SEC at GEO2.Poptel.org.uk
06-01-1995, 08:16 PM
Further information about ICOF Community Capital is attached.
You can direct any enquiries to me at:
aries-v.woodell@geo2.poptel.org.uk
Vivian Woodell
ICOF
COMMUNITY
CAPITAL
FINANCE AS IF PEOPLE MATTERED
YOUR INVESTMENT FOR A SUSTAINABLE FUTURE
INTRODUCTION
Many communities around the UK are experiencing a dramatic return
to self help. For too long the pursuit of conventional economic
progress and increasing centralisation have eroded the power of
local people to manage and control their own lives. People are
realising that if they want meaningful jobs and relevant
services, they will have to provide them for themselves.
Communities are building their own businesses. Businesses which
are value based, people centred and benefit the community through
their trading activities. They are developing out of the
devastation caused by industry closures and comprehensive
redundancies and the desire to build a future where local skills
and resources address local needs.
These businesses might be called co-operatives, development
trusts, voluntary, community, social or green businesses.
Collectively known as Social Economy Businesses, they may be
community or employee owned but all will supply goods or services
which add social and environmental value.
They provide important local services such as neighbourhood
security, housing estate management, community shops, local
transport, leisure and creche facilities and managed workspace.
Others are dedicated to the provision of alternative energy
sources, recycling programmes and a variety of other green
issues. They rescue jobs by taking over companies and services
abandoned by the private or public sectors. They have given
people back their dignity and self respect and for many they are
the only hope of a future.
Investment in such businesses is essential to the future well-
being of our society.
There is widespread recognition from the private and the public
sectors that there is a real need for regeneration investment in
the UK's poorer communities. It is equally recognised that the
most appropriate channel for investment is through the social
economy. But the return on the investment, a low asset base and
the absence of a track record create problems. These, in the
minds of conventional providers of finance, have to take
precedence over any social or environmental benefits. The
riskier the investment the higher the return that is expected.
Few of these companies offer high financial returns, but with
appropriate investment they can operate as viable businesses.
ICOF Community Capital Limited has been set up to help finance
such businesses.
WHAT IS ICOF COMMUNITY CAPITAL?
ICOF Community Capital is a new UK investment society offering
individuals and organisations membership shares. This is a social
investment. ICOF Community Capital will not accept deposits but
its shares are withdrawable subject to certain conditions. The
money raised is invested to obtain social and environmental
benefit as well as a return for the investor. It should not be
regarded solely as an investment for personal gain or profit.
ICOF Community Capital invests in social economy businesses which
are viable and operate in a commercially effective manner. We
recognise that their level of profitability may be constrained
by the achievement of social or environmental benefit and we hope
our investors share this recognition. This is an ethical
investment with a priority for people rather than profit.
ICOF Community Capital is a membership organisation with a one
member one vote constitution. We expect it to develop its own
sense of community.
ICOF Community Capital is an Industrial and Provident Society for
the benefit of the community. It is a business and not a charity.
We accept money as an investment and although no guarantee can
be given, it is expected that results will enable interest to be
paid. It is a goal to provide interest in line with inflation.
The minimum investment is 250 pounds sterling, the maximum is
20000 pounds sterling and normally withdrawals can be made on 6
months notice. We hope the monetary value of your investment will
be maintained, but it may go down.
--------------------------------------------------------------
"A community business is a trading organisation which is set up,
owned and controlled by the local community and which aims to
create self-supporting jobs for local people and to be a focus
for local development. Any profits from its business activities
go to create more employment or to provide local services, or to
assist other schemes of community benefit".
---------------------------------------------------------------
WHO MANAGES ICOF COMMUNITY CAPITAL?
ICOF Community Capital is managed by Industrial Common Ownership
Finance Limited (ICOF), a company limited by guarantee without
share capital. ICOF established ICOF Community Capital.
ICOF is authorised under the Financial Services Act and is
registered with IMRO (the Investment Managers Regulatory
Organisation) as a non-discretionary fund manager. See
Organisation and Management, page XX.
ICOF exists to help people take more control of their economic
lives. For over 22 years, this has been achieved mainly through
the provision of loan finance and business advice, to enable
people to own and democratically control the businesses in which
they work. By the end of 1994, 248 co-operative businesses had
received 260 loans totalling 2460000 pounds sterling. Our market
research tells us that the average number of workers per co-op
is just over 6. This would suggest that around 1560 jobs have
been created or sustained, which works out at one job for every
1577 pounds borrowed.
---------------------------------------------------------------
"A worker co-operative is a business which is owned and
controlled by its employees. Membership is open to all
employees, and all members have one vote irrespective of capital
or labour input."
---------------------------------------------------------------
Sound business finance, coupled with equal opportunity,
environmental concern and the pursuit of social justice will
continue to be the hallmarks of ICOF's policy and practice and
are the foundation for ICOF Community Capital Limited.
SOCIAL INVESTMENT
If social economy enterprises are to raise their profile and
expand their vision there will need to be a continued growth
in social investment .
