What happens to AWTA Ltd's Profits?
Because AWTA Ltd is a Public Company, Limited by Guarantee, any/all profits are retained by the Company to fund capital investment, to minimise testing fees in subsequent years, and/or to fund research programs that benefit the industry.
In 1998 AWTA Ltd provided a grant of $3,000,000 from its unappropriated profits to establish "The AWTA Ltd Wool Education Trust". The purpose of the trust is to provide ongoing financial support for tertiary training in wool and wool textile science and technology at the undergraduate and post -graduate level.
In 2001 AWTA Ltd initiated a program, in co-operation with combers and topmakers, to update the TEAM formula to reflect the current performance of top making mills around the world and to determine whether or not the additional information about fibre diameter distribution and fibre curvature provided by the LASERSCAN technology can improve the prediction of processing performance of mill consignments.
The final TEAM report provided a single formula, since known as the TEAM FORMULA, which provided a prediction of Hauteur based on Staple Length, Staple Strength, Mean Fibre Diameter, Adjusted Percentage of Middle Breaks and Vegetable Matter Base. For the first time it was proposed that individual mills could use this formula, together with a mill adjustment factor specific to their process, to predict Hauteur from the greasy wool measurements. TEAM also provided formulae for prediction of Coefficient of Variation of Hauteur and Romaine.
However, it is important to appreciate that TEAM provided benchmarking formulae, because they are based on a statistical regression analysis of the database of greasy wool measurements and processing results, within a specified period of time. In the ensuing years there have been considerable improvements in combing technology. It is therefore entirely appropriate to revisit the database, to examine any shifts that may have occurred and to evaluate whether or not the additional measurements of the fibre diameter distribution and fibre curvature can improve the accuracy of processing prediction. The new TEAM trial (christened TEAM-3) was initiated to update the TEAM formulae. It will cost $500.000 and is being funded from AWTA Ltd's unappropriated profits.
In 2003/04, 2004/05, 2005/06 and 2006/07 AWTA Ltd held fees to the previous years levels, despite the anticipated drop in production. This decision meant that losses would be incurred in those year. These losses were absorbed into retained profits from previous years.
AWTA Ltd's structure as a Public Company Limited by Guarantee, provides it with the unique ability to utilise unappropriated profits for this purpose. While clients continuously benefit from this policy, the benefits are perhaps most visible when times are tough.