Making the world a smaller place - Computershare

THE NEWSLETTER FROM COMPUTERSHARE – ISSUE 17 SUMMER 2006

CERTAINTY INGENUITY ADVANTAGE

Making the world a smaller place

NEXT >

http://www.computershare.com

Foreword


Welcome from Chris Morris

Welcome to our second electronic issue ofInsight, just after the World Cup draws to aclose. Football is one thing that can genuinelymake the world feel a smaller place – and everysingle person I’ve sat next to recently on aplane has been more than happy to commenton Australia’s performance.

This issue of our newsletter introduces ourGlobal Capital Markets Group, focusing on thework they’ve undertaken to globalise ourregistry and share plan offerings. Several newclients are benefiting from this approach, whichis making the world feel like a smaller, morereachable place for international companieswanting to offer a global face to shareholders.

You can also read about several of our onlineservices, including a couple of new additions –Dashboard and Dividend Elections.

The more issuers and shareholders we canencourage to make good use of online services,the more paper we can eliminate from thecommunications process – which can only begood for the environment.

Our congratulations go to Dave Belmont ofCODASciSys, who was recently named ICSACompany Secretary of the Year and I’d also liketo extend a big warm welcome to three newComputershare clients: John Menzies plc, IBMand William Hill.

I hope you’re enjoying this latest edition ofInsight in its electronic format; please feel free to pass on any comments that youmay have.

Chris Morris

Making the world a smaller place…

> Business without borders: Global Capital Markets Group

> The Company Law Reform Bill and Shareholder Communications

> Keeping it simple: Computershare’s own Global Employee Share Plan

> The eco-friendly way to manage stocks online

> Corporate Social Responsibility leaders raise their voices

> Reporting Dashboard

> Print acquisition spurs growth in Germany

> Positive results from the first quarter forComputershare UK Contact Centre

> Interactive Voice Response

> Update on eTree

> The Scene

CLICK LINKS BELOW TO ACCESS CONTENTS

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Lead Article: Global Capital Markets Group


into an execution phase. While the ‘final bell’ isclearly still a few rounds away, very credibleglobal business partnerships are rapidly beingforged. Witness situations such as NASDAQbecoming a 24% shareholder of the LondonStock Exchange (LSE) and the NYSE Group(itself only recently created as a publiccompany) signing a definitive agreement withEuronext for a ‘merger of equals’ creating‘NYSE Euronext’, as high-profile examples ofglobalisation. There is a widespread predictionthat further amalgamations will occur overtime, extending the consolidation across othertime zones.

The full effect of these developments is still notclear, yet they’ve sparked plenty of interest(and in some cases concern) in many aboardroom. What might these developmentsmean for UK plcs listed on the LSE, apart fromaccess to a deeper liquidity pool? Will acombined NYSE Euronext actively seek topoach domestic UK listings from the LSE tooffer a combined listing or integrated tradingservice on both sides of the Atlantic? WillNASDAQ, assuming it subsequently acquires

YOUR WORLD IN PERSPECTIVESophisticated capital structures; investoractivism; increased governance and compliancepressures; complex, changing legal andregulatory frameworks; reduced flexibility inidentifying and communicating with investors;and stock exchange mergers are just a few ofthe pressures for the corporate issuer.

Globalisation is a reality in today’s financialmarkets for all companies, regardless of sizeand whether or not they are listed on multiplemarkets. Companies are battling to capturecapital from local and international investors,while institutional capital efficiently flows inand out of markets at a keystroke. The need forissuers to openly engage with investors,particularly active investors such as hedgefunds, has never been greater.

The need for a global service provider is alsonow more important than ever before.

HEATED EXCHANGESIt is clear from daily press coverage thatmergers and takeovers of major stockexchanges are no longer just strategicambitions; proposed transactions are moving

In this article, Paul Conn, President of Computershare’s Global Capital Markets Group,delivers a view on the seismic changes unfolding in the major equities markets in the UK,Europe and across the Atlantic and how Computershare’s global solution is equippingissuers to quickly adapt.

