1. Enterprise Investment Program
A brief overview
Enterprise Investment Program 1

2. EIP
(ENTERPRISE INVESTMENT PROGRAM)
–Generic programme
–Manufacturing and Fruit & Veg
packaging
Enterprise Investment Program 2

3. What is important?
1. Qualifying criteria (mandatory)
2. Evaluation criteria (Merit)
3. Structuring
4. Timing
5. Value of grants
Enterprise Investment Program 3

4. OFFERING
Investment grant
• 30% to 15% of qualifying costs (regressive sliding block
scale)
• Plant, machinery, equipment, commercial vehicles, land &
buildings
• projects capped at R200 million fixed assets
Foreign Investment Grant (supplementary):
• Actual transport costs to SA from abroad
• Subject to maximum of
15% of the value of imported M&E or R10m.
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5. LEGAL
• Manufacturing Development Act 187 of 1993.
• Income Tax Act no. 58 of 1962 as amended,
Section 10 (1) (y);
• Tax: section 12 P and 11th schedule
• Available for 6 years until July 2014
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6. Target Projects
• New or expansion projects
– manufacturing (MIP)
– Tourism (TSP)
• Also: Upgrading of production capability in
existing clothing and textile facilities
• Local and foreign owned projects
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7. Mandatory requirements
• Qualifying activity
• Registered legal entity in RSA
• No applications earlier than 12 months or less
than 3 months before the planned production
starting date.
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8. Expansions
Additional mandatory requirements
Enterprise Investment Program 9
 Expand by 30% or 35% in Plant & Equipment
 Increase turnover by 15% & 25% in years 1 & 2
respectively

9. Example: Value & timing of grants
PROJECT INFORMATION New/Exp.
R
Plant & Equipment at purchase price 24,000,000
Own land & buildings (Expansion: proportional to add floor area)
Limited to 100% of P&E 15,960,000
Vehicles at factory site & Customised vehicles. (Limited to 20% of
P&E) 40,000
Subtotal 40,000,000
Leased Buildings (Capitalise @ 20%; limited to 20% of P&E. Nil
Leased Land – zoned industrial or commercial. (Capitalise@ 20%
p.a.) Nil
Grand Total 40,000,000
TIMING & VALUE OF EXPECTED GRANTS
MEDIUM /
LARGE
Expected production starting date: 1 January 2012
Base year: Financial year NA
Interim year: Financial year 28 February 2012
Claim year 1: Financial year 28 February 2013 3,000,000
Claim year 2: Financial year 28 February 2014 3,000,000
R6,000,000

10. ROLE OF THE AUDITOR
1. Factual findings report
2. Audited financial statements
– Within six months after year-end
3. Management accounts for divisions
– Audit requirements
4. Tax Clearance Certificate
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11. IMPORTANT FOR PLANNING
1. Divisions do qualify
2. BEE rating is important
3. Grant is not taxable (Tax act: 10 (1) (y) ). This may change.
4. Capital works in progress – no grant
5. Only CC’s and companies (and trusts in case of TSP)
6. Only private sector shareholders allowed
7. Only fin. lease assets. (must be capitalised)
8. Grant ceases at liquidation
9. Claim every six months
10. Own L&B attract much higher grant than leased L&B.
11. Comply with all laws, e.g. zoning; PAYE, UIF, etc.
Enterprise Investment Program 15