DHDA - Annual Report 2016...development, digital media and content creation, eLearning and healthtech, employing almost 725 people. ... redeveloped Grainstore building at the end of

ANNUAL REPORT 2016CREATING DIGITAL GROWTH

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WE PLAY A LEADING ROLE IN DIGITAL CREATIVITY

ContentsChairman’s Statement 4

CEO’s Report 6

The Work of the DHDA 8

The DHDA Board 12

Corporate Governance 14

Financial Statements 17

THE DIGITAL HUB IS A VIBRANT CLUSTER OF TECHNOLOGY, DIGITAL MEDIA AND INTERNET COMPANIES, LOCATED ON A CAMPUS IN THE HISTORIC LIBERTIES AREA OF DUBLIN CITY.

1

ANNUAL REPORT 20162

Ireland51

UK11

South Africa

2

France3

Holland1

Italy3

Poland1

Spain1

Sweden1

Switzerland1

UAE1

India1 New

Zealand1

Russia1

China1

Canada2

USA14

Australia1

152 participants attended other learning courses.

28 new companies moved into office space at our enterprise cluster comprising a 50:50 split between indigenous and foreign direct investment (FDI) businesses.

97 tech, Internet and digital media companies in total.

725 people now work with companies based at The Digital Hub.

21 young people attended Future Creators Cadets in 2016.

22 graduated from Future Creators.

68 attended D8 Surfers Club.

Country breakdown of companies based in The Digital Hub.

Total

97

ANNUAL REPORT 2016 3

Highlights 2016

I have always taken the view that the real measure of The Digital Hub’s success is the success of our client companies, and by this measure 2016 was another highly successful year. During the year, 28 new companies moved into office space at The Digital Hub. At year-end, The Digital Hub hosted 97 digital companies operating in sectors such as software development, digital media and content creation, eLearning and healthtech, employing almost 725 people. The Digital Hub is not only the largest digital enterprise cluster in Ireland, it is also unique in that it embraces a roughly 50:50 split of indigenous and foreign-owned companies from countries such as the United States of America, the United Kingdom, the United Arab Emirates, Italy and France. This vibrant mix provides fertile ground for sharing ideas, resources, talent and connections, for solving problems, for cooperating on product development, and for marketing, reducing costs and innovating.

The Digital Hub Development Agency supports client companies with flexible rental arrangements, shared facilities, opportunities for networking (both business and social), and a range of information seminars and workshops to help them overcome business challenges and scale successfully.

In pursuit of its strategic goal to grow the enterprise cluster, and its responsibility to make a positive contribution to urban regeneration, the Agency is seeking to redevelop its property portfolio, which includes a number of derelict buildings that played an important role in Dublin’s industrial past, and which the Agency maintains in accordance with

statutory responsibilities. Our goal is to work with private sector developers to repurpose these buildings and make them suitable for life and work in the 21st century. This work is complex, both legally and technically, and the Board has been given considerable support by Dublin City Council in pursuit of this goal, for which we are extremely grateful.

The Board’s redevelopment strategy is already bearing fruit for the Liberties area. Following the opening of the redeveloped Grainstore building at the end of 2015, 2016 saw the opening of the 500-unit student accommodation facility on Bonham Street, and the opening of Roe Lane – a new pedestrian throughway linking Thomas Street to Bonham Street. Roe Lane now provides easy access to the Binary Hub student accommodation and the Digital Depot, and further integrates The Digital Hub into its local community. These developments have brought new life and economic activity into the area, and created opportunities for existing and new local service businesses.

Our commitment to our community is also demonstrated in the range of projects we have hosted for local people and businesses. Our Future Creators and Future Creators Cadets programmes for young people, which we run in conjunction with our neighbours the National College of Art & Design and H2 Learning, goes from strength to strength. In these programmes, young people from the area are given a practical introduction to a range of digital skills, such as coding, sound and video production, web and graphic design, and electronics, transforming them from passive consumers into creative producers.

ANNUAL REPORT 20164

Chairman’s StatementAs Chairman of the Board of the Digital Hub Development Agency (DHDA), I am pleased to present the 2016 Annual Report and Financial Statements.

During the year, the Board commissioned an independent review of its effectiveness, and subsequently welcomed the appointment by the Minister for Communications, Climate Action & Environment of three new Board members – Michael Conlon, Brian Keogh and Ann Markey – who bring a wealth of expertise and experience to the Board. Brian agreed to chair the newly constituted Property Committee, and Ann took over as chair of the Audit and Risk Committee. These Committees took on a tremendous workload during the year and helped greatly to ensure the smooth running of the Board, for which I thank them.

During the year, the Agency was fortunate to have the services of Mr Gerry Macken as Acting Chief Executive, on secondment from Dublin City Council. As his term of secondment came to a close, the Board, with the consent of the Minister for Communications, Climate Action & Environment, appointed Fiach Mac Conghail as Chief Executive Officer. The appointment was made following a rigorous recruitment campaign facilitated by the Public Appointments Service. Mr Mac Conghail was previously Director and CEO of the Abbey Theatre, and was a Senator from 2011 to 2016.

The Agency continues to make progress on its transition to the aegis of Dublin City Council, as agreed under the Government’s Public Sector Reform Plan. The strategy for the transition includes financial and occupancy targets, and the Agency has succeeded in meeting or exceeding them.

In January 2016, the Board learned with sadness of the death of our colleague, Mr Seamas Ratigan, who served on the Board since 2012. Mr Ratigan was a valued Board member who had a keen understanding of the role played by The Digital Hub in the development of the local community and the regeneration of the area.

I would like to thank all members of the dedicated staff of the Agency for their commitment and support. Their work has been vital to the growth and success of the enterprise cluster. I would also like to express my appreciation to the Department of Communications, Climate Action & Environment, to Dublin City Council, to the Public Appointments Service, and to the other Government Departments that supported DHDA throughout the year.

The Agency is fortunate to have a very strong Board, committed to realising The Digital Hub vision. I thank all members of the Board for their guidance, assistance and hard work throughout the year. In particular, I would like to extend my thanks, and those of the Board, to Ms Katherine Licken, who served on the Board since 2010, and whose term of office expired in October 2016.

Finally, I wish to express my and the Board’s appreciation for the continuing support of the Minister and his officials, and I look forward to the continued successful development of the Hub and its ongoing contribution to Dublin’s digital ecosystem and to the local and national economies.

Paul Holden

Chairman


INTRODUCTION

The Digital Hub campus is very much on track to meet its strategic objectives to support emerging and scaling tech and digital enterprises, to participate and invest in the urban renewal and regeneration of the Liberties area of Dublin 8 and to continue our commitment to digital learning with the local community. 2016 saw 28 new companies establishing a presence in our vibrant community at The Digital Hub, with an almost 50:50 split between indigenous and foreign direct investment (FDI) businesses. This brings the total number of companies at the cluster to 97. Collectively 725 people worked with companies based in The Digital Hub at year-end. We have a strong pipeline of indigenous and international companies looking to move in and we are on track to shortly have over 100 digital media, technology and internet businesses operating out of our enterprise space.

Examples of Irish companies joining The Digital Hub during 2016 include:

> Bizimply, developers of an online workforce management application that supports the way restaurants and retail businesses manage and engage with their employees;

> Neuromod, a medical device company specialising in the research and development of neuromodulation technologies. The company is committed to developing innovative patient-centric treatments that promote positive therapeutic change in the human nervous system;

> patientMpower, a platform that empowers patients to better manage their care, and helps health providers and researchers to improve treatments, particularly in cases of transplant, idiopathic pulmonary fibrosis (IPF), vasculitis, and prostate cancer.

