INDEPENDENT TIMBER MERCHANTS CO-OPERATIVE LIMITED INVESTMENT STATEMENT

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1 INDEPENDENT TIMBER MERCHANTS CO-OPERATIVE LIMITED 2012 INVESTMENT STATEMENT

2 This investment statement is prepared as at 11 September There is a registered prospectus containing the offer of securities to which this investment statement relates. IMPORTANT INFORMATION (The information in this section is required under the Securities Act 1978) Investment decisions are very important. They often have long-term consequences. Read all documents carefully. Ask questions. Seek advice before committing yourself. Choosing an investment When deciding whether to invest, consider carefully the answers to the following questions that can be found on the pages noted below: 1. What sort of investment is this? 1 2. Who is involved in providing it for me? 2 3. How much do I pay? 3 4. What are the charges? 3 5. What returns will I get? 3 6. What are my risks? 5 7. Can the investment be altered? 6 8. How do I cash in my investment? 6 9. Who do I contact with enquiries about my investment? Is there anyone to whom I can complain if I have problems with the investment? What other information can I obtain about this investment? 7 Page In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of that prospectus on request. The Financial Markets Authority regulates conduct in financial markets The Financial Markets Authority regulates conduct in New Zealand's financial markets. The Financial Markets Authority's main objective is to promote and facilitate the development of fair, efficient, and transparent financial markets. For more information about investing, go to 1. What sort of investment is this? 1.1 The securities offered to you by Independent Timber Merchants Co-operative Limited (the "Company") are fully paid ordinary shares having a nominal value of $1.00 each issued by the Company ("Ordinary Shares").

3 2 1.2 The Ordinary Shares have the rights and obligations set out in the Company s constitution. The Ordinary Shares are offered to enable you to become a transacting shareholder of the Company. The Ordinary Shares are therefore offered only to prospective transacting shareholders. Transacting shareholders are entitled to receive distributions in the form of rebates and dividends paid by the Company. 1.3 Under the Company's constitution, transacting shareholders must comply with the ITM Rules and meet any minimum purchase requirement. The ITM Rules are prescribed from time to time by the board of directors of the Company (the "Board"). The ITM Rules deal with trading areas, supplier arrangements, trade marks and signage, advertising, accounts and exit. A copy is available upon request from the Company. 1.4 The rights of a transacting shareholder include the right to an equal share in the distribution of the surplus assets of the Company if the Company is liquidated, and a right to exercise one vote for each Ordinary Share held, subject to complying with the requirements of a transacting shareholder. 1.5 The Company's constitution contains restrictions on the transfer or issue of shares to a transacting shareholder where that share issue or transfer would result in a transacting shareholder either: a. together with any other person "related" (as that term is defined in the Company's constitution) to that transacting shareholder, becoming the holder or controller of, or increasing its holding or control above, 10% of the shares then on issue in the Company; and/or b. together with any "associate" (as that term is defined in the Company's constitution) of that transacting shareholder, becoming the holder or controller of, or increasing its holding or control above, 20% of the shares and/or voting rights then on issue in the Company. 1.6 Where a transacting shareholder breaches the percentage thresholds set out in paragraphs 1.5a and/or 1.5b as a result of another transacting shareholder surrendering its shares in the Company, that transacting shareholder is entitled to retain all of its then current shares but is: a. prohibited from further increasing its shareholding; b. if required by the Board, only entitled to vote such number of its shares which, together with the number of shares held by any person or persons related to it, represent a maximum of 10% of the Company shares then on issue; and c. if required by the Board, only entitled to vote such number of its shares which, together with the number of shares held by any of its associates, represent a maximum of 20% of the Company shares then on issue. 2. Who is involved in providing it for me? 2.1 The issuer of the Ordinary Shares is Independent Timber Merchants Co-operative Limited whose registered office is 38 Tarndale Grove, North Harbour Industrial Estate, Albany, Auckland. The Company's directors are Grant Carruthers, David James Fleming, Stephen Ray McNally, Dawne Maree Mihaere and John Daniel O'Sullivan.

4 3 2.2 The Company's registered office address and the names of the Company's directors are current as at the date of this Investment Statement, but are subject to change. A current list of the Company's directors and the Company's current address may be viewed on the Companies Office website at There are no promoters of this offer. Principal activities of the Issuer 2.4 The Company is a limited liability co-operative company registered on 1 April 2003 under both the Companies Act 1993 and the Co-operative Companies Act The Company prior to registration was registered as an industrial and provident society under the Industrial and Provident Societies Act 1908 since February The principal activities of the Company are: a. the group or bulk buying and marketing on a mutual basis of timber, hardware, building, plumbing and home improvement supplies for the wholesaling or retailing business of transacting shareholders; b. to ensure transacting shareholders maximise mutual benefit from their transactions with the Company and their ownership of the Company. 3. How much do I pay? What are the amounts payable and the method of payment? 3.1 The total amount payable by a new transacting shareholder is $14, Payment shall be made to the address of the registered office of the Company set out above. You are required to make the payment in full to become a transacting shareholder. The sum payable by you for the Ordinary Shares is $12,000 being the nominal value of $1.00 each for 12,000 Ordinary Shares to qualify as a transacting shareholder of the Company. An additional fee of $2,500 (plus GST) is applied to cover your shareholder set-up costs. 3.2 There is no "cooling-off" period during which you may cancel your investment in the Ordinary Shares once you have completed the procedures for payment and for becoming a transacting shareholder. 4. What are the charges? 4.1 There are no charges in addition to the price of the Ordinary Shares and the set-up costs as set out above that are payable to the Company as issuer of the Ordinary Shares. The Company will not alter the charges. 5. What returns will I get? What is the nature of the returns? 5.1 The returns on the Ordinary Shares will comprise any distributions in the form of any dividends and any rebates. Rebates are calculated by reference to the trading level with the Company of the particular transacting shareholder. Any rebate is calculated by reference to the number or value or volume of transactions, or the profit derived by the Company (as determined by the Board of the Company). Therefore, rebates may vary between transacting shareholders.

