agm – 30 th may 2014. objective to complete the fund raising for a community hydro scheme at...
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AGM – 30th May 2014
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OBJECTIVE
To complete the fund raising for
a community hydro scheme at
Harlaw Reservoir and
‘make it happen’.
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AgendaAGM
Chairman's remarksApproval of annual accountsAgreement to verify the accountsAppointment of verifier (Gordon Mavor).Election of the Board
Project reportProject FinancesQuestionsWine, juice and nibbles FRESH – Honourable Mention fresh
egg newcomer
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Chairman’s RemarksAn excellent beginning - 9th April 2013
242 members£334k capitalWilling members with expertise and experienceVery positive reaction across Scotland
Design Contract – Adrian LaycockEquipment ordered February 2014 target installation August 2014Preferred construction contractorChallenges
Lease – 1st draft received from CEC May 2014Trees!!OfGem - pre-accreditationRising costs
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Society AccountsAccounting period
2nd September 2012 - 31st March 2014Prepared and verified by Gordon Mavor Approve AccountsApprove verification of accounts
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Income & ExpenditureFOR THE 18 MONTH PERIOD ENDED 31ST MARCH 2014
2014 2014
Notes £ £
INCOME
Income 2 0
Bank Interest 458
458
EXPENDITURE
Annual Memberships 233
Expenses 114
Stationery 50
Website Costs 600
Accountancy Fees 300
Depreciation 0
1,297
(DEFICIT)/SURPLUS FOR THE YEAR -839
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Balance SheetAS AT 31ST MARCH 2014
2014 2014
NOTE NO £ £
TANGIBLE FIXED ASSETS 3 65,562
65,562
CURRENT ASSETS
Bank and Cash 267,248
Debtors 4 27
267,274
CREDITORS:-Amounts falling
due within one year 5 300
266,974
CREDITORS:-Amounts falling
due after more than one year 0
332,536
CAPITAL AND RESERVES
Share Capital 7 333,375
Net (Deficit)/Surplus for current year 6 -839
Shareholders funds 332,536
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Election of the BoardRule 65
Up to nine Directors elected by and from the Society’s Members; Up to three Directors as representative[s] appointed/nominated
by Balerno Village Trust (SC 369378)Nominated by Balerno Village Trust
Simon Dormer, Ian Hynd, Martin PettyNominated by Harlaw Hydro members
Lynn Molleson,
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What‘s happened since NovemberDesign AgreedEquipment Ordered – delivery August Technical team meeting fortnightlyMeetings with CEC Flood Prevention / NHS /
SPN . . Grid Connection upgradedFiT rate pre-accreditation applied forPipe Liner Repaired
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Construction Contract5 Contractors invited to tender4 Quotations ReceivedPreferred bidder selected
July start or defer to next year??
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Figures and Assumptions (2013)1 Capital Cost (ref. HE Feasibility Study) £313,000
2 Annual Maintenance and Servicing (ref. HE Feasibility Study) £3,452
3 Annual increase in Maintenance and Servicing 4.0%
4 Reserve Fund to cover plant repair and replacement (% of surplus from year 2) 10.0%
5 Cost of Lease (free for first 6 years) % of income less other costs 4.0%
6 IPS Share issue £150,000
7 Commercial Loan with a lump sum repayment annually £163,000
8 Interest rate paid on commercial loan 8.0%
9 Interest rate paid to shareholders 4.0%
10 Approximate income from electricity generated pa (ref. HE Feasibility Study) £58,000
11 RPI used in forecasting income 2.5%
12 Year 1 will only generate 50% of expected annual electricity
13 The Commercial Loan will be repaid over 10 years.
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Financial Projection - 2013Year Income Maint. &
Serv.Share
InterestLoan
Payments Cost of Lease
Oper. Costs
Oper. Surplus
Available to BVT
Capital Reserve
A B C D E F G H I
B+C+D+E A-F G-H
1 £29,000 £3,452 £0 £24,292 £0 £27,744 £1,256 £0 £1,2562 £59,450 £3,590 £6,000 £24,292 £0 £33,882 £25,568 £5,000 £20,5683 £60,936 £3,734 £6,000 £24,292 £0 £34,025 £26,911 £10,000 £16,9114 £62,460 £3,883 £6,000 £24,292 £0 £34,175 £28,285 £15,000 £13,2855 £64,021 £4,038 £6,000 £24,292 £0 £34,330 £29,691 £20,000 £9,6916 £65,622 £4,200 £6,000 £24,292 £0 £34,492 £31,130 £25,000 £6,1307 £67,262 £4,368 £6,000 £24,292 £1,304 £35,964 £31,298 £30,000 £1,2988 £68,944 £4,543 £6,000 £24,292 £1,364 £36,199 £32,745 £30,000 £2,7459 £70,667 £4,724 £6,000 £24,292 £1,426 £36,442 £34,225 £30,000 £4,225
10 £72,434 £4,913 £6,000 £24,292 £1,489 £36,694 £35,740 £35,000 £74011 £74,245 £5,110 £6,000 £0 £2,525 £13,635 £60,610 £55,000 £5,61012 £76,101 £5,314 £6,000 £0 £2,591 £13,906 £62,195 £55,000 £7,19513 £78,004 £5,527 £6,000 £0 £2,659 £14,186 £63,818 £55,000 £8,81814 £79,954 £5,748 £6,000 £0 £2,728 £14,476 £65,478 £55,000 £10,47815 £81,952 £5,978 £6,000 £0 £2,799 £14,777 £67,176 £60,000 £7,176
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Figures and Assumptions (2014)1 Capital Cost (Actual + committed + contingency) £414,1072 Annual Maintenance and Servicing (ref. HE Feasibility Study) £3,4523 Annual increase in Maintenance and Servicing 4.0%4 Cost of Lease (free for first 6 years) % of income surplus 4.0%5 IPS Share issue £334,7506 Commercial Loan with a lump sum repayment annually £105,0007 Interest rate paid on commercial loan 8.0%8 Interest rate paid to shareholders 5 4.0%9 Approximate income from electricity generated pa (A Laycock) £63,000
10 RPI used in forecasting income 2.5%11 Year 1 will only generate 50% of expected annual electricity12 The Commercial Loan will be repaid over 10 years.