The Digital Hub also became home to a number of international companies in 2016, including:

> AdScribe, a company started in London in 2014 that helps TV platforms to realise new revenue and increase customer satisfaction through analytics and advertising;

> CoinaPhoto, a new photo sharing social media platform connecting users to a vibrant global community and marketplace for real digital photography;

> PicMonkey, originally established in Seattle, who have helped create more than 2 billion images since 2012 using the company’s creative tools platform for photo editing and graphic design.

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CEO’s Report2016 was another momentous year within The Digital Hub as we firmly established our position as Ireland’s largest and most established cluster of technology, digital media and internet companies.

The mix of companies within our cluster is always changing, and since taking up my role as CEO in November 2016, we are renewing our focus on revitalising the cluster dynamic to ensure more companies really reap the benefits from being part of our wider digital community.

The renewal and regeneration of vacant sites under our ownership in the Liberties continues to be a priority for us and will play a key role in the future growth of our enterprise cluster. We look forward to strengthening our working relationships and in particular our relationships within the local community in order to enhance Dublin 8’s reputation as a great place to live and work.

Throughout the year, we continued to deliver our successful community learning initiatives including Future Creators, Future Creators Cadets and D8 Surfers Club. In total, 263 people attended our various learning programmes.

We also provided companies at The Digital Hub with opportunities to learn at a variety of seminars and workshops.

In terms of enterprise initiatives, we held a highly successful Connected Health Workshop, jointly organised with Molecular Medicine Ireland, to promote and support digital solutions to healthcare problems.

2016 also saw the completion and relaunch of The Digital Hub’s new website, developed by Software Design, one of the enterprises based in The Digital Hub.

I would like to use this opportunity to thank the many important stakeholders who continue to support The Digital Hub, including the Minister and his officials at the Department of Communications, Climate Action & Environment, Dublin City Council, IDA Ireland, Enterprise Ireland, the Local Enterprise Office, the companies based on our campus, the schools and colleges in the community, and the local community and its associations.

On a personal note, I would like to offer a very special thanks to all the staff of the Agency who continue to work tirelessly on behalf of the Agency and The Digital Hub’s resident companies.

Finally, I would also like to thank the members of the Board and in particular the Chairman, Paul Holden.

Fiach Mac Conghail Chief Executive Officer


The CampusThe DHDA is continuously working to provide its client companies with the infrastructural supports they need in order to thrive. By the end of 2016, The Digital Hub campus had 126,000 square feet of space, located across the campus. Offering flexible, competitively priced ‘plug and play’ commercial office space within a vibrant digital business community continues to be a key attraction of the campus.

To cater for the ever-increasing demand from companies to locate at The Digital Hub, the DHDA continued to progress the competitive dialogue and sales process for the development of vacant sites on Thomas Street that will be used to fund the growth of the enterprise cluster. In 2016, the initial stage of engaging with potential strategic investors and development partners was completed, and the project has now moved into stage 2 of the tender process to select the preferred bidder.

The clustering of companies at The Digital Hub is also creating a demand for services and amenities in the immediate neighbourhood of the Liberties and is resulting in the revitalisation of the Dublin 8 area. An entrepreneur approached the DHDA in late 2016 to discuss the possibility of placing a unique retail coffee shop, constructed out of refurbished shipping containers, on The Digital Hub campus. This project will come to fruition and open for business in 2017.

The historic and iconic ‘St Patrick’s Tower’ has played its part during the course of the year in drawing attention to The Digital Hub. The Tower, which is Europe’s tallest smock windmill, was specially lit up for the first time in green and red lights respectively for St Patrick’s Day and Christmas festivities.

Energy Usage

Energy Usage (kWh) 20162015

(Restated)

Renewable Sources

2016

Electricity (MPRN) 985 850 95%

Natural Gas (GPRN) 767 567 0%

Electricity and Steam (non-MPRN)

1369 1613 100%

Total Consumption 3121 3030 75.4%

Focus on Our Community Learning Initiatives

FUTURE CREATORS

Future Creators, one of The Digital Hub’s flagship strategic learning initiatives for the local Dublin 8 community, was successfully rolled out for the sixth consecutive year in 2016.

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The Work of the Digital Hub Development Agency (DHDA)

Established in 2011 by The Digital Hub and delivered with the National College of Art and Design (NCAD) and H2 Learning, the Future Creators programme aims to equip young people (aged 13-16 years old) from Dublin 8 with a set of digital skills, including animation, coding, social media, digital image and sound manipulation, filmmaking, and robotics. The programme also works to enhance their exposure to STEM subjects and art and to build their confidence, so they may consider pursuing a career related to digital skills. Furthermore, it promotes key 21st century skills of teamwork, collaboration, problem-solving and communication among the participants.

At a graduation ceremony held in June 2016, 22 local students – 11 boys and 11 girls, aged between 13 and 16 years – were presented with certificates marking their successful completion of the digital media programme. The Future Creators students attended the Youth Film Festival, and produced a short film that was premiered on Irish TV. A new group of 24 young participants started the Future Creators programme in October 2016, and these will complete the programme in June 2017.

FUTURE CREATORS CADETS

Following its successful pilot launch in 2015, The Future Creators Cadets programme was run for the second year in 2016. Designed as an after-school digital learning programme for 10-12 year olds in the Dublin 8 area, the programme is delivered with the National College of Art and Design (NCAD) and H2 Learning.

Inspired by the Future Creators programme, the Future Creators Cadets course is tailored to the abilities, interests and needs of younger participants, providing an excellent knowledge base for participants who choose to progress to the Future Creators programme. In 2016, 21 young students participated in the programme.

The Future Creators Cadets learn basic circuitry and electronic skills, spatial, product and textile design, music and music technology, with the additional option of coding. The programme runs throughout the academic year, with classes taking place once a week for two hours.

D8 SURFERS CLUB

Thanks to the support of the Department of Communications, Climate Action & Environment, The Digital Hub was able to roll out its D8 Surfers Club for the second year running. Attracting 68 participants over the course of the year, the D8 Surfers Club provided Dublin 8 residents with a free digital literacy course and the opportunity to learn important online skills such as how to use a laptop/tablet, email, Skype and other communication tools, and how to surf the internet.

The D8 Surfers Club is a five-week course of two-hour classes. With just 10 participants per class, the relaxed setting ensures that everybody can learn at their own pace and get the attention they need from the dedicated tutor.

COLLABORATING WITH OTHERS TO PROMOTE DIGITAL SKILLS

In 2016, we also worked with other community organisations, including An Cosán, the Solas Project and the South Inner City Community Development Association (SICCDA) to deliver further digital learning workshops that covered topics such as music and coding, social media and how to use your tablet and smartphone.

Our Future Creators programme inspired the ‘Digital Skills Pathways for Youth across Europe’ project, which is funded by the Erasmus+ Programme of the European Commission through Léargas, the Irish National Agency for national and international exchange and cooperation programmes in education. The project was a collaboration between The Digital Hub, H2 Learning, NCAD, Krzyzowa Foundation (Poland) and MFG Baden-Württemberg (Germany), with the objective of developing an out-of-school digital media programme for young people. Called ‘Digital Pathways’, the programme will include a package of resources for organisations and individuals working with young people all over Europe when it is completed in early 2017.