Business without bordersDelivering certainty in an uncertain world

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Lead Article: continued


the LSE, try to migrate plc ADR listings fromthe NYSE Group to offer a similar transatlanticservice for those non-US companies that itdoes not currently service today? Will NYSEEuronext later seek to acquire LSE, or toestablish a rival equities exchange in London,as was reported in The Financial Times on 19 June 2006? Will ADR structures changeover the medium to longer term? Will it bepossible to integrate the liquidity pools of thesemarkets, while keeping local regulations inplace? While there is still plenty of jockeyingamong the European and New York-basedexchanges, the longer-term ramifications ofthis type of transaction will be wide reachingover time, even though in the short term,change is likely to be downplayed.

Our analysis suggests that these marketchanges may impact certain clearing andsettlement arrangements. There are manyfactors driving this, such as European marketconsolidation and harmonisation, developmentof international linkages between clearinghouses and competition between clearinghouses seeking to clear trades conductedthrough these new mega-markets. A glimpse ofthis was seen in the otherwise seeminglyinnocuous announcement made by the LondonStock Exchange on 24 May 2006 that it wantsto foster a competitive environment forclearing of trades executed on its exchange.How this might later impact settlement andregistration arrangements for plc issuers, if atall, is not yet clear, though the announcementsays trades will settle in CREST.

The focus on who trades your securities, wherethey are traded and how they are held orregistered will become even more important, aswill the need for issuers to seamlessly connectwith investors across different market systems.

FORCING A GLOBAL DIALOGUE Corporate governance initiatives are stilldriving changes to laws, regulations andpractices while directives continue to surfacefrom European harmonisation initiatives. At thetime of writing, the UK Company Law ReformBill is exercising the minds of interested parties,especially issuers. Currently before Parliament,the Bill has been targeted by brokers seeking to

include amendments to obligate issuers toenfranchise and communicate with beneficialshareholders.

In the US, the NYSE has recently released areport on proxy voting following a review by anexpert industry panel. Many aspects of the USsystem are now being debated across industry,such as whether to give issuers the right toidentify and directly communicate with theirbeneficial shareholders (since a majority ofshares are held in street name) and to open upthe beneficial shareholder communicationssystem. Currently communications have to beeffected through brokers and otherintermediaries.

We anticipate that shareholdercommunications, enfranchisement and proxyvoting will all remain focal points over the next12–36 months.

The deployment of e-communications solutionsis important if a) investors are to receive timelyand effective communications from issuers,and b) issuers are to capture the full financialbenefit from reduced production costs for . . .

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A world of opportunities through a single view

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Industry Update


The Company Law Reform Bill andShareholder Communications

A change that could prove a major benefit toissuers is the inclusion of an option to send allcommunications to shareholders electronicallyby default.

Schedule 7 of the Bill provides that quotedcompanies may send a link to the notice ofmeeting, a proxy card and annual report andaccounts held on a website to shareholderselectronically by default. To take advantage ofthe change, issuers will be required to make

amendments to their Articles of Associationby passing a special resolution, requiring 75%of the received vote to be in favour, prior tointroducing electronic communications as thedefault. Once passed, the issuer would beobliged to give shareholders the option ofproviding an email address or continuing toreceive documentation in paper format. Non-respondents will receive no communicationsgoing forward other than an annual reminder

(in paper) that will again invite them to providean email address or request paper reports.

To ensure that all shareholders continue toenjoy their communication rights, issuers willbe expected to send an advisory note to non-respondents and those electing to receivedocuments in paper on a yearly basis,informing them of how to receive notificationsin electronic form. For companies that incursubstantial costs in printing and dispatch of the annual report, accounts and notice of meeting, defaulting to electroniccommunications could offer significant costsavings. In addition to the financial benefits,switching to electronic communications wouldalso deliver obvious environmental benefitsdue to the reduction in paper usage.

On Tuesday 8 June the Bill was transferred tothe House of Commons, having receivednumerous amendments in the House of Lords.Extra Parliamentary time has been dedicated tothe Company Law Reform discussions to ensurethat what is proving to be one of the largestBills to have been debated in Parliament,receives full scrutiny from a range ofviewpoints. The Bill is still subject to change andComputershare will be following its progressionthrough the Commons with close interest ■

The Company Law Reform Bill is designed to effect numerous changes to existing law including the way in which quoted companies can communicate information with their shareholders.



