Special Purpose Financial Statements Second Science and Technology Project

Transcription

1 Special Purpose Financial Statements Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized This version of financial starements are a translation from the original, which was prepared in the Croatian language. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of the report takes precedence over this translation.

2 Contents Independent Auditor's report 1-2 Summary of funds received 3 Summary of expenditures 4-5 Summary of statements of expenditures ( SOEs ) 6 Statement of designated accounts 7 Balance sheet 8 Notes to special purpose financial statements 9-15

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6 Special purpose financial statements Summary of expenditures by main categories 10 July December January December 2016 Accumulated to date in Euro IBRD GOV Total IBRD GOV Total IBRD GOV Total A B Capacity Building for Absorption of EU Funds General Technical A1 Assistance 158, ,646 4,015-4, , ,661 A2 Tech, Assistance for Proj, Applications Preparation 83,443-83,443 52,421-52, , ,864 A3 Project Management Support 646,167 6, , ,133 2, , ,300 8,785 1,003, ,256 6, , ,569 2, ,320 1,292,825 8,785 1,301,610 Research and Innovation Programs B1 BICRO Programs 2,308, ,568 2,985,129 3,578, ,468 4,570,811 5,886,904 1,669,036 7,555,940 B2 UKF, MSE and other Programs 1,867, ,141 2,627, , ,875 1,106,563 2,652,174 1,082,016 3,734,189 4,176,047 1,436,709 5,612,756 4,363,031 1,314,343 5,677,374 8,539,078 2,751,052 11,290,130 C Unallocated D Fees 58,901-58, ,901-58,901 TOTAL 5,123,204 1,442,743 6,565,947 4,767,600 1,317,094 6,084,694 9,890,804 2,759,837 12,650,641 PPA EXPENDITURE 1,029,073 1,947 1,031, ,029,073 1,947 1,031,020 TOTAL EXPENDITURE 6,152,277 1,444,690 7,596,967 4,767,600 1,317,094 6,084,694 10,919,877 2,761,784 13,681,661 The accompanying notes form an integral part of the special purpose financial statements 4

7 Special purpose financial statements Summary of expenditures by main categories 10 July December January December 2016 Accumulated to date in Euro IBRD GOV Total IBRD GOV Total IBRD GOV Total Consulting services 786, , , ,871 1,130,734-1,130,734 Sub-financing 4,176,047 1,436,709 5,612,756 4,363,031 1,314,343 5,677,374 8,539,078 2,751,052 11,290,130 Operating costs 65,724 6,034 71,758 42,326 2,751 45, ,050 8, ,835 Training 35,669-35,669 18,372-18,372 54,041-54,041 Fronting fee 58,901-58, ,901-58,901 TOTAL 5,123,204 1,442,743 6,565,947 4,767,600 1,317,094 6,084,694 9,890,804 2,759,837 12,650,641 PPA EXPENDITURE 1,029,073 1,947 1,031, ,029,073 1,947 1,031,020 TOTAL EXPENDITURE 6,152,277 1,444,690 7,596,967 4,767,600 1,317,094 6,084,694 10,919,877 2,761,784 13,681,661 The accompanying notes form an integral part of the special purpose financial statements 5

8 Special purpose financial statements Summary of statements of expenditures ( SOEs ) Aplication No, and date Consultant services Subfinancing in EUR Operating costs Training Total Total SOE as at 31 December ,302 1,687,061 65,502 4,085 2,106,950 SOE Mar , ,565 11,570 13, ,398 SOE Jul ,090 3,269 2, ,502 SOE Dec , ,135 (3,098) 5, ,138 Total loan from 1 January to 31 December ,835 1,671,790 11,741 20,672 2,043,038 Total SOE as at 31 December ,137 3,358,851 77,243 24,757 4,149,988 SOE May , ,794 2,893 8, ,687 SOE Dec , ,036 50,122 9, ,547 Total loan from 1 January to 31 December ,397 1,065,830 53,015 17,992 1,457,234 Total SOE as at 31 December ,009,534 4,424, ,258 42,749 5,607,222 SOE May , ,790 14,161 11,302 1,066,341 SOE Jun ,451 1,107,176 18,354 (298) 1,169,683 SOE Jul ,374 1,305,189 4,342 1,290 1,366,195 SOE Oct ,993 1,033,357 2,732 4,882 1,109,964 Total loan from 1 January to 31 December ,907 4,339,512 39,589 17,175 4,712,183 Total SOE as at 31 December ,325,440 8,764, ,847 59,925 10,319,405 The accompanying notes form an integral part of the special purpose financial statements 6

