8.25% to 9.75%), 9.0% to 11.5% for Regio

nal Ireland assets (31

December 2020: 9.0% to 11.25%

), 7.5% to 11.75% for UK assets

(31 Dece

mber 2020: 7.0% to 11.25%) have bee

n used; and



The val

ues applied to e

ach of these key assumptio

ns are derived from a co

mbination o

f internal and external f

actors based

on historical

experience of the valuers and of manag

ement and takin

g into account the stabi

lity of cash flows typically

associated with these factors.

Financial St

atements

140

Notes to the consolidated

financial statements

(continued)

Impairment

(continued)

Following

the impairment assessments

carried out on

the Group’s CGUs at 31 December 2021

, the reco

verable amou

nt was deemed lowe

than the carrying amo

unt in one of the Group’s

UK CGUs

which resul

ted in an impai

rment charge of €0.3 millio

n (£0.

3 million), relating to

right-

-use assets (note 13) and fix

tures, fittings and eq

uipment (note 12).

At 31 December

202

1, impai

rment reversal assess

ments were carrie

d out on the

Group's CGUs where there

had been a previo

impairment of right-

-use assets a

nd fixtures, fittings and

equipment. Fol

lowing this assessment, reversals of previou

s impairments

relating to o

ne of the Group's Irish CGUs were recognise

d in profit o

r loss as a result of improved performance

forecasts

This resulted in a

reversal of previo

us impairment charge

s of

€0.4 million

on right-

use assets (note 13) and €

0.1 millio

n on fixtures, fittings and eq

uipment

(note 12).

At 31 December 2021, th

e recoverabl

e amount of this CGU was €3.6 mi

llion (2020: €3.1 mill

ion).

Covid-

19 continu

es to impact the Group’s busine

ss and operations. As a result, the Gro

up’s projections are su

bject to a greater le

el of

uncertainty than be

fore the pandemic as governments worldwi

de continue to imple

ment measures to protect publi

c health, roll out

vaccine prog

rammes and support business and e

mployment. Therefore

, the estimation of cash flo

ws which take into acco

unt the o

ngoing

impacts of the pandemi

c, prepared to suppo

rt the VIU estimates, is a key source o

f estimation uncertai

nty. P

rojections have

been prepared

taking into

account all information reasonabl

y available in the

environment at 31 December 2021. Broadly, the cash flow proje

ctions

assume that the successful vacci

nation roll out and the

evolution of the virus has allo

wed recovery of the ho

spitality sector to co

mmence

with a return to more normalise

d levels of trade b

etween

202

3 and 2025 depend

ing on location and business mix

If the 2022 EBITDA forecasts use

d in cashflow in VIU estimates for imp

airment testing as at 31 Decembe

r 2021 had been fore

cast

lower, there would

have been no impairment for the year en

ded 31 Decembe

r 2021 for right-

-use assets and fixtures, fittings and

equipment and

goodwill.

141

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Intangible asset

s and goodwill

Goo

dwill

Other

intangible

assets

Total

€’000

Cost or valuation

Balance at 1 January 20

78,963

2,470

81,433

Additions

Effect of movements in e

xchange rates

753

Balance at 31 December 2021

79,716

2,517

82,233

Balance at 1 January 20

79,628

2,416

82,044

Additions

Effect of movements in e

xchange rates

(

665

)

Balance at 31 December 2020

78,963

2,470

81,433

Accumulated amortisation an

d impairment loss

Balance at 1 January 20

(48,947)

(753)

(49,700)

Amortisation of intang

ible assets

(539)

Balance at 31 December 2021

(48,947)

(1,292)

(50,239)

Balance at 1 January 20

(45,716)

(195)

(45,911)

Impairment loss durin

g the year

(3,226)

Amortisation of intang

ible assets

(558)

Translation adjustment

(5)

Balance at 31 December 2020

(48,947)

(753)

(49,700)

Carrying amounts

At 31 December 2021

30,769

1,225

31,994

At 31 December 20

30,016

1,717

31,733

Goodw

ill

Goodwill i

s attributable to factors includi

ng expected profitability an

d revenue growth, i

ncreased market share, increased

geographical

presence, the o

pportunity to develop the Grou

p’s brands and the synergi

es expected to arise withi

n the Group after acqui

sition.

As at 31 December 2021, the go

odwill cost figure incl

udes

€1

2.2 million (£10.3 million) which i

s attributable to good

will arising on

acquisition o

f foreign operations. Conse

quently, such goodwil

l is subsequently retransl

ated at the closing rate. The retranslation at 31

December 2021 resulted in

a foreign exchange

gain

€0.

8 million and a corresponding

crease in goodwill

. The comparative retranslation

at 31 December 20

resulted in

a foreign exch

ange loss

of €0.7 million.

Carrying amount of goodwill

allocated

Number of

cash-generating units

At 31 December 2021

202

2020

€’000

Moran Bewley Hotel

Group (i)

25,

074

24,366

Other acquisitio

ns (i)

1,350

1,305

2007 Irish hotel o

perations acquired (ii

)

4,345

30,

769

30,016

The above table

represents the number of CGUs to which g

oodwill

was allocated at 31 December 2021

Financial St

atements

142

Notes to the consolidated

financial statements

(continued)

Intangible assets an

d goodwill

(

continued

)

Annual goodwil

l testing

The Group tests good

will annually for impairment and more frequ

ently if there are indi

cations that goodwill mig

ht be impaired

. Due to the

Group’s policy o

f revaluation of land and bu

ildings, and the allo

cation of goodwill to individ

ual CGUs, impairment of goo

dwil

l can occur as

the Group realise

s the profit and revenue gro

wth and synergies which unde

rpinned the good

will. As these materialise, they are recorded as

revaluation g

ains to the carrying value of the

property and conseq

uently, elements of goodwill

may be required to be

written

off if the

carrying value o

f the CGU (which include

s revalued property an

d allocated goodwill) excee

ds its recoverable

amount on a

VIU basis. The

impairment of goo

dwill is recorded through pro

fit or loss though the revaluation g

ains on property are taken to reserves throu

gh othe

comprehensive

income provided there were no p

revious impairment charge

s through profit o

r loss

Following

an impairment review of the CGUs contai

ning go

odwill at 31 D

ecember 2021, no g

oodwill

was required to be impaire

d (

2020

€2.6 million for a CGU relating

to an Irish hotel

and €0.6 million (£0.6 mill

ion) for a CGU relating to a UK

hotel

The Group continues to

monitor the impact o

f Covid-19 on the operating

results of the Group and also

the impact of the UK

’s departure from the European Uni

on.

Future under-

performance i

n any of the Group’s major CGUs

may result i

n a material write

-down of goodwill which wo

uld have a

substantial impact on the

Group’s

results and equity.

(i) Moran Bewley Hotel G

roup and other singl

e asset acquisition

For the purposes of imp

airment testing, goodwil

l has been allocated to each o

f the hotels acquired

as CGUs. As these hotel p

roperties

are

valued annu

ally by independent external val

uers, the recoverabl

e amount of each

CGU is based on a fair value

less costs of disposal

estimate, or where this valu

e is less than the carryin

g value of the asset, the VIU of the CGU is assessed

Costs of acquisition

of a willing buyer which are

factored in by extern

al valuers when cal

culating the fair value

price of the asset are

gnificant for the

se assets (2021: Ireland 9.96%, UK 6.8%, 20

: I

reland 9.92%, UK 6.8%). Purcha

sers

’

costs are a key di

fference between

VIU and fair value le

ss costs of disposal as prepared

by external val

uers.

At 31 December 2021, the rec

overable amou

nts of the ten CGUs were based o

n VIU, determined by discou

nting the future cash flows

generated from the co

ntinuing use

of these hotels. Note

details the assumptions use

d in the VIU estimates for impair

ment testing.

(ii) 2007 Iris

h hotel operations acquired

For the purposes o

f impairment testing, goodwill has b

een allocated to each of the CGUs representing the

Irish hotel o

perations acquired

in 2007. Eight hote

ls were acquired at that time but o

nly four of these

hotels had goodwill associated with them. The go

odwill related to

one of these CGUs was fully i

mpaired

(€2.6 millio

during the year ended 31 Dece

mber 2020. The remaining

three of these hotels are

valued annu

ally by independent external val

uers, as the freehold

interest

in the prop

erty is owned by the Group. Wh

ere hotel prope

rties

are valued ann

ually by independent external val

uers, the recoverab

le amount of each CGU is based o

n a fair value le

ss costs o

f disposal

estimate, or where this valu

e is less than the carryin

g value of the asset, the VIU of the CGU is assessed

. The recoverabl

e amount at 31

December 2021 of each of the

se CGUs which have

associated goodwill is b

ased on VIU. V

is determined by d

iscounting the future

cash

flows generated from the

continui

ng use of these hotels. Following the impairment assessme

nt carried out at 31 Decembe

r 2021, there

was no impairment of g

oodwill relating

to these CGUs.

Costs of acquisition

of a willing buyer which are

factored in by extern

al valuers when cal

culating the fair value price of the asset are

significant for these

assets (2021: 9.96%, 2020: 9.92%). Purchase

rs costs are a key d

ifference betwe

en VIU

and fair value l

ess costs of

disposal as prepared

by external valuers. Note 10 detail

s the assumptions used

in the VIU estimates.

The key judgements and

assumptions used in estimatin

g the future cash flows in

the impairment tests are subjective

and include projected

EBITDA (as defined i

n note 2), discount rates and the

duration of the

discounted cash flow mod

el. Expected fu

ture cash flows are

inherently unce

rtain and therefore

liable to change materiall

y over time (note 10).

Other intangible assets

Other intangib

le assets of

€1.

2 million at 31 December 2021 represen

t a software licence ag

reement entered into by the

Group

2019

This software lice

nce was extended during

the year and will now run to 31 May 2024 and is bei

ng amortised o

n a straight-line basis over

the life of the asset. Addi

tional software licenses were

entered into

during the year ended 31 Decembe

r 2021 of

€0.05 m

illion

(2020:

€0.05

million

The Group reviews the

carrying amounts of o

ther intangible assets an

nually to determine

whether there is any in

dication of im

pairment. If

any such indicato

rs exist then the asset’s recove

rable amount is

estimated.

At 31 December 202

there

were no indicators of impai

rment present and the

Directors conclud

ed that the carrying value

of other

intangible assets was not impai

red at 31 December

202

143

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

12 Property, plan

t and equipme

Land and

buildings

Assets under

construction

Fixtures,

fittings and

equipment

Total

€’000

At 31 December 20

Valuation

1,088,847

1,088,8

Cost

79,094

147,714

226,808

Accumulated depreciatio

n (and impair

ment charges)

(71,

Net carrying amount

1,088,847

79,

094

75,

1,243,902

At 1 January 202

1, net carrying amount

1,058,548

61,886

82,

1,202,

Additions/(reversal of a

dditions) t

hrough capital expe

nditure

12,870

7,597

20,382

Reclassification from ass

ets under construc

tion to land and b

uildings and fixtures,

fittings and equipment f

or assets that have

come into use

)

Capitalised labour costs (

note 6)

138

Capitalised borrowing c

osts (note 5)

1,942

Revaluations gains

through OCI

20,037

Revaluation losses

through OCI

(5,655)

Reversal of revaluation los

ses through profit or los

9,404

Revaluation losses t

hrough profit or loss

(2,567)

Impairment of fixtures

, fittings and equipment

(5)

Reversal of previo

us impairment cha

rges of fixtures, fitti

ngs and equipment

125

Depreciation charge fo

r the year

(11,2

)

(15,793)

(27,0

)

Translation adjus

tment

19,9

2,751

1,6

24,348

At 31 December 20

21, net carrying amou

1,088,847

79,094

75,

961

1,243,902

The equivalent disclosu

re for the prior year is as fo

llows:

At 31 December 20

Valuation

1,058,548

Cost

61,886

137,231

199,117

Accumulated depreciatio

n (and impairmen

t charges)

(54,922)

Net carrying amount

1,058,548

61,886

82,309

1,202,743

At 1 January 2020, net

carrying amount

1,324,468

59,600

87,247

1,471,315

Additions through c

apital expendit

ure

714

10,986

13,712

25,412

Reclassification from ass

ets under construc

tion to land and b

uildings and fixtures,

fittings and equipment f

or assets that have

come into use

6,129

(7,489)

1,360

Capitalised labour costs (

note 6)

165

Capitalised borrowing c

osts (note 5)

1,392

Disposal of property,

plant and equipme

(68,902)

(536)

(2,462)

(71,900)

Net revaluation loss

es through OCI

(143,631)

Net revaluation losses

through profit or los

(30,807)

Impairment of fixt

ures, fittings and equi

pment

(1,015)

Depreciation charge fo

r the year

(11,134)

(15,473)

(26,607)

Translation adjus

tment

(18,319)

(2,136)

(1,126)

(21,581)

At 31 December 20

, net carr

ying amount

1,058,548

61,886

82,309

1,202,743

*Accumulated depreciat

ion of buildings is s

tated after the elimination of de

preciation, reva

luation, disposals and impairmen

Financial St

atements

144

Notes to the consolidated

financial statements

(continued)

12 Property, plan

t and equipme

(

continued

)

The carrying value

of land and buildings (revalu

ed at 31 December 2021) is

€1,

088.8 million

(20

: €

058.5 million). The valu

e of these

assets under the cost mod

el is

€

49.

8 million (20

: €

834.2 milli

on). In 2021, unrealised rev

aluation gains of

€

20.0 million and

unrealised

losses of

€

5.7 millio

n have been reflected throug

h other comprehensi

ve income and in the reval

uation reserve in eq

uity.

Revaluation loss

€

million

and a reversal of prior peri

od revaluation losses of €

9.4 million have be

en reflected in administrative expe

nses through

profit or loss.

Included in land

and buildings at 31 December 2021 is land at a carryin

g valu

e of

€

.0 million (20

: €

301.3 million) which i

s not

depreciated. The

re are

€

6.1 million of fixtures, fittin

gs and equi

pment which have be

en depreciated in full but are stil

l in use at 31

December 2021

(31 Decembe

r 2020: €4.8 milli

on)

Additions to assets un

der construction

during the year ended 31 December 2021 include

the following:



Devel

opment expenditu

re incurred on ne

w hotel builds of €

9 million primarily relating

to the new hotels being built at the

former Tara Towers site in Dubl

in and at the site

Shoreditch

in London; and



Interest cap

italised on

loans and borrowings relatin

g to

qualifying assets of €1.

9 million (note 5).

Capitalised lab

our costs

of €0.2 million (2020: €0.

2 million

) relate

to the Group’s intern

al development team and are d

irectly related to

asset acquisitions an

d other constructio

n work comple

ted in relation to

the Group’s property, plant and

equipment.

Impairment assessments were

carri

ed ou

t on the Group’s CGUs at 31 Dece

mber 2021

. The recoverable amount was de

emed lower than

the carrying amoun

t in one of the Group’s UK CGUs which

resulted in an impairmen

t charge of €0.3 million (£0.3 million) (note

,13),

relating to rig

ht-

-use assets and fixtures, fittings and e

quipment.

At 31 December

202

1, impai

rment reversal assess

ments were carrie

d out on the

Group's CGUs where there

had been a previo

impairment of right-

-use assets a

nd fixtures, fittings and

equipment. Fol

lowing this assessment, reversals of previou

s impairments

relating to o

ne of the Group's Irish CGUs were recognise

d in profit o

r loss as a result of improved performance

forecasts. This resulted in a

reversal of previo

us impairment charge

s of €0.4 million o

n right

use assets and €0.1 millio

n on fixtures, fittings and eq

uipment (note 10).

On 24 April 2020, the Grou

p completed the

sale and leaseback

of the Clayton Hotel Charl

emont for €64.2

million. The Group now op

erates

this hotel un

der a lease with a term of 35 years. As part of

the transactio

n, a further €0.8 million

was receivable co

ntingent on the addi

tion

of three bedroo

ms to the property and the co

st of this developmen

t is

being borne by the Group

. At

31 December 2021, €0.

5 million h

been recei

ved, with the remaining balance

due on completion

of the project.

The sale result

in the

derecognition of the property asset with the

previously re

cognised revaluation g

ains of €30.3 milli

on in the

revaluation reserve

being transferred to retain

ed earnings. Immediately p

rior to sale, the p

roperty was revalued b

y external valuers in

accordance with the Ro

yal Institution o

f Chartered Surveyors (RICS) Valu

ation Standards and the fai

r value restated accordingly. The

valuation was based o

n the expected pri

ce that would be recei

ved to sell the asset outright i

n an orderly transaction between market

participants at that date on the

assumption

that all future economic bene

fits for the asset are disposed of.

In a sale and subseq

uent leaseback, the vendo

r retains the economic bene

fit post rent of the asset for the p

eriod of the lease. Upon sale,

the asset is derecog

nised entirely and, fol

lowing the leaseb

ack, under IFRS 16, is replaced with

right-

-use asset which corresp

onds to

the value o

f the discounted lease liabili

ty and a portion of the

difference between the

fair value prior to sale an

d the sales proceeds

received. The rig

-use asset does not consequently re

cognise a significant element of the b

enefits which the Group co

ntinues to enjoy

which was recogni

sed in the fair value o

f the asset prior to sale and

leaseback.

Consequentl

y, this result

in a portion of the €7.7 milli

on difference between the

fair value prio

r to sale and th

e sales proceeds being

treated as an accountin

g loss (€1.7 millio

n) recognised in profit or l

oss

in 2020

and €6.0 million being capitalised

as part of the right

-use

asset.

The Group ope

rates the Maldron Hotel Limeri

ck and, since the acqui

sition of Fonteyn Prope

rty Holdings Limited in 2013, ho

lds

a secured

loan over that pro

perty. The loan is not expected

to be repaid. Accordingl

y, the Group has the risk

s and rewards of owners

hip and acco

unts

for the hotel as an o

wned property, reflectin

g the substance o

f the arrangement.

At 31 December 2021, property, pl

ant and e

quipment, including

fixtures, fittings and equ

ipment in leased prope

rties, with a c

arrying

amount of €1,080.0 million

(2020: €1,055.1 million

) were pledge

d as security for loans and bo

rrowings.

145

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

12 Property, plan

t and equipme

(

continued

)

Material valuation uncertainty bas

is in the pri

or year

The value

of the Grou

p’s property at

December 2021 reflects ope

n market valuations carrie

d out as at 31 December 2021 by

independen

t external valuers having appro

priate recognised p

rofessional quali

fications and recent experience

in the location

nd value of

the property be

ing valued. The external val

uations performed

were in accordance with the

Royal Institution o

Chartered Surveyors (RICS)

Valuation Standards. As a resul

t of Covid-

with effect from March 2

020, similar to other real estate ma

rkets, the market for hotel

assets

d experienced sign

ificantly lower levels of transactio

nal activity and liqu

idity. As at

the valuation

date of 31 December

2021

prop

erty

markets were mostly functio

ning again, with transactio

n volumes and

other relevant evidence

at levels where an ade

quate quant

um of

market evidence

existed upon which to base op

inions of value, and therefore the valuation

s as at 31 December

2021

have not bee

reported by the

valuers on the basis of ‘material valuatio

n uncertain

ty’, as set out in VPS 3 and VPGA 1

0 of the RICS Valuati

on Global

Standards. The valuations at 31 De

cember 2020 were repo

rted on the

basis of ‘material valuation u

ncertainty’

due to the i

mpact of the

Covid-19 pandemic at that time

when less weigh

t could be attached to previ

ous market evide

nce to fully inform opini

ons of value as at 31

December 2020.

Measurement of fair value

The fair v

alue measurement o

f the Group’s own

-use property has b

een categori

sed as a Level 3 fair valu

e based on the inputs to the

valuation techniqu

e used. At 31 December 2021

propertie

s were revalue

d by independent external val

uers engag

ed by the Group (31

December 20

The principal

valuation technique used by th

e independent extern

al valuers engaged by th

e Group was discounted cash flo

ws. Th

valuation mod

el considers the present val

ue of net cash flows to b

e generated from the property o

ver a ten year period (with an assumed

terminal value at the

end of year 10). Valuers’ forecas

t cash flow include

d in these cal

culations represents the expectatio

of the valuers

for EBITDA (driven by

averag

e room rate (‘ARR’) (calculated as to

tal revenu

e divided by

total rooms sold) and occupan

cy) for the property

and also takes acco

unt of the expectations o

f a prospective purch

aser. It also include

s their expectation for capi

tal expenditure which the

valuers, typically, assume as app

roximately 4% of revenu

e per annum. This does not always reflect the

profile of actual

capital expenditure

incurred by the

Group. On specific assets, refurbi

shments are, by natu

re, periodi

c rather than annual. Valuers’ expectation

of EBITDA are

based off their trading

forecasts (bench

marked against competition, market and actual

performance). Th

e expected n

et cash flows are

discounted u

sing risk adjusted discount rates. Amon

g other factors, the

discount rate e

stimation considers the qu

ality of the

property and

its location. The fin

al valu

ation also include

s a deduction of full purchaser’s costs b

ased on the val

uers’ estimates

at 9.

96% for assets

located in the

Republic of Ireland (31 December 20

: 9.92%) and 6.8

% for assets located in the

UK (31 December 20

: 6.8%).

The valuers use the

ir professional judgemen

t and experience to balance the

interplay between the

different assumptions an

d valuation

influences. For e

xample, initial discou

nted cash flows based o

n individually reasonab

le inputs may result in a valuatio

n whic

h challenges

the price per k

ey metrics (value of hotel di

vided by room numbers) in recent hotel transactio

ns. This would then

result in one or more

the inputs be

ing amended for preparation of a revi

sed discounted cash flo

w. Consequentl

y, the individual inputs may chang

from the

prior perio

d or may look individually un

usual and there

fore must be considered

as a whole in the con

text of the overall valuati

on.

