Our North American Region comprises operations in the United States and Canada

UNITED STATES

Background
Investor Services (CIS)

Our important entry into the United States market took place with the acquisition of the Harris Bank transfer agency (registry) in January 2000.

Part of the initial acquisition phase focused on the integration of acquisitions into Computershare's business base which included stabilising back-end operations to ensure uninterrupted service delivery for certificate/dividend processing, client services, and the contact centre.

Critical to retaining our initial market share position of 5% and building the Computershare brand was the implementation of dedicated customer relationship initiatives. Our success in this area has been reflected in client retention and the establishment of strong relationships with all clients including large corporations such as Walgreens, Agilent, and Texas Instruments.

Despite previously operating on a third party software system we have grown our client base, adding 34 new clients including major companies such as Harley Davidson and ADC Telecommunications, as well as a number of small- to mid-sized companies. With the SCRIP system now in place we are very excited about our future opportunities.

Employee Stock Purchase Plans (ESPP)

Another important area of growth for Computershare is the employee stock purchase plan (ESPP) and stock option plan (SOP) businesses. Our introduction in North America began with the acquisition of the Harris Bank United States ESPP business, gaining 1.3% market share for employee stock purchase plans and 0.6% market share of stock option plans.

Later in 2000, we acquired the Merrill Lynch ESPP book of business bringing our share of the United States ESPP business to 8% and includes clients such as Walgreens and Roadway.

Analytics (CAS)

Computershare's Analytics business began through its acquisition of Financial Data Concepts, a strategic market intelligence company based in Maryland in 2001. Since then, the following new initiatives have been launched:

• IRtrack, a new global market intelligence and investor relations tool in October 2001; subscribed top clients such as Consolidated Edison and Canadian Natural Resources
• Continued data redistribution and/or private labelling work with current clients including Microsoft Money, Multex, Shareholder.com, and Standard and Poor's
• Intensified marketing of streetsight.net, another market intelligence product, targeting firms involved in money management and capital markets.

Document Services (CDS)

As part of Computershare's strategy in achieving economies of scale in its print and mail operations, a new facility was set up in Burr Ridge, Illinois, with advanced technology to commence operations. As a result, high volume print and mail jobs are undertaken for our employee plans and registry (transfer agent) clients. High profile transactions during the year included:

• More than 800,000 plan statements for various employee plan clients
• Over 180,000 customised proxy cards for the Compaq-HP merger for their critical annual meeting within a 48-hour turnaround
• Approximately 140,000 mailpacks for shareholders of JM Smuckers on the Procter and Gamble spin-off.

Approved ADR Depository

Following approval from the United States Securities Exchange Commission in July of this year, Computershare is now an approved ADR Depository. Earlier this year, development work on the ADR offering had begun and was complemented by informal promotion in a pre-market launch. We have received a high degree of interest from the global marketplace and since receiving approval have added our new ADR services to our client offering.

Market Trends Overview

The events of September 11, and an outbreak of corporate accounting malpractices and financial scandals have caused unprecedented havoc in the United States economy, propelling a sharp economic downturn. This has severely hampered new business development efforts.

IPO activity has substantially reduced, and stock splits and mergers and acquisitions have been virtually non-existent due to a depressed state of the stock market overall.

Regarding proxy administration, the SEC approved amendments to the NYSE rules to reduce large issuers' fees for street-name proxy administration. The change lowers proxy unit fees by 20%. The approval supports Computershare's push for an open market for these services. Computershare was invited by the Securities and Exchange Commission to make a presentation to them and other industry participants on this issue.

External activities connected with employee plans have presented Computershare with business opportunities, for example, delayed FICA legislation is having a positive result on the employee plan industry. Furthermore, the Internal Revenue Service issued guidance to impose taxes on the exercising of qualified ESPPs and statutory ISOs, as of 1 January, 2003.

Market trends indicate that 43% of companies outsource the administration of their employee share plans, 14% of companies expect to increase the amount of stock in their employees' total compensation packages, and that 12% of companies intend to increase their use of ESPPs in the coming year.

