computershare limited report to shareholders 2001 annual report.pdf · report to shareholders 2001...

Why this number is so important.

Report to Shareholders 2001

Com

putershare Limited R

eport to Shareholders 2001

www.computershare.com

Cover Team (L-R) Chad Norrish Barbara Robertson Michael Clark Atsuko Shima Tonia Kendall Peter Scott Paul BuswellInvestor Services Investor Services Plan Managers Analytics Document Services Technology Services Corporate

Computershare LimitedABN 71 005 485 825

Directors Alexander Stuart Murdoch (Chairman)Christopher John Morris (Managing Director)Peter John GriffinMark Edward ElliottPenelope Jane MaclaganAnthony Norman Wales

Company SecretaryDarryl John Corney

Registered Office18-62 Trenerry CrescentAbbotsford Victoria 3067

PO Box 103 AbbotsfordVictoria Australia 3067

Telephone +61 3 9235 5500Facsimile +61 3 9235 5601

Stock Exchange ListingsAUSTRALIAN STOCK EXCHANGE LIMITEDTHE NEW ZEALAND STOCK EXCHANGE

SolicitorsMINTER ELLISON Level 23, Rialto Towers525 Collins Street Melbourne Victoria 3000

AuditorsARTHUR ANDERSEN360 Elizabeth StreetMelbourne Victoria 3000

Share RegistryCOMPUTERSHARE LIMITED 18-62 Trenerry CrescentAbbotsford Victoria 3067



BankersNATIONAL AUSTRALIA BANK LIMITED500 Bourke StreetMelbourne Victoria 3000

AUSTRALIA AND NEW ZEALANDBANKING GROUP LIMITED530 Collins StreetMelbourne Victoria 3000

THE ROYAL BANK OF SCOTLAND PLC138-142 HolbornLondon UK EC1N 2TH

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because at Computersharewe use 7 key drivers tomeasure our performance,our people and the value wedeliver for shareholders.

And here they are

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OUR SEVEN KEY DRIVERS

1 2A defined strategy Executing thestrategy

What we are doing– Delivering a ‘single solution’ to the international securities

industry – by offering technology and services globally that our competitors cannot.

Where we are– The leader in the biggest markets in the world with share

registry operations in eight countries covering three major global time zones.

How we are doing– On track – meeting our strategic objectives and pleased with

progress.

Where we are going– Expanding, particularly in pursuing opportunities in Europe and

Asia, and providing significant value-added services to ourcustomers.

What we are doing– Consolidating and better integrating our businesses to deliver

a single solution. From this solid base we will build throughorganic growth.

Where we are– Major strategic acquisitions in Hong Kong, US, Australia and the

United Kingdom have consolidated Computershare’s marketleadership position.

How we are doing– The strength of our strategy is reflected in our reported EBITDA

(up 65% when non-recurring items are excluded) and in theamount of new business we continue to win. Significantefficiency and productivity gains have positioned us for furthergrowth in all markets.

Where we are going– Organic growth, improved efficiencies, expansion through

acquisition and the release of a new suite of unmatched globalservices to multinational issuers and their shareholders.

3

3 4The ability to lead – to set the trends

Clear focus oncustomer needs

What we are doing– First global registry to develop a fully integrated share registry

and a fully integrated system for management and operation ofEmployee Plans. Actively working with industry groups to reducesettlement cycle from three days to one day.

Where we are– Introduced web-based Investor Centre providing easy access for

shareholders. Meeting with Australian, Canadian and UK industrygroups and working towards reduced settlement period.

How we are doing– Continuing to lead the way by adding content and value to our

web-based services and providing input to various internationalgroups considering their moves to dematerialised shareholdings.

Where we are going– Increasingly involved with the development of international

markets by serving as an industry representative on cross-industry committees. Continuing to add new content to our web services.

What we are doing– Improving registry operations, process and information flows.

Restructuring share registry for better service, quality andproduction.

Where we are– Restructure, process flows and business flows complete

in the US, UK and Australia. Migration of companies onto our technology platform proceeding in the US, Canada and Hong Kong.

How we are doing– Marked improvements in service levels to our clients and their

shareholders together with internal efficiency gains through re-structure are evidenced in all businesses.

Where we are going– Constantly endeavouring to improve delivery of services through

more efficient process, structure and technology.

4

5 6Growth in keymarket areas

Development of leading edgetechnology

What we are doing– Sharply differentiating our global service through further

development and implementation of Computershare’stechnology.

Where we are– Global technology structure covers three major time zones,

giving us scope for 24 hours per day, 7 days per week (24/7)services to support our businesses.

How we are doing– Successfully implemented planned software upgrades, reliable

global networks, new look web site, sophisticated call centre in the US, and adding to web content.

Where we are going– COSMOS technology continuing to be deployed in all remaining

markets by end of June 2002. Direct Stock Purchase Plans andother applications will be designed to service shareholdersglobally.

COSMOS technology; evolving and continuing to support our global products and services.

OUR SEVEN KEY DRIVERS

What we are doing– Investigating acquisition opportunities in Europe and Asia.

Positioning for organic growth in the US and other major markets.Growing Employee Plan services. Broadening Analytics services.

Where we are– New successes in UK, South Africa, United States, Hong Kong

and Canada, including companies such as Telkom, Estee Lauder,Zurich Financial, Lucent, Texas Instruments and Canadian Pacific.

How we are doing– Achieving our milestones. We are unique by providing

companies, shareholders and employees with the only trulyglobal share registry in the world.

Where we are going– Expecting gradual returns from share registry technology

platform and organic growth in North America and Hong Kong.Analytics growth expected, with City Watch in the UK and FDCin US. Employee Plans anticipated to show accelerated growth.

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7Develop our culture to attract and keep the best people

What we are doing– Empowering individuals for more job satisfaction, re-engineering

processes for increased efficiencies, offering employees optionsand shares to create a vested interest and increasing stafftraining.

Where we are– New offices in South Africa and New Zealand. New fit outs in

the US, Canada and Australia.

How we are doing– Staff satisfaction is high, motivational levels are high and staff

turnover is minimal.

Where we are going– Constantly evaluating policies and systems, and ensuring staff

are involved in processes and decision making.

>>please read on

For more details on how Computershare measures up,

2001 FINANCIAL HIGHLIGHTS

Investor facts

Revenue increased by 84% on the back ofstrong growth in shareholder accounts undermanagement and the contribution of recentlyacquired businesses. The majority (80%)of the group’s income comes from routineoperations with the major income driver beingthe numbers of investors who hold shares.

Before non-recurring items, the EBITDA wasup 65% on the previous years level with theongoing efficiency program throughout thegroup targeting margin improvement in thecoming years. The operating performance ofthe group continues to reflect the benefitsto be realised from the deployment of acommon technology platform across theInvestor Services businesses.

The impact of recent acquisitions continuesto expand the group's asset base withmanagement attention focused onimprovements in working capitalmanagement and maximising cashflow fromoperating activities. A significant part of theasset base is represented by goodwill arisingfrom acquisitions. This goodwill representsthe value attributed to the future earningspotential of businesses acquired.

’97 ’98 ’99 ’0110.7

31.2

56.2

91.7

147.0

21.7

293.9

394.9

43.6

212.2248.3

659.4

PROFIT ($000) JUNE 2001 JUNE 2000 %CHANGE

Sales revenue 724,613 394,864 +84%

Earnings before interest, depreciation, amortisation and tax 151,608* 91,698 +65%

Profit attributable to shareholders after tax 54,916* 38,193 +44%

BALANCE SHEET ($000)

Total assets 903,994 659,445 +37%

Total shareholders’ equity 472,902 386,001 +23%

PERFORMANCE INDICATORS

Basic earnings per share 7.2 cents 7.5 cents – 4%

Return on shareholders’ equity 8% 10% – 20%

Net debt to equity 35% 26% +35%

Earnings before interest, depreciation, amortisation and tax/interest 11 times 29 times – 62%

Staff numbers at 30 June 5,148 4,300 +20%*BEFORE NON-RECURRING ITEMS

’97 ’98 ’99 ’00 ’01 ’97 ’98 ’99 ’00 ’01

SALES REVENUE $m EBITDA $m TOTAL ASSETS $m

PERFORMANCE INDICATORS

151.6724.6724.6 151.6

904.0904.0

’00

6

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2001 PERFORMANCE HIGHLIGHTS

69millionSHAREHOLDER ACCOUNTS

+29%2001 % CHANGE

5,148EMPLOYEES

+20%2001 % CHANGE

81%EMPLOYEES WHO HOLDEQUITY OR OPTIONS INCOMPUTERSHARE LIMITED

KPI’sThe Principal KPI‘s are ‘Revenue per Holder account’ and ‘Holder accounts per employee.’

Both showed improvement in 2001 with more to come, as the common technologies platform is deployed worldwide.

NO.1Computershare is now the largestand only global registry business*

*CREDIT SUISSE FIRST BOSTON ANALYST REPORT 17/01/01

The global spread of similar businesses within the Computershare group enablesmanagement to benchmark operations using group-wide KPI‘s.

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How would you describe thepast 12 months?Our results this year demonstratethe continuing growth of the companywhen excluding non-recurring items.On this basis our total revenue showsan increase of 84% over the previousyear and EBITDA of $151.6 millionrepresents a year on year growth of65%. Operating profit before tax wasup 45% and Net Profit After Taxwas brought in at $54.9 million,an increase of 44%.

The writedown of $21.3 million on ourEtrade investment now prices theseshares on our books at 60 cents pershare and we believe this to be bothprudent and realistic.

Our business continues to grow. Wecan now rightly claim our position asthe largest and only truly global shareregistrar. More than having globalreach, we believe we stand apart fromour competitors with our ability to offera broader range and depth of servicesusing our own technology (including our web-based services). We are ableto integrate our Plan Managers,Analytics and Document Servicesbusinesses together with InvestorServices to create a seamless andefficient service in world markets.

Our strategy has raised the bar bycreating the only totally integratedservice solution for companies andtheir shareholders on a global basis.

Our Markets Technology group alsoshares in our success this year. Wewere successful with our bid to thePacific Stock Exchange to provide themwith our trading system for their optionmarket and with ICAP (formerly GarbanIntercapital) in the UK for their Swapstrading. These two very differentinstruments are a testament to theversatility of our trading systemarchitecture and software.

In what areas has thecompany expanded?Over the past twelve months we haveconcentrated on acquiring businessesto position ourselves for growth andfurther strengthening of our serviceofferings to companies andshareholders.

In November 2000 we purchased the Employee Share Purchase Planbusiness from Merrill Lynch in the US.This was followed, in March 2001, withthe acquisition of RPC Plan Managersin Australia. These businesses aremarket leaders which complement ourexisting plan offering in Australia andthe UK and have been fully integratedinto Computershare.

In the same month we also purchasedthe remaining 50% share in Ci Limited(now operating as ComputershareDocument Services). The company will provide all the communication and document output services for our share registries in Australia, the UK, US and Canada.

In March 2001 we acquired theremaining 50% shareholding in HongKong’s leading share registrar, CentralRegistration Services, with plans tomigrate the share register onto ourtechnology platform by June 2002.

The acquisition of Citywatch in the UK in November 2000 and Financial DataConcepts in the US in March 2001adds significant breadth to our Analyticsoffering and positions them well forgrowth in the coming financial year.

Computershare can berightly described as asingle source provider.Now let us share withyou our strategies andthe reasons why we areso excited about thiscompany and our future.

CHAIRMAN AND MANAGING DIRECTOR ’S REVIEW

Dear Investors,

65%*

EBITDA INCREASE OVER LAST YEAR*BEFORE NON-RECURRING ITEMS

9

Many people see our main lineof business as the managementof companies’ share registers.Do you have any comments on this?Traditional services developed by the share registrar have expandedconsiderably over the last few years.This is highlighted by the renaming of our registry services division toComputershare Investor Services.

We see the core maintenance of theshare register as the basis for providingan ever increasing range of services toboth investors and companies. This hasbeen demonstrated by our developmentof global analytics, employee servicesand document services businesses. We have focused on developing acomplete range of products deliveredover the Internet to both investors and companies.

The financial services industry is like atechnology arms race, with the winnersin the technology race taking the prize.Computershare now has close to 500 technology staff who primarilyservice our registry business worldwide.

The Employee Plan Businessseems high on your radar, can you explain why?At Computershare we have seen thepower of employees owning shares inour company and see this as a growingtrend by companies. We also see othercountries following the lead of the UK, who have encouraged employeeshare ownership with aggressive taxconcessions. As both governments and companies realise the power ofemployee share ownership, this area of our business will expand considerably.

We are also convinced of the merits ofthe single service provider model, wherecompanies can look to us to handleservices to both shareholders and staffglobally. We see great cross-sellingopportunities in this area especially in theUS where only 10% of the Employee Planclients are also share registry clients.

We are able to draw on the significantknowledge and experience of our staff ineight countries who provide this service,and we believe that our market share,acquired through both organic growthand acquisition, places us in acommanding position to grow this business on a truly global scale.

SANDY MURDOCH Chairman & CHRIS MORRIS Managing Director & CEO

NO.1SHARE REGISTRAR IN FIVE OF THEEIGHT MARKETS WE COMPETE IN

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Some analysts say that organic growth in the US will be very difficult to achieve.What is your reaction to that?Growth in a market where the starting point is a relativelysmall market share is always going to present challenges.

Right now we believe it is about positioning ourselves properlyto meet and overcome these challenges. Progress so far hasbeen broadly as we forecast, with the US coming in at aroundbreak-even (EBITDA) this financial year.

We have seen a major restructuring of the US transferagency providers, with DST buying the remaining share of Equiserve and Mellon buying out the 50% of their jointventure previously owned by Chase. The recent downturn in corporate actions and IPO’s has also led a number ofsmaller players to reconsider their long-term future in thiscompetitive market.

Our focus in the US has been on two fronts: first to improve service levels; and the second, to introduce our proprietary software.

On the service side we have completely restructured our business both in management and staff. Our internalstatistics and those conducted by Group Five (whospecialise in conducting service quality surveys) haveconfirmed a vast improvement in service levels.

On the technology front, we have delivered our newEmployee Share Plan product and we are due to have all conversions of the Merrill book of business completed by November. We are now testing our share registrysystem with the first conversions of live companiesscheduled for December 2001. We are also on schedule to release the first phase of our global employee optionsystem in December 2001, with full US functionality due

for completion in June 2002. When these technologyinitiatives come online they will establish a clear lead infunctionality over our US competitors and therefore placeus in a strong position to obtain major new clients.

Installation of our sophisticated telephony system thateclipses our competitors in terms of versatility andefficient handling of all types of incoming and outgoingcommunications will be completed well before the end of this calendar year.

Computershare Document Services is now fully establishedand servicing our transfer agency.

In summary, our significant R&D investment in the USshould tell its own story. We remain solid and committed to our business in this important market and we plan toplace proper emphasis on its ability to grow in the future.

What have been the highlights for the year?It is hard to quote specific highlights in a year that has seen many acquisitions and considerable improvement inour registry operations globally. As far as major contractsare concerned, the deal to supply our trading systemtechnology to ICAP and the contract to supply BP for theirglobal Employee Plans business would have to behighlights. The ICAP deal proved that our trading systemtechnology is world leading and the BP deal proved thevalue of our global services.