ICOF Community Capital loans range in size from 5000 to
50000 pounds. All funds are revolving: every pound repaid is
available to lend to another business. Demand continues at
record levels both from the worker co-op sector and new social
economy clients. Total lending for 1995 is projected at 415000
pounds sterling, which includes 100000 pounds lent from ICOF
Community Capital. ICOF Community Capital lending is expected
to increase to 200000 pounds in 1996, 300000 pounds in 1997 and
over 400000 pounds in 1998.
Nearly all businesses start out small, the vast majority very
small. Most stay small. Of the 2 million businesses in the UK
less than one third have more than 2 people, whilst over 80% of
co-operatives employ more than this number. Community
businesses, by their very nature, start off larger with the
intention to grow, usually incur higher overhead costs and have
a priority of social added value over financial profit and yet,
contrary to popular belief, have a better chance of survival.
Nevertheless all small business is an investment risk. But we
have a strategy to reduce the investment risk to ICOF Community
Capital: The ICOF Guarantee Fund.
The ICOF Guarantee Fund
ICOF Guarantee Company Limited is a company limited by shares and
is a wholly owned subsidiary of ICOF Limited. The Guarantee Fund
exists solely to raise money to cover any capital losses made
by ICOF Community Capital. Without it, if the loss rate
increased, lending would have to be restrained to prevent a rapid
depletion of ICOF Community Capital and our ability to pay
interest would be impaired. With the loss covered by the
Guarantee Fund, lending can proceed as planned and interest paid.
For example, a 10% write off rate on the capital advanced to a
business means, for every pound in the Guarantee Fund, ten pounds
can be lent from ICOF Community Capital without risk to
shareholders. Therefore, an income stream to the Guarantee Fund
is essential to continued risk free investment.
Guarantee Fund Contributions
There are two main sources of income: donations made to the
Guarantee Fund from individuals and corporate bodies; and annual
interest waived by Shareholders in ICOF Community Capital.
The more members there are who are willing to waive their rights
to interest, the greater the secure lending capacity of ICOF
Community Capital.
THE SOCIAL ECONOMY
The ICOF Community Capital potential borrowing community is
likely to increase with the continuing trend to privatise and
commercialise many aspects of public services. Legislation in
health, education, housing, transport and social services will
boost activity in the social economy. For co-ops, community
businesses, or existing employees forming associations, to win
the service contracts, they will need ICOF Community Capital to
be a success.
Here are some examples of local communities who are attempting
to provide their own solutions through the creation of community
businesses. Some are large now, but all have experienced
difficulties in raising finance to support their endeavours.
Possil Community Business
UK's largest community business located in one of Europe's
poorest estates in Scotland. It has three trading companies:
Allander Security, Allander Decorating and Allander Cleaning with
annual turnover of 1.2 million pounds sterling. It has created
120 jobs and has taken on many security jobs which the private
sector avoid and succeeds because of local knowledge and support.
PCB recently acquired a retail lock and safe business.
Antur Waunfawr
Antur Waunfawr is a community owned enterprise in North Wales,
which offers community based training to people with learning
difficulties. It successfully integrates three goals: to
regenerate a depressed rural service economy; to create
independent living opportunities for people with learning
disabilities; and to overcome the environmental dereliction of
the local community. Income is generated by the rural skills
teams and market gardening. There is also a building team and
a cafe. Established in 1984 AW has won world wide praise for its
methods and successes, resulting from the practice of enabling
all individuals to contribute to the common good of the community
according to their abilities.
The Rio Cinema
A once fine building, dilapidated and the target of vandalism for
many years, was restored to its classic 1930's condition. A
building which neither the public nor the private sector had a
use for was returned to a focal point for local entertainment,
education and training. The London Borough of Hackney, through
the endeavours of local people forming a community business, now
not only has a popular and comfortable cinema, but facilities for
music and film making workshops and tea room and bar.
Afan Community Transport
Living or working in Afan Valley in South Wales presents most
people with a transport problem. If you are elderly, disabled
or house bound it used to be impossible, until a group of
enterprising local people formed their own community business -
Afan Community Transport. With the help of Port Talbot Co-
operative Development Agency, they worked hard to raise the
necessary start-up finance. Now they are working hard to keep
up with the increasing demand on their services.
AppleJacks
Started by Camden Society for People with Learning Difficulties
in 1985, AppleJacks cafe is a thriving community business in the
heart of London. Providing a real working environment enables
effective acquisition of skills and confidence. Outside catering
is also in demand with capacity for 2 or 3 functions a day for
groups up to 250. The success has led to the opening of
FlapJacks in Kentish Town, another cafe, which has taken on the
role of providing sheltered employment. People move from one
cafe to the other and acquire skills at their own pace, whilst
their enthusiasm has resulted in commercial success.