5 4 5.2 At the end of each financial period, each transacting shareholder is credited with a proportion of the trade suppliers' contributions based on the trading level of the transacting shareholder. Each transacting shareholder is also credited with a proportion of any annual tax paid surplus of the Company calculated by reference to the transacting shareholder's trading level. The annual tax paid surplus, or deficit, is calculated by deducting rebates to transacting shareholders, expenses and taxation from the gross revenue. These amounts are credited to the indemnity fund account of each transacting shareholder, which is held by the Company to meet claims of trade suppliers to the Company in the event of a transacting shareholder not meeting any payment obligations to the Company. The balance of a transacting shareholder's indemnity fund account is determined and paid out in accordance with the ITM Rules when the transacting shareholder exits. 5.3 Upon the departure of a transacting shareholder, there is no return from an increase in the value of Ordinary Shares because the Ordinary Shares are surrendered at their nominal value of $1.00 each or their market value, if this is a lesser amount. 5.4 Transacting shareholders are entitled to an equal share in the distribution of the surplus assets of the Company if the Company is liquidated. What are the key factors that determine the returns? 5.5 There can be no assurance that any distributions will be paid or the level of any distribution. 5.6 Any return in the form of a dividend distribution will be principally determined by the financial performance of the Company and the dividend policy of the Board of the Company. This is in turn largely determined by the volume of and the margins on the transactions of the transacting shareholders. This will be affected by the market conditions in which transacting shareholders and the Company operate. Any dividend must be paid equally to all holders of Ordinary Shares. 5.7 Currently, any annual tax paid surplus is returned by way of crediting the transacting shareholders' indemnity fund accounts or by adding a loading to rebates payable (which are then referred to as "bonus rebates") rather than being available for distribution by way of dividends. 5.8 The indemnity fund account balance is determined by the profitability of the trading of the Company, the level of trading of the transacting shareholder, and any amounts paid to trade suppliers where transacting shareholders have failed to make those payments. 5.9 The indemnity fund account balance of a transacting shareholder is determined and paid upon exit in accordance with the ITM Rules. Currently, the ITM Rules provide that the timing of the payment will depend on whether the business is sold to a person who becomes a transacting shareholder. In that case, the account is paid immediately. In other cases, provided that the selling transacting shareholder has given the Company the required prior notice of sale of its business to a purchaser who does not wish to become a transacting shareholder, payment of the account is made over a three year period The Company is required under the Companies Act 1993 to satisfy the solvency test before authorising any distribution.

6 5.11 No amount of return is promised to you. No rate of return is guaranteed by the Company or any of its Directors There is no guarantee that any returns of the Company will be similar to the historic returns of the Company, or its predecessor entity The dates on which or frequency with which returns on the Ordinary Shares are paid is not fixed and will instead be paid as and when determined by the Board. Taxation 5.14 Taxation will affect the returns to transacting shareholders. Taxes paid or payable by the Company are taken into account when determining the net income of the Company Under current legislation, a New Zealand transacting shareholder is entitled to available imputation credits (if any) for New Zealand income tax paid by the Company You should seek your own advice on your individual tax position. Reserves 5.17 The Board of the Company has established a general reserve fund that is administered in accordance with the ITM Rules. Reserves (including the general reserve fund) will affect the returns to shareholders The Company is legally liable to pay or apply any returns to the benefit of transacting shareholders. 6. What are my risks? 6.1 The future performance of the Company and therefore the returns on the Ordinary Shares may be influenced by a range of factors, many of which are outside the control of the Company and its Directors. 6.2 There is a risk that money paid by you for the Ordinary Shares will not be recovered in full and there is also a risk that you will not receive the returns referred to in "What returns will I get?" above. These risks are described below. 6.3 Upon the surrender of the Ordinary Shares when you cease to be a transacting shareholder, you may receive an amount less than the nominal amount of the Ordinary Shares as your original investment. This would occur where the market value of the Ordinary Shares is less than the paid up nominal value of the Ordinary Shares. 6.4 If the Company does not perform profitably, then the Company could suffer an overall financial loss and this will adversely affect indemnity fund account balances. In such circumstances, it is reasonably foreseeable that upon liquidation you as a holder of Ordinary Shares will receive less than the nominal amount paid for the Ordinary Shares. However, your loss will be limited to the total amount paid up for the Ordinary Shares. 6.5 If one or more transacting shareholders fail to meet their payment obligations to the Company, this will have an adverse effect on your indemnity fund account balance.