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Financial Projection - 2014Year Income Maint. &
Serv.Share
InterestLoan
Payments Cost of Lease Oper. Costs Oper. Surplus Available to
BVTCapital Reserve
A B C D E F G H I
B+C+D+E A-F G-H
1 £31,500 £3,452 £0 £15,648 £0 £19,100 £12,400 £0 £12,4002 £64,575 £3,590 £13,390 £15,648 £0 £32,628 £31,947 £5,000 £26,9473 £66,189 £3,734 £13,390 £15,648 £0 £32,772 £33,418 £10,000 £23,4184 £67,844 £3,883 £13,390 £15,648 £0 £32,921 £34,923 £15,000 £19,9235 £69,540 £4,038 £13,390 £15,648 £0 £33,076 £36,464 £20,000 £16,4646 £71,279 £4,200 £13,390 £15,648 £0 £33,238 £38,041 £25,000 £13,0417 £73,061 £4,368 £13,390 £15,648 £1,586 £34,992 £38,069 £30,000 £8,0698 £74,887 £4,543 £13,390 £15,648 £1,652 £35,233 £39,654 £30,000 £9,6549 £76,759 £4,724 £13,390 £15,648 £1,720 £35,482 £41,277 £30,000 £11,277
10 £78,678 £4,913 £13,390 £15,648 £1,789 £35,740 £42,938 £35,000 £7,93811 £80,645 £5,110 £13,390 £0 £2,486 £20,986 £59,660 £55,000 £4,66012 £82,661 £5,314 £13,390 £0 £2,558 £21,262 £61,399 £55,000 £6,39913 £84,728 £5,527 £13,390 £0 £2,632 £21,549 £63,179 £55,000 £8,17914 £86,846 £5,748 £13,390 £0 £2,708 £21,846 £65,000 £55,000 £10,00015 £89,017 £5,978 £13,390 £0 £2,786 £22,154 £66,864 £60,000 £6,864
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Additional Finance
Funding Shortfall £19k
Contingency £45k
Cash Flow (VAT recovery) £41k
Total £105k
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Funding SourcesRe-open sale of shares (June)Social Investment Scotland
Will lend £65k - 8%Diligence fees around £3650
Coop / Coop Community FundWill lend up to £150k – 6%Diligence - 1%Will buy up to £50k of shares
No early repayment costs for SIB or Coop
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What next? (November 2013)Apply to pre-accredit FiT (Feed in Tariff) for 67kw Design accepted by CECs Panel EngineerOrder Turbine / generator – December 2013Lease FormalisedSelect contractor January 2014Submit SEIS1 Spring 2014Start Build – Spring 20141st AGM – May/June 2014 Generate Electricity – Autumn 2014
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What next? (May 2014)Agree and sign lease June 2014Award Construction Contract June 2014Secure additional finance July 2014Re-open sale of Harlaw Hydro shares June 2014Submit SEIS1 August / September 2014Start Build – July 2014Generate Electricity – Autumn 2014
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QuestionsWine and ‘nibbles’
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The 4 Rubber Ducks to line upPlanning Permission
Granted October 2012
Extraction License Granted by SEPA October 2012
Lease agreement Heads of terms approved by CEC March 2013
Grid Connection G59 submitted to Scottish Power March 2013
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Another idyllic country scene
– or – potential for
another hydro scheme?
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Seed Enterprise Investment Scheme (SEIS)Harlaw Hydro Limited
SEIS is administered by the Small Companies Enterprise Centre (SCEC) in HM Revenue & Customs (HMRC)
The company must submit form SEIS1 to the SCEC The company cannot submit an SEIS1 until either:
it has been trading for at least four months orit has spent at least 70 per cent of the monies raised by the
relevant issue of sharesIf the SCEC accepts that the company, its activities, and
the shares all meet the requirements of the scheme, it will issue the company with a certificate to that effect, and will supply claim forms (SEIS3s) for the company to send to the investors so they can claim tax relief
The company issues SEIS3s to qualifying Investors.
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Seed Enterprise Investment Scheme (SEIS)The Investor
Using the SEIS3 supplied by the company the investor claims on their Self Assessment tax return for the tax year in which the shares were issued (i.e. 2013/2014)
Investors can claim relief up to five years after the 31 January following the tax year in which the investment was made.
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Enterprise Investment Scheme (EIS)Harlaw Hydro Limited
EIS is administered by the Small Companies Enterprise Centre (SCEC) in HM Revenue & Customs (HMRC)
The company must submit form EIS1 to the SCEC The company cannot submit an EIS1 until it has been
trading for at least four months (confirmed using form EIS2).
The company then has 2 years to submit the formIf the SCEC accepts that the company, its activities,
and the shares all meet the requirements of the scheme, it will issue the company with a certificate to that effect, and will supply claim forms (EIS3s)
The company issues EIS3s to qualifying Investors.
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Enterprise Investment Scheme (EIS)The Investor
Using the EIS3 supplied by the company the investor claims on their Self Assessment tax return for the tax year in which the shares were issued (i.e. 2013/2014)
Investors can claim relief up to five years after the 31 January following the tax year in which the investment was made.