The Charsfield Three Horseshoes Community Pub Limited (Community Benefit Society no: 31509R) Prospectus

Charsfield has been without a pub since the Three Horseshoes closed in May 2011.

Together we can open it again. We can secure it for the long term as a successful ‘community pub’, providing a range of facilities for everyone living in, working in, or visiting the area.

This is a unique opportunity for you to help revitalise the pub so that it provides facilities for everyone (most particularly a good pub with decent food and excellent real ale) and supports local producers.

www.froth.org.uk

The Charsfield Three Horseshoes Community Pub Limited

What has happened so far? Two meetings (50+ at each) just before the pub closed (May 2011) agreed the village should save the pub. ‘Friends of the Three Horseshoes’ (FROTH) formed, with a steering group of 8 local volunteers. FROTH has organised monthly parties/meetings in the Village Hall, each attended by over 70 people. Charsfield’s first ‘pop-up pub’ on Christmas day was enjoyed by over 200 people. A packed and lively New Year’s Eve party in the village hall was again a big success and attended by over 100 people. At the meetings, the steering group gave updates on the progress that had been made and what still needed to be done. The funds raised paid for producing, launching and distributing this prospectus. The Society has an established contact email list of over 150 ‘supporters’ and people interested in being kept in touch with what is happening. The Charsfield Three Horseshoes Community Pub Limited The steering group has now set up The Charsfield Three Horseshoes Community Pub Limited which came into existence on 12 January 2012. It is a ‘Community Benefit Society’, a special form of legal organisation (like a company, but specifically designed for community schemes such as this one). It is referred to as ‘the Society’ below. ‘FROTH’ will continue alongside the Society as the informal group organising parties and pop-up pubs, at least until the pub is bought and re-opened. The Society’s aims: To get the pub re-opened on a secure and permanent basis. To make the pub a ‘hub’ for local life, where people can meet and socialise. To use the pub as the base for other local activities and services for the whole community. What now? This document is an invitation to you: To become a member of the Society. To invest to help buy the Three Horseshoes and set it up as a community pub (if no-one else buys it in the meantime). As set out in its Rules (available on www.froth.org.uk) the Society’s formal legal ‘objects’ are:

To buy the freehold of the Three Horseshoes, Charsfield, Suffolk; To run the Three Horseshoes as a pub, and to provide services based at the pub, for the benefit of people who live in, work in, or visit the Charsfield area; and To operate in an open, democratic, environmentally-sustainable and family-friendly way, providing welcoming facilities at the pub for all members of the community including by, where possible, using local produce.

All members of the Society will have an equal say in how the Society is run – one member one vote. We hope people will join us in investing because they are committed to getting the pub running again as a community resource for those who live in, work in, or visit the Charsfield area. This is not a commercial investment or a way to ‘make money’ from the pub. But, if the pub does well, the Society would pay investors interest on their investment at a similar rate to a building society account.

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This prospectus On the following pages there is more information about: The Charsfield area. ‘The Charsfield Three Horseshoes Community Pub Limited’ (the Society). The Society’s ‘Board of Directors’. Buying the Three Horseshoes. Running the Three Horseshoes. The ‘business plan’. Joining and investing in The Charsfield Three Horseshoes Community Pub Limited. There is more information on the FROTH website – www.froth.org.uk

The Charsfield Area Charsfield is a village near Wickham Market and Woodbridge, North East of Ipswich, Suffolk.

Charsfield became internationally famous as the setting for Ronald Blythe’s 1969 book Akenfield: Portrait of an English Village, made into a film by Director Peter Hall in 1974. In 1997 Anglia TV made two short documentaries about the village and in 2004 as part of the 30th anniversary of the original film BBC4 made Akenfield Revisited. Charsfield has changed a lot since then. Many of the village facilities had closed even before the Akenfield film was made. With the pub also now closed, Charsfield has few community facilities left. The primary school, the village hall, the recreation ground, and two churches are all important, but none provides an independent ‘hub’ for village life as the pub did before, and could do again.