Financial St

atements

146

Notes to the consolidated

financial statements

(continued)

12 Property, plan

t and equipme

(

continued

)

Measurement of fair value

(contin

ued)

The significant un

observable inputs and d

rivers thereof are summarise

d in the fol

lowing table:

Significant unobs

ervable inputs

31 December 2021

Dublin

Regional

Ireland

Total

Number of h

otel assets

Average Room Rate

< €75/£75

€75

€100/£75

£100

> €100/£100

Terminal (Year 10) capi

talisati

on rate

<8%

-10%

Price per key*

< €150k/£150k

€150k

€250k/£1

50k

-£250k

€250k

€350k

/£2

50k-£350k

> €

50k

/£350k

31 December 20

Dublin

Regional

Ireland

Total

Number of h

otel assets

Average Rooms Rate

< €75/£75

€75

€100/£75

£100

€100/£100

Terminal (Year 10) capi

talisati

on rate

<8%

-10%

Price per key*

< €150k/£150k

€150k

€250k/£1

50k

-£250k

€250k

€350k/£2

50k

-£350k

> €

350k/£3

50k

Price per key represents the valuation of a hotel divided by the number

of rooms in that hotel.

The significant un

observable inputs are:



Valuers’ forecast cash flow



Risk adjusted discoun

t rates and terminal (Year 10) capitalisation

rates are specific to each

property;



Dublin assets:



Risk adjusted discount rates range b

etween 7.75% and 9.75% (31 December 2020: 8.25% and 9.75

%).



Weighted average risk adjusted d

iscount rate is 8.72% (31 December 2020: 8.88%).



Terminal capitalisation rates range betwee

n 5.75% and 7.75% (31 December 2020: 6.25% and 7.75

%).



Weighted average terminal capi

talisation rate is 6.72% (31 December 2020: 6.88%



Regional Ireland:



Risk adjusted discount rates range b

etween 9.0% and 11.5% (31 December 2020: 9.0% and 11.25

%).



Weighted average risk adjusted d

iscount rate is 9.56% (31 December 2020: 9.69%).



Terminal capitalisation rates range b

etween 7.00% and 9.5

(31 December 2020: 7.00% and 9.25

%).



Weighted average terminal capi

talisation rate is 7.56% (31 December

2020:

7.69%

147

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

12 Property, plan

t and equipme

(

continued

)

Measurement of fair value

(continu

ed)

Significant unobs

ervable inputs

(con

tinu

ed)



UK:



Risk adjusted discount rates range b

etween

and 11.7

(31 December 2020: 7.0% and 11.25

%).



Weighted average risk adjusted d

iscount rate is 9.04% (31 December 2020: 8.52%).



Terminal capitalisation rates range b

etween 5.00% and 9.25% (31 December 2020: 5.00% and 9.25

%).



Weighted average terminal capi

talisation rate is 6.54% (31 December 2020: 6.52%



Valuers have broad

ly assumed a recovery from the impact o

f Covid-19 to normalised trading level

s between

2023

and 202

depending on l

ocation and business mix which is a key valuatio

n assumption. This is reflected i

n Average Room Rate

assumptions, shown in the

table on the previou

s page

showing movements year on ye

which were ge

nerally used as the

approximate base for 2022.

Revenue per available room metrics (‘RevPAR’

) for 2020 and 2021 are heavily distorted by the impact of periods of government

restr

ictions

on occupancy when

the

hotels were

largely closed

to all

except essential

services. In

order to

present information

which

indicative

the

nobservable

nputs

and

drivers

which

discounted

cash

flows

are

based,

the

Group

considers

appropriate

give

indication

of Average Room Rates for the h

otels.

The estimated fair value

under this valu

ation model would increase or decrease if:



Valuers’ forecast cash flow was hi

gher or lowe

r than expected; and/o



The risk adjusted discou

nt rate and terminal capitalisatio

n rate was lower or hi

gher.

Valuations also

had regard to relevant price p

er key metrics from hotel sales activity.

The property revalu

ation exercise carried o

ut by the Group

’

s external value

rs is a complex exercise, which no

t only takes into acco

unt the

future earnings fore

cast for the hotels, but al

so a number of othe

r factors, including

and not

limited to, market conditi

ons,

comparable hotel

sale transactions, inflation and the

underlying value of an asset. As a result, it is not possi

ble, for the Group

to perform a

quantitative sensi

tivity for a change in the

property values. A change in an individual quantitative

variable would not nece

ssarily lead to an

equivalent chang

e in the overall outcome and would

require the application of judg

ement of the valuers in

terms of how the variable

change could poten

tially impact on ove

rall valuations.

Leases

Group as a les

see

The Group leases prop

erty assets, which inclu

des land and buildings and related fixtures an

d fittings, and oth

er equipmen

t, relating to

vehicles, machin

ery and IT equipment. Informatio

n about leases fo

r which the Group i

s a lessee is presented belo

Right-

-use assets

Propert

assets

Other

equipment

Total

€’000

Net book value at 1 Januar

2021

932

411,007

Additions

90,282

90,306

Depreciation ch

arge for the year

(19,460)

(62)

(19,522)

Remeasurement of lease l

iabilitie

Impairment charge

(315)

Reversal of previo

us impairment charges

354

Translation adjustment

9,245

Net book value at 31 December 20

491,832

491,869

Net book value at 1 January 20

386,258

149

386,407

Additions

61,670

Depreciation ch

arge for the year

(20,589)

(74)

(20,663)

Remeasurement of lease l

iabilitie

(1,578)

Impairment charge

(7,541)

Translation adjustment

(7,288)

Net book value at 31 December 20

0,932

411,007

Right-

-use assets comprise leased

assets that do not meet the d

efinition

of investment property.

res

€’

€’000

Net

ook

2021

932

411,00

ion

90,

cha

rge

(

19,

460)

(

62)

(

19,

522)

emea

reme

793

irmen

cha

(

315)

(

315)

pre

mpa

rmen

cha

rges

354

Tra

ment

246

Net

ook

Dec

emb

2021

491,83

491,8

Financial St

atements

148

Notes to the consolidated

financial statements

(continued)

13 Leases

(

continued

)

Group as a les

see

(continued)

Additions du

ring the year ended 31 December 2021 relate to:



Jul

y 2021, the Group en

tered into a

year lease of Maldron

Hotel Glasgow Ci

. This resulted

in the recogni

tion of

right-

use asset

of €35.0 million

(£29.8 millio

and lease liability

€32.

1 million (£27.3 millio

n). The Group included lease

prepayments and in

itial direct costs of

€2.

9 million (

£2.

5 milli

on) as part of the initial

measurement of the rig

ht-

-use asset.



In Dece

mber 2021, the Group en

tered into a 35 year lease o

f Clayton Hotel Manchester City Centre

This resul

ted in the

recognition o

f a right-

use asset of €

3 million (£46.6 million), whic

h in

cludes €

6.2 million (£5.2 mill

ion) of initial direct costs

and a lease li

ability of €

49.1 million (£41.4 million). The hotel

opened to the public i

n January 2022.

Additions in

2020 relate to the Group ente

ring into a 35 year le

ase in April 2020 of the Clayton Hotel Charlemont in

Dublin followi

ng a sale

and leaseback

transaction which resulted in

the recognition of a right-

-use asset

of €56.3 million

and

lease liability

€46.6 million. The

Group included €3.6 mil

lion of lease prepaymen

ts and initial direct costs in the

initial measure

ment of the right

-use asset. In addition, as

a result of the sale and

subsequent leaseback

, the Group retaine

d the economic benefit post rent of the asset for the period o

f the lease.

This resulted in a p

ortion of the €7.7 milli

on difference betwee

n the fair value prio

r to sale and the sale proceeds b

eing ca

pitalised as part

of the right-

use asset (€6.0 millio

n) in accordance

with IFRS 1

In November 2020, the Group

entered in

to a lease agreement to lease 44 newly bu

ilt rooms at Clayton Hotel Birmin

gham for 32 years. This

resulted in the

recognition of a right-

use asset of €5.4 million

(£4.8 millio

n), which includes €0.1 milli

on of in

itial direct costs and a lease

liability of €5.3 mill

ion (£4.7 millio

n).

The weighted ave

rage incremental borrowing

rate for new leases e

ntered into during the

year ended 31 December 2021 is 6.8%

(2020:

5.59%).

The Group has chose

n not to avail of the alternative accoun

ting treatment set out in IFRS 16

–

Covid-19 Related

Rent Concessions

during

the year 31 December 2021 o

r the year ende

d 31 December 2020. Conseq

uently, any adjustmen

ts to the terms of the impacted leases

have been tre

ated as a remeasurement.

During the year en

ded 31 December 2021, lease amendmen

ts, which were no

t included in

the original lease agreemen

ts, were made

two of the Group’s lease

s. Both of these h

ave been treated as a modi

fication of lease

liabilities and resulted

in a decrease

lease liabilities

of €1.6 million an

d a €1.3 million decrease to the

carrying value

of the right

use assets. As the rig

ht-

-asset relating to one

of these

leases had be

en previously impaired, the resul

ting difference

of €0.3 million has been rec

ognise

d as a re

measurement gain o

n right-

-use

assets in profit or lo

ss (note 2). In additi

on, following agreed

rent reviews and rent adjustments,

which formed part of the

original lease

agreements, certain o

f the Group’s le

ases were reassessed durin

g the year.

This resulted in an increase in lease

liabilities and

related right-

use assets of €2.1 million

Variable le

ase costs which are linked to an i

ndex, rate or are consid

ered fixed payments in sub

stance are included in the

mea

surement of

lease liabiliti

These represent

€

44.4 milli

on of lease liabilitie

s at 31 December 20

(31 December

: €

.9 million).

Lease liabil

ities

202

2020

€’000

Current

10,761

9,667

Non-current

388,871

352,434

Lease liabil

ities at 1 January

399,632

362,101

Additions

81,210

51,946

Interest on lease l

iabilities (note 5)

409

22,405

Lease payments

(33,339)

(28,023)

Remeasurement of lease l

iabilitie

517

(1,578)

Translation adjustment

(7,219)

Lease liabil

ities at 31 December

481,926

399,632

Current

10,049

10,761

Non-current

471,877

388,871

Lease liabil

ities at 31 December

481,926

399,632

149

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

13 Leases

(

continued

)

Group as a les

see

(continued)

Non-cancellabl

e undiscounted lease cash flows payabl

e under lease contracts are set out be

low:

At 31 December 20

Republic of

Ireland

Total

Republic of

Ireland

Total

€’000

£’000

€’000

£’000

€’000

Year ended 31 Decembe

r 2021

25,515

7,486

33,842

During the year 2022

23,230

12,976

38,672

22,492

7,526

30,863

During the year 2023

22,376

12,355

37,079

22,358

7,605

30,817

During the year 2024

20,205

12,436

35,005

20,205

7,673

28,740

During the year 2025

19,965

12,508

34,851

19,965

7,753

28,589

During the year 2026

20,048

12,601

35,044

20,048

7,772

28,693

During the years

202

–

203

198,375

133,205

356,900

198,375

82,545

290,191

During the years 2037

–

2046

134,791

146,098

308,659

134,791

91,183

236,215

From 2047 onwards

59,953

118,790

201,323

56,181

63,051

126,313

498,943

460,969

1,047,533

519,930

282,594

834,263

Sterling amounts have

been converted usin

g the closing fore

ign exchange rate of

4028

as at 31 December 2021 (0.8

9903

as at 31

December 20

The weighted ave

rage lease life o

f future minimum rentals payable u

nder leases is

.1 years (31 December 20

: 29.4 years). Lease

liabilities are mon

itored within the

Group’s treasury function

r the year en

ded 31 December 2021, the total fi

xed cash outflows relatin

g to property assets and o

ther equipme

nt amounted to

€

million (31 Decembe

r 2020:

€28.0 millio

Unwind of right-

-use assets and rel

ease of interest charge

The unwinding o

f the right-

-use assets as

at 31 December 2021 and t

he rele

ase of the interest o

n the lease liabilities as at 31 December

202

1 through profit o

r loss over the terms of the leases h

ave been d

isclosed in the follo

wing table:

Depreciation of right-

-use asset

Interest on lease liabiliti

Republic of

Ireland

Total

Republic of

Ireland

Total

€’000

£’000

€’000

£’000

€’000

During the year 2022

13,827

6,723

21,828

14,857

11,568

28,624

During the year 2023

13,538

6,676

21,483

14,423

11,518

28,130

During the year 2024

11,631

6,676

19,576

14,013

11,465

27,657

During the year 2025

11,5

6,676

19,494

13,662

11,404

27,234

During the year 2026

11,5

6,331

19,078

13,288

11,335

26,778

During the year 2027

11,240

6,111

18,513

12,886

11,251

26,276

During the years 2028-

2037

107,259

56,367

174,340

101,427

104,505

225,796

During the years 2038-

64,376

56,011

131,034

43,666

74,594

132,439

From 2048 onwards

24,748

35,103

66,523

8,689

28,556

42,6

269,712

186,674

491,869

236,9

276,196

565,

Sterling amounts have

been converted usin

g the closing fore

ign exchange rate of

0.84028

as at 31 December 2021.

Financial St

atements

150

Notes to the consolidated

financial statements

(continued)

13 Leases

(

continued

)

Group as a les

see

(continued)

The actual depreci

ation and

interest charge throug

h profit or loss will de

pend on the co

mposition of the Group’s lease p

ortfolio in

future

years and is subject to ch

ange, driven by:



commen

cement of new le

ases;



modi

fications of existin

g leases;



reassessment

s of lease li

abilities following perio

dic rent reviews; and



impai

rments and reversals of previ

ous impairment charge

s of right-

-use assets.

As a result of the impact of Covi

19, impairment tests were carried o

ut on the Group

’s CGUs at

31 Dece

mber 2021 (note

). Each hotel

operating b

usiness is deemed to be a CGU as the cash flows g

enerated are in

dependent of o

ther hotels in the Group. As a result of the

impairment tests

the ri

ght-

-use asset

relating to one o

f the Group’s CGUs

impaired by €

0.3 million at 31 Decemb

er 2

1 (31

December 20

: €

7.5 millio

n relating to four CGUs).

Impairment reversal asse

ssments were also carried out o

n the Group's CGUs where there h

ad been a p

revious impairmen

t of right-

-use

assets and fixtures, fitting

s and equip

ment. Following

the as

sessment at 31 Decembe

r 2021, a reversal of previ

ous impairment charges o

€0.4 million rel

ating to

right-

-use assets and

€0.1 million to

fixtures, an

d fittings and e

quipment was recognised in p

rofit or loss relating

to one of the

Group’s Irish CGUs

(notes 10,

12)

Leases of property assets

The Group leases prop

erties for its hotel o

perations and office space

. The leases of hotels typi

cally run for a period

of between 25 and

years and leases of o

ffice space for 10 years.

Some leases provid

e for additional rent payments that are base

d on a perce

ntage of the reve

nue/EBITDAR that the Group gen

erates at the

hotel in the pe

riod. The Group sub-leases part of one

of its propertie

s to a tenant under an operating

lease.

Variable le

ase costs based on revenue/EBITDAR

These variable le

ase costs link rental payments to h

otel cash flows and red

uce fixed payme

nts. Variable lease costs which are considered

fixed in substance are

included as part of lease liab

ilities and not i

n the following table.

Variable le

costs based on revenue/EBITDAR for the year end

ed 31 December 2021 are as follows:

Variable le

ase costs based on revenue/EBITDAR for the ye

ar ended 31 Decemb

er 2020 are as follows:

Variable lease

costs element

Estimated impact on

variable

lease costs of

5% increase in

revenue/EBITDAR

€’000

Leases with lease paymen

ts based on reven

ue/EBITDAR

130

Variable le

ase

costs element

Estimated impact on

variable lease

costs of

5% increase in

revenue/EBITDAR

€’000

Leases with lease paymen

ts based on reven

ue/EBITDAR

271

151

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

13 Leases

(

continued

)

Group as a les

see

(continued)

Extension optio

ns and termination

options

As at 31 December 2021, the Grou

p, as a hotel l

essee, does not have

any extension options. The Gro

up holds a single terminatio

n option in

an office space le

ase. The Group assesses at lease commence

ment wheth

er it is reasonably c

ertain not to terminate the option and

reassesses if there is a sign

ificant event or ch

ange in circumstances within

its control. The rel

ative magnitude of op

tional

lease payments to

lease payments is as fol

lows:

Leases not yet commence

d to which the lessee

is committed

The Group has multip

le agreemen

ts for lease at 31 December 2021 and details of the

non-cancellable lease rentals and o

ther contractual

obligations payab

le under these agreements are set ou

t hereafter. These

represent the mini

mum future lease paymen

ts (undiscou

nted) in

aggregate that the

Group is required to make

under the agreements. An agree

ment for lease is a bi

nding agreement be

tween external

third parties and the

Group to enter into a l

ease at a future date. The dates o

f commencement of the

se leases may change

base

d on the

hotel opening dates. The amo

unts payable may also ch

ange slightly if there are an

y changes in room numbers del

ivered throu

construction.

Agreements for lease

At 31 December

202

At 31 December

2020

€’000

Less than one year

14,528

5,165

One to two years

10,542

20,794

Two to three years

23,400

21,682

Three to five years

,139

51,801

Five to fifteen years

2,8

262,042

Fifteen to twenty five ye

ars

203,837

274,672

After twenty five years

3,938

336,512

Total future lease paymen

716,

972,668

The significant move

ment since the year end 31 Decembe

r 2020 is principal

ly due to the followin



The

ar leases for the Maldron Ho

tel Glasgow City and Clay

ton Hotel Manchester City Centre bo

th commenced during

2021.

This resulted in a rig

ht-

-use asset and lease liability b

eing recognised for both leases in the consolid

ated statement of financial

position and

their respective cashflows being remove

d from the agreements for lease table abo

ve; and



The ag

reement for lease for the

Maldron Hotel

in Birmingham, which was reflected in the

amount as at 31 December 2020, will

no longer pro

ceed.

Included

the

above

table

are

future

lease

payments

agreements

for

lease,

with

lease

term

years

with

the

expect

opening

dates

follo

ws: Mald

ron

Hotel

Manchester City

Centre

(opened

February 2022

), Clayton

Hotel

Bristol City

(Q1

2022),

Clayton Hotel

Glasgow

City (Q2 2022), The Samuel Hotel

, Dublin (Q2 2022), Maldron Hotel Victoria Manchester (H1 2024), M

aldron

Hotel Liverpool City (H1 2024),

Maldron Hotel

Brighton (H1 2024) and Maldron Ho

tel Croke Park, Dublin (

2024).

In February

2022,

the Group

comm

enced

a new

operating

lease

with Art-Invest Real

Estate

of Ho

tel Nik

ko i

n Düsseld

orf, Germany. The

lease

term

20 years,

with

two

year

tenant

extensio

ptions.

The re

nt,

with

a g

uaranteed

minimum, is

determined

the

revenue performance

of the hotel. The h

otel re-opened to the public

under the Group’s manag

ement from 15 February 2022.

Lease liabil

ities

recognised

(discounted)

Potential future lease

payments not included i

lease liabili

ties (discounted)

€’000

Office buildi

494

1,439

Financial St

atements

152

Notes to the consolidated

financial statements

(continued)

13 Leases

(

continued

)

Group as a les

see

(continued)

Other leases

The Group has appl

ied the short-term and low value

exemptions available

under IFRS 16 where appli

cable and recognises l

ease payments

associated with short-term leases o

r leases for which

the underlyi

ng asset is of low value

as an expense on a straight-

line basi

s over the

lease term. Where the

exemptions were n

ot available, rig

ht-

-use assets have been recognised with co

rresponding lease liabilities.

2021

2020

€’000

Expenses relating to sho

rt-term leases recognised

in administrative expen

ses

112

169

Expenses relating to l

eases of low-value assets, exclud

ing short-term leases of low-value assets,

recognised

in administrative expenses

130

184

299

r the year en

ded 31 December 2021, cash outflo

ws relating to fixture

s, fittings and equ

ipment, for which the Group has avai

led of the

IFRS 16 short term and lo

w value exemptions, amounted to

€

0.2 mill

ion

(31 December 2020: €0.3 mill

ion).

Group as a les

sor

Lease income from lease

contracts in which the

Group acts as lessor is outl

ined below:

202

2020

€’000

Operating lease

income (note 4)

355

279

The Group leases i

ts investment property and h

as classified these le

ases as operating leases b

ecause they do not transfer substanti

ally all

of the risks and rewards inci

dental to ownership

of these assets to the le

ssee. Operating l

ease income from sub

-leasing right-

-use assets

for the year ended

31 December 2021 amounted to

€0.

1 milli

on (31 December 20

: €0.1 millio

The followin

g table sets out a maturity analysis o

f lease payments, showin

g the undiscoun

ted lease payments receivab

le:

202

2020

€’000

Less than one year

310

One to two years

274

277

Two to three years

274

265

Three to four years

274

265

Four to five years

274

265

More than five years

1,159

1,371

Total undiscounted l

ease payments receivable

2,5

2,753

Sterling amounts have

been converted usin

g the closing fore

ign exchange rate of 0.84028 as at 31 December 2021 (31 December 2020:

0.89903).

153

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

14 Contract fulfilm

ent costs

Current asset

Non-current asset

202

2020

€’000

1 January

22,374

13,346

Costs incurred in ful

filling contract to date

13,197

8,737

Capitalised borrowi

ng costs (note 5)

684

291

At 31 December

36,255

22,374

Contract fulfilment costs relate

to t

he Group’s contractual ag

reement with Irish Reside

ntial Propertie

EIT plc (

‘

I-RES

’

entere

d into on 16

November 2018, for I-RES to purchase

a residential d

evelopment the Group is d

eveloping (comprising 69 residenti

al units) on the site of

the former Tara Towers hote

Revenue and the

associated cost will be recog

nised on this contract in profit o

r loss when the p

erformance obligatio

n in the

contract has

been met. Based on

the terms of the contract, this will

be on legal

com

pletion of the co

ntract which will occur on p

ractical completion o

the developmen

t project which is expected

to be

quarter two

202

2. As a result, revenue will

be recognised at a poin

t in time in the

future when the pe

rformance obligation is met, rather than over time.