Gwynfi Community Co-operative
The co-op was established in 1983 to re-open the former Co-
operative Retail Services supermarket in the village of
Blaengwynfi in the upper Afan Valley in South Wales. It is the
oldest community business in Wales with a turnover of over
300000 pounds. The original store dates back to 1905 but was
closed in 1983 after the collapse of the mining industry. The
closure instantly united residents to buy and run the shop
themselves. The shop is by far the largest in the area and
provides an important social as well as economic function in the
community.
Angel Town Community Project
Set up eight years ago to serve a Brixton housing estate which
used to be known as "Hell Town" due to the levels of crime and
vandalism. Now the crack dealers have gone and several projects
and businesses are beginning to flourish. There are workshops,
a nursery, a restaurant, a laundry, social club and bar, where
only garages stood before. Thirty people are currently employed.
Angel Town is about to embark on a massive refurbishment to
improve the fabric of the estate and thereby the quality of life
for every tenant.
ORGANISATION AND MANAGEMENT
The ICOF Group of companies consists of :
Industrial Common Ownership Finance Limited
ICOF plc
ICOF Guarantee Company Limited
ICOF is a private company limited by guarantee without share
capital. Membership of ICOF is open to anyone who is interested
in the social economy, subject to an annual subscription of
8 pounds sterling. There are currently 120 members who are
mainly individuals.
ICOF is managed by an elected board of sixteen non-executive
directors, known as Trustees who are appointed by the members at
the Annual General Meeting. They include members of social
economy businesses, representatives of affinity organisations
and an elected representative of the ICOF plc shareholders.
Trustees receive no remuneration for their work and there are no
executive directors.
The Trustees of ICOF plc are the same as the Trustees of ICOF.
ICOF plc has 550 shareholders who are mainly individuals but also
include supportive bodies such as consumer Co-operative
Societies, The Society of Friends, the Co-operative Bank,
co-operative businesses and development agencies.
The Trustees of ICOF consider that an Industrial and Provident
Society is the most appropriate vehicle for social investment,
offering individuals and organisations withdrawable membership
shares. ICOF Community Capital is a separate membership
organisation with a one member one vote constitution, its first
Directors have been drawn from ICOF's Trustees. All Directors
will retire from office at the 1996 AGM to make way for an
election. The society will have no staff and loan fund
management is undertaken by contractual arrangement with ICOF.
ICOF Guarantee Company is a company limited by shares and is a
wholly owned subsidiary of ICOF. The ICOF Guarantee Fund exists
solely to cover any capital losses made by ICOF Community Capital
via the receipt of donations and interest waived by members of
ICOF Community Capital.
ICOF Community Capital Directors
Michael Angerson Andy Love
General Manager Trylon Ltd Political Officer
Co-op Party, ICOF plc
shareholders elected
representative
Peter Cockerton Stuart McKellar
Accountant Director Con-Econ
Delta T Devices Ltd Community Business
Consultant
Caroline Charlton Christine Riddle
Investment Officer Ex-Chair Commonwealth
West Midlands Co-op Finance Board Scott Bader
Christine George David Scholes
Director Everywoman Accountant
Magazine Co-operative Union Ltd
Andrew Hibbert Bruce Wood
Manager Daily Bread Co-op Chairperson ICOF
Cambridge, ICOM Treasurer Community Capital,
Co-op Development worker
Mick Jones Vivian Woodell
Commonwealth Secretary Social Economy
Scott Bader Commonwealth Consultant
Simon Jones
Chief Executive Wales Co-op
Training Centre
ICOF Ltd Staff
Martin Hockly David Ralley
Business Adviser Chief Executive and Secretary
Compliance Officer IMRO to the Trustees
Lesley Kluz Ian Taylor
Administrator Business Adviser
There are a number of associates throughout the UK who are
available for contractual work to supplement staff activities if
necessary.
ICOF Community Capital Advisers
Accountants and Auditors Solicitors
Kilby Fox & Co Malcolm Lynch Solicitors
Chartered Accountants Vassalli House
& Registered Auditor 20 Central Road
St Martins House Leeds
43/44 Billing Road LS1 6DE
Northampton NN1 5DA
Bankers Company Secretary &
Registered office of
ICOF Community
Capital
Co-operative Bank plc David Ralley
47-49 St Giles Street 12-14 Gold Street
Northampton Northampton
NN1 1JQ NN1 1RS
INVESTMENT INFORMATION
Investing in ICOF Community Capital
We offer shares of 1 pound sterling nominal value which must be
paid in full. The minimum investment is 250 pounds sterling.
Joint applications are welcome.
The shares are transferable and will be repaid at the original
price paid, except in the circumstances outlined below. There
is no prospect of capital gain. Although there is no guarantee,
we have a target to pay interest in line with inflation, without
deduction of tax at source. The Directors have decided that
interest will not be paid cash, but will be paid as an increase
in shares in the society. There are no management fees or
charges to members envisaged.
We intend to keep enough available cash in ethical and socially
responsible financial institutions to meet members' requests for
withdrawals, for which a six months period of notice is
required. If the investment is to be retained, withdrawals
should not be at such a level that would reduce the investment
below the minimum of 250 pounds sterling.