Looking ahead, what are your plans forComputershare?We will continue towards our objective of gaining apresence in all major world markets, and this will include our ongoing attention to European and Asian regions.

Our management teams worldwide have a clear focus andan enthusiasm to provide the very highest quality of serviceto our company clients and their shareholders. This focuswill, we believe, help facilitate our drive to gain marketshare and win new business in all our major markets.

How are your management and staff teams?We have always sought to employ and retain people of thehighest calibre at all levels within the organisation.The resultsthis year are an indication of the success of this aim and ofthe dedication, commitment and loyalty of all staff. This hashelped us to achieve what we believe, are very crediblefinancial results in a year that was for many companies inour sector lacklustre.

CONSOLIDATED RESULTS A$mFULL YEAR COMPARISONS

Total Revenue

EBITDA

EBITDA NUMBERS ARE BEFORE NON-RECURRING ITEMS

JUN ’01

754.3

151.6

JUN ’00

408.4

91.7

JUN ’99

302.8

56.2

JUN ’98

147.0

31.2

11

Much has been asked of staff this year and many havesacrificed life at home to travel overseas. Our employeesare our real strength by making it their business to seek out and develop our businesses to meet our strategic andtactical objectives. Our sincere thanks go to all staff andmanagement of the company.

Your main Australian competitor hasindicated that they will be processingcompanies on their new system from 1st January 2002. What does this mean for Computershare?We happily compete in all markets throughout the world, and Australia is no different. For many years the predominantshare registry system used by the major players in Australiawas ours. As a consequence the differential was focussedonly on service quality and we believe that even then weheld our corner well. The transition to offer competitionbased on technology as well as service is something we are very much looking forward to.

The depth and breadth of our service offering and our globalpositioning are all key elements of difference. We believethat companies in Australia will look to ensure that thecritical service to their shareholders is based on robusttechnology that is tried, tested, reliable and innovative.

Have there been any changes in themembership of the Board?Three changes have been made this year. Mark Elliott, the group’s Chief Legal Counsel, was appointed to a casualvacancy on the Board on 5 January 2001.

John Shergold, who joined the board in 1996, has advisedthat his workload in other areas does not allow him thetime required to fulfil his role with the company and itsinternational expansion. He therefore tendered hisresignation in May of this year. John was Chairman of the Audit Committee and contributed significantly to the

strategic development of the company. We thank himsincerely for his contribution during his term as a director.

With effect from 30 September 2001, Tony Waleswill relinquish his executive responsibilities for theComputershare Limited group. Tony will remain on theBoard of Computershare Limited as a Non ExecutiveDirector.

In this capacity, he will chair the group’s Risk and AuditCommittee. The charter of this committee includes anoversight role on acquisitions.

Tony Wales has been involved with Computershare since1981 and has been instrumental in much of the strategicexpansion of Computershare. We acknowledge thesignificant personal effort Tony had made to the success ofthe Computershare group and the contribution he has madein sourcing, evaluating and integrating many of the businessacquisitions. As a direct consequence Tony has spentsignificant periods of time away from his family.

We expect the change in Tony’s role to be handledsmoothly with Mr Darryl Corney, Chief Financial Officer,assuming all Tony’s executive responsibilities. For the past3 years Mr Wales and Mr Corney have worked closelytogether in guiding the finance function at ComputershareLimited.

Alexander (Sandy) Stuart MurdochCHAIRMAN

Christopher John MorrisMANAGING DIRECTOR AND CEO

473TECHNOLOGY STAFF SERVICE OUR

GLOBAL BUSINESS

Connecting Computershare

Asia/Pacific

Johannesburg Hong Kong

The global securities industry continues to be characterised by significant change.Globalisation is creating a vast new set ofopportunities; competition for capital hasincreased sharply; share ownership hassurged in popularity and scope; a new wave of privatisations and demutualisationsis bringing greater capital opportunities tothe fore, and more sophisticated financialmarkets technology is rapidly changing the international investment landscape.

Through these changes, a whole newgeneration of investors is being ushered ontothe world stage – investors who are reachingout beyond national borders to spread theirinvestment risks across sectors and markets.

In turn, a renewed enthusiasm by companiesfor well articulated investor relationprograms reflects a global trend thatacknowledges the role of good corporategovernance and the importance of opencommunications to increasing numbers of employee, retail and institutionalshareholders worldwide.

Computershare monitors these trendsclosely to define and execute a globalstrategy that combines the efficient and seamless deployment of a full range of technology, financial and investor services.

UK/European/African regional support

Company

The ability to combine key elements to offer a total shareregistry service – consistently delivered throughout the eightcountries in which we operate – creates a clear distinctionbetween Computershare and its competitors both nationallyand internationally.

TECH

NOLO

GY

INVESTORSERVICES

ANALYTICS

LondonDublin

Analytics (CAS)uses our global databases to deliver a comprehensive range of investor relations services to companies andsecurities industry participants. Services include shareownership analysis; proxy targeting and solicitation;global peer company ownership; share trading analysis;investor relations contacts management databases;investor targeting; and investor relations consulting.These offerings help companies to understand thedynamics of their share registers and to implement their investor relations programs.

Investor Services (CIS)provides a comprehensive range of registry and investor services including efficient daily management of company share registers and employee share plans,assistance in corporate actions such as initial publicoffers, floats, rights issues, bonus issues, takeovers,mergers, capital restructures and dividend reinvestmentplans. The company also manages company meetings,proxy processing, mailing, document management,demutualisation and investor contact centre solutions.

1313

regional support North American regional support

Sydney Auckland

Shareholder

Toronto Chicago

SERVICES

PLANMANAGERS

DOCUMENTSERVICES

Document Services (CDS)provides all paper and document needs for our coreshare registries, as well as handling the high volumemail outs that are a feature of modern-day shareregistry practice. The diverse offerings includeintegrated communication design and standardisedcommunication systems, laser printing, intelligentmailing and electronic information delivery services.

Technology Services (CTS)underpins our total service package through creativetechnology applications that are deployed at all stages of the financial market cycle.

Key applications include our proprietary share registrymanagement software; equity and derivative tradingsystems; order routing, market surveillance and integrated web-based information and reporting solutions.

Our technology solutions are implemented across theglobal securities industry, supporting service provision to listed companies, investors, employees, exchanges,market regulators and other financial institutions.

Plan Managers (CPM)offers total management of employee share, stock and options plans. Our approach to this fast-growingservice sector entails the effective and efficient design,communication and ongoing administration of plans for the benefit of companies and their employees. We combine a detailed understanding of the legal and regulatory environments across different markets,while our technology channels orders through toappropriate markets and brokers. Information isdelivered to plan participants in a highly efficientmanner, through our fully integrated web-based services.

WHAT WE OFFER? THE COMPUTERSHARE ADVANTAGE

14

Technology Services(CTS)

Investor Services(CIS)

Document Services(CDS)

Plan Managers(CPM)

Analytics Services(CAS)

Global technology and infrastructure support for existing Computershare proprietary software,together with a full range of development services for new products.

Trained technology teams who understand the businessneeds of our company clients and their shareholders.Skilled, mobile and flexible teams located in the UK, US,Australia and Canada, plus technology/support staff in allbusinesses worldwide, providing full 24/7 support.

Our product range encompasses registermaintenance, corporate actions administration,nominee services, share dealing programmes andcustomer contact management. We are unique inthat we are the only global registry. Located in everymajor English-speaking country, we have over 7,000clients ranging from large multi-nationals to smallprivate companies.

Unique products delivered by a dynamic team, supportedby world-beating technology. Our global infrastructureallows us to work on solutions 24 hours a day. To date,we have driven the pace of change in every country inwhich we operate – our Internet products alone havechanged the face of shareholder relations.

Global servicing of paper and electronic documentneeds for issuers, investors and for manycorporations to provide effective communication to their end-users/customers. This includes design,document composition and computer programming,through to various production and distributionmethods (mono, four-colour mail, email, fax, online web presentment).

Our dedication to getting it right across all areas of communications and processes gives our clients the ultimate advantage. It adds up to clearercommunications, the elimination of costly processing,data integrity, improved quality, cost savings onmaterials and a minimisation of call inquiries.

The only global provider who can coordinate andmanage employee share and option plan schemes.Our approach ensures clients’ employee share plan(ESP) objectives meet remuneration objectives, andoperate and communicate to employees efficiently.This value added service offering attracts a higher feemargin structure than the mainstream registry service.

We combine highly specialised and experienced staffwith leading software, as a fully integrated, globalservice offering. The proprietary software is purpose-builtfor managing and communicating highly valuable shareplan benefits to employees, and capturing all necessaryand often complex taxation information. Our leading callcentres in three major time zones and web basedinvestor centre mean 24/7 service – a powerfulcombination not easily replicated.

Global investor relations and market intelligenceservices to issuers and other market participants. We help our clients to understand their shareholderbase and trends in cross-border portfolio investments.

For the first time issuers, brokers, investment bankers andretail investors are able to access share ownership andfund management company/fund profiles on a global basis.Data is single-source and is available in standardisedformats. No longer is it necessary to piece togetherinformation from each geographic market to obtain a globaloverview of their shareholder base and market activity.

Fully integrated and global solutionsfor companies and shareholders.Local Access, Global Services.

Computershare’s business is a worldwide commonplatform. Here is a summary,sector-by-sector.

OPPORTUNITIES GROWTH OF SECTOR MKT PENETRATION/POSITION

15

Continue to research and apply the latest technologyto support both existing and future trends in the globalmarketplace which reinforces our leadership position.The proper application of that technology is a significantpoint of difference compared to our competitors.

As the world’s only global registrar, we expect tobenefit from the globalisation of the world’s largestcorporations by providing integrated solutions across all borders. Cost benefits are gained by spreadingdevelopment costs across a worldwide network,allowing us to achieve technological superiority overour competitors.

Through consistent quality services we have beensuccessful in leveraging additional business (apart fromregistry services) from current clients. We expect thiswill continue in all locations. Using our globalexperience we fine tune our offerings in any givenlocation to any given client. We continue to implement‘best practice’ on a global basis.

Significant growth is available from this under serviced market. Existing plans are poorly serviced or coordinated badly through a range of differentchannels, leading to major companies increasinglylooking to outsourcing the management of their plans. Many other companies also find outsourcingpreferable in the absence of in-house resources. Taxation concessions in Australia and UK are also fuelling growth.

The growing use of technology in investorcommunications creates opportunities to develop online products. Recent acquisitions of UK and UScompanies providing online market intelligence have given us a leading position in that field. Further expansion into Canada and South Africais under investigation.

Computershare Technology Services providesservices into the Computershare group ofcompanies and its growth is largely determinedby the needs of our global businesses.

The market is anticipating a quiet year for IPOs, but it is also expecting activity in mergers andacquisitions. The benefits of our global propositionand technical superiority are increasingly understoodby clients. We expect to attract a number ofsignificant clients from our competitors next year.

With our aggressive global acquisition path weexpect to continue the strong growth of documentservices output for the Investor Services businessand related commercial clients on a worldwidescale. The foray into North America alone willresult in the additional annual production of 200 million documents laser imaged, intelligentlymailed and produced electronically.

Concessions and tax incentives in the US, UKand Australia have resulted in significantincreases in employee share and option plansparticipation. Since 1972, the number of USemployees participating in ESP’s has grown from 250,000 to over eight million today. New share owning democracies in Eastern Europe will also create significant new growth opportunities.

The past year saw the creation of ComputershareAnalytics Services as a separate business unitwithin the Group. We expect demand for ourservices to continue to grow around the world,particularly as corporations come to realise the benefits of local access to standardisedglobal data.

NO.1

NO.1

NO.1 Unique intelligentprinting able to offertruly global solutionsto companies

The largest andonly global shareregistrar

In terms of breadth,depth and globalisationof Computershare’stechnology

N/A

Leading global providerfor the management ofEmployee PlanSchemes.

LONDON

EDINBURGH

CHANNELISLANDS

BRISTOL

HONG KONG DENVER

LOS ANGELES

DALLAS

CALGARYEDMONTON QUEBEC

ST JOHN’S

NEW YORK

DUBLIN

AUCKLAND

MONTRÉAL

CLEVELANDCHICAGO

VANCOUVER

WINNIPEG

MELBOURNE

BRISBANE

ADELAIDE

SYDNEYPERTHJOHANNESBURG

TORONTO

HALIFAX

MANILA

NEW JERSEY

NO.1

16

Technology Services (CTS)

REVIEW OF OPERATIONS

6%OF EXTERNAL REVENUE

The creative and intelligent use of integratedComputershare designed technology thatembraces the service needs of businesses and its clients is a key to setting us apart from our competitors. This is the cornerstone that has driven our strategy over the years and has seen Computershare establish its global footprint in the provision of technology solutions and services to thesecurities industry.

In support of this strategy we have set up major technologydevelopment sites in the United Kingdom, US, Canada and Australiacovering all major time zones. In addition, we provide localintegrated technology support and infrastructure services in allbusinesses worldwide.

OverviewThe wide-ranging role of Technology Services is broadly reflected in its organisation of global teams who take responsibility, on theone hand, for supporting our existing proprietary share registrysoftware and, on the other hand, are involved in the development of new technology and the enhancement of existing systems.

In addition to these teams we have the Markets Technology Groupwho support and develop the technology used by stock exchanges,brokers, regulators and other markets around the world.

In terms of our share registry operations, there have been siximportant streams of development work.

Detailed analysis and design of the enhancements necessary for the installation of our proprietary share registry software for the US,Canada and Hong Kong is well under way and will be operational inall three centres by the end of June 2002, with the first migration ofcompanies expected in Hong Kong and the US in December 2001.

Computershare has a responsibility to over 7,000 companies andclose to 69 million shareholders. As a consequence it is crucial thatour systems can be relied on. In this context we have nowestablished a fully redundant Wide Area Network (WAN) throughoutthe world to ensure the continuation of registry services in theevent of communication (network) failure in any one location.

Our continuing effort to bring to companies and shareholders thehighest quality of service led us to a detailed review of ourtelephone call centre and internal investor services processes.

17

In researching a solution we aimed for a system that would provideimprovements in response times and be flexible enough to handleincoming communications from all sources (e.g. letters, e-mail,facsimile, telephone). Equally we sought to ensure that we will beable to apply the technology throughout our businesses to enable24/7 availability for all shareholders. Our new system has beenimplemented in the US and Canada, with plans to roll it outworldwide over the coming months.

Computershare’s web site at www.computershare.com has alsoundergone a significant makeover, with a new design and the launchof the ground-breaking Investor Centre that, amongst other things,provides shareholders with a portfolio view of their holdings. This isthe first of its kind in Australia and we plan to continue to lead theway in the creative application of this technology.

Our Issuer-on-Line service brings the share register onto the desksof company secretaries, their staff and their investor relationsdepartments with the ease of web-based delivery.

Software in support of Computershare Plan Managers isprogressing on track. This important initiative will create a unique,fully integrated system for the management of these plans.

Our COSMOS technology continues to evolve and is in operation in the UK and Australia in tracking beneficial ownership undernominees and other custodians. As well as this, COSMOS providesthe infrastructure for our Investor Centre that enables investors tosee a portfolio view of their holdings and will automatically updatethe information for new holdings as they occur.

Computershare’s COSMOS technology will continue to bedeveloped to support products for the group, including EmployeeOption Plans and core share registry systems.

