Independent auditor’s report to the members of Dublin Port Company

Report on the audit of the financial statements

Opinion

In our opinion, Dublin Port Company’s financial statements:

give a true and fair view of the Company’s assets, liabilities and financial position as at 31 December 2022 and of its profit and cash flows for the year then ended;
have been properly prepared in accordance with Generally Accepted Accounting Practice in Ireland (accounting standards issued by the Financial Reporting Council of the UK, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” and Irish law); and
have been properly prepared in accordance with the requirements of the Companies Act 2014.

We have audited the financial statements, included within the Annual Report and Financial Statements, which comprise:

the Balance Sheet as at 31 December 2022;
the Profit and Loss Account and Statement of Comprehensive Income for the year then ended;
the Statement of Cash Flows for the year then ended;
the Statement of Changes in Equity for the year then ended;
the Accounting Policies; and
the Notes to the Financial Statements.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (Ireland) (“ISAs (Ireland)”) and applicable law.

Our responsibilities under ISAs (Ireland) are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We remained independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in Ireland, which includes IAASA’s Ethical Standard as applicable to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

Our audit approach

Overview

Overall materiality

€1,925,000
Based on c. 5% of profit before tax and exceptional items.

Performance materiality

€1,443,000

Audit scope

We performed a full scope audit of the Company’s financial statements, based on the materiality levels.

Key audit matters

Appropriateness of key assumptions used to determine the valuation of the gross defined benefit pension scheme liabilities.

The scope of our audit

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements. In particular, we looked at where the Directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. This is not a complete list of all risks identified by our audit.

Key audit matter	How our audit addressed the key audit matter
Appropriateness of key assumptions used to determine the valuation of the gross defined benefit pension scheme liabilities. Refer to “Accounting Policies – Employee Benefits - Post-employment benefits - Defined Benefit Pension Plan”, Note 3 “Critical judgements and estimates in applying the Company’s accounting policies” and Note 31 “Post-Employment Benefits - ii Defined Benefit Schemes”. The Company operates four defined benefit pension schemes. The gross defined benefit pension scheme liabilities as at 31 December 2022 amounted to €170.4 million. The liabilities in respect of these defined benefit schemes are valued on an actuarial basis and are subject to a number of actuarial assumptions which include the discount rate, inflation rate and life expectancy rates. We determined this to be a key audit matter as there is inherent judgement in determining the actuarial assumptions and a modest change in the assumptions could have a significant impact on the calculation of the gross defined benefit pension scheme liabilities which could result in a material change in the amount of the overall surplus for the defined benefit pension schemes.	We obtained an understanding of the processes used to determine the discount rate, inflation rate and life expectancy rates used in calculating the defined benefit pension liabilities. Our audit team assisted by our internal actuarial experts, challenged the appropriateness of the actuarial assumptions used by the Company in calculating the gross defined benefit pension scheme liabilities. This included benchmarking certain assumptions such as the discount rate, the inflation rate and the mortality rate against market data and considering whether each of these assumptions sit within an acceptable range of possible outcomes. Based on our procedures, we concluded that the actuarial assumptions used by management were within appropriate ranges. We assessed the disclosures within the financial statements and considered the disclosures to be reasonable.

Key audit matter

How our audit addressed the key audit matter

Appropriateness of key assumptions used to determine the valuation of the gross defined benefit pension scheme liabilities.

Refer to “Accounting Policies – Employee Benefits - Post-employment benefits - Defined Benefit Pension Plan”, Note 3 “Critical judgements and estimates in applying the Company’s accounting policies” and Note 31 “Post-Employment Benefits - ii Defined Benefit Schemes”.

The Company operates four defined benefit pension schemes. The gross defined benefit pension scheme liabilities as at 31 December 2022 amounted to €170.4 million.

The liabilities in respect of these defined benefit schemes are valued on an actuarial basis and are subject to a number of actuarial assumptions which include the discount rate, inflation rate and life expectancy rates.

We determined this to be a key audit matter as there is inherent judgement in determining the actuarial assumptions and a modest change in the assumptions could have a significant impact on the calculation of the gross defined benefit pension scheme liabilities which could result in a material change in the amount of the overall surplus for the defined benefit pension schemes.

We obtained an understanding of the processes used to determine the discount rate, inflation rate and life expectancy rates used in calculating the defined benefit pension liabilities.

Our audit team assisted by our internal actuarial experts, challenged the appropriateness of the actuarial assumptions used by the Company in calculating the gross defined benefit pension scheme liabilities. This included benchmarking certain assumptions such as the discount rate, the inflation rate and the mortality rate against market data and considering whether each of these assumptions sit within an acceptable range of possible outcomes.

