INCENTIVE DISCOUNT – AND REBATE SCHEME FOR FARMERS
What is a discount scheme?
• Suidwes Landbou pays its customers an annual incentive equal to 80% of the company’s profit before tax.
• The rebate per customer is determined by the business done with Suidwes Landbou on the basis of the profit per transaction.
• The rebate is paid in two parts, namely;
– 20% in cash; and
– 80% in the form of preferred shares in the Company.
Why a rebate scheme?
• The shareholders profile of Suidwes Landbou matures.
• Young farmers do not invest in primary agriculture with the same risks.
• It offers the opportunity for young farmers to aquire shares in an agricultural company without buying shares.
• The long-term result of the scheme is that the biggest clients will be the largest shareholders and therefore could control the Company.
Benefits of the scheme:
The scheme gives young farmers the opportunity to have a share in an agricultural company without paying for it in cash.
• The scheme enables Suidwes Landbou to become an extension of the farming operation.
• Suidwes shares automatically improves the client’s balance sheet.
• The client aquires ‘pension’, which also acts as a first-class security for financing.
• The largest client has the largest influence in the company.
Who qualifies for the rebate scheme?
• Any bona fide farmer who is a client of Suidwes Landbou will annually qualify for a rebate.
• A bona fide farmer is any farmer who farms within the borders of the RSA and is registered for VAT under Appendix 7 of the Income Tax Act.
Highlights of the rebate scheme:
• The rebate is calculated annually at the end of the financial year on 30 April.
• Twenty percent of the rebate is paid in cash, while the rest is used to acquire shares in the company.
• The rebates of clients who are not ordinary shareholders of Suidwes Landbou will be applied to aquire the minimum number of ordinary shares, ie 40,000 shares.
• Once a farmer aquired 40 000 ordinary shares in Suidwes Landbou, preferred shares will be issued at R5.00 per share.
• The preferred shares are redeemed upon retirement, death or after 15 years, against the issued value unless settled in full before the 15-year period has expired, in which case the price is discounted.
Where is the rebate aquired?
• The scheme applies to Suidwes Landbou’s financing, trade, mechanisation and grain storage as well as handling activities.