Our Markets Technology Group has also enjoyed success this yearthrough business wins with the Pacific Stock Exchange, ICAP(formerly Garban Intercapital) and with the delivery of our marketsystems to Cyprus, Budapest and the Bendigo Stock Exchange.

In concluding this report I would like to pay tribute to ourtechnology staff worldwide. Many travel away from their homes forlong periods and all of them work with the commitment and loyaltythat generate our success as a group and a company.


First to market with web-based investor and issuerservices in Australia and theUnited Kingdom.

In twelve months over 24 million hits on the site.

Improved technology provides99.62% availability on theweb-site.

18

Despite a recent downturn in IPO and othercorporate activities, both revenue and profitfrom all businesses has been in line with ourbudget expectations. Shareholder numberscontinue to grow, and show an increase of29% to 69 million shareholder accounts.An important challenge faced by us all this year was to streamlineour business and create service productivity and efficiency gains. To a large extent we have achieved this by flattening managementstructures and improving work processes. In addition, we havecompleted the integration of Document Services, Plan Managersand Analytics to create our unique, fully integrated service offeringto companies and shareholders.

Our technology has also played a key role in improving efficiency and, crucially, adding significant improvements to our service standards.

OverviewOf particular note is the recent implementation of our InvestorContact Centre in Melbourne, which was officially opened in June by the Victorian Minister for State and Regional Development,the Honourable John Brumby MP. The Investor Contact Centreprovides services to shareholders and other incoming callers, aswell as initiating calls to shareholders on behalf of companies.

Our registry businesses in the US and Canada have taken this a step further, where the most up-to-date telephony technology isable to handle incoming communications whether they are receivedby telephone, e-mail or fax. This technology will be deployedthroughout the world over the coming months and will bringsignificant improvements for both external and internalcommunication management.

The introduction of the Investor Centre on our web site(www.computershare.com) brings to Australian shareholders, forthe first time, a portfolio view of all shareholdings in Australiancompanies whose share registers are serviced by Computershareas well as valuations of their portfolio. When a shareholder isregistered for the first time, they will be provided with a secure

Investor Services (CIS)


86%(INCLUDING ANALYTICS)

OF EXTERNAL REVENUE

Call Centre StatsAUSTRALIAHandling 150,000 per month.80% of calls answered within30 seconds (and improving).1.5% abandon rate.

UNITED KINGDOM80% calls answered within 20 seconds.2% abandon rate (and improving).

UNITED STATES OF AMERICAAverage speed to answer is 20 seconds (and improving).Abandon rate 1.3%.95% of shareholdercorrespondence completed onday of receipt.

19

identification number that will enable them to affect changes totheir details maintained on the share register. Over the comingmonths it is planned to add even more services to our InvestorCentre and to implement the same service in all other markets.

Our focus on service standards and general gains in efficiency areaimed at positioning our businesses for growth and will continuethroughout the coming financial year. We are already seeing theresults in all our operations, where research is indicating asignificant improvement in service levels. Even greaterimprovements are contemplated in the US, Canada and Hong Kongfollowing the migration of companies onto our proprietary shareregistry software (SCRIP) by the end of June 2002.

We have been encouraged this year with our successes at winningnew business in most of our markets. In some cases we have beenable to win business away from our competitors and in others(particularly the United Kingdom) we were successful in winning a significant portion of floats and demutualisations that came into that market.

The US has experienced further consolidation of share registries with the exit of the original banks who had partialownership in the two key competitors. Despite this, serviceofferings to companies remain fragmented, with Employee Plansand Analytics services managed by a diverse range of serviceproviders. In this context we believe we have a strong competitiveedge through our fully integrated approach that brings all theseservices together. This is further enhanced by our ability to servicethese companies through our international offices.

It is also reasonable to suggest that US companies do not have atendency to be tied to a particular service provider. They are willingto consider change, and value the creative and efficient use oftechnology.

The outlook for the coming year augurs well in all businesses. Ourglobal spread combined with our breadth and depth of servicescombine to create the only global, fully integrated share registryservice in the world. Our successful moves towards greaterefficiencies, productivity and our focus on superior service willcontinue throughout the year, creating a framework for growth andsuccess over the coming months.

Major Business Additions 2001BP (Plans)Aggregate IndustriesBradford and BingleyAllied DomecqFriends ProvidentOrangeBarclays PLC/WoolwichVodafone Group/Eircell 2000Telkom SARoyal Bank of Scotland Group/National Westminster BankAlintaGas LimitedWoolworths LimitedHarley Davidson IncAuckland Energy ConsumerTrust

20

Investor Services cont.


Computershare Analytics Services (CAS)During the course of this year Computershare acquired CitywatchLimited in the UK and Financial Data Concepts LLC in the US. These acquisitions have been fully integrated into the existingComputershare Analytics business and are central to our strategyof building a global share ownership database. Both Citywatchand FDC are leaders in the online provision of share ownershipinformation in the UK and US equity markets.

We recently undertook the third annual Computershare InvestorRelations Practice Survey that highlighted the growing use oftechnology in investor communications. With this in mind we are exploring several opportunities to develop further onlineproducts as well as expanding into Canada and South Africa.

Computershare Analytics is in its formation year and consequentlywe are not providing segment reporting this year.

Total Revenue ($m) 2000 2001

Australia 89.4 102.7

United States 20.5 111.1

Canada 19.9 161.3

New Zealand 11.5 11.5

United Kingdom 157.2 208.6

Ireland 9.9 11.0

South Africa 27.2 25.6

Hong Kong (100%) 23.3 30.5

SCRIP, the world’s bestregistry system.Technology is the foundation ofa registry service. We considerSCRIP (developed andmaintained by ComputershareTechnology Services) to be theworld’s best registry system. Its Internet services (IssuerOnline for clients and InvestorCentre for shareholders) havebrought the industry into thethird millennium.Computershare employsworld-leading technology inthe fields of documentscanning, automateddocument processing andtelephone response handling.Our staff are well trained, withrelevant skills that effectivelymirror our clients’ needs.

21

Australia

ESTIMATED MKT. SHAREOUTLOOKMARKET SUMMARY

United Kingdom

Canada

South Africa

Hong Kong

In 2000-2001 we concentrated our efforts onoptimising our operational efficiency. With tightermanagement focus, improved processes and theintroduction of automated workflow we have started toreap real returns. We continued to welcome importantnew registry clients, including AlintaGas, via aprivatisation, and Woolworths Limited, via a transferfrom a competitor.

Continued domination in administration of majorcorporate actions, including demutualisation ofBradford & Bingley and Friends Provident, the flotation of Orange, the takeovers of Woolwich byBarclays and of Eircell by Vodafone, winning businessfrom competitors.

Issuers and investors alike have reacted very positively to Computershare’s entry into the Canadian market. Webring a promise and reputation of enhanced technologicalcapability, quality, innovation and investment that islacking in the current Canadian market. We have retainedall of our clients as well as won considerable newbusiness across Canada throughout the year. Ourfocused, coordinated team is committed to ensuring our number one position within the industry.

Computershare Custodial Services Ltd. has beenappointed as the eighth Central Securities DepositoryParticipant (CSDP) under STRATE (Share TransactionsTotally Electronic), the only CSDP in South Africa that is not a registered bank. We have been appointedregistrar for the largest privatisation ever to occur inSouth Africa.

Computershare HK implemented the first online IPO in Hong Kong for the Mass Transit Rail (MTR) float,which created an additional half million shareholders.Operating profits increased by 23% over last year, while we continued to increase client accounts in line with expectations.

67%

36%

USA In our first year as Computershare Investor Services, we have seen great progress. Acquisition of Merrill Lynch’semployee plan business added three hundred clients andalmost one million employee accounts. The acquisition ofAmerican Securities Transfer and Trust in Denver broughtin over eight hundred small capitalisation accounts.

5%

93%

39%

62%

60%

New Zealand We maintain the New Zealand register of BrierleyInvestments, now based in Singapore, and providecustodian services to local shareholders. In addition,we acquired and now handle 1/4 million electricityconsumers on behalf of Auckland Energy ConsumerTrust. In March 2001, we managed the ‘separation’ of New Zealand’s largest conglomerate, FletcherChallenge Limited, distributing $US1.2 billion andNasdaq-listed stock to shareholders.

We are confident that we have the infrastructure,specialist registry expertise and focus on our clients’needs to continue to improve our position andcompetitive standing in the marketplace. Our ability tooffer full registry services to the increasing number ofdual listed companies further aids our positioning. Beingable to deliver the appropriate registry support, reportingand advisory capabilities on the one platformstrengthens our unique competitive advantage.

Continue market dominance, especially with IPOs andM&As. We are realising a steady flow of major clientsfrom our more traditional competitors – a trend we plan to accelerate in the coming year by integrating value-added services into our core business. This consists ofnew dealing facilities and our own document servicesdivision, which can expand in line with our increasedglobal presence.

Numerous initiatives will be brought to market in thenext twelve months, bringing added value to our clientsand increased efficiency to our operations. Theseinclude Computershare’s Document Services division,electronic workflow and imaging processing, operationalconsolidation, new state of the art telephony systems,enhanced web capabilities and the conversion toComputershare’s propriety stock transfer system, SCRIP.

Computershare SA is developing and implementingservices for managing company and employeeschemes. We are also in a joint venture, developinga new product that will allow retail investors to applyfor shares offered through IPOs. We will continue toseek growth in all areas of our business.

Together with Computershare UK, we are proposing to introduce a set of cross border registry services toa large UK client base who are seeking listings inHong Kong.

The short and long-term outlook for the US stock transfer industry is good. Current market trends, ourcommitment to success and significant improvementswe have made in terms of quality, process andtechnology ensure our growth strategy in the USwill remain on schedule.

New Zealand registry staff are looking forward to thechallenges and opportunities that the coming year willoffer and in particular the possibility of proving oureffectiveness and competitiveness in the increasinglyglobal share registry arena.

73%Ireland We consolidated our number one position in Ireland by

taking advantage of a quiet period in the market earlyin the year when we completed the acquisition of theBank of Ireland share registry business.

The market outlook is encouraging, with an increasinglevel of corporate actions scheduled for the first quarterof 2002. Early indications are that ComputershareIreland is well positioned to maximise potential and take advantage of further state privatisations andmarket demutualisations.

22

Now established with five facilities in four countries and producing in excess of 250 million documents per year,Computershare Document Services is positioned for global growth.

OverviewIn January 2001 Computershare purchased the remaining 50%share in Ci Limited and the new group now operates asComputershare Document Services (CDS).

The previous vertical integration of this business with the shareregistry in the UK has proved to be a great success and we haveadopted a similar model with the recently completed integrationwithin our share registries in Australia and the US. CDS will also be fully integrated within our Canadian business in December 2001.

As a result CDS will be located in four countries and five strategiclocations around the world, servicing the paper and electronicdocument needs for Computershare’s corporate clients as well as other key direct, commercial clients.

CDS is able to provide an end-to-end service for clients. Fromdesign, document composition and computer programming,through to a wide range of distribution methods. These include highspeed laser printing and intelligent mail processing, or alternativelydelivery by e-mail, fax or online web presentment.

Unlike the US where CDS has only recently become fullyoperational, the established operations in both the UK and Australiahave contributed to our success in these countries. Of significance,CDS managed the document needs for the recent NRMA float bydistributing over 3 million documents to 1.2 million policyholders. In the UK, CDS was instrumental in the large corporate actions andhigh profile jobs for Bradford and Bingley, Barclays/Woolwich andFriends Provident, resulting in 20 million documents for these threejobs alone, produced error free in a timely and secure manner.

To provide an idea of scale, CDS produce, each month, around 20 million documents in Australia and up to 10 million documents in the UK.

Document Services (CDS)



23

CDS has also undertaken capital investment in Australia to acquire the latest technology in high-speed laser printers. This has increased their capacity to produce well over 500,000 encodedcheques daily. To further improve service levels, CDS is finalisingaccreditation under ISO 9002 to provide further comfort for the end customer on both the integrity of the process and the level of service.

As well as its vital role to service our client companies, CDS alsooffer other, commercial services that account for around 30% oftotal CDS revenue. In Australia they worked closely with a majorenergy supplier and developed the first online bill presentmentpayment through Australia Post’s Consolidated web site. This isnow the largest web enabled bill presentment site in Australia.

Similar commercial success can be found in the UK where CDSsystems are linked to the Call Centre of one of Britain’s largestenergy companies and automatically dispatch relevant documentson a daily basis to their customers including CDS designed‘welcome packs’ sent to new customers of the power company.

The market in which CDS operates has been estimated at A$500 billion annually. Given our goal of establishing a printing and mailing presence in every country in which we operate, CDS is well positioned to take a significant slice of this enormous pieand provide global document solutions to its strong client base.

Australia

OUTLOOKMARKET SUMMARY

United Kingdom

The electronic print and mail industry underwent a consolidationas the major providers, including CDS, increased their provision of products and services in web enabled and on line transactionalservices. CDS NSW completed the move into their new purposebuilt premises – with full security and the latest complete service offerings.

The UK market generated substantial print, mail and imagingopportunities for the major industry players, allowing the CDS siteto further enhance it’s reputation for service quality. CDS wasengaged for the production of several high profile jobs such asBradford & Bingley 12 million documents, Barclays/Woolwich 2 million documents and Friends Provident 6 million documents.

The outlook in the Australian market favors the organisationsthat can consolidate their offerings as a complete service, frominitial concept through to final delivery. The larger players, suchas CDS, are leveraging off national and international experienceto ensure Australian customers receive the latest offeringsavailable worldwide.

With the market demanding more enhanced service offerings, and CDS ready to deliver it, the outlook for CDS is very positive. Our unique ability to service both the issuer and the commercialcustomer provides a unique platform to cross sell to our clients. By leveraging off the existing global production platform, we ensureCPU clients are the first to market with a proven product base.

Total Revenue ($m) 2000 2001

Australia 40.1 43.1

United Kingdom 14.9 23.4

Computershare is alone in fullyintegrating the printedcommunication needs ofissuers within its shareregistry operations, providing a seamless full service forcompanies and theirshareholders.

24

Despite slow downs in world economies andincreased share price volatility, the global trendto increasing ownership of shares byindividuals shows no sign of abating. Employee Share Plans (ESP’s) are an extremely efficient mechanismto enhance that process, as all employees can be offered theopportunity to ‘earn’ an ownership share of the business they workin. The growth in shares as part of household assets can becompared to the dramatic increase in widespread ownership of carsand houses over the last 100 years. However we are at thebeginning of the share ownership cycle, and CPM is positionedright at its core.

OverviewWe are the largest ESP manager in the world, with over three millionemployees and 600 corporate clients. Our market share representsjust over 30% in the UK, 50% in Australia and 20% in the US.

Computershare Plan Managers was formed in 2001 and combinesthe existing share plan business run within Computershare InvestorServices with the newly acquired Employee Plan businesses in theUS and UK. We are also currently introducing CPM into the SouthAfrican market.

By bringing these separate businesses together under a globalstructure we have harnessed the relative strengths of our systems,together with our specialist staff, to create a unique, globallycoordinated, total plan management service. Our staff in eachlocation are members of professional industry groups, and areactively involved in promoting the interests of widespread employeeshare ownership. In addition, we have provided valuable informationto the Australian Federal Government as it forms new policy in theESP area.