Case Study: Employee Share Plan


Keeping it simpleThe creation and management of Computershare’s own Global Employee Share Plan

The plan has been running successfullywithout the need for any significantamendment for over the five years, a periodthat has seen substantial company growthwith employee numbers doubling to 10,000.Over 3,000 eligible employees currentlyparticipate, with many enjoying substantialreturns on their investment.

WHY ENCOURAGE EMPLOYEE OWNERSHIP?Computershare wanted to give each employeethe opportunity to acquire a meaningfulshareholding over time and to share in thecompany’s financial performance.

DESIGNING THE BENEFITHigh employee participation in the global planwas dependent on making the offer as simpleand attractive as possible to employees. Thebenefit was centred around the following core principles:

> To offer the same or similar benefits to allemployees worldwide, subject to localjurisdictional rules

> Computershare matching each currencyunit up to the equivalent of AU$3,000pa,where legally possible

> To attract any available tax concessions

> Two-year holding period on theComputershare matched contributions

> Voluntary, but encouraged participation.

In most cases the plan has utilised local taxconcessions, increasing the net benefits to employees.

To ensure maximum participation, each region was consulted and local ownership was fostered by allowing the timing andbranding of the offer to vary according to localrequirements. The core design team supportedeach region on tax, legal, communication andadministrative matters.

COMMUNICATING THE BENEFITClear and tailored communication campaignswere developed to promote the benefits of theplan in each region. Campaigns were supportedwith tailored email blasts, state-of-the-art IVR telephony and an educational websiteincorporating a ‘one-click’ enrolment service.Management and team leader support wascrucial. All senior personnel were activelyengaged and provided with Information Kits, and take-up rates were measured bybusiness unit.

In 2001, Chris Morris, CEO of Computershare, announced his intention to implement a shareplan to offer all employees worldwide the chance to benefit from the dynamic growth andfuture opportunities in the company.

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Case Study: continued


With a robust offer management platform inplace, the country coordinators were free tofocus on improving take-up and to undertakeproactive planning for future share plan events.

SIMPLE ONLINE MANAGEMENTFor the global plan to be successful a globalmanagement platform was needed, allowingemployees to manage their share portfoliothroughout all stages of the plan lifecycle. Theweb-centric, self-help solution removed theneed for paper, thus significantly reducing riskand cost.

Participants can view the value of their shareportfolios online, create statements for reportingand tax purposes and can cost-effectively initiatethe sale of their available shares online. Selectcountry coordinators can view participants’holdings and access management reportsanytime, anywhere in the world.

Participants were also sent employeeshareholder cards. These are credit card sizedpassports that allow employees to access thewebsite, thereby fostering a sense of ownershipand participation.

THE OUTCOMESince 2001 Computershare has expanded toover 10,000 employees, operating in 20countries around the globe and participation inthe plan is now at over 50% of the entireeligible population.

Sound plan design and management, such asacquiring shares on a regular monthly basis toreduce the impact of a fluctuating share price,combined with Computershare’s expansion andimproved performance has resulted in manyemployees enjoying returns in excess of 150%.

The value of this benefit to each employee issignificant with 3,100 employees holdingAU$35 million worth of Computershare shares(0.9% of the company), equating to an averageof AU$11,290 for each participating employee, ameaningful shareholding by any measure ■

Participants can view the value of their share portfolios online, create statements for reporting and tax purposes and cost-effectively initiate the sale of their available shares online.

EXAMPLE:

a participant contributing

£50pmfor 48 months (£2,400)

>has seen their shareholding increase to

£14,200including matching shares

Value of shares correct at time of going to press



Feature: Self Service


The eco-friendly way to manage stocks online

To take advantage of this new provision,shareholders will need to log on toComputershare’s websitewww.computershare.com and sign up toInvestor Centre; this will give them access to aportfolio view of the stocks that they hold andprovide a way of managing their holdingselectronically in a secure environment.Services already available include the ability toregister new addresses and changes to bankaccount details, as well as share dealingservices and appointing a proxy to vote ontheir behalf at company meetings. The newdividend registration service now offers theaverage shareholder access to the same rangeof online services previously only enjoyed bylarge institutions.

