I have audited the financial statements of the Industrial Development Agency for the year ended 31 December 2007 under the Industrial Development Act, 1993.
The financial statements, which have been prepared under the accounting policies set out therein, comprise the Accounting Policies, the Operating Account, the Balance Sheet, the Cash Flow Statement and the related notes.
The Agency is responsible for preparing the financial statements in accordance with the Industrial Development Act, 1993, and for ensuring the regularity of transactions. The Agency prepares the financial statements in accordance with Generally Accepted Accounting Practice in Ireland. The accounting responsibilities of the Members of the Agency are set out in the Statement of Board Members' Responsibilities.
My responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).
I report my opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland. I also report whether in my opinion proper books of account have been kept. In addition, I state whether the financial statements are in agreement with the books of account.
I report any material instance where moneys have not been applied for the purposes intended or where the transactions do not conform to the authorities governing them.
I also report if I have not obtained all the information and explanations necessary for the purposes of my audit.
I review whether the Statement on Internal Financial Control reflects the Agency’s compliance with the Code of Practice for the Governance of State Bodies and report any material instance where it does not do so, or if the statement is misleading or inconsistent with other information of which I am aware from my audit of the financial statements. I am not required to consider whether the Statement on Internal Financial Control covers all financial risks and controls, or to form an opinion on the effectiveness of the risk and control procedures.
I read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements. I consider the implications for my report if I become aware of any apparent misstatements or material inconsistencies with the financial statements.
In the exercise of my function as Comptroller and Auditor General, I conducted my audit of the financial statements in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board and by reference to the special considerations which attach to State bodies in relation to their management and operation. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures and regularity of the financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgments made in the preparation of the financial statements, and of whether the accounting policies are appropriate to the Agency’s circumstances, consistently applied and adequately disclosed.
I planned and performed my audit so as to obtain all the information and explanations that I considered necessary in order to provide me with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming my opinion I also evaluated the overall adequacy of the presentation of information in the financial statements.
In my opinion, the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the Agency's affairs at 31 December 2007 and of its income and expenditure for the year then ended.
In my opinion, proper books of account have been kept by the Industrial Development Agency. The financial statements are in agreement with the books of account.
John Buckley
Comptroller and Auditor General
11 June 2008
The Industrial Development Agency (IDA) Ireland was established on 1 January 1994 as an agency of Forfás (the policy and advisory board for industrial development in Ireland) under the provisions of the Industrial Development Act, 1993.
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 Board has taken steps to ensure an appropriate control environment is in place by:
The Board has also established processes to identify and evaluate business risks. This is achieved in a number of ways including:
The system of internal financial control is based on a framework of regular management information, and administrative procedures including segregation of duties, and a system of delegation and accountability.
In particular it includes:
The IDA has an internal audit department, which reports directly to the Audit and 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 and 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 and 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 and 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 and 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 2007, the Board conducted a review of the system of internal financial controls.
Signed on behalf of the Board:
John Dunne
Chairman
9th April 2008
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 recognised accountancy bodies are adopted as they become applicable.
Tangible Fixed Assets comprise:
Telecommunication A ssets 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.
Accounts Receivable comprise amounts due in respect of:
Accounts Payable comprise amounts payable in respect of:
By way of memorandum Income and E xpenditure in respect of Industrial Property transactions are set out in note 22 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 (5) 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.
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.
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.
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.
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.
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.
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 | 124623 | 131218 |
| National Training Fund | 2 | 1034 | 1269 |
| EU - INTERREG 111A Programme | 3 | 670 | 132 |
| EU & Excheuer Co-Funded Research Technology and Innovation (RTI) for Industry Programme | 4 (a) | 3430 | 4296 |
| ESF Receipts | 4 (b) | - | 3961 |
| Grant Refunds | 14572 | 10776 | |
| Rental Income | 2374 | 3220 | |
| Less Rental Income Received from Enterprise Ireland Client Companies | 5 (a) | -95 | -72 |
| Other Income | 6 | 2762 | 1497 |
| Profit on Disposal of Assets | 7 | 33818 | 61089 |
| 183188 | 217386 | ||
| Expenditure | |||
| Grants Payable | 8 | 78518 | 96687 |
| "Promotion, Administration and General Expenses | 9 (a) | 45808 | 40121 |
| Industrial Building Charges | 10 | 15552 | 11833 |
| Depreciation Charges | 11 | 18431 | 16970 |
| 158309 | 165611 | ||
| Net Operating Surplus for Year | 24879 | 51775 | |
| Contribution to the Exchequer | 12 | -12486 | -6731 |
| Balance at 1 January | 26524 | 35990 | |
| Transfer to Capital | 13 | -35556 | -54510 |
| Balance at end of Year | 3361 | 26524 | |
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 25 form part of these Financial Statements.