Since the formation of Plan Managers we have been successful inwinning significant new business in competitive tenders frommultinational companies who understand the benefits that accruethrough our global model and our end-to-end service offering.

Plan Managers (CPM)



25

Over the coming months we believe there will be significant growthin this under serviced market. Existing plans are poorly serviced orcoordinated badly through a range of different channels, and thatleads major companies, increasingly, to look to outsourcing themanagement of their plans. Many other companies also findoutsourcing preferable in the absence of in-house resources.

Tax concessions in the US since 1972 have seen the number ofemployees participating in ESP’s grow from 250,000 to over eightmillion today. New concessions in the UK last year will see 900London Stock Exchange listed companies reconstruct plans for over one million employees, enabling them to acquire up to$A20,000 pa worth of shares, tax free. The UK Government isexpecting 1,750 companies to take advantage of the newconcessions. These concessions are conditional on plans beingoffered to all employees. Australia also requires broad basedofferings to qualify for tax concessions, and both major politicalparties are keen to enhance current concessions to a moreinternationally competitive level.

All major locations are seeing more shares being offered toemployees rather than options, as they create more durableemployee shareholder interest and motivation. These trends and fiscal initiatives will see a dramatic lift in both numbers of individuals and shares under management in ESP’s.

New share owning democracies in Eastern Europe will also createsignificant new opportunities.

We expect to secure an increasing number of major corporatesaround the world, as we promote our global, full service capability,building on the early success in attracting major internationalcompanies.

Efforts will also be focused on delivery of this enhanced service to existing corporate clients, with appropriately enhanced feestructures, as well as marketing to new prospective clients whomay be seeking a better solution. Our strong competitive edge andfirst mover advantage will provide opportunities to increase marketshare in all locations.

We are very excited about the future of CPM.

A recent survey conducted inthe UK with the top 350 FTSElisted companies revealed that67% are planning to introducenew plans under thegovernments All EmployeeShare Scheme (AESS).

26

Plan Managers cont.


MKT. SHAREOUTLOOKMARKET SUMMARY

United Kingdom

Six years ago 80% of the top 50 ASX listed companiesoffered share plans. Now over 80% of the top 350 listedcompanies have at least one plan, and some of theseoperate three types of plans. Many subsidiaries ofmultinationals run plans for their Australian employees,who collectively employ more people than ASX listedcompanies. There are no other direct competitors inAustralia at the moment offering the full range ofservices to match CPM, and certainly no providers withthe global network. There are currently over 750,000employees participating in share plans, in respect ofover $3 billion worth of shares.

The key event in the UK over the last year has been theintroduction of the All Employee Share Ownership Plan(AESOP). The UK Government has recognised the roleemployee share ownership can play in improving theperformance of UK companies. The new plan gives someof the most generous tax breaks for share plansanywhere in the world, and they have set a target ofdoubling the number of companies offering share plans to their employees. The equity incentives market is very buoyant, with an increasing number of companiesproviding their employees with shares in one form oranother. More international companies are also lookingat ways to provide shares to their overseas employees.CPM is ideally placed to benefit in this market. We have a significant client base already. We are able toadminister all types of employee share plans and ourinternational capability exceeds anything our competitorscan provide. We are also at the leading edge of newtechnology for this market.

50%

30%

20%

Currently all sides of politics are keen to furtherenhance widespread and deeper levels of employeeownership in Australia. We expect further tax andregulatory concessions to encourage this process,with details expected to become public as weapproach the next Federal election at the end of2001. Australian companies are followinginternational trends by providing shares and optionsas part of employee remuneration. Leading financialcommentators are also enthusiastically endorsingshare plans as effective financial planning facilities.These factors lead us to expect the market willexperience serious growth in line with NorthAmerica and UK.

We believe the market will continue to grow overthe coming years. Share plans are high profile nowand there is clear government backing for effectiveequity incentives. The AESOP will provide increasingopportunities to grow our client base. We alsoanticipate an increase in the number of companieslooking to outsource their own in-house share planadministration service. We are optimistic both aboutthe future growth prospects of the market and ourability to capitalise on that growth.

USA There is a growing participation in employee plans, withmore and more companies granting options to a broaderbase of employees. Research indicates that companiesare continuing to issue broad based option plans despiterocky market conditions. Other studies are showing thatthe granting of options to mid-level managers iscorrelated to an increase in shareholder returns. Thiscontinues to present a tremendous opportunity forComputershare and its employee plan product line.

Computershare is uniquely positioned to benefit from the continuing growth of employee incentiveschemes linked with the trend for companies tooutsource the resulting administration.

Australia

27

Products and Services Overview

Services OverviewCOMPUTERSHARE TECHNOLOGYSERVICES (CTS)

A global group of business and technologyexperts who support our existingproprietary share registry systems anddevelop, design, enhance and implementnew systems to support our globalstrategy.

INVESTOR SERVICES (CIS)

Expert management of companyregistersLegal and statutory obligations requirecompanies to follow a set of rules for themanagement of shareholder registers. Partof this is to keep shareholders informedand where applicable, pay dividends andmanage a range of other corporate events.These tasks are usually performed by aprofessional share registry, relieving acompany of this burden and acting as thefirst point of contact for shareholderinquiries.

Computershare is the world’s largestshare registry (termed ‘Stock TransferAgent’ in North America), and the onlyglobal registrar. Over 5,000 staff, manageclose to 69 million shareholder accountsfor 7,000 companies in eight internationallocations.

Our impressive network of internationaloperations offers clients efficient dailymanagement of company share registersand employee share plans, and assistancein corporate actions such as floats, rightsissues, bonus issues, takeovers, mergers,capital reconstructions and dividendreinvestment plans.

Other facilities offered includemanagement of company meetings, proxyprocessing, mailing, documentmanagement, IPOs, demutualisationmanagement and call centre services.

PLAN MANAGERS (CPM)

Computershare Plan Managers wasformed in 2001 and combines the existingshare plan business run within CIS withthe newly acquired Employee Planbusinesses in the US and UK. CPM offers aunique, globally co-ordinated total planmanagement service.

DOCUMENT SERVICES (CDS)

Meeting Clients’ needsThis service provides clients with the fullbenefits of our global presence. CDS’semployees in Australia, US, Canada andthe U.K. operate at the forefront ofelectronic document management toformulate a variety of communicationssolutions ranging from laser printing,intelligent mailing, communication designand electronic document delivery.

ANALYTICS SERVICES (CAS)

Register analysisComputershare Analytics offers shareownership and share trading analysisservices to listed companies in Australia,New Zealand, Asia and the UnitedKingdom.

Product OverviewCOSMOS TECHNOLOGY

The global system for the new centuryCOSMOS is Computershare’s new systeminfrastructure that will be the basis of allfuture products. Already supporting arange of services, this client-server,object-oriented design enables a modularapproach to system customisation.COSMOS’ component-based client servertechnology and evolutionary functionalityensures a streamlined process, supportingComputershare’s global registry plan.

SCRIP

The proven registry systemSCRIP links to stock exchange settlementsystems around the world and maintainsup-to-date records of company registers inreal-time. It handles everything from dataentry, inquiries and reporting, through tocompany meetings, employee share plans,dividends, rights issues, bonus issues,floats and more. Its diverse functionalityalso allows for IVR, internet inquiry andonline updating.

AUTOMATED SECURITIES TRADINGSYSTEM (ASTS)

Making the trade happen ASTS is a trading system for globalsecurities exchanges. Modelled on a high-performance open platform, ASTS deploysmulti-instrument, multi-currency,

multi-function trading facilities to morethan ten international exchanges.

SECURITIES MARKETS AUTOMATEDRESEARCH TRAINING ANDSURVEILLANCE (SMARTS)

Automated market regulatorSMARTS is a powerful market surveillanceand information system that alertsauthorities to any improprieties and assistsin ensuring a fair and efficient market.

CHAMP

Connects Australian participants to CHESSCHAMP is a PC-based software systemthat seamlessly connects our Australianbroking and institutional clients to theAustralian Stock Exchange’s CHESSsettlement system.

INVESTOR CENTRE

Get information off the webInvestor Centre allows investors incompanies for whom Computershare actsas share registrar / transfer agent toobtain the latest information concerningtheir shareholding, as well as daily stockprices and graphs. Recent innovationsinclude the ability for investors to obtain a portfolio view of their shareholdings andto instigate minor changes to the standingdetails maintained by our share registry.See www.computershare.com

ISSUER ONLINE

Obtains data without the expense of adedicated terminalIssuer Online is a web-based service thatreplaces the need for company personnelto use a dedicated SCRIP terminal toaccess their company register information.

EXEMPT MARKETS

Allows viewing of live bids and offersExempt markets enable companies to offertheir shareholders some liquidity withouttaking on the full range of obligations thatcome with a stock exchange listing.Computershare uses its ASTS stockexchange trading system to match buyersand sellers on exempt markets providedfor shareholders in companies that areclients of our registry business inAustralia.

28

Board of Directors

COMPUTERSHARE LIMITED

Alexander (Sandy) Stuart MurdochDDA, BEc, ASA, ASIAChairman, age 60Sandy Murdoch has been Chairman ofComputershare since listing in 1994.His previous experience included fiveyears with merchant bank Chase NBAGroup Limited in corporate finance andlending and twelve years as the ChiefExecutive Officer of Linfox Transport Group.Sandy has an enthusiasm for thecompany that is evident through hisinvolvement with senior executives andstaff throughout the world. He is anactive participant in senior executivemeetings, and his wealth of knowledgeand leadership skills are highly valued.Sandy is also chairman of ERG Limited,CPI Group Limited and Q-Vis Limited.

Christopher John MorrisManaging Director, age 53Chris Morris became Managing Director of Computershare in 1990, having been a founding member since the company’sestablishment in 1978. Chris has extensiveknowledge of the securities industry andits user requirements from both a nationaland international perspective. He hasapplied this knowledge in constructing and executing his vision for Computershare,and this is reflected in his successfulmanagement from its early formativestages through the substantial growth in recent years.

Peter John Griffin B.Comm (Melb), ASIADeputy Chairman, age 61Peter Griffin has been a member of theBoard since 1994. Peter has had over 35years experience in investment banking,both as a founding partner of one of thesenior Australian stockbroking firms andas Chief Executive of one of the leadinginvestment groups in Australia. Peter isan active and involved member of thecompany, where he regularly attends andparticipates in senior executive meetings.His background, experience andunderstanding of international marketsare highly valued both at board level andwithin the senior management of Computershare. Peter also serves on the board of JustJeans Group Limited and Grand HotelCompany Ltd and is Director of N M Rothschild Australia Holdings PtyLimited group of companies.

Penelope Jane Maclagan BSc (Hons), DipEdExecutive Director, age 49Penny Maclagan was appointed to the board as an executive director in May 1995.Throughout her career with ComputersharePenny has been involved with all aspectsof technology support and development.Her detailed understanding of ourtechnology and her sharp business skillsand understanding of the securitiesindustry, combine into a prodigious forcethat is used to the benefit of ourcompany. In her role as ManagingDirector of Computershare TechnologyServices, Penny is responsible forplanning, developing and executingtechnology across the world in support of our global strategy.

Anthony Norman Wales FCA, FCISFinance Director, age 57Tony has been an Executive Directorsince 1990 and prior to that was aNon-Executive Director.In his role as Finance Director, Tony hasplayed a pivotal role in managing thecompany’s expansion from its days as a small Australian provider of bureauservices to one of Australia’s largest andmost successful technology companies,spread throughout eight countries.Tony has a detailed understanding of the industry and, in his time as FinanceDirector, has played a major role innegotiations and in the due diligenceprocess for all our major acquisitionsthroughout the period.

Mark Edward Elliott LLB, B.Comm (Melb), ASIAExecutive Director, age 39Mark Elliott joined Computershare in 1999 and was appointed as an ExecutiveDirector to fill a casual vacancy on 5 January 2001. Mark continues with his responsibilities as the Chief LegalCounsel for the Computershare Group of Companies. He was previously a Partner at theinternational law firm, Minter Ellison, and has practised in the corporate and securities law area throughout his professional career. He first became actively involved inComputershare when he co-ordinated the float of Computershare on theAustralian Stock Exchange in 1994. Mark co-ordinates the internal and external legal resources and riskmanagement of Computershareworldwide.

29

Board of Directors (L-R) Tony Wales, Penny Maclagan, Mark Elliott, Chris Morris, Sandy Murdoch and Peter Griffin

30

Divisional Heads and Global Principals

COMPUTERSHARE LIMITED

Corporate

Finance

Darryl CorneyGlobal

Marketing

Michael GardnerGlobal

Global Services Group

Dudley ChamberlainAustralia

Paul ConnNorth America

Stuart CrosbyChris HolleyoakUnited Kingdom

Share Registry and Transfer Agency

Hamish Gidley-Baird Australia

David LeeHong Kong

Steve RothbloomUnited States of America

Mike SmithNew Zealand

Ed StockdaleUnited Kingdom

Frik VermaakSouth Africa

Russ WaterhouseCanada

Trevor WatkinsIreland

Computershare Technology Services

Carol CloughAustralia

Martyn DrakeUnited Kingdom

Greg ChrispStuart IrvingNorth America

Markets Technology Group

Peter JessupGlobal

Web Group

David SmithGlobal

Computershare Analytics

Ian MathesonGlobal

Nick DawsonUnited Kingdom

Neal NemeroffUnited States of America

Computershare Document Services

Martin GarnerUnited Kingdom

Andrew HeardUnited States of America

Gary HunterMelbourne

David HynesCanada

Wayne NewlingSydney

Computershare Plan Managers

Barbara HallNorth America

Geoff PriceAustralia

Graham StaplesUnited Kingdom

Concise Financial ReportTable of contents

Corporate GovernanceStatement 32

Directors’ Report 34

Statement of Financial Performance 38

Statement of Financial Position 39

Statement of Cash Flows 41

Notes to the FinancialStatements 42

Directors’ Declaration 50

Independent Audit report 51

Office Locations 52

Glossary 55

Shareholder information 56

Corporate directory 57

Financial calendar

30 August 2001Announcement ofresult for the company’s2001 financial year

12 SeptemberBooks close for final dividend

28 SeptemberPayment of final dividend

10 October Mailing of Annual Report

8 NovemberAnnual General Meeting –Melbourne

27 February 2002Announcement of resultfor the half year ending31 December 2001

31

The 2001 Concise Financial Report has been derived from Computershare Limited’sFinancial Report 2001. The financial statements included in the Concise FinancialReport cannot be expected to provide as full an understanding of ComputershareLimited’s performance, financial position and financial and investing activitiesas provided by the Financial Report 2001.

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The Board of Directors is responsible for setting thestrategic direction of Computershare and ensuringit is properly managed and continuously improvesits performance so as to protect and enhanceshareholders’ interests. The Board keeps its ownprocesses under review and aims to achieve globalbest practice in matters of corporate governance.To assist in the execution of its responsibilities, theBoard has established a number of Board Committeesand a framework for the management of theCompany.

The Board

The Company presently has three non-executivedirectors, which includes the chairman, and threeexecutive directors, ensuring independence andobjectivity. Details of each present member of theBoard and their shareholdings are disclosed in theDirectors’ Report.