Costs incurred in fulfil

ling the contract during the ye

of €

.2 million (20

€

8.7 millio

n) relate directly to this con

tractual arrangement

with I-RES. These costs, primaril

y build co

sts, have been used in order to satisfy the contract and are e

xpected to be rec

overed. The Group

has reclassified these

contract fulfilment costs from no

n-current assets to current assets on the state

ment of financi

al position as at 31

December 2021, as the rev

enue will be rece

ivable within 12 months of this date.

Interest capitalised o

n loans and borrowings relating

to this develop

ment (qualifying asset)

was €0.

7 million during the ye

ar ended

December 2021 (20

: €0.

3 millio

n) (note 5).

The overall sale val

ue of the transaction is

€42.4 millio

(excluding VAT), which is due i

n quarter

two

2022 (upon

practical completi

on)

Contract fulfilment costs paid

have been

included in investing activ

ities in the consolid

ated statement of cash flows as they are not

primarily derived

from the principal reven

ue-producing activities of the Group.

Financial St

atements

154

Notes to the consolidated

financial statements

(continued)

15 Trade and

other receivable

202

2020

€’000

Non-current assets

Other receivable

2,271

2,521

Prepayments

4,042

6,538

6,313

9,059

Current assets

Trade receivable

5,519

2,238

Prepayments

4,033

3,892

Contract assets

1,224

720

Accrued income

1,092

605

Other receivable

1,906

1,776

13,774

9,231

Total

20,087

18,290

Non-current assets

Included in no

n-current other receivables at 31 Decembe

r 2021 and 31 December 2020

, is a rent deposit o

f €1.4 million pai

d to the

landlord on the

sale and leaseback of Clayton H

otel Charlemon

t. This deposit is repayable to the Group at the end of the

lease term. Also

included is a de

posit paid as part of anothe

r hotel property le

ase contract of €0.9 million

(2020: €0.9 million)

which is interest-bearing

and

refundable at the

end of the lease term.

Included in no

n-current prepayments at 31 December 2021 are costs

€

3.8 million (31 Decembe

r 20

: €

6.3 millio

n) associated with

future lease agree

ments for hotels which are currentl

y being constructed o

r in planning. Whe

n these leases are signed, these co

sts will be

reclassified to rig

ht-

-use assets. The non-current prep

ayments for Maldron Hotel

Glasgow City and Clayton Hotel Manchester City Centre

at 31 December 2020 have now b

een reclassified to

the right-

-use assets at 31 December 2021.

Current assets

Other receivable

s at 31 December 2021 include

€1.1 mi

llion

(2020: €1.3 million)

for go

vernment grants relatin

g to wage subsidies. These

amounts were receive

d in January 2

022.

Contingent asset

As part of the sale and le

aseback of the Clayton Ho

tel Charlemont in 2020

(note 13), €

8 m

illion

was receivable conting

ent on the addition

of three bedroo

ms to the property.

As at 31 December 2021, €0.

milli

on has been

received with €0.

3 million di

sclosed as a contingent

asset as at 31 December 2021.

155

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

15 Trade and othe

r receivable

(

continued

)

Trade receivable

s are subject to the expe

cted credit loss model

in IFRS 9

inancial Instr

uments

. The Group applie

s the IFRS 9 simplified

approach to measurin

g expected credit lo

sses which uses a lifeti

me expected loss allo

wance for all trade receivables. To

measure the

expected credit l

osses, trade receivables have

been grouped base

d on shared credit risk characteristics an

d the numbe

r of day

s past due.

Aged analysis of trade receivabl

Gross

Expected

Impairment

Net

receivables

credit loss

provision

receivables

2021

rate

2021

€’000

2021

€’000

Not past due

2,328

0.0%

2,328

Past due < 30 days

1,159

0.0%

1,159

Past due 30

–

60 days

944

2.9%

(27)

917

Past due 60

–

90 days

207

10.8%

(22)

185

Past due > 90 days

1,331

30.1%

(401)

5,969

)

5,5

Gross

Expected

Impairment

Net

receivables

credit loss

provision

receivables

2020

Rate

2020

€’000

2020

€’000

Not past due

802

0.0%

802

Past due < 30 days

817

0.0%

817

Past due 30

–

60 days

331

0.0%

331

Past due 60

–

90 days

143

18.2%

(26)

117

Past due > 90 days

527

67.6%

(356)

171

2,620

(382)

2,238

Management doe

s not expect any signi

ficant losses from trade receivables that have n

ot been provided for as shown above, contract

assets, accrued in

come or other receivab

les. Details are incl

uded in the credit risk section

in note 24.

16 Inventories

202

2020

€’000

Goods for resale

1,298

917

Consumable stores

341

1,665

1,258

Inventories reco

gnised as cost of sales duri

ng the year amounted

to €

12.6 million (

2020

: €

10.9 millio

Cash and c

ash equivalent

2020

€’000

Cash at bank and in h

and

41,112

50,197

41,112

50,197

Financial St

atements

156

Notes to the consolidated

financial statements

(continued)

Capital

and reserves

Share capital and share premium

At 31 December 2021

Authorised share capi

tal

Number

€’000

Ordinary shares of €0.01 each

10,000,000,000

100,000

Allotted, called-

up and fully paid shares

Number

€’000

Ordinary shares of €0.01 each

222,865,363

2,229

Share premium

504,895

At 31 December 20

Authorised share capi

tal

Number

€’000

Ordinary shares of €0.01 each

,000,000,000

100,000

Allotted, called-

up and fully paid

Number

€’000

Ordinary shares of €0.01 each

222,732,900

2,227

Share premium

504,735

All ordinary sh

ares rank equally with reg

ard to the Company’s residual assets.

During the year en

ded 31 December 2021, the Company issued 93,172

shares o

f €0.01 per share followi

ng the vesting

Awards granted in

relation to the

2018 LTIP, under the 2017 LTIP plan (note 7).

291

shares were also issued du

ring 2021 under the Share Save schemes

granted in 2017. The wei

ghted average share p

rice at the date of exe

rcise for options exercise

d during the year

was €4.53 per share

(note

7).

In September 2020, the Company i

ssued 37,000,000 shares, as desc

ribed furthe

r in note 18 (a) below.

Dividends

During the year e

31 December 2021, the Group did

not make any divid

end payments (year ended

31 December

2020:

€

Nil

Nature and purpose of res

erves

(a) Capital contribution

and merger reserve

As part of a Group reorgani

sation in 2014, the Company b

ecame the ultimate parent entity o

f the then existing Grou

p, when it acquire

100% of the issued share cap

ital of DHGL Limited in e

xchange for the i

ssue of 9,500 ordinary shares o

f €0.01 each. By doi

ng s

o, it also

indirectly acq

uired the 100% sharehold

ings previously held by DHGL Limited in e

ach of its subsidiarie

s. As part of that reorganisation,

shareholder l

oan note obligations (incl

uding accrued interest) of DHGL Limi

ted were assumed by the

Company as part of the consideration

paid for the eq

uity shares in DHGL Limited.

The fair value of the

Group (as then heade

d by DHGL Limited) at that date was estima

ted at €40

million. The fair value o

f the shareholde

loan note obl

igations assumed by the Company as p

art of the acquisition was €29.7 milli

on and the

fair value of the

hares issued by th

Company in the share

exchange was €10.3 million

The difference be

tween the carrying valu

e of the shareholde

r loan note obligations (€55.4 mill

ion) prior to the reorg

anisatio

n and their fair

value (€29.7 millio

n) at that date represents a contributio

n from shareholde

rs of €25.7 million which h

as been credited to a separate

capital contribu

tion reserve. Subsequen

tly, all shareholder loan note obl

igations were settled in

2014, in exchange for shares issued

in the

Company.

157

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Capital and

reserves

(

continued

)

(a) Capital contribution

and merger reserve

(continued)

The insertion o

f Dalata Hotel Group plc as the n

ew holding company of DHGL Limited in 2014 did not mee

t the definition o

f a business

combination unde

r IFRS 3

Business Combinations

, and, as a consequen

ce, the acquired

assets and liabilities of DHGL Limited an

d its

subsidiaries co

ntinued to be carried in

the consolidated financial statements at their respective carryin

g values as at the d

ate of the

reorganisation

. The consolidated financial

statements of Dalata Hotel Group

plc were prepared

on the basis that the Company is a

continuation

of DHGL Limited, reflecting

the substance of the arrang

ement.

As a cons

equence

, a merger reserve of €10.3 mill

ion

(negative) arose in the co

nsolidated statement of financi

al position. This repre

sents

the difference b

etween the consideration

paid for DHGL Limited in

the form of shares of the Company, an

d the issued share

cap

al of

DHGL Limited at the date of the re

organi

sation which was a nomi

nal amount of €95.

September 2020, the Company

omplete

d the placing of new ordi

nary shares of €0.01 each in the shar

e capital of the

Company. 37.0

million ordin

ary shares were issued at €2.55 each

which raised €92.0

milli

on after costs of €2.4 millio

The Group availed of merger rel

ief

to simplify future distrib

utions and as a result,

€9

1.6 million

was recognised in the

merger reserve being the difference b

etween the

nominal valu

e of each share (€0.01 each) and the amou

nt paid (€2.55 per share)

after deducting

costs of the share

placing of €2.4 milli

on.

(b) Share-based payment reserve

The share-based payment reserve

comprises amounts equ

ivalent to the cumulative cost o

f awards by the Group und

er equity-settled

share-

based payment arrangeme

nts being the

Group’s Long Term Incentive Plan

s and the S

hare Save schemes. On vesting, the co

st of

awards previously reco

gnised in the share-based payments reserve is transferred

to retained earni

ngs. Details of the share awards, in

addition to awards whi

ch vested during the ye

ar, are disclosed in no

te 7 and on pages 81 to

the Remuneration Committee rep

ort.

The hedging rese

rve comprises the effective portio

n of the cumulativ

e net change in the fair valu

e of hedging instrumen

ts used in cash

flow hedge

s, net of deferred tax where appli

cable. There is no deferred tax asset recognised i

n the hedging reserve at 31 Decembe

r 2021,

due to uncertain

ty of obtaining a tax benefit for cash flo

w hedges in

future periods.

(d) Revaluation reserve

The revaluation rese

rve relates to the reval

uation of land and

buildings in line with th

e Group’s policy to fair value the

assets at each

reporting date (note

12), net of deferred tax.

(e) Translation r

eserve

The translation reserve co

mprises all forei

gn currency exchange

differences arising from the translatio

n of the financial stat

ements of

foreign operation

s, as well as the effective p

ortion of any foreign currency di

fferences arising from he

dges of a net investment i

n a foreign

operation (no

te 24).

Trade and othe

r payables

202

2020

€’000

Non-current liabiliti

Other payables

1,896

Current liabili

ties

Trade payables

12,621

5,917

Accruals

30,810

19,610

Contract liabili

ties

10,5

9,044

Value added tax

9,2

4,834

Payroll taxes

19,642

9,263

82,792

48,668

Total

84,688

48,668

Financial St

atements

158

Notes to the consolidated

financial statements

(continued)

Trade and

other payable

(

continued)

Non-current liabili

ties

Included in no

n-current other payables at 31 Dece

mber 2021 are retention p

ayments

of €1.9 million

relating

to construction p

rojects. The

retention paymen

ts become due where ce

rtain conditions in

the construction contracts are met, usually twelve

months after practical

completion of the pro

jects.

Current liabili

ties

Accruals include

capital expenditure accruals for work i

n progress at year en

d which have not yet been invoice

d and accruals in relation to

costs on enterin

g new leases and agreements for lease which h

ave not yet been i

nvoiced (2021

: €

5 million, 20

: €

6.5 milli

on).

Value added tax and payrol

l taxes

Under the warehousi

ng of tax liabilitie

s legislation in

troduced by the Financial Provi

sions (Covid-19) (No. 2) Bill 2020 and Finance Act 2020

(Act 26 of 2020) and amende

d by the Finance

(Covid-19 and Miscellaneous Provi

sions) Act 2021, Irish VAT li

abilitie

s of €3.6 million (2020:

€4.9 million) relatin

g to the year ended 31 Decembe

r 2021 have been

deferred. Other VAT liabil

ities at 31 December 2021 o

f €0

.7 million

relate to UK VAT liabil

ities incurred

in quarter four 2021.

Irish payroll tax liab

ilities of

€10

million (2020: €7.8 mil

lion) relating to the

year ended 31 De

cember 2021 have been deferred u

nder the

Debt Warehousing

scheme. Other payroll tax li

abilities at 31 December

2021

of €1.8 million rel

ate to Irish and UK payrol

l tax liabili

ties

incurred in Dece

mber 2021.

In the UK, VAT liabili

ties of £0.4 millio

n (€0.5 million) and

payroll tax liabilities o

f £0.3 million (€0.3 million) were def

erred in 2020 and were

paid by in

stalments during 2021. There were no

further deferrals of UK V

AT or payroll tax liabilities during 2021.

As at 31 December 2021, the to

tal Irish de

ferred VAT liabil

ities of €8.5 million

and payroll tax liabilitie

s of €17.8 million

relating to both

2020 and 2021, are payable d

uring the year en

ding 31 December 2022.

On 21 December 2021, the Irish Go

vernment ann

ounced the extensi

on of the Debt Warehou

sing Scheme in princi

ple following the re-

introduction

of Covid-19 restrictions. Subsequent to the ye

ar-

end

it was confirmed that Irish VAT liabil

ities of €8.3 milli

on and payroll t

liabilities of €15.6 mil

lion deferred at 31 Dece

mber 2021 may be furth

er deferred

to 30 April 2023. Deferre

d Irish VAT liabi

ities of €0.2

million and payro

ll tax liabilitie

s of €2.2 million do not qu

alify for the extension an

d remain payable du

ring the

year ended 31 December

2022

(note 8).

Provision f

or liabilities

202

2020

€’000

Non-current liabili

ties

Insurance provisio

6,454

6,747

Current liabili

ties

Insurance provisio

1,734

1,528

8,188

8,275

The reconcili

ation of the movement in the pro

vision during

the year is as follows:

202

2020

€’000

At 1 January

8,275

6,563

Provisions made du

ring the year

–

charged to profit or l

oss

2,000

2,500

Utilised durin

g the year

(837)

(758)

Reversed to profit or l

oss during the year

(1,250)

(30)

At 31 December

8,188

8,275

159

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Provision f

or liabilities

(continued)

This provision

relates to actual and poten

tial obligations arising

from the Group’s

insurance arrangements where the Gro

up is self-insured.

The Group has third p

arty insurance cove

r above specific limits for in

dividual claims and has an o

verall maximum aggregate p

yable for all

claims in any on

e year. The amount provid

ed is principally based on projected settl

ements as determined

by external lo

ss adjusters. The

provision al

so includes an estimate for claims in

curred but not ye

t reported and incurred

but not enough reported.

The utilisation

of the provision i

s dependent on the timing o

f sett

lement of the o

utstanding claims. The Group

expects the majority of the

insurance provi

sion will be utili

sed within five years of the

period end date, howeve

r, due to the nature

of the provision, t

here is a level o

uncertainty in the

timing of settlement as the Group g

enerally cannot precisel

y determine the

extent and duration of the clai

m process.

The provision

has been discounted to reflect the

time value of mon

ey though the effect is not sig

nificant.

The self-insurance prog

ramme commenced in Jul

y 2015 and increasing levels of clai

ms data is becoming availab

le. Claim provi

sions are

assessed in lig

ht of claims experie

nce and amended acco

rdingly to ensure provisio

ns reflect recent expe

rience and trends. Th

ere has been

a reversal of provisi

ons made in p

rior periods of

€

3 million (20

: €

millio

n) which has been credited within ad

ministrative expen

ses.

21 Loans and borr

owings

Non-current liabili

ties

202

2020

€’000

Bank borrowing

313,533

314,143

Total loans and b

orrowings

3,533

314,143

The amortised cost of lo

ans and borrowings at 31 Dece

mber 2021 is €313.5 mill

ion (31 December 2020:

€314.1 millio

n). T

he drawn loan

facility as at 31 December 2021 is

€317.2 mil

lion

consi

sting of Sterling term borrowing

s of

£176.5 million (€210

million) and revol

ving

credit facility bo

rrowings (

‘

RCF

’

) of

£90 million (€107.

1 milli

on). The undrawn loan facili

ties as at 31 December 2021 were

€257.

4 milli

(

2020: €247.9 millio

On 2 November 2021, the Group

entered into

an amended and restated facility ag

reement with its banking

club to provide addi

tional

flexibility an

d liquidity to support the Group

following the continued impact of Covid-

The Group availe

d of its option to extend the

maturity of its debt facilitie

s by a period

of 12 months

. The Group’s debt facilitie

s now consist of a €200 million term l

oan facility, with a

maturity date of 26 October 2025 a

nd a €364.4 milli

on RCF: €304.9 millio

n with a maturity date of 26 Octob

er 2025 and €59.5 m

illion with

a maturity date of 30 September 2023.

The Group had agree

d in July 2020 that previous cove

nants comprising Net Debt to EBITDA and

Interest Cover wo

uld not be tested ag

ain

until June 2022 (

‘

the Previo

us Covenants

’

). These two cove

nants were replaced, u

ntil that date, by a Net Debt to Value covenant and a

minimum liqui

dity restriction whe

reby either cash, remaining

available facilities or a co

mbination of both must not fall

belo

w €50 million at

any point to 30 March 2022. Unde

r the revised lo

an facility agreement entered into in Nove

mber 2021, the Previous Coven

ants will now

not be tested un

til June 2023. The Net Debt to Val

ue covenant an

d the minimum liqui

dity restriction will remain in

place unti

l that date.

The Net Debt to Value must be

equal to or less than 55% at each testing

date until 31 Decemb

er 2022. At 30 June 2023, the Net Debt to

EBITDA covenant maximum is 4.0x

and the Interest Cove

r minimum is 4.0x. The Group is in compli

ance with its covenants as at

December 2021.

In line with IFRS 9 derecog

nition criteria, the Grou

p assessed whether the terms and cash flo

ws of the mod

ified liabili

ties were substantiall

different as a result of this amen

ded and restated facility agree

ment. The Group pe

rformed the 10% test referred

to in note 1 (xxvi

)

(derecogniti

on of financial liabilities accounting

policy) to assess whether the

discounted prese

nt value of the cash flows under the n

terms, discounted usi

ng the original effective

interest rate, includ

ing any lender fees paid net of any fees receive

d, was at least 10 percent

different from the discounte

d present value

of the remaining cash flows of the o

riginal fin

ancial liability.

The Group also p

erformed a

qualitative assessment by c

omparing the ame

nded terms with the origi

nal terms of the facility ag

reement

The changes were n

ot deemed

to be substantial with the

majority of them already i

ncluded in the

quantitative test

As a result, the loans were deemed to b

e non-

substantially modi

fied which required the amorti

sed cost of the lo

ans to be remeasured at the date o

f modification and le

to a

modification gain

of €

2.7 mil

lion being immediatel

y recognised in pro

fit or loss in 2021 (note 5).

Costs of €

1.2 million

incurred in relation to

the amendment were cap

italised and are amortised

to profit or loss on an e

ffective interest rate basis over the term of the loan facili

ty.

Financial St

atements

160

Notes to the consolidated

financial statements

(continued)

21 Loans and b

orrowings

(continued)

In July 2020, the amendmen

t and restatement of the lo

an facility, which in

cluded amended

covenant margin ratchets as well as an

extension to the

testing of the Previous Co

venants, resulted in

the loans and borrowing

s being non-s

ubstantially mod

ified. A modification

loss of €4.

3 million

(note 5)

was recogni

sed in profit or lo

ss in 2020 as a result. Costs of €0.6 millio

n inc

urred in relation to this amendment

were capitalised

to loans and borrowings.

Following

a fundamental review and reform of major inte

rest rate bench

marks undertaken gl

obally, the Group replaced LIBOR, as its

Sterling variable

interest rate, with an alternative risk-free b

enchmark rate, Sterling Overni

ght Index Averag

‘SONIA’

plus an agreed credi

adjustment spread ‘CAS spread

’. The transition

was effective for all

Sterling lo

ans and borrowings on the

ir next roll date, post 2 Nove

mber

2021. All of the Grou

p’s bo

rrowings and rel

ated interest rate swaps had transiti

oned to SONIA

plus CAS spread by 31 Decembe

r 2021.

SONIA is calculated using

the cumulative compo

und method, compounded

using a 5-day lag. There were two approaches avail

able to

determining

the CAS spread applicable o

n transition to SONIA. The Group elected to

use the ISDA (International Swaps and

Derivatives

Association) historical

median approach as its preferred

approach

CAS spread methodol

ogy is based

on the median difference

(spread) between LIBOR and SONI

A calcul

ated over the p

revious five year period. The CAS spread has been agreed

at 11.9 basis points for

loans rolling q

uarterly and 3.3 basis points for loans rol

ling monthly.

The Group has adop

ted the Phase 2 amendments issue

d by the IASB in

Interest Rate Benchmark Refor

–

Phase 2

–

Amendments to IFRS 9,

IAS 39, IFRS 7, IFRS 4 and IFRS 16.

he Group has availe

d of the practical exped

ient which allows the Gro

up to update the effective

interest

rate for the transition to SONIA

, withou

t having to modify the l

oans and borrowing

s which c

ould have result

in a modification gai

n or

loss in profit o

r loss.

e Group has ce

rtain derivative financi

al instruments which hedge interest rate expo

sure on a portio

n of these loans (note 22)

The

sterling variabl

e interest rate on

these interest rate swaps transitio

ned to SONIA during

the year ended 31 December 2021. The Group

ensured that the CAS spread app

licable on the loan

s and borrowings match

in so far as possible the CAS spread agree

d on the interest

rate swaps. Under the terms of

the loan facil

ity agreement, an i

nterest rate floor is in place

which prevents the

Group from receivin

g the

benefit of sub-zero b

enchmark SONIA and Euribor rates.

