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Corriemulzie Burn & Hydro Scheme Supporters, Braemar, Royal Deeside
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Share&Offer!
May$2015
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Directors’ Letter
12th May 2015
Dear Society Members and Potential Members,
This share offer is an invitation to apply for shares in
Braemar Community Hydro, a Community Benefit Society
formed to build and operate a 100kW hydro scheme near
Braemar.
This is an exciting opportunity to be part of a social
enterprise generating clean, low carbon electricity and
providing revenues for a community fund, as well as a
good return for members.
The project already has full planning permission and a firm
grid connection offer. The Pioneer Share Offer in March
2015 was fully subscribed and raised £150,000 with great
support from the community and its friends. This Offer is
designed to raise the £650,000 balance required to build
the scheme.
Since the Pioneer Offer closed we have agreed a design
and build contract with Highland Eco-Design giving a high
degree of confidence in the construction cost for the
scheme. The design phase is underway and the
construction will start this summer.
Our legal structure is based on other successful renewable
energy Societies across the UK which have raised similar
sums for this type of project. This Share Offer Document
gives you the information you need in order to decide if this
investment is right for you.
Please join and help us raise the balance we need to bring
Braemar Community Hydro to fruition.
The Directors
CONTENTS
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SUMMARY OF OFFER ............ 3!
BUSINESS OVERVIEW ........... 4!
DIRECTORS’ LETTER ............. 2
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RISK FACTORS ....................... 14!
MANAGEMENT AND ADMIN ... 16!
SHARE OFFER ........................ 17!
TERMS AND CONDITIONS ..... 18!
APPLICATION .......................... 19!
FINANCIAL PROJECTIONS ..... 13
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3
Summary of Offer
This is a summary of the offer to acquire
shares in Braemar Community Hydro Ltd
(BCH; the Society). This summary should
be read as an introduction only and any
decision to invest should be made on the
basis of the document as a whole.
Introduction
The purpose of this share offer is to raise
funds to build a 100kW hydro scheme on
the Corriemulzie Burn. The £650,000
raised will fund the construction and pay
back the pre-development loan which
covered the planning permission and
consents work. The Grid Connection fee
will be paid from the funds already raised.
BCH aims to be generating renewable
electricity by the autumn of 2016.
The Society
The project purpose is to generate
electricity from the Corriemulzie Burn just
to the west of Braemar. Electricity will feed
into the National Grid and provide enough
electricity to power approximately 75
homes. BCH are also investigating the
possibility of selling electricity directly to
the National Trust for Scotland (NTS) at
Mar Lodge. It is estimated the scheme will
displace the equivalent of 150 tonnes of
carbon dioxide per year.
BCH will generate revenue from the sale
of electricity and receive income from the
feed in tariff for generation (FiT), a
government
incentive
to
support
renewable energy projects. A projected
annual surplus over expenses will enable
BCH to accrue a substantial local
community fund and make interest and
capital repayments to members.
The Offer
This Offer Document seeks to raise funds
by the issue of Offer Shares at £1 each,
payable in full on application. The offer will
be opened for applications from 12th May
2015 and will close on 30th June 2015.
Should the offer be under subscribed at
that time the Directors reserve the right to
issue the shares subscribed for and
continue the offer.
Braemar Community Hydro Share Offer
Those applying for membership should
regard these Shares as a long-term
investment. They may subscribe for a
minimum of 100 shares and a maximum
of 100,000 shares.
This share offer is designed to be eligible
for EIS tax relief. At current rates of tax
relief this amounts to 30% income tax
relief on investment under this share offer.
Assurance of reliefs has been applied for
from HMRC but neither the Society’s nor
the Members’ eligibility for EIS tax relief
can be guaranteed.
Returns to Members are calculated using
the assumptions stated in this Offer
Document. The projected return over the
expected life of the Project equates to an
internal rate of return (IRR) of 5% over a
20-year project period. Any benefit of tax
relief is in addition to this. (IRR assuming
EIS tax relief would be 8 %)
Shares will not be traded on a recognised
stock exchange and are not transferable.
Members may apply to withdraw shares
after the end of the third year of operation.
Share withdrawal is at the discretion of the
board. The Society intends to repay
members’ share capital over a 20-year
period, subject to financial performance
and available funds.
Each shareholder, whatever the relevant
stake, automatically becomes an equal
member of the Society on a ‘one member
one vote’ basis.
Risks
All investment and commercial activities
carry
risk.
Investors
should
take
appropriate advice and make their own
risk assessment whilst bearing in mind the
social and environmental benefits of the
Project.
Those interested in investing should do so
only after reading this document in full and
taking appropriate financial and other
advice. This share offer is not covered by
the Financial Ombudsman Service or the
Financial
Services
Compensation
Scheme.
May 2015
4
Business Overview
This section provides details about the Project and the organisations that have put it
together.
Renewable Energy Societies
The first renewable energy Society in the UK was Baywind in Cumbria, established in 1997.
There are now renewable energy Societies across the UK and across the technologies.
