Mr. Seamus McCarthy:

Enterprise Ireland’s main objectives are to support sustainable economic growth, and to deliver regional development and employment in Ireland. In pursuit of those objectives, Enterprise Ireland provides direct financial support to companies in the form of development grants and equity investments. It also promotes research and development activity in Ireland by funding projects involving collaboration between industry and third level education institutions, and focused on realising the commercial potential of research.

Enterprise Ireland’s main source of income is in the form of Oireachtas grants paid out of the Vote for the Department of Jobs, Enterprise and Innovation. In 2013, these totalled €279 million - down from €290 million in 2012. In addition, Enterprise Ireland administered grant funding amounting to €11.2 million on behalf of the Department of Agriculture, Food and the Marine and the Department of Education and Skills. It also generated €10.8 million in income from refunds of financial support, returns on its investments, rental of industrial property and professional fee income.

In 2013, Enterprise Ireland incurred expenditure of €263 million. This included €92 million on grant assistance for science and technology development, €51 million on company development grant assistance and indirect support, €35 million on grant funding to the county and city enterprise boards, business innovation centres and the Crafts Council of Ireland, and €81 million on administration costs, including a pay bill of around €58 million.

Enterprise Ireland holds a significant investment portfolio. At the end of 2013, its equity investment portfolio spanned more than 1,000 mainly unquoted companies, with a net book value of €152 million. It also had significant holdings managed through its seed and venture capital fund with a net book value of €118 million. Enterprise Ireland carries out annual impairment reviews on both equity investments and seed and venture capital funds.

The financial statements for 2013 received an unqualified opinion. Since the balance sheet date, the county and city enterprise boards have been dissolved and replaced with a network of local enterprise offices, based in local authorities. On the dissolution of the enterprise boards, their assets and liabilities were transferred to Enterprise Ireland. I plan to examine that transfer in the context of the audit of Enterprise Ireland’s financial statements for 2014.

The primary role of IDA Ireland is to attract foreign direct investment to Ireland, including encouraging already established foreign-owned companies to invest further here. It does that by promoting Ireland as an attractive location to potential investors, through the payment of grant aid in appropriate cases and through the development of industrial property which is readily available for use by potential investors.

The IDA received State grants of around €129 million in 2013. Its other income included profits on the disposal of assets, grant refunds and rental income. In 2013, the IDA incurred expenditure of €147 million, including €88 million in grants to enterprises in support of research and development activity, capital investment, employment and training, just under €32 million spent on pay, administration and general expenses, €9 million spent on marketing, consultancy, promotions and advertising and just under €5 million on expenses related to the property portfolio.

At the end of 2013, the IDA’s property portfolio had a net book value of approximately €100 million. The IDA revalues property based on reviews carried out internally or by independent valuers, as appropriate, where there are indications that the carrying amount may not be recoverable. The impairment charge in 2013 was €4.8 million.

The financial statements for 2013 received an unqualified opinion. However, my audit report drew attention to ongoing non-effective expenditure, amounting to €1.3 million in 2013. This relates to rent and associated costs of unoccupied office space in two buildings assigned in 2013 to the IDA from the former Forfás when it was dissolved. Most of this expense relates to Carrisbrook House in Ballsbridge, which has been largely unoccupied for many years. The committee has previously considered this matter when it examined Forfás financial statements.