Paragraph 7(2) of the First Schedule to the Industrial Development Act, 1993 requires the Agency to keep, in such form as may be approved of by the Minister for Enterprise, Trade and Employment with the consent of the Minister for Finance, all proper and usual accounts of money received and expended by it. In preparing those accounts, the Board is required to:
The Board is responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Agency and which enables it to ensure that the Financial Statements comply with Paragraph 7(2) of the First Schedule to the Industrial Development Act, 1993. The Board is also responsible for safeguarding all the assets of the Agency and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
On behalf of the Board of IDA I acknowledge our responsibility for ensuring that an effective system of internal financial control is maintained and operated by the Agency.
The system can only provide reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected in a timely period.
The IDA has an internal audit department, which reports directly to the Audit & Finance Committee of the Board. This committee meets on at least a quarterly basis to review reports prepared by Internal Audit and other departments. The Audit & Finance Committee in turn keeps the Board informed of the matters that it has considered.
The internal audit function operates in accordance with the Framework Code of Best Practice set out in the Code of Practice for the Governance of State Bodies. A rolling three-year Internal Audit work plan is determined by the Audit & Finance Committee and revised annually where required. The current work plan takes account of areas of potential risk identified in a risk assessment exercise carried out by management and reviewed by the Audit & Finance Committee and the Board. The Internal Auditor provides the Committee with quarterly reports on assignments carried out. These reports highlight deficiencies or weaknesses, if any, in the system of internal financial control and the recommended corrective measures to be taken where necessary.
The Board's monitoring and review of the effectiveness of the system of internal financial control is informed by the work of the Internal Auditor, the Audit & Finance Committee, which oversees the work of the Internal Auditor and the executive managers within IDA Ireland who have responsibility for the development and maintenance of the financial control framework.
I confirm that, in respect of the year ended 31 December 2008, the Board conducted a review of the system of internal financial control.
Signed on behalf of the Board
John Dunne
Chairman
10th June 2009
(a) The Financial Statements have been prepared in accordance with the historical cost convention in the form approved by the Minister for Enterprise, Trade and Employment with the consent of the Minister for Finance and are denominated in euro.
The Financial Statements are prepared on an accrual basis, except where stated in the Accounting Policies. The financial year is 1 January to 31 December.
Financial Reporting Standards recommended by the recognised accountancy bodies are adopted as they become applicable.
(b) Tangible Fixed Assets comprise:
(i) Land which is held for the purposes of industrial development.
(ii) Site development works.
(iii) Industrial buildings leased to tenants including buildings in the course of sale where title had not passed at the year end.
(iv) Vacant property available for industrial promotion or in the course of sale where title had not passed at the year end.
(v) Other Fixed Assets including motor vehicles, computer and office equipment and fixtures and fittings.
(c) Telecommunication Assets comprise:
Telecommunication Assets constitute an indefeasible right of use of a designated portion of a global telecommunications network for a period of 25 years from 2000.
(d) Investments consist entirely of equity investments.
(e) Accounts Receivable comprise amounts due in respect of:
(i) Properties sold on a deferred basis. Interest is charged on these amounts at the Exchequer Lending Rates advised by the Department of Finance or the EU Discount Reference Rate as applicable.
(ii) Rents due under the terms of lease agreements, for periods of up to 35 years, entered into between the Agency and tenants, charges for the use of undeveloped lands and estate maintenance charges billed to tenants.
(iii) Fees from purchase options given on IDA property, deposits paid by IDA for the purchase of property where title had not passed to the Agency at 31 December, and the provision of other services.
(iv) Amounts due in respect of the disposal or leasing of telecommunication assets.
(v) Amounts due in respect of joint arrangements.
(vi) Amounts due in respect of loans advanced and interest thereon.
(f) Accounts Payable comprise amounts payable in respect of:
(i) Creditors.
(ii) Grants that have matured for payment.
(iii) Deposits for uncompleted sales.
(g) Provisions for liabilities and charges comprise:
(i) Amounts provided in respect of potential costs associated with the dilapidations provision of operating leases.
(ii) Amounts provided where the future costs arising under operating leases are estimated to exceed the amounts recoverable from
sub lessees.
(h) By way of memorandum Income and Expenditure in respect of Industrial Property transactions are set out in note 23 to the Financial Statements.
Income from Oireachtas grants, grant refunds, the National Training Fund, investments, the European Social Fund and the European Regional Development Fund save as referred to in 05 below, represent actual cash received.
Industrial Property included in tangible fixed assets has been acquired, developed or constructed for the purposes of assisting in the promotion and development of industry and is not considered to be investment property but normal fixed assets.