Scotland has several windpower Societies up and running and some hydropower Societies
which are raising funds or are in the process of being built – Harlaw Hydro & Sunart
Community Hydro (www.harlawhydro.org.uk) (www.sunartcommunityrenewables.org.uk) for
example.
Community Benefit Societies are formal democratic structures with the legal ability to raise
money directly from members of the public. With a ‘one member one vote’ system and a
board elected from the membership, they offer a fair and transparent way to operate a
community-owned enterprise. They also have the power to prioritise investment from the
local area and ensure that financial benefits from investment flow to people in the locality.
Societies are registered with the Financial Conduct Authority (FCA).
The Project
The following work has been completed:
•
•
•
•
•
•
•
•
•
Technical and financial feasibility studies
Planning consent in place
SEPA CAR licence issued
SSE Grid connection offer in hand with deposit of £12,000 paid
Feed in Tariff Preliminary Accreditation from Ofgem
Lease agreement with land owner
£150,000 raised through Pioneer Share offer
Design contract (Phase 1) awarded to Highland Eco-Design
Construction contract (Phase 2) binding offer from Highland Eco-Design open for
acceptance until October 2015
The final cost of the preparatory work (plus interest thereon) is estimated at £120,000 and
this has been largely funded by a Community & Renewables Energy Scheme (CARES) Loan
which is to be repaid, including interest, out of the proceeds of the subsequent share offer.
An element of these costs (£10,000) has been funded by Braemar Community Limited
(BCL).
The project will be developed by a Community Benefit Society, Braemar Community Hydro
Limited, which will be responsible for the operation and maintenance of the installation.
Installation will be by Highland Eco-Design (www.highlandeco.com) , a specialist hydro
installer based in Perthshire, who were appointed following competitive tender.
The scheme will occupy land leased from the landowner, Mar Estate.
Braemar Community Hydro Share Offer
May 2015
5
Braemar Community Hydro Limited
Braemar Community Hydro Limited was incorporated and registered with the UK Financial
Conduct Authority as a Community Benefit Society number 7076 in February 2015. The
Society has seven Directors: David Chandler, Mike Daniels, Richard Gledson, Alastair
Hubbard, Glenn Perkins, Dave Sherrard and Rob Turner. It is completely independent of
BCL.
The Society’s Rules are based on Co-operatives UK’s Model Rules for a Community Benefit
Society. A copy of Braemar Community Hydro’s Rules is available by application to the
Society (see back of this Offer Document for contact details) or from the Society website
www.braemarhydro.org.uk
Braemar Community Hydro is completely focused on the installation of this hydro plant and
currently does not plan any further developments.
Braemar Community Hydro Share Offer
May 2015
6
The Site
Corriemulzie Burn was chosen for its combination of catchment and head (the drop of
altitude over the scheme length). The hydro resource figures are informed by technical
assumptions made by two hydro consultants, Dulas and Highland Eco Design. The
estimated average output is 311 MWh per year. The water resource figures to achieve the
energy yield are approved and now fully consented by SEPA.
The view from Corriemulzie along the Dee Valley
The turbine
The hydro scheme will be a run-of-river scheme using water from the Corriemulzie Burn and
one of its tributaries, with an installed capacity of 100 kW. The two intakes will draw water
from the river and convey it via a buried pipeline (the penstock) to a powerhouse below the
Braemar Community Hydro Share Offer
May 2015
7
Corriemulzie Falls. The turbine in the powerhouse will generate electricity for export to the
national grid. Water will be returned to the river via a short tailrace pipe. The amount of
electricity generated at any one time will depend on the flow of the river and the design
assumes overall system efficiency of 36%. A compensation flow, as required by SEPA,
leaves a continuous flow in the burn at all times and will protect the ecology of the river
system.
Picture of Hydrover Turbine
Electricity Sales
The default arrangement is for all the electricity to be exported to the local grid and for the
society to receive a mix of wholesale value plus secured government incentive payments.
Our feed in tariffs (FiTs) for generation are locked in at 19.72p per kWh and are index-linked
to RPI. They are payable for the first 20 years of the scheme.
Presently BCH are exploring the possibility of selling electricity directly to Mar Lodge estate
to meet their demand. This is an exciting prospect as the power generated would meet a
local need and potentially increase the scheme revenue. It is currently being assessed by
consultants on behalf of BCH and the NTS; however financial analysis at this time is based
on export to the national grid as that is the default position.
Mar Lodge (National Trust for Scotland)
Braemar Community Hydro Share Offer
May 2015
8
Capital
The overall cost of the project is projected to be £800,000.
The Pioneer Share Offer in March 2015 raised £150,000 with 45 Members joining the
Society. This Offer aims to raise the balance of £650,000 from existing and new members.
Members’ return is currently forecast at 5% (excluding any tax reliefs), with members’ capital
returned by the end of a 20 year period.
The overall costs of the project are as follows:
Detailed Design & Construction
Grid Connection balance due
Development costs including CARES
loan
Legal, advisory, marketing & project
management
Planning permission conditions
Contingency at 10% of construction
cost
Total
510,000
85,000
120,000
30,000
5,000
50,000
£800,000
If the Offer is undersubscribed at end June the Directors reserve the right to issue the shares
subscribed for and continue the offer.