3 The Charsfield Three Horseshoes Community Pub Limited

Many people feel that, without the pub, the local area has lost its social heart. But the highly successful FROTH parties have shown that people around Charsfield want to get that back. Losing it for good would be a great blow to the area, even for people who are not regular pub goers. Charsfield parish has a population of about 360. Neighbouring communities with no pub include:

Charsfield 360 Dallinghoo 160 Monewdon 110 Letheringham 60 Hoo 100 Debach 100 Clopton 370 Total 1,270

The Charsfield Three Horseshoes Community Pub Limited Stage 1: FROTH The FROTH steering group circulated questionnaires last summer. Local people said: They want to get the pub open again. They are keen to help to make that happen, including by investing. They want ‘the village’ to buy the pub, rather than just renting it. The overwhelming majority want that to be done by an organisation in which each member has an equal vote regardless of how much money they have invested (which is why we have set up a Community Benefit Society rather than an ordinary company). 45 people said that they would invest over £70,000 between them (ranging from £250 to £10,000 each). That was a fantastic response in a very short time, particularly given that the proposals were not formal, detailed or firm at that stage. Lots of other people said they too would invest, but they would wait until the Society was set up formally with specific plans before coming forward and saying how much. Many of those would-be investors have not been regular users of the pub in the past – but they would be if it was a community pub; or they just want the pub to be there (to keep the social heart in the village), so they have the option of going there occasionally. Full details of the questionnaires and answers are on www.froth.org.uk Stage 2: The Charsfield Three Horseshoes Community Pub Limited With such enthusiastic responses to the questionnaires, it was decided to set up formally. We took advice, including from Co-Operatives UK. After looking into the various options, and dealing with the procedures involved, The Charsfield Three Horseshoes Community Pub Limited was set up. That

4 A Community Benefit Society took longer than hoped, but is now finalised. There is information on www.froth.org.uk including links to an independent guide to ‘what it means to invest in a Community Benefit Society’. The Financial Services Authority (FSA) registered the Society on 12 January 2012 (FSA Number: 31509R), making it a formal legal entity (like a company, but for democratically-run community enterprises).

The Society’s Rules (based on model rules produced by Co-Operatives UK and formally approved by the FSA) are available on www.froth.org.uk. In outline: The Society can only do things consistent with its formal stated objects – as above. It is a ‘limited liability’ corporate body (so no-one can lose or be liable for more than they have invested). Anyone over 16 can become a member if they invest the minimum amount (as below). All members have one vote regardless of how much they invest. At least half the members at any time must live or work within 6km of the Three Horseshoes (see map on page 3). The Society is controlled by all the members, voting in ‘General Meetings’. The Board (3 to 10 people, currently 8) makes decisions between General Meetings. At each Annual General Meeting, all the members will elect the next Board. The Board has a Chairperson, a Secretary, and a Finance Director. The Society can employ managers and others to run the pub. The Society can pay interest on investments. Members can ask to withdraw their investment after 3 years (see more detail below). Shares are only ever worth what was paid for them, and might be worth less. Any ‘profit’ (after any interest payments have been made) from running or owning the pub must be ploughed back into the pub. If the Society were to be wound up, then any money left after paying back investors must be dispersed to another, local, community organisation. So members cannot make money from it (other than through interest on their investment). Rules can only be changed by a two thirds majority of members. Some cannot be changed. That provides a solid basis for us all to work together and invest in our community in a democratic fashion, but with appropriate controls in place to minimise the risk of things going wrong.

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FROTH supporters outside the Three Horseshoes

