The Shannon Airport Group Annual Report and Accounts 2024

Annual Report and Accounts | 2024

RISK AND GOVERNANCE REPORT (CONTINUED)

Operational standards The Group is obliged to meet various operational and quality standards including, but not limited to, those standards set by the Irish Aviation Authority, AirNav Ireland and European Aviation Safety Agency as part of its aerodrome licensing requirements. Strategic Priority Excelling in Operations. Impact Failure to meet any of these standards could result in sanctions, up to and including the withdrawal of the Airport’s operating licence or financial penalties being imposed on the Group. Mitigation ͳ The Group has systems in place to monitor compliance with externally established quality standards. These systems include the capture of data, continuous monitoring and appropriate escalation processes. Sustainability The Group complies with the requirements of Ireland’s Climate Action Plan and is committed to conducting its business with minimal environmental impact. Strategic Priority Excelling in Operations Investing in Property & Infrastructure for Growth Winning Hearts and Minds Empowering our People Impact A breach of these requirements or the impact of climate change could result in serious financial loss or reputational damage to the Group. The Group has invested in structures, processes and resources to meet and monitor compliance with reporting requirements, impact and targets. ͳ Projects ongoing to reduce the Group’s carbon footprint. ͳ Mitigation ͳ The Group actively engages with various bodies and agencies of the State and other stakeholders to address environmental issues associated with conducting business in the aviation and property sectors.

Safety, security and sustainability The Group’s operations are subject to an increasingly stringent range of safety, security and sustainability laws, regulations and standards. Strategic Priority Excelling in Operations Winning Hearts and Minds Impact A breach of any such law or regulation could result in the imposition of material sanctions on the Group and have a material adverse effect on the Group’s business. Mitigation ͳ Staff training in the areas of safety, security and sustainability, as well as strong emphasis on monitoring compliance, form an integral part of the Group’s mitigating strategies. These are designed to prevent a serious breach of statutory or other regulatory obligations. ͳ The Group continues to invest in safety and security installations, systems and resources to meet legal and regulatory requirements to achieve best industry standards across all its business units. ͳ The Group actively engages with various bodies and agencies of the State and other stakeholders to address safety, security and sustainability issues of operating an airport. Information technology systems Effective and secure information technology systems are critical for the efficient management of the business and to support operational activities. Strategic Priority Excelling in Operations Driving Commercial Performance Impact A significant failure of the Group’s information technology systems could result in significant disruption to operations, financial loss or reputational damage to the Group. The Group could also be negatively impacted by cyber-attacks, data breaches or similar incidents involving a significant disclosure, loss or theft of personal data.

PRINCIPAL RISKS AND UNCERTAINTIES (Continued) Funding (Continued) Mitigation ͳ The Group maintains effective relationships with financial institutions. ͳ The Group maintains a bank overdraft to fund its Airport working capital requirements and maintains minimum cash balances across the Group to ensure it can fund its operations and capital needs. ͳ The Group tracks and reports on key initiatives to generate funds e.g. disposal of property, debt raising plans and free cash flows. ͳ The Group operates strong business and financial control systems with regular operational cash flow and cash balance position reporting, early signalling of material deviation from plan and carries out reviews to ensure liquidity is maintained. ͳ The Group engages regularly with its funders in relation to its current funding obligations and any potential issues faced by the business on its repayment capacity and financial covenants. Business continuity The Group’s operations are subject to operational risks and other unforeseen events such as weather events, fire, flooding, mechanical systems failure, technical failures, terrorism, geopolitical events, cyber-attacks and infectious diseases. Disruption to operations could also arise due to internal or third party industrial action. Strategic Priority Excelling in Operations Driving Commercial Performance Impact Disruptions to operational and commercial activities could result in a significant financial and/or reputational impact on the Group and give rise to potential legal liabilities for the Group.

Mitigation ͳ

The Group seeks to eliminate the risk of discontinuity of services by having robust systems and business continuity plans. Where events result in significant disruption to services, the Group activates its business continuity plans in order to minimise the impact of the disruption. ͳ Insurance is in place in relation to certain unforeseen events. ͳ Strong working relationships and protocol in place with various State bodies and agencies to deal with infectious diseases and public health threats to ensure appropriate safety protection measures are in place to meet the Group’s business requirements. Talent management risk The Group is dependent upon the availability, quality, ability and commitment of personnel in order to sustain, develop and grow the business in line with its key objectives. The requirement of the Group to set salary levels with reference to the salary of the CEO may inhibit the recruitment/retention of senior personnel. Strategic Priority Empowering our People Driving Commercial Performance Impact Targets may be at risk through failing to attract, recruit, retain and manage key personnel with appropriate experience and skills. Mitigation ͳ The Group has put in place robust recruitment processes and effective human resource management policies and procedures together with strategic workforce planning to ensure appropriate resources are in place to meet the Group’s business requirements. ͳ Engagement with Senior Posts Remuneration Committee in relation to remuneration arrangements for CEOs of commercial state bodies.