Focus on Customer Relationship Initiatives

Our outstanding success in developing customer relationships has largely been attributed to introducing significant improvements in service levels.

In order to address the key areas, we have sourced an independent consulting firm to hold monthly shareholder satisfaction surveys to pulse shareholder satisfaction and also instituted an internal quality assurance programme focusing on critical processes to quickly resolve shareholder concerns. Comparative results show dramatic increase in satisfaction in just one year:

• Overall Service - 92%, up from 79% (industry average - 86%)
• Account Service - 92%, up from 79% (industry average - 86%)
• Certificate Service - 92%, up from 79% (industry average - 85%)
• Telephone Service - 86%, up from 80% (industry average - 81%)

Our ongoing service level monitoring includes:

• A client advisory board comprising representatives from our client base to generate feedback on quality of services and give client perspectives on company strategy and direction
• Focus groups on specific areas such as annual meeting procedures, investment plans, and employee plans, for example, to gain input on improving service delivery
• Measuring issuer satisfaction via the independent industry surveys.

We are also pro-actively communicating with clients through our new client magazine Insight and have realigned our client services/relationship management structure to place greater emphasis on responsiveness to client needs and ensuring a better fit of staff capabilities to fulfil client service requirements.

Significant Transactions in 2002
Investor Services (CIS)

We continued our focus on growing the business despite economic slowdown, and won 36 new clients taking our total number of clients to 1,000.

Based on number of shareholder accounts, we currently have a 5% share of the United States stock transfer agent market.

Significant, high profile transactions during the year include:

• Partnership with Citibank Agency and Trust to provide securities processing and related services in handling global mergers and acquisitions, debt exchanges, and other types of reorganisations which started with the Nestle-Ralston-Purina acquisition
• HP-Compaq merger - provided reorganisation services, performed transfer of shares, annual meeting and proxy voting services, and print and document delivery services
• JM Smuckers (spin-off of Procter and Gamble brands Jif® and Crisco®) - performed spin off, dividend processing, and print and mail services.

Plan Managers (CPM)

Computershare continues to maintain 8% of the United States market share for ESPP and 0.6% for SOP. We signed 22 new share plan clients bringing our total number of clients to 350. The major achievement during the period was the successful conversion of all ESPP clients from their existing system to the newly developed Computershare SCRIP system.

High profile transactions with new clients during the year include:

• Home Depot - ESPP
• BP Amoco (UK-based) - new option scheme software being developed.

Technology Enhancements for North America

By building on our business acumen in technology we have enhanced capabilities with the completed migration of US clients to SCRIP and the commencement of our Canadian SCRIP migration.

• New telephony systems have been installed and have resulted in increased shareholder satisfaction that has been reflected throughout our ratings. Features of the system include:

1. - Faster and more precise response to customer issues
2. - Less wait time for callers because of automated features (faster access to account information and auto-enrolment features)
3. - Easier call flow even during peak hours

• Web and IVR (interactive voice recognition) capabilities have now been installed for use by ESPP participants, giving them access to account information and the ability to perform transactions at any time
• Workflow and electronic data capture technology have been implemented across all aspects of operations resulting in more efficient work processes.

Priorities

• Enhancement of SCRIP to the United States registry business
• Continued focus on service quality to issuers and shareholders
• Improved operational efficiency across the expanded North American region
• Continuation of enhancing web capabilities
• Continued focus on quality by implementing service improvements to achieve steady and high-level client and shareholder satisfaction in all aspects of the business
• Focus on gaining new business, and realigning sales, marketing and client services
• Technology - Revolutionise the Computershare website - Further develop COSMOS, our stock option system and next generation ESPP system.

Internally, priorities are to:

• Roll out the Employee Stock Purchase Plan to employees
• Launch full intranet for North America
• Develop and coordinate national focus groups to respond to global opinion survey responses
• Develop different training functions to better support remote offices.