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Forests for Friends Ltd
Bahnhof
8750 Glarus

www.forestsforfriends.com
info@forestsforfriends.com

The value of a share

Nominal value
Tax value

The stocks of Forests for Friends Ltd. can be freely traded. There is no public market. The company is not listed on a stock exchange. Therefore, the time value of the stock is not easy to determine.

The long-term yield depends mainly on the development of the price for plantation teak, the rate of inflation, the US-dollar fluctuation, and the increase in the value of the land. Forecasts over 10 or 20 years are not serious. Periodical re-evaluations and thus fluctuations are necessary and are carried out regularly.
Tree plantations retain and increase their value only if they are regularly maintained and cultivated. The company must guarantee the financial resources for the entire period. Two models of payment by the investors are possible: the periodic payment of the maintenance costs or the prepayment for the entire period. Forests for Friends' model is that of pre-payment.

New investors must pay for the remaining maintenance costs up until the final harvest along with the pure share value so as not to dilute the value of the shares.


Nominal value

...is a formal part of the share. It is 100 Swiss Francs. It is the value of the share without the surcharge (agio) at the time it is bought and this is the value registered in the commercial register. It has nothing to do with the market value of the share. The nominal value becomes interesting, when capital is paid back to the shareholders. In many countries, the payback of the nominal value is not regarded as income and is thus tax exempt.


Tax value

Unfortunately, the answer to the question about the tax value of our share is neither easy nor clear-cut. In Switzerland, the situation is as follows:

The tax value on 31st December is usually the same as the closing stock price of the last trading day of December (source: Telekurs Financial). If there is no such price available, the last available price is taken (Art. 66, Abs. 1 StHG).
Non-listed security, i.e. not traded on a stock exchange, must be declared at the fair market value (tax value) at 31st December. If this value is not known at the time of handing in the tax declaration, the last-known tax value can be declared (tax value at 31st December of the previous year), subject to adjustment by the tax authorities.
Source: SR 642.14: Federal law of 14.12.1990 on the harmonisation of the direct taxes of the cantons and communities (StHG)

Our share was issued in 2006 and is not listed. The tax office of the Canton of Glarus defined a net tax value of CHF 84.70 per share per the 31st December 2015. Until the announcement of the tax value for 2016 you can use the value of 2015 for your tax declaration.