At 31 December 2021, property, pl

ant and e

quipment, including

fixtures, fittings and equ

ipment in leased prope

rties, with a c

arrying

amount of €1,080.0 millio

n (2020: €1,055.1 millio

n) were pledg

ed as security for loans and b

orrowings.

161

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

21 Loans and b

orrowings

(continued)

Reconciliation of

movements of li

abilities to cash flows ari

sing from financing activities for the y

ear ended 31 Decemb

er 202

Liabilities

Equity

Loans and

borrowings

Lease liabilities

Trade and

other payables

Derivatives

(net)

capital

premium

Merger

reserve

Total

€’000

Balance as at 31 Decemb

314,143

399,632

48,668

9,042

2,227

504,735

81,264

1,359,711

Changes from financing ca

sh flows

Vesting of share a

wards and options

160

162

Other interest and f

inance costs paid

0,162)

(2,486)

(2,63

(15,285)

Receipt of bank loans

13,000

Repayment of bank loans

(30,575)

Interest on lease liab

ilities

(24,409)

4,409)

Repayment of lease liab

ilities

(8,930)

Total changes from finan

cing cash

flows

(27,737)

(33,339)

(2,486)

(2,637)

160

(66,037)

Liability-related other

changes

The effect of changes

in foreign

exchange rates

20,963

497

753

632

31,845

Changes in fair value

(6,

840

)

(6,840)

Interest expense on

bank loans and

borrowings (note 5)

8,908

Other finance costs

(2,744)

244

(

500

)

Other movements in

trade and othe

payables

35,509

Additions to lease liabili

ties during the

year

81,210

81,

Interest on lease liab

ilities

24,409

,409

Other movements in

lease liabilities

517

Total liability-related

other changes

27,127

115,633

38,506

(6,208)

Balance as at 31 Decemb

er 2021

3,533

481,926

84,688

197

2,229

504,895

81,264

1,468,732

Financial St

atements

162

Notes to the consolidated

financial statements

(continued)

21 Loans and borr

owings

(continued)

Reconciliation of

movements of li

abilities to cash flows ari

sing from financing activities for the y

ear ended 31 Decemb

2020

Liabilities

Equity

Loans and

Lease

Trade and

Merger

borrowings

liabili

ties

other

payables

Derivatives

capital

premium

reserve

Total

€’000

Balance as at 3

1 Decem

ber 20

411,739

362,101

66,163

4,523

1,851

504,488

(10,337)

1,340,528

Changes from fi

nancing cas

h flows

Vesting of share a

wards and options

247

253

Equity share pl

acing i

ssuance

370

93,980

94,350

Costs of sha

re placing

(2,379)

Other interest an

d finance costs

paid

(556)

(10,408)

(1,992)

(12,956)

Receipt of

bank loans

61,486

Repayment of

bank loan

(146,572)

Interest on le

ase liabi

litie

(22,405)

Repayment of

lease li

abiliti

(5,618)

Total changes fr

om fina

ncing cash

flows

(85,642)

(28,023)

(10,408)

(1,992)

376

247

91,601

(33,841)

Liability-rel

ated other cha

nges

The effect of

changes in f

oreign

exchange rate

(16,578)

(7,219)

(644)

(243)

(24,684)

Changes in fai

r value

6,754

Interest expen

se on bank l

oans and

borrowings

9,097

Other finance

costs

4,624

1,146

5,770

Other movem

ents in trade

and

other payables

(16,686)

Additions to

lease l

iabili

ties during

the year

51,946

Interest on le

ase liabi

litie

22,405

Other movem

ents in le

ase liabi

litie

(1,578)

Total liabi

lity-related

other

changes

(11,954)

65,554

(7,087)

6,511

53,024

Balance as at 3

1 Decem

ber 20

314,143

399,632

48,668

9,042

2,227

504,735

81,264

1,359,711

163

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

21 Loans and borr

owings

(continued)

Net debt is calcul

ated in line with banki

ng covenants and in

cludes external loans and borrowin

gs drawn and owed to the banking club as at

31 December 2021 (rather than the amo

rtised cost of the lo

ans and borrowings) less cash and cash equival

ents. The below table

also

includes a reconci

liation to net debt and lease l

iabilities. Interest rate swap liabilitie

of €

1.0 million are not include

d in the below table.

Reconciliation of

movement in net debt for the y

ear ended 31 December 2021

Sterling

Euro

facility

Total

Loans and borrowi

ngs

£’000

€’000

At 1 January 2021

269,500

299,768

14,000

313,768

Cash flows

Facilities drawn do

13,000

Loan repayments

(3,000)

(3,575)

(27,000)

(30,575)

Non-cash changes

Effect of foreign e

xchange movements

20,963

At 31 December 2021

266,500

317,156

Cash and cash equivalents

At 1 January 2021

50,197

Movement during

the year

(9,085)

At 31 December 2021

41,112

Net debt at 31 December 2021

6,044

Reconciliation of

net debt and lease li

abilities

Net debt at 31 December 2021

276,044

Lease liabili

ties as at 1 January 2021

399,632

Additions

81,210

Interest on lease l

iabilities

24,409

Lease payments

(33,

339

)

Remeasurement of lease l

iabilitie

517

Translation adjustment

9,4

Lease liabil

ities at 31 December 202

(note 13)

481,926

Net debt and lease liabi

lities at 31 December 2021

7,970

Financial St

atements

164

Notes to the consolidated

financial statements

(continued)

21 Loans and borr

owings

(continued)

Net debt is calcul

ated in line with banki

ng covenants and includes external loan

s and borrowings drawn and owed to the

banking club as at

31 December 20

(rather than the

amortised cost of the l

oans and borrowing

less cash and cash equ

ivalents. The below tabl

e also

includes a reconci

liation to net debt and lease l

iabilities. Interest rate swaps of

€

0 million are no

t included in the below tables.

Reconciliation of

movement in net debt for the y

ear ended 31 Decem

ber 20

Sterling

Euro

facility

Total

Loans and borrowi

ngs

£’000

€’000

At 1 January 20

266,500

313,235

102,197

415,432

Cash flows

Facilities drawn do

10,000

10,986

50,500

61,486

Loan repayments

(7,000)

(7,875)

(138,697)

(146,572)

Non-cash changes

Effect of foreign e

xchange movements

(16,578)

At 31 December 20

269,500

299,768

14,000

313,768

Cash and cash equivalents

At 1 January 20

40,586

Movement during

the year

9,611

At 31 December 20

50,197

Net debt at 31 December 20

263,571

Reconciliation of

net debt and lease li

abilities

Net debt at 31 December 20

263,571

Lease liabili

ties as at 1 January 20

362,101

Additions

51,946

Interest on lease l

iabilities

22,405

Lease payments

(28,023)

Remeasurement of lease l

iabilitie

(1,578)

Translation adjustment

(7,219)

Lease liabil

ities at 31 December 20

(note 13)

399,632

Net debt and lease liabi

lities at 31 December 20

663,203

165

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

22 Derivatives

The Group has entered

into interest rate swaps with a n

umber of financi

al institutions in o

rder to manage the intere

st rate risks arising

from the Group’s borrowing

(note 21

Interest rate swaps are emplo

yed by the Group to p

artially convert the Group

’s Sterling deno

minated borrowings from flo

ating

to fixed

interest rates. The S

terling

interest rate appli

cable to the Group’s inte

rest rate swaps was LIBOR

for the year end

ed 31 December 2021

Following

a fundamental review and reform of major inte

rest rate bench

marks undertaken gl

obally, the Group replaced

LIBOR wit

h an

alternative risk-free ben

chmark rate, Sterling

Overnight Inde

x Average

‘S

ONIA’

plus an agre

ed credit adjustmen

t spread ‘CAS

spread

’ duri

the year ende

d 31 December 2021. The Group had ful

ly transitioned its Sterling variable

rate to SONIA plus CAS spread on all its deri

vatives

and Sterling de

nominated loans and borrowing

31 December 2021. The Group ensured that the CAS spread agree

d on the Group

’

interest rate swaps match

in so far as possib

the CAS spread on the

Group

’

borrowings. The wei

ghted average quarterly CAS spread

agreed for the Group

’

s de

rivatives effective as at 31 December 202

1 is 11.1 basis po

ints

and the quarterly CAS spread on the

Group’s loans

and borrowing

s 11.9 basis points (note 21). The Group has updated its h

edging documentatio

n for SONIA. Althou

gh, the CAS spreads are

slightly di

fferent on the hedged i

tem and the hedging instrument, it is marginal and as a re

sult, the hedge relatio

nships continue to

be fully

hedge effective as at 31 Decembe

r 2021 and hedg

e accounting continues to b

e applied (notes 21,

24)

The Group currently h

olds the following

derivatives as at 31 December 2021:



Two interest rate swaps with an e

ffective date o

f 3 February 2020 which hedge the SONIA benchmark rat

e on £101.5 milli

on of the

Sterling den

ominated borrowing

s for the period to the original maturity of the term borrowin

gs on 26 October 2023. These swaps

fix the SONIA benchmark rate to

1.39%.



Two interest rate swaps with an eff

ective date of 26 Octob

er 2018 and a maturity date of 26 October 202

3 which hedge the SONIA

benchmark rate on £75.0 mil

lion of the entirety o

f the Sterling denominated borrowin

gs. These swaps fix the SONIA benchmark

rate at 1.27% on a notional

of £63

million an

d 1.28% on a notional of £12

million o

f Sterling deno

minated borrowings.



Four interest rate swaps were e

mployed with

an effective date of 26 October 2023 and a maturity date of 26 Octobe

r 2024 which

hedge the

SONIA benchmark rate on the Sterling

term denominated

borrowings. These swaps fix the SONIA benchmark rate

between 0.95% and 0.96%.

As at 31 December 2021, the in

terest rate swaps cover 100% of the

oup’s

term Sterling

denominated

borrowings of £176.5 million for

the period

to 26 October 2024. The extended year o

f the term debt, to 26 October 2025, is currently u

nhedged

. All derivatives have been

designated as he

dging instruments for the pu

rposes of IFRS

Fair value

202

2020

€’000

n-current assets

Interest rate swap assets

832

Non-current liabili

ties

Interest rate swap liab

ilities

(1,029)

(9,042)

Net derivative liabil

ities

(197)

(9,042)

202

2020

€’000

Included in other compreh

ensive income

Fair value gain/

(loss) on interest rate swaps

6,208

(6,511)

Reclassified to profit o

r loss (note 5)

2,637

1,992

8,845

(4,519)

The amount reclassified

to profit or lo

ss represents the incremen

tal interest

expense arising

under the interest rate swaps be

cause actual

LIBOR rates were lo

wer than the swap rates.

Financial St

atements

166

Notes to the consolidated

financial statements

(continued)

Deferred tax

202

2020

€’000

Deferred tax assets

20,161

12,344

Deferred tax liabili

ties

2,896)

(39,404)

Net deferred tax liabil

ities

(22,

735

)

(27,060)

202

2020

Movements in year

€’000

At 1 January

–

net liab

ility

(27,060)

(55,831)

Credit for year

–

to profi

t or loss (note 9)

5,441

7,997

(Charge)/credit for year

–

to o

ther comprehen

sive income

(1,1

)

20,774

At 31 December

–

net liabil

ity

(

22,735

)

(27,060)

The majority of the de

ferred tax liabili

ties result from the Group’s po

licy of ongoing

revaluation of land and building

s. Whe

re the carrying

value of a prop

erty in the financial statements is greater

than its tax b

ase cost, the Group reco

gnises a deferred tax liabi

ity. This is

calculated usin

g applicable Irish and UK corporatio

n tax rates. The use o

f these rates,

in line

with the applicable acco

unting standards,

reflects the intenti

on of the Group

to use these assets for ongoi

ng trading purposes. Shoul

d the Group dispose of a pro

perty,

the actual tax

liability wo

uld be calculated with reference to

rates for capital gains o

n commercial property. The deferred tax liabil

ities have

creased

from €

.4 millio

n at 31 December 20

to €

42.9 millio

n at 31 December 2021. This relates primarily to

an increase i

n taxable gains

recognised

on properties held through o

ther comprehensive in

come a

nd other temporary di

fferences on assets through profit

loss

during the ye

ar ended 31 December 2021, which incorpo

rates the impact of the remeasuremen

t of the UK liab

ilities at the 25% rate.

The majority of the de

ferred tax assets of €

20.2

millio

n recognised at 31 December 2021 relate to tax lo

sses and interest carried fo

rward by

the Group. A deferred

tax asset of

€17.

0 million

(2020: €

10.0 mill

ion) has been rec

ognised in respect of cumulative tax lo

sses and interest

carried forward at 31 Decemb

er 2021

of €

80.1 millio

n (31 December 2020

: €64.0 million)

As a resul

t of the impact o

f Covid-19, the Group

incurred corpo

ration tax losses during the

year ended 31 Decembe

r 2021

These tax losses can be carried forward inde

finitely for offset

against future taxable profi

ts. The losses incurred du

ring 2021 cannot be carried

back to earlier peri

ods. The Group also has tax losses

carried forward from earli

er periods,

€

millio

n of

2020

losses will be carrie

d back during 2022 and offset against pro

fits generated

2019

, which should generate futu

re corporation tax refunds o

€

1.6 million during 2022.

Included within the €80.1 mi

llion tax losses carried fo

rward at 31 Dece

mber 2021, is a balance o

f €19.9 millio

(

31 December 2020: €11.2

million) relatin

g to interest expenses carried forward in

the UK. In the UK, there i

s a limit on corp

oration tax deductions fo

r interest

expense incu

rred. The unused interest expense

carried forward by the UK Group

companies at 31 Decemb

er 2021 can be carri

ed fo

rward

indefinitely and

offset against future taxable p

rofits.

The increase in the

deferred tax asset recogn

ised on tax losses and in

terest carried forward from €10

.0 million at 31 Decembe

r 2020 to

€17.0 million at 31 Dece

mber 2021, relates to the in

crease in tax losses

and interest recog

nised during the year en

ded 31 Decembe

r 2021

and the impact of the reme

asurement of deferred

tax recognised i

n respect of UK tax losses and in

terest at the 25% rate.

A deferred tax asset has been

recognised

in respect of Irish and UK tax losses and intere

st, on the basis that it is prob

able that, after the

carry back of tax losses to earlie

r periods, there will b

e sufficient taxable p

rofits in future peri

ods to utilise the carried forward tax losses

and interest.

In considering the

available evidence to suppo

rt the recognition

of the deferred tax assets, the Group takes into co

nsideration the impact

of both positi

ve and negative evidence incl

uding historical finan

cial pe

rformance, projection

s of future taxable

income and the en

acted tax

legislation.

167

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

23 Deferred tax

(

ntinued

)

In preparing fore

casts to determine future taxabl

e profits, there are a

number of po

sitive factors underpinni

ng the recoverability of the

deferred tax assets:



Prior to the

Covid-19 pandemic, the

Group displayed a h

istory of profit growth eve

ry year. Once normal tradi

ng resumes, the

Group currently forecasts that this

profit growth wil

l recommence;



In li

ne with economic and

industry analysis, it is expected that the h

ospitality in

dustry will recove

r in the coming years;



The Group

is confiden

t that it is well positi

oned to take advantage o

f opportunities that will arise

during 2022 and into the future,

including the

opening of a large pipeli

ne of new hotels which will contribute particu

larly to the utilisatio

n of UK tax losses, which

can be carried forward and

utilised on a g

roup basis. As at 31 Decembe

2021

the Group had 11 n

ew hotels in

the pipeline (eigh

in the UK, three in Irel

and) which are due to o

pen from quarter 1 2022 onwards, which wil

l contribute

to future growth. There are

also extension

s planned to be

carried out o

n three of the Group’s existing

hotels

; and



The abse

nce of expiry d

ates for carrying forward UK and Irish tax losse

The Group also consi

dered the relevant neg

ative evidence in de

termining the recoverabil

ity of deferred tax assets:



The qu

antum of profits require

d to be earned to utilise

the tax losses carried forward; and



Forecasts of

future taxable profitabi

lity are subject to inherent unce

rtainty which is he

ightened due to the ongoing i

mpact of

Covid-19 on the h

ospitality industry.

Based on the Group

’s financial projections, the

deferred tax asset in respect of

Irish tax losses carried forward

of €24

.4 milli

on is estimated

to be recovere

d in full by the year ending 31 December 2027, with th

e majority bein

g recovered by the

end of the year ending

December 2022. The deferred tax a

sset in respect of UK tax l

osses and interest e

xpense carried forward

of €5

5.7 million is estimated to be

recovered in

full in by the year ending

31 December 20

, with the majority be

ing recovered b

y the end of the year ending 31 De

cember

202

The Group acquire

d Hotel La Tour Birmingham Limite

d in July 2017. At that time, the co

mpany had tax trading losses forward of £8.2

million (€9.6 mill

ion) which were not reco

gnised as an asset in

the statutory accounts of that company. Ho

tel La Tour Birming

ham Limited

sold Hotel

La Tour Birmingham (now Clayton Hote

l Birmingham) in August 2017, at which time a

taxable capi

tal gain of £6.0 mill

ion (€7.0

million) arose. The

Group opted to roll ove

r this capital gain by re

ducing the future tax base cost of capi

tal assets.

Due to uncertainty o

ver the future utilisatio

n of these tax losses, the remaining related

deferred tax asset was derecognised

during the

year ended 31 Dece

mber 2020. At 31 December

202

1, there are unre

cogni

sed tax losses in respe

ct of the Clayton Hotel Birmingham trade

of £7.9 million (€

9.4 milli

on). The tax effect of these unreco

gnised tax lo

sses at 31 December 2021 is £2.0

milli

on (€

2.4 million) if the losses

were to be util

ised at the 25% corporation tax rate that wil

l be in e

ffect from 1 April 2023.

There is no de

ferred tax asset recognised in the he

dging reserve at 31 December 2021 due to unce

rtainty in ob

taining a tax benefit for the

cash flow hedge

s in future periods.

Financial St

atements

168

Notes to the consolidated

financial statements

(continued)

Deferred tax

(

continu

)

Deferred tax arises from

temporary di

fferences relating to

Balance as at 31 December 2021

Net balance at

1 January

202

Recognised in

profit or l

oss

Recognised in

OCI

Net deferred

tax

Deferred tax

assets

Deferred tax

liabilities

202

€’000

Property, plant and

equipment

(35,830)

(1,478)

(1,1

)

(38,424)

1,064

(39,488)

Leases

(1,

272

)

(15)

(1,287)

121

(3,408)

Tax losses and

interest carried

forward

10,042

6,934

16,976

Net deferred tax

(liabilitie

s)/assets

(27,060)

5,441

(1,1

)

(22,

735

)

20,161

Balance as at 31 December 20

Net balance at

1 January 20

Recognised in

profit or l

oss

Recognised in

OCI

Net deferred

tax

Deferred tax

assets

Deferred tax

liabilities

2020

€’000

Property, plant and

equipment

(56,287)

(880)

21,337

(35,830)

722

(36,552)

Leases

(1,798)

526

(1,272)

1,580

(2,852)

Tax losses and

interest carried

forward

1,691

8,351

10,042

Other

563

(563)

Net deferred tax

(liabilitie

s)/assets

(55,831)

7,997

20,774

(27,060)

12,344

(39,404)

The Group has multip

le legal enti

ties across the UK and Ireland that w

ill not settle

current tax

liabilities an

d assets on a net basis an

d their

assets and liabil

ities will not be realise

d on a net basi

s. Therefore, deferred tax assets and li

abilities are recog

nised on

an individual entity

basis and are not o

ffset on a Group or jurisd

ictional basi

169

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Financial i

nstrumen

ts and risk man

agement

Risk exposures

The Group is expo

sed to various financial risk

s arising in the normal course o

f business. Its financial risk

exposures are predominantly

related to the cred

itworthiness of cou

nterparties and risks rel

ating to changes in intere

st rates and foreign cu

rrency

exchange rates. The

Group is exposed

to external economic risk associated

with the continuing impacts from the Covid-19 pan

demic which has severe

impacted the busi

ness and operations o

f the Group during the year ended 31 Dece

mber 2021 and 31 December 2020 (note 1).

The Group uses finan

cial instruments througho

ut its business: lo

ans and borrowings and

cash and cash equivalents are used to

finance the Group

’s operations; trade an

d other receivable

s, trade

d other payable

s and accruals arise directly from op

erations; and

derivatives are used

to manage interest rate risks and to

achieve a desired p

rofile of bo

rrowings. The Gr

oup uses a net in

vestment hedge

with Sterling de

nominated borrowings to h

edge the foreign exchan

ge risk from investments in ce

rtain UK ope

rations. The Group

does not

trade in financial

instruments.

The followin

g tables show the carrying amo

unt of Group financial assets and liabil

ities including their values in

the fair value hierarchy fo

the year ende

d 31 December 2021. The tables do

not include fair val

ue information for financi

al assets and financial

liabilities not

measured at fair value i

f the carrying amoun

t is a reasonable approximation o

f fair value. A fair value d

isclosure for lease li

abilities is not

required.