9 Special purpose financial statements Statement of designated accounts in EUR 10 July December January December 2016 Balance at beginning of the period - 698,072 Transfers from Loan account to designated account Funds from PPA 1,190,924 - Funds from Loan 5,616,298 5,212,184 Credited on designated account 6,807,222 5,910,256 Direct payments from Designated account Claimed on SOEs for PPA (1,044,848) - Claimed on SOEs for Loan (4,562,373) (4,712,183) (5,607,221) (4,712,183) Claimed on SOE (undebited previous year) 361, ,929 Debits from Designated account not yet claimed (863,785) (557,346) (6,109,150) (4,767,600) Balance at the end of the period 698,072 1,142,656 STATEMENT OF DESIGNATED ACCOUNT - fee and interest Balance at beginning of the period - 61 Interest earned Fee (408) (60) Transfer to designated account (90) - Balance at the end of the period 61 1 Total balance at the end of the period 698,133 1,142,657 The accompanying notes form an integral part of the special purpose financial statements 7

10 Special purpose financial statements Balance sheet at 31 December December 2015 in EUR 31 December 2016 in EUR ASSETS Bank balances 698,133 1,142,657 Fees and transfer to designated account 60 - Project expenditures (from IBRD loan) 6,093,376 10,860,976 Project expenditures fronting fee 58,901 58,901 Project expenditures (from Government funds) 1,444,690 2,761,784 Total 8,295,160 14,824,318 SOURCES IBRD (PPA and Loan) 6,807,166 12,019,404 IBRD - fronting fee 58,901 58,901 Exchange rate differences at reinstatement (15,718) (15,771) 6,850,349 12,062,534 Government funds 1,444,690 2,761,784 Interest received Total 8,295,160 14,824,318 The accompanying notes form an integral part of the special purpose financial statements 8

11 Special purpose finacial statements Notes to the special purpose financial statements 1 General International Bank for Reconstruction and Development ( IBRD ) and the Republic of Croatia ( Government ) signed an Advance Agreement for Preparation of Proposed second Science and Technology Project on 16 February 2012 and 30 April 2012, respectively, to facilitate the preparation of ( Project or STP II ), On 22 May 2013, IBRD and the Republic of Croatia signed a Loan agreement Second Science and Technology Project (Loan number 8258-HR). The objectives of the Project are to support absorption of EU Funds in the research and innovation sector by capacitating selected public sector organizations and stimulating the demand for those funds from the business and scientific communities. Main project headings can be summarized as follows: Part A: Capacity Building for Absorption of EU Funds 1. Support to the selected public sector organizations in the research and innovation sector to improve their capacity to qualify for and manage EU Funds in the area of research and innovation through Technical Assistance and Training; 2. Support to selected public sector organizations in the research and innovation sector for the development of applications for research and development grant schemes and infrastructure projects for EU Funds; 3. Support to selected public sector organization for project management and implementation, through financing of Operating Costs, Training and audit for the Project. Selected public sector organizations include the Ministry of Science and Education ( MSE ), Business Innovation Croatian Agency BICRO ( BICRO ) and Unity through Knowledge Fund ( UKF ), MSE has overall responsibility of the project and for strategic guidance on Project implementation. Part B: Research and Innovation Programs 1. Support for research and innovation programs through the provision of Sub-financing, through HAMAG-BICRO, to Beneficiaries for Sub-projects in accordance with the Operational Procedures; 2. Support for strengthening human resources, research excellence and research commercialization through the provision of Sub-financing for collaborative research activities with the Croatian Diaspora and leading international scientific institutions under the Research Cooperability Program; for young scientists for implementation of the Young Researchers and Professionals Program; and for mobility of scientists in order to enhance the flow of knowledge and skills in the Republic of Croatia under the Connectivity Program; 3. Support for strengthening innovation activities through the provision of Sub-financing, through MSE, to Beneficiaries of Sub-projects, including for investments and activities in research commercialization and intellectual property protection of research results under the Technology Transfer Office Support Program. 9