A
loan
has
been
discussed
with
Social
Investment
Scotland
(SIS
www.socialinvestmentscotland.com) who are a not-for-profit provider of business loans to
the third sector in Scotland as well as being a social enterprise and registered charity. BCH’s
preference is to cover the entire cost of the scheme through membership, however the
possibility of a loan facility gives the Directors confidence that the scheme will be built by the
target date.
Braemar Community Hydro Share Offer
May 2015
9
Project stages and timeline
The following timeline is indicative:
Early Summer
2015
Share Offer
Summer 2015
Installation commences
Summer 2016
Installation complete. Connection and testing
Late
2016
Summer Project commissioned and generating
Late 2017
AGM and first interest payment
Community Fund
Braemar Community Hydro will create a community fund. This will be the surplus generated
from electricity sales minus payment of interest and repayment of capital to members, and
the rent to the landlord (Mar Estate). In the early years this is expected to be approximately
£7,000 per year. Over the life of the project the total community benefit is estimated to be in
the region of £500,000.
The fund will be managed by Braemar Community Limited. BCL is already a registered
charity whose purpose is defined as “furthering the sustainability of the community of
Braemar” and to date BCL has worked on many diverse projects including developing
community assets, preserving the natural and built environment, providing recreational
facilities and promoting educational experiences for the Braemar community. BCL
membership is open to all local residents and the Board of BCL is elected by its members.
To ensure the widest possible community engagement BCL will manage a grants application
process through a panel comprising community representatives (BCL, Braemar Community
Council, BCH, Tourism Group, etc.) The panel will be the sole body for awarding the
community fund.
These principles will be developed into a Memorandum of Understanding between BCH and
BCL.
Legal Agreements
A lease has been agreed with the landlord, The Trustees of Mar Estate (Mar Estate).
The principal terms of the lease are as follows:
•
•
•
The initial lease term will be for 20 years with an option at the Societies sole
discretion to extend for a further 20 years, giving Braemar Community Hydro
appropriate access to all required land for 40 years.
A market rent for the first 20 years of the lease has been agreed based on a
percentage of the gross income generated by the scheme and this charge is
reflected in the current financial projections.
In the subsequent 20 year period, after the end of the FiT period, the net surplus
arising from the scheme, and assuming all obligations to members have been
satisfied, will be shared equally by the landlord and Braemar Community Hydro
Braemar Community Hydro Share Offer
May 2015
10
EIS Tax Relief
The Society will apply for Enterprise Investment Scheme (EIS) tax relief for this share offer.
This can be a significant benefit to taxpayers, irrespective of the amount of shares
subscribed for or the rate at which Income Tax is
paid.
Income Tax relief is a percentage of the value of
the shares, which qualifying Members can claim
back against income tax for the financial year in
which the shares were issued (or the previous
year). Shares qualifying for EIS must then be held
for 3 years.
If shares lose value then members can set this
loss (minus the initial relief) against income for tax
purposes in that year (or the previous year).
Funds invested in an EIS scheme can also
provide significant relief of Capital Gains Tax if
you have recently sold an asset.
EIS Income Tax relief example
Mary is a qualifying taxpayer who
invests £1,000 in EIS qualifying
shares. The EIS relief available is
£300 (£1,000 at 30%). If her income
tax liability for the year (before EIS
relief) was, for example, £3,000, she
could reduce it to £2,700 as a result
of her investment. See
www.gov.uk/government/publications/
the-enterprise-investment-schemeintroduction for more details
Advanced Assurance of eligibility for EIS has been applied for from HMRC. The Directors
are not in a position to absolutely guarantee eligibility however similar SEIS assurance has
been received for the earlier Pioneer Share Offer. Investors should take their own advice as
to whether they are eligible for EIS tax relief.
Assumptions
The Projections are based on the following principal assumptions:
1. That annual energy production of the Installation will be in line with the estimates
made. In the event that the predicted energy production falls below the projected
levels the revenues of The Society will be reduced. In the case of a technical fault,
the Society will endeavour to make sure that this is covered by warranties and/or
insurance, including for losses incurred as a result.
2. Current expectations relating to the global energy market, the UK electricity industry,
government policy, and the desirability for and promotion of electricity from
renewable sources, will remain reasonably consistent and reasonably favourable to
the Installation over the next 20 years, resulting in continuing demand for electricity
and related Environmental Attributes produced by the Installation.
3. Prices at a reasonably similar level to those currently obtainable will be achieved
through the life of the Installation (after allowance for annual inflation).
4. Operation and maintenance costs will be incurred from the start of operations. It is
projected that these costs will rise no faster than the income.
Projections and assumptions such as these are inherently less reliable over longer time
spans.