The Directors of ICOF Community Capital have the right to waive
or reduce the notice period for withdrawal. They also have a
right to suspend withdrawal for prudential reasons or reduce the
amount payable upon each share when withdrawn if the auditors of
ICOF Community Capital certify that there are more liabilities
than assets. As ICOF COmmunity Capital grows, it should be
possible to reduce the withdrawal notice period.
This is a social investment. It should not be regarded solely
as an investment for personal gain or profit. As a member you
will become one of the persons who own ICOF Community Capital and
have a say in its decisions. Membership is one member one vote
regardless of the size of the shareholding. The maximum
shareholding is set by law at 20000 pounds sterling, although
there is no limit to investment from other industrial and
provident societies.
ICOF Community Capital is an Industrial and Provident Society and
is governed by its rules, a copy of which is available on
request. Profits remaining after the payment of interest to
members are put back into the society, or used for associated
educational or charitable purposes.
In addition to the Annual General Meeting of the society members
will be informed of our activities via the annual report and an
ICOF quarterly Newsletter. We hope our members will feel a sense
of community themselves by their involvement with ICOF Community
Capital. The effectiveness of our input into the social economy
is determined by the support and commitment of our members and
their belief in social action and its power to create a
sustainable future.
Procedure for Application
1. Applications must be for a minimum of 250 pounds sterling,
ie 250 shares at 1 pound each.
2. Applications must be made on the form provided, photocopies
of the application form cannot be accepted.
3. The application form must be accompanied by a sterling
cheque or bankers draft made payable to ICOF Community
Capital Limited and drawn on a bank in the UK.
4. Joint applications are welcome, but all joint applicants
must sign the application form. In the case of a
corporation, the application must be signed by an
authorised person whose designation must be stated.
5. We have a target to offer interest, approximately in line
with inflation. Payment will not be made in cash but
credited to each member's shareholding as new shares.
Interest rates are set by the Board of Directors. Interest
rates can be obtained from time to time from the
Northampton office.
6. Please consider carefully the option to waive any interest
due on your shares. Waived interest is transferred to the
ICOF Guarantee Fund, which exists to cover any capital
losses made by ICOF Community Capital. Along with
donations, waived
interest is the only source of income for the ICOF
Guarantee Fund. The larger the ICOF Guarantee Fund, the
lower is the risk to ICOF Community Capital and the greater
will be the opportunity to help all those wishing to fulfil
social, mutual or community objectives. Remember the ICOF
Guarantee Fund has a leverage or gearing effect such that
for each 100 pounds donated, assuming a 10% write-off rate
on capital advanced, we will be able to cover the lending
risk of 1000 pounds in ICOF Community Capital.
7. There is a six month period of notice required for
withdrawals. The Directors may wish to suspend withdrawals
until sufficient cash is available. It is important to
note that share values may fall if ICOF Community Capital
incurs losses.
8. The Directors of ICOF Community Capital reserve the right
to reject any application in whole or in part. If any
application is not accepted, then the application monies
will be returned by cheque through the post at the
applicant's risk.
9. Acceptance of applications will be notified by the issue of
share certificates, which will be posted within 21 days of
issue.
10. Please send the application form to ICOF Community Capital
12-14 Gold Street, Northampton, NN1 1BR, today.
APPLICATION FOR MEMBERSHIP & SHARES IN ICOF COMMUNITY CAPITAL
PLEASE USE BLOCK CAPITALS
I/We wish to become a member of ICOF Community Capital, in
accordance with the rules, and hereby apply for shares
(minimum 250) of 1 pound each and enclose a cheque payable to
ICOF Community Capital Limited for the total amount.
Mr, Mrs, Miss, Ms or title First name(s) in full
Surname
Address
Postcode
Telephone
I wish to waive any interest due on my shares in favour of the
ICOF Guarantee Fund. ( Tick as
appropriate) YES NO
I understand that interest is not paid in cash but added to my
shareholding as new shares and that there is a withdrawal notice
period of six months. I also understand that the Directors may
wish to suspend withdrawals until sufficient cash is available.
Signature Date
Where did you hear of ICOF Community capital?
For joint applications all applicants must sign
Second applicant
Mr, Mrs, Miss, Ms or title
First name(s) in full
Surname
Signature Date
The shares will be held in the name of the first applicant
Please return the completed application, together with your
cheque made out to ICOF Community Capital Limited in an envelope
using the Freepost address:
ICOF Community Capital Limited
FREEPOST
12-14 Gold Street
Northampton
NN1 1BR
Further copies of this document can be obtained from ICOF
Community Capital Tel 01604 37563
The Share Issue appeal is embodied in its name: Finance as if
People Mattered, Your Investment for a Sustainable Future.
ICOF Community Capital Limited is an industrial and provident
society registered under number 27915R on 14th January 1994 as
a society for the benefit of the community. ICOF Community
Capital is not required to issue a prospectus, since it is not
registered as a company, but has sought to give you information
about ICOF Community Capital in this document. Shares in an
industrial and provident society are not considered an investment
within the meaning of the Financial Services Act 1986.
