Planet - People - Prosperity - Leading progressive food producers committed to a sustainable future - Silver Fern Farms Co-operative
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Planet - People - Prosperity Leading progressive food producers committed to a sustainable future
STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
Stronger together
Silver Fern Farms Co-operative Limited
encompasses more than 6,000 ordinary
In order to achieve our
shareholders and 15,100 rebate shareholders vision, of innovating to
throughout New Zealand, who together supply
sheep, beef and deer to Silver Fern Farms Limited. meet the highest possible
Our Co-operative exists to lead progressive food standards of sustainable PLANET PEOPLE PROSPERITY
producers, committed to a sustainable future.
farming practice, we have
World class sustainable Instill a culture of best in Delivering a compelling
developed three strategic farm practices led by class governance shareholder value proposition
pillars. We want to grow evolving consumer
Deliver effective Transparent and authentic
preferences
our Co-operative with governance extension for relationships with all
Leadership in current and up and coming stakeholders
suppliers who align in transitioning towards low governors Delivering consistent
carbon production across
market focus and strive our sphere of influence.
Offer scholarship
opportunities that support
returns on equity
Ensuring the integrity of
towards sustainable our people and their the Partnership’s founding
communities.
farming practice. documents are maintained.
We believe it is important that farmers continue to have a say in their red meat processor,
marketer and exporter, to ensure it is founded in mutual long term value creation, and
achieving this can be done through your ownership in Silver Fern Farms Co-operative.
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
Why become a
shareholder?
A strong Silver Fern Farms This growing of value is of benefit to our Co-operative
as a sustainably profitable Silver Fern Farms
underpinned by a stable returns dividends for our Co-operative to distribute
and loyal livestock supply
Dividend and
to our shareholders.
We believe the regular distribution of a dividend to
base is better able to grow Co-operative shareholders combined with a
Patronage
value with customers in patronage reward to supplying shareholders will
encourage further loyal supply over time and will
global markets. generate demand for shares from non-shareholder
suppliers and under-shared suppliers.
Reward Pools
Silver Fern Farms Co-operative intends to distribute
the majority of future dividends that it receives to
shareholders through a combination of dividends
to all shareholders (both ordinary and rebate) and a
patronage reward only to Co-operative shareholders
who supply livestock to Silver Fern Farms. The aim The shareholders’ agreement between the Co-operative
is to encourage suppliers of livestock to and Shanghai Maling sets a minimum payment of 30% of
Silver Fern Farms to also become shareholders in Net Profit After Tax (NPAT) as a dividend annually.
the Co-operative, and unlock additional value. This dividend will be split 50-50 between Silver Fern Farms
In addition to distributions, shareholder suppliers will Co-operative Limited and Shanghai Maling.
receive shareholder supply benefits, which you can In turn, the intention is for the Co-operative to distribute
read more about in this booklet. the money dividend it receives to its ordinary and rebate
shareholders through a dividend and a patronage reward.
The Co-operative would make these payments once any
funds required for retention within the Co-operative have
been determined by the Co-operative Board.
The payment time frame will normally occur after the
Co-operative’s Annual Meetings which are expected to take
place during the second quarter of the calendar year.
The Co-operative has a financial year ending 31 December.
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M S.C O O P
S H A R E H O L D E R B E N E FI T S
Planet
World class sustainable Leadership in transitioning
farm practices led by evolving towards low carbon production
consumer preferences across our sphere of influence
Preferential access to value-added programmes, Carbon pilots underway with
which match consumer preferences to fully-shared suppliers
sustainable farm practices.
We see significant opportunities in Carbon for
New Zealand grass fed red meat producers. In 2019
we identified this opportunity to create value for
shareholder suppliers and kicked off with a carbon
pilot of 17 diverse farms from across New Zealand.
VA L U E-A D D E D P R O G R A M M E S
Importantly, each one is a Silver Fern Farms
Reserve Beef Co-operative shareholder.
Thanks to funding support from MPI’s Sustainable
Food and Fibre Futures Fund we were able to hold two
workshops on carbon. We were able to identify and Silver Fern Farms Co-operative is
better understand all greenhouse gas emissions on farm proud to have partnered with the
using Overseer, and assess vegetation types on these University Book Shop to offer a range
Venison Global Retail farms and their sequestration rates. of seasonal books at fantastic prices
exclusively for Silver Fern Farms
By understanding each farm in detail we can explore
shareholders.
100% Standard where the additional value might sit, either by
• Beef balancing total farm emissions against sequestration You can access the entire UBS range
for carbon-neutral product claims, or creating long online or in their Dunedin store,
• Lamb term partnerships between shareholders and those with great deals for shareholders on
• Angus companies wishing to purchase carbon credits. handpicked books across a variety
of genres. Explore the Green and
We have also worked with Toitu Envirocare throughout
Enviro section for a selection of books
the project to help develop their farm carbon
that reinforce the need to focus on
certification tool, and the pilot farms are all now on a
our planet.
path to achieve certification. This aligns with the Toitu
Envirocare Carbon Reduce certification already held by
Silver Fern Farms Ltd, as the first red meat processor
in New Zealand with a certified carbon footprint. The
work we have done as a company and through this
partnership with our pilot farmers has helped to guide
our low carbon future, and investigate a service offering
to all eligible shareholders that might include on-farm
measurement, verification, and support to manage and
optimise the value of on-farm carbon.
