THE Ennis 2040 Designated Activity Company (DAC) incurred a total loss of €52,331 at the end of December 2023, according to company accounts.
The Abridged Financial Statement (AFS) obtained by The Clare Champion for the financial year ended December 31, 2023 shows a loss of €29,645 at the start of January 2023 and another €22, 686 was added during the year giving a total of €52,331 at the end of the year.
The total debtors was €1.352 million including trade debtors €46,912, taxation €116,487, prepayments €17,919 and amounts recoverable on contracts €1,170,888.
Amounts owed to group undertakings totalled €2.2 million.
The AFS outlined the company had entered into contracted agreements with suppliers to carry out project work in the Ennis area concerning potential future developments in the town.
The value of contracts not provided for is €326,900. The company has availed of the exemption under FRS 102 Section 1A in relation to the disclosure of transactions with group undertakings. The company is a wholly owned subsidiary of Clare County Council.
The company is therefore exempt from disclosing transactions with its parents and has not disclosed such transactions.
Councillor Tom O’Callaghan is very concerned about this statement in the company’s AFS.
The financial statements were approved and authorised for issue by the board of directors on April 26, 2024. The company has four employees – three working in operational and management and one in administration.
It operates a defined contribution pension scheme for its employees providing benefits on final pensionable pay.
According to council minutes of meetings provided in June 2021, the council stated an Operating Officer would be appointed to manage the Ennis 2040 plan and would be supported by existing staff who will be allocated to the project.
Councillor O’Callaghan pointed out the company now employs four staff, which is in conflict with what was stated before it was established.
Chief Executive Pat Dowling stated that the Chief Officer would report directly to him and elected members.
It was stated Ennis 2040 DAC would undertake to repay all monies received to Clare County Council as set out in an agreed loan agreement.
Repayments would be financed from rental income from commercial, residential or enterprise developments, delivered through the Ennis DAC or joint venture partnerships.
An explanation note on the nomination and appointment of directors stated non-executive directors are usually chosen because they have a breadth of experience, specific skills and can bring specialist knowledge to the board. “Of greatest importance is their independence from the management of the company and any of its interested parties. Non-executive directors should take responsibility for monitoring and challenging the performance of management, especially with regard to progress made towards meeting the company’s strategic objectives.”
Council minutes also recorded a statement from Mr Dowling that updates on this project have been provided on a regular basis in the monthly Management Report.
Councillor O’Callaghan said it is prudent the Ennis DAC has experts in different fields to ensure the right decisions are made in the future.
The Fianna Fáil Councillor claimed there is a conflict of interest being a councillor and a member of a “high risk speculation company”.
If Ennis DAC doesn’t generate the required income, Councillor O’Callaghan warned the council would be liable.
Commenting on media reports that there is a downward trajectory for the value of commercial office and retail space, he asked who is advising the Ennis 2040 DAC to promote investment in commercial development.
The council has organised a workshop for the Ennis Municipal District on March 4 and for all councillors on March 24.
In response to a series of questions tabled by Councillor O’Callaghan, the council confirmed it has advanced Ennis 2040 €2.2 million as part of the €10 million loan.
This loan was drawn for 20 years at a fixed interest rate of 2.6% with the first three years interest only. This cost to date by Ennis DAC is about €95,000 in interest.
When the full €10 million is drawn down, the indicative repayments annually based on the current interest rate is €65,000.
As per draft 2024 Accounts of Ennis DAC, the value of fixed and currents assets is €2.24 million, offset by the loan balance of €2.2 million.
The funds drawn down have been applied to the design, planning and progression of key projects on behalf of the council and Ennis DAC in Abbey Street, Francis Street, Harvey’s Quay and the Post Office Field.
In addition, the funds also covered company set up, ongoing operational costs and overheads. Such overheads are fully allocated to each project in proportion to the duration of time spent on the particular project.
The four projects are works provided on behalf of the council under a Service Level Agreement and the costs are recouped from the council.
Currently, the council is carrying these costs as Preliminary Expenditure Work in progress on its balance sheet.
A total of about €5.15 million preliminary expenditure is carried on the books of the council, which is not DAC activity and will form part of the 2024 Works in Progress on the council’s balance sheet.
At this juncture, the entity has as yet not progressed significantly any of its own sites that will be a draw on the loan approved.
The primary activity to date has been on council owned sites, which is indicative of the turnover of the entity to date and the work in progress expenditure reported in the council accounts.
A number of key property purchases are in progress where the remaining loan finance will be used to secure these sites.
East Clare correspondent, Dan Danaher is a journalism graduate of Rathmines and UL. He has won numerous awards for special investigations on health, justice, environment, and reports on news, agriculture, disability, mental health and community.