Board Committees

The Board has created a number of committeesincluding an Audit Committee, NominationsCommittee and a Remuneration Committee. It is theboard’s policy that committees of the Board dealingwith corporate governance matters should be chairedby a non-executive director and have at least amajority of the members being non-executivedirectors. Any director or committee of the Board isentitled to obtain independent professional or otheradvice at the cost of the Company, unless the Boarddetermines otherwise, and is entitled to obtain suchresources and information from the Company,including direct access to employees of and advisersto the Company, as they may require.

Audit Committee

The principal functions of the Audit Committeeinclude reviewing and making recommendations tothe Board and assisting it in the discharge of itsresponsibilities in respect of compliance withstatutory responsibilities relating to accounting policyand disclosure. It is responsible for assessing theadequacy of accounting, financial and operatingcontrols, reviewing the performance of the externalauditors and examining their evaluation of internalcontrols and management’s response.

The audit committee is chaired by Tony Wales andhas two other members: Sandy Murdoch and PeterGriffin. The managing director and the externalauditors are invited to Audit Committee meetings atthe discretion of the committee. The committeemeets twice each year and on other occasions wherecircumstances require.

Nomination Committee

The composition of the Board is reviewed annually bythe Nominations Committee to ensure that the Boardhas the appropriate expertise and experience. Whena vacancy exists or where it is considered that theBoard would benefit from the services of a newdirector with particular skills the committee selectsa panel of candidates. The Board then appoints themost suitable candidate who must stand for election at the general meeting of shareholders. The Nominations Committee is chaired by SandyMurdoch and has two other members, being PeterGriffin and Tony Wales.

Remuneration Committee

The Board has a Sub Committee comprised of non-executive directors Sandy Murdoch, Peter Griffinand Tony Wales.

The senior executive management of the Company,comprising the founders and major shareholders,have specifically expressed the view that theirremuneration should take some account of thesignificant equity holding they have in the Company.With this background, the sub committee has allowedremuneration for the personnel to be retained at arate below market level and at a level that does notfully recognise their significant contribution to theCompany.

As a policy, the Company seeks to remunerate staffin line with market conditions and reflective of theircontribution. The Board is very keen to have as manyemployees as possible with an equity holding in theCompany. Many staff have been granted options overshares in the Company at various stages and the Boardis keen to see the practice continue. It closely linksthe employees’ success with the company’s success.

The directors believe that a significant contributingfactor in the success of the Company is the wideshareholding of staff facilitated by the option plan.

Market Disclosure Policy

The Company has a market disclosure policy. Theprimary objective of the policy is to ensure that pricesensitive information is communicated to theinvestment community in a uniform manner and thatmaterial information is not disclosed inadvertently.Darryl Corney has been appointed the disclosureofficer and is required to collate and, whereappropriate, disclose share price sensitiveinformation.

Corporate Governance Statement

COMPUTERSHARE LIMITED AND ITS CONTROLLED ENTITIES CONCISE FINANCIAL REPORT 2001

33

Equity Participation byNon-Executive Directors

The Board encourages non-executive directors to ownshares in the Company.

Annual Review

It is the Board’s policy that the Board should at leastannually review the performance of the Board, theCompany and management, and the allocation of thework of the Company between the Board andmanagement.

Conflicts of Interest

In the event that a potential conflict of interest mayarise, involved directors must withdraw from alldeliberations concerning the matter. They are notpermitted to exercise any influence over other Boardmembers or receive relevant Board papers

Ethical Standards

The Company recognises the need for directors andemployees to observe the highest standards ofbehaviour and business ethics when engaging incorporate activity.

The Company seeks to maintain its reputation forintegrity. The Board has adopted a code of ethics thatsets out the principles and standards with which allofficers and employees are expected to comply in theperformance of their respective functions. A keyelement of that code is the requirement that officersand employees act in accordance with the law andwith the highest standards of propriety. The code andits implementation are to be reviewed each year. Acopy of the code of ethics is available to shareholderson request.

Identification and Managementof Significant Business Risk

The Board and senior management identifies thesignificant areas of potential business and legal risk.The identification, monitoring and, where appropriate,the reduction of significant risk to the Company arehighlighted in the bi-annual business plan presentedto the Board by the managing director. The Boardreviews and approves the parameters under whichsuch risks will be managed before adopting thebusiness plan.

Code of Practice for Buying and SellingComputershare Securities

The freedom of directors and executives to deal inComputershare’s securities is restricted in a numberof ways – by statute, by common law and by therequirements of the Listing Rules of the ASX. In

addition to these restrictions, the Code of Practice isthat directors and executives of the Computersharegroup may only buy or sell Computershare shares,after notifying the Chairman, in the four weeksimmediately following Computershare’s half year andfull year financial results announcements and, ifrelevant, any Annual General Meeting announcement.

Shareholder Relations

The Computershare shareholders are responsible forvoting on the appointment of directors. The Boardseeks to inform shareholders of all majordevelopments affecting the Company by:• Making available all periodic financial reports and

announcements of material developments on theComputershare website – www.computershare.com

• Submitting proposed major changes in theCompany’s affairs to a vote of shareholders,as required by the Corporations Law

• An Annual General Meeting is held each year toenable shareholders to receive reports by the Boardof the Company’s activities. All shareholders whoare unable to attend these meetings areencouraged to communicate issues or askquestions by writing to the Company.

34

The Board of Directors of Computershare Limited haspleasure in submitting its report in respect of thefinancial year ended 30 June 2001.

Directors

The names of the directors in office at the date of thisreport are:• A.S. Murdoch (Chairman)• C.J. Morris (Managing Director)• M.E. Elliott• P.J. Griffin• P.J. Maclagan• A.N. Wales

The qualifications, experience and responsibilities ofdirectors are outlined on page 28 of the Report toShareholders – 2001.

Directors’ Interests

At the date of this report, the direct and indirectinterests of the directors in the shares of thecompany are:

Name Number of options Number of Ordinary Shares

M.E. Elliott 3,000,000 1,000,000

P.J. Griffin – 2,250,000

P.J. Maclagan – 16,245,525

C.J. Morris – 53,322,542

A.S. Murdoch – 609,800

A.N. Wales – 32,592,384

Directors’ Meetings

The number of meetings of the Board of Directors(and of Board committees) and the number ofmeetings attended by each of the directors during thefinancial year are:

Audit Nomination RemunerationDirectors’ Committee Committee CommitteeMeetings Meetings Meetings Meetings A B A B A B A B

A.S. Murdoch 8 8 4 4 1 1 1 1

M.E. Elliott 4 4 – – – – – –

P.J. Griffin 8 8 4 4 1 1 1 1

P.J. Maclagan 8 8 – – – – – –

C.J. Morris 8 8 – – – – – –

J.P. Shergold 7 7 3 3 1 1 1 1

A.N. Wales 7 8 3 4 – – – –

A Number of meetings attendedB Number of meetings held during the time

the director held office during the year.

Principal Activities

The principal activities of the consolidated entityduring the course of the financial year were theoperation of a computer bureau, operation of shareregistries, including the administration of employeeshare and option plans, and the provision of softwarespecialising in share registry, financial and stockmarkets. The Group also offers corporate trustservices and acts as trustee for clients’ debt offeringsin certain markets.

Computershare is a registered securities transferagent. In addition, certain subsidiaries are Trustcompanies who‘s charters include the power toaccept deposits primarily acting as an escrow andpaying agent on behalf of customers. In certainjurisdictions the Group is subject to regulation bycertain federal and state agencies and undergoesperiodic examinations by those regulatory agencies.

There were no other significant changes in the nature ofthe activities of the consolidated entity during the year.

Consolidated Profit

The consolidated profit of the consolidated entityfor the financial year was $38,734,474 after incometax and outside equity interests. This represents a 1% improvement on the 2000 result of $38,192,143.Consolidated profit of the consolidated entity forthe financial year excluding non recurring items was$54,915,845 after income tax and outside equityinterests. This represents a 44% improvement onthe 2000 results of $38,192,143.

Dividends

The following dividends of the consolidated entityhave been paid, declared or recommended sincethe end of the preceding financial year:• A final ordinary dividend of half a cent per share

amounting to $2,688,067 fully franked in respectof the year ended 30 June 2000 was paid on29 September 2000.

• An interim ordinary dividend of half a cent per shareamounting to $2,717,635 fully franked in respect of the year ended 30 June 2001 was paid on 28 March 2001.

• A final dividend recommended by the directors of the company in respect of the year ended 30 June 2001, to be paid on 28 September 2001,is an ordinary dividend of half a cent per shareamounting to $2,738,062 fully franked.

Directors’ Report


35

Review of Operations

The group has recorded an operating profit beforetax and non-recurring items of $90.9m for the yearended 30 June 2001 (2000: $62.5m). The result wasachieved on revenue of $754.3m (2000: $408.4m).Before non-recurring items the group’s earningsbefore interest, tax, depreciation and amortisation(EBITDA) increased by 65% to $151.6m (2000:$91.7m). A comparison to the prior year demonstratesthe continuing growth of the business in the past12 months:

A major focus across the business was to increaseoperating efficiencies as the revenue base grew.The following cost control initiatives were undertakenin 2001:• A reduction in US staff numbers representing

annual savings of A$5m and expenditure of A$3.7mto enable our US print & mail facility to reduce out-sourced work and take on external business.The second half saw the US return a positiveEBITDA result with the margins expected to growas a result of the initiatives undertaken.

• Set up of a state of the art centralised call centre inMelbourne at a cost of A$1.3m, resulting in savingsin state-based administration costs in future years.

• Ongoing technology development in preparation ofthe roll out of SCRIP software in Hong Kong,Canada and the United States. In North Americaapproximately A$30m per annum is currentlyspent on third party system providers. Theimplementation of SCRIP in this marketplacewill result in significant cost savings.

• Changes in the South African market throughthe introduction of STRATE have resulted in staffreductions and an overhaul of the business to meetthe challenges of a new electronic settlementsystem.

Significant Changes in the State of Affairs

Significant changes in the affairs of the consolidatedentity during the financial year, which are reported inthe consolidated financial statements were:• Acquired the Employee Stock Purchase Plan (ESPP)

administration business from Merrill Lynch andentered into a strategic alliance with Merrill Lynchto facilitate expansion of Computershare’s servicecapabilities in the USA.

• Increased interest in Central Registration HongKong from 50% to 100%. This business servicescompanies representing 60% of marketcapitalisation in Hong Kong and continues to deliverexcellent results.

• Acquired RPC Plan Managers in Australia as partof the employee plan business global strategy.

• Secured a strategic partner in South Africa, UnionAlliance Holdings Ltd, with this group acquiringa 15% interest in Computershare South Africa.This transaction positions Computershare as a

preferred provider of registry services in the upcom-ing privatisation process in South Africa, evidencedby our recent appointment by Telkom SA.

• Signed our largest ASTS transaction with ICAP plc(formerly Garban Intercapital).

• Agreement with Pacific Exchange (PCX) to developan electronic, screen based trading system forequity options and other derivatives. Developmentcosts of approximately $2.3m related to this projecthave been expensed in the 2001 financial year.

• The move to 100% interest in the Ci Group (nowcalled Computershare Document Services ‘CDS’).CDS is a major service provider to Computershareregistry businesses and is a leading provider ofelectronic documents to the Australian and UKmarkets with services ranging from laser printing,intelligent mailing, scanning, communication designand electronic delivery.

• City Watch, the United Kingdom’s leading providerof ownership data for UK equities, was purchasedfrom Reuters as part of Computershare‘s globalexpansion of the Analytics business.

• Acquired Financial Data Concepts (FDC) in the USAto complete Analytics’ global coverage strategy.

In the opinion of the directors there were no othersignificant changes in the affairs of the consolidatedentity during the financial year under review that arenot otherwise disclosed in this report or theconsolidated accounts.

Significant Events After Year End

No matter or circumstance has arisen since the endof the financial year which is not otherwise dealt within this report or in the consolidated financialstatements, that has significantly affected or maysignificantly affect the operations of the consolidatedentity, the results of those operations or the state ofaffairs of the consolidated entity in subsequentfinancial years.

Likely Developments And Future Results

The directors remain confident of the consolidatedentity’s immediate future. The consolidated entity willcontinue to pursue its policy of increasing its marketshare through expansion into local and overseasmarkets during the next financial year. Further detailscan be found in the press release which accompaniedthe ASX Appendix 4B announcement.

Share Options

Details of options granted to directors or relevant officers as part of their remuneration are set out in thesection of this report headed Directors’ and Officers’ Remuneration. Details of shares under option, or issuedduring or since the end of the financial year due to the exercise of an option, are set out in Note 19 to thefinancial statements and form part of this report. The names of the employees who currently hold options areentered in the Register of Options kept by the company pursuant to section 170 of the Corporations Act 2001.The register may be inspected free of charge.

Directors’ and Officers’ Remuneration

Remuneration of directors and senior executives of the company is established by the RemunerationCommittee. Remuneration is determined as part of an annual performance review, having regard to marketfactors and a performance evaluation process. For executive directors and officers, remuneration packagesgenerally comprise salary and superannuation. Executives are also provided with longer-term incentivesthrough the employee share ownership and option schemes, which act to align the executives’ actions with theinterests of the shareholders.

The Board meets annually to review its own performance. The senior executive directors are responsible forevaluating the performance of the Chief Executive, who in turn evaluates the performance of all other seniorexecutives.

Details of remuneration provided to directors and the five most senior executive officers of the consolidatedentity for the year ended 30 June 2001 are as follows:

Base Directors Other OptionsSalary Fee Superannuation Bonus Benefits Total granted during

$ $ $ $ $ $ the year

DirectorsA.S. Murdoch – 105,000 10,500 – – 115,500 –

M.E.Elliott* 358,000 – 35,800 – 62,354 456,154 –

P.J. Griffin – 82,501 8,250 – – 90,751 –

P.J. Maclagan 323,000 – 45,500 – – 368,500 –

C.J. Morris 385,000 – 38,500 – – 423,500 –

J.P. Shergold – 62,468 6,247 – – 68,715 –

A.N. Wales 335,000 – 33,500 – 11,739 380,239 –

OfficersS. Rothbloom 557,932 – 5,576 204,575 144,170 912,253 –

R. Waterhouse 557,932 – – 223,173 – 781,105 –

J. Leiper 575,056 – 23,752 – – 598,808

E. Stockdale 400,727 – – 16,327 27,393 444,447 –

A.H. Gidley-Baird 300,194 – 24,016 – 11,739 335,949 –

* full year remuneration

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Directors’ Report cont.


37

Indemnification of Officers

During the period, the company paid an insurance premium to insure directors and officers of the companyand its controlled entities against liability. The directors of the company are as detailed earlier in the report andthe contract also covers all executive officers and directors and executive officers of controlled entities.

Disclosure of the amount of insurance premium payable and a summary of the nature of liabilities coveredby the insurance contract is prohibited by a confidentiality clause in the contract.

Rounding of Amounts

The parent entity is a company of the kind specified in the Australian Securities and Investments Commissionclass order 98/0100. In accordance with the class order, amounts in the consolidated financial statements andthe Directors’ report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.

Signed in accordance with a resolution of the directors.

