republic of serbia the innovation fund - the world...

Republic of SerbiaThe Innovation Fund

Project: Serbia Innovation ProjectEC Grant No. TF011257

for the period from 1 January 2015 to 16 January 2016with Independent Auditor's Report thereon

Belgrade, 15 April 2016

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Republic of Serbia, The Innovation Fund

PROJECT: SERBIA INNOVATION PROJECTEC GRANT NO. TF011257

FOR THE PERIOD FROM 1 JANUARY 2015 TO 16 JANUARY 2016WITH INDEPENDENT AUDITOR'S REPORT THEREON

C O N T E N T S : Page

Independent Auditor’s Report 1 - 2

Financial Statements 3 - 7

Background 8

Notes 9 - 14

kpmg

KPMG d.o.o. Beograd Kraljice Natalije 11 11000 Belgrade Serbia

Tel.: +381 (0)11 20 50 500 Fax: +381 (0)11 20 50 550 www.kpmg.com/rs

KPMG d.o.o. Beograd, a Serbian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Mati ni broj:17148656 PIB: 100058593 Ra un: 265-1100310000190-61

REPUBLIC OF SERBIA

THE INNOVATION FUND

Independent Auditor’s Report

We have audited the accompanying financial statements of the Innovation Fund of the Republic of Serbia (hereinafter: the Innovation Fund), which comprise the Project Sources and Uses of Funds (the Summary of Funds Received), the Uses of Funds by Project Activity (the Summary of Expenditures) and the Statement of Designated Account of the Serbia Innovation Project. The financial statements have been prepared by management of the Innovation Fund based on the financial reporting provisions of the EC IPA Grant Agreement and related Project Agreement dated 5 December 2011 between the Innovation Fund of the Republic of Serbia and International Bank for Reconstruction and Development (IBRD), acting as administrator of funds provided by the European Commission (EC) under the European Union Instrument for Pre-Accession Assistance Trust Fund, EC Grant No. TF011257.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements in accordance with the financial reporting provisions of the EC IPA Grant Agreement, EC Grant No. TF011257, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements, based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

kpmg

2

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements of the Innovation Fund for the period from 1 January 2015 to 16 January 2016 are prepared, in all material respects, in accordance with the financial reporting provisions of the EC IPA Grant Agreement, EC Grant No. TF011257.

Other Matter

In addition to the ISA requirements to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, in accordance with requirements of the Contract for Consultants’ Services, we plan and perform the audit in order to obtain reasonable assurance about whether operations are in compliance with Manual for Mini Grants program and Manual for Matching Grants Program.

Basis of Accounting and Restriction on Distribution and Use

Without modifying our opinion, we draw attention to Note 1 to the financial statements, which describe the basis of accounting. The financial statements are prepared to assist the Innovation Fund to comply with the financial reporting provisions of the Agreement referred to above. As a result, the financial statements may not be suitable for another purpose. Our report is intended solely for the Innovation Fund, EC and IBRD and should not be distributed to or used by parties other than the Innovation Fund, EC or IBRD.

Belgrade, 15 April 2016 KPMG d.o.o. Beograd

(L.S.)

Partner

Republic of Serbia, The Innovation FundNotes to the Financial Statements

9

NOTES

1 Basic accounting policies

Basic accounting policies applied in preparation of the financial statements of the Innovation Fund are as follows:

(a) Cash basis accounting

The Innovation Fund’s policy is to prepare the accompanying financial statements on the cash receipts and disbursements basis. On this basis receipts and payments are recognized only when cash is received or paid.

(b) Transactions in foreign currencies

All transactions relating to replenishment and usage of funds denominated in foreign currencies are stated in EUR at the rate ruling on the transaction dates and using the bank’s foreign exchange rate.

(c) Disclosures in financial statements

All data are expressed in EUR.

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11

3 Funds Received - Transfers to DA until 16 January 2016 – EC Grant No. TF011257

In EUR

Grant bank funds 7,112,000.00

Total Advance Payment in 2011 700,000.00Advance payment 30 December 2011 700,000.00

Total Replenishment in 2012 628,836.13First Replenishment 12 April 2012 96,526.80Second Replenishment 26 June 2012 230,821.89Third Replenishment 24 July 2012 26,841.89Fourth Replenishment 10 September 2012 80,535.96Fifth Replenishment 30 October 2012 194,109.59

Total Replenishment in 2013 1,565,975.34First Replenishment 16 January 2013 90,923.94Second Replenishment 8 February 2013 223,466.93Third Replenishment 14 March 2013 240,193.91Fourth Replenishment 18 April 2013 134,195.77Fifth Replenishment 17 June 2013 127,194.79Sixth Replenishment 9 October 2013 750,000.00

Total Replenishment in 2014 2,802,555.02First Replenishment 28 January 2014 800,000.00Second Replenishment 20 March 2014 498,945.98Third Replenishment 26 August 2014 586,923.91Fourth Replenishment 17 October 2014 512,897.79Fifth Replenishment 3 December 2014 403,787.34

Total Replenishment in 2015 786,561.27First Replenishment 5 February 2015 174,172.06Second Replenishment 2 April 2015 361,393.52Third Replenishment 2 September 2015 50,000.00Fourth Replenishment 10 November 2015 104,153.60Fifth Replenishment 23 December 2015 96,842.09

Total Replenishment in 2016 94,744.74First Replenishment 5 January 94,744.74

Total disbursed fund 6,578,672.50FUNDS NOT DISBURSED 533,327.50


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4 Building Capacity in the Innovation Fund (Component 1) – Expenditures in FY 2015 (for year ending December 31, 2015 including period January 01-16, 2016)

