Mr. Seamus McCarthy:

I thank the Chairman. The Shannon Development Group financial statements for 2013 cover the activities of Shannon Free Airport Development Company Limited and two subsidiaries, Shannon Castle Banquets and Heritage Limited and Kilrush Creek Marina Limited. Shannon Development's core functions in the mid-west region over many years have included industrial and tourism development and management of industrial property. The group was substantially restructured in 2013, with certain functions being transferred to other public bodies with national remits. The changes that are taking place are summarised in a diagram in the statement I have furnished to the committee. The diagram indicates that Shannon Free Airport Development Company's indigenous enterprise and foreign direct investment activities have transferred to Enterprise Ireland and IDA Ireland, respectively. It also shows that the company's tourism development responsibilities have transferred to Fáilte Ireland. Under the Shannon Airports (Shannon Group) Act 2014, the residual parts of Shannon Development and Shannon Heritage became subsidiaries of Shannon Group plc. The diagram shows that the property management activities will transfer to Shannon Commercial Enterprises Limited and that the activities of Shannon Castle Banquets and Heritage Limited will transfer to the Shannon Heritage Company as part of the Shannon Group. Finally, Kilrush Creek Marina Limited is being disposed of by the company.

Under the 2014 Act, the audit of the financial statements of Shannon Commercial Enterprises Limited will no longer be performed by my office. The 2013 financial statements reflect the changes occurring in the group, including a disaggregation of the group's income and expenditure for the year between the continuing and discontinued operations. In 2013, the Shannon Development Group recorded a deficit for the year of €1.6 million. Its income for the year included €10.8 million in rental income from its commercial property assets, €11.2 million from its tourism activities, €5 million in profit on the sale of assets and investments and €5.2 million in Oireachtas and EU grant funding. The Oireachtas grant funding was provided to cover the costs of grants to industry and exceptional costs of €3.4 million arising from a voluntary redundancy and early retirement scheme, which was part of the group's restructuring. Expenditure in 2013 totalled €34 million. This included €16.7 million in operating expenses, including pension-related costs, depreciation of €5.7 million, €5.2 million in direct property management expenses, €3.7 million in direct tourism expenses and €1.7 million in grant payments. Some €1 million was incurred in 2013 in costs directly related to the restructuring of the company. These costs are analysed in further detail in note 10 of the financial statements. This expenditure is in addition to the redundancy and early retirement expenditure of €3.4 million, which is included under the other headings.

Shannon Development held a significant portfolio of property assets. At 31 December 2013, the group held tangible assets with a net book value of €64 million, comprising €51.9 million of industrial land and buildings and €10.9 million of land and buildings associated with its tourism activities. The net book value of the property assets reflects the effect of significant impairment amounts charged in previous years. Total asset impairments of €32.9 million were recognised in the 2012 financial statements as a result of a comprehensive valuation of assets undertaken with external professional assistance, conducted as part of a due diligence review prior to the transfer to Shannon Group. Under the terms of the State Airports (Shannon Group) Act 2014, the liabilities, duties, obligations and funding of the pension scheme for Shannon Development up to the date of its transfer to the Shannon Group plc will be taken on by the Minister for Jobs, Enterprise and Innovation. The group’s financial statements for 2013 received an unqualified audit opinion.