A. S. Murdoch C. J. MorrisChairman Director18 September 2001

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Consolidated Parent entity

2001 2000 2001 2000$000 $000 $000 $000

Revenues:Sales revenue 724,613 394,864 2,135 40,051

Other revenues from ordinary activities 29,705 13,500 29,703 40,829

Total revenue 754,318 408,364 31,838 80,880

Expenses:Direct services 545,219 276,482 3,159 27,131

Technology development 41,591 30,779 – 5,718

Corporate services 11,731 9,976 11,731 9,976

Depreciation and amortisation 46,318 25,997 2,257 3,376

Borrowing costs 14,402 3,193 13,302 1,288

Net foreign exchange loss on hedges – – 8,560 776

Net foreign exchange loss on other financial instruments 397 – 397 –

Write down investment in E*Trade (‘ETR’) 21,264 – 21,264 –

Total expenses 680,922 346,427 60,670 48,265

Share of net profit of associates accounted for using the equity method 2,383 571 – –

Profit/(loss) from ordinary activities before income tax expense 75,779 62,508 (28,832) 32,615

Income tax (expense)/benefit relating to ordinary activities (33,695) (21,906) 2,402 (8,024)

Net profit/(loss) 42,084 40,602 (26,430) 24,591

Net profit/(loss) attributable to outside equity interests 3,350 2,409 – –

Net profit/(loss) attributable to members of the parent entity 38,734 38,193 (26,430) 24,591

Net exchange difference on translation of financial report of self-sustaining foreign operations 29,599 1,650 – –

Total revenues, expenses and valuation adjustments attributable to members of the parent entity recognised directly in equity 29,599 1,650 – –

Total changes in equity other than those resulting from transactions with owners as owners 68,333 39,843 (26,430) 24,591

Basic earnings per share (cents per share) 7.2 7.5

Diluted earnings per share (cents per share) 7.2 7.5

This statement should be read in conjunction with discussion and analysis included in the Directors’ Report


Statement of Financial Performancefor the year ended 30 June 2001

39


2001 2000 2001 2000$000 $000 $000 $000

Current AssetsCash assets 66,276 47,764 9,497 19,215

Receivables 160,927 121,445 1,456 7,670

Other financial assets 152 12 – –

Inventories 5,218 3,485 – –

Other 11,507 9,804 1,445 604

Total Current Assets 244,080 182,510 12,398 27,489

Non-current AssetsReceivables 709 74 389,366 190,485

Investments accounted for using equity method – 38,454 – –

Other financial assets 8,096 28,065 210,637 209,590

Property, plant & equipment 118,878 90,765 5,389 9,735

Deferred tax assets 27,615 10,526 11,277 1,248

Intangibles – goodwill 502,473 308,864 – –

Intangibles – other 2,143 187 344 190

Total Non-Current Assets 659,914 476,935 617,013 411,248

Total Assets 903,994 659,445 629,411 438,737

Current LiabilitiesPayables 98,316 76,480 33,512 4,935

Interest bearing liabilities 2,486 2,798 1,863 1,372

Tax liabilities 38,442 18,742 3,592 5,211

Other provisions 25,894 25,237 3,542 3,242

Other – deferred settlement on acquisition 22,156 59,822 – –

Total Current Liabilities 187,294 183,079 42,509 14,760

Non-current LiabilitiesInterest bearing liabilities 230,130 85,691 228,419 62,967

Deferred tax liabilities 6,699 1,534 3,139 377

Other provisions 6,345 3,140 263 228

Other – deferred settlement on acquisition 624 – – –

Total Non-Current Liabilities 243,798 90,365 231,821 63,572

Total Liabilities 431,092 273,444 274,330 78,332

Net Assets 472,902 386,001 355,081 360,405

Statement of Financial Position as at 30 June 2001

40


2001 2000 2001 2000$000 $000 $000 $000

EquityContributed equity 354,603 328,022 354,097 327,516

Reserves 30,778 1,411 545 545

Retained profits 83,993 50,733 439 32,344

Parent entity interest (a) 469,374 380,166 355,081 360,405

Outside equity interest (a) 3,528 5,835 – –

Total Equity 472,902 386,001 355,081 360,405

Members of the Parent entity Outside Equity Interests

2001 2000 2001 2000$000 $000 $000 $000

(a) Interest in the equity of the consolidated entity:Contributed equity 354,603 328,022 – 1,827

Reserves 30,778 1,411 (106) (75)

Retained profits 83,993 50,733 3,634 4,083

Total Interest in Equity 469,374 380,166 3,528 5,835


Statement of Financial Position cont.as at 30 June 2001


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2001 2000 2001 2000$000 $000 $000 $000

Cash Flows From Operating Activities Receipts from customers 713,325 365,201 19,266 39,135

Payments to suppliers and employees (603,063) (293,403) (12,419) (20,510)

Dividends received 3,603 2,173 – 10,667

Interest paid and other costs of finance (13,598) (3,090) (13,056) (1,169)

Interest received 3,850 4,433 626 2,719

Australian net GST paid (5,541) – 1,821 –

Income taxes paid (30,297) (20,207) (5,222) (8,035)

Net operating cash flows 68,279 55,107 (8,984) 22,807

Cash Flows From Investing Activities Purchase of controlled entities (59,294) (183,276) – –

Purchase of businesses (40,362) – – –

Investment in subsidiaries – – (19,421) (124,014)

Investment in associated entities – (38,936) – –

Investment in listed entities (2,576) (4,728) (2,576) (4,469)

Investment in unlisted entities (1,823) (1,147) – –

Payments for property, plant and equipment (43,301) (56,087) (223) (1,808)

Security deposit on premises (1,200) – (1,200) –

Loans granted to other entities (264) (829) – –

Loans granted to controlled entities – – (148,980) (117,420)

Loan repayments received 23 – – –

Proceeds from sale of property, plant and equipment 1,994 266 3,159 6

Proceeds from sale of property, plant and equipment to related entity – – 4 –

Proceeds from sale of SUMMIT 6,653 – – –

Proceeds from sale of investments 3,685 2,868 – –

Other – (965) – –

Net investing cash flows (136,465) (282,834) (169,237) (247,705)

Cash Flows From Financing ActivitiesProceeds from issues of shares 8,581 208,265 8,581 208,265

Proceeds from borrowings 215,861 82,982 215,861 62,000

Repayment of borrowings (72,266) (38,423) (50,500) (28,700)

Loans from controlled entities – – 1,107 777

Dividends paid (5,406) (5,038) (5,406) (5,038)

Repayment of finance leases (2,630) (2,864) (1,140) (1,429)

Other – settlement of deferred acquisition – Canada (59,822) – – –

Other (518) 815 – –

Net financing cash flows 83,800 245,737 168,503 235,875

Net increase/(decrease) in cash held 15,614 18,010 (9,718) 10,977

Cash at the beginning of the financial year 47,533 29,168 19,215 8,238

Exchange rate variations on foreign cash balances 2,306 355 – –

Cash at the end of the financial year 65,453 47,533 9,497 19,215


Statement of Cash Flowsfor the year ended 30 June 2001

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1. Statement of SignificantAccounting Policies

Basis of accountingThe financial statements have been prepared asa general purpose financial report which complieswith the requirements of the Corporations Act 2001,Australian Accounting Standards, other authoritativepronouncements of the Australian AccountingStandards Board and Urgent Issues Group ConsensusViews. The accounting policies used are consistentwith those adopted in the previous year. The directorshave elected under Section 334(5) of the CorporationsAct (2001) to apply Accounting Standard AASB 1041 – ‘Revaluation of Non-Current Assets (Revised2001)’ for the financial year ended 30 June 2001. The financial statements have also been prepared in accordance with the historical cost convention anddo not take account of changes in either the generalpurchasing power of the dollar or in the prices ofspecific assets except for certain assets which, where noted, are at valuation.

Principles of consolidationThe consolidated financial statements include thefinancial statements of the parent entity,Computershare Limited, and its controlled entities,referred to collectively throughout these financialstatements as the ‘Consolidated entity’.

All inter-entity balances and transactions have beeneliminated. Where an entity either began or ceased tobe controlled during the year, the results are includedonly from the date control commenced or up to thedate control ceased.

Financial statements of foreign controlled entitiespresented in accordance with overseas accountingprinciples are, for consolidation purposes, adjustedto comply with group policy and generally acceptedaccounting principles in Australia.

Foreign currency transactionsForeign currency transactions are converted toAustralian dollars at exchange rates approximatingthose in effect at the date of each transaction.Amounts payable and receivable in foreign currenciesat balance date are converted to Australian dollars atthe average of the buy and sell rates available on theclose of business at balance date. Revaluation gainsand losses are brought to account as they occur. The financial statements of all foreign operations aretranslated using the current rate method as they areconsidered self-sustaining.

Exchange differences relating to monetary items areincluded in the Statement of Financial Performance,as exchange gains or losses, in the period whenthe exchange rates change. Where the exchangedifference relates to hedging part of the netinvestment in a self-sustaining foreign operationthe exchange difference is transferred to the foreigncurrency translation reserve on consolidation.

Income taxThe financial statements apply the principles of tax-effect accounting. The income tax expense in theStatement of Financial Performance represents tax onthe pre-tax accounting profit adjusted for income andexpenses never to be assessed or allowed for tax-ation purposes. The provision for deferred incometax liability and the future income tax benefit includethe tax effect of differences between income andexpense items recognised in different accountingperiods for book and tax purposes, calculated at the taxrates expected to apply when the differences reverse.

The benefit arising from estimated carry forward tax losses is recorded as a future income tax benefitonly where realisation of such benefit is consideredto be virtually certain. The benefit arising from timingdifferences is recorded as a future income tax benefit where realisation of such benefit is beyondreasonable doubt.

No provision is made for withholding tax on unremittedearnings of applicable foreign incorporated controlledentities as there is currently no intention to remitthese earnings to the parent entity.

InventoriesInventories are valued at the lower of cost andnet realisable value. Cost is assigned on a first-infirst-out basis.

Prepaid inventory is recorded at cost and is boughton behalf of the Company’s clients. As the inventoryis used, the costs are billed.

Recoverable amount of non-current assetsAll non-current assets are reviewed at least annuallyto determine whether their carrying amounts requirewrite down to recoverable amount. Recoverableamounts for all non-current assets are determinedusing net cash flows that have not been discountedto present values.

Property, plant & equipmentThe amounts at which property, plant and equipmentare stated in these financial statements are regularlyreviewed. Where revaluations are made they arebased on reports by independent valuers.

The gain or loss on disposal of revalued assets iscalculated as the difference between the carryingamount of the asset at the time of disposal and theproceeds on disposal and is included in the profit andloss of the consolidated entity in the year of disposal.Any related revaluation increment in the assetrevaluation reserve at the time of disposal istransferred to retained earnings.

DepreciationItems of property, plant and equipment, excludingfreehold land and leasehold plant and equipment,are depreciated on a straight line basis at ratescalculated to allocate their cost or valuation, less

Notes to the Financial Statementsfor the year ended 30 June 2001


43

estimated residual value, against revenue over theirestimated useful life. Additions and disposals aredepreciated for the period held in the year ofacquisition or disposal. Depreciation expense hasbeen determined based on the following rates ofdepreciation – Buildings (2.5% per annum), Plant andEquipment (10% to 50% per annum), Fixtures andFittings (13% to 50% per annum) and Motor Vehicles(15% to 40% per annum).

InvestmentsControlled entitiesThe investments in the controlled entities are carriedin the company’s financial statements at the lower ofcost and recoverable amount. Dividends are broughtto account in the Statement of Financial Performancewhen they are proposed by the controlled entities.

Associated entitiesInterests in material associated entities are brought toaccount using the equity method. Under this methodthe investment in associates is initially recognised atits cost of acquisition and its carrying value issubsequently adjusted for increases or decreases inthe investor’s share of post-acquisition results andreserves of the associate. The investment in associatedentities is decreased by the amount of dividendsreceived or receivable. Investments in associates arecarried at the lower of cost and recoverable amount inthe accounts of the parent entity.

Other financial assetsAll other investments are carried in the accounts atthe lower of cost or recoverable amount. Dividendincome is brought to account when declared.

LeasesAssets acquired under finance leases are capitalisedand amortised over the life of the relevant lease, orwhere ownership is likely to be obtained on expirationof the lease, over the life of the asset. Lease paymentsare allocated between interest expense and reductionin the lease liability.

Operating lease assets are not capitalised and rentalpayments are charged as against operating profit inthe period in which they are incurred.

Software development costsInternally developed software and related costs areexpensed in the year in which they are incurred.

GoodwillOn acquisition of a controlled entity, the differencebetween the purchase consideration plus incidentalexpenses and the fair value of identifiable net assetsacquired is initially brought to account as goodwill ordiscount on acquisition.

In establishing the fair value of the identifiable netassets acquired, a liability for restructuring costs isonly recognised at the date of acquisition where thereis a demonstrable commitment and a detailed plan.

The liability is only recognised where there is little orno discretion to avoid payments to other parties insettlement of costs of the restructuring and a reliableestimate of the amount of the liability as at the dateof acquisition can be made.

Revisions in the estimated amount of restructuringcosts which are recognised as a liability as at the dateof acquisition are accounted for by adjusting theamount of the liability and the amount of goodwill.These adjustments are made in the reporting period in which the revision in the estimate occurs.Consequential adjustments to reflect the cumulativeeffect of revisions on the amount of amortisation ofgoodwill are recognised in the Statement of FinancialPerformance in the reporting period in which therevision in estimate occurs.

Purchased goodwill is amortised on a straight linebasis over the period during which the benefits areexpected to arise. These periods have beenindividually assessed on an entity by entity basis andvary between 5 to 20 years from the date of gainingcontrol. The unamortised balance of goodwill isreviewed at each balance date and charged to profitand loss to the extent that applicable future benefitsare no longer probable.

Employee entitlementsProvision has been made in the financial statementsfor benefits accruing to employees in relation toannual leave, long service leave, workers compens-ation and vested sick leave. No provision is made fornon-vesting sick leave as the anticipated pattern offuture sick leave taken indicates that accumulatednon-vesting sick leave will never be paid.

All on-costs, including payroll tax, workers’ compen-sation premiums and fringe benefits tax are includedin the determination of provisions. Vested sick leave,annual leave and the current portion of long serviceleave are measured at their nominal amounts.

The non-current portion of the long service leaveprovision is measured at the present value ofestimated future cash flows, discounted by theinterest rate applicable to CommonwealthGovernment securities maturing in the period theliability is expected to fall due. A 4% per annum rateof increase in employee wage and salary rates wasassumed in the present value calculations.

Retirement benefitsContributory superannuation and pension plansexist to provide benefits for the consolidated entity’semployees and their dependents on retirement,disability or death. The plans are accumulation plans.The employee sponsors contribute to the plans atvarying rates of contribution depending on theemployee classification. The contributions madeto the funds by group entities are chargedagainst profits.

44

Employee share and option ownership schemesCertain employees are entitled to participate in shareand option ownership schemes. No remunerationexpense is recognised in respect of employee sharesand options issued.

Operating revenueSales revenue comprises registry and bureau revenue,sale of software licences and associateddevelopment, installation and maintenance fees (netof returns, discounts and allowances) and documentprocessing services. Registry and bureau revenueincludes all revenue earned on the provision of regularservices to customers, primarily fixed monthlymaintenance fees and transaction processing fees.Additionally, sales revenue includes all associatedrevenue earned from managing various clientcorporate actions, such as capital raisings,demutualisations and takeovers, which occurperiodically. Revenue derived from both sourcesof sales revenue includes variable margin incomeearned on administered funds, including Save AsYou Earn Schemes.