| On behald of the Board: | ||
|---|---|---|
| John Dunne | Barry O'Leary | Loreta Brennan Glucksman |
| Chairman | Chief Executive | Chairman, Audit and Finance Committee |
| Notes | 2007 €'000 |
2006 €'000 |
|
|---|---|---|---|
| Tangible Fixed Assets | |||
| Industrial Property | 14 | 343783 | 307768 |
| Other Fixed Assets | 15 | 1427 | 1193 |
| 345210 | 308961 | ||
| Intangible Assets and Investments | |||
| Telecommunication Assets | 16 | - | 693 |
| Investments | 17 | - | - |
| Total Tangible and Intangile Assets and Investments | 345210 | 309654 | |
| Current Assets | |||
| Accounts Receivable | 18 | 14798 | 9437 |
| Cash at Bank and on hand | 69078 | 93758 | |
| 83876 | 103195 | ||
| Current Liabilities | |||
| Accounts Payable | 19 | 79353 | 75743 |
| Net Current Assets | 4523 | 27452 | |
| Long Term Receivables | |||
| Accounts Receivable: amounts falling due after more than one year | 18 | 772 | 1676 |
| Deferred Income | |||
| EU INTERREG 111A Programme | 3 | 1934 | 2604 |
| Net Assets | 348571 | 336178 | |
| Representing: | |||
| Capital | 13 | 345210 | 309654 |
| Operating Account | 3361 | 26524 | |
| 348571 | 336178 | ||
The Basis of Accounting, Accounting Policies, Cash Flow Statement and Notes 1 to 25 form part of these Financial Statements.
| On behald of the Board: | ||
|---|---|---|
| John Dunne | Barry O'Leary | Loreta Brennan Glucksman |
| Chairman | Chief Executive | Chairman, Audit and Finance Committee |
| Notes | 2007 €'000 |
2006 €'000 |
|
|---|---|---|---|
| Reconciliation of Net Operating Surplus to Net Cash Inflow from Operating Activites | |||
| Net Operating Surplus for Year | 24879 | 51775 | |
| Depreciation Charges: | |||
| Industrial Property | 11 | 17050 | 15583 |
| Other Fixed Assets & Telecommunication Assets | 11 | 1381 | 1387 |
| EU-INTERREG 111A Programme Grant Amortised | 3 | -670 | -132 |
| Expenditure Capitalised | 9 (a) | -589 | -235 |
| Profit on Disposal of Assets | 7 | -33818 | -61089 |
| Bank Interest | 6 | -2215 | -967 |
| (Increase)/Decrease in Accounts Receivable amounts falling due within one year | -5361 | 30764 | |
| Increase in Accounts Payable | 3610 | 58807 | |
| Decrease in Accounts Receivable amounts falling due after more than one year | 904 | 113 | |
| Net Cash Inflow from Operating Activities | 5171 | 96006 | |
| CASH FLOW STATEMENT | |||
| Net Cash Inflow from Operating Activities | 5171 | 96006 | |
| Contribution to the Exchequer | 12 | -12486 | -6731 |
| Returns on Investments and Servicing of Finance | 23 (a) | 2215 | 967 |
| Capital Expenditure and Financial Investment | |||
| Acquisitions | 23 (b) | -59649 | -86782 |
| Disposals | 23 © | 40069 | 76626 |
| Management of Liquid Resources | |||
| (Increase) in Short-Term Deposits | 23 (d) | -26526 | -20474 |
| (Decrease)/Increase in cash for the period | -51206 | 59612 | |
| Reconciliation of net cash flow to movement in the net funds | |||
| (Decrease)/Increase in cash for the period | -51206 | 59612 | |
| Increase in Liquid Resources | 23 (d) | 26526 | 20474 |
| Movement in net funds in the period | -24680 | 80086 | |
| Net funds at 1 January | 23 (d) | 93758 | 13672 |
| Net funds at 31 December | 69078 | 93758 | |
| On behald of the Board: | ||
|---|---|---|
| John Dunne | Barry O'Leary | Loreta Brennan Glucksman |
| Chairman | Chief Executive | Chairman, Audit and Finance Committee |