COMPANIES OPERATING IN THE DIGITAL HUB

AT 31ST DECEMBER 2016

1. Adaptive International

2. Adscribe

3. Afility

4. Alien TT

5. Amazing.com

6. Aptify

7. Artofus

8. Athena Media

9. Atlas

10. Axon Search

11. Base2Digital

12. beActive

13. Big Bang Design

14. Bizimply

15. Braahmam

16. Canary

17. Capiche Creative

18. CB Media

19. Ceithre Digital Thinking

20. City & Guilds

21. Click Ahead

22. Cloud Media

23. Cloudbeds

24. CoinaPhoto

25. Consumer Data Protection

26. CoolMoss Creative Agency

27. Creative Nation

28. Danal Mobile Solutions Ireland

29. Davis Events Agency

30. DIDWW

31. Digital Skills Academy Limited

32. Digital Strategy Consultants

33. Dot Nice International

34. EasySafe

35. Equinox eBusiness Solutions

36. Eventbrite

37. Ezora

38. Fluid Rock

39. Fractus Learning

40. Geraghty Energy Consultants

41. Get Smart Media

42. Good Travel Software

43. H2 Learning

44. ICST

45. Imprez

46. iNavtas

47. Incognito Software

48. Infocare Healthcare Systems

49. Jool ERP

50. Juvo

51. Keyedin Solutions

52. Lonely Planet Global

53. Maithú IT Solutions

54. Mashup Media

55. Medical EGuides

56. Minfarm

57. National Digital Research Centre

58. Neuromod Devices

59. Nextdoor

60. Noggin

61. Numbergroup

62. Odin Consultants Limited

63. Optimal Workshop

64. patientMpower

65. Pentagon 2000

66. Phoenix Safety

67. PicMonkey

68. Pillarprojects

69. PixelSoup

70. PlayON

71. Plugmedia

72. Primeur

73. Process

74. Relevant Play

75. Requisys

76. RT Digital

77. SalesManager International

78. Silicon Republic

79. Skylads

80. SoftPotential

81. Software AG

82. Software Design

83. Sonru

84. South West Inner City Local Employment Centre

85. Square1

86. SWOT Digital

87. Tenego Partnering

88. The Localizer

89. Think Research Corporation

90. TIBCO Software

91. Treasury Delta

92. Tyndall National Institute

93. VHM World

94. VSware

95. Xwerx

96. Youpass

97. Zoozh Technology

See also: www.thedigitalhub.com/companydirectory

ANNUAL REPORT 201610

http://www.thedigitalhub.com/companydirectory

http://www.thedigitalhub.com/companydirectory

WE CREATE A COLLABORATIVE COMMUNITY FOR BUSINESS GROWTH, NETWORKING AND CREATIVITY


Board members are appointed by the Minister for Communications, Climate Action & Environment with the consent of the Minister for Public Expenditure & Reform in accordance with the terms of the Digital Hub Development Agency Act 2003. Board appointments are for a period of not more than three years, and members are eligible for re-appointment.

Within its own activities and use of committees with approved terms of reference, the Board operates in accordance with the provisions set out in the Digital Hub Development Agency Act 2003, and within the guidelines set out in the Code of Practice for the Governance of State Bodies issued by the Department of Finance. The Board holds as many meetings each year as may be necessary for the performance of its functions and not less than one meeting per quarter. The quorum for a meeting is six members. During 2016, the Board held eight meetings.

Membership of the Board in 2016 was as follows:

> Paul Holden (Chairman) (8/8)*, Managing Director, Rédacteurs Limited

> Fiach Mac Conghail (1/1), CEO, Digital Hub Development Agency

> Michael Conlon (5/6), CEO, South Inner City Community Development Association. Appointed 03/06/16.

> Clare Duignan (7/8), Non-Executive Director

> Owen Keegan (8/8), Chief Executive, Dublin City Council

> Brian Keogh (6/6), Chartered Engineer. Appointed 03/06/16.

> Katherine Licken (6/6), Assistant Secretary, Department of Communications, Climate Action & Environment. Term expired 03/10/16.

> Gerry Macken (6/7), Interim CEO, Digital Hub Development Agency. Term expired 11/11/16.

> Ann Markey (6/6), Non-Executive Director. Appointed 03/06/16.

> Brendan McDonagh (6/8), Executive Director, IDA

> Seamus Ratigan (0/1), Community Representative. Deceased 31/01/16.

The Board expressed condolences at the passing of Seamas Ratigan on 31st January 2016, and acknowledged his contribution as a Board member and his commitment to the local community.

* Numbers in brackets indicate the number of meetings attended/number of meetings held whilst a member of the Board.


The DHDA BoardThe Board of the DHDA is responsible for setting the broad strategy and policies for the Agency, and has oversight responsibility for the activities of the Agency.

PAUL HOLDEN(CHAIRMAN)MANAGING DIRECTOR, RÉDACTEURS LIMITED

AUDIT AND RISK COMMITTEE

The Audit and Risk Committee has specific terms of reference, aimed at assisting the Board in overseeing the integrity of the financial statements, the financial reporting process, the risk management and assessment process, and the Agency’s compliance with internal policies. The Committee oversees the Internal Audit function and its compliance with the principles set out in the Code of Practice.

During 2016, the Finance and Audit Committee met on six occasions and comprised the following members:

> Brendan McDonagh (Chair until September 2016)

> Ann Markey (Chair from September 2016)

> Clare Duignan

> Victor Leonov (Non-Board member)

PROPERTY COMMITTEE

The Property Committee was constituted by the Board and held its first formal meeting in November 2016. The role of the Property Committee is to assist the Board in ensuring that all aspects of the Agency’s property policy are kept under regular review and to examine and assess all property proposals prior to approval by the Committee for recommendation to the Board and subsequently for Ministerial approval where required. The Committee ensures that the Agency’s property policy is implemented by management in accordance with good practice, particularly with regard to transparency of procurement, expenditure, disposals and the associated costs and benefits.

The Committee is comprised of the following members:

> Brian Keogh (Chair)

> Fiach Mac Conghail (CEO)

> Michael Conlon

> Ann Markey


FIACH MAC CONGHAILCEO, DIGITAL HUB DEVELOPMENT AGENCY

KATHERINE LICKEN ASSISTANT SECRETARY, DEPARTMENT OF COMMUNICATIONS, CLIMATE ACTION & ENVIRONMENT.

MICHAEL CONLON CEO, SOUTH INNER CITY COMMUNITY DEVELOPMENT ASSOCIATION.

GERRY MACKENINTERIM CEO, DIGITAL HUB DEVELOPMENT AGENCY.

CLARE DUIGNANNON-EXECUTIVE DIRECTOR

ANN MARKEYNON-EXECUTIVE DIRECTOR

OWEN KEEGANCHIEF EXECUTIVE, DUBLIN CITY COUNCIL

BRENDAN MCDONAGHEXECUTIVE DIRECTOR, IDA

BRIAN KEOGHCHARTERED ENGINEER.