In EUR

Consulting services 74,681.274,899.35

Risto Kalske, Investment Committee Member 3,646.85Yehoshua Shuki Gleitman, Strategic Advisor 7,499.37Francis Skrobiszewski, Operation Advisor 19,246.35

Local Consultant Legal 22,967.50Environmental Expert 2,096.52

Vladim 14,325.33

Other 60,664.12

Contracts for Project Visibility Events and workshops-venue rent, translationservices, printing 6,006.97Audit of the Project, KPMG d.o.o. 4,500.00NPS d.o.o and Go Pro d.o.o, Software/Maintenance 4,384.00E.G.P Applied Economics Ltd, Monitoring and Evaluation 45,773.15

TOTAL EXPENDITURES (Component 1) 135,45.39


13

5 Implementation of Financial Instruments to Support Enterprise Innovation (Component 2) – Expenditures in FY 2015 (for year ending December 31, 2015 including period January 01-16, 2016)

In EUR

Mini Grants 394,742.52Aggios Europe d.o.o., Contract for Project "Energy Management Software For Mobile and Embedded Devices" (Project ID 330) 7,970.00Srma-zip d.o.o., Contract for Project "Optimization of the Agricultural Soil Cultivation by Innovative Break-through Concept: Combined Cultivating Machine, Second Generation CCM-2" (Project ID 308) 6,076.73Biounik d.o.o., Contract for Project "Application of a new biostimulator in corn seed processing" (Project ID 433) 6,211.84DNET Inovacioni centar d.o.o, Contract for Project "AR App Genie" (Project ID 299) 4,123.31Brainstorm d.o.o., Contract for Project "Kiss Menu - Mobile Ordering 2.0" (Project ID 410) 5,225.75EON plus d.o.o., Contract for Project "Software Application for Environmental Impact Assessment" (Project ID 358) 6,032.64Visoki vakuum d.o.o., Contract for Project "High vacuum pump" (Project ID 315) 11,362.02011LAB d.o.o., Contract for Project "MOBICOMP - Modular Biometric Computer Platform" (Project ID 374) 6,482.51Starglass d.o.o., Contract for Project "Development and manufacturing of multifunction production line for bending, tempering of bent and fussion of glass" (Project ID 361) 6,295.21TimePad d.o.o., Contract for Project "TimePad" (Project ID 424)_RSD account (1,336.23)Novelic d.o.o., Contract for Project "Radar for Visualy Impaired Persons" (Project ID 481) 39,371.03NS Web developem d.o.o., Contract for Project "Clinic in Cloud" (Project ID 630) 30,656.63Unitehna alati d.o.o., Contract for Project "Vine/Fruit Green Pruning Device" (Project ID 489) 35,126.40Coprixmedia d.o.o., Contract for Project "Interactive the world around us" (Project ID 623) 38,102.55365ADS d.o.o., Contract for Project "brides2bride" (Project ID 548) 26,180.05Cofa Games d.o.o., Contract for Project "Awakening Of Heroes" (Project ID 494) 34,906.38Eipix Entertaiment d.o.o., Contract for Project "Creating Worlds" (Project ID 585) 33,640.20Eko Fungi d.o.o., Contract for Project "21stCentury Food" (Project ID 622) 24,620.45Projekt Inženjering Tim d.o.o., Contract for Project "Seismo-Safe 2G3-GOSEB Building System" (Project ID 476) 36,434.85Euro Call d.o.o., Contract for Project "Innovative Ultrasonic Heat Meters" (Project ID 497) 35,923.97


14

Matching Grants 767,255.11BSK d.o.o., Contract for Project "Air-berry Harvester" (Project ID 176) 26,903.53Vizus d.o.o., Contract for Project "Passive house standardized window and door system AT-135" (Project ID 188) 12,243.35Tajfun hil d.o.o., Contract for Project "World's first renewable energy laboratory on the Web" (Project ID 175) 55,090.92Desing d.o.o., Contract for Project "Innovative fruit preparations in the pilot aseptic plant" (Project ID 205) 24,982.65Duochem d.o.o., Contract for Project "Ecologically friendly biocide" (Project ID 253) 34,390.40I.R.C. Sentronis d.o.o., Contract for Project "Development and Commercialization of Clip - Around DC/AC Current Transducers" (Project ID 312) 70,625.97Morena inzenjering d.o.o., Contract for Project "Cassius - tennis clay court robot"(Project ID 370)_RSD account (710.79)Alfanum d.o.o., Contract for Project "World-Class Speech Technologies for South Slavic Languages"(Project ID 314) 125,295.33Techno Foam d.o.o., Contract for Project "Automatic sponge cutting and packing machine" (Project ID 380) 146,640.17Techno Foam d.o.o., Contract for Project "Automatic sponge cutting and packing machine" (Project ID 380)_RSD account 1,063.91Milinkovic Company d.o.o., Contract for Project "Improvement of MC System" (Project ID 458) 94,693.18Techno Naiss Group d.o.o., Contract for Project "X - Ray Collimator With Automatic Filter Replacement" (Project ID 527) 176,389.61Techno Naiss Group d.o.o., Contract for Project "X - Ray Collimator With Automatic Filter Replacement" (Project ID 527)_RSD account 308,78

TOTAL EXPENDITURES (Component 2) 1,161,997.63

Independent Auditor’s Report – pages 1 and 2.

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