This post transferred from the cdb-l mailing list
You can direct any enquiries to me at:
aries-v.woodell@geo2.poptel.org.uk
Vivian Woodell
ICOF
COMMUNITY
CAPITAL
FINANCE AS IF PEOPLE MATTERED
YOUR INVESTMENT FOR A SUSTAINABLE FUTURE
INTRODUCTION
Many communities around the UK are experiencing a dramatic return
to self help. For too long the pursuit of conventional economic
progress and increasing centralisation have eroded the power of
local people to manage and control their own lives. People are
realising that if they want meaningful jobs and relevant
services, they will have to provide them for themselves.
Communities are building their own businesses. Businesses which
are value based, people centred and benefit the community through
their trading activities. They are developing out of the
devastation caused by industry closures and comprehensive
redundancies and the desire to build a future where local skills
and resources address local needs.
These businesses might be called co-operatives, development
trusts, voluntary, community, social or green businesses.
Collectively known as Social Economy Businesses, they may be
community or employee owned but all will supply goods or services
which add social and environmental value.
They provide important local services such as neighbourhood
security, housing estate management, community shops, local
transport, leisure and creche facilities and managed workspace.
Others are dedicated to the provision of alternative energy
sources, recycling programmes and a variety of other green
issues. They rescue jobs by taking over companies and services
abandoned by the private or public sectors. They have given
people back their dignity and self respect and for many they are
the only hope of a future.
Investment in such businesses is essential to the future well-
being of our society.
There is widespread recognition from the private and the public
sectors that there is a real need for regeneration investment in
the UK's poorer communities. It is equally recognised that the
most appropriate channel for investment is through the social
economy. But the return on the investment, a low asset base and
the absence of a track record create problems. These, in the
minds of conventional providers of finance, have to take
precedence over any social or environmental benefits. The
riskier the investment the higher the return that is expected.
Few of these companies offer high financial returns, but with
appropriate investment they can operate as viable businesses.
ICOF Community Capital Limited has been set up to help finance
such businesses.
WHAT IS ICOF COMMUNITY CAPITAL?
ICOF Community Capital is a new UK investment society offering
individuals and organisations membership shares. This is a social
investment. ICOF Community Capital will not accept deposits but
its shares are withdrawable subject to certain conditions. The
money raised is invested to obtain social and environmental
benefit as well as a return for the investor. It should not be
regarded solely as an investment for personal gain or profit.
ICOF Community Capital invests in social economy businesses which
are viable and operate in a commercially effective manner. We
recognise that their level of profitability may be constrained
by the achievement of social or environmental benefit and we hope
our investors share this recognition. This is an ethical
investment with a priority for people rather than profit.
ICOF Community Capital is a membership organisation with a one
member one vote constitution. We expect it to develop its own
sense of community.
ICOF Community Capital is an Industrial and Provident Society for
the benefit of the community. It is a business and not a charity.
We accept money as an investment and although no guarantee can
be given, it is expected that results will enable interest to be
paid. It is a goal to provide interest in line with inflation.
The minimum investment is 250 pounds sterling, the maximum is
20000 pounds sterling and normally withdrawals can be made on 6
months notice. We hope the monetary value of your investment will
be maintained, but it may go down.
--------------------------------------------------------------
"A community business is a trading organisation which is set up,
owned and controlled by the local community and which aims to
create self-supporting jobs for local people and to be a focus
for local development. Any profits from its business activities
go to create more employment or to provide local services, or to
assist other schemes of community benefit".
---------------------------------------------------------------
WHO MANAGES ICOF COMMUNITY CAPITAL?
ICOF Community Capital is managed by Industrial Common Ownership
Finance Limited (ICOF), a company limited by guarantee without
share capital. ICOF established ICOF Community Capital.
ICOF is authorised under the Financial Services Act and is
registered with IMRO (the Investment Managers Regulatory
Organisation) as a non-discretionary fund manager. See
Organisation and Management, page XX.
ICOF exists to help people take more control of their economic
lives. For over 22 years, this has been achieved mainly through
the provision of loan finance and business advice, to enable
people to own and democratically control the businesses in which
they work. By the end of 1994, 248 co-operative businesses had
received 260 loans totalling 2460000 pounds sterling. Our market
research tells us that the average number of workers per co-op
is just over 6. This would suggest that around 1560 jobs have
been created or sustained, which works out at one job for every
1577 pounds borrowed.
---------------------------------------------------------------
"A worker co-operative is a business which is owned and
controlled by its employees. Membership is open to all
employees, and all members have one vote irrespective of capital
or labour input."
---------------------------------------------------------------
Sound business finance, coupled with equal opportunity,
environmental concern and the pursuit of social justice will
continue to be the hallmarks of ICOF's policy and practice and
are the foundation for ICOF Community Capital Limited.
SOCIAL INVESTMENT
If social economy enterprises are to raise their profile and
expand their vision there will need to be a continued growth
in social investment .