SEAMUS RATIGANCOMMUNITY REPRESENTATIVE DECEASED

The DHDA was established as a statutory body under the Digital Hub Development Agency Act 2003 and operates under the aegis of the Minister for Communications, Climate Action & Environment who is empowered to provide funds to the Agency, to issue general policy directives, and to seek information on the Agency’s activities. While operating in accordance with the provisions of the Act, the Agency also complies with a range of other statutory and administrative requirements, in particular those set out below:

CODE OF PRACTICE FOR THE GOVERNANCE OF STATE BODIES

The DHDA’s Governance Manual adopted by the Board sets out all aspects of governance, accountability, procedures and operational structures, and seeks to apply all the provisions of the Code of Practice for the Governance of State Bodies issued by the Department of Finance in 2009. In a separate report furnished annually to the Minister, the Chairman confirms compliance with the requirements of the 2009 Code.

A revised Code of Practice for the Governance of State Bodies took effect from 1st September 2016 and is applicable for reporting purposes to accounting periods commencing on or after that date. The DHDA engaged its Internal Auditors to undertake an assessment of its current compliance with the provisions of the new Code. This process will identify gaps arising and will lead to the formulation of an implementation programme to assist the Agency in achieving compliance with the revised requirements at the earliest possible date.

GUIDELINES FOR THE APPRAISAL AND MANAGEMENT OF CAPITAL EXPENDITURE

The DHDA adopts the guidelines set out in the Public Spending Code issued by the Department of Public Expenditure & Reform for the planning, appraisal and evaluation of capital expenditure projects.

ETHICS IN PUBLIC OFFICE ACT 1995, AND STANDARDS IN PUBLIC OFFICE ACT 2001

Board members and staff members holding designated positions are obliged to comply with the provisions of the Ethics in Public Office Act 1995, and the Standards in Public Office Act 2001, and to furnish a Statement of Interests to the Standards in Public Office Commission where there may be a material influence on their performance of Agency matters.

FREEDOM OF INFORMATION ACT 2014

The DHDA complies with the provisions of the Freedom of Information Act 2014. The Act provides a legal right to individuals to access information held by the Agency, to the greatest extent possible consistent with the public interest and the right to privacy. However, the Act provides protection for information that is confidential, commercially sensitive or personal, and such information cannot be released under the Act without those who supplied the information being consulted. Requests for information under the Act can be addressed to the Freedom of Information Executive, Digital Hub Development Agency, Digital Exchange, Crane Street, The Digital Hub, Dublin 8.


Corporate Governance

EMPLOYMENT EQUALITY ACTS 1998-2015

The DHDA is an equal opportunities employer and is committed to a policy of equal opportunities in the organisation. The Agency is committed to ensuring that no staff member or applicant for employment receives less favourable treatment than any other on any grounds not relevant to good employment practice.

SAFETY, HEALTH AND WELFARE AT WORK ACT 2005

The wellbeing of the DHDA’s employees is safeguarded through strict adherence to health and safety standards. The Agency has taken the necessary actions to ensure compliance with the Safety, Health & Welfare at Work Act 2005, including the adoption of a safety statement. This extends to the Public Health (Tobacco) Acts 2002 and 2004.

CLIENTS’ CHARTER

The DHDA has issued its Clients’ Charter, which sets out its commitment to a high quality of service to clients and to the general public. This Charter includes a procedure for dealing with complaints, if they arise.

OFFICIAL LANGUAGES ACT 2003

The DHDA comes under the remit of the Official Languages Act 2003, which provides a statutory framework for the delivery of services through the Irish language. In accordance with Section 10 of the Act, this Annual Report is published simultaneously in Irish and English.

PROMPT PAYMENT OF ACCOUNTS ACT 1997

The DHDA is committed to meeting its obligations under the Prompt Payment of Accounts Act 1997 and ensuring that payments to suppliers in respect of all valid invoices are paid promptly. The Agency’s internal controls include procedures to identify invoices and contracts for payment within the prescribed payment dates. These procedures are designed to provide reasonable, although not absolute, assurance of compliance with the Prompt Payment of Accounts Act 1997, amended by the European Communities (Late Payment in Commercial Transactions) Regulations 2002. On a quarterly basis, the DHDA reports the number and values of payments made on its website.

The table below provides a breakdown of payments made to suppliers during 2016:

Details Number Value

Payments made:

within 15 days 457 €3,622,284

within 16 to 30 days 4 €10,637

in excess of 30 days 0 n/a

Total payments 461 €3,632,921

Disputed invoices at end of year

– –



Financial StatementsFor the year ended 31st December 2016

Comptroller and Auditor General Report 18

Statement of Board Members’ Responsibilities 20

Statement on Internal Financial Control 21

Statement of Income and Expenditure and Retained Revenue Reserves 22

Statement of Comprehensive Income 23

Statement of Financial Position 24

Statement of Cash Flows 25

Notes to the Financial Statements 26


Digital Hub Development Agency

I have audited the financial statements of the Digital Hub Development Agency for the year ended 31 December 2016 under the Digital Hub Development Agency Act 2003. The financial statements comprise the statement of income and expenditure and retained revenue reserves, the statement of comprehensive income, the statement of financial position, the statement of cash flows and the related notes. The financial statements have been prepared in the form prescribed under Section 31 of the Act, and in accordance with generally accepted accounting practice.

Responsibilities of the Members of the Agency

The members of the Agency are responsible for the preparation of the financial statements, for ensuring that they give a true and fair view and for ensuring the regularity of transactions.

Responsibilities of the Comptroller and Auditor General

My responsibility is to audit the financial statements and to report on them in accordance with applicable law.

My audit is conducted by reference to the special considerations which attach to State bodies in relation to their management and operation.

My audit is carried out in accordance with the International Standards on Auditing (UK and Ireland) and in compliance with the Auditing Practices Board’s Ethical Standards for Auditors.

Scope of audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the financial statements, sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of

� whether the accounting policies are appropriate to the Agency’s circumstances, and have been consistently applied and adequately disclosed

� the reasonableness of significant accounting estimates made in the preparation of the financial statements, and

� the overall presentation of the financial statements.

I also seek to obtain evidence about the regularity of financial transactions in the course of audit.

In addition, I read the Agency’s annual report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies, I consider the implications for my report.

Opinion on the financial statements

In my opinion, the financial statements:

� give a true and fair view of the assets, liabilities and financial position of the Digital Hub Development Agency as at 31 December 2016 and of its income and expenditure for 2016; and

� have been properly prepared in accordance with generally accepted accounting practice.

In my opinion, the accounting records of the Agency were sufficient to permit the financial statements to be readily and properly audited. The financial statements are in agreement with the accounting records.

Comptroller and Auditor General ReportFor presentation to the Houses of the Oireachtas


Matters on which I report by exception

I report by exception if I have not received all the information and explanations I required for my audit, or if I find

� any material instance where money has not been applied for the purposes intended or where the transactions did not conform to the authorities governing them, or

� the information given in the Agency’s annual report is not consistent with the related financial statements or with the knowledge acquired by me in the course of performing the audit, or

� the statement on internal financial control does not reflect the Agency’s compliance with the Code of Practice for the Governance of State Bodies, or

� there are other material matters relating to the manner in which public business has been conducted.

I have nothing to report in regard to those matters upon which reporting is by exception.

Patricia Sheehan For and on behalf of the Comptroller and Auditor General

15 December 2017


The Digital Hub Development Agency was established under the Digital Hub Development Agency Act, 2003.

Section 31(4) of the Act requires the accounts of the Agency to be kept in such form and manner as may be specified by the Minister for Communications, Climate Action and Environment, be prepared by the Chief Executive Officer for each financial year and approved by the Agency as soon as practicable but not later than three months after the end of the financial year for submission to the Comptroller & Auditor General for audit.