More and more of us are becoming used tomanaging our financial affairs online and webelieve that this ‘self service’ option meets theincreasing requirement of shareholders to dealwith their portfolios in the same way ■

Computershare believes that it is. With ourdatabase of more than 90 million shareholdersaround the globe, we have long championed thecause of quick, secure and environmentallyfriendly communication between listedcompanies and their shareholders.

In keeping with this commitment,Computershare has extended the range ofInvestor Centre services to incorporate anelectronic method for shareholders to registertheir instructions for Dividend ReinvestmentSchemes and Scrip dividends. Currency electionsfor cash dividends will also be available whereapplicable. The larger institutions who aremembers of CREST will be able to make theirelections directly via CREST, saving the timetaken to complete and post paper election forms.These advantages have previously been confinedto large institutional investors but InvestorCentre allows the smaller private investor to takeadvantage of exactly the same service.

Years after the predictions that electronic communications would supplant the use of paper, is it finally coming true – at least as far as shareholders are concerned?




When Gordon Brown announced to the CBI Conference in November 2005 that he wasabandoning the requirement for companies to produce an annual Operating and FinancialReview, the outcry from social and environmental activists was predictable. So too was thewelcome from the CBI and others.

Feature: Sustainability


Corporate Social Responsibilityleaders raise their voices

The biggest surprise however was the greatdisappointment expressed by an alliance ofcompanies, pressure groups and the media. Thedissatisfied reaction that the Chancellor had socomprehensively failed to predict was down tothe fact that many companies had alreadybegun to plan, and even produce their reportsin keeping with the anticipated guidance.

The Chancellor’s Company Law Reform Billannouncement replaces some, but not all ofthe OFR requirements, retaining the need for‘narrative’ reporting. The likely outcome of‘light touch’ requirements will be that thosecompanies currently excelling in reporting onsocial and environmental issues will continue todo so within the new framework. Those thatdon’t, however, will be under little regulatorycompulsion to do so. Looking at the broaderpicture, it seems likely that the continuingevolution of social and environmental reportingwill result in a greater take-up as specific‘sustainability’ issues become more pressing.

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Feature: continued


THE CERES CONFERENCE ON CLIMATE CHANGEThe chief environmental issue is now climatechange, which has moved to centre stage. Inthe past few weeks alone, climate change hasbeen a lead item in Time Magazine, the ITVnews and Vanity Fair, along with the usualcoverage in the Guardian and Independent.How long will it be before business reportingon CO2 emissions becomes as commonplace asreporting on revenues, costs and margins? Nottoo long if the recent CERES Conference inOakland California is anything to go by!

The annual CERES (Coalition forEnvironmentally Responsible Economies)conference usually attracts a mix of SRI fundmanagers and analysts, activists and somecompany specialists. This year though it wasdifferent – the mainstream was there in force.Al Gore gave a compelling, moving andchallenging presentation on climate change,while introducing his film An InconvenientTruth. Paul Anderson, CEO of Duke Energymade a powerful case for a federal carbontax and Peter Darbee, CEO of energycompany PG&E inspired the audience with areview of what can be done to cut energyuse. Looking back through history it is prettyclear that where CERES is today, the rest ofus are tomorrow.

An Inconvenient Truth: a feature-lengthdocumentary on Al Gore’s campaign to makethe issue of global warming a recognisedproblem worldwide

THE BUSINESS IN THE COMMUNITY (BITC) CONFERENCEThe UK stance on Corporate Responsibilityissues was aired at the BITC Conference on 9 May with Opposition Leader David Camerontaking centre-stage. Unfortunately hiscomments on the sale of inappropriate clothingto children drew the headlines the next day,which diverted attention from the reallyimportant issues at hand.

Flag, the Cambridge-based creativecommunications agency and Computersharecompany, attended the conference, duringwhich it exhibited and focused on the launch ofthe 2005 CR Index. Other business communitydelegates were also out in force. PhilHodkinson, Group Finance Director of HBOS,Larry Hirst, CEO of IBM UK and Carolyn McCall,CEO of Guardian Media Group all gave forcefuland eloquent presentations on the impact thatsocial and environmental issues have onbusiness. John Rogers, Chief Executive of theUK Society of Investment Professionals alsomade his voice heard, even if his message onthe distance still left to travel was a littlesobering for some ■


http://www.flag.co.uk


Issuer Online, Computershare’s self-service register access for our client companies, hasintroduced a new concept called ‘Reporting Dashboard’.

