WHAT IS WAMMCO?
WAMMCO International is the trading name of the Western Australian Meat Marketing Co-operative Limited which is registered in Western Australia under the Companies (Co-operative) Act 1943.  It's principal activities are the acquisition, processing and marketing of prime lamb.

WAMMCO is wholly owned and controlled by Western Australian lamb producers and exists solely to maximise benefits to its active members.  It is controlled by a Board of Directors comprising a strategic mix of producer members, elected by active members, and independent directors, whose appointment is confirmed by the active members. Each member receives one vote regardless of the number of shares held.

WAMMCO gives producers the unique opportunity to actively participate in, and benefit from, all aspects of their industry.

WHO IS AN ACTIVE MEMBER?
Article 7 of our Articles of Association requires an active member to:

1. hold the minimum number of shares prescribed by the Board (currently set at a minimum of 100).
2. satisfy the patronage requirement determined by the Board (currently the delivery of a minimum of 100 lambs per year).
3. comply with any other terms and conditions imposed by the Board.

WHAT ARE THE BENEFITS OF MEMBERSHIP?
All active shareholders have a wide range of entitlements including:

• participating in any pool bonus (based on patronage) that may be declared (see below).
• preferential access to available killing space, on a “first come first serve basis”, over non-members
• preferential access to available forward contacts
• voting rights
• receiving any dividends that may be declared
• participating in any winding up

The extent of a member’s entitlement to any pool bonuses and preferential access to killing space is determined by the number of participation units the member holds.  Currently participation units are issued on the basis of 1 unit for each 8 shares held.  This means if a member supplies 200 lambs and wishes to ensure they qualify for any pool rebate and have access to preferential killing space they must hold a minimum of 1600 shares (1600 shares divided by 8 gives 200 participation units).

WHY 8 SHARES FOR EACH PARTICIPATION UNIT?
The ratio is determined by an estimate of the infrastructure costs required to process the member’s lambs.  In other words we estimate it will require an additional $8 capital expenditure to provide the necessary infrastructure to process one of the member’s lambs.

HOW MUCH DO I PAY?
Each subscription share has a nominal value of one dollar ($1.00) and this is the amount payable for each share.

A new member has two options in acquiring shares:

1. They may pay the full amount in cash upfront and immediately be entitled to receive any future pool bonus that may be declared.
2. They may acquire the required shareholding over a period of time. This is done by paying cash for the first of the required 8 shares, with the remaining 7 shares being funded from any future pool bonuses, provided the member qualifies (see later).  As an example a new member wishes to acquire 200 participation units covering 200 lambs. This will require 1600 shares.  The member pays $200.00 cash for 200 shares with the remaining 1400 shares being issued from any future pool bonuses. There is no commitment to take up additional cash shares.

The cash component may be deducted from a livestock payment payable direct to the member (ie. not through an agent).

There is no time period stipulated for the acquisition of the additional 7 shares as this will depend on future bonuses declared.

HOW ARE BONUSES PAID?
To qualify for any bonus a member must pool their lambs.  A pooled lamb is one that is supplied over-the hooks, on a weight range and fat score basis, at the weekly scheduled price.  An initial payment based on the scheduled price is made with a further distribution being determined after the trading results for the year are known.

All other forms of purchase involve pre-negotiation and involve an element of risk being transferred to WAMMCO and do not qualify.

Although all other forms of purchase are excluded there are currently provisions in place to ensure members holding indexed price forward contracts do not receive less than the pool price (schedule plus any bonus).

Bonuses can be in the form of either shares; cash or a mixture of both.  Bonuses are taxable in the hands of the member.

CAN I INCREASE MY SHAREHOLDING?
Yes.  In fact, if members are to receive the maximum bonus that may be available, it is essential they review their shareholding to cover any increases in lambs supplied.  Additional shares may be acquired in the same manner as a new shareholding (see above). 

Additional shares (and hence participation units) cannot be purchased to cover lambs already supplied, although producers do have 21 days from the date of each delivery to subscribe for additional shares, if required, to acquire sufficient participation units to cover those particular lambs.

HOW DO I CASH IN MY INVESTMENT?
You may sell your shares if you can find and agree a price with a purchaser.  There is no formal market for the shares.  Any resulting transfer is subject to Board approval.
Alternatively your shares will be redeemable at the discretion of the Board if you have either

1. exited the farming industry on a permanent basis
2. been inactive as a member for a continuous period of 3 years

Redemption is subject to sufficient funds being available and WAMMCO not holding more than 10% of its share capital.