The Society’s Board of Directors The 8 members of the FROTH steering group were the ‘founder members’ of The Charsfield Three Horseshoes Community Pub Limited and, as founder members, became its first Board. At the first AGM (which must be held between 1 December 2012 and 31 May 2013), the Society’s members will elect the next Board; and then annually after that. The Board Secretary is paid a small amount for the work involved in that job. Other Board members are entirely voluntary. The Board of Directors: Di Alexander has lived in Charsfield for 4 years. She enjoys exploring the footpaths and bridleways around Charsfield with her dog. She is on the committee of the Charsfield Flower Show and has just taken up the role of Secretary to the Flower Show Committee. Di is a Diagnostic Radiographer with a speciality in Advance Practice Ultrasound, working for an NHS Trust within East Anglia. Peter Clitheroe has lived in Charsfield for 15 years and is a writer and broadcaster with experience developing national occupational standards and training for the hospitality industry. He was on the Steering Group that developed the Charsfield Parish Plan a couple of years ago. He was one of the founders of the Charsfield Crazy Boules nights during which the gravel in the Three Horseshoes car park was so carefully redistributed. Amanda Illing has lived in Charsfield for 6 years and works as a senior manager in legal services. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a trustee of a community legal access charity. Pauline Llewellyn has lived in Charsfield for 20 years and has taken an active part in village life since retiring as a Community Midwife. She is on the Tennis Club committee, the Recreation Ground committee, the Village Hall committee and the Parochial Church Council. She is trying to learn how to play golf and enjoy the open air. She plays bowls for Otley Bowls Club and is Treasurer of the Fynn Bowls League. Mandy Morton has lived in Charsfield since February 2011. She worked as a Senior Buying Manager and Product Developer in the Fashion and Textiles Industry for the past 25 years, working in London, Europe and the Far East. Prior to moving to Charsfield Mandy was also a Director and Chairman of Pounsley Road Residents Ltd in Sevenoaks, and a member of her Local Community Forum. She is also a qualified Plasterer. Mandy is the Society’s Secretary.

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Dave Whitley has lived in Charsfield for 22 years and is now retired. He was a senior manager with BT and has both technical and business qualifications. He had his own consultancy business and ran "Countryside B&B” with his wife. He was Handicap Secretary at Cretingham Golf Club for 10 years. David Wolfe has lived in Charsfield for 6 years. He works as a barrister specialising in challenging public authorities. He has been on the boards of a range of small and large community, commercial and public bodies (including several school governing bodies including in Suffolk) for over 20 years. He was a County Councillor in Cambridgeshire. David is the Chair of the Society’s Board of Directors. Andy Wyatt has lived in Charsfield for 12 years and now works as a management consultant specialising in telecommunications. He has worked in the UK, Middle East and Asia. Previously he was at BT, responsible for large scale programmes, and product and services development. Andy is the Society’s Finance Director.

Buying the Three Horseshoes The Society needs to raise the money to buy the Three Horseshoes (unless someone else buys it first, in which case everyone can become customers of the new owners). It is currently owned by Edward Bolton. He also owns and runs ‘Just Hair’ in Woodbridge. The freehold was on the market while the last tenants, Martin and Emma, were in the pub. When they left, it was re-launched on the market (with some additional land and a slightly reduced price). The agent’s particulars are on www.froth.org.uk. The main details are given below in the appendix. The ‘additional land’ is the land immediately behind the fence at the back of the car park. The sale does not currently include the land between the pub and London Villa; nor the land behind the pub and running up the back of the St Peter’s Close gardens. The asking price of £289,000 is ‘negotiable’.

The Society obtained independent professional advice from Tony Wheeler at Fleurets, a highly- regarded specialist. He advised to offer up to £160,000. A copy of his report is on www.froth.org.uk. It was sent to Christies, Edward Bolton’s agents, who said £160,000 is less than he would ‘look to accept’. But they did not take up the invitation to comment on Tony Wheeler’s analysis. It seems that offers to buy have been made, but not accepted (partly, it seems, because the potential purchasers wanted more of the back land than Edward Bolton is currently prepared to sell). Some of the interest is from people who want to develop behind the pub and who may also want to try and persuade the Council to grant permission for the pub itself (plus the car park and garden) to be redeveloped as housing (something considered further below).

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Running the Three Horseshoes When the Society gets to the point of purchase, it will advertise widely for a manager (or managers, to share the tasks) to run the pub and the kitchen. They would probably live in the flat above the pub. The Society will pay them a salary, but with an extra, performance-related, amount to give them a direct incentive in making the pub flourish. They will be supported by other staff. Employing managers rather than having tenants means that investors in the Society could be eligible for tax relief on their investment (as below). Also, managers can be initially employed on a probationary basis, where tenants cannot. The Board will advertise for and select the manager(s). Groups around the country who have set up community pubs in a similar way have told us that, when they advertised for staff to run their pub, they had many applications and a good field of candidates to choose from. That matters because: Getting the right people to run the pub is fundamental to its success. The manager(s) must be committed to running a pub for the whole community and able to provide a warm and welcoming atmosphere for everyone. They will have run a pub before – we will ask for references and find out how they performed in previous employment. They will need to be good with real ale and with providing a range of good pub food at prices to attract the full range of people who will want to come to the pub. They will need to be enthusiastic about developing additional facilities and activities to help secure the pub financially and make it attractive to the whole community. They will need to be committed to the Society’s formal ‘objects’ (as above) including operating in environmentally-sustainable and family-friendly way, and using local produce where possible.