Braemar Community Hydro Share Offer
May 2015
11
Notes on the Financial Projections
1. Project Costs:
a. The detailed design and construction cost (ca. £510,000) is based on a fixed
price design and build contract with Highland Eco-Design. The design phase
of the contract is underway and the construction phase is open for
acceptance until October 2015.
b. The Grid Connection balance due (ca. £85,000) is based on a binding offer
from SSE which remains open until July 2015.
c. The CARES loan repayment (£110,000) is as advised by CARES. The
additional £10,000 of development costs is to be repaid to BCL.
d. The balance covers advisory fees, planning condition mitigation, project
management and a contingency at 10% of the construction cost.
2. Inflation is projected at 2.5% per annum over the 20-year period with the exception of
electricity sales where price escalation is set at 3.5%, a conservative reflection of the
strong trend to outstrip RPI over the last decade.
3. Income is based on the combined value of the Feed-in Tariff for generation,
electricity sales, and other benefits being 25.42p/kWh, reflecting relevant FiT and
current electricity pricing.
4. Depreciation is straight-line over 20 years. Capital is projected to be returned to
Members annually after year 3 subject to the maintenance of a contingency reserve
within the Society.
5. Business rates are projected at nil due to reliefs available for renewable energy
technologies.
6. Operating expense include maintenance, rent, insurance and administrative costs.
7. Administration costs of the Society are set at £5,000/year. This is as quoted by
Sharenergy for their service which covers book-keeping, production of annual
accounts, maintenance of membership database, phone, email and postal support of
members, preparation of AGM papers and annual return, FCA and other regulatory
fees. The Society will produce annual accounts and as a small business will apply for
the exemption from audit.
8. Profits are paid as interest to Members or gifted to the Community Fund. Any tax that
may arise from project costs not being eligible for tax relief is not considered material,
so the projections do not predict any liability for Corporation Tax. Note that Members
are likely to be liable for Income Tax on the interest paid.
9. Normal monthly cash expenditure is expected to be small and will be amply covered
by the generation and FIT income. The Projections anticipate that the Society will be
cash positive each year from the commencement of operations.
10. Projections are based on a 20-year period in order to reflect both the generating FiT
period and that over which members capital is repaid. The community benefit
Braemar Community Hydro Share Offer
May 2015
12
payments will continue for a further 20-year period if the option of renewal of the
lease is taken up, as anticipated.
Braemar Community Hydro Share Offer
May 2015
13
20 year income and expenditure projections
Operational+Projections
£000
£000
£000
£000
£000
+yr+1+
+yr+2+
+yr+3+
+yr+4+
+yr+5+
Year
£000
£000
£000
+yrs++++++++++ +yrs+++++++++++
+all+yrs+++++
6810+ 11820+
1820+
Income
Operating0income
000000000000082
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0000090
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0001,221
0002,156
Operating0Expenses
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0001,683
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Distributions
Community0fund
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Interest0&0Capital0Returned
000000000000017
0000019
0000121
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0001,510
£
£
£
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£
£
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+Member+Returns
IRR
No0tax0relief
5.5%
EIS0shares
8.5%
Example+of+members+returns+investing+£1000
£
Capital0Subscribed
Interest0&0Capital0Returned
Tax0relief0(EIS0shares)
+yr+81+
M0000000001,000
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£
£
£
+yrs+++++++++++yrs+++++++++++
+all+yrs+++++
+yr+0+ +yr+1+ +yr+2+ +yr+3+
+yr+4+
+yr+5+
6810+ 11820+
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0000000M
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0
001,888
0000000M 0000300
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000000000M 00000000M 00000300
Cashflow0(No0tax0relief)
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M0000000001,000
M0000000001,000
0000000M
0000000M
Braemar Community Hydro Share Offer
000000436
000000436
1,096
0
1,096
0
00000888
001,188
May 2015
14
Risk Factors
All investment and commercial activities carry risk, and investors should take appropriate
advice and make their own risk assessment whilst bearing in mind the social and
environmental aspects of this investment opportunity. Attention is drawn to the following:
General investment risks
•
The value of shares can fluctuate according to the value of the underlying business.
•
Offer Shares will not be transferable or traded on a recognised stock exchange.
•
Members wishing to withdraw their share capital will be able to apply to the Board for
this purpose after the third year of operation. Withdrawal of share capital is at the
discretion of the Board.
Renewable energy industry risks
•
Government policy towards renewable energy may change. However throughout the
operation of the FiT and previous similar schemes such as ROC and NFFO, the
Government has maintained the commitment to the process of ‘grandfathering’ which
ensures that whatever tariff a project is registered for at the commencement of
operation, will remain the same for the duration of the FiT period. Therefore, revenue
from FiTs for the Society should not be affected by any future changes to the FiT.
This payment is also index linked to RPI.
•
New technology inventions and developments may render existing technologies and
equipment obsolete. However, hydro turbines are a stable technology and the
chosen turbine has a high level of efficiency so technological advances of this
magnitude within the life of the project are considered unlikely.
•
Long-term changes to weather patterns could result in lower levels of production.
However, there is no evidence that the Society is aware of that this will affect energy
production at this site. Atypical short-term weather conditions could affect expected
levels of generation, although overall patterns outside anticipated parameters are
unlikely.
•
Operational costs may rise faster than anticipated during the life of the Project. The
Society will enter into contracts for operation, maintenance and administration to
reduce this risk as far as practicable.
