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EIIS INFORMATION SUMMARY
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DUBLIN WHISKEY COMPANY
The Company/ Officers/Advisors Dublin Whiskey Company Limited
Company Name:
Registration No.: 519122 Date of Incorporation:
22nd October 2012
Directors:
Marie Byrne
Edmond O’Flaherty
Maria O’Brien
Registered Office:
33 Mill Street, Dublin 8
Auditors/Accountants:
L’Estrange & Co
College House, 71-73 Rock Road
Blackrock, Co. Dublin
Taxation:
Michael Clifford & Associates
15 Herbert Place, Dublin 2
Solicitors: Susan Fenton
Suite 101, Serpentine Business Centre
48 Serpentine Avenue, Ballsbridge,
Dublin 4
Dublin Whiskey Company has engaged the services of a specialist UK consultancy company which have conducted an in-depth review of the financial position and investment opportunities relative to the company. 2
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Employment & Investment Incentive Scheme (EIIS - Tax Relief) Information Memorandum OCTOBER 2014
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DUBLIN WHISKEY COMPANY
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INFORMATION SUMMARY
INFORMATION SUMMARY The company is seeking to raise funds under the employment and investment incentive scheme (EIIS) which is a tax based incentive. A summary of the business and its promoters is set out below along with a summary of the tax relief.
1. CONTEXT OF IRISH WHISKEY
building itself and towards the design and purchase of our custom-designed distillation equipment. The purpose of this EIIS is to raise additional funds to complete the build and installation of equipment.
The Irish Whiskey sector is ambitious for its future. Having been distilled in Ireland since the 6th century, Irish Whiskey is one of the oldest spirit drinks in Europe. It is a premium product that is now the fastest growing spirits category in the world. In the last decade, the category grew by almost 200%. In 2013, more than 6.2 million 9-litre cases of Irish Whiskey were exported to over 100 countries around the world. This figure is set to double to 12 million by 2020, and double again to 24 million by 2030.
The operation of the distillery will be overseen by Dr Jim Swan (Master Distiller) who has been involved in the distilling business, for nearly 30 years.
3. THE BUSINESS
2. INVESTMENT PROPOSAL The company received full planning permission in June 2014 for a distillery with a visitor centre at 33 Mill Street, Dublin 8. The promoters have invested over one million euro in the company to date with the capital invested in the
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The company will produce both a single malt & an Irish pot still whiskey
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Pre-sales of casks to investors and enthusiasts has already commenced
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Production of own branded whiskey
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Production of white label spirits
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A retail outlet & visitor centre
DUBLIN WHISKEY COMPANY
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INFORMATION SUMMARY
THE PROMOTERS
THE DISTILLER
Edmond O’ Flaherty CHAIRMAN Edmond established and grew Ireland’s largest dental implant and cosmetic centre at the Seapoint clinic with over 40 employees. He has worked in myriad other companies across a range of sectors. He has completed executive education in Harvard University and Cambridge University in Finance and launching new ventures.
JIM SWAN
Dr Jim Swan: (Master Distiller) Renowned in the whiskey industry he has advised some of the most successful start-up distilleries in the world (Kavalan, Kilchoman & Penderyn) including the only whiskey ever to score a 100% rating at the Beverage Testing Institute in Chicago. Dr Swan is retained exclusively by DWC in Ireland and is the author of numerous scientific papers and has taken part in many tv and radio broadcasts into spirit quality. Recently he was given a special award from the Malt Advocate for services to the industry.
Marie Byrne MANAGING DIRECTOR
Marie has wide & successful management experience with particular expertise in startup ventures. Founder of the first health care finance company in Ireland she was nominated for the Young Entrepreneur of the Year in 07. Additionally, she has managed large scale, multi-country projects such as European retail and rebranding initiatives in AVIVA .She has completed the Brewing & Distilling Course in London, a founding member of the Irish Whiskey Association and a frequent contributor to the media on whiskey in Ireland.