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
S H A R E H O L D E R B E N E FI T S
People
Instil a culture Deliver effective Offer scholarship
of best-in-class governance extension opportunities that
governance for current and up and support our people and
coming governors their communities
To The Core — Leadership and Governance
Development Programme
This unique and award winning programme has
been designed for Silver Fern Farms and Farmlands
shareholders and gives participants an opportunity
to learn more about governance in our co-operatives,
as well as develop skills needed to operate at board
level.
The programme is held in Christchurch during June
each year, covering 3 days with a wide range of
topics presented by experienced governors and the
Chief Executives Officers from both Co-operatives,
together with presenters from external boards. The Co-operative Governance Scholarships of
up to $5000 each, provide the opportunity for
Silver Fern Farms Co-operative shareholders to
gain knowledge, skills and experience to contribute
both as governors of our Co-operative and
participate in the governance of rural communities.
There are three programmes supported
through the Scholarship.
$ Fonterra Governance Development Programme
$ Kellogg Rural Leadership Programme
$ Agri-Women’s Development Trust —
Escalator Programme
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
S H A R E H O L D E R B E N E FI T S
Prosperity
Delivering consistent Transparent and Delivering a compelling Ensuring the integrity
returns on equity authentic relationships shareholder value of the Partnership’s
The Partnership entered into between the
with all stakeholders proposition founding documents
Co-operative and Shanghai Maling in
You can read all of Silver Fern Farms $ Preferential access to Processing Space
is maintained
December 2016 was underpinned by the
Co-operative’s Annual Reports since 2012 on – which typically delivers better value for
range of commitments made to each other, Our supplying shareholders are also the people that
our website, or on Unlisted Exchange (USX). your livestock
and how we jointly support Silver Fern Farms are eligible to become Directors of our Co-operative.
Limited into the future. A key requirement of $ Priority access to special programmes
your Co-operative board is to ensure these – delivering a premium They are also the ones who make the selection of our
commitments and promises are delivered. Farmer-Elected Directors through the voting system.
$ Distributions by the Co-operative with two
Our farmers remain at the heart of governance of our
pools; Dividend and Patronage Reward
Co-operative and are also represented on the Board
$ Invitations to events such as domestic of Silver Fern Farms Limited.
and international in-market tours
Recent Dividend and Patronage Reward returns
$ Silver Fern Farms product through Your
Co-operative Store and our online retail
Year Dividend Patronage Paid
partners Gourmet Direct.
per share Reward out
per share
You can read more about Co-operative distributions
on the following pages. 2017 2.8c 2.9 April 2018
2018 – 3.0c* April 2019
2019 & 4 4
2019 5.4c 6.0c Aug. 2020
2020
2020 5.5c 5.7c April 2021
Consecutive years of Consecutive years of *Not imputed.
profitable returns dividend and patronage
Yielded the two strongest
reward to supplying
financial results of the
shareholders
past decade for the
Co-operative
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
Distributions by
the Co-operative
There are two pools:
D IVI D E N D P O O L PATRO NAG E RE WARD P O O L Our objective is that a shared supplier
Will pay an amount per share owned across receiving dividend and patronage reward Glide path
Will pay an amount per share owned across
qualifying ordinary and rebate shares up to the will be at least twice as well rewarded as a
all ordinary and rebate shares. If an under-shared, non-shared or new
share standard. non-supplying shareholder.
supplier wishes to acquire sufficient shares
Exclusive to co-operative shareholders supplying The maximum size of the patronage reward pool to meet the share standard, they can
livestock direct via our livestock reps. is at the discretion of the board, and presently sits either buy the shares, or agree to use all
at 35%. reasonable endeavours to buy these shares
Silver Fern Farms Eligibility is subject to current minimum supply over a three year ‘glide-path’ period. If this
Co-operative requirements set out in our constitution (400 SU Supply loyalty over time, benefitting the operations
second path is chosen the under-shared,
Limited shares annually), and the Patronage reward is based on of Silver Fern Farms Limited.
non-shared or new supplier can have
are traded on the shares owned at 31 December. automatic access to the priority benefits
The patronage reward payment on a per share basis
Unlisted Exchange: is intended to provide a supplying shareholder, who of a fully shared supplier, for as long as
www.usx.co.nz owns shares at the share standard, with a total return they comply with the agreement. However,
(dividend + patronage reward) at least twice the dividends and patronage rewards, and
Share standard associated voting rights, will only apply to
dividend payment alone.