In preparing the financial statements, the Board Members’ are required to:

� select suitable accounting policies and apply them consistently

� make judgements and estimates that are reasonable and prudent

� comply with applicable accounting standards, subject to any material departures disclosed and explained in the financial statements

� prepare the financial statements on the going concern basis unless it is an inappropriate basis

The Board is responsible for keeping adequate accounting records which disclose with reasonable accuracy at any time the financial position of the Agency and which enables it to ensure that the financial statements are prepared in accordance with Section 31 of the Digital Hub Development Agency Act 2003. The Board is also responsible for safeguarding the assets of the Agency and hence for taking reasonable steps to prevent and detect fraud and other irregularities.

Signed on behalf of the Board:

Paul Holden Chairman

Fiach Mac Conghail Chief Executive Officer

5th December 2017

Statement of Board Members’ Responsibilities


Responsibility for Internal Financial Control

On behalf of the Board of the Digital Hub Development Agency, I acknowledge our responsibility for ensuring that an effective system of internal financial control is maintained and operated.

The system provides reasonable, but not absolute, assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or detected in a timely period.

Key Control Procedures

The Board has taken steps to provide an appropriate control environment by:

� clearly defining management responsibilities;

� establishing formal procedures for reporting significant control failures and ensuring appropriate corrective action.

The Board has established processes to identify and evaluate business risks by:

� identifying the nature, extent and financial implication of risks facing the Agency including the extent and categories which it regards as acceptable;

� assessing the likelihood of identified risks occurring;

� assessing the Agency’s ability to manage and mitigate the risks that do occur;

The system of internal financial control is based on a framework of regular management information, administrative procedures including segregation of duties, and a system of delegation and accountability.

In particular, it includes:

� comprehensive budgeting system with an annual budget which is reviewed and agreed by the Board;

� regular reviews by the Board of periodic and annual financial reports which indicate financial performance against forecasts;

� setting targets to measure financial and other performance.

DHDA has an internal audit function which operates in accordance with the Framework Code of Best Practice set out in the Code of Practice for the Governance of State Bodies (2009). The work of internal audit is informed by analysis of the risk to which the body is exposed; the annual internal audit plans are based on this analysis. The analysis of risk and the internal audit plans are endorsed by the Audit & Risk Committee and approved by the Board. At least annually, Internal Audit provides the Board with a report of internal audit activity. The report includes Internal Audit’s opinion on the adequacy and effectiveness of the system of internal financial control.

The Board’s monitoring and review of the effectiveness of the system of internal financial control is informed by the work of internal audit, the Audit & Risk Committee which oversees the work of internal audit, the management of the Digital Hub Development Agency who have responsibility for the development and maintenance of the financial control framework, and comments made by the Comptroller and Auditor General in his management letter or other reports.

Annual Review of Controls

I confirm that, in respect of the year ended 31st December 2016 the Board conducted a review of the effectiveness of the system of internal financial control.


Paul Holden Chairman

5th December 2017

Statement on Internal Financial ControlFor the year ended 31st December 2016


2016 2015

Note € €

Income

Commercial Income 2,791,275 2,175,727

Exchequer Grants 4 1,586,837 1,667,717

Other Grants – 4,562

Net Deferred Pension Funding 16(c) 215,000 270,000

4,593,112 4,118,006

Expenditure

Staff Related Costs 5 1,131,500 1,177,729

Operations, General and Administration Costs 6 2,303,011 2,344,537

Community Liaison 7 50,383 73,683

Digital Initiatives 8 124,346 108,624

3,609,240 3,704,573

Surplus from Operating Activities 983,872 413,433

Increase in value of Property, Plant and Equipment previously recognised as impairment

9 – 2,805,009

Movement in fair value of Investment Properties 10 – 1,557,541

Profit on Disposal of Property – 1,730,000

Corporation Tax 12 (33,766) 8,603

Surplus for Year 950,106 6,514,586

Balance at 1 January (33,486,021) (40,000,607)

Balance at 31 December (32,535,915) (33,486,021)

The Statement of Cash Flows and Notes 1 to 18 form part of the financial statements.


Paul Holden Fiach Mac Conghail Chairman Chief Executive Officer

5th December 2017

Statement of Income and Expenditure and Retained Revenue ReservesFor the year ended 31st December 2016


2016 2015

Note € €

Surplus for Year 950,106 6,514,586

Experience Gains/(Losses) on Pension Liabilities 16(c) (410,000) (80,000)

Adjustment to Deferred Pension Funding 410,000 80,000

Total Recognised Gains for the year 950,106 6,514,586




5th December 2017

Statement of Comprehensive IncomeFor the year ended 31st December 2016


2016 2015

Note € €

Fixed Assets

Property, Plant and Equipment 9 12,092,987 11,919,414

Investment Properties 10 14,057,266 13,720,000

26,150,253 25,639,414

Current Assets

Receivables 13 285,691 619,324

Cash and Cash Equivalents 2,520,253 1,479,996

2,805,944 2,099,320

Current Liabilities

Payables (amounts falling due within one year) 14 935,555 1,025,782

Net Current Assets Less Liabilities 1,870,389 1,073,538

Total Assets Less Liabilities before Pensions 28,020,642 26,712,952

Deferred Pension Funding 16(c) 2,575,000 1,950,000

Pension Liabilities 16(c) (2,575,000) (1,950,000)

Total Net Assets 28,020,642 26,712,952

Represented by:

Capital Account 15 60,556,557 60,198,973

Retained Revenue Reserves (32,535,915) (33,486,021)

28,020,642 26,712,952




5th December 2017

Statement of Financial PositionAs at 31st December 2016


2016 2015

Note € €

Cash Flows from Operating Activities

Surplus from Operating Activities 983,872 413,433

Depreciation 73,933 273,002

(Increase)/Decrease in Receivables 13 299,867 (120,399)

Increase/(Decrease) in Payables 14 (90,227) (204,954)

Bank Interest (1,562) (5,204)

Net Cash Flows from Operating Activities 1,265,883 355,878

Cash Flows from Investing Activities

Payments to acquire Property, Plant and Equipment (584,772) (1,187,117)

Net Cash Flows from Investing Activities (584,772) (1,187,117)

Cash Flows from Financing Activities

Bank Interest Received 1,562 5,204

Capital Funding 15 357,584 876,768

Net Cash Flows from Financing Activities 359,146 881,972

Net Increase in Cash and Cash Equivalents 1,040,257 50,733

Cash and Cash Equivalents at 1 January 1,479,996 1,429,263

Cash and Cash Equivalents at 31 December 2,520,253 1,479,996

Statement of Cash FlowsFor the year ended 31st December 2016


1. Accounting Policies

The Digital Hub Development Agency was set up under The Digital Hub Development Agency Act 2003, with the project office located in Digital Depot, Roe Lane, The Digital Hub, Dublin 8.