In relation to the recognition of any profits andlosses on the corporate actions which span reportingperiods, where they can be reliably measured,revenue and expenses arising from the project arerecognised in the Statement of Financial Performanceby reference to the stage of completion of the projectas at balance date.

Software licence sales and associated development,installation and maintenance fees are recognised inaccordance with written customer agreements soas to match revenue with expenses.

Other revenue includes interest income on short-termdeposits controlled by the economic entity, royaltiesand dividends received from other persons.

Insurance recoveriesThe consolidated entity recognises amountsreceivable under its insurance policies, net of anyrelevant excess amounts, upon indemnity beingacknowledged by the insurers.

Financial instruments included in equityOrdinary share capital bears no special terms orconditions affecting income or capital entitlementsof the shareholders.

Financial instruments included in liabilitiesLoans are recognised when issued at the amountof the net proceeds received, with any premium ordiscount on issue amortised over the period tomaturity. Interest is recognised as an expense onan effective yield basis.

Financial instruments included in assetsTrade debtors are initially recorded at the amountof the contracted sale proceeds.

Provision for doubtful debts is recognised to theextent that recovery of the outstanding receivablebalance is considered less than likely. Any provisionestablished is based on a review of all outstandingamounts at balance date.

Forward currency exchange contracts are initiallyrecognised as either an asset or liability, at an amountequal to the premium or discount on the forwardcurrency exchange contracts. The assets andliabilities recognised are subsequently remeasured byreference to exchange rates at balance date. The gainor loss on remeasurement is brought to account inthe Statement of Financial Performance unless thecontracts are entered to hedge anticipated futuretransactions, in which case the gain or loss isdeferred and included in the initial measurementof the anticipated item being hedged.

The premium or discount on the forward currencyexchange contracts is amortised over the periodof the contracts, unless the contracts are entered tohedge anticipated future transactions, in which casethe premium or discount is included in the initialmeasurement of anticipated items being hedged.

Bank deposits and loans are carried at cost. Interestrevenue is recognised on an effective yield basis.

Other investments, including equity interests in non-subsidiary, non-associated corporations are includedin investments at the lower of cost or recoverableamount. Dividend income is brought to account whendeclared.

Hedge accountingThe economic entity applies the principles of hedgeaccounting as set out in the relevant AustralianAccounting Standards and UIG pronouncements,using both interest rate and foreign currency swapsand options. To the extent that hedging instrumentsare required to be marked to market and becomeineffective as a hedge of the intended risk all gainsand losses are recognised immediately in theStatement of Financial Performance.

Restatement of Comparative InformationThe consolidated entity has adopted the presentationand disclosure requirements of Accounting StandardsAASB 1018 ‘Statement of Financial Performance’,AASB 1034 ‘Financial Report Presentation andDisclosure’ and AASB 1040 ‘Statement of FinancialPosition’ for the first time in the preparation of thisfinancial report. In accordance with the requirements of these Standards, comparative amounts have been reclassified in order to comply with the newpresentation format. The reclassification of comparativeamounts has not resulted in a change to the aggregate amount of current assets, non-currentassets, current liabilities, non-current liabilities orequity, or the net profit/loss of the company orconsolidated entity as reported in the prior yearfinancial report.


45


2001 2000 2001 2000$000 $000 $000 $000

2. Operating Profit

a) Profit from ordinary activities is after crediting the following revenues:Sales revenueRendering of services 724,613 394,864 2,135 40,051

Other revenuesNet foreign exchange gains 692 149 – –

Dividends received from:

other persons 214 420 – –

controlled entity – – – 10,667

Net gains on scheme administration 6,649 3,959 – –

Interest received from:

other persons 3,663 4,974 273 3,042

controlled entities – – 15,473 3,153

Rent received 4,598 2,000 – –

Licence fees received from controlled entities – – 4,780 1,742

Other fees received from controlled entities – – 5,993 500

Gross proceeds from the sale of:

Property, plant & equipment 1,970 266 4 6

Investments 3,689 – – –

SUMMIT (refer note 2(b)) 6,653 – – –

Non-current assets to controlled entities – – 3,159 –

Trust distribution from controlled entities – – – 21,582

Other revenue items in total 1,577 1,732 21 137

Total other revenues 29,705 13,500 29,703 40,829

754,318 408,364 31,838 80,880

Share of net results of associates 2,383 571 – –

Total revenues 756,701 408,935 31,838 80,880

Profit from ordinary activities is after charging the following expenses:

Depreciation and amortisationDepreciation of property, plant and equipment 18,131 14,656 268 1,950

Amortisation of:– Leased assets 1,295 1,748 967 1,349

– Leasehold improvements 874 42 16 16

– Establishment costs 5 85 – –

– Software development costs – 1,289 – –

– Premium on forward exchange contract 1,006 61 1,006 61

– Goodwill 25,007 8,116 – –

Total depreciation and amortisation 46,318 25,997 2,257 3,376

46


2001 2000 2001 2000$000 $000 $000 $000

Borrowing costsInterest paid

to other persons 11,630 2,242 10,931 665

on finance leases 433 622 173 265

to controlled entities – – 43 29

Exchange loss on refinancing of foreign currency loans 1,277 – 1,277 –

Loan facility fees 1,062 329 878 329

Total borrowing costs 14,402 3,193 13,302 1,288

Other operating expense itemsOperating lease rentals1 19,373 10,772 2,633 2,453

Provision for employee entitlements 4,360 1,394 265 463

Net charge to provision for doubtful trade debts 1,667 2,730 – 604

(Profit) on disposal of investments (427) – – –

Expense from sale of:Plant and equipment 1,630 703 – –

Plant and equipment to controlled entity – – 3,159 –

Investments 3,262 – – –

(Profit)/loss on sale of property, plant and equipment (340) 437 (4) (6)

1 Operating lease rentals includes contingent rentals of approximately $514,000.

b) Significant ItemsRevenues:Computershare Technology Services Pty. Limited sold the SUMMIT broker/client accounting system to WilcoInternational (a wholly owned subsidiary of Automatic Data Processing Inc.) for a net gain of $6,155,033 (after tax $4,062,324). Since the sale of SUMMIT to Wilco in February 2001, Computershare Limited has ceasedto be a significant technology provider to E*Trade Australia Limited (‘ETR’). As a consequence, the significanceof the Computershare Limited shareholding in ETR has shifted from being strategic to passive.

Expenses:As at 30 June 2001, Computershare Limited held 9,361,250 shares (12.67%) in the issued capital ETR. Thehistorical cost of the investment is approximately $26,880,423. As required by the Accounting Standards theBoard of Computershare Limited has reviewed the recoverable amount of its investment and concluded that awrite-down in the value of the investment was appropriate. The results for the year ended 30 June 2001 reflecta pre tax write-down of $21,263,673 (after tax $20,243,673). After this write-down the carrying value of theinvestment is now $5,616,750 at $0.60 per share.

In accordance with Australian Accounting Standards the write down of the investment in ETR has only beenpartially tax effected. Computershare believe that in future periods it will generate sufficient capital gains tooffset the write-down. However, at present, this is not virtually certain. In the event that gains are generated in future, the loss arising from the write-down will be tax effected and a favourable adjustment booked. In theresults for the year ended 30 June 2001, the additional tax expense incurred by not fully tax effecting the write-down is $6,208,000.


47


2001 2000 2001 2000$000 $000 $000 $000

3. Income Tax

The difference between income tax expense provided in the financial statements and the prima facie income tax expense is reconciled as follows:

Operating profit/(loss) 75,779 62,508 (28,832) 32,615

Prima facie income expense/(benefit) tax thereon at 34% (2000: at 36%) 25,765 22,503 (9,803) 11,741

Tax effect of permanent differences:– Amortisation of goodwill not deductible 4,084 1,967 – –

– Research and development allowance (823) (449) – (178)

– Depreciation not deductible 311 354 7 7

– Non deductible provisions 314 561 – –

– Benefit of timing difference on ETR not booked 6,208 – 6,208 –

– Recoupment of tax losses not previously booked (106) (1,893) – –

– Benefit of tax losses not brought to account 61 897 – –

– Foreign tax credits from controlled entity – – – (191)

– Franked dividend from controlled entity – – – (3,840)

– Other 881 527 184 151

Prior year tax (over)/under provided (752) (510) 31 241

Restatement of deferred tax balances due to income tax rate changes 303 292 971 93

Effect of different tax rates on overseas income: – Canada 1,784 444 – –

– Other (4,335) (2,787) – –

Income tax expense/(benefit) on operating profit/(loss) 33,695 21,906 (2,402) 8,024

As at 30 June 2001, companies within the consolidated entity had estimated unconfirmed unrecouped incometax losses of $3,135,000 (2000: $6,091,000) available to offset against future years’ taxable income. The benefitof these losses has not been brought to account as realisation is not virtually certain. The benefit will only beobtained if:

a) the companies derive future assessable income of a nature and of an amount sufficient to enable thebenefits from the deductions for the losses to be realised;

b) the companies continue to comply with the conditions for deductibility imposed by law; andc) no changes in the taxation legislation adversely affect the companies in realising the benefit from the

deductions for the losses.

48


2001 2000 2001 2000$000 $000 $000 $000

4. Retained Profits And Dividends

Retained profitsRetained profits at the beginning of the financial year 53,230 17,960 32,344 13,085

Dividends provided for or paid (5,475) (5,332) (5,475) (5,332)

Net profit 42,084 40,602 (26,430) 24,591

Adjustment resulting from acquisition of outside interests (2,212) – – –

Retained profits at the end of the financial year 87,627 53,230 439 32,344

EquityTotal equity at the beginning of the financial year 386,001 135,733 360,405 131,881

Total changes in equity recognised in the Statement of Financial Performance 68,333 39,843 (26,430) 24,591

Contributed equity 26,581 209,771 26,581 209,265

Dividends (5,475) (5,332) (5,475) (5,332)

Total changes in outside equity interests (2,538) 5,986 – –

Total equity at the reporting date 472,902 386,001 355,081 360,405

Dividend franking accountRetained profits and reserves that could be distributed as dividends and franked out of existing franking credits or out of franking credits arising from income tax payable: at 30% (2000: at 34%) 84,827 53,130 37,931 32,747

DividendsDividends paid during the financial year in respect of the previous year – fully franked 2,688 2,377 2,688 2,377

Dividends paid and proposed in respect of the current financial year – fully franked 5,475 5,332 5,475 5,332

Consolidated

2001 2000

5. Earnings Per Share

Basic earnings per share 7.2 cents 7.5 cents

Diluted earnings per share 7.2 cents 7.5 cents

a) Weighted average number of ordinary shares used in the calculation of basic earnings per share 540,565,426 506,327,488

b) All potential ordinary shares, being options to acquire ordinary shares, are not considered dilutive.

c) Since 30 June 2001 and before completion of these financial statements there has been an issue of1,516,000 ordinary shares.


49

6. Segment Information

The consolidated entity operates predominately in four industries: investor services, plan management,document services and technology services. The investor services operations comprise provision of registryservices. The Plan Management operations comprise the provision of management of employee share plans.Document service operations comprise laser imaging, intelligent mailing, scanning and electronic delivery.

Revenue fromcustomers outside the Intersegment

consolidated entity revenue Total revenue Segment result Segment assets

2001 2000 2001 2000 2001 2000 2001 2000 2001 2000$000 $000 $000 $000 $000 $000 $000 $000 $000 $000

Business:Investor Services 644,798 355,394 3,790 167 648,588 355,561 75,119 85,168 746,376 570,344

Plan Management 23,672 2,144 – – 23,672 2,144 (6,281) (4,609) 57,400 –

Document Services 38,365 36,284 28,151 18,737 66,516 55,021 5,625 2,466 32,104 18,614

Technology Services 45,051 11,366 46,152 4,020 91,203 15,386 22,052 (12,652) 32,760 18,391

Corporate 2,432 3,176 25,823 37,142 28,255 40,318 (20,483) (8,088) 35,354 52,096

Eliminations – – (103,916) (60,066) (103,916) (60,066) (253) 223 – –

Consolidated 754,318 408,364 – – 754,318 408,364 75,779 62,508 903,994 659,445

Geographic:Australia 177,580 155,205 19,453 30,134 197,033 185,339 8,552 27,579 152,621 185,872

New Zealand 10,795 10,696 748 855 11,543 11,551 3,412 (91) 10,700 11,110

South Africa 25,627 27,159 – – 25,627 27,159 2,879 9,268 15,646 13,156

United Kingdom 227,290 164,675 9,237 7,793 236,527 172,468 51,335 18,167 168,214 135,274

Ireland 11,025 9,904 – – 11,025 9,904 1,331 1,460 13,899 9,166

Hong Kong 8,969 3 – – 8,969 3 5,211 – 85,227 1,174

Philippines 178 295 338 12 516 307 (607) 661 229 402

USA 131,552 20,531 1,826 34 133,378 20,565 (17,260) 1,313 229,069 120,559

Canada 161,302 19,896 – – 161,302 19,896 21,179 3,928 228,389 182,732

Unallocated – – – – – – (253) 223 – –

Eliminations – – (31,602) (38,828) (31,602) (38,828) – – – –

Consolidated 754,318 408,634 – – 754,318 408,364 75,779 62,508 903,994 659,445

Intersegment charges are at normal commercial rates.

50

The directors of Computershare Limited declare that the accompanying concise financial report is presentedfairly in accordance with applicable Australian Accounting Standards and is consistent with the consolidatedentity’s 30 June 2001 full financial report.

In respect to the 30 June 2001 full financial report the directors declared that:

a) the financial statements and associated notes comply with the accounting standards and Urgent IssuesGroup Consensus Views;

b) the financial statements and notes give a true and fair view of the financial position at 30 June 2001 andperformance of the company and consolidated entity for the year then ended;

c) in the directors’ opinion;• there are reasonable grounds to believe that the company will be able to pay its debts as and when they

become due and payable, and the companies and parent entity who are a party to the deed described inNote 24 of the full financial report, will together be able to meet any obligations or liabilities to which theyare, or may become subject by virtue of the deed of cross guarantee dated 20 July 1998; and

• the financial statements and notes are in accordance with the Corporations Act 2001, including sections296 and 297.

Made in accordance with a resolution of the directors.

A. S. Murdoch C. J. MorrisChairman Director

18 September 2001

Directors’ Declaration


51

To the Members of Computershare Limited:

Scope

We have audited the concise financial report of Computershare Limited for the financial year ended 30 June2001 as set out on pages 38 to 50 in order to express an opinion on it to the members of the company. Thecompany’s directors are responsible for the concise financial report.

Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonableassurance whether the concise financial report is free of material misstatement. We have also performed anindependent audit of the full financial report of Computershare Limited for the year ended 30 June 2001. Ouraudit report on the full financial report was signed on 18 September 2001 and was not subject to any qualification.

Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financial report is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and analysis which were not directly derived from the fullfinancial report. These procedures have been undertaken to form an opinion whether, in all material respects, the concise financial report is presented fairly in accordance with Accounting Standard AASB 1039 ‘ConciseFinancial Reports’.

The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the concise financial report of Computershare Limited complies with Accounting StandardAASB 1039 ‘Concise Financial Reports’.