By appointing the manager(s) on a ‘probationary’ basis, the Society will be able to terminate their contract after 6 months if things are not going well. The Board will formally monitor progress against targets agreed with the manager(s) on a regular basis, and report to the members. The pub should be open all day every day – consistent with being a welcoming community resource for everyone to use. It will offer good pub food at a range of prices, including occasional ‘special’ nights (maybe with occasional guest chefs) where more exotic or expensive menus would be available. It will have a choice of good real ales particularly from local and small breweries; also wine to suit all tastes including good ‘house’ wines along with more pricey choices as well. Once the basics are in place, the members of the Society can consider and vote on a range of possible additional facilities to make the pub a resource for a wider range of people and help boost turnover. People in the village have already put forward lots of ideas for consideration, including: Newspapers, good coffee and breakfast available on Saturday and Sunday mornings. Film/video evenings and other events co-ordinated with other village activities. An internet ‘cafe’ corner and Wifi. A small village shop. Facilities for cyclists using ‘Sustrans Route 1’ which goes past the pub (red on map on page 3). B&B cabins. These could help make the pub more attractive and differentiate the Charsfield Area from other pub catchment areas. The pub will provide a place for social gathering and cultural activities. It will be a friendly, welcoming place where villagers and visitors can meet and relax, or just drink and eat.

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The Society’s ‘Business Plan’ The Society needs to raise the money to buy the pub. The Society then needs to undertake urgent repairs to get the pub open again. The Society would then re-open and run the pub, covering its costs. The Society would, in due course and as finances allowed, consider investing in improving the facilities and consider paying interest to investors. Buying the pub Assuming the pub can be bought for £160,000 as recommended by the Society’s independent professional advice, then the table below represents the cost to buy it and re-open it:

Purchase of Three Horseshoes £160,000 Stamp duty £2,000 Professional fees £5,000 Urgent refurbishment £40,000 Fixtures & fittings (including kitchen) £30,000 Ingoing stock – bar £2,000 Ingoing stock – kitchen £3,000 Advertising £1,000 Operating capital £10,000 Total to be raised £253,000

So £253,000 is the Society’s target figure when it comes to getting investment commitments. It will be for the members of the Society at the time to decide what offer the Society makes for the pub, and what it then spends on getting the pub going again.

The aim is to raise the majority of that money from individual members/investors. Companies, businesses and other organisations can also join, getting one vote each, and investing up to the same maximum of £10,000 each. There is the possibility of grants (including perhaps money from the District Council to assist with bringing the flat up to standard). It may also be possible to borrow some of the money – although obviously it would be better not to have to do so. The Board will not ask investors for the whole of their investment until the Society has had an offer accepted and is in a position to buy the pub. The initial minimum investment in the Society is set at £100 per person (100 shares at £1 each). So anyone who wants to become a member will need to pay £100 now. It is hoped that at least 200 people/organisations will become members. That initial money will allow the Society to cover the costs of setting up the Society and the process of buying the pub (paying professional fees, and so on), but not the actual cost of buying the pub. By joining and becoming a ‘member’ of the Society, you will get a vote in decisions on how the Society and the pub are to be run. From now on, the Society will hold open/public meetings to