The basis of accounting and significant accounting policies adopted by the Digital Hub Development Agency are set out below. They have all been applied consistently throughout the year and for the preceding year.

a) General Information

The primary functions of the Digital Hub Development Agency as set out in Section 8 of that Act are as follows:

i) procure, secure the provision of and to promote and facilitate the development, including the carrying out of construction or maintenance works, of The Digital Hub as a location for digital enterprises and related activities;

ii) formulate strategies to encourage individuals and enterprises engaged in digital content and related activities to locate in The Digital Hub;

iii) promote and facilitate the procurement of technical and communications infrastructure to attract digital enterprises to The Digital Hub;

iv) prepare a development plan in accordance with Section 9;

v) prepare estimates of the costs of implementation of the development plan and propose possible funding options;

vi) oversee and manage implementation of the development plan;

vii) consult with local community interests in or adjacent to The Digital Hub as part of the implementation of the development plan;

viii) enter into agreements with other persons in order to secure the development of The Digital Hub whether by means of a concession, joint venture, public private partnership or any other means;

ix) enter, where appropriate, into an agreement with a person who has arranged or provided funding for the carrying out of any part of the development of The Digital Hub.

The Digital Hub Development Agency is a Public Benefit Entity (PBE).

b) Statement of Compliance

The financial statements of the Digital Hub Development Agency for the year ended 31 December 2016 and the prior year have been prepared in accordance with FRS 102, the financial reporting standard applicable in the UK and Ireland issued by the Financial Reporting Council (FRC), as promulgated by Chartered Accountants Ireland.

c) Basis of Preparation

The financial statements have been prepared under the accruals method of accounting, except for Exchequer Grants and for certain assets and liabilities that are measured at fair values as explained in the accounting policies below. The financial statements are in the form approved by the Minister for Communications, Climate Action and Environment with the concurrence of the Minister for Finance under the Digital Hub Development Agency Act 2003. The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the financial statements of the Digital Hub Development Agency.

Notes to the Financial StatementsFor the year ended the 31st December 2016


1. Accounting Policies (continued)

d) Revenue

Exchequer Grants

Revenue is generally recognised on an accruals basis; one exception to this is in the case of Exchequer Grants which are recognised on a cash receipts basis.

Commercial Income

Commercial and other income is recognised on an accruals basis. Unearned revenue is recorded as deferred income and is transferred to the Statement of Income and Expenditure and Retained Revenue Reserves when earned.

Interest Income

Interest income is recognised on an accruals basis using the effective interest rate method.

e) Property, Plant and Equipment

(i) Development Assets

Development assets consist of land and buildings owned by the Agency to be used for the purpose of developing a centre of innovative technology-based enterprise. Upon development, the assets are accounted for as Investment Properties.

Development Assets are treated as Property, Plant and Equipment and are measured using the revaluation model. Where the assets carrying amount is increased as a result of revaluation, the increase is recognised in the Statement of Comprehensive Income. Where the increase reverses a revaluation decrease previously recognised for the relevant assets, it is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves.

(ii) Fixtures & Fittings and Computer Equipment

Fixtures & Fittings and Computer Equipment are stated at cost less accumulated depreciation, adjusted for any provision for impairment. Depreciation is provided at rates estimated to write off the cost less the estimated residual value of each asset on a straight line basis over their estimated useful lives, as follows:

Fixtures and Fittings 20% per annum Computers Equipment 33⅓% per annum

Residual value represents the estimated amount which would currently be obtained from disposal of an asset, after deducting estimated costs of disposal, if the asset were already of an age and in the condition expected at the end of its useful life.

If there is objective evidence of impairment of the value of an asset, an impairment loss is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves.

f) Investment Properties

Investment Properties are properties on which development has been completed and which are retained by DHDA for the purpose of their investment potential and rental generation.

Investment properties are initially recognised at cost. Investment properties whose fair value can be measured reliably are measured at fair value. Changes in fair value are recognised in the Statement of Income and Expenditure and Retained Revenue Reserves.


1. Accounting Policies (continued)

g) Receivables

Receivables are recognised at fair value, less a provision for doubtful debts. The provision for doubtful debts is a specific provision, and is established when there is objective evidence that DHDA will not be able to collect all amounts owed to it. All movements in the provision for doubtful debts are recognised in the Statement of Income and Expenditure and Retained Revenue Reserves.

h) Operating Leases

Rental expenditure under operating leases is recognised in the Statement of Income and Expenditure and Retained Revenue Reserves over the life of the lease. Expenditure is recognised on a straight-line basis over the lease period, except where there are rental increases linked to the expected rate of inflation, in which case these increases are recognised when incurred. Any lease incentives received are recognised over the life of the lease.

i) Employee Benefits

Short-term Benefits

Short term benefits such as holiday pay are recognised as an expense in the year, and benefits accrued at year-end are included under Payables in the Statement of Financial Position.

Retirement Benefits

Digital Hub Development Agency operates a defined benefit pension scheme.

DHDA has an arrangement with the Department of Communications, Climate Action and Environment (DCCAE) under which DHDA will be reimbursed all monies required to settle pension obligations when they fall due. In return, DHDA is required to pay DCCAE an amount equal to employee contributions for the year plus an employer contribution at rates set by the Department of Public Expenditure and Reform. Pension costs reflect pension benefits earned by DHDA staff in the period and are shown net of employee pension contributions, which are retained by DCCAE. An amount equal to the benefits earned by staff is recognised as deferred funding in line with the reimbursement arrangement set out above.

Pension scheme liabilities represented by the present value of future pension payments earned by DHDA staff to date are measured on an actuarial basis using the projected unit method (if appropriate). The amount to be included in the financial statements for the Deferred Pension Funding amount is estimated at an amount equal to the estimate of the obligation for the pension scheme liabilities.

j) Deferred Tax

In accordance with FRS 102, the Digital Hub Development Agency provides for deferred tax on a ‘full provision’ basis arising from timing differences between the recognition of gains or losses in the financial statements and their recognition in a tax computation. Deferred tax balances are not discounted as it is considered that the effect of discounting would not be material.

k) Capital Account

Capital Account represents the value of assets transferred to the Agency on its establishment and thereafter plus other capital funding and grants received.

Notes


2. Critical Accounting Judgements and Estimates

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the date of the Statement of Financial Position and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements have had the most significant effect on amounts recognised in the financial statements.

Impairment of Property, Plant and Equipment

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting date.

Depreciation and Residual Values

The Directors have reviewed the asset lives and associated residual values of all fixed asset classes, and in particular, the useful economic life and residual values of fixtures & fittings and computer equipment, and have concluded that asset lives and residual values are appropriate.

Retirement Benefit Obligation

The assumptions underlying the actuarial valuations from which the amounts recognised in the financial statements are determined (including discount rates, rates of increase in future compensation levels, mortality rates and healthcare cost trend rates) are updated annually based on current economic conditions, and for any relevant changes to the terms and conditions of the pension and post-retirement plans.

The assumptions can be affected by:

(i) the discount rate, changes in the rate of return on high-quality corporate bonds;

(ii) future compensation levels, future labour market conditions;

(iii) health care cost trend rates, the rate of medical cost inflation in the relevant regions.

3. Going Concern and Future Development

DHDA currently meets its operational costs from a mix of Exchequer Grants and commercial income and it is anticipated that Exchequer Grants will continue to be available to the Agency to meet ongoing financial obligations. For this reason the financial statements continue to be prepared on a going concern basis.

Properties owned by DHDA consist of a mix of development assets and investment properties, with the investment properties being licenced/leased to tenants for use as enterprise offices. DHDA remains focused on the delivery of enterprise offices within The Digital Hub campus and continues to make progress on the development of its properties, consistent with its objectives.

A competitive dialogue process commenced during 2015 for the potential redevelopment of the Crane Street site, consisting of the combined Vathouse 7 building and the Cash & Carry Warehouse and adjacent sites. During 2016 DHDA has also undertaken feasibility assessments relating to other assets and sites within its portfolio.