Risks specific to the Society
•
The projections are based on the predicted energy yield of the project. If it were to be
lower on average over the project period then members’ return would reduce.
•
Equipment failure due to exceptional circumstances would increase maintenance
costs and this would impact on Society income. However, warranties and insurance
will be in place in the event of mechanical breakdown of the equipment and will cover
loss of income for associated periods of business interruption. Accidental and
malicious damage will also be covered under insurance and public liability insurance
is provided.
•
Any changes to the FiT that occur before the turbine is commissioned could result in
a change to projections, or in the worst case, non-viability of the project. However
the Society has obtained Preliminary Accreditation (tariff secured on 24 September
2014, validity period expires on 24 September 2016) to ensure that the modelled FiT
level is available. If commissioning were to be delayed such that this FiT was not
available Members predicted return would reduce.
Braemar Community Hydro Share Offer
May 2015
15
Risks specific to this Share Offer
•
If the Society fails to raise the required funding then the Society will seek to fund the
shortfall through a loan. Should this not be forthcoming then the Society would be
likely to be wound down and this could lead to a loss of some capital subscribed
under this Share offer. Members who are eligible for EIS tax relief should be able to
claim loss relief under this circumstance. Lenders have already been contacted and
broad terms discussed, in order to mitigate this risk. Any project loan taken on by the
Society will incur interest. If not covered by the project contingency this would have
an impact on member interest and/or community benefit payments.
Braemar Community Hydro Share Offer
May 2015
16
Management and Administration
This section provides details on the Board and the running of The Society.
The Board
Current Board members are:
•
David Chandler C.A.
Age 69
Retired Accountant
•
Mike Daniels
Age 44
Land Manager John Muir Trust
•
Richard Gledson
Age 52
Resident Factor Balmoral Estate
•
Alastair Hubbard B.A.
Age 48
Local business Owner
•
Glenn Perkins
Age 66
Retired Engineer
•
David Sherrard
Age 58
Chartered Engineer
•
Rob Turner
Age 56
Manager and Chartered Engineer
Disclosure
Administration
None of the directors of Braemar Community Hydro have,
Sharenergy will provide an ongoing administration service
for at least the past five years, received any convictions
for the Society for an annual fee, which is set at £5,000,
(for any fraudulent offence or otherwise), or been involved
rising with RPI as a fixed contract for 5 yrs.
in any bankruptcies or receiverships, or received any
public recrimination or sanction by a statutory or regulatory
Accounts
authority or designated professional body, or been
Braemar Community Hydro was incorporated on 3
disqualified from any function by any court.
February 2015. Its first financial year-end is 31
st
rd
March
2016. At the time of commencing this share issue BCH
Conflicts of Interests
holds £150,000 raised in the March 2015 Pioneer Share
David Chandler, Al Hubbard and Glenn Perkins are
Offer.
directors of BCL.
Interest Policy
Remuneration
Members’ Shares will attract a payment of interest
No remuneration has been paid to Directors. When the
annually in arrears. Interest rates will be as determined by
Hydro Installation is generating electricity each Director
the Board which will aim to provide members with an
will be entitled to claim fees and/or expenses not
internal rate of return over 20 years of the order of 5%.
exceeding £50 p.a. in addition to travel expenses.
The
Directors’ share applications will be met in full, but there
performance.
rates
paid
may
vary
according
to
financial
are no pension schemes, share option schemes and
except for the reimbursement of expenses, there are no
Legal Proceedings
other benefits for Directors.
There have been no governmental, legal or arbitration
proceedings relating to the Project or Braemar Community
Board Practices
Hydro and none are pending or threatened which could
Directors serve in accordance with the Rules. There are
have a significant effect on the financial position or
no service contracts for them or the Secretary. The
profitability of the Society.
Society will have no employees and the business is not
dependent on key individuals. Day-to-day operations will
Rules of the Society
be managed by the Society, under the supervision of the
Community Benefit Societies are governed by Rules
Board. As a Community Benefit Society, Braemar
approved by the Financial Conduct Authority. A copy of
Community Hydro complies with statutory requirements
the Rules is available from the Society (see contact details
and those of the Financial Conduct Authority. As the
on back page of this Offer).
Shares will not be listed, Braemar Community Hydro is not
obliged to comply with The Combined Code on Corporate
Further information
Governance.
Other documents mentioned in this Offer are available
from the Society (see contact details on back page of this
Development Handover
Offer). General information sourced from third parties in
BCL will be reimbursed for development costs incurred
this Offer Document has been accurately reproduced. As
before and in relation to the Offer.
far as the Directors are aware and are able to ascertain
from information published by that third party, no facts
have been omitted which would render the reproduced
information inaccurate or misleading.
Braemar Community Hydro Share Offer
May 2015
17
Share Offer
Reasons for the Offer and use of proceeds
special procedures have been established for non-resident
This Offer is being made so that Braemar Community
holders.
Hydro and its Members are able to generate renewable
energy and benefit the local community financially and
Voting rights
through the generation of low-carbon electricity.