9 The Charsfield Three Horseshoes Community Pub Limited

update on what is going on, but member-only meetings will vote to decide what the Society actually does including on what to offer for the pub, and what to spend on refurbishment. When you join the Society, you will also need to say how much more you are willing to invest in the end (when the Society comes to buy the pub). That information will be kept entirely confidential to the Board. No-one else needs to know how much each person has invested (we each get the same one vote after all). The Board will publish the total amount promised as that sum goes up. The Society will only be able to make an offer to buy the pub when it has enough money committed in that way. It will be for the members at the time to decide on that. If the Society can then agree a purchase at an acceptable price with Edward Bolton, the minimum investment in the Society will then rise to £250, with a maximum of £10,000 per member set by the Board. So all of us will then need to top up our investment (by paying between £150 and £9,900). Anyone who does not pay the extra within two months will then cease to be a member (and will probably get only part of their initial £100 back). So the four stages look like this: 1. Initial membership investment – £100. At the point of joining, members will be asked how much they will ultimately invest (£250-£10,000); 2. When the total amount promised reaches the target of £253,000, the members of the Society at the time will decide on making a formal offer to Edward Bolton; 3. When an offer has been accepted, the Society will enter into a ‘contract to buy’; and 4. Only then will the Society ask members to increase their investment to the figure they promised so that the Society can complete the purchase. The FROTH questionnaires showed that, although some people could only invest £250, others would invest up to the £10,000 per person limit. It would be good to have as many member/investors as possible to maximise community ownership and democratic involvement. Based on the questionnaires answers, the spread of investment to raise the target figure of £253,000 could look something like this:

£250 40 people £500 20 people £1,000 40 people £2,000 15 people £3,000 15 people £5,000 15 people £10,000 5 people

The Board is optimistic about the Society raising the money. But that will only happen if we all decide to become members and all agree to invest. If we leave it to other people, it won’t happen. Some people have said they will invest in the end, but they have been planning to wait until the Society makes a formal offer, or has its offer accepted before coming forward. But the Society cannot make an offer until it has enough investment promised, so please don’t hold back in that way. You need to join up now (and pay £100) and say (confidentially) how much you will put in later. The Society will only ask for the rest of the money when a deal is agreed with Edward Bolton. Your investment will not be sitting around waiting until a deal is done. Urgent works The Board has looked carefully at the pub with the assistance of local builders, a local electrician and a roofer. They have given a good idea of its condition, what is needed to get it open, and what work would be needed in the longer term to get it into good condition.

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The structure of the building and the roof are basically in sound condition. However, there is no felt under much of the roof and some of the (cement) flashings have failed so there are leaks into the upstairs rooms. So the roof would need to be scaffolded and stripped, and then felt and new battens put in place before the tiles were re-laid and new (lead) flashings installed (and repairs done internally). That needs to be done before the building is occupied again, at a cost of £10,000-£15,000. Some rewiring is also needed. It would be best done when the roof is off, at a cost of up to about £5,000. Installing a new kitchen will cost about £20,000. In the future, many – if not all – of the windows need to be replaced. That cost is not included above. The Society has also already had lots of help from people in and around Charsfield – people with skills in building, electrical installation, running pubs, legal matters, and other things. Anyone with skills, expertise, or just time and energy to contribute, should let us know. That could be skills such as accountancy which would be useful now; or practical skills that could help with getting the pub going once the Society has bought it. In other parts of the country where people have set up community enterprises (including pubs), they had lots of offers of help from local people with skills or time. Certainly, if the Society does buy the pub, there will be lots to do – repairing and improving the building, the garden and so on. With help from volunteers we can sort those things at the lowest cost, to give the pub the best possible start. Running the pub – how will it work? The manager(s) will run the pub overseen and guided by the Board and the members (voting at formal meetings). But the Board/members will not be involved in ‘operational’ day-to-day decisions – a pub cannot be run day-to-day ‘by committee’. The Board will make sure that things are consistent with what the community wants and the Rules of the Society, and report back to the members through newsletters and at meetings. Members, voting in meetings, will make the major decisions – such as about any capital works, or adding new facilities, and on appointment of the Board at each AGM. Running the pub – the money? The last tenants, Emma & Martin, kindly provided FROTH with some financial data. In their last 12 months’ trading, the pub turned over just under £90,000 (+VAT). Of that, £20,800 went as rent.