At the discretion of the Board, subscription shares are currently redeemable at their face value of $1.00 per share.

The Board sets aside a predetermined amount each year to redeem shares on a “first come” basis.

WHAT ARE MY RISKS?
As with any investment the risk you carry is the loss of all, or part, of the capital subscribed if WAMMCO suffers losses to the extent that the individual value of shares falls below the nominal $1.00 face value.

Any payment of pool bonuses, dividends or redemptions is dependant on profitability and the level of reserves to be maintained.  There is no guarantee of any payment in any given year.

HOW WILL I BE UPDATED ON MY INVESTMENT?
All members will receive a copy of the annual reports, including the Chairman’s and CEO’s report and are entitled to attend and participate in the annual general meeting.  WAMMCO also maintains communication by sending all members a newsletter (“Lambline”) on a regular basis as well as including an information supplement on WAMMCO activities (“WAMMCO Info”) in the rural press.  Monthly updates and outlooks are also given over RadioWest in a WAMMCO segment on their Rural Focus programme.  Finally regular meetings are held throughout the year in various parts of the State to allow personal interaction between members and the Board and Staff.

Each year you will also receive a share statement showing details of your current shareholding.

WHAT DO I DO NEXT?
If you are interested in becoming a member please complete and return the  share application form.  If you require additional information, contact the Company Secretary, Bruce Ede, on Tel 92620999 Fax 93550961 Email bruce@wammco.com.au or write to:

Mr B Ede
Company Secretary
WAMMCO International
PO Box 4059
VICTORIA PARK   WA   6100

DISCLAIMER
This above is supplied for general information purposes only and if you have any doubts or concerns you should seek independent advice from an investment advisor.  

WAMMCO International is the trading name of the Western Australian Meat Marketing Co-operative Limited.

The ownership and control of the Co-operative is vested in its shareholding members. Each shareholder is entitled to 1 vote, regardless of the number (or type) of shares held.

The composition of the Board of Directors is a balance of member elected producer directors and appointed independent directors. Members do not elect the independent directors but must confirm their appointment.

All active shareholders have the following entitlements:

• participation units in the ratio of 1 for each 8 shares held, or in the course of being acquired. The total number of participation units a member holds determines the extent of their entitlement to:
  • any pool bonus (based on patronage) that may be declared.
  • preferential access to available killing space, on a “first come first serve basis”, over non members
  • preferential access to available forward contacts
• voting rights
• any dividends that may be declared
• participation in any winding up

Foundation Shareholders

These shares were issued free of charge to Western Australian producers who applied, based on their patronage prior to the 31 August 2003. They are no longer available and foundation members seeking to increase their shareholding (and hence their participation units) must do so by taking-up subscription shares.

Foundation shareholders have participation units based on 1 lamb for each 8 shares held.

Subscription Shares

These shares are the means by which producers may become members of the Co-operative, or by which existing memebers may increase their shareholding.

Subscription shares entitle a member to 1 participation unit for each 8 shares held,  or to which they are committed to acquire. To acquire the 8 shares the producer pays $1 cash (which may be deducted from a producer direct livestock payment) for the first of the 8 shares, with the the remaining 7 shares being acquired out of future pool bonus payments .

Bonus Shares

The Board may, from time-to-time, issue bonus shares to members on such terms and conditions as are considered appropriate. Bonus shares do not entitle members to participation units.

Pool Bonus Payments

To qualify for participation in pool bonus payments members must hold 1 participation unit for each lamb delivered. Participation units are  issued on the bases of holding, or acquiring, 8 shares for 1 participation unit. Additional shares (and hence participation units) cannot be purchased to cover lambs already supplied, although producers do have 21 days from the date of each delivery to subscribe for additional shares, if required, to acquire sufficient participation units to cover those particular lambs.

Pool bonus payments are only payable on lambs traded over the hooks at the weekly schedule price.  All other forms of purchase, including contract, on farm  and saleyard purchases, involve transferring additional risk to the co-operative and are excluded.

Share Redemption

The Board may consider redeeming a member’s shareholding either when they have exited the farming industry or if the member has been inactive for a period of 3 years.

All share redemptions are at the discretion of the Board and redemption value depends on the class of share held.

Further Details can be made to WAMMCO directly, or any Board Member.