Based on our procedures, we concluded that the actuarial assumptions used by management were within appropriate ranges.

We assessed the disclosures within the financial statements and considered the disclosures to be reasonable.

How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which Company operates.

Materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:

Overall materiality	€1,925,000
How we determined it	c. 5% of profit before tax and exceptional items.
Rationale for benchmark applied	We applied this benchmark because in our view this is a metric against which the recurring performance of the Company is commonly measured by its stakeholders and it results in using a materiality level that excludes the impact of non-recurring items which are not reflective of the Company’s ongoing trading activity.

We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% of overall materiality, amounting to €1,443,000.

In determining the performance materiality, we considered a number of factors - the history of misstatements, risk assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of our normal range was appropriate.

We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above €96,250 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Conclusions relating to going concern

Our evaluation of the Directors’ assessment of the Company’s ability to continue to adopt the going concern basis of accounting included:

evaluating the Company’s going concern assessment (being the period of 12 months from the date on which the financial statements are authorised for issue) and challenging the key assumptions. Additionally we have considered management’s assessment of the likely impact which the current macroeconomic environment may have on financial performance and liquidity for the going concern assessment period;
testing the mathematical integrity and accuracy of the cash flow forecasts and the models prepared by management;
consideration of the financing facilities in place including assessing the nature of facilities, repayment terms and covenants; and
evaluating the disclosures in the financial statements and their consistency with the underlying assessment made by the Company.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company’s ability to continue as a going concern for a period of at least twelve months from the date on which the financial statements are authorised for issue.

In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the Company’s ability to continue as a going concern.

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

Reporting on other information

The other information comprises all of the information in the Annual Report and Financial Statements other than the financial statements and our auditors’ report thereon. The Directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.

With respect to the Directors’ Report, we also considered whether the disclosures required by the Companies Act 2014 have been included.

Based on the responsibilities described above and our work undertaken in the course of the audit, ISAs (Ireland) and the Companies Act 2014 require us to also report certain opinions and matters as described below:

In our opinion, based on the work undertaken in the course of the audit, the information given in the Directors’ Report for the year ended 31 December 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
Based on our knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified any material misstatements in the Directors’ Report.

Code of Practice for the Governance of State Bodies (the “Code of Practice”)

Under the Code of Practice for the Governance of State Bodies (the “Code of Practice”) we are required to report to you if the statement regarding the system of internal control required under the Code of Practice as included in the Corporate Governance Statement in the Directors’ Report does not reflect the Company’s compliance with paragraph 1.9(iv) of the Code of Practice or if it is not consistent with the information of which we are aware from our audit work on the financial statements. We have nothing to report in respect of this responsibility.

Responsibilities for the financial statements and the audit

Responsibilities of the Directors for the financial statements

As explained more fully in the Directors’ Responsibility for Financial Statements set out on page 32, the Directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view.

The Directors are also responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Based on our understanding of the Company and industry, we identified that the principal risks of non-compliance with laws and regulations related to breaches of health and safety regulations and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2014 and relevant tax legislation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to the posting of inappropriate journal entries to manipulate financial results and potential management bias in accounting estimates. Audit procedures performed by the engagement team included:

Discussions with the Audit and Risk Committee, management and internal audit including any known or suspected instances of non-compliance with laws and regulations and fraud;
Reading the meeting minutes of the Board of Directors and Audit and Risk Committees;
Inspection of internal audit reports;
Evaluating whether there was evidence of management bias that represents a risk of material misstatement due to fraud;
Identifying and testing journal entries, including non standard revenue entries and unusual account combinations based on our risk assessment; and
Designing audit procedures to incorporate elements of unpredictability around the nature, timing or extent of audit procedures performed.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the IAASA website at: https://www.iaasa.ie/getmedia/b2389013-1cf6-458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf

This description forms part of our auditors’ report.

Use of this report

This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with section 391 of the Companies Act 2014 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Other required reporting

Companies Act 2014 opinions on other matters

We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly audited.
The financial statements are in agreement with the accounting records.

Other exception reporting

Directors’ remuneration and transactions

Under the Companies Act 2014 we are required to report to you if, in our opinion, the disclosures of Directors’ remuneration and transactions specified by sections 305 to 312 of that Act have not been made. We have no exceptions

John Dunne
for and on behalf of PricewaterhouseCoopers

Chartered Accountants and Statutory Audit Firm

Dublin

31st March 2023