Arthur AndersenChartered Accountants

Ivan M. WingreenPartner

Melbourne 18 September 2001

Independent Audit report

52

Office Locations

Australia

Melbourne – Corporate Office COMPUTERSHARE LIMITED18–62 Trenerry Crescent Abbotsford Vic 3067Telephone 61 3 9235 5500Facsimile 61 3 9235 5601

SydneyCOMPUTERSHARE INVESTOR SERVICES PTY LIMITEDLevel 3/60 Carrington Street Sydney NSW 2000

GPO Box 7045Sydney NSW 1115

Telephone 61 2 8234 5000Facsimile 61 2 8234 5050

Investor enquiries 1300 855 080 (for use within Australia only)

e-mail [email protected]

COMPUTERSHARE TECHNOLOGY SERVICESLevel 5/60 Carrington Street Sydney NSW 2000Telephone 61 2 8234 5000

COMPUTERSHARE ANALYTICSLevel 4/60 Carrington Street Sydney NSW 2000Telephone 61 2 8234 5000Facsimile 61 2 8234 5450

AdelaideCOMPUTERSHARE INVESTOR SERVICES PTY LIMITEDLevel 5/115 Grenfell Street Adelaide SA 5000GPO Box 1903Adelaide SA 5001Telephone 61 8 8236 2300Facsimile 61 8 8236 2305Investor enquiries 1300 556 161

(for use within Australia only)e-mail [email protected]

BrisbaneCOMPUTERSHARE INVESTOR SERVICES PTY LIMITEDCentral Plaza One Level 27/345 Queen Street Brisbane Queensland 4000GPO Box 523Brisbane Queensland 4001Telephone 61 7 3237 2100Facsimile 61 7 3229 9860Investor enquiries 1300 552 270


MelbourneCOMPUTERSHARE INVESTOR SERVICES PTY LIMITEDLevel 12/565 Bourke Street Melbourne Vic 3000GPO Box 2975EEMelbourne Vic 3001Telephone 61 3 9611 5711Facsimile 61 3 9611 5710Investor enquiries 1300 850 505

(for use within australia only)e-mail [email protected]

PerthCOMPUTERSHARE INVESTOR SERVICES PTY LIMITEDLevel 2/45 St George’s Terrace Perth WA 6000GPO Box D182Perth WA 6840Telephone 61 8 9323 2000Facsimile 61 8 9323 2033Investor enquiries 1300 557 010


Channel Islands

JerseyCOMPUTERSHARE INVESTOR SERVICES (CHANNEL ISLANDS) LTDPO Box 83Ordnance House31 Pier RoadSt Helier Jersey JE4 8PW Channel IslandsTelephone 44 153 482 5329Facsimile 44 1534 825 250e-mail [email protected]

Canada

TorontoCOMPUTERSHARE TRUST COMPANY OF CANADA11th Floor 100 University Avenue Toronto Ontario M5J 2Y1Telephone 1 416 263 9200Facsimile 1 416 981 9800

CalgaryCOMPUTERSHARE TRUST COMPANY OF CANADA6th floor/ 530 8th Avenue SW Calgary Alberta T2P 3S8Telephone 1 403 267 6800Facsimile 1 403 267 6529

EdmontonCOMPUTERSHARE TRUST COMPANY OF CANADA970 Canadian Western Bank Place10303 Jasper Avenue Edmonton Alberta T5J 3N6Telephone 1 780 448 7598Facsimile 1 780 426 4032

HalifaxCOMPUTERSHARE TRUST COMPANY OF CANADASuite 501, 1465 Brenton StreetPost Office Box 36012Halifax Nova Scotia B3J 3S9Telephone 1 902 420 3553Facsimile 1 902 420 2764

MontrealCOMPUTERSHARE TRUST COMPANY OF CANADA1800 Avenue McGill CollegeMontreal Quebec H3A 3K9Telephone 1 514 982 7000Facsimile 1 514 982 7069

53

VancouverCOMPUTERSHARE TRUST COMPANY OF CANADA510 Burrard Street Vancouver British Columbia V6C 3B9Telephone 1 604 661 9400Facsimile 1 604 669 1548

Winnipeg

COMPUTERSHARE TRUST COMPANY OF CANADA1190-201 Portage AvenueWinnipeg Manitoba R3B 3K6Telephone 1 204 940 4600Facsimile 1 204 940 4608

Hong KongCENTRAL REGISTRATION HONG KONG LIMITEDRooms 1901–5, 19th floorHopewell Centre183 Queen’s Road East, Hong KongTelephone 852 2862 8628Facsimile 852 2865 0990

852 2529 6087email [email protected]

IrelandCOMPUTERSHARE INVESTOR SERVICES (IRELAND) LIMITEDHeron HouseCorrig RoadSandyford Industrial Estate Dublin 18Telephone 353 1216 3100Facsimile 353 1216 3151e-mail [email protected]

New ZealandCOMPUTERSHARE REGISTRY SERVICES LTDLevel 2/159 Hurstmere Road TakapunaNorth Shore CityPrivate Bag 92119Auckland 1020Telephone 64 9 488 9700Facsimile 64 9 488 8777

South Africa

JohannesburgCOMPUTERSHARE SERVICES LIMITED2nd Floor/Edura House41 Fox Street Johannesburg 2001PO Box 61051Marshalltown Johannesburg 2001Telephone 27 11 370 7865Facsimile 27 11 370 7702e-mail [email protected]

COMPUTERSHARE CUSTODIAL SERVICES2nd Floor/Edura House41 Fox Street Johannesburg 2001PO Box 62051Marshalltown Johannesburg 2107Telephone 27 11 370 7865Facsimile 27 11 688 7732Swift CSEVZAJJe-mail [email protected]

COMPUTERSHARE OUTSOURCING LIMITEDMezzanine JSE Building17 Diagonal Street Johannesburg 2001PO Box 24Newtown 2113Telephone 27 11 374 0460Facsimile 27 11 688 7726e-mail [email protected]

United Kingdom

BristolCOMPUTERSHARE INVESTOR SERVICES PLCThe PavilionsBridgwater RoadBedminster Down Bristol BS99 7NHTelephone 44 870 702 0003Facsimile 44 870 703 6101e-mail [email protected]

COMPUTERSHARE ANALYTICSThe PavilionsBridgwater RoadBedminster Down Bristol BS99 7NHTelephone 44 870 703 6081Facsimile 44 870 703 6118

EdinburghCOMPUTERSHARE INVESTOR SERVICES PLCOwen House8 Bankhead Crossway North Edinburgh EH11 4BRTelephone 44 870 702 0012Facsimile 44 870 703 6143e-mail [email protected]

LondonCOMPUTERSHARE TECHNOLOGY SERVICES AND COMPUTERSHARE INVESTORSERVICE PLC7th floor, Jupiter HouseTriton Court14 Finsbury Square London EC2A 1BRTelephone 44 207 920 0010Facsimile 44 207 256 7823e-mail [email protected]

COMPUTERSHARE ANALYTICS7th floor, Jupiter HouseTriton Court14 Finsbury Square London EC2A 1BRTelephone 44 870 703 6181Facsimile 44 870 703 6159

United States of America

ChicagoCOMPUTERSHARE INVESTOR SERVICES, LLC2 North LaSalle Street Chicago, Illinois 60602

Telephone 1 312 588 4990Facsimile 1 312 601 4332

COMPUTERSHARE SECURITIES CORPORATION2 North LaSalle Street Chicago, Illinois 60602Telephone 1 312 588-4992Facsimile 1 312 601 4340

54

Office Locations cont.

COMPUTERSHARE TECHNOLOGY SERVICES2 North LaSalle Street Chicago, Illinois 60602Telephone 1 312 588 4993Facsimile 1 312 601 4429

ClevelandCOMPUTERSHARE INVESTOR SERVICES, LLC7550 Lucerne Drive, Suite 103Cleveland, Ohio 44130-6503Telephone 1 440 239 7351Facsimile 1 440 239 7355

DallasCOMPUTERSHARE INVESTOR SERVICES, LLC1601 Elm Street, Suite 4340 Dallas, Texas 75201Telephone 1 214 665 6031Facsimile 1 214 969 1859

EnglewoodCOMPUTERSHARE PLAN MANAGERS9603 South Meridian Boulevard, 4th floorEnglewood, Colorado 80112Telephone 1 800 621 3777Facsimile 1 303 264 5307

LakewoodCOMPUTERSHARE TRUST COMPANY, INC.12039 West Alameda Parkway, Suite Z-2Lakewood, Colorado 80228Telephone 1 303 986 5400Facsimile 1 303 986 2444

Note: Both Colorado offices will relocate to a singleaddress in mid December 2001 as follows: 350 Indiana Street Golden Colorado 80401Telephone +1 800 621 3777

Los AngelesCOMPUTERSHARE INVESTOR SERVICES, LLCTelephone 1 800 621 3777

New YorkCOMPUTERSHARE TRUST COMPANY OF NEW YORKWall Street Plaza88 Pine Street, 19th floor New York, New York 10005Telephone 1 212 701 7600Facsimile 1 212 701 7664

RockvilleCOMPUTERSHARE ANALYTICS N.A., INC.4954 Wyaconda Road Rockville, Maryland 20852Telephone 1 301 881 2252Facsimile 1 301 881 0287

SomersetCOMPUTERSHARE PLAN MANAGERS300 Davidson Avenue Somerset, New Jersey 08873Telephone 1 800 621 3777Facsimile 1 732 627-7560

Note: The New Jersey office will re-locate from mid December2001 to:Raritan Plaza 3, 101 Fieldcrest Avenue, Edison, New Jersey 08837Telephone number will remain the same.

55

ASTS Automated Securities Trading System –A trading system for global securitiesexchanges

CHAMP Connects Australian broking andinstitutional clients to the AustralianStock Exchange’s CHESS settlementsystem

CTS Computershare Technology Services

CDS Computershare Document Services

CPM Computershare Plan Managers

CDS Computershare Document Services

COSMOS Computershare’s new technology thatforms the basis of all future products

EDC Electronic Data Capture – processesvery large volumes of documents whiledirectly updating a company register

Investor on-lineA web-based service for shareholdersto obtain a range of personalshareholding information from theshare register

Issuer Online A web-based service for companies toexplore their own share register

ORMS Order Routing Management System –allows brokers and fund managers tomanage and route orders to multiplemarkets (equities, derivatives, fixedinterest) from a single workstation

Registry See share registry

SCRIP Computershare’s software system thatsupports the management of companyshare registers

Share Registry The generic term used to describe themanagement of a public companyshare register. Used in Australia, NewZealand and the United Kingdom.

SMARTS Securities Markets AutomatedResearch Training and Surveillance – Asystem that alerts authorities to anyimproprieties and assists in ensuring afair and efficient market

Transfer Agent The generic term used to describe themanagement of a public companyshare register. Used in Canada and theUnited States of America.

Transfer Secretary The generic term used to describe themanagement of a public companyshare register. Used in South Africa.

Glossary

56

This section contains additional information requiredby the Australian Stock Exchange Limited listing rulesnot disclosed elsewhere in this report.

Shareholdings

Substantial shareholdersThe following information is extracted from theCompany’s Register of Substantial Shareholders.

Date of Notice Number ofName to Company ordinary shares

Christopher John Morris 7 Sept 2001 53,322,442

Deutsche Australia Limited and related bodies corporate 2 July 2001 50,255,532

Credit Suisse First Boston Australia(Holdings) Limited and relatedbodies corporate 1 Aug 2001 34,839,550

Anthony Norman Wales 15 Sept 2000 32,592,384

SAS Trustee Corporation 31 July 2001 29,059,973

Class of shares and voting rightsAt 4 September 2001, there were 23,196 holdersof ordinary shares in the company. The voting rightsattaching to the ordinary shares, set out in Clause 50of the company’s Constitution, are:

‘a) every member may vote

b) on a show of hands every member has one vote

c) on a poll every member has:• for each fully paid share held by the member,

one vote; and• for each partly paid share held by the member,

a fraction of a vote equivalent to the proportionwhich the amount paid up bears to the totalissue price of the share.’

At 4 September 2001, there were 18,102,043 optionsover ordinary shares issued to eligible employees atthe absolute discretion of the board. The options aregenerally exercisable 3 years after the date granted orearlier in the case of the employee’s death or retirement.

Distribution of shareholders as at 4 September 2001Size of holding Ordinary shareholders

1 – 1,000 8,953

1,001 – 5,000 10,142

5,001 – 10,000 1,829

10,001 and over 2,272

Total shareholders 23,196

There were 147 shareholders holding less thana marketable parcel of 100 ordinary shares at4 September 2001.

Twenty largest shareholders as at 4 September 2001

Ordinary sharesNumber %

Chase ManhattanNominees Ltd 75,944,607 13.83

Finico Pty Limited 52,887,942 9.63

National Nominees Limited 33,114,442 6.03

Welas Pty Limited 32,592,384 5.94

Westpac Custodian Nominees 30,896,366 5.63

P.J. Maclagan 16,213,058 2.95

M.J. O‘Halloran 13,668,529 2.49

AMP Life Limited 12,750,516 2.32

National Mutual LifeAssociation of Australasia Limited 8,216,692 1.50

Australian Foundation Investment Company Limited 7,000,000 1.27

Citicorp Nominees Pty Limited 6,703,126 1.22

MLC Limited 6,339,116 1.15

Perpetual Trustees Victoria Limited 5,901,072 1.07

Queensland Investment Corporation 5,897,390 1.07

Cogent Nominees Pty Ltd (SMP accounts) 4,552,706 0.83

Cogent Nominees Pty Ltd 4,019,356 0.73

Perpetual Trustees Victoria Limited (MTRBAL account) 3,752,429 0.68

ANZ Nominees Limited 3,518,043 0.64

Commonwealth CustodialServices Limited 3,433,037 0.63

Mr Gary Leslie Ryan 3,219,732 0.59

Total 330,620,543 60.20

Shareholder information


Cover Team (L-R) Chad Norrish Barbara Robertson Michael Clark Atsuko Shima Tonia Kendall Peter Scott Paul BuswellInvestor Services Investor Services Plan Managers Analytics Document Services Technology Services Corporate

Computershare LimitedABN 71 005 485 825

Directors Alexander Stuart Murdoch (Chairman)Christopher John Morris (Managing Director)Peter John GriffinMark Edward ElliottPenelope Jane MaclaganAnthony Norman Wales

Company SecretaryDarryl John Corney

Registered Office18-62 Trenerry CrescentAbbotsford Victoria 3067



Stock Exchange ListingsAUSTRALIAN STOCK EXCHANGE LIMITEDTHE NEW ZEALAND STOCK EXCHANGE

SolicitorsMINTER ELLISON Level 23, Rialto Towers525 Collins Street Melbourne Victoria 3000

AuditorsARTHUR ANDERSEN360 Elizabeth StreetMelbourne Victoria 3000

Share RegistryCOMPUTERSHARE LIMITED 18-62 Trenerry CrescentAbbotsford Victoria 3067



BankersNATIONAL AUSTRALIA BANK LIMITED500 Bourke StreetMelbourne Victoria 3000

AUSTRALIA AND NEW ZEALANDBANKING GROUP LIMITED530 Collins StreetMelbourne Victoria 3000

THE ROYAL BANK OF SCOTLAND PLC138-142 HolbornLondon UK EC1N 2TH

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Report to Shareholders 2001

Com

putershare Limited R

eport to Shareholders 2001


computershare limited report to shareholders 2001 annual report.pdf · report to shareholders 2001...

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