7 6 6.6 If you as a holder of Ordinary Shares do not conduct transactions with the Company to the level required under the Constitution as a result of market or other conditions, you will not receive any returns from rebates. 6.7 You are not required to pay more money in respect of the Ordinary Shares other than the total nominal value disclosed above under "How much do I pay?". Consequences of insolvency 6.8 Transacting shareholders will not be liable to pay money to any person as a result of the insolvency of the Company. 6.9 The claims on the assets of the Company that will or may rank ahead of the claims of shareholders in the event of the Company being put into liquidation or receivership are the liabilities and contingent liabilities of the Company, including all taxes, and any costs and expenses incurred in liquidation or receivership There are no claims on the assets of the Company that will or may rank equally with the claims of all transacting shareholders in the event of the Company being put into liquidation. 7. Can the investment be altered? 7.1 The Company does not have any power to alter the amount of money payable by you or otherwise to alter the terms of your investment in the Company. The nominal value of Ordinary Shares may only be altered under the strict procedure set out in the Cooperative Companies Act The constitution of the Company which, together with the Companies Act 1993, governs the rights and obligations of transacting shareholders may only be altered by a special resolution of shareholders. 8. How do I cash in my investment? Exit 8.1 The terms and conditions relating to exit upon the sale of a transacting shareholder's business are governed by the ITM Rules, which are subject to change by the Board of the Company, and by the Company's constitution. Transfer and sale 8.2 Your right to transfer Ordinary Shares is restricted by the Company's constitution. In practical terms, a transfer would only be permitted where you have complied with the obligations as a transacting shareholder and the transferee has satisfied the Board that it has met the criteria for becoming a transacting shareholder. The Board of the Company has an absolute discretion to approve any transferee. Surrender 8.3 If you wish to cease to be a transacting shareholder, then subject to complying with requirements applying to payment of accounts, you may request that your Ordinary Shares be surrendered. This will result in you ceasing to be a transacting shareholder of the Company.

8 7 8.4 The Company may also require the surrender of your Ordinary Shares in certain circumstances. This may occur if you cease to be a transacting shareholder, or you have failed to comply with the requirements relating to transactions with the Company, or if the Board resolves that it is in the best interests of the Company due to your actions detrimentally affecting the Company. Subject to limited exceptions, if you are investing in the Company via a company, the Company may also require the surrender of your company s shares in the Company if shares in your company are issued or transferred without the prior written consent of the Company's Board resulting in the proportionate legal or beneficial ownership of shares in your company differing from what it was on the date on which your company first became a transacting shareholder. 9. Who do I contact with enquiries about my investment? 9.1 Enquiries about your investment can be addressed to: Gordon Buswell Chief Executive Officer 38 Tarndale Grove North Harbour Industrial Estate Albany Auckland Telephone: (09) Is there anyone to whom I can complain if I have problems with the investment? 10.1 If for any reason you are unhappy with any aspect of your investment you may wish to contact Gordon Buswell at the above address If you are not satisfied with the Company's response to your complaint, you may be able to refer your complaint to the Financial Services Complaints scheme, an approved dispute resolution scheme under the Financial Service Providers (Registration and Dispute Resolution) Act You can contact Financial Services Complaints Limited at: Financial Services Complaints Limited PO Box 5967 Lambton Quay Wellington 6145 Phone: / Fax: Web: info@fscl.org.nz. 11. What other information can I obtain about this investment? Prospectus and financial statements 11.1 This Investment Statement provides only a summary of the Ordinary Shares. Other information relating to the Ordinary Shares is contained in the registered prospectus and financial statements relating to the Company and can be obtained free of charge during normal business hours from the Company.

9 The registered prospectus, financial statements and other documents relating to the Company can be viewed on the Companies Office website at Where relevant documents are not available on the Companies Office website, a request for documents may be made by contacting the Companies Office Business Service Centre by telephone on Annual Information 11.3 The annual information that will be given to shareholders is a copy of the annual report and a written statement of the number of Ordinary Shares held (unless there has been no change since the last statement). Information available on request 11.4 You can also request from the Company at any time, free of charge: a. a statement of the number of ordinary shares held; b. copies of this investment statement; c. a copy of the Company's most recent annual report and financial statements; d. a copy of the Company s most recent registered prospectus. Important Note 11.5 If you did not receive a copy of this investment statement before applying for Ordinary Shares, you may within 10 working days of the date this investment statement is sent to you, withdraw your application by written notice to the address of the Company set out above.

PHARMACY WHOLESALERS (BAY OF PLENTY) LIMITED INVESTMENT STATEMENT

PHARMACY WHOLESALERS (BAY OF PLENTY) LIMITED INVESTMENT STATEMENT Page 1 INVESTMENT STATEMENT RELATING TO THE OFFER OF EQUITY SECURITIES (ORDINARY SHARES) IN PHARMACY WHOLESALERS (BAY OF PLENTY) LIMITED