(a) The carrying amounts for tangible fixed assets, other than land, and for telecommunication assets comprise:
Historic cost less accumulated depreciation and less a provision for impairment of the assets, where applicable, to endeavour to ensure that the value of the assets carried in the Financial Statements do not exceed their estimated recoverable amounts.
(b) The carrying amounts for Land and Investments comprise:
Historic cost less a provision for impairment of the assets, where applicable, to endeavour to ensure that the value of the assets carried in the Financial Statements do not exceed their estimated recoverable amounts.
(c) Depreciation is calculated in order to write off the cost of assets less, where applicable, any impairment provision over their estimated remaining useful lives. No provision for depreciation is made in respect of land or investments.
(d) Provisions for impairment may be made following reviews of fixed assets, telecommunication assets and investments carried out by officers of IDA or independent valuers, as appropriate, if events or changes in circumstances or economic conditions indicate that the carrying amount of the assets or investments may not be fully recoverable. Any such provisions will be recognised in the Operating Account in the year in which they are made.
Where a subsequent review indicates that the circumstances which gave rise to a provision for impairment no longer exist or have changed materially the accumulated provision for impairment will be reduced accordingly.
(e) The cost of land, site development and industrial property includes an apportionment of administration costs associated with the acquisition or development of the assets.
European Regional Development Fund grants received in respect of the purchase or development of fixed assets are treated as a deferred credit and are amortised to the operating account annually over the useful economic life of the assets to which they relate.
Known bad debts are written off and specific provision is made for any amount the collection of which is considered doubtful.
The IDA Financial Statements do not reflect a consolidation of the results of the investee companies because IDA activities are so different from those of the investee companies that such consolidation would be incompatible with the obligation to give a true and fair view.
Grants are accrued in the Financial Statements when the grantee complies with stipulated conditions.
Assets and liabilities denominated in foreign currencies are translated at the exchange rates ruling at the Balance Sheet date. Revenues and costs are translated at the exchange rates ruling at the dates of the underlying transactions.
Profits and losses arising from foreign currency translations and on settlement of amounts receivable and payable in foreign currency are dealt with in the Operating Account.
The rentals under operating leases are dealt with in the Financial Statements as they fall due. In the case of industrial property available for promotion a provision is made, where applicable, for future rental payments by the Agency.
Capital represents funds utilised for the acquisition and development of industrial property, the acquisition of other fixed assets, telecommunication assets and investments taking account of disposals, depreciation charges and, where applicable, provisions for impairment in the carrying amounts.
All IDA staff are employees of Forfás and are seconded to the Agency by Forfás. Legislation requires Forfás to prepare and administer pension schemes for the granting of pension entitlements to its staff including staff seconded to IDA. Forfás is also responsible for pension reporting requirements, including those set out under FRS 17. Voluntary early retirement costs paid directly by IDA and all pension contributions deducted from staff are accounted for in the Operating Account in the period in which they arise.
| Notes | 2007 €'000 |
2006 €'000 |
|
|---|---|---|---|
| Income | |||
| Oireachtas Grants | 1 | 122,619 | 124,623 |
| National Training Fund | 2 | 2,500 | 1,034 |
| EU - INTERREG 111A Programme | 3 | 383 | 670 |
| EU & Exchequer Co-Funded Research Technology and Innovation (RTI) for Industry Programme | 4 | 1,690 | 3,430 |
| ESF Receipts | - | - | |
| Grant Refunds | 4,189 | 14,572 | |
| Rental Income | 2,396 | 2,374 | |
| Less Rental Income received from Enterprise Ireland Clients | 5 (a) | (76) | (95) |
| Other Income | 6 | 4,392 | 2,762 |
| Profit on Disposal of Assets | 7 | 48,679 | 33,818 |
| 186,772 | 183,188 | ||
| Expenditure | |||
| Grants Payable | 8 | 79,691 | 78,518 |
| Promotion, Administration and General Expenses | 9 (a) | 48,060 | 45,808 |
| Industrial Building Charges | 10 | 45,856 | 15,552 |
| Depreciation & Impairment Charges | 11 | 43,309 | 18,431 |
| 216,916 | 158,309 | ||
| Net Operating (Deficit)/Surplus for Year | (30,144) | 24,879 | |
| Contribution to the Exchequer | 12 | (8,566) | (12,486) |
| Balance at 1 January | 3,361 | 26,524 | |
| Transfer from/(to) Capital | 13 | 25,686 | (35,556) |
| Balance at end of Year | (9,663) | 3,361 |
Amounts shown under Income and Expenditure are in respect of continuing activities. There are no recognised gains or losses, other than those dealt with in the Operating Account.