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The Board believes that, owned by the Society and run as a community pub, it can do much better. It is hard to get figures for other local pubs, but turnovers nearly double those figures are reported in similar pubs in the area, and that is without the benefit of them being community pubs. But, we want to be cautious in our planning. So the Society’s plan assumes the business ‘starts small’.

Cost per year Salary – live in manager(s) £20,000 Wages – part-time staff £9,000 Employers NI £1,560 Allowance for holiday pay £2,500 Business rates £3,1001 Insurance £1,500 Utilities (Electricity/Gas/Water) £5,400 Telephone £250 Advertising £2,000 Mileage allowance to wholesalers £1,500 Bank and card machine charges £1,600 Stocktaking £720 Accountant £1,200 Cleaning materials, toilet paper, etc. £1,200 Waste disposal £1,000 Equipment repairs & renewals £2,500 Buildings maintenance £2,500 Sundry expenses £1,000 Society’s Secretary £500 Total £59,030

If 40% of the pub’s income is spent on purchasing stock (the industry norm), the pub would need a turnover of about £100,000 (+VAT) per year. Given a historic turnover of just under £90,000 (+VAT) as above, and with the new benefit of being a community pub, the Board is optimistic that a higher figure can readily be achieved: We believe that people will use the pub more when it is community owned and run. Drink and eat to support your village! The FROTH parties have shown that there are plenty of people in the area who want a pub, including people who had got out of the habit of going to the pub over the last few years. Owned and run by the community, with staff chosen for their record of successfully running a pub and with the potential to serve everyone’s needs, the pub should be able to offer facilities and a wider range of services that are attractive and welcoming to everyone. The Society’s commitment to using seasonal local produce wherever possible should make the pub more attractive to people. We expect that local people will volunteer their time, skills and expertise to help get the pub running and maintained. That could include help with maintaining and improving the building, the garden and other facilities. The Society will hold periodic ‘work parties’ where people can get together to work on the pub and the garden. That should save the Society a lot of money compared to an ordinary pub, and so improve profits.

1 It may be possible to persuade the Council to give the Society a substantial discount on that figure.

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There are also opportunities to develop other sources of income for the pub – such as by welcoming the many cyclists who regularly pass through the village on Sustrans Route 1 and by linking up with other facilities in the area, such as the village hall, to provide joint activities and events (perhaps offering catered facilities for business and other group meetings). Although we are optimistic, we also need to be cautious. The figures above do not allow for any interest payments to investors. We doubt that interest would be paid in the first couple of years. If the pub does well, we would expect any extra money in that initial period to be used to invest in improving the building and paying an appropriate performance incentive to the staff. The Board would then decide, from year 3, whether interest should be paid to investors and at what rate. We would hope the Society would be able to pay interest at a rate similar to a building society account from year 3. But, people should invest primarily to support their community, to save the pub, and to have a say in how the pub is run, rather than to make money. The Society’s accounts will be publicly available. They will be independently audited each year. What if the Society cannot agree a price and actually buy the pub? The Society might not be able to agree a price with Edward Bolton, or someone else might buy the pub in the meantime. If that happened, the Society would have spent some or all of the £100 initial membership that all of us had invested on professional fees and other costs, but without buying the pub. Obviously, the Society would pay what was left back to the members who had invested. But they would clearly have lost some or maybe all of their money. So that initial £100 is at particular risk. The Society will not ask anyone to pay their full investment until it has agreed a deal with Edward Bolton. That’s why everyone needs to say now (confidentially) what they will invest at that point. What if the pub does well? It will be for the members/Board at the time to decide what happens if the pub does well financially. But we would expect that, if that happened: Part of the money would be used as a profit-related payment to the pub manager(s), so they have an incentive to make the pub do well and continue to improve; Part would be reinvested in maintaining and improving the facilities; and Part would be used to pay interest to investors at a rate similar to a building society account. What if the pub does badly? The figures suggest that the pub should do well, owned and run as a community pub. If, over time, the pub does not do well enough to cover its costs (even as a community pub) then the Society would not be able to keep running it as a pub. It would need to sell the building and other assets to repay investors. The pub might be worth less then than the Society had paid for it. Shares could be worth less than we all paid for them. But, in that event, it is quite possible that Suffolk Coastal District Council would grant planning permission for a ‘change of use’ to allow the pub and garden to be developed as housing, something most unlikely to be allowed while the pub is viable. That is absolutely not what anyone wants – everyone is doing this to get the pub open and keep it going on permanent basis. But if it happened, then the possibility of getting planning permission would give the Society a good chance of being able to pay back what people had invested (because the property could be worth more as housing than it would as a pub). Importantly, however, no-one could be paid back more than they had invested – any surplus after paying back investors at £1 a share would (under the Rules) have to be handed over to another local community scheme for the benefit of the local area. The Rules include an ‘asset lock’, an