3. Going Concern and Future Development (continued)

During 2015, the Grainstore building was refurbished for lease to tenants in exchange for the Bonham Street site, upon which student accommodation was developed. The Grainstore building was fully let as at 31 December 2016.

As part of the Programme for Public Sector Reform, DHDA will transition under the aegis of Dublin City Council by means of the establishment of an independent entity, at which time the DHDA will be dissolved. The transition will be effective upon the enactment of legislation. DHDA are engaged in an ongoing consultative process with relevant stakeholders.

4. Exchequer Grants

DHDA confirms that it has adequate financial control systems in place to manage granted funds as per guidelines under the Department of Public Expenditure and Reform Circular 13/2014.

Grants received from the Department of Communications, Climate Action and Environment, made under Section 29 of the Digital Hub Development Agency Act 2003 (Vote 29: Subhead A4) for the purposes of expenditure by the Agency in the performance of its functions were as follows:

2016 2015

€ €

Current

– Operations 1,172,000 1,274,000

– Community Liaison 70,713 68,666

– Digital Initiatives 70,000 107,501

– Management & Security of Undeveloped Properties 274,124 193,050

1,586,837 1,643,217

– BenefIT Programme – 24,500

Capital

– Development Works – 347,403

– 7&8 Thomas St, 1 Crane St – 372,929

– 720,332

Capital grant receivable from Dublin City Council for the purpose of construction works on undeveloped, protected structures was as follows:

2016 2015

€ €

– 7&8 Thomas St, 1 Crane St 357,584 156,436

Notes


5. Staff Related Costs

a) The average number of persons employed by DHDA during the year was 10 (2015: 10). In addition the DHDA retains the services of two third party agency administrative staff. The aggregate payroll costs were as follows:

2016 2015

€ €

Salaried Staff 553,863 562,028

Third party agency Staff 93,073 85,584

Secondment Staff 95,944 108,427

Board Member fees 33,624 27,360

Employer’s PRSI 56,607 48,671

Employer’s Pension Contribution 83,389 75,659

Adjustment to Deferred Exchequer Pension Funding 215,000 270,000

1,131,500 1,177,729

b) Salaried Staff Breakdown (above €60,000)

No of Employees No of Employees

2016 2015

€60,000 to €70,000 1 1

€70,001 to €80,000 – –

€80,001 to €90,000 – –

€90,001 to €100,000 – –

€100,001 to €110,000* 2 2

* Includes one staff member on secondment to the Department of Communications, Climate Action and Environment.

c) DHDA adheres to Government pay policy and the terms of the Lansdowne Road Agreement which took effect from 1st July 2016. In 2016, an amount of €28,467 (2015: €31,870) was deducted from payroll in respect of the Pension Levy and paid over to the Department of Communications, Climate Action and Environment. In 2016, expenditure of €2,000 (2015: €1,500) was awarded to staff as employee recognition. Additional staff related costs totalling €1,943 were incurred in respect of a Christmas Party, gifts of flowers and other staff events.

For the period to 13th November, the role of CEO was filled under a secondment arrangement from Dublin City Council, for which a salary of €78,451 and a secondment levy of €17,493 were paid. Fiach Mac Conghail commenced as CEO with effect from 7th November 2016 and salary paid from that date until 31st December 2016 was €15,310. No performance-related payments or other allowances were made.


5. Staff Related Costs (continued)

d) DHDA complies with Government guidelines in respect of payment of fees to Board members. There were no Board-related expenses paid in 2016. Board member fees paid in 2016 were as follows:

2016 2015

Paul Holden (Chair) 11,970 11,970

Chief Executive Officer – –

Clare Duignan 7,695 7,695

Ann Markey (appointed 3 June 2016) 4,439 –

Brian Keogh (appointed 3 June 2016) 4,439 –

Michael Conlon (appointed 3 June 2016) 4,439 –

Owen Keegan – –

Katherine Licken – –

Brendan McDonagh – –

Seamas Ratigan (deceased 31 January 2016) 642 7,695

6. Operations, General and Administration Costs

2016 2015

Note € €

Travel & Subsistence 2,500 6,810

Property-Related Costs 1,534,878 1,463,020

Office Overheads¹ 98,160 80,415

Insurance 63,239 60,953

Marketing-Related Costs 49,093 66,507

Networking Events (Agency’s contribution)² 6,605 5,393

Property Development-Related Costs³ 291,035 222,953

Professional Services 6.1 194,898 137,136

Audit Fee 7,000 11,000

Depreciation (see Note 9) 73,933 273,003

Bad Debts (17,990) 14,942

Bank Charges 1,562 1,919

Sundry (1,902) 486

2,303,011 2,344,537

¹ Office Overheads include one non-cancellable operating lease with the total amount due for the remaining contract period as follows: €7,070 within one year and €15,908 between two and five years.

² DHDA’s policy on networking events ensures that a high standard of probity and accountability is maintained and that instances where expenditure is incurred on food and/or drink are managed responsibly and with business purpose.

³ Property Development-Related Costs relates to expenditure associated with maintenance of the undeveloped properties.

Notes


6. Operations, General and Administration Costs (continued)

6.1 Professional Services

2016 2015

€ €

Recruitment 9,700 15,121

Property Valuation 33,000 –

Legal/Internal Audit/Taxation 32,643 24,815

PR/Public Affairs 62,400 62,400

Digital Content Services 34,800 34,800

Other Services 22,355 –

194,898 137,136

7. Community Liaison

Relates to the cost of providing local community programmes.

2016 2015

€ €

Programme Management 34,416 34,205

Programme Delivery 13,656 22,776

Furniture & Equipment 1,130 15,403

Other Costs 1,181 1,299

50,383 73,683

Additional costs of €21,387 relating to local community programmes have been capitalised during 2016.

8. Digital Initiatives

Relates to the cost of digital projects and initiatives which provide a test-bed for use of digital media.

2016 2015

€ €

Future Creators 89,930 71,286

Connected Health – 37,338

Project Management 34,416 –

124,346 108,624


9. Property, Plant and Equipment

Development Assets

Fixtures &Fittings

ComputerEquipment

Total

€ € € €

Cost/Valuation

at 1 January 2016 11,790,000 2,678,423 1,134,337 15,602,760

Additions 168,236 3,011 76,261 247,508

At 31 December 2016 11,958,236 2,681,434 1,210,598 15,850,268

Depreciation

at 1 January 2016 – 2,569,222 1,114,124 3,683,346

Charge for year – 52,168 21,767 73,935

At 31 December 2016 – 2,621,390 1,135,891 3,757,281

Net Book Value

at 1 January 2016 11,790,000 109,201 20,213 11,919,414

at 31 December 2016 11,958,236 60,044 74,707 12,092,987

10. Investment Properties

The movement in the carrying value of the assets held as Investment Properties is set out below.

Investment Properties 31 Dec2015

Additions Disposal Reclass Revalue 31 Dec2016

€ € € € € €

Digital Depot 2,800,000 160,942 – – – 2,960,942

Gatelodge 470,000 – – – – 470,000

Digital Court 3,580,000 – – – – 3,580,000

10-13 Thomas Street 950,000 – – – – 950,000

157 Thomas Street 850,000 – – – – 850,000

85-87 Thomas Street 560,000 – – – – 560,000

Townhouse Twenty2 1,000,000 – – – – 1,000,000

Bonham Street car spaces 230,000 – – – – 230,000

Grainstore 3,280,000 176,324 – – – 3,456,324

13,720,000 337,266 – – – 14,057,266

Notes


11. Revaluation of Properties

(i) Every five years, DHDA has engaged a professional firm of valuers to carry out an independent valuation of the Agency’s properties. In the interim period, DHDA has valued its properties by reference to general property market indices and/or professional opinion.