Financial asset

Total

measured at

carrying

fair value

amortised cost

amount

Level 1

Level 2

Level 3

Total

202

2021

€’000

Financial assets

Derivat

ives (note 22)-

hedging instr

uments

832

Trade and ot

her

receivab

les excluding

prepayments

(note 15)

2,012

Cash at bank a

nd in hand

(note 17)

41,112

112

832

3,124

53,956

Financial li

abilities

Financial li

abilities

Total

measured at

carrying

fair value

amortised cost

amount

Level 1

Level 2

Level 3

Total

2021

€’000

Financial li

abilities

Bank loan

s (note 21)

(31

3,533)

(31

3,533)

(31

3,533)

(31

3,533)

Trade and othe

r payables

and accrual

s (note

)

(45,327)

5,327)

Derivat

ives (note 22)-

hedging instr

uments

(1,029)

(1,02

58,860

)

59,889

)

Financial St

atements

170

Notes to the consolidated

financial statements

(continued)

24 Financial i

nstruments

and risk man

agement

(

continued

)

The followin

g tables show the carrying amo

unt of Group financial assets and

liabili

ties including their values in the fai

r va

lue hierarchy for

the year ende

d 31 December 20

. The tables do

not include fair val

ue information for financi

al assets and financial liabilities not

measured at fair value i

f the carrying

amount is a reasonabl

e approximation of fair value. A fair value disclosure for le

ase liabilities is n

required.

Financial asset

Total

measured at

carrying

fair value

at amortised cost

amount

Level 1

Level 2

Level 3

Total

2020

€’000

Financial asset

Trade and ot

her receiv

ables

excluding pr

epayments

(note 15)

7,860

Cash at bank a

nd in hand

(note 17)

50,197

58,057

Financial li

abilities

Financial li

abilities

Total

measured at

carrying

fair value

amortised cost

amount

Level 1

Level 2

Level 3

Total

2020

€’000

Financial li

abilities

Bank loan

s (note 21)

(314,143)

Trade payabl

es and accr

uals

(note

)

(25,527)

Derivat

ives (note 22)-

hedging instr

uments

(9,042)

(339,670)

(348,712)

Fair value hierarchy

The Group measures the fair val

ue of financi

al instruments based o

n the degree to which i

nputs to the fair value measurements are

observable an

d the significance of the in

puts to the fair value

measurements. Financial instruments are ca

tegori

sed by the typ

e of

valuation metho

d used. The valuation metho

ds are as follows:



Level 1: Quoted pri

ces (unadjusted) in active markets for identical

assets or liab

ilities.



Level 2: Inputs othe

r than quoted prices includ

ed in Level 1 that are observable for the

financial in

strument, either directly (

i.e.

as prices) or indire

ctly (i.e. derived from prices).



Level

Inputs for the financi

al instrument that are not based o

n observable market data (uno

bservable inputs).

The Group’s poli

cy is to recognise any transfers between

levels of the

fair value hie

rarchy as of the end of the repo

rting pe

od during

which the transfer occurred

. During the year en

ded 31 December 2021, there were no reclassificatio

ns of financial

instruments and no

transfers between l

evels of the fair value

hierarchy used in measu

ring the fair value o

f financial instruments.

Estimation of fai

r values

The principal

methods and assumptions used

in estimating the

fair values of financial assets and

liabilities are explaine

d hereafter.

Cash at bank and in hand

For cash at bank and in h

and, the carrying value

is deemed to reflect a reason

able approxi

mation of fair value.

171

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

24 Financial instr

uments and r

isk manageme

(

continued

)

Derivatives

Discounted cash flow an

alyses have bee

n used to determine

the fair value of the in

terest rate swaps

, taking i

nto account current market

inputs and rates (Level

2).

Receivables/payables

For the receivables an

d payables with a remainin

g term of less than one year o

r on demand balances, the carrying value

net of impairment

provision, where ap

propriate, is a reasonable

approximation of fair value. The

non-current receivables and payables carrying val

ue is a

reasonable ap

proximation of fair value.

Bank loans

For bank loans, the fai

r value was calculated

based on the presen

t value of the expected

future principal and interest cash flows discounted

at interest rates effective

at the reporting d

ate. The carrying value of floating rate intere

st-bearing loans and borrowin

gs is considered to

be a reasonable

approximation of fair value

. There is no di

fference between margin

s available in the marke

t at year end and the margins

that the Group was paying

at the year en

Credit risk

Exposure to credit ris

Credit risk is the risk o

f financial loss to the Group

arising from granting

credit to customers and

from investing cash and

cash equivalents

with banks and fin

ancial institutions.

Trade and other receivables

The Group’s exposure to

credit risk is influ

enced mainly by the

individual characteristics of each custome

Other receivables inclu

amounts owed from the g

overnment in

the form of wage subsidi

es totalling

€1.1 million

at 31 December 2021

(2020: €1.3 mil

ion), which

were received i

n January 2022. The Group is also

due

€

8 mill

ion

(2020: €0.7 million)

from a key in

stitutional lan

dlord under a contractual

agreement where the

landlord reimburses the Group

for certain amo

unts spent on capi

tal expenditure in that speci

fic property.

Non-

current receivabl

es include rent deposi

ts of €2.3 million (2020: €2.3 m

illion) owed

by two landlords at the e

nd of the le

ase term. Other

than this, there is no co

ncentration of credit risk o

r dependence

on individual custome

rs due to the large number of custo

mers

Management has a credi

t policy in place and

the exposure to credit risk is monitore

d on an ongoing basis. Outstand

ing customer bal

ances

are regularly mon

itored and reviewed for in

dicators of impairment (evi

dence of finan

cial difficulty of the customer or payme

t default).

The maximum exposure to cred

it risk is rep

resented by the carrying amount of e

ach financial asset (note 15).

The ageing

profile of trade receivable

s at 31 December 2021 is provided in n

ote 15. Management does not expect any

significant lo

sses

from trade receivables that have

not been p

rovided for as shown in note 15, contract assets, accru

inco

me or other recei

vables

The Group has a contractual ag

reement with I-RES whereby I-RES will

purchase a residen

tial development that the Group is devel

oping on

the site of the former Tara

Towers hotel

. The overall sale value of the transaction is

€42.4 millio

(excluding VAT) with costs of

€

million incurred

as at 31 December 2021 (note 14

These co

ntract fulfilmen

t costs are not conside

red financial assets and are n

ot covered

by the credit risk d

isclosures, however, the Group conti

nues to monitor the potenti

al for any future credit risk. There is n

o eviden

ce of such

as at 31 December

202

Cash and cash equivalents

Cash and cash equival

ents comprise cash at bank and

in hand and give rise to credit risk on the amo

unts held with counte

rparties. The

maximum credit risk is represen

ted by th

e carrying value

at the reporting date. The Gro

up’s policy for i

nvesting cash is to l

imit risk of

principal loss and to

ensure the ultimate recovery o

f invested funds by limiting credit risk.

The Group reviews regu

larly the credit rating o

f each bank and, if necessary, takes action to en

sure there is appropriate cash

and cash

equivalents hel

d with each bank based on the

ir credit rating. During the year end

ed 31 December 2021, cash and cash eq

uivalents were

held in line

with

predetermined limits dependi

ng on the credit rating of the rel

evant bank/financial

institution.

Financial St

atements

172

Notes to the consolidated

financial statements

(continued)

Financial

instrumen

ts and risk manageme

(

continued

)

Credit risk

(continued)

Cash and cash equivalents

(contin

ued)

The carrying amount o

f the following fin

ancial assets represents the

Group’s maximum credi

t exposure. The maximum expo

sure to

credit

risk at year end was as follows:

Carrying

amount

202

2020

€’000

Trade receivable

5,519

2,238

Other receivable

4,177

4,297

Contract assets

1,224

720

Accrued income

1,092

605

Cash at bank and in h

and

41,112

50,197

3,124

58,057

quidity risk

Liquidity risk i

s the risk that the Group will e

ncounter difficulty in

meeting the oblig

ations associated with its financial liabilities. In general,

he Group’s approach to

managing liqu

idity risk is to ensure as far as possib

le that it

will always have sufficient li

quidity

through a

combination o

f cash and cash equivalents, cash flows and u

ndrawn credi

t facilities to:



Fund i

ts ongoing activi

ties;



All

ow it to invest in

hotels that may create value for shareh

olders; and



Maintai

n sufficient financial

resources to mitigate again

st risks and unforeseen eve

nts.

The Group contin

ued to tightly manage cash and

liquidity in 2021. A number of strategie

s, similar to those i

n 2020, were executed to

manage the impact of Covi

d-19 on the Group, includ

ing:



Avai

ling of govern

ment wage subsidy schemes, othe

r non-payroll related grants, and g

overnment assistance in

the form of

commercial rates waivers and wa

rehousing

of tax liabilities, where p

ossible, in Ireland and the UK (note 8);



Cance

llation/postponement o

f all non-essential non-committed capi

tal expenditure; and



Proactive

cost control and

strict working capital manage

ment in all hotels and Central Office.

Furthermore, in Novembe

r 2021, the Group to

ok additional action to

provide enhanced fl

exi

bility and liquidi

ty of its debt faciliti

es. Firstly,

the Group extend

ed the maturity of its debt facili

ties by 12 months. The Grou

p also pushed ou

t the testing of EBITDA

-related covenants by

an addition

al 12 months, to 30 June 2023, to prevent an

y potential breaches in co

venants as a result of the d

elayed recovery from Covi

on trailing

12 month EBITDA. Therefore, the tempo

rary suite of covenan

ts including Net Deb

t to Value covenants and

a minimum liquidi

restriction (whereby e

ither cash, remaining

ailable facilities or a co

mbination of both must not fall be

low €50.0 million), will

remain in

place for an add

itional 12 month period, u

ntil 30 March 2023.

The Group’s debt facil

ities now consist of a €200 mil

lion term loan

facility,

with a maturity date

of 26 October

2025 and a €364.4 milli

on revolving credi

t facility (‘

RCF

’

)

€304.9 mill

ion with a maturity date o

f 26

October 2025 and €59.5 mill

ion with a maturity date o

f 30 September 2023.

In 2020, other liqui

dity strengthening actio

ns were taken such as the cancellation

of the 2019 final dividend orig

inally recommended by th

Board, the sale and le

aseback of Clayton Hote

l Charlemont for €64.2 mill

ion in April 2020 an

d an equity raise in Septembe

r 20

20 raising net

proceeds of €92.0 mil

lion.

The Group monitors i

ts Debt and Lease Service Cover, which is 1.6 tim

es for the year end

ed 31 December

202

1 (31 December 2020: 0.1

times), in order to monito

r gearing and liq

uidity taking into account both ban

k and lease fi

nancing. The Gr

oup have prepared finan

cial

projections and

subjected them to scenario testin

g which also supports o

ngoing liquidity risk assessmen

t and manage

ment. Furt

her detail

of this is disclosed

in note 1 (i) Going concern on pag

es 1

and 115 and in the Viabili

ty Statement on pages

Despite the impact of Covi

d-19, the Group remains in a stron

g liquidity positi

on with

cash and undrawn facilities of €298.

5 millio

n at 31

December 2021

The Group was in

full compl

iance with its covenants as at 31 December 2021

173

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Financial instru

ments and ri

sk manageme

(continued)

Liquidity ris

(continued)

The followin

g are the contractual maturities of the

Group’s financial l

iabilitie

s at 31 December 202

1, including estimated undiscounte

interest payments. In the bel

ow table, bank loans are

repaid in line with their maturity dates, even tho

ugh the Grou

p has the flexibili

ty to

repay and draw the rev

olving credit facility throu

ghout the term o

f the facilit

ies

which would improve its liquidity positi

on. The non-

cancellable

undiscounted lease cashflows payab

le under lease co

ntracts are set out

in note 13. A po

sitive cash flow in the be

low table

indicates the variabl

e rate for interest rate swaps, based on curren

t forward curves, is forecast to be h

igher than fixed rates.

Contractual cashfl

ows

Carrying value

Total

6 months

–

202

or less

months

years

€’000

Bank loans

(313,533)

(354,

267

)

(5,2

)

(5,5

)

(10,

363

)

(

038

)

Trade and other

payables and accrual

(45,

327

)

5,327)

3,408)

(23)

(1,896)

Interest rate swaps

,029)

(1,

004

)

(786)

(249)

,889)

(

400,598

)

9,4

)

(5,8

)

(12,2

)

(333,038)

The equivalent di

sclosure for the p

rior year is as follows:

Contractual cashflows

Carrying value

Total

6 months

–

2020

or less

months

years

€’000

Bank loans

(314,143)

(339,289)

(4,110)

(4,353)

(15,299)

(315,527)

Trade payables and

accruals

(25,527)

(24,781)

(746)

Interest rate swaps

(9,042)

(9,036)

(1,293)

(1,366)

(2,634)

(3,743)

(348,712)

(373,852)

(30,184)

(6,465)

(17,933)

(319,270)

Market risk

Market risk is the risk that chang

es in market prices an

d indices, such as interest rates and foreig

n exchange rates,

will affect the Group’s

income or the val

ue of its holdings of financial

instruments. The objectiv

e of market risk manageme

nt is to manage and control

marke

t risk

exposures within acce

ptable parameters, while opti

mising the return.

(i)

Interest rate risk

The Group is expo

sed to floating interest rates on i

ts debt oblig

ations and uses hed

ging instruments to mitig

ate the risk ass

ociated with

interest rate fluctuation

s. The Group has enter

into interest rate swaps (note 22) which he

dge the variabil

ity in cash flows attributabl

e to

interest rate risk. All such

transactions are carrie

d out within the

guidelines set by the Board. The Group seeks to appl

y hedge accounting

manage volatil

ity in profit or los

Following

a fundamental review and reform of major inte

rest rate bench

marks undertaken gl

obally, the G

roup replaced LIBOR, as its

Sterling variable

interest rate,

SONIA plus an agre

ed credit adjustmen

t spread ‘CAS spread’ from 2 Nov

ember 2021. The transition

was

effective for all Sterling

loans and borrowing

s on their next rollover

date, post 2 Novembe

r 2021. All of the Group

’s borrowings and rel

ated

interest rate swaps had transitio

ned to SONIA by 31 Dece

mber 2021 (n

otes

21,

22). The impact of the IBOR reform is limited

to the Sterling

variable rates appl

icable for the Group

’

s loans and borrowi

ngs and interest rate swaps. At 31

December 2021, the Grou

p had £266.5

llio

n (€

317

.2 million) of loans and b

orrowings that were impacted

by the IBOR reform.

The Group has adop

ted the Phase 2 amendments issue

d by the IASB in Interest Rate Benchmark Reform

–

Phase 2

–

Amendme

nts to IFRS

9, IAS 39, IFRS 7, IFRS 4 and IF

RS 16.

The Group h

availed

of the practical expedi

ent which allows the Grou

p to update the effective

interest rate for the transitio

n to SONIA, without h

aving to modi

fy the loans and

borrowings which could have result

in a modification

gain or lo

ss in profit or loss.

Financial St

atements

174

Notes to the consolidated

financial statements

(continued)

Financial instru

ments and ri

sk managemen

(continued)

Market risk

(continue

(i)

Interest rate risk

(continue

The Group has upd

ated its hedge documentatio

n and hedge relationships

reflect the ch

anges to the hedged item, hed

ging instrument

and hedged risk for the

updated benchmark interest rate. The Group c

ontinue

s to determine the existence of an eco

nomic relationship

between the h

edging instrument and h

edged item based on the reference

interest rates, maturities and

the notio

nal amounts. The Group

assesses whether the deri

vative design

ated in each hedgin

g relationship is expected

to be effective in offsetting

changes in cash flows of

the hedged ite

m using the hypothetical derivative metho

d. The Group ensured that the CAS spread appl

icable on the loans an

d borrowings

match

in so far as possible, the

agreed CAS spread on the i

nterest rate swaps (notes

, 22). Under the Phase

2 amendments, hedge

accounting i

s not discontinued solely because

of the IBOR reform. Therefore, even thoug

h the CAS spreads are slightly di

fferent on the

hedged item and the

hedging instrument as a resu

lt of the IBOR refor

m, it has a marginal

impact and the hedging instruments continue to

effectively hed

ge the interest rate risks on

the hedged ite

ms. As a result, the hedge relationships con

tinue to be fully hedge effective as at

31 December 2021 and hed

ge accounting contin

ues to be applied.

As at 31 December 2021, the in

terest rate swaps cover 100%

of the G

roup’s

term Sterling

denominated

borrowings of £176.5 million for

the period

to 26 October 2024. The extended ye

ar of the term debt, to 26 Octobe

r 2025, is currently unhe

dged.

The interest rate profil

e of the Group's interest-bearing fin

ancial liabilities as repo

rted to the manage

ment of the Group is as follo

Nominal amount

202

2020

€’000

Variable rate instruments

Financial liabili

ties

–

borrowings

7,156

313,768

Effect of interest rate swaps

(210,049)

(196,323)

7,107

117,445

These interest-bearing fi

nancial liabil

ities do not equate to amortise

d cost of loans and

borrowings an

d instead represent the drawn

amounts of loans and

borrowings which are o

wed to external lenders.

The weighted ave

rage interest rate for 2021 was 3.55% (20

: 2.

%),

of which 2.68% (20

: 1.

to margin.

The interest expen

se for the year ended 31 Decembe

r 2021 has been sensitised in the

following tables for a reasonably po

ssible change in

variable intere

st rates.

SONIA plus spread repl

aced LIBOR as the Group’s

Sterling variable

rate for the latter part of 2021. As a re

sult, the

Group has consid

ered what a likely change

in both LIBOR/SONIA could have

been in 2021. The Group has reviewed an

d analysed both the

forward curve statistics for the

remainin

g loan tenor and the historical

interest rates for a period o

f 10 years,

which inclu

des period

s of

interest rate volatil

ity. A similar approach has be

en taken for EURIBOR, which is the variab

le rate on eu

ro-denominated loans and

borrowings.

In relation to the

upward sensitivity, the Group bel

ieves that a reasonable chan

ge in the Sterling variable intere

st rate would be an uplift to

%, being the h

ighest 3 month SONIA rate plus spread, based on

current forward curves

. The Group beli

eves approximately 1% is

reasonable for the

euro variable rate sensi

tivity which is the highest 3 month EURIBO

R rate taking into accou

nt both historical information

and forward curve

for the pe

riods reviewed.

In relation to the

downward sensitivity, the Group has used

an interest rate of zero as there is a floo

r embedded in the

loan facilities, which

prevents the Group

from benefiting from any red

uction in rates sub-zero, however, it results in

an additional i

nterest cost for the Group o

hedged loan

At 31 December 2021, all Sterl

ing term borrowin

gs (£176.5 million) up to 26 October 2024 were h

edged with in

terest rate swaps. The

Group does no

t currently hedge its variabl

e interest rates on its Sterling RCF

There was no e

uro-denominated RCF as at 31 Decembe

2021.

175

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Financial instru

ments and ri

sk managemen

(continued)

Market risk

(continue

(i)

Interest rate risk

(continue

The followin

g table shows the sensitised weighted ave

rage interest rate

where the variabl

e rate is sensitised upwards or d

ownwards.

weighted ave

rage interest rate includ

es the impact of hedging on he

dged portions of the u

nderlying loans. Changes in LIBOR/SONIA rates

have had a mini

mal impact due to the majority o

f Sterling borrowin

gs being hedged (note 22). The impact on profit or loss is shown

hereafter. This analysis assume

s that all oth

er variables, in particu

lar foreign cu

rrency exchange rates, remain con

stant.

2021

actual weighted

average variable

benchmark rate

Sensitised weighted

average

as a result of up

ward

sensitivity

nsitised weighted

average

as a result of

downward sensitivi

Euro variable rate

1.0%

Sterling variable

rate

0.9

1.3%

Cash flow sensi

tivity analysis f

or variable rate instruments

Effect on profit or l

oss

Increase

in rate

Decrease in

rate

€’000

202

(Increase)/decrease in in

terest on loans and b

orrowings

(1,

586

)

Decrease/(increase) in tax credit

(9)

(Increase

crease in loss

(1,

2020

(Increase)/decrease in in

terest on loans and b

orrowings

(1,494)

323

Decrease/(increase) in tax credit

187

(40)

(Increase)/decrease in lo

(1,307)

283

Contracted maturities o

f estimated interest pay

ments from swaps

The followin

g table indicates the periods in which

the cash flows associated with the in

terest rate swaps are expected

to occur and the

carrying amounts of the

related hedging

instruments for the year ended 31 December 202

A po

sitive cash flow in the

below table

indicates the variab

le rate for interest rate swaps, based on curren

t forward curves, is forecast to b

e higher than fixed rates. The below

amounts only refer to

the undiscounted interest forecasted to b

e incurred under the

interest rate swap liabi

lities:

31 December 2021

Carrying

12 months

More than

Amount

Total

or less

1 year

€’000

Interest rate swaps

Liabilities

(1,029)

(1,

004

)

(1,0

)

The table overle

af indicates the periods in whi

ch the cash flows associated with cash flow he

dges are expected to i

mpact profit or loss and

the carrying amoun

ts of the related he

dging instruments for the year ende

d 31 December 2021. A positive cash flow i

n the table overleaf

indicates the variab

le rate for interest rate swaps, based on curren

t forward curves, is forecast to b

e higher than fixed rates. The b

elow

amounts only refer to

the undiscounted inte

rest forecasted to be in

curred under the inte

rest rate swap liabiliti

Financial St

atements

176

Notes to the consolidated

financial statements

(continued)

Financial instru

ments and ri

sk manageme

(

continued

)

Market risk

(continue

(i)

Interest rate risk

(continue

31 December 2021

Carrying

12 months

More than

Amount

Total

less

1 year

€’000

Interest rate swaps

Liabilities

(1,029)

(1,

004

)

(1,0

)

The followin

g table indicates the periods in

which the cash flows associated with the

interest rate swaps are e

xpected to occur and the

carrying amounts of the

related hedging

instruments for the year ended 31 December 20

31 December 20

Carrying

12 months

More than

Amount

Total

or less

1 year

€’000

Interest rate swaps

Liabilities

(9,042)

(9,036)

(2,659)

(6,377)

The followin

g table indicates the periods in

which the cash flows associated with cash flo

w hedges are e

xpected to impact profit or loss and

the carrying amoun

ts of the related he

dging instruments for the year ende

d 31 December 20

December 20

Carrying

12 months

More than

Amount

Total

or less

1 year

€’000

Interest rate swaps

Liabilities

(9,042)

(9,036)

(2,659)

(6,377)

(ii)

Foreign currency ris

As per the Risk Managemen

t section of the an

nual report on page

, the Group is exp

osed to fluctuations in the

Euro/Sterling

exchange rate.