ICOF Community Capital loans range in size from 5000 to
50000 pounds. All funds are revolving: every pound repaid is
available to lend to another business. Demand continues at
record levels both from the worker co-op sector and new social
economy clients. Total lending for 1995 is projected at 415000
pounds sterling, which includes 100000 pounds lent from ICOF
Community Capital. ICOF Community Capital lending is expected
to increase to 200000 pounds in 1996, 300000 pounds in 1997 and
over 400000 pounds in 1998.
Nearly all businesses start out small, the vast majority very
small. Most stay small. Of the 2 million businesses in the UK
less than one third have more than 2 people, whilst over 80% of
co-operatives employ more than this number. Community
businesses, by their very nature, start off larger with the
intention to grow, usually incur higher overhead costs and have
a priority of social added value over financial profit and yet,
contrary to popular belief, have a better chance of survival.
Nevertheless all small business is an investment risk. But we
have a strategy to reduce the investment risk to ICOF Community
Capital: The ICOF Guarantee Fund.
The ICOF Guarantee Fund
ICOF Guarantee Company Limited is a company limited by shares and
is a wholly owned subsidiary of ICOF Limited. The Guarantee Fund
exists solely to raise money to cover any capital losses made
by ICOF Community Capital. Without it, if the loss rate
increased, lending would have to be restrained to prevent a rapid
depletion of ICOF Community Capital and our ability to pay
interest would be impaired. With the loss covered by the
Guarantee Fund, lending can proceed as planned and interest paid.
For example, a 10% write off rate on the capital advanced to a
business means, for every pound in the Guarantee Fund, ten pounds
can be lent from ICOF Community Capital without risk to
shareholders. Therefore, an income stream to the Guarantee Fund
is essential to continued risk free investment.
Guarantee Fund Contributions
There are two main sources of income: donations made to the
Guarantee Fund from individuals and corporate bodies; and annual
interest waived by Shareholders in ICOF Community Capital.
The more members there are who are willing to waive their rights
to interest, the greater the secure lending capacity of ICOF
Community Capital.
THE SOCIAL ECONOMY
The ICOF Community Capital potential borrowing community is
likely to increase with the continuing trend to privatise and
commercialise many aspects of public services. Legislation in
health, education, housing, transport and social services will
boost activity in the social economy. For co-ops, community
businesses, or existing employees forming associations, to win
the service contracts, they will need ICOF Community Capital to
be a success.
Here are some examples of local communities who are attempting
to provide their own solutions through the creation of community
businesses. Some are large now, but all have experienced
difficulties in raising finance to support their endeavours.
Possil Community Business
UK's largest community business located in one of Europe's
poorest estates in Scotland. It has three trading companies:
Allander Security, Allander Decorating and Allander Cleaning with
annual turnover of 1.2 million pounds sterling. It has created
120 jobs and has taken on many security jobs which the private
sector avoid and succeeds because of local knowledge and support.
PCB recently acquired a retail lock and safe business.
Antur Waunfawr
Antur Waunfawr is a community owned enterprise in North Wales,
which offers community based training to people with learning
difficulties. It successfully integrates three goals: to
regenerate a depressed rural service economy; to create
independent living opportunities for people with learning
disabilities; and to overcome the environmental dereliction of
the local community. Income is generated by the rural skills
teams and market gardening. There is also a building team and
a cafe. Established in 1984 AW has won world wide praise for its
methods and successes, resulting from the practice of enabling
all individuals to contribute to the common good of the community
according to their abilities.
The Rio Cinema
A once fine building, dilapidated and the target of vandalism for
many years, was restored to its classic 1930's condition. A
building which neither the public nor the private sector had a
use for was returned to a focal point for local entertainment,
education and training. The London Borough of Hackney, through
the endeavours of local people forming a community business, now
not only has a popular and comfortable cinema, but facilities for
music and film making workshops and tea room and bar.
Afan Community Transport
Living or working in Afan Valley in South Wales presents most
people with a transport problem. If you are elderly, disabled
or house bound it used to be impossible, until a group of
enterprising local people formed their own community business -
Afan Community Transport. With the help of Port Talbot Co-
operative Development Agency, they worked hard to raise the
necessary start-up finance. Now they are working hard to keep
up with the increasing demand on their services.
AppleJacks
Started by Camden Society for People with Learning Difficulties
in 1985, AppleJacks cafe is a thriving community business in the
heart of London. Providing a real working environment enables
effective acquisition of skills and confidence. Outside catering
is also in demand with capacity for 2 or 3 functions a day for
groups up to 250. The success has led to the opening of
FlapJacks in Kentish Town, another cafe, which has taken on the
role of providing sheltered employment. People move from one
cafe to the other and acquire skills at their own pace, whilst
their enthusiasm has resulted in commercial success.
Gwynfi Community Co-operative
The co-op was established in 1983 to re-open the former Co-
operative Retail Services supermarket in the village of
Blaengwynfi in the upper Afan Valley in South Wales. It is the
oldest community business in Wales with a turnover of over
300000 pounds. The original store dates back to 1905 but was
closed in 1983 after the collapse of the mining industry. The
closure instantly united residents to buy and run the shop
themselves. The shop is by far the largest in the area and
provides an important social as well as economic function in the
community.