(ii) The last independent valuation was conducted by BNP Paribas Real Estate (“BNP”) as at 31 December 2015 and resulted in significant revaluation gains including the reversal of prior impairment charges. The Agency sought additional guidance from BNP in considering property values as at 31 December 2016. Using an approach consistent with that adopted for the prior year BNP have opined that no impairment or material change in values arose during 2016 with regard to properties owned by the Agency.

(iii) The valuation was determined on the basis of rental income while taking account of the short term nature of the various licences and leases, the location, the condition of the properties and general market conditions.

(iv) DHDA is restricted to using the relevant properties for digital enterprises and mixed development purposes. This was taken into account in determining the valuations.

Development Assets

As outlined in the Accounting Policies, Development Assets are valued using the revaluation model.

The independent valuation of the Development Assets as at 31 December 2015 resulted in a net overall upward revaluation of €2,805k, with certain assets being revised upwards by €3,497k in total and other assets being revalued downwards by €692k in total.

The upward revaluation reversed a valuation decrease previously charged against profit. Accordingly, the net movement in the fair value of Development Assets was recognised in the Statement of Income and Expenditure and Retained Revenue Reserves for the year ended 31 December 2015.

Investment Properties

The independent valuation of the Investment Properties as at 31 December 2015 resulted in an overall upward revaluation of €1,558k which was recognised in the Statement of Income and Expenditure and Retained Revenue Reserves for the year ended 31 December 2015.


12. Taxation

DHDA is liable to Corporation Tax in respect of interest income (Case III/IV) and rental income (Case V). DHDA also provides for Deferred Tax on a ‘full provision’ basis arising from timing differences between the recognition of gains or losses in the financial statements and their recognition in a tax computation.

Taxation charged/(credited) to the Income and Expenditure Account was as follows:

2016 2015

€ €

Tax on ordinary activities – –

Deferred Tax 33,766 (8,603)

Charge for the year 33,766 (8,603)

Section 610 of the Taxes Consolidation Act 1997 (Schedule 15) provides an exemption to DHDA from Capital Gains Tax on disposals made on or after 1st January 2008. For all other tax liabilities, the Digital Hub Development Agency strives to be exemplary in its compliance with taxation laws and in accordance with its tax obligations.

13. Receivables

2016 2015

€ €

Rental Receivables 75,390 295,804

VAT 59,634 22,099

Dublin City Council – Capital Contribution – 156,436

Other Receivables & Prepayments 99,758 60,310

Deferred Tax Asset 50,909 84,675

285,691 619,324

Notes


14. Payables (amounts falling due within one year)

2016 2015

€ €

Payables and Accruals – Operations 231,366 246,832

– Property Development 87,350 46,386

PSWT and Relevant Contracts Tax 53,296 20,354

Payroll Taxes 27,095 17,905

Sundry Deductions 166 8,862

Holiday Pay Accrual 7,152 4,151

Deferred Income 4,507 216,407

Tenants’ Security Deposits 524,623 464,885

935,555 1,025,782

15. Capital Account

2016 2015

€ €

1 Jan Opening Balance 60,198,973 59,322,205

Funding: Exchequer

Development Works (incl. Grainstore) – 347,403

7&8 Thomas St, 1 Crane St – 372,929

Funding: Dublin City Council

7&8 Thomas St, 1 Crane St 357,584 156,436

31 Dec Closing Balance 60,556,557 60,198,973

16. Pension Costs

a. Pension Scheme

Under Section 21 of the Digital Hub Development Agency Act 2003, DHDA provides a scheme for the granting of superannuation benefits to and in respect of its staff members, subject to Ministerial approval. DHDA’s Superannuation Scheme and Spouses & Children’s Pension Scheme were operated on an approved ‘administrative basis’ until formally sanctioned on 27/03/2017 by the Minister for Communications, Climate Action and Environment with the consent of the Minister for Public Expenditure and Reform. The former scheme provides retirement benefits (lump sum and pension) and death gratuity benefits in respect of death in service. The latter scheme provides pension benefits for surviving spouses and dependent children of deceased members. Both schemes are unfunded defined benefit superannuation schemes.


16. Pension Costs (continued)

Pension levies are deducted from salaries and paid over to the Department of Communications, Climate Action and Environment annually together with the employer contribution. Under the arrangement in place, DCCAE will reimburse in full the pension liability of the Agency as and when those liabilities fall due. DHDA recognises its right to the reimbursement as a separate asset.

The Board has adapted the treatment and disclosures required by the accounting standard, Financial Reporting Standard 102 (Retirement Benefits) to reflect the arrangements in operation. The FRS 102 pension liability at 31st December 2016 is €2,575,000 (2015: €1,950,000).

The results set out below are based on an actuarial valuation of the pension liabilities in respect of Agency staff as at 31st December 2016. This valuation was carried out by a qualified independent actuary for the purposes of FRS 102.

b. Financial Assumptions

The financial assumptions used to calculate scheme liabilities under FRS 102 are:

2016 2015

Discount rate 1.85% 2.35%

Salary rate increase 2.25% 2.25%

Pension rate increase 2.25% 2.25%

Inflation rate increase 1.75% 1.75%

Life expectancy at age 65: Male 21 years 22 years

Life expectancy at age 65: Female 24 years 25 years

c. Pension Costs

i) Analysis of total pension costs charged to expenditure

Pensions Cost of €83,389 charged to the Income and Expenditure Account is in accordance with funding arrangements agreed with DCCAE. In the absence of the reimbursement arrangement, the impact on costs would have been:

2016 2015

€ €

Total Employer Contributions 83,389 75,659

Current service cost* 165,000 170,000

Interest Costs 50,000 100,000

Adjustment to Deferred Exchequer Pension Funding (215,000) (270,000)

83,389 75,659

* Employee contribution of €28,071 (2015: €25,407) has been included in the calculation of the current service cost.

Notes


16. Pension Costs (continued)

ii) Movement in Net Pension Liability

2016 2015

€ €

Net Pension Liability at 1 January 1,950,000 1,600,000

Current Service Cost 165,000 170,000

Interest Cost 50,000 100,000

Experience (gain)/loss on scheme liabilities 410,000 80,000

Pensions paid in year – –

Net Pension Liability at 31 December 2,575,000 1,950,000

17. Board Members – Disclosure of Transactions

The Digital Hub Development Agency adheres to the guidelines issued by the Department of Public Expenditure and Reform in relation to the disclosure of interests by Board members and staff members in designated positions of employment.

During 2016, a situation arose relating to a short-term lease arrangement where a potential conflict of interest could have arisen. Under the circumstances, the relevant Board member did not participate in or attend discussions relating to the short-term lease arrangement that could have given rise to a potential conflict of interest.

18. Approval of Financial Statements

The Financial Statements were approved by the Board on 4th December 2017.


Documents

DHDA - Annual Report 2016...development, digital media and content creation, eLearning and healthtech, employing almost 725 people. ... redeveloped Grainstore building at the end of