Each Member has one vote, regardless of the number of
Shares held. There are no pre-emption rights.
Offer Shares
£650,000 (Six Hundred and Fifty Thousand) ordinary
Rights to share in profits
Shares of £1 are offered at par and payable in full on
All Members are entitled to share in interest declared out
acceptance of an application on the Terms and Conditions
of annual profits, such payments to be divided equally
of this Offer Document. The Shares, which will not be
between the total Shares in issue. This means that a
traded on any stock exchange, have been created under
Member with 10,000 shares has a single vote but will
the Co-operative and Community Benefit Societies Act
receive interest on all 10,000 shares.
2014.
Redemption provisions
Successful applicants will receive share certificates and
Redemption of Shares may take place in accordance with
their details and holdings will be recorded in a share
the Rules. Members do not have the right to withdraw
register to be kept by Sharenergy, on behalf of the
share capital but the Board of The Society has the power
Society, at The Pump House, Coton Hill, Shrewsbury, SY1
to permit Shares in The Society to be withdrawn by
2DP, or any successor business address. Each person or
agreement between the Board and the Member. Members
organisation issued with Shares becomes a Member of
can apply for withdrawal of share capital after the third
the Society, with membership rights defined in the Rules.
year of operation. As surplus funds are accrued the Board
The principal rights are:
may propose phased redemption of shares to the
Members, for their approval. Should Member capital be
•
•
One vote per holding on resolutions of the
fully repaid (as intended) before the end of the lease the
Members,
Board
including
in
relation
to
the
•
choose
to
transfer
the
assets
and
responsibilities to another organisation with a similar
The right to receive a proportionate annual
community purpose.
interest payment as a return on the investment
•
may
appointment of Directors.
in shares (subject to available surplus).
Liquidation
The right to the return of the original investment
Should the Installation come to the end of its life before
when recommended by the Board and approved
Member shares have been redeemed Members may
by the members (subject to available surplus
choose to liquidate the Society, in which case assets will
assets and any new business of the Society).
be realised and the net proceeds applied in repaying
As a Member, eligibility for election to the Board.
Members’ share capital. Any surplus will not be paid to
Members but will be transferred to another body with
similar aims as required by the Society’s Rules.
Share allocation
Shares applied for and paid up will be issued as soon as
the offer closes. The funds so subscribed will then be
Taxation
available to the Society.
Interest payments made to Members will be subject to
United Kingdom taxation. It is expected that payments will
For the avoidance of doubt there are no separate share
be made gross and investors will be responsible for
classes – all shares whenever issued are equivalent
declaring this income on their tax returns.
Member Shares
carrying exactly the same rights.
Similarly, all Members of the Society have equal status.
Provisions on death of a Member
In accordance with the Society’s Rules, on the death of a
Interest payments
member of the Society, their personal representative can
Interest will be paid on the balance of each Member’s
apply for withdrawal of the share capital. The Board will
account at rates reflecting annual financial performance.
endeavour to satisfy any request under this provision with
The date on which entitlement to interest arises will be
due consideration to the other responsibilities of the
announced each year. It is envisaged that any interest
Society.
unclaimed for a period of 7 years will be cancelled for the
benefit of all Members. Interest payments are restricted to
that rate which in the opinion of the Directors is required to
obtain and retain the capital required by the Society. No
Braemar Community Hydro Share Offer
May 2015
18
Terms and Conditions
Eligibility
The Offer is open to any person (over 16 yrs old) or
organisation meeting the membership requirements.
Pricing, trading and dealing
arrangements
Shares are offered at their par value of £1 and the
Application procedure
•
•
underlying asset value of each Share is likely to remain at
Shares shall be applied for using the Application
£1. Any Share redemption is intended to take place at par
Form following the Guidance Notes.
unless the share value has been reduced by the Society
By delivering an Application Form an Applicant offers
due to significant underperformance of the scheme.
to subscribe, on the Terms and Conditions contained
•
in this Offer Document, for the number of Shares
Applying for Shares
specified, or such lesser number as may be
Before completing the Application Form you should
accepted.
consider taking appropriate financial and other advice.
An Applicant who receives Shares agrees to
Your attention is particularly drawn to:
automatic membership of Braemar Community Hydro
and to be bound by its Rules.
•
An application once made cannot be withdrawn.
•
Multiple subscriptions will be admitted .
•
The Risk Factors section which describes risks
relating to an investment in the Offer Shares.
•
Terms and Conditions of the Offer. By completing the
Application Form you will make an irrevocable offer
The Offer timetable
The Offer will remain open until 30th June 2015. Should
which may be accepted by the Society.
•
The Rules of the Society. In buying Offer Shares you
the offer be undersubscribed at that time the Directors
will become a Member of the Society and will be
reserve the right to issue the shares subscribed for and
bound by those Rules.
continue the offer.
Amount to invest
None of the Society, its Directors or advisors will be
The price of each share is £1. The minimum number is
responsible for loss of interest or any other benefit
100 and the maximum is 100,000 shares. Annual interest
suffered by Applicants during the period the monies are
payments will be based on the number of Shares you
held by the Society.
hold, but you will only have one vote, regardless of the
number of Shares you hold.