Angel Town Community Project
Set up eight years ago to serve a Brixton housing estate which
used to be known as "Hell Town" due to the levels of crime and
vandalism. Now the crack dealers have gone and several projects
and businesses are beginning to flourish. There are workshops,
a nursery, a restaurant, a laundry, social club and bar, where
only garages stood before. Thirty people are currently employed.
Angel Town is about to embark on a massive refurbishment to
improve the fabric of the estate and thereby the quality of life
for every tenant.
ORGANISATION AND MANAGEMENT
The ICOF Group of companies consists of :
Industrial Common Ownership Finance Limited
ICOF plc
ICOF Guarantee Company Limited
ICOF is a private company limited by guarantee without share
capital. Membership of ICOF is open to anyone who is interested
in the social economy, subject to an annual subscription of
8 pounds sterling. There are currently 120 members who are
mainly individuals.
ICOF is managed by an elected board of sixteen non-executive
directors, known as Trustees who are appointed by the members at
the Annual General Meeting. They include members of social
economy businesses, representatives of affinity organisations
and an elected representative of the ICOF plc shareholders.
Trustees receive no remuneration for their work and there are no
executive directors.
The Trustees of ICOF plc are the same as the Trustees of ICOF.
ICOF plc has 550 shareholders who are mainly individuals but also
include supportive bodies such as consumer Co-operative
Societies, The Society of Friends, the Co-operative Bank,
co-operative businesses and development agencies.
The Trustees of ICOF consider that an Industrial and Provident
Society is the most appropriate vehicle for social investment,
offering individuals and organisations withdrawable membership
shares. ICOF Community Capital is a separate membership
organisation with a one member one vote constitution, its first
Directors have been drawn from ICOF's Trustees. All Directors
will retire from office at the 1996 AGM to make way for an
election. The society will have no staff and loan fund
management is undertaken by contractual arrangement with ICOF.
ICOF Guarantee Company is a company limited by shares and is a
wholly owned subsidiary of ICOF. The ICOF Guarantee Fund exists
solely to cover any capital losses made by ICOF Community Capital
via the receipt of donations and interest waived by members of
ICOF Community Capital.
ICOF Community Capital Directors
Michael Angerson Andy Love
General Manager Trylon Ltd Political Officer
Co-op Party, ICOF plc
shareholders elected
representative
Peter Cockerton Stuart McKellar
Accountant Director Con-Econ
Delta T Devices Ltd Community Business
Consultant
Caroline Charlton Christine Riddle
Investment Officer Ex-Chair Commonwealth
West Midlands Co-op Finance Board Scott Bader
Christine George David Scholes
Director Everywoman Accountant
Magazine Co-operative Union Ltd
Andrew Hibbert Bruce Wood
Manager Daily Bread Co-op Chairperson ICOF
Cambridge, ICOM Treasurer Community Capital,
Co-op Development worker
Mick Jones Vivian Woodell
Commonwealth Secretary Social Economy
Scott Bader Commonwealth Consultant
Simon Jones
Chief Executive Wales Co-op
Training Centre
ICOF Ltd Staff
Martin Hockly David Ralley
Business Adviser Chief Executive and Secretary
Compliance Officer IMRO to the Trustees
Lesley Kluz Ian Taylor
Administrator Business Adviser
There are a number of associates throughout the UK who are
available for contractual work to supplement staff activities if
necessary.
ICOF Community Capital Advisers
Accountants and Auditors Solicitors
Kilby Fox & Co Malcolm Lynch Solicitors
Chartered Accountants Vassalli House
& Registered Auditor 20 Central Road
St Martins House Leeds
43/44 Billing Road LS1 6DE
Northampton NN1 5DA
Bankers Company Secretary &
Registered office of
ICOF Community
Capital
Co-operative Bank plc David Ralley
47-49 St Giles Street 12-14 Gold Street
Northampton Northampton
NN1 1JQ NN1 1RS
INVESTMENT INFORMATION
Investing in ICOF Community Capital
We offer shares of 1 pound sterling nominal value which must be
paid in full. The minimum investment is 250 pounds sterling.
Joint applications are welcome.
The shares are transferable and will be repaid at the original
price paid, except in the circumstances outlined below. There
is no prospect of capital gain. Although there is no guarantee,
we have a target to pay interest in line with inflation, without
deduction of tax at source. The Directors have decided that
interest will not be paid cash, but will be paid as an increase
in shares in the society. There are no management fees or
charges to members envisaged.
We intend to keep enough available cash in ethical and socially
responsible financial institutions to meet members' requests for
withdrawals, for which a six months period of notice is
required. If the investment is to be retained, withdrawals
should not be at such a level that would reduce the investment
below the minimum of 250 pounds sterling.
