AGM – 30 th May 2014. OBJECTIVE To complete the fund raising for a community hydro scheme at Harlaw Reservoir and ‘make it happen’.

AGM – 30th May 2014

OBJECTIVE

To complete the fund raising for

a community hydro scheme at

Harlaw Reservoir and

‘make it happen’.

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

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

Society AccountsAccounting period

2nd September 2012 - 31st March 2014Prepared and verified by Gordon Mavor Approve AccountsApprove verification of accounts

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

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

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,

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

Construction Contract5 Contractors invited to tender4 Quotations ReceivedPreferred bidder selected

July start or defer to next year??

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.

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

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.

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

Additional Finance

Funding Shortfall £19k

Contingency £45k

Cash Flow (VAT recovery) £41k

Total £105k

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

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

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

QuestionsWine and ‘nibbles’

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

Another idyllic country scene

– or – potential for

another hydro scheme?

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.

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.

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.

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.