The Group is expo

sed to transactional fore

ign currency ri

sk on trading activities cond

ucted by subsidiarie

in currencies other than their

functional curren

cy and to foreign currency translatio

n risk on the retransl

ation of foreig

n operations to Euro.

The Group’s poli

cy is to manage foreign cu

rrency exposures commerciall

y and through nettin

g of exposures where

possible. The Gro

up’s

principal transactio

nal exposure to

foreign exchange risk relates to

interest costs on its Sterling b

orrowings. This risk is mitigated by the

earnings from UK subsidi

aries which are den

ominated in Sterling

The Group’s gain o

r loss o

n retranslation of the ne

t assets of foreign currency subsid

iaries is taken d

irectly to the translation rese

rve.

The Group limits its exp

osure to foreig

n currency risk by using

Sterling debt to he

dge part of the Group’s inve

stment in UK s

ubsidiaries. The

Group financed ce

rtain acquisitions and de

velopments in the UK by o

btaining funding thro

ugh external borrowings de

nominated i

Sterling. These bo

rrowings amounted

to £266.5 millio

n (€317.

2 million) at 31 December 20

21 (

2020: £266

.5 millio

n (€296.4 million

)) and

are designated

as net investment hedge

s. The net investment hedg

e was fully effective durin

g the year.

177

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Financial instru

ments and risk m

anagemen

(

continued

)

Market risk

(continue

(ii)

Foreign currency ris

(continued)

This enables g

ains and losses arising o

n retranslation o

f those foreign currency borrowi

ngs to be recogni

sed in Other Comprehensive

Income, providi

ng a partial offset in reserves ag

ainst the gains an

d losses arising on translation of the ne

t assets of those UK operations.

Sensitivity analysis on tran

sactional

risk

The Group

performed a sensi

tivity analysis o

n the impact on the

Group’s loss after tax and equ

ity

had foreign

exchange (

‘fx’

) rates been

different. The Group revie

wed the historical averag

e monthly EUR:GBP fx rates over a period o

f 15 years which incorp

orates both periods

of economic g

rowth and economic recessio

The Group have also reviewed the

foreign exchange

forwards curve for the loan

tenor. Based

on this data, the hi

ghest and lowest average EUR:GBP fx rates have been

used for the pu

rposes of the sensitivities, respectively, 0.92 and

0.71.

Capital management

The Group’s poli

cy is to maintain a strong capi

tal base so as to maintain

investor, creditor an

d market confidence and

to sus

tain future

development of the

business. Manageme

nt monitors the return o

n capital to ordinary sh

areholders.

The Board of Directors seeks to mai

ntain a bal

ance between the high

er returns that might be possibl

e with higher leve

ls of bor

rowings and

the advantages and

security afforded by a

sound capital position. The

Group’s target is

typically to ach

ieve a pre-tax leveraged return o

equity of 15% on i

nvestments and a rent cover of 1.85 times

year thre

e for leased assets.

Typically, the Group

monitors capital using

a ratio of Net Debt to Adjusted EBITDA after fixed rent which

excludes the e

ffects of IFRS 16,

line with its ban

king covenants. This is calculated base

d on the prior 12 month pe

riod. The Net Debt to Adjusted EBITDA before taking

account of the acco

unting impact of IFRS 16 as at 31 December 2021 is

9.2x (31 December 20

not rele

vant due to lo

sses

Following the

amendment and restatement of th

e facility agre

ement in November 2021, this covenan

t is not required

to be tested until

June 2023

however, it continu

es to be monitored by the Gro

up and serves to set margins on the

Group

’

s loans. The Group monitors Net Deb

t to

Value, which i

s a temporary covenant under the

Group’s loan facil

ity agreement, and is 24% at 31 Decem

ber 2021 (31 December 2

020:

23%). Under the facili

ty agreement, Net Debt to Val

ue must be 55% or

lower. The Group

also monitors Net Debt and Lease Liabili

ties to

Adjusted EBITDA which, at 31

December 2021, is 12.0x (31

December 2020: n

ot relevant du

e to losses).

The Group’s approach to cap

ital managemen

t has ensured that it

continues to maintain a very stron

g financial position and an approp

riate

level of gearing

despite the continuing impacts from the Covid-19 pan

demic. The Group e

ntered the Covid-19 pandemic in 2020 with a

strong balance

sheet, and despite the material i

mpact that Covid-19 had

on the Grou

p’s financial perfo

rmance, the Group remain

s in a

strong positio

n with significant financial h

eadroom. As at 31 December 2021, the Gro

up had prop

erty, plant and eq

uipment of €

3.9

million.

The Group’s asset backing

provided it with the

ability to real

ise funds from the sale and le

aseback of Clayton Hotel

Charlemo

nt in 2020

whilst its level

of gearing ensured

the Group continues to be able to meet its funding co

sts of both interest and rent and retain the supp

ort

of its banking

club and institutional landl

ords.

The Group completed a share placing i

n September 2020, raising

€92.0

million after costs.

The purpose o

f this was to materially strengthen

the Group’s financial

position, provide ad

diti

onal headroom in the eve

nt of a more

prolonged i

mpact from Covid-19 and enable

the commencement of the de

velopment of a hote

l in Shoreditch, London, o

n a site owned by

the Group.

The Board revie

ws the Group’s capital structure on

an ongoing

basis

including as part of the normal strategic and financial

planning proce

sses. It ensures that it is appropriate fo

r the hotel industry given

its exposure to de

mand shocks and the normal eco

nomic

cycles.

Loss

Equity

Strengthening

Weakening

Strengthening

Weakening

of Euro

€’000

Decrease/(increase) on inte

rest costs on Sterling loan

741

(2,

373

)

741

(2,373)

Impact

tax credit

(

)

228

(

)

228

Decrease/(increase) in loss

(Decrease)/increase in equity

670

(2,1

)

(2,14

Financial St

atements

178

Notes to the consolidated

financial statements

(continued)

25 Commitments

Section 357 Companies Ac

t 2014

Dalata Hotel Group p

lc, as the parent compan

y of the Group and

for the purposes o

f filing exemptions referred to i

n Section 357 of the

Companies Act 2014, has ente

red into gu

arantees in relation to the

liabilities of the Republic of Ireland registere

d subsidiary compan

ies

which are listed b

elow:

- Suvanne Management Limi

ted

- Candlevale Limite

- Carasco Management Limited

- DHG Arden Limited

- Heartside Limited

- Merzolt Limited

- Palaceglen Limite

- Pondglen Limi

ted

- Songdale Limited

- Bayvan Limited

- Amelin Commercial Limite

- Lintal Commercial Limited

- DHG Burlington Road Limite

- Pillo Hotel

s Limited

- Dalata Support Services Li

mited

- Loadbur Limited

- Bernara Commercial Limite

- DHG Cordin Limited

- Adelka Limited

- Leevlan Limited

- DS Charlemont Limited

- Fonteyn Property Ho

ldings Limited

- DHG Barrington Limite

- DHG Dalton Limited

- Fonteyn Property Ho

ldings No. 2 Limited

- DHG Glover Limited

- DHG Eden Limited

- DHG Harton Limited

- Galsay Limited

- DHG Fleming Limited

- DHG Indigo Limited

Capital commitments

The Group has the fol

lowing commitments for future cap

ital expendi

ture under its co

ntractual arrangements.

202

2020

€’000

Contracted but not pro

vided for

37,783

30,608

This relates primarily to the

development o

f the new build ho

tel development of Maldro

n Merrion Road and the residential development

(comprising 69 reside

ntial units) on the site o

f the former Tara Towers

hotel (note 14

)

of €9.5 million an

d the construction of a ne

w hotel in

Shoreditch, Londo

n (€24.1 million)

which are contractually c

ommitted. It also incl

udes committed capi

tal expenditure at othe

r hotels in the

Group.

The Group has further commitmen

ts in relatio

n to fixtures, fittings and equi

pment in some of its leased hote

ls. Under certain lease

agreements, the Group

has committed to

spending a percen

tage of turnover on cap

ital expenditure in respect of fixtures, fittings and

equipment i

n the leased hotels over the life of the

lease. The Group h

as estimated this commitment

be €5

0.0 milli

on (31 December

2020

: €5

1.2 million) spread o

ver the life o

f the various leases with the majori

ty ranging in

length from 20 years to 34 years

The turnover

figures used in

this estimate are based on

2019 revenues which

reflects a more normal year of trading.

26 Related party

transaction

Under IAS 24

Related Party

Disclosures

, the Group has related

party relationshi

ps with shareholders and Directors of the Co

mpany.

Remuneration of key managemen

Key management is d

efined as the Directors of the Comp

any and doe

s not extend to any other members of the

Executive M

anagement

Team. The compensation o

f key managemen

t personnel is set out i

n the Remuneration Committee rep

ort

on pages 81 to

. In addition,

the share-based paymen

ts expense for key manag

ement in 2021 was

€0.

5 million (20

20:

€

0.7 mill

ion).

There are no othe

r related party transactions req

uiring disclosure

in accordance with IAS 24 in these consolidated

financial statements.

27 Subsequent ev

ents

In February

2022,

the Group

comme

nced

a new

operating

lease

with Art-Invest Real

Estate

of Hotel

Nikk

Düsse

ldorf, Germany

The

hotel

-opened

under

the

Group’s

new

management from 15

February 2022

. This hotel represents

the Group’s

first

hotel

Continental Europe

and is in li

ne with the Gr

oup's ambition to establish a

presence in large commercially attractive E

uropean cities.

The lease term

is 20 years,

with two 5 year tenant extensi

on options. The rent, with a guarantee

d minimum, is determined b

y the revenue performance

of the hotel.

179

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

27 Subsequent ev

ents

(continued)

January

202

the

Group

opened

its

new

Clayton

Hotel

Manchester

City Centre,

which it

leasing

year

lease.

February

2022,

the Group also op

ened its new Maldron Hote

l Manchester City Centre, which it is leasing on a 35 ye

ar lease.

There

were

no othe

subse

quent events

which would

require

adjustment

or a discl

osure

thereon

in these

onsolidated

inancial

statements.

Subsidiary un

dertaking

A list of all subsid

iary undertakings at 31 December 2021 is set out belo

Country of

Ownership

Subsidiary undertaking

Incorporation

Activity

Direct

Indirect

DHG Glover Limited

Ireland

Holding compan

100%

DHG Fleming Limited

Ireland

Financing co

mpany

100%

DHG Harton Limited

Ireland

Holding compan

100%

Cenan BV

Netherlands

Financing co

mpany

100%

DHGL Limited

Ireland

Holding compan

100%

Dalata Limited

Ireland

Holding compan

100%

Hanford Commercial Limited

Ireland

Hotel and cateri

100%

Anora Commercial Limited

Ireland

Hotel and cateri

100%

Ogwell Limited

Ireland

Hotel and cateri

100%

Caruso Limited

Ireland

Hotel and cateri

100%

CI Hotels Limited

Ireland

Hotel and cateri

100%

Tulane Business Manage

ment Limited

Ireland

Hotel and cateri

100%

Dalata Support Services Limited

Ireland

Hotel manageme

100%

Fonteyn Property Ho

ldings Limited

Ireland

Hotel manageme

100%

Fonteyn Property Ho

ldings No. 2 Limited

Ireland

Asset management

100%

Suvanne Managemen

t Limited

Ireland

Hotel and cateri

100%

Carasco Management Limited

Ireland

Hotel and cateri

100%

Amelin Commercial Limited

Ireland

Hotel and cateri

100%

Lintal Commercial Limited

Ireland

Hotel and cateri

100%

Bernara Commercial Limi

ted

Ireland

Property investment

100%

Pillo Hote

ls Limited

Ireland

Dormant company

100%

Loadbur Limited

Ireland

Property holdi

company

100%

Heartside Limited

Ireland

Hotel and cateri

100%

Pondglen

Limited

Ireland

Hotel and cateri

100%

Candlevale Limi

ted

Ireland

Hotel and cateri

100%

Songdale Limite

Ireland

Hotel and cateri

100%

Palaceglen Limi

ted

Ireland

Hotel and cateri

100%

Adelka Limited

Ireland

Property holdi

company

100%

Bayvan Limited

Ireland

Property holdi

company

100%

Leevlan Limited

Ireland

Hotel and cateri

100%

DHG Arden Limited

Ireland

Hotel and cateri

100%

DHG Barrington Limite

Ireland

Hotel and cateri

100%

DHG Cordin Limited

Ireland

Property holdi

company

100%

DS Charlemont Limited

Ireland

Hotel and cateri

100%

Galsay Limited

Ireland

Hotel and cateri

100%

Merzolt Limited

Ireland

Hotel and cateri

100%

DHG Burlington Road Limi

ted

Ireland

Hotel and cateri

100%

DT Sussex Road Operations Limite

(In Liquidation)

Ireland

Dormant company

100%

DHG Eden Limited

Ireland

Hotel and cateri

100%

DHG Dalton Limited

Ireland

Property holdi

company

100%

Williamsberg

Property Limited

Ireland

Property holdi

company

100%

Oak Lodge Manag

ement Company Limited by Guarantee

Ireland

Management company

100%

DHG Indigo Limited

Ireland

Holding compan

100%

The registered address

of these companies is 4th Floor, Bur

ton Court, Burton Hal

l Drive, Sandyford, Dublin 1

The registered address

of this company is Van Heuve

n Goedhartlaan 935A, 1

181 LD Amstelveen, The Nether

lands.

Financial St

atements

180

Notes to the consolidated

financial statements

(continued)

28 Subsidiary un

dertakings

(continued)

Country of

Ownership

Subsidiary undertaking

Incorporation

Activity

Direct

Indirect

DHG Belfast Limited

N Ireland

Hotel and cateri

100%

DHG Derry Limited

N Ireland

Hotel and cateri

100%

DHG Derry Commercial Limited

N Ireland

Property holdi

ng company

100%

DHG Brunswick Limited

N Ireland

Hotel and cateri

100%

Dalata UK Limited

Holding compan

100%

Dalata Cardiff Limited

Hotel and cateri

100%

Trackdale Limited

Hotel and cateri

100%

Islandvale Limited

Hotel and cateri

100%

Crescentbrook Limite

Hotel and cateri

100%

Hallowridg

e Limited

Hotel and cateri

100%

Rush (Central) Limited

Property holdi

ng company

100%

Hotel La Tour Birming

ham Limited

Hotel and cateri

100%

SRD (Trading) Limited

Hotel and cateri

100%

SRD (Management) Limited

Hotel and cateri

100%

Hintergard Limited

Jersey

Property holdi

ng company

100%

Dalata Deutschland Hol

ding GmbH

Germany

Holding compan

100%

Dalata Deutschland Hote

lbetriebs GmbH

Germany

Dormant company

100%

The registered address

of these companie

s is Butcher Street, Londonderry

, County De

rry BT48 6HL,

The registered address

of these companie

s is St Mary Street, Cardiff, W

ales, CF10 1GD,

The registered address

of this company is

12 Castle Street, St Helier J

ersey, JE2 3RT.

The registered address

of this company is

Thurn-

und

Taxis-Platz 6, 60313 Fran

kfurt am Main, Germany

During the year en

ded 31 December 2021, following

a Group internal

restructure, the following e

ntities were merged i

nto

their parent

entity, DHGL Limited, - Dalata Man

agement Services Limite

d, Cavenford DAC, Vizmol Limi

ted, Sparrowdale

Limited and Swintron

Limited.

These entities were

holding entities, with the exce

ption of Dalata Ma

nagement Service

s Limited, which was a managemen

t compan

Earnings per s

hare

Basic earnings per share

is computed by d

ividing the loss/profit for the year availab

le to ordinary shareholde

rs by the weighted ave

rage

number of ordin

ary shares outstanding

during the year. Diluted e

arnings per share is compute

d by dividing the

ss/

profit for the year

available to o

rdinary shareholders by the wei

ghted average nu

mber of ordinary shares outstandi

ng and, when dil

utive, adjusted

for the

effect of all poten

tially dilutive

shares. The following table sets out the

computation for b

asic and diluted loss per share for the years ended

31 December 2021 and 31 Decemb

er 20

202

2020

Loss

attributable to shareho

lders of the parent (€’000) –

basic and di

luted

(6,329)

(100,678)

Adjusted loss

attributabl

e to sharehold

ers of the parent (€’000) –

basic and dilu

ted

(

14,290

)

(53,864)

Loss per share

–

Basic

(

2.8

) cents

(50.9) cents

Loss per share

–

Diluted

(

2.8

) cents

(50.9) cents

Adjusted loss per share

–

Basic

(6.4) cents

(27.2) cents

Adjusted loss per share

–

Diluted

(6.4) cents

(27.2) cents

Weighted

average shares outstanding

–

Basic

222,831,030

197,751,585

Weighted

average shares outstanding

–

Diluted

222,831,030

197,751,585

There is no di

fference between

basic and diluted loss pe

r share for the

year ended

31 December 2021 and 31 December 2020

Potential

ordinary shares are onl

y treated as diluti

ve if their dilution resul

ts in a decreased earning

s per share or increased loss per share. There have

been no adjustments made to

the number of wei

ghted average shares ou

tstanding in cal

culating adjusted basic or adju

sted dilut

earnings per share i

n 2021 and 2020.

181

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Maldron Hotel

South Mall

Cork

Notes to the consolidated

financial statements

(continued)

Earnings per s

hare

(continued)

Adjusted earnin

gs per share (basic and d

iluted) is presented as an al

ternative performance measure to sho

w the underl

ying perf

ormance

of the Group exclu

ding the tax adjusted effects of items consid

ered by manage

ment to not reflect normal trading activitie

s or distort

comparability ei

ther year on year or with other similar bu

sinesses (note 2).

2020

Reconciliation to adjus

ted loss for the year

€’000

Loss before tax

(11,436)

(111,461)

Finance costs

32,878

37,953

Profit/(loss) before tax and finan

ce costs

21,442

(73,508)

Adjusting items (note 2)

Net property revalu

ation movements through p

rofit or loss

(6,790)

30,836

Impairment of good

will

3,226

Net reversal

previous impairmen

t charges/ (impairment charges) of ri

ght-

-use

assets

(39)

7,541

Net reversal

previous impairmen

t charges/ (impairment charges) of fixture

s, fittings

and equipment

(120)

1,015

Loss on sale and l

easeback

1,673

Remeasurement gain o

n right-

-use assets

(

277

)

Hotel pre-openin

g expenses

1,927

Adjusted profit/(loss

) before tax and finance costs

16,143

(29,136)

Finance costs

(32,878)

(37,953)

Adjusting items in fi

nance costs

Modification (gain)/l

oss on amended debt facili

ty (note 5)

(2,704)

4,272

Adjusted loss befor

e tax

(19,439)

(62,817)

Tax credit

5,107

10,783

Adjusting items in tax credit

Tax adjustment for adjusting

items

(1,830)

Adjusted loss f

or the year

(14,

290

)

(53,864)

Approval of

the financial s

tatements

The financial statements were ap

proved

by the Directors on 28 February

202

Financial St

atements

182

Company

Financial

Statements

For the year ended

31 December 2021

183

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Company statement of financial position

at 31 December 2021

Note

202

2020

€’000

Assets

Non-current assets

Investment in subsid

iaries

866

,427

864,729

Total non-current assets

866,427

864,729

Current assets

Trade and other rece

ivables

120

Amounts owed by subsi

diaries

4,348

3,988

Cash and cash equival

ents

207

Total current assets

4,407

4,315

Total assets

870,834

869,044

Equity

Share capital

2,229

2,227

Share premium

504,895

504,735

Share-based payment reserve

3,085

3,419

Merger reserve

91,601

Retained earnin

260,922

Total equity

862,904

Current liabili

ties

Trade and other payab

les

2,124

1,603

Amounts owed to sub

sidiaries

4,760

4,537

Total current liabi

lities

6,140

Total liabiliti

6,140

Total equity and liabi

lities

870,8

869,044

On behalf of the Bo

ard:

John Hennessy

Chair

Dermot Crowley

Director

Financial St

atements

184

Company statement of changes in equity

for the year ende

d 31 December 2021

Attributable to equity holders o

f the Company

Share-based

payment

Merger

Retained

capital

premium

reserve

earnings

Total

€’000

At 1 January 2021

2,227

504,735

3,419

91,601

0,922

2,904

Comprehensive income:

Loss for the year

(1,2

)

(1,2

)

Total comprehensive loss f

or the year

(1,2

)

(1,2

)

Transactions with o

wners of the Company:

Equity-settled share-based payme

nts

2,159

Vesting of share awards and o

ptions (note 8)

160

(2,493)

2,493

162

Total transactions wi

th owners of the Company

160

(334)

2,493

2,321

At 31 December 2021

2,229

504

895

3,085

91,601

262,1

863,9

At 1 January 20

1,851

504,488

4,900

259,682

770,921

Comprehensive income:

Loss for the year

(2,521)

Total comprehensive loss f

or the year

(2,

521

)

(2,521)

Transactions with o

wners of the Company:

Equity-settled share-based payme

nts

2,280

Vesting of share awards and o

ptions (note 8)

247

(3,7

)

3,7

253

Equity share placin

g issuance

370

93,980

94,350

Costs of share placing

(2,379)

Total transactions wi

th owners of the Company

376

247

(1,481)

91,601

3,761

94,504

At 31 December 20

2,227

504,735

3,419

91,601

0,922

2,904

185

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Company statement of cash flows

for the year ende

d 31 December 2021

202

2020

€’000

Cash flows f

rom operating activities

Loss for the year

(1,2

)

(2,521)

Adjustments for:

Dividends rece

ived from subsidiary unde

rtakings

(33)

Finance costs

107

991

Foreign exchan

ge loss on borrowings

Share-based payment expen

461

661

(698)

(828)

Increase in trade and o

ther payables

521

444

Decrease/(increase) in trade and

other receivab

les

(71)

Net cash used in operating a

ctivities

(102)

(455)

Cash flows f

rom investing activities

Cash movements on amou

nts due from subsidi

aries

(245)

736

Dividends rece

ived

Net cash (used

from investing activi

ties

(245)

769

Cash flows f

rom financing activities

Interest and finance co

sts paid

Proceeds from vesting of share aw

ards and optio

162

253

Purchase of shares in subsid

iary undertakin

(92,467)

Proceeds from issue of share cap

ital, net of expe

nses

91,971

Net cash from/(used) in financi

ng activities

162

(199)

Net (decrease

increase in cash and cash equi

valents

(185)

115

Cash and cash equivalents at

the beginning of

the year

207

167

Effect of movements in e

xchange rates

(

)

(75)

Cash and cash equivalents at

the end of the year

207

Financial St

atements

186

Notes to the Company financial statemen

forming part of the Compan

y financial statements

1 Significant acco

unting pol

icies

The individual fi

nancial statements of the Co

mpany have been pre

pared in accordance with

IFRS as adopted by the EU, and as applied in

accordance with the Co

mpanies Act 20

14.