Procedures on receipt of Applications
•
•
•
•
•
•
•
•
•
Offer cheques/bankers’ drafts will be presented on
Allocation
receipt and may be rejected if they do not clear on
The shares will be allocated on a first come first served
first presentation.
basis.
Surplus Application Monies may be retained pending
clearance of successful Applicants’ cheques.
Declaration
Applications may be rejected in whole, or in part, or
In signing the Application Form you are making an
be scaled down, without reasons being given.
irrevocable offer to enter into a contract with the Society.
Application Monies in respect of any rejected or
Under Money Laundering Regulations, you may be
scaled-down Applications shall be returned no later
required to produce satisfactory evidence of your identity
than one month after the end of the Offer.
and it is a condition of the Offer that you do so as
No interest is payable on submitted Application
requested. Non-UK residents must take responsibility for
Monies which become returnable.
ensuring that there are no laws or regulations in their own
Applications on incomplete or inaccurate Application
country that would prevent them from investing in or
Forms may be accepted as if complete and accurate.
receiving income from a UK Society.
The Society reserves the right not to enter into
correspondence with Applicants pending the issue of
Payment
share certificates or the return of Application Monies.
Please attach a cheque or bankers draft payable to
Results of the Offer will be reported to all applicants
Braemar Community Hydro Limited drawn on a UK bank
within one month after the Offer has been closed.
or building society, for the exact amount shown in the box
Share certificates will be issued to successful
under ‘Amount to invest’. You may also pay by bank
Applicants within one month after the end of the Offer
transfer.
Period.
•
In the case of under subscription the Board will take
the decision as whether to proceed with the Offer.
!
Braemar Community Hydro Share Offer
May 2015
19
BRAEMAR COMMUNITY HYDRO SHARE APPLICATION
Before completing this Application Form you should:
• Read the accompanying Share Offer Document
• Pay special attention to the Risk Factors set out in this Offer Document
• Consider where you need to take financial advice or other advice
• Read the Rules of Braemar Community Hydro (see website)
• Check the BCH web site for any Offer updates: www.braemarhydro.org.uk
PLEASE USE CAPITALS AND BLACK INK AND COMPLETE BOTH PAGES OF
THE FORM
I wish/my organisation wishes to invest a total amount of £
,
. 00
in Braemar Community Hydro on the Terms and Conditions of the Offer Document at
the price of £1.00 per Share. You may invest not less than £100 and not more than
£100,000.
Please tick if you wish to be allocated shares qualifying for EIS tax relief
Individual Applicant details
Title (Mr/Mrs/Ms/other):
Surname:
Address:
Post code:
Forenames:
Day-time Telephone:
Email:
Please provide your email address if possible to keep admin costs down.
If you would like payments from the Society to be paid by bank transfer and not by
Name on account:
Sort code:
Account number:
cheque, please provide bank details
If the Application is an organisation please fill in the contact details above and
also
Organisation name:
Organisation address:
Type of organisation:
Registration number:
Position of authorised signatory:
Please continue to and sign the Declaration overleaf
20
Declaration
I confirm my understanding that:
•
•
•
This Application may be withdrawn if a supplementary Offer Document is issued, but not otherwise and if and when
accepted by the Society forms a contract in law on the Terms and Conditions of the Offer Document.
An Applicant who/which is not UK resident is responsible for ensuring that this Application complies with any laws
or regulations applicable outside the UK to which he/she/it is subject.
If the Offer reaches its total it is possible that an otherwise eligible Application will not be accepted in part or in
whole.
I confirm that:
•
•
•
•
•
•
I have read the Offer Document (including the Risk Factors and the Guidance Notes to this Application Form) and
the Rules of the Society.
I am over 16 and the Applicant meets the Offer eligibility criteria.
The Society is hereby authorised to make such enquiries as are deemed necessary to confirm the eligibility of this
Application.
The Applicant is not relying on any information or representation in relation to the Offer Shares or the Society that
is not included in the Offer Document.
The Applicant shall provide all additional information and documentation requested by the Society in connection
with this Application, including in connection with money laundering, taxation or other regulations.
If signing this Application on behalf of any person/organisation I am doing so with explicit authority.
I understand that any cheque supporting this application will be presented for
payment upon receipt and I warrant that it will be paid on first presentation.
Signature (Applicant/on behalf of
Applicant organisation as applicable):
Payment
I wish to pay by
cheque:
Date:
transfer:
Cheque
Please attach a single cheque or
banker’s draft for the amount shown
above, payable to Braemar Community
Hydro Limited and crossed a/c Payee.
(tick as appropriate)
Transfer
Please transfer to the following account:
Braemar Community Hydro Limited
Sort Code: 80 06 66
Account Number: 10171062
Please use the Applicant name as the
reference attached to the transfer.
Send your completed Application Form and payment to:
Braemar Community Hydro Limited, c/o David Chandler CA, Ellangowan, Chapel
Brae, Braemar, AB35 5YT
We would be grateful if you would inform us how you first heard of this Share Offer:
This application form can be photocopied and additional application forms are
available to download from www.braemarhydro.org.uk. For all enquiries use the
contact details on the back of this Offer document.