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unchangeable legal rule, which would prevent the assets being passed to anyone or any organisation which was not itself a community organisation. What about tax relief? The Board has been given what is known as ‘advanced assurance’ by HMRC on the basis of the Society’s Rules and the Society’s plans as described in this prospectus (which HMRC have seen). So investments should be eligible for tax relief as part of the ‘Enterprise Investment Scheme’ (EIS). That means that tax payers who invest at least £500 (within a single tax year and at the point the Society buys the pub) can be eligible for up to 30% tax relief on that investment. Someone investing £1,000 would get £300 in tax relief (such that the £1,000 investment would, in effect, cost only £700). They can claim the 30% tax back for the tax year in which they make the investment2. But they must then leave the money invested for at least 3 years from the point at which the pub starts trading. Note that the initial £100 investment when you first sign up will probably not qualify for the purposes of EIS tax relief. So the minimum overall investment if you want to claim tax relief would be £600, with 30% tax relief being available on the £500 invested at the point the Society buys the pub.

Joining and investing in The Charsfield Three Horseshoes Community Pub Limited Why should I become a member and invest now? There are good reasons for all of us to join the Society now and invest to help get the pub open again: The main reason is to help get a pub back for the Charsfield area, set up and running on a secure long term basis as a resource and facility for us all. This is an exciting community project. With the pub community-owned and run, it has a much better chance of meeting everyone’s needs as well as being commercially successful. Many people who have got out of the habit of using the pub will be attracted back when it is community owned and run. You can help make that happen. Losing the pub for good would be a big blow for everyone in the area, not just those who are regular pub users. There are developers out there who would like to turn it into housing. The best way to block that is for the Society to make an offer to buy at the price recommended by the independent valuation. The Council should then refuse planning permission for any future ‘change of use’ from pub to housing. Without a pub, the village would also be much less attractive for new people moving in. Local estate agents have confirmed that having a thriving pub in the village would increase the market appeal of local houses, and the level of interest if they were put up for sale. If the pub is successful, then the Society should be able to pay interest to its investors at a rate similar to a building society account. Clearly, some people can only afford the minimum investment (£250 in the long run) but others can afford more. We hope everyone will invest what they can, to make this a success as a joint effort. What happens when I become a member? When you become a member and pay the £100, the Society will give you a numbered membership certificate and a share certificate. You will receive regular updates on progress (at least monthly while