12 Special purpose finacial statements Notes to the special purpose financial statements (continued) 1 General (continued) Part B: Research and Innovation Programs (continued) HAMAG-BICRO and UKF are responsible for sub-financing to beneficiaries, including selecting sub-projects for financing from loan and PPA proceeds, pre-screening, evaluation and supervision procedures while protecting its interests and the interests of the IBRD. In the period from 10 July 2012 to 31 December 2016 former BICRO, respectively HAMAG-BICRO sub-financed the following programmes relating to STP II: - PROGRAM I - Proof of Concept ( PoC ): o o PoC Private supports the entrepreneurs pre-commercial activities in the early developmental phase of new products, services and technological processes; PoC Public - designed to support scientists and researchers from Croatian universities and institutes to help them to turn their idea into a global business and to help them to bridge the gap between their ideas and early scientific results and commercial potential; - PROGRAM II - The Development of the knowledge-based companies RAZUM aimed at the development of new-technology-based enterprises and academic entrepreneurship; - PROGRAM III - Research and development program IRCRO incite small and medium enterprises to cooperate with scientific and research institutions on private research and development activities. UKF supports research that is competitive at an international level, fosters research that creates new values in Croatian economy and supports projects that help the development of research infrastructure in Croatia. In the period from 10 July 2012 to 31 December 2016, UKF sub-financed following programs: - Cooperability Crossing Borders Grant - supports medium-scale collaborative research projects in Croatia with involvement of scientific and research Croatian Diaspora; 10

13 Special purpose finacial statements Notes to the special purpose financial statements (continued) 1 General (continued) Project restructuring At 5 November 2014 MSE initiated STP II restructuring due to the statutory changes of STP II s beneficiaries: 1, Merger of BICRO and Croatian Agency for Small Entrepreneurship and Investment ( HAMAG ) into new agency: Croatian Agency for Small Business, Innovation and Investment ( HAMAG-BICRO ) on 8 May 2014 and 2, Transfer of UKF from MSE to Croatian Science Foundation ( CSF ). Transfer Agreement between MSE and CSF was signed on 19 February Due to the abovementioned changes, at the beginning of May 2014, the financing of Component B.1. BICRO Programs were temporarily suspended until the completion of restructuring and, consequently, BICRO s special account was closed in June Since February 2014, the financing of UKF programs within the Component B.2 was reduced to 18 existing sub-projects contracted prior to signing of the transfer agreement, which remained under authority of MSE until the restructuring completion. The restructuring was ended on 25 February 2015 when Annex to the Loan agreement was signed. Additional agreements for inclusion of HAMAG-BICRO and Croatian Science Foundation in STPII were signed on 13 April 2015 for HAMAG-BICRO and 7 April 2015 for Croatian Science Foundation. Changes in restructuring also includes: 1. MSE transferred to HAMAG-BICRO activity to support centres for technology transfer of EUR 1,500, Funds for activity Component I conducted by HAMAG-BICRO are increased by EUR 1,012,506. The second restructuring of STP II was initiated on the basis of the Conclusions of the Government of the Republic of Croatia from 4 May 2016, under which the Ministry of Science and Education is in charge that, related to the, in cooperation with the International Bank for Reconstruction and Development, to agree on the restructuring of the Project and to extend the current closing date of the loan. The reasons for the second restructuring of STP II were conditioned by the first restructuring of the project, by ensuring the sustainability of HAMAG-BICRO and UKF's R&D programs through funding from other sources, and the quality preparation of four R&D infrastructure projects application for funding via ERDF within the Operational Program "Competitiveness and Cohesion ". In view of the importance of the Project for the Republic of Croatia and the development of its scientific and R&D capacity in the public and private sectors, Minister of Science and Education sent to the Minister of Finance on 24 November 2016 a letter Restructuring Request for the Second Project on Technological Development, which includes the following: A) extension of the STP II project for 21 months until March 31, 2019; 11