THANK YOU FOR APPLYING TO JOIN BRAEMAR COMMUNITY HYDRO.
Short Board Biographies
David Chandler. Dave is a Chartered Accountant. He was a senior partner in accountants Touche
Ross & Co in Aberdeen before retiring to Braemar. He is a Director of Braemar Community
Limited and treasurer of many local organisations.
Mike Daniels. Mike is Head of Land Management for the John Muir Trust and previously worked
for the Deer Commission for Scotland, Macaulay Institute, Scottish Agricultural College and
Scottish Natural Heritage. In 1997 he completed a PhD on the biology and conservation of the
wildcat in Scotland. He has lived in Braemar for 15 years.
Richard Gledson. Richard is a Chartered Surveyor and has been Resident Factor at Balmoral
since May 1996. He is Chairman of the Dee District Salmon Fishery Board and The River Dee
Trust. In 2014 Richard oversaw the installation of a 100kW hydro electricity generating scheme at
Balmoral.
Alastair Hubbard. Alastair is a local business owner who has lived and worked in Braemar since
1997. He is a member of the Braemar Fire Service and the Braemar Mountain Rescue. Al is a
Director of Braemar Community Limited.
Glenn Perkins. Glenn is a retired Oil & Gas Engineer. He moved to Aberdeen in 1995 and
subsequently to Braemar in 2003. Glenn is a Director of Braemar Community Limited.
David Sherrard. Dave has co-owned and been a director of three consulting engineering business
in the north-east of Scotland, and has also held senior positions in two corporate energy firms. He
has an Engineering Degree from Cambridge University and is a Chartered Engineer. He has lived
in Braemar since 2009.
Rob Turner. Rob holds a degree in physics and is a Chartered Engineer through the Institute of
Engineering and Technology. He moved to Braemar in 2013 and works in Aberdeen as a principal
consultant in process safety.
The
The Board of BCH launch the Share Offer
Glossary
Applicant An applicant for Offer Shares through submission of an Application Form.
Application Form The form in this Offer Document which must be completed to be returned in
accordance with the Terms and Conditions of this Offer and the Guidance Notes.
Application Monies The total gross sum realised by this Offer.
Board The Board of Directors of Braemar Community Hydro.
Braemar Community Hydro (or the Society) Braemar Community Hydro Ltd. A Community Benefit
Society Registered with the FCA No. 7076
Braemar Community Hydro Shares Ordinary shares of £1 in Braemar Community Hydro.
BCL Braemar Community Limited A community company and registered charity set up to further
the sustainability of the community of Braemar
Climate Change The phrase widely used to describe changing weather patterns as a direct result of
global warming.
Community Fund A fund endowed by the Society which is to be distributed to local organisations.
Directors The directors of Braemar Community Hydro.
EIS Enterprise Investment Scheme. Incentive for tax payers investing in small scale enterprises
looking to raise finance
FiT (Feed in Tariff) Incentive for renewable electricity generation introduced by HM Government on
1st April 2010 under powers from the Energy Act 2008.
Installation in this Offer Document refers to the Hydro turbine, civil works and ancillary equipment of
the Project.
kW (kilowatt) A unit that measures power and is equal to 1 thousand watts.
kWh (kilowatt hour) A unit that measures energy and is equal to the energy that can provide the
power of 1 kW for the period of one hour.
MWh (megawatt hour) A unit that measures energy and is equal to the energy that can provide the
power of 1 MW for the period of one hour.
NFFO Non fossil fuel obligation
Offer The Offer of Shares in the Society contained in this Offer Document.
Offer Costs The expenses incurred by or on behalf of the Society in issuing shares
Offer Period The period during which the Offer will remain open (including any extension) as set out
in the Offer timetable in this document.
Offer Shares New shares of £1 in the Society, offered at par on the Terms and Conditions and
payable in full on application.
Project The proposed ownership and operation by the Society of a Hydro Installation
Projections The financial projections for the Society set out in this document.
ROC Renewables Obligations Certificate
Rules The Rules of the Society, available on demand.
Sharenergy Sharenergy Co-operative Limited. A Registered Society (registered no. 31237R)
Site the location of the proposed Hydro Installation.
Terms and Conditions The terms and conditions of the Offer contained in and constituted by this
Offer Document.
For enquiries relating to the project please contact, in the first instance, any of the
Directors:
David Chandler
07880 554 539
Mike Daniels
07469 118 149
Richard Gledson
07764 942 824
Al Hubbard
07899 670 750
Glenn Perkins
07791 755 584
Dave Sherrard
07746 598 095
Rob Turner
07583 625 751
You can also contact the Development Manager, Nick Mardall on 07828 225 674.
The Society email is:
[email protected]
The Society website is:
www.braemarhydro.org.uk
This Society has been developed with support from Sharenergy, Local Energy
Scotland, Deeside Donside Development Partnership, Braemar Community Limited
and the Cairngorm National Park Authority.