Significant accou

nting policies specifically a

pplicable to the

se individual Company financial

statements and which are no

t re

flected within

the accountin

g policies for the Group co

nsolidated financi

al statements are detailed be

low.

(i)

Investments in subsidiari

Investments in subsidi

aries are accounted

for in these individual

Company financial statements on the

basis of the direct equity interest,

rather than on the b

asis of the reported results and n

et assets of investees. Inve

stments in subsidiaries are carried at cost less impairment.

Share-based payments in respe

ct of employee

s in subsidiaries are accou

nted for as an increase i

n the cost of investments in sub

sidiaries.

On 31 December 2021, the ma

rket capitalisation

of the Company

(€829.0 millio

was lower

than the Co

mpany’s

net assets, which

principall

y comprise its investments in subsidiarie

s (market capitalisation i

s calculated by multiplying

the share price on that d

ate by the

number of shares in i

ssue). This is a potenti

al indicator of impairment and con

sequently, investments in

subsidiaries were assesse

d for

potential i

mpairment at 31 December 2021

Market capitalisatio

n can be temporarily i

nfluenced by a number of different marke

t factors

and uncertainti

es, most evidently the i

mpact of Cov

-19 in 2020 and

202

1 and more specifically, the tig

htening of governmen

t restrictions

during the ye

ar ended 31 December 2021 as a result of the e

mergence of the

Omicron variant. In addition, share prices reflect a di

scount

due to lack of control

rights.

For the purposes o

f the consolidated financial

statements, each subsidiary hotel op

erating unit is con

sidered a CGU as it is the smallest

identifiabl

e group of assets that generates cash inflo

ws that are largely in

dependent of the

cash inflows from other

assets or groups of

assets. Therefore, impai

rment tests are carried ou

t at a hotel operating u

nit level and an impairment recog

nised if required. Thi

s ensures

the net assets of the Group

on consolidatio

n are not in excess of their recoverable

amount. The

value in use (‘VIU’)

cashflow projection

include the impact o

f Covid-19. Please see note 10 o

f the consolidated financi

al statements for further details.

The net assets of the Group o

€

957.4 million

(20

€932.8 million

) already in

clude any required impairment charges in

relation to the

carrying value o

f the assets in subsidiaries. The Company con

cluded that the net assets of the Group, whi

ch are a reasonable e

stimate of

the recoverable

amount of the investments in subsid

iaries, are significantly in exce

ss of the carrying valu

e of its investments

subsidiaries

(€86

6.4 million

). Note 10 of the consolidated

financial statements include

a sensitivity as to what impact a ch

ange in fore

casts at 31

December 2021 would h

ave had on the ne

t assets of the Group at that date. No addi

tional impairment charge

s were required as a resul

t of

the sensitivity, and

therefore, the carrying val

ue of the investment in

subsidiaries remains significan

tly less than the net assets of the

Group. As a result of the ab

ove, the Company concl

uded that the carrying val

ue of its investments in subsidiarie

s was not impaired as at 31

December 2021

(ii)

Intra-group guarantees

Where the Compan

y enters into financial

guarantee contracts to guarantee

the indebtedne

ss of companies within the Group, the Company

considers these to

be insurance arrangeme

nts and accounts for them as such. The

Company treats the guarante

e contract as a contingent

liability until

such time as it becomes probabl

e that it will be requi

red to make a payment und

er the guarantee.

2 Investment

s in subsidiaries

202

2020

€’000

Investments in subsidiarie

866,427

864,729

202

2020

Movements in year

€’000

At 1 January

864,729

48,408

Cost of share-based payments in resp

ect of subsidiaries

1,698

1,619

Additions to inve

stments

814,702

At 31 December

866,427

864,729

187

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the Company financial statemen

(continued)

2 Investment

s in subsidiaries

(continue

On 3 April 2020, the Directors of th

e Company, approve

d the capitalisation of a lo

an payable of

€722

.2 milli

on from DHGL Limited, an

indirect subsid

iary of the Company, into share capital of DHGL Limited. As a resu

lt, DHGL Limited

issued o

ne €1 ordinary sh

are for €722.2

million to the Company

as consideration for the repayment o

f this loan. DHGL Limited was released

from all its liabilitie

s in respect of the

loan.

In September 2020, the Company s

ubscribed for share capi

tal in DHG Fleming Limi

ted and DHG Glove

r Limited, direct subsidiarie

s of the

Company. The Company p

urchased 499

shares in DHG Glover Limited f

or €3

0.5

million and

499 shares in DHG Fleming Limited for €6

2.0

million.

Details of subsidiary u

ndertakings are incl

uded in note 28 of the consolidated fin

ancial statements.

3 Trade and oth

er receivables

202

2020

€’000

Prepayments

Value added tax

Corporation tax

120

Amounts owed by sub

sidiaries

202

2020

€’000

Amounts owed by su

bsidiaries

4,348

3,988

4,348

3,988

Amounts owed by su

bsidiaries are non-interest bearing

and are repayable on demand. The amoun

ts owed by subsidiaries h

ave been

reviewed and

no credit losses are expected base

d on the financial

position of subsidiaries. As a resul

t, no expected credit loss provision has

been recognise

Cash and cash equivale

nts

2020

€’000

Cash at bank and in h

and

Trade and other

payables

2021

2020

€’000

Trade payables

Accruals

257

297

Payroll taxes

1,843

1,213

2,124

1,603

Financial St

atements

188

Notes to the Company financial statemen

(continued)

Trade and other

payables

(continued)

Payroll tax liabil

ities of

€

1.7 million (2020:

€

1.1 millio

n) have been deferred unde

r the Debt Warehou

sing scheme as at 31 December 2021

and are payable

during the year ending 31 Dece

mber 2022.

7 Amounts owed

subsidiaries

202

2020

€’000

Amounts owed

bsidiaries

4,760

4,537

4,760

4,537

As at 31 December 2021, the amo

unts due to subsi

diary undertakings are repayabl

e on demand and

include interest-bearing loans of

€

million

(2020: €0.1 mill

ion) with an annual in

terest rate of 2.4% (2020: 1.4%). Other amoun

ts due to grou

p undertakings ar

e non-interest

bearing.

8 Share capit

al, share premium and

merger reserve

At 31 December 2021

Authorised share capi

tal

Number

€’000

Ordinary shares of €0.01 each

10,000,000,000

100,000

Allotted, called-

up and fully paid shares

Number

€’000

Ordinary shares of €0.01 each

222,865,363

2,229

Share premium

504,895

At 31 December 20

Authorised share capi

tal

Number

€’000

Ordinary shares of €0.01 each

10,000,000,000

100,000

Allotted, called-

up and fully paid shares

Number

€’000

Ordinary shares of €0.01 each

222,732,900

2,227

Share premium

504,735

All ordinary sh

ares rank equally with reg

ard to the Company’s residual as

sets

189

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Notes to the Company financial statemen

(continued)

8 Share capit

share premium and

merger reserve

(continued)

During the year en

ded 31 December 2021, the Company issued 93,172

shares o

f €0.01 per share followi

ng the vesting

Awards granted in

relation to the

2018 LTIP, under the 2017 LTIP plan

39,291 shares were

also issued du

ring 2021 under the Share Save schemes granted i

201

The weighted ave

rage share price at the date o

f exercise for optio

ns exercised du

ring the period was €4.53 per share

Merger reserve

In September 2020, the Company c

ompleted a n

on pre-emptive placing of

millio

new ordinary shares of €0.01 each i

n the share

capital of the Compan

y. As part of the Placing, the Boo

krunners J&E Davy and Joh. Berenb

erg, Gossler & Co. KG, Lond

on Branch subscribed

for preference shares in

Oak

Funding Limited, a subsidi

ary of the company, for €92.5 millio

n. The Company issue

d 37,000,000 new ordinary

shares at €2.55 each (€94.4 milli

on) in consid

eration of these preference shares an

d redeemed the

preference shares for €92.5

illio

n net

of costs.

The Company incurred ad

ditional

costs of €0.5 million in rel

ation to the share issuance

. The subsidiary was subsequentl

liquidated. The Compan

y availed of merger rel

ief and as a result €91.6 mil

lion, represen

ting the premium paid on

the issue of

ordinary

shares net of costs, was recog

nised in

the merger reserve.

9 Dividends

During the year en

December 2021, the Company di

d not make any d

ividend paymen

(2020: €Nil)

During the year en

ded 31 December 2021, the Company did not rece

ive dividend income (20

: €

0.03 mil

lion) from its subsidi

ary

undertaking

Attributable profit

or loss of the Comp

any

The loss attributable to shareh

olders dealt with in

the financial statements o

f the Company for the ye

ar ended 31 Decembe

r 2021 w

€

million (20

: €

2.5 milli

on). As permitted by Sectio

n 304 of the Compani

es Act 2014, the statement of pro

fit or loss and oth

comprehensive

income for the Company has not be

en separately p

resented in these finan

cial statements.

11 Company relat

ed party discl

osures

Under IAS 24

Related Party Disclo

sures

, the Company has related part

y relationshi

ps with Directors of the Company a

nd with its subsidi

ary

undertaking

s (notes 26 and 28 of the conso

lidated financial statements).

Remuneration of key manage

ment

Key management is d

efined as the Directors of the Comp

any. The compe

nsation of ke

y management personne

l is set out in the

Remuneration Committee rep

ort on pages 81 to

and n

ote 26 of the consoli

dated financial statements.

Transactions with r

elated parties

During the year en

ded 31 December 2021, the Company charged fees amo

unting to

€

6 million (

2020

: €2.

4 mill

ion) to its subsidi

ary

undertaking

s for services provided during

the year.

12 Commitments

Section 357 Companie

s Act 2014

Dalata Hotel Group pl

c, as the parent Company o

f the Group and for the p

urposes of fili

ng exemptions referred to in Sectio

n 357 of the

Companies Act 2014, has ente

red into gu

arantees in relation to the

liabilities of Republic o

f Ireland registered subsid

iary c

ompanies which

are listed hereafter:

Financial St

atements

190

Notes to the Company financial statemen

(continued)

12 Commitment

(continued)

- Suvanne Management Limi

ted

- Candlevale Limite

- Carasco Management Limited

- DHG Arden Limited

- Heartside Limited

- Merzolt Limited

- Palaceglen Limite

- Pondglen Limi

ted

- Songdale Limited

- Bayvan Limited

- Amelin Commercial Limite

- Lintal Commercial Limited

- DHG Burlington Road Limite

- Pillo Hotel

s Limited

- Dalata Support Services Li

mited

- Loadbur Limited

- Bernara Commercial Limite

- DHG Cordin Limited

- Adelka Limited

- Leevlan Limited

- DS Charlemont Limited

- DHG Dalton Limited

- DHG Barrington Limite

- DHG Glover Limited

- Fonteyn Property Ho

ldings Limited

- DHG Harton Limited

- Fonteyn Property Ho

ldings No. 2 Limited

- DHG Fleming Limited

- DHG Eden Limited

- DHG Indigo Limited

- Galsay Limited

Other guarantees

At 31 December 2021, the Co

mpany has undertake

n to guarantee the obli

gations of its subsidiarie

s in relation to the following:

Property

Subsidiary

Term

Term remaining

(years)

Lease

Clayton Hotel

Burlington Road

DHG Burlington Road Limi

ted

The Gibson Hote

Galsay Limited

31.7

Clayton Hotel

Cardiff

Dalata UK Limited

Maldron Hotel Smithfi

eld

Anora Commercial Limited

Clayton Hotel

Birmingham

Hotel La Tour Birming

ham Limited

Maldron Hotel

Newcastle

Dalata Cardiff Limited

Clayton Hotel

Cambridge

SRD (Trading) Limited

Clayton Hotel

Charlemont

Charlemont Limited

Maldron Hotel

Glasgow City

Dalata Cardiff Limited

34.6

Clayton Hotel

Manchester City Centre

Dalata Cardiff Limited

35.0

Agreement for Lease

Clayton Hotel

Glasgow City

Dalata Cardiff Limited

35.0

Clayton Hotel

Bristol City

Dalata Cardiff Limited

35.0

Maldron Hotel V

ictoria Manchester

Dalata Cardiff Limited

35.0

Maldron Hotel

Manchester City Centre

Dalata Cardiff Limited

35.0

Maldron Hotel

Liverpool City

Dalata Cardiff Limited

35.0

Maldron Hotel

Brighton

Dalata Cardiff Limited

35.0

Maldron Hotel

Croke Park, Dublin

Tulane Business Manage

ment Limited

35.0

The Samuel Hotel, Dubl

Tulane Business Manage

ment Limited

35.0

Loans and borrowi

ngs

DHG Fleming Limited

3.8

13 Subsequent ev

ents

There were no subse

quent events which wou

ld require an adjustment or a di

sclosure thereon

in these Company financial statements.

14 Approval of the

financial stateme

nts

The financial statements were ap

proved

by the Directors on 28 February 2

191

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Supplementary

Financial Inform

ation

Alternative Perfo

rmance Measures

(

‘

APM

’

) and

other defini

tions

The

oup

reports

certain

alternative

performance

measures

(‘APMs’)

that are

not

defined

unde

International

inancial

Report

ing

Standards

(‘IFRS’), which is the fr

amework under which the consolidated

financial

statements are prepared. These are sometimes referred

as ‘non

GAAP’ measures.

The Group

believes that

reporting

these APMs

provides useful

supplemental information which,

when

viewed in

conjunction with

the

IFRS

financial

information,

provides

stakeholders

with

comprehensive

understanding

the

underlying

financial

and

operatin

performance of the Grou

p and its operating seg

ments.

These APMs are primarily u

sed for the following pu

rposes:



to eval

uate underlyin

g results of the operation

s; and



to di

scuss and explain

the Group’s performance with the in

vestment analyst communi

ty.

The APMs can have limitatio

ns as analytical tool

s and should not be considered i

n isolation or as a substitute for an analysis of the results in

the consolidated financial

statements which

are prepared

under IFRS. These

performance measures may not

be calculated

uniformly b

all

companies and the

refore may not be dire

ctly comparable with si

milarly titled measures and disclosures of othe

r companies.

The definitions of and reconciliations for certain APMs are

contained within the consol

idated financial statements.

A summary

definition of

these APMs together with the

reference to the relevant note in the consolidated financial statements where they are reconcil

ed is included

below.

Also inclu

ded below

is in

formation pertaini

ng to

certain APMs

which are

not

mentioned

within

the consol

idated financi

l statemen

but which are referred to

in other sections of thi

s report. This informatio

n includes a definition of the APM, in additio

n to a reconciliation o

the

APM

most

directly

reconci

lable

line

item

presented

the

consolidated

financial

statements.

References

the

consolidated

financial statements are incl

uded as applicab

le.

(i)

Adjusting items

Items

which are

not reflective of

normal tr

ading activities or

distort comparability either year

year or

with

other simila

r businesses. The

adjusting items are disclosed in note 2

and note

to the consolidated financial statements.

Adjusting items with a

cash impact are set out

in APM xi below.

(ii)

Adjusted EBITDA

Adjusted

EBITDA

APM

representing

earnings

before

interest

lease

liabilities,

other

interest

and

finance

costs,

tax,

depreciation of

property,

plant

and

equipment

and

right-

-use

assets

and

amortisation

intangible

assets,

adjusted

show

the

underlying

operating

performance

the

Group

and

excludes

items

which

are

not

reflective

normal

trading

activities

distort

comparability

ther

year

year or with other similar bu

sinesses.

Reconciliation: Note 2

(iii)

EBITDA and Segments EBITDA

EBITDA

APM

representing

earnings

before

interest

lease

liabilities,

other

interest and

inance cost

tax,

depreciation of

property,

plant and eq

uipment and right-

-use assets and amortisation of intangib

le assets.

Reconciliation: Note 2

Segments

EBITDA

represents

‘Adjusted

EBITDA’

before

central

costs,

based

payments

expense

and

other

income

for

each

reportable

segments:

Dublin,

egional

Ireland

and

the

UK.

presented

the

operational

contribution

leased

and

owned

hotels in e

ach geographical location.

Reconciliation: Note 2

(iv)

EBITDAR and Segme

nts EBITDAR

EBITDAR is

APM representing earnings before

lease costs,

interest

on lease

liabilities,

other

interest a

nd finance

costs, tax

, depreciation

of property, plant an

d equipment and right-

-use assets and amortisation o

f intangible assets.

Segments

EBITDAR

represents

Segments

EBITDA

before

variable

lease

costs

each

the

reportable

segments:

Dublin,

Regional

Ireland

and the UK.

Reconciliation: Note 2

(v)

Adjusted (loss)/earnings per share (EPS) (basic and diluted)

Adjusted

EPS

(basic

and

diluted)

presented

alternative

performance

measure

show

the

underlying

performance

Group

excluding

the tax

adjusted effects o

f items

considered

by manag

ement to

not refle

ct normal tradi

ng activities

distort comp

arability eith

year on year or with o

ther similar businesses.

Reconciliation: Note

Financial St

atements

192

Supplementary

Financial

Information

(con

tinued)

Alternative Perfo

rmance Measures

(

‘

APM

’

) a

nd other defini

tions

(continued)

(vi)

Net Debt

Net debt is calcul

ated in line with banki

ng covenants and includes external lo

ans and borrowings drawn an

d owed to the

banking club as at

year end (rather than the amo

rtised co

st of the loans and borrowin

gs), less cash and cash equi

valents.

Reconciliation: Note

(vii)

Net Debt and Lease Liabilities

Net Debt (see definitio

) and Lease Liabilitie

s at year end.

Reconciliation: Note

(viii)

Net Debt to Adjusted EBITDA

excludi

ng the impact of IFRS 16

Net D

ebt (see

definitio

)

divided

by the

‘Adjusted E

BITDA excluding the

impact

of IFRS

16’ (s

ee definition

after

deducting fixed lease

costs (see g

lossary

) for th

e year

ended

31 Decembe

r. This APM

is pre

sented to

show the

Group’s finan

cial leve

rage before the

applicatio

n of

IFRS 16

Leases

Reconciliation: Refer

below

(ix)

Net Debt and Lease Liabiliti

es to Adj

usted EBITDA

Net

Debt

and

Lease

Liabilities

(see

definition

vii

)

divided

by the

‘

Adjusted

EBITDA’

(see

definition

ii)

the

year.

This

APM

presented to

show the Group’s financi

al leverage after incl

uding the accoun

ting estimate of lease liabi

lities followi

ng t

he application o

f IFRS 16.

Reconciliation: Refer

below

(x)

Net

Debt to Value

Net Debt (see defi

nition

) divid

ed by the valuatio

n of property assets

as provided

by external valu

ers at year en

d. This APM is p

resented t

show the gearin

g level of the Group un

der banking covenan

ts.

Reconciliation: Refer

below

Reconciliation of Net Deb

t APMs -

definitions

(vi), (vii), (viii), (ix), (x)

Reference in financial

statements

31 December

2021

€’000

31 December

2020

€’000

Loans and borrowi

ngs

Statement of financial positi

313,533

314,143

Exclude accounti

ng impact of IFRS 9

3,623

(375)

External loans and bo

rrowings drawn

Note 21

317,156

313,768

Less cash and cash equival

ents

Statement of financial po

sition

(41,112)

(50,197)

Net Debt (APM

)

(A)

Note 21

276,044

263,571

Lease Liabilitie

s - current and non-current

Statement of financial po

sition

481,926

399,632

Net Debt and Lease Liabi

lities (APM v

ii)

(B)

Note 21

757,970

663,203

Adjusted EBITDA

(C)

Note 2

63,237

18,692

Adjusted EBITDA excludi

ng the impact of IFRS

(APM xvi)

(D)

29,973

(11,949)

Net Debt to Adjusted EBITDA

excluding the

impact of IFRS 16

(APM v

iii)

(A/D)

9.2x

n/a

Net Debt and Lease Liabi

lities to Adjus

ted

EBITDA (APM

)

(B/C)

2.0

35.5x

Valuation o

f property assets as provide

d by

external valuers

(E)

1,146,274

1,124,256

Net Debt to Value (APM x)

(A/E)

24%

23%

Net

Debt to Adjusted EBITDA excluding the

impact of IFRS 16

is not applicable in

2020 as

Adjusted EBITDA excluding the impact of

IFRS 16

was

negative.

Property assets valued exclu

de assets under co

nstruction and fittin

gs, fixtures and equipme

nt in leased ho

tels.