To receive the full benefits of the patronage the actual number of shares held.
reward shareholder-suppliers will need to be It is envisaged that this mechanism, alongside
‘fully shared’ to the share standard. the other priority benefits offered to shareholder- There is no cap on the number of shares
suppliers, will incentivise under-shared and held by any shareholder, other than those
The number of shares required to be fully shared stipulated in the Co-operative’s constitution
non-shared suppliers to acquire shares in
are as follows: (5% voting cap) or under the Takeovers
Silver Fern Farms Co-operative.
> 8 shares per SU supplied for Code. For very large suppliers, (who
supply over 58,333 SU per annum), the
the first 5,000 SU
maximum number of shares they need to
> 3 shares per SU thereafter own to have full access to the shareholder
benefits programme is 200,000 shares. The
> Maximum number of shares patronage reward will be paid on the shares
required is 200,000. owned up to the share standard, which may
be above the 200,000 shares.
A lamb/bobby/mutton
= 1 stock unit
a deer
= 6 stock units and
a cattle beast
= 12 stock units.
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STRONGER TOGETHER SHAREHOLDER BENEFITS PROGRAMME S I LV E R F E R N FA R M S.C O O P S I LV E R F E R N FA R M E R .C O. N Z
How distributions
can work
Take a look at how the patronage reward works across Calculating your Making future Dividend
some possible scenarios, using the dividend and share standard and Patronage Reward
patronage reward figures from our 2020 result. You can calculate your Share Standard using the Payments
share calculator on the Silver Fern Farmer website
Ownership of the Shares must be by the same legal
and mobile app.
UNDER SHARED F U L LY S H A R E D OVER SHARED entity that supplies livestock to Silver Fern Farms.
This is to ensure compliance with the Co-operative
Stock Units supplied (SU) 5,000 5,000 5,000 Companies Act. Patronage Reward is a form of
Share Standard 40,000 40,000 40,000 dividend that “discriminates” between supplying
and non-supplying shareholders, and by law this
Shares Owned 30,000 40,000 50,000
can only occur if there is an identical supply/
Shares Eligible for 30,000 40,000 50,000 shareholding relationship.
Dividend
Please check your holding information with Link
Shares Eligible for 30,000 40,000 40,000 Market Services.
Patronage Reward
To ensure that your payment is made to your current
Example returns* bank account on the day of payment, you are
Dividend per share 5.5c 5.5c 5.5c encouraged to check your bank account and other
holding details currently held at our share registry,
+ Patronage Reward 5.7c 5.7c 5.7c Link Market Services Limited.
per eligible share
Payments will only be made by direct credit into your
Dividend ($) $1,650 $2,200 $2,750
nominated bank account. If you wish to update your
+ Patronage Reward ($) $1,710 $2,280 $2,280 bank account details, you can do so online by visiting
the Link Market Services Investor Centre at:
Total distribution $3,360 $4,480 $5,030
www.investorcentre.linkmarketservices.co.nz
The dividend is The dividend is payable The dividend is
payable on 30,000 on 40,000 shares payable on 50,000 You will require your CSN/Holder Number
shares owned. The owned. The patronage shares owned. The and Authorisation Code (FIN) to access your
patronage reward is reward is paid on patronage reward is holding information. Your FIN is available via your
You can access Silver Fern Farmer website and
paid on 30,000 shares 40,000 shares meeting paid on 40,000 shares sharebroker, or via Link Market Services.
mobile app at:
owned, below the share the share standard. owned up to the share Please note: Link Market Services may charge a
www.silverfernfarmer.co.nz
standard. standard, but not on the fee to retrieve the FIN.
10,000 over the share or by downloading the app for iOS or Android on the
This under-shared
standard. App Stores.
supplier could have
increased their To register for the Silver Fern Farmer app contact our
distribution by 33% if Customer Services team on 0800 362 362 or email
they were fully shared. service@silverfernfarms.co.nz
*Based on the $8.1m Co-operative Distribution (2020)
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To get in touch: Silver Fern Farms Co-Operative 283 Princes Street PO Box 941, Dunedin 9054 New Zealand Clark Taylor – Shareholder Relations Manager freephone: 0800 362 362 tel. +64 29 914 5060 email. clark.taylor@silverfernfarms.co.nz To buy or sell Silver Fern Farms Co-operative Limited shares: Silver Fern Farms Co-operative Limited shares are traded on the Unlisted Exchange: www.usx.co.nz Our company code on the Unlisted Exchange is ‘SFF’. On the Unlisted Exchange you can see company announcements, and trading information. All trading on Unlisted is conducted by six Unlisted registered brokers: • Jarden NZ • Hobson Wealth Partners • JB Were • Craigs Investment Partners • Forsyth Barr; and • Hamilton Hindin Greene. To buy or sell Silver Fern Farms Co-operative Limited shares via Unlisted you need to be registered with one of these sharebrokers. silverfernfarms.coop | June 2021
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