2 This is not tax advice. Investors should get their own advice on what they need to do to claim EIS tax relief.

14 A Community Benefit Society things are getting going, perhaps quarterly once the pub is up and running) and have log-in access to the members-only section of the web site. You will also be able to attend members-only meetings where members discuss and vote on what the Society should do. Initially, the decisions will be about buying the pub and getting it open again. There will be an Annual General Meeting, with ordinary General Meetings as needed. Members will vote by show of hands or ballot at the meetings, or by email/post for people who cannot get to a meeting. What about investors from out of the area? Investors from out of the area are very welcome – indeed we will probably need them to raise the target total. Anyone over 16 can be a member. It does not matter where they live. Both members of a couple can be members. But, as above, the Society’s Rules require that at least half the members live or work within 6km of the pub (see map on page 3). That is to ensure that the pub remains under local control and remains accountable to the people most likely to be using it. But the Society also wants investors from beyond that area – now is the time to fulfil your dream of owning a pub. How about buying membership for someone as a present? So what do I do? Use the application form with this leaflet, or download a form from www.froth.org.uk At this stage, you will need to buy 100 shares of £1 each (£100 total). Each person in a household over 16 can be a member in their own right. You will need to pay by cheque or (preferably) by a direct bank transfer to the Society’s bank account (details on the form). The Society will process applications for membership in turn. The Society’s Rules require that at least half the members live or work within 6km (see map on page 3) of the Three Horseshoes, so we will need to keep a check on that. You will also need to say (confidentially) how much you intend to invest when the Society actually comes to buy the pub (which we hope will be in a few months’ time). As explained above, all of us will need to increase our investment at that point to the level we promised when we became members (between £250 and £10,000) or lose our membership at that point if we do not. The form also asks if you would be able to assist in any practical ways with getting the pub re- opened. If you have skills or expertise or even just time to give, then please do come forward. What will happen to my personal information? A list of the names of members – and whether they live/work within the 6km (see map on page 3) or not – will be publicly available. That is needed for voting and accountability purposes. But the Board will keep confidential details of where members live/work, their contact information, and the number of shares they have bought or intend to buy and any other personal information. What about getting my investment back later? The Board has formally resolved that everyone needs to leave their money invested for at least 3 years. That is to ensure stability and get the pub off to the best possible start. For the initial £100, the 3 years runs from 20 January 2012. For the rest of your investment, the 3 years will run from the point at which the Society buys the pub (but remember that the Society will only ask you to pay the rest of your investment at the point when it is actually about to buy the pub). After the 3 years, members can ask to withdraw their investment (and so stop being members and receiving any interest payments). The Board will consider all such applications, in turn, at the time. The Society would pay investors back at the value of shares at the time (which could, of course, be less than their original £1 price each) if it can afford to do so. Funds for that could come from accumulated operating profits, or from other, new, people having invested. The Board hopes that new people moving into the area will invest, particularly (perhaps) where the person into whose house they were moving had invested. 15 The Charsfield Three Horseshoes Community Pub Limited

Any questions? If you have any questions, feel free to email the Board at [email protected], or ring 01473 813890 (leave a message and someone will ring you back), or write to The Charsfield Three Horseshoes Community Pub Limited, C/O 6, St Peters Close, Charsfield, IP13 7RG. All Board members live in Charsfield, so we can be available on the phone, by email, or in person. We will put together a list of Frequently Asked Questions (FAQs) and post them on our website and send them to everyone on our contact list, so that everyone gets the same information.

www.froth.org.uk FROTHchars @FROTHchars

Appendix: Highlights from Christie & Co’s sales literature: Situation The Three Horseshoes is located in the village of Charsfield north of the affluent market town of Woodbridge (7 miles), with a number of villages and towns close by including Wickham Market (3 miles), Framlingham (6 miles) and Ipswich (11 miles). The business is the only public house in the village, with a local primary school close by. The property A two-storey detached brick built property with origins, we are advised, dating back to the 19th Century, under a pitched tiled roof with a single storey pitched extension to the side with further timber built outbuilding to the rear. Public areas The bar area is able to accommodate seating for circa 20-30 customers and benefits from an open fireplace. The former restaurant area also has its own separate bar servery and extends into the single storey extension to the right providing seating for approximately 14, whilst the main dining area can accommodate an additional 20-30 covers. Ladies and gentleman’s WC’s. Ancillary areas Trade kitchen. Beer cellar. Utility room. Bottle store and general storage located in the timber outbuilding to the rear. Owner's accommodation Situated on the first floor the private accommodation comprises 2 bedrooms, lounge, kitchen and bathroom. The accommodation can be accessed via an internal staircase or an external metal staircase via the flat roof to the rear of the property. External details Car park to the left of the property. Lawned beer garden adjacent to the car park, with additional land now available. Patio area to the front of the property. Timber outbuilding currently used for storage. The business The Three Horseshoes enjoys a central location within the village of Charsfield and benefits from an extensive catchment area including the affluent market town of Woodbridge and Ipswich, and a number of tourist attractions close by. Although the business has recently closed, we believe the Three Horseshoes offers an excellent opportunity for either a first time buyer looking to enter the licensed trade, or an operator looking for their first business venture. The property is now being offered with the inclusion of additional land immediately to the rear of the car park, in addition to the existing beer garden, which offers great potential for additional al fresco dining and drinking areas.

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