– Nominal value
– Tax value

The value of a share is basically determined by the market. No active market has established itself forl the registered  shares of Forests for Friends Ltd.
Our share is a typical long-term investment. It not listed on a stock exchange, but it can be traded. The price level is a matter of negotiation between acquirer and seller. Following aspects can be considered:

• The majority of Forests for Friends Panama’s plantations that continue to be intensively maintained were planted in 2004 and 2005 with some small areas already planted in 2003. The 2002 plantations (Torio and Zapotal) are not being maintained area-wide.
• Teak plantations are capital intensive. Maintenance costs peak in the first years and then reduce continually.
• The world-wide trading of CO2-certificates has not yet been established. The income is not yet calculable.
• The thinnings in year 4 do not produce any revenues and in year 7 and 10 none of any importance. Year 14 will generate considerable income.
• The final harvest of the trees is planned in 20 years. 85 % of the revenues can be expected with the final harvest and the sales of the land.

Consequence: Forests for Friends Ltd will generate no income from its daughter company in Panama until 2014 and only modest income until 2018. We do not expect to be able to pay any kind of dividends generated from our core business, i.e. the sale of timber, to shareholders before 2019.
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 83.30 per share per the 31^st December 2010. For 2011 we have not yet received an official value. Further information will follow, as soon as it is available.