The Basis of Accounting, Accounting Policies, Cash Flow Statement and Notes 1 to 26 form part of these
Financial Statements.
| John Dunne | Barry O'Leary | Loretta Brennan Glucksman |
| Chairman | Chief Executive | Chairman , Audit and Finance Committee |
| Notes | 2007 €'000 |
2006 €'000 |
|
|---|---|---|---|
| Tangible Fixed Assets | |||
| Industrial Property | 14 | 317,490 | 343,783 |
| Other Fixed Assets | 15 | 2,034 | 1,427 |
| 319,524 | 345,210 | ||
| Intangible Assets and Investments | |||
| Telecommunication Assets | 16 | - | - |
| Investments | 17 | - | - |
| Total Tangible and Intangible Assets and Investments | 319,524 | 345,210 | |
| Current Assets | |||
| Accounts Receivable | 18 | 18,757 | 14,798 |
| Cash at Bank and on hand | 71,924 | 69,078 | |
| 90,681 | 83,876 | ||
| Current Liabilities | |||
| Accounts Payable | 19 | (13,389) | (12,560) |
| Net Current Assets | 77,292 | 71,316 | |
| Long Term Receivables | |||
| Accounts Receivable: amounts falling due after more than one year | 18 | 13,219 | 772 |
| Long Term Payables | |||
| Accounts Payable: amount falling due after more than one year | 19 | (61,650) | (61,650) |
| Provisions | |||
| Provisions for Liabilities and Charges | 20 | (36,973) | (5,143) |
| Deferred Income | |||
| EU INTERREG 111A Programme | 3 | (1,551) | (1,934) |
| Net Assets | 309,861 | 348,571 | |
| Representing: | |||
| Capital | 13 | 319,524 | 345,210 |
| Operating Account | (9,663) | 3,361 | |
| 309,861 | 348,571 |
The Basis of Accounting, Accounting Policies, Cash Flow Statement and Notes 1 to 26 form part of these Financial Statements.
| John Dunne | Barry O'Leary | Loretta Brennan Glucksman |
| Chairman | Chief Executive | Chairman , Audit and Finance Committee |
| Notes | 2007 €'000 |
2006 €'000 |
|
|---|---|---|---|
| Reconciliation of Net Operating (Deficit)/Surplus to net cash inflow from operating activities |
|||
| Net Operating (Deficit) /Surplus for Year | (30,144) | 24,879 | |
| Depreciation and Impairment Charges: | |||
| - Industrial Property | 11 | 42,438 | 17,050 |
| - Other Fixed Assets & Telecommunication Assets | 11 | 871 | 1,381 |
| EU - INTERREG 111A Programme Grant Amortised | 3 | (383) | (670) |
| Expenditure Capitalised | 9 (a) | (417) | (589) |
| Profit on Disposal of Assets | 7 | (48,679) | (33,818) |
| Bank Interes | 6 | (2,892) | (2,215) |
| (Increase) in Accounts Receivable amounts falling due within one year | (3,959) | (5,361) | |
| Increase/ (Decrease) in Accounts Payable amounts falling due within one year | 829 | (1,853) | |
| Increase in Provisions and Charges | 31,830 | 5,463 | |
| (Increase) / Decrease in Accounts Receivable amounts falling due after more than one year | (12,447) | 904 | |
| Increase / (Decrease) in Accounts Payable amounts falling due after more than one year | - | - | |
| Net Cash (Outflow)/Inflow from Operating Activities | (22,953) | 5,171 | |
| CASH FLOW STATEMENT | |||
| Net Cash (Outflow)/Inflow from Operating Activities | (22,953) | 5,171 | |
| Contribution to the Exchequer | 12 | (8,566) | (12,486) |
| Returns on Investment and Servicing of Finance | 24 (a) | 2,892 | 2,215 |
| Capital expenditure and financial investment | |||
| - Acquisitions | 24 (b) | (37,901) | (59,649) |
| - Disposals | 24 (c) | 69,374 | 40,069 |
| Management of Liquid Resources | |||
| (Increase) in short term deposits | 24 (d) | (11,000) | (26,526) |
| (Decrease) in cash for the period | (8,154) | (51,206) | |
| Reconciliation of net cash flow to movement in net funds | |||
| (Decrease) in cash for the period | (8,154) | (51,206) | |
| Increase in liquid resources | 11,000 | 26,526 | |
| Movement in net funds in the period | 2,846 | (24,680) | |
| Net funds at 1 January | 24 (d) | 69,078 | 93,758 |
| Net funds at 31 December | 71,924 | 69,078 |
| John Dunne | Barry O'Leary | Loretta Brennan Glucksman |
| Chairman | Chief Executive | Chairman , Audit and Finance Committee |