INDUSTRY ADVISOR
Pat Burke
Industry veteran Pat Burke was managing director of Teachers Whisky and Beefeater Gin and Director of Ballantine’s Whisky. He has consulted with a number of International Companies in the Wine/Spirit industry such as Suntory and Campari America with regard to strategic management, JV development and the branding of consumer products. His early career was spent with Irish Distillers working on key brands such as Jameson, Tullamore Dew and Old Bushmills in the US and Asia. He was based in the US for a number of years supporting Irish whiskey brands and joins DWC as a senior advisor.
Pat O’Brien OPERATIONS DIRECTOR
Pat is a qualified master craftsman with the London City & Guilds, and for the last 28 years has successfully ran his own companies with up to 90 employees and whose clients have included Harrods of London, the Dorchester hotel and a number of Embassies. During this time Pat returned to college and achieved a degree in structural engineering. Pat is going to direct the construction & all the operational aspects of the fitout in order to bring the city centre distillery to life.
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DUBLIN WHISKEY COMPANY
INVESTMENT STRUCTURE The company is seeking to raise €1,500,000 in the form of EIIS Shares of €1 each (‘A’ Ordinary Shares) in the company under the Employment & Investment Incentive.
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EII LEGISLATION & TAX RELIEF
SUMMARY OF EIIS LEGISLATION & TAX RELIEF •
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The EII Scheme is a Tax Relief incentive scheme (formerly BES), which enables investors to deduct the costs of their investment from their total income for income tax purposes. It is one of the few sources of total income relief, including for example rental income from investment properties held in a personal capacity, bank deposit interest income and ARF imputed distribution income.
INVESTMENT CRITERIA
Relief is available in two tranches; initially at 30% in year in which the investment is made with a further 10% tax relief available after 3 years provided additional criteria are met, i.e. where it can be shown that employment levels at the company have increased over the three year holding period or where the company has used the capital raised on R & D. For investments made in 2014 the relief will be available at 41%, the 40% referred to above relates to investments in 2015 et seq
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Investments must be made in an un-quoted trading company.
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Maximum investment in any one year is €150,000 per individual, unused relief can be carried forward to the following tax year (Husband & Wife may each subscribe for shares provided they each have sufficient income).
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Minimum investment per individual is €250 under the scheme – however minimum investment in Dublin Whiskey Company in any one year is €10,000
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The company may raise up to €5m in any one year or €15,000,000 in total.
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The individual must subscribe for new Ordinary Shares in the company which carry no preferential rights.
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The company will carry on a qualifying trading activity.
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The minimum holding period for tax relief purposes is now four years.
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Predicted annual return of 3%.
DUBLIN WHISKEY COMPANY
INVESTOR REQUIREMENTS •
Investors must have an income at the higher rate of income tax (41%/40%) in any given tax year to maximise the benefit of the relief.
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EIIS investments made after October 2013 and before 1st January 2017 will not be subject to the High Earners restriction.
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The investor is responsible for submitting his/her own individual claim for tax relief to the Revenue Commissioners.
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The company will apply to Revenue in [early 2015] for individual certification which should become available in [March/April 2015].
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The investor must of course be tax resident in the state and not otherwise connected with the company i.e. own more than 30% of the share or loan capital of the company.
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An investor may invest in any number of companies subject to the annual cap of €150,000.