(xi)

Free Cash Flow

Net cash

from o

perating

activities

less amou

nts paid

for

interest,

finance

costs, refu

rbishment

capital e

xpenditure

fixed lease

payments an

after

adding

back

the

cash

paid

respect

items

that

are

deemed

one

-off

and

thus

not

reflecting nor

mal

trading

activities

distorting

comparability ei

ther year on year or with other similar bu

sinesses (see

definitio

n i). This APM is pre

sented to sho

w the cash gene

rated from

operating activi

ties to fund acquisitions, de

velopment expenditure, rep

ayment of debt and

dividends.

Reconciliation: Refer

below

193

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Supplementary

Financial Inform

ation

(continued)

Alternative Perfo

rmance Measures

(

‘

APM

’

) and

other defini

tions

(continued)

(xii)

Free cash flow per share (FCF

Free Cash Flow

(see definiti

on xi) divided by th

e weighted ave

rage shares outstandi

ng - basic. This AP

M forms the b

asis for the performance

condition measure i

n respect of share awards made after 3 March 20

21.

Historically,

S for

LTIP performance

measure purpo

ses has

been

adjusted

exclude th

e impact

of items

that

are

deemed

one-off

and

thus

not reflecting n

ormal trading activi

ties or distorting

comparability e

ither year on

year or with o

ther simil

ar businesses.

e Group intends to

take

similar

approach

with

FCFS

encourage

the

igorous

pursuit

opportunities,

and

excluding

certain

one-off

items,

drive

the

behaviours we se

ek from the executives and

encourage manageme

nt to invest for the lo

ng-

term interests of shareh

olders.

Reconciliation: Refer

below

(xiii)

Debt and Lease Service Cover

Free Cash Flow (see definition xi) before payment of lease costs, inter

est and finance costs divided by the total amount paid

for lease costs,

interest and finan

ce costs. This APM is prese

nted to show the Grou

p’s ability to mee

t its debt and le

ase co

mmitments.

Reconciliation: Refer

below

Reconciliation of APMs (xi

), (xii), (xiii)

Reference in financial

statements

2021

€’000

2020

€’000

Net cash from operating activiti

Statement of cash flows

90,579

22,804

Other interest and fin

ance costs paid

Statement of cash flows

(15,285)

(12,956)

Refurbishment capital e

xpenditure paid

(4,298)

(9,

Fixed lease payments:

- Interest paid on l

ease liabilitie

Statement of cash flows

(24,409)

(22,405)

- Repayment of lease li

abilities

Statement of cash flows

(8,930)

(5,618)

37,657

(27,926)

Exclude adjusting items

with a cash effect:

Net impact from tax deferrals

from go

vernment Covid-

19 support schemes

Note 8

(12,776)

(13,484)

Pre

-openin

g costs

Note 2

1,927

Debt facility fees

Note

1,202

Free cash inflow/(outflow) (APM x

28,010

(40,779)

Weighted

average shares outstanding

–

basic

Note

222,831,030

197,751,585

Free Cash Flow per share (APM xi

–

cents

A/B

12.

(20.6)

Total lease costs paid

33,458

30,964

Other interest and finan

ce costs paid

Statement of cash flows

15,285

12,956

Total lease costs, intere

st and finance costs pai

48,743

43,920

Free Cash Flow before le

ase and finance

costs

D=A+C

76,753

3,141

Debt and Lease Service

Cover (APM xiii)

D/C

1.6x

0.1x

The Group has deferred VAT and payroll taxes under

government support schemes. T

his non

-recurring initiative was intro

duced by government

Covid-19 sup

port

schemes a

allows

the tem

porary

retention

of an el

ement o

f ta

xes coll

ected

during 202

and 2021

behalf of

x a

uthorities.

The Group deferred

VAT and payro

ll taxes amounting to

€13.

llion

during 2021 (2020: €13

.5 milli

on) which are expected

to be

payable during

2022. This

was

offset

by amounts

totalling €0.

8 million

for UK

VAT

and

payroll

tax liabilities th

at were

def

erred

during 2020

and

aid

2021.

The

impact of these deferr

als have been excluded in the c

alculation of Free Cash Flow to

show cash flows

from trading for the yea

Total lease costs paid compri

ses payments of fixe

d and variable lease costs during the year

The

2020

comparative

has been amended to ex

clude the impact of a

mend and restate facility fe

es paid during th

year for

consistency

with the presentatio

n in 2021. As a result, Free Cash Outflow for 2020 has

creased from

(€41,329k

) to (€40,7

k).

Financial St

atements

194

Supplementary

Financial Inform

ation

(con

tinued)

Alternative Perfo

rmance Measures

(

‘

APM

’

) a

nd other defini

tions

(continued)

(xiv)

Normalised Return on Invested Capital

Adjusted E

BIT

divided by

the

Group’s

average

invested capital.

The

Group

defines invested

capital

total

assets

less

total liabilities at

the

year

end

and

excludes

the

accumulated

revaluation

gains/losses

included

property,

plant

and

equipment,

Net

Debt,

derivative

financial

instruments and

taxatio

n rel

ated b

alances. The

Group

also excl

udes th

impact of

deferred

VAT

and p

ayroll

tax l

iabilitie

s payabl

e at

year end

as these

are qu

asi-debt in

nature and

the

investment in

the

construction of

future assets

or ne

wly opened,

owned

assets which

have

not yet

reached

full

operating

performance. The

Group’s

net

assets

are

adjusted

reflect

the

average

level

acquisition

investmen

t spend

and

the

average leve

l of working capital for the accounti

ng period. The ave

rage invested capital i

s the average of the invested cap

ital for the year.

Adjusted EBIT represen

ts the Group’s

operating loss for the

year restated to remove the i

mpact of adjusting items as define

d in APM (i) and

the impact

adopting IFRS 16 by rep

lacing depreci

ation of right-

-use assets with fixed lease costs and amortisatio

n of lease costs

The Group presents thi

s APM to provide

stakeholders with a more mean

ingful understandi

ng of the underlying

financial and operating

performance of the Grou

p. The Group exclud

es assets which have no

t yet reached full operating

performance and assets un

der

nstruction at year en

d and therefore did

not generate a return to show the u

nderlying pe

rformance of the Group. Due to the significant

impact of Covid-

19 on the

Group’s financial p

erformance, the return was neg

ative for 2020 as the Group i

ncurred losses in

this year.

Reconciliation: Refer

Below

Reconciliation of

APM (xiv)

Reference in financial

statements

2021

€’000

2020

€’000

Operating profit/

(loss)

Statement of comprehensive

income

21,442

(73,508)

Add back:

Total adjusting ite

ms as per the financial statements

Note 2

(5,299)

44,372

Depreciation o

f right-

-use assets

Note 2

19,522

20,663

Less:

Additional

amortisation of intangible assets if IAS 17

still appl

ied

(45)

(44)

Fixed lease costs

(33,264)

(30,641)

Amortisation of lease

costs

(328)

(454)

Adjusted EBIT excluding I

FRS 16

2,028

(39,612)

Net assets at balance

sheets date

Statement of financial po

sition

957,413

932,780

Less revaluation upl

ift in property,

ant and equipment

(239,015)

(224,3

)

Add back Net D

ebt

Note 21

276,044

263,571

Add back net d

eferred tax liability

Statement of financial po

sition

22,735

27,060

Add back current tax li

ability

Statement of financial po

sition

282

Add back net d

erivative liabilities

Statement of financial po

sition

197

9,042

Add back defe

rred VAT and payroll tax liabil

ities

Less assets under con

struction at year end

Note 8

Note 12

26,261

(79,094)

13,484

(61,886)

Less contract fulfilment costs

Statement of financial po

sition

(36,255)

(22,374)

Normalised invested capital

937,420

Average normalised i

nvested capital

932,9

874,702

Normalised

turn

Average

Invested Capital

(APM

xiv)

A/B

0.2%

n/a

cludes the combined net revalua

tion uplift included in property, pla

nt and equipment since the

revaluation policy was adopte

d in 2014 or in

the case

hotel

assets

acquired

after this

date

, since

the

ate of

acquisition. The

carrying

value o

f l

and and

buildings,

evalued at

December

2021,

€1,088.8

millio

(2020:

€1,058.5

million).

value

these

assets

under

the

ost

model

€849.8

million

(2020:

€834.2

million).

Therefore,

the

revaluation

uplift

included

property,

plant

and

equipment

€239.0

million

(2020:

€224.3

million).

Refer

note

the

financial statements.

(xv)

Modified EBIT

For

the

purposes

the

annual

onus

evaluation,

EBIT

modified

remove

the

effect

fluctuations

between

the

annual

and

budgeted

EUR/GBP

exchange

rate

and

other

items

which

are

considered,

the

Remuneration

Committee,

fall

outside

the

framewo

the

budget

target set

for the

year

. Forei

exchange

movements

represent

the d

ifference

on co

nverting

EBITDA from

UK ho

tels a

t ac

tual

foreign

exchange rates during 2021 v

ersus budgeted foreign exchange rates,

after depreciation. The

budgeted EUR/GBP

exchange rate was

0.90 in

2021 (2020: 0.90).

Reconciliation: Refer

below

195

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Supplementary

Financial Inform

ation

(continued)

Alternative Perfo

rmance Measures

(

‘

APM

’

) and

other defini

tions

(continued)

(xv)

Modified EBIT

(continued)

Reconciliation of APM (xv)

Reference in financial

statements

2021

€’000

2020

€’000

Loss before tax

Statement of

comprehensive

income

(11,436)

(111,461)

Interest on lease l

iabilities

Note 2

24,409

22,405

Other interest and fin

ance costs

Note 2

8,469

15,548

Remove impact of adjusting

items

Note 2

(5,299)

44,372

Foreign exchan

ge movements

(621)

(2)

Modified EBIT

–

APM (xv)

15,522

(29,138)

Foreign exchange movements

UK EBITDA - GBP

17,458

2,867

UK EBITDA translated at budge

ted FX rates - Euro

19,398

3,186

UK EBITDA translated at actual FX r

ates - Euro

Note 2

20,662

3,399

Impact of movements in forei

gn exchange

(A)

(1,264)

(213)

Depreciation o

f property, plant and equipme

nt, right-

-use

assets and amortisatio

n on UK assets - GBP

12,413

12,010

Depreciation o

f property, plant and equ

ipment, right-

-use

assets and amortisatio

n on UK assets translated at budg

eted FX

rates - Euro

13,793

13,344

Depreciation o

f property, plant and equi

pment, right-

-use

assets and amortisatio

n on UK assets translated at ac

tual FX

rates - Euro

14,436

13,555

Impact of movements in forei

gn exchange

(B)

643

211

Foreign exchange movements

(A+B)

(621)

(2)

Excluding IFRS 16 numbers

Due to the significant impact from the adop

tion of IFRS 16 on the Group’s consolidated financial statements from 2019 onwards

, additional

APMs were

inclu

ded to

provide

the reade

r with

more in

formation to

help

explai

n the

Group’s und

erlying

operating

performance. The

Group

now

believe

sufficient

period

time

has

passed

since

was

irst

adopted

there

are

number

periods

avai

labl

enable

comparison

performance

following

the

adoption

16.

result,

the

Group

reducing

number

APMs

that

presents

excluding

the imp

act of IFRS 16.

targets for

the

Group’s

exi

sting share-based

payment

schemes

and the

banki

ng facilitie

s agreements

and

covenants unde

r those agreemen

ts continue to b

e calculated e

xcluding the impact of IFRS 16, the Group

contin

ues to present and

reconcile

the following APMs.

(xvi)

Adjusted EBITDA excluding

the impac

t of IFRS 16

Earnings

before

adjusting items,

interest and

finance

costs,

tax, depreci

ation,

amortisation

of intangi

ble

assets

defin

ed above

and restate

remove

the

impact

adopting

IFRS

16,

replacing

IFRS

right

-use

asset

depreciatio

and

lease

liabili

interest

with

lease

costs

calculated under IAS 17.

Reconciliation: Refer

Below

Reconciliation of APM (xvi

)

Reference in financial

statements

2021

€’000

2020

€’000

Operating profit/(loss)

Statement of comprehensive

income

21,442

(73,508)

Add back:

Total adjusting ite

ms as per the financial statemen

Note 2

(5,299)

44,372

Depreciation o

f property, plant and equipmen

Note 2

27,033

26,607

Depreciation o

f right-

-use assets

Note 2

19,522

20,663

Amortisation of intang

ible assets

Note 2

539

558

Less fixed lease costs

(33,264)

(30,641)

Adjusted EBITDA excluding the im

pact of IFRS 16 (APM xvi)

29,973

(11,949)

(xvii)

(Loss)/earnings per

share excludi

ng IFRS 16 (basic) and Adjusted loss pe

r share excludi

ng IFRS 16 (basic)

Basic

(loss)/earning

per

restated to

remove the

mpact

adopt

ing

IFR

16,

including

replacing

right

-use-asset

depreciation,

lease

liability

interest,

net

reversal

impairment

charges/(impairment

charges)

ight

-use

asset

and

fixtures,

fittings

and

equipment an

d the remeasurement gain o

n right of-use-assets with the l

ease costs as calculated u

nder IAS 17. This APM forms the basi

s for

the performance con

dition measure in resp

ect of share awards made before 3 March 2021.

Financial St

atements

196

Supplementary

Financial Inform

ation

(con

tinued)

Alternative Perfo

rmance Measures

(

‘

APM

’

) a

nd other defini

tions

(continued)

(xvii)

(Loss)/earnings per share

excluding IFRS 16 (basic

) and Adjusted loss per

share excluding IFRS

(continued)

Historically,

S for

LTIP perfor

mance

measure purpose

s h

as b

een

adjusted to

exclude

items that

are

deemed

one-off

and

thus

not

reflecting

normal trading activi

ties or distorting co

mparability either year on ye

ar or with other similar businesses. The Group wants to e

ncou

rage the

vigorous pursuit of opportunities, and by excl

uding certain one

-off ite

ms, drive the behaviours we

seek from the

executives

and encourage

management

invest

for

the

long-

term

interests

shareholders.

Adjusted

loss

per

excluding

16 i

defined

basic

(loss)/earnings

per share before adjusting

items (see definition i) and r

estated to remove the

impact of ado

ptin

IFRS 16, including replacing IF

RS 16

right-

-use asset depreciation an

d lease liabili

ty interest with lease costs und

er IAS 17.

Reconciliation: Refer

below

Reconciliation of

APM (xvii

)

Reference in financial

statements

2021

€’000

2020

€’000

Loss for the year

Statement of

comprehensive

income

(6,329)

(100,678)

Exclude adjusting i

tems not applicable

under IAS 17

Net reversal of previo

us impairment

charges/(impairment charg

es) of right-

-use assets and

fixtures, fittings and

equipmen

Note 2

(159)

8,556

Remeasurement gain o

f right-

-use asset

Note 2

(277)

Additional

loss on sale and leaseback

Note 12

(5,977)

Depreciation o

f right-

-use assets

Note 2

19,522

20,663

Interest on lease l

iabilities

Note 2

24,409

22,405

Amortisation of lease co

sts under IAS 17

(328)

(454)

Less fixed lease costs

(33,264)

(30,641)

Tax impact of IFRS 16

(2,105)

(3,096)

Profit/(Loss) for

the year excluding the impact of

IFRS 16

(A)

1,469

(89,222)

Remove impact of adjusting

items excludin

g IFRS

Hotel pre-openi

ng expenses

Note 2

1,927

Net

revaluation movements

through profit

loss as

if IAS

still appli

(6,835)

30,792

Impairment of good

will

Note 2

3,226

Modification (gai

n)/loss on amended deb

t facility

Note 5

(2,704)

4,272

Loss on sale and l

easeback of Clayton Ho

tel Charlemont

7,650

Tax impact of adjusting items

275

(544)

Adjusted loss f

or the year excluding the impact of IFR

S 16

(B)

(5,868)

(43,745)

Weighted

average shares outstanding - basic

(C)

Note

222,831,030

197,751,585

Basic

earnings/(loss)

per

excluding

impact

IFRS

(APM xvii)

(A/C)

0.7 cents

(45.1) cents

Adjusted

loss

per

excluding

the

impact

IFRS

basic

(APM x

(B/C)

(

2.6)

cents

(22.1) cents

Right-

-use assets

re not

recognised

under the

previous accoun

ting standard,

IAS 17

Leases. The

refore, there

would have

een n

impairment,

impairment

reversal

right-

-use

assets

remeasurement gain

n r

ight-

-use

ssets.

the

impairment

fixtures,

fittings

and

equipment related to t

he impairment of right-

-use assets, this impair

ment is also excluded.

prior

year,

the

accounting

for

the

loss

the

sale

and

leaseback

Clayton

Hotel

Charlemont

iffers

under

IFRS

mpared

the

evious accou

nting standard, IAS

17. Under IFRS 16, the propert

y is derecognised upo

n sale of the asset

and replaced wit

h a ri

ght-

use asset

following the

leaseback. A

portion of

the

€7.7

million difference

between the

fair va

lue prior to

sale

and

the

sal

es proceeds

was capitalised as

part

of the

righ

-use

asset,

with

the

remaining

balance

corded

profit

loss.

Under

the

accounting

tandard,

the

entire

differen

must be recorded immedi

ately as a lo

ss in profit or loss.

197

Dalata Hot

el Group plc

Annual Report & Acco

unts 2021

Glossary

Revenue per availa

ble room (RevPAR)

Revenue per available

room is

calculated as

total

rooms revenue divided by

the number

available rooms, which

also equiv

alent

to the

occupancy

rate

multiplied

the

average

daily

room

rate

achi

eved.

This

a commonly

used

dustry

metric

which

facilitates

comparison

between compani

es.

Average Room Rate (

ARR) - also Average Daily Rate (ADR)

ARR

calculated

as roo

revenue

divided b

number o

rooms sold

This

is a commonly

used i

ndustry

metric

which

facilitates

comparison betwee

n companies.

‘Like for Like’ occu

pancy, ARR and RevPAR KPI

‘Like

for

Like’

occupan

cy, ARR

and RevPAR

KPIs

include

full

year

performance

all

hotels regardless

of when

acquired.

he Dublin

portfoli

excludes

the Ballsbridge

Hotel as

the hotel

effectively has

not traded

since March

2020. The UK portfoli

o excludes al

l new

hotels which

have

not be

nefited

from a

full 12

months of

trading. Therefore, Mald

ron Ho

tel Glasg

ow City i

s exclud

ed as

the hotel

newly op

ened since

August

2021.

Where

applicable,

the

performance

atistics

disclosed

for

January

and

February

2022

also

exclude

Clayton

Hotel

Manchester

City

Centre

and

Maldron

Hotel Manch

ester

City

Centre

which op

ened

in early 2022

and

Hotel

Nikko,

Dusseldorf

which was

take

over

ebruary

2022. This is a commonly used i

ndustry metric and provide

s an indication of the underlying rev

enue performance.

Segments EBITDAR margi

Segments EBITDAR

margin represents

‘Segments

EBITD

AR’

as a

percentage of

the

total

revenue f

or the

following

Group s

egments: Dublin,

Regional Irel

and and the UK. Also referred to as Ho

tel EBITDAR margin

Effective tax rate

The Group’s tax credit

for the ye

ar divided

by the loss before tax presented in the consoli

dated statement of comprehensive

income.

Fixed lease

costs

Fixed costs incurred b

y the lessee for the

right to use an u

nderlying asset during

the lease term as calculated un

der IAS 17

Leases

Hotel asse

Hotel

assets

represents

the

value

property,

plant

and

equipment

per

the

consolidated

statement

financial

position

December

2021.

Refurbishme

nt capital expenditure

The

oup

typically

allocates

approx

imately

4% of

annual

revenue

refurbishment

capital e

xpenditure

ensure

the

portfolio

remains

fresh

for its

customers and

adheres

to brand stand

ards.

Due

to the

impact of the

Covid-19

pandemic from

March 2020, th

is ratio

did not

apply for

2021 and 2020.

Financial St

atements

198

Advisor and Shareholder Contacts

Advisors

Stockbrokers

Davy

Davy House

49 Dawson Street

Dublin 2

Ireland

Berenberg

60 Threadneedl

e Street

London

EC2R 8HP

United Kingdo

Solicitor

A&L Goodbody

IFSC, North Wall Quay

Dublin 1

Ireland

Auditor

KPMG

1 Stokes Place

St Stephen’s Green

Dublin 2

Ireland

Investor Relations

and PR

FTI Consulting

The Academy

Suites 2A & 2B

42 Pearse Street

Dublin 2

Ireland

Registrar

Computershare Investor

Services (Ireland) Limited

3100 Lake Drive

Citywest Business Campus

Dublin 24

D24 AK82

Ireland

T: 00353 1 447 5566

F: 00353 1 447 5571

webquerie

s@computershare.co.uk

Principal Banks

Ulster Bank Ireland DAC

Ulster Bank Head Office

Central Park

Leopardstown

Dublin

Ireland

Allied Irish Bank pl

Bankcentre

Ballsbridge

Dublin 4

Ireland

Bank of Ireland pl

40 Mespil Road

Dublin 4

Ireland

Barclays Bank Ireland plc

One Molesworth Street

Dublin 2

Ireland

HSBC Bank Plc

1 Grand Canal Square

Grand Canal Harbour

Dublin 2

Ireland

Shareholder

Information

Company Secretary and Registered

Office

Seán McKeon

Dalata Hotel Group p

4th Floor, Burton Court

Burton Hall Drive

Sandyford

Dublin 18

Registered Number

534888

Contact Details

T: 00353 1 206 9400

F: 00353 1 206 9401

Company Website

www.dalatahotelgrou

p.com

Dalata Hotel Gr

oup PL

Central Oﬃce:

4th Floor

, Burt

on Court,

Burton Hall Drive, Sandyf

ord,

Dublin 18, Ireland

+353 (0)1 206 9400

+353 (0)1 206 9401

info@dalatahotelgr

oup.com

dalatahotelgr

oup.com

Dalata Hotel Gr

oup PL

ANNUAL REP

T AND ACCOUNT

S 2021

On the front co

r: a gr

aphic

depiction of the diver

sity and

inclusiveness at Dalata.