14 Special purpose finacial statements Notes to the special purpose financial statements (continued) B) reallocation of funds from sub-component B1.4 (Support Programme Technology Transfer Office, TTO) to the sub-component B2.1 (UKF program); C) minor changes to the STPII Key Performance Indicators. The Ministry of Finance sent an official Request for the Project Restructuring to the World Bank on 28 December Activities in 2016 In March 2016 a contract for preparation of Feasibility study and cost benefit analysis for three infrastructural projects which are on an indicative list for EU tenders (Centre for Advance Laser Techniques CALT under Institute for Physics; Croatian scientific and educational cloud HR- ZOO under University Computing Centre; Open Scientific Infrastructural Platforms for Innovative Applications in the Economy and Society - O-ZIP under Ruđer Bošković Institute). In autumn 2016, contracts for development of project documentation for CALT and HR-ZOO projects, and Organization and implementation of a public architectural tender at the Ruđer Bošković Institute were concluded, as well. 12

15 Special purpose finacial statements Notes to the special purpose financial statements (continued) 1 General (continued) In 2016 HAMAG-BICRO has invite tenders for: - Component I (PoC 6)) 62 projects were contracted in the total amount of HRK 18,718,329 (EUR 2,495,777)) - Component II (Razum) 7 projects were contracted in the amount of co-financing of HRK 24,662,693 (EUR 3,245,091) - Component III (IRCRO) 19 projects were contracted with HRK 13,226,615 (EUR 1,740,344) - Projects under Office for technology transfer Two calls / deadlines were announced and a total of 41 project applications were received. In 2016, a total of 15 projects were contracted for a total value of HRK 5,707, (EUR 760,953.56), and in October 2016 a contract was terminated (of a value HRK 549,770.55). Unity through Knowledge Fund (UKF), now under Croatian Science Foundation, has carried a tender for projects as part of program Partnership in Research and in December 2016 nine new projects were contracted which means that together with existing 18 UKF projects all funds allocated to UKF are now contracted. 2 Basis of preparation The special purpose financial statements of the Project are prepared under the cash basis of accounting. Under the cash basis of accounting, transactions are recorded when cash is paid or received by the Project. 13

16 Special purpose finacial statements Notes to the special purpose financial statements (continued) 3 Significant accounting policies Following are the principle accounting policies adopted in preparation of these special purpose financial statements. a) Functional and presentational currency The special purpose financial statements are prepared in Euro. Transactions arising in currencies other than Euro are translated into the Euro using the Croatian National Bank exchange rates prevailing at the date of transaction. The exchange rate prevailing as at 31 December 2016 was 1 EUR: kuna ( HRK ) b) Funds received Funds received represent cash received from the IBRD and the Government, and are recognised when received, or in the case of direct payments from loan account (Fronting fee) when the Project receives notification of payment from the IBRD. c) Expenditures Expenditures represent cash expenditures of the Project and are recognized when paid. Expenditures for sub-financing relate to sub-financing made available by the Project to HAMAG- BICRO and Croatian Science Foundation (CSF) for Unity through Knowledge Fund (UKF) for disbursement to beneficiaries. These expenditures are recorded when disbursed to UKF beneficiaries and HAMAG-BICRO. 4 Subsequent events The most important event is the completion of the second restructuring of STP II by signing the Annex no 2 of the Loan Agreement on 13 April

17 Special purpose finacial statements Notes to the special purpose financial statements (continued) 5 A) Unity through Knowledge Fund (UKF) The following table presents usage of the funds for the project beneficiary Unity through knowledge fund (UKF) by main categories. Usage of funds for the project beneficiary UKF is included within the Statement of expenditures by main categories. 31 December January December 2016 Accumulated to date in EUR IBRD GOV TOTAL IBRD GOV TOTAL IBRD GOV TOTAL Consulting 332, ,111 services 92,285-92, , ,396 Sub-financing 1,531, ,140 2,291, , ,875 1,106,563 2,316,544 1,082,015 3,398,559 Operating 73,057-73,057 costs 25,667-25,667 98,724-98,724 Training 3,365-3,365 2,893-2,893 6,258-6,258 1,940, ,140 2,700, , ,875 1,227,408 2,845,922 1,082,015 3,927,937 15