The Directors of ICOF Community Capital have the right to waive
or reduce the notice period for withdrawal. They also have a
right to suspend withdrawal for prudential reasons or reduce the
amount payable upon each share when withdrawn if the auditors of
ICOF Community Capital certify that there are more liabilities
than assets. As ICOF COmmunity Capital grows, it should be
possible to reduce the withdrawal notice period.
This is a social investment. It should not be regarded solely
as an investment for personal gain or profit. As a member you
will become one of the persons who own ICOF Community Capital and
have a say in its decisions. Membership is one member one vote
regardless of the size of the shareholding. The maximum
shareholding is set by law at 20000 pounds sterling, although
there is no limit to investment from other industrial and
provident societies.
ICOF Community Capital is an Industrial and Provident Society and
is governed by its rules, a copy of which is available on
request. Profits remaining after the payment of interest to
members are put back into the society, or used for associated
educational or charitable purposes.
In addition to the Annual General Meeting of the society members
will be informed of our activities via the annual report and an
ICOF quarterly Newsletter. We hope our members will feel a sense
of community themselves by their involvement with ICOF Community
Capital. The effectiveness of our input into the social economy
is determined by the support and commitment of our members and
their belief in social action and its power to create a
sustainable future.
Procedure for Application
1. Applications must be for a minimum of 250 pounds sterling,
ie 250 shares at 1 pound each.
2. Applications must be made on the form provided, photocopies
of the application form cannot be accepted.
3. The application form must be accompanied by a sterling
cheque or bankers draft made payable to ICOF Community
Capital Limited and drawn on a bank in the UK.
4. Joint applications are welcome, but all joint applicants
must sign the application form. In the case of a
corporation, the application must be signed by an
authorised person whose designation must be stated.
5. We have a target to offer interest, approximately in line
with inflation. Payment will not be made in cash but
credited to each member's shareholding as new shares.
Interest rates are set by the Board of Directors. Interest
rates can be obtained from time to time from the
Northampton office.
6. Please consider carefully the option to waive any interest
due on your shares. Waived interest is transferred to the
ICOF Guarantee Fund, which exists to cover any capital
losses made by ICOF Community Capital. Along with
donations, waived
interest is the only source of income for the ICOF
Guarantee Fund. The larger the ICOF Guarantee Fund, the
lower is the risk to ICOF Community Capital and the greater
will be the opportunity to help all those wishing to fulfil
social, mutual or community objectives. Remember the ICOF
Guarantee Fund has a leverage or gearing effect such that
for each 100 pounds donated, assuming a 10% write-off rate
on capital advanced, we will be able to cover the lending
risk of 1000 pounds in ICOF Community Capital.
7. There is a six month period of notice required for
withdrawals. The Directors may wish to suspend withdrawals
until sufficient cash is available. It is important to
note that share values may fall if ICOF Community Capital
incurs losses.
8. The Directors of ICOF Community Capital reserve the right
to reject any application in whole or in part. If any
application is not accepted, then the application monies
will be returned by cheque through the post at the
applicant's risk.
9. Acceptance of applications will be notified by the issue of
share certificates, which will be posted within 21 days of
issue.
10. Please send the application form to ICOF Community Capital
12-14 Gold Street, Northampton, NN1 1BR, today.
APPLICATION FOR MEMBERSHIP & SHARES IN ICOF COMMUNITY CAPITAL
PLEASE USE BLOCK CAPITALS
I/We wish to become a member of ICOF Community Capital, in
accordance with the rules, and hereby apply for shares
(minimum 250) of 1 pound each and enclose a cheque payable to
ICOF Community Capital Limited for the total amount.
Mr, Mrs, Miss, Ms or title First name(s) in full
Surname
Address
Postcode
Telephone
I wish to waive any interest due on my shares in favour of the
ICOF Guarantee Fund. ( Tick as
appropriate) YES NO
I understand that interest is not paid in cash but added to my
shareholding as new shares and that there is a withdrawal notice
period of six months. I also understand that the Directors may
wish to suspend withdrawals until sufficient cash is available.
Signature Date
Where did you hear of ICOF Community capital?
For joint applications all applicants must sign
Second applicant
Mr, Mrs, Miss, Ms or title
First name(s) in full
Surname
Signature Date
The shares will be held in the name of the first applicant
Please return the completed application, together with your
cheque made out to ICOF Community Capital Limited in an envelope
using the Freepost address:
ICOF Community Capital Limited
FREEPOST
12-14 Gold Street
Northampton
NN1 1BR
Further copies of this document can be obtained from ICOF
Community Capital Tel 01604 37563
The Share Issue appeal is embodied in its name: Finance as if
People Mattered, Your Investment for a Sustainable Future.
ICOF Community Capital Limited is an industrial and provident
society registered under number 27915R on 14th January 1994 as
a society for the benefit of the community. ICOF Community
Capital is not required to issue a prospectus, since it is not
registered as a company, but has sought to give you information
about ICOF Community Capital in this document. Shares in an
industrial and provident society are not considered an investment
within the meaning of the Financial Services Act 1986.
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