Illustrative example of EII Investment return The following example illustrates the potential return of an EIIS investment €25,000 assuming a 12% uplift over the investment period INVESTOR COST Investment Amount
€25,000
Plus once-off Agent commission , if applicable @ 2% Total Cost to Investor
€500 €25,500
First Tranche Income Tax Relief @ 30%
-€7,500
Second Tranche of Income Tax Relief @ 10%
-€2,500
Net Cost of Investment (Note 1)*
€15,500
POTENTIAL RETURN ON INVESTMENT Net Cost of Investment (note 1)
€15,500
Less net Sale Proceeds (note 2)
€28,000
Gross Monetary Gain
€12,500
Capital Gains Tax (note 3)
€406
Net Return to Investor
€12,094
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EII LEGISLATION & TAX RELIEF
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DUBLIN WHISKEY COMPANY
NOTES
EXIT MECHANISM
1. Net cost of investment calculated as €25,000 plus 2% commission and less income tax reliefs.
A put and call option agreement will be entered into between the company and the holder of the ‘A’ Ordinary Shares allowing those investors to exit the investment after a period of four years from the date of the investment. The put and call option agreement will provide for the shares to be bought and sold at open market value.
2. Net sale proceeds calculated as amount invested plus assumed growth of 12% over the four year investment period. 3. Capital gains tax based on 33% of net proceeds less total cost of investment and allowing for annual gains tax threshold of €1,270. KEY RISKS •
Medium- to long-term investment in unquoted companies with no early exit mechanism; investors should not expect to release any investment capital within a 4 year period.
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Investors are exposed to the performance of the company and as such may lose some/ all of their invested capital; the value of the investment may go down as well as up.
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Investors should seek competent professional tax advice on the efficiency of investing in EII Schemes
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Prospective investors should determine the suitability of EIIS investments based on their own personal circumstances
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EII LEGISLATION & TAX RELIEF
2015 - SOURCE OF CAPITAL €000’s
2015 - USE OF CAPITAL €000’s Working capital €295
Promoters’ shares, €1500 Tax incentive loans, €750
Advance cask sales, €275 Gov’t grant, €350
Plant & Machinery €1200
Site cost & construction €1000
Visitor centre €380
STARTUP COSTS - THROUGH 2019 Site cost & construction
1,000,000
Visitor center
380,000
Total construction costs
1,380,000
Plant & equipment Plant & Machinery
1,200,000
Barrels
520,876
Total plant & equipment costs
1,720,876
Whiskey laydown (Note 1)
2,099,429
Dry goods
29,132
Total inventory
2,128,561
Working capital requirement
1,441,053
Total finance requirements
6,670,490
FINANCED BY: Promoters’ shares
1,500,000
New investors’ shares
500,000
Advance cask sales
1,170,490
Government grant
350,000
Tax incentive loans
1,500,000
Long-term debt
1,650,000
Total financing
6,670,490
Notes: 1. Laydown cost includes distillate and direct labour.
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DUBLIN WHISKEY COMPANY
Offer for subscription for ‘A’ Ordinary Shares of €1 each at €1 per share, payable in full on application. Number of shares applied for: Amount enclosed: € I declare that I have read and understood this application form and that I am fully aware of the risks entailed in investing in the Company. If you are using an agent for this investment you may be subject to a commission fee. First Name: Surname (Mr/Mrs/Ms) Address in full:
PPS Number: Tax District: Telephone Home:
Work:
Signature: Date:
I wish to apply for the number of shares set out above and I hereby undertake and agree to accept same, subject to the Memorandum and Articles of Association of the Company. I enclose a cheque/Bankers draft made payable to Dublin Whiskey Company for the above mentioned sum, being the amount payable, in full, on application for the stated number of ‘A’ Ordinary Shares in respect thereof. I agree to accept the same or lesser number of ‘A’ Ordinary Shares in respect of which the application may be accepted. I agree that this application shall be irrevocable and that confirmation of the shares allotted to me (if any) and/or a cheque for any refund monies may be posted to me, at my risk, to the address shown on the Application form. I acknowledge that no representation as to the availability of any Tax Relief or advantage is made or deemed to be made by Dublin Whiskey Company or its officers, agents or servants.
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DUBLIN WHISKEY COMPANY
33 Mill Street, The Liberties, Dublin 8, Ireland T: +353 1 454 7333 E: hello@dublinwhiskeycompany.ie www.dublinwhiskeycompany.ie 16