Feature: Online Facility


Reporting Dashboard

This is a new way of viewing standard reportson screen in a user-friendly web page format,with the option to download the full report in a crisp new style as a PDF file for printing, oras a CSV file suitable for manipulation in a spreadsheet.

Key register statistics such as your issuedcapital summary, top holders report,geographical shareholder analysis, paymentelections breakdown and range of sharesreport are available to view on the DashboardSummary screen at a glance; refreshed at thefrequency that you request. Other reports suchas significant movements can also bescheduled to your desired frequency for you toselect for viewing. The emphasis is on showingonly the data that is important to you, on yourown PC, when you want to view it.

Alongside the Reporting Dashboard, our newCustom Reports option (if requested) providesfurther flexibility, allowing you to schedule aselection of reports when it suits you. Theseinclude lists of registered members and lists ofholders above a certain threshold. Once reportparameters have been chosen and submitted,the report will run at Computershare and willappear within Issuer Online shortly afterwards,available for download in CSV and PDF format.

Periodic reports are securely stored in thesystem for 13 months; all daily reports arestored for two weeks, during which time theywill be available to view and download.

Following a successful pilot programme, theReporting Dashboard is now available onrequest to any issuers who are signed up touse Issuer Online. Please contact your AccountManager to discuss your requirements ■



Regional Report


Printing acquisition spurs growth in Germany

This acquisition has allowed Computershare to extend its printing capabilities withinComputershare Document Services, andcontinues the prolonged period of growth forComputershare within the German market.

ADM is a highly regarded document servicesprovider which has been providing high-qualityprinting services for over 40 years. ADM has aleading reputation for innovation and flexibility,with banks and insurance companies providingmore than 50% of its turnover.

With the acquisition of ADM, Computersharehas significantly extended its documentservices capabilities in terms of both qualityand quantity. We are now able to derive greatervalue from core registry, AGM and employeeshare programme competencies through highlysecure print and digital delivery services. Inaddition, Computershare has enhanced itsability to deliver secure transaction data tofinancial companies.

ADM has 40 employees, increasing the numberof Computershare employees in Germany to400. Rainer Tillich, managing director of ADM,has been appointed to head the expandedDocument Services division of Computershare ■

www.adm-muenchen.de

Computershare is pleased to announce the acquisition of ADM GmbH, the Munich-based printing company.


http://www.adm-muenchen.de


Feature: Shareholder Satisfaction Survey


Positive results from the first quarter forComputershare UK Contact Centre

Our dedicated Contact Centre in Bristol fieldsover 125,000 shareholder calls per monthcovering issues as diverse as dividends,meetings and how to accept various corporate actions.

We are pleased to be able to share with you the results from our first UK ShareholderSatisfaction Survey. In our January issue weexplained that the survey was based on workalready undertaken in our Australian group andwas designed to capture feedback and monitorsatisfaction from your shareholders.

Between January and March an independentmarket research company has undertaken1,000 telephone interviews with shareholdersto obtain feedback about the services that weprovide. We did not contact shareholders ofclients that decided to opt out of the survey orthose that were not registered with theInformation Commissioner’s Office.

Here are some of the key high-level findings forthe last quarter:

83% of shareholders are satisfied withthe services received from the Contact Centre(of the remainder 8% were dissatisfied and 9%were neutral)

74% believe their query to be resolvedand are not waiting for fulfilment

78% were satisfied with the time it tookto answer their telephone query

62% believe that we are better than mostContact Centres

91% of shareholders had no change or amore favourable perception of our clients afterdealing with our Contact Centre

We will continue to invest in conducting regularShareholder Satisfaction Surveys because weare confident that the results will be critical inimproving our technology and processes andwill help us to monitor improvements to ourcustomer service.

If any of you are not yet included in theShareholder Satisfaction Survey but would liketo be, contact your Account Manager. Furtherdetails can be found at www.ico.gov.uk ■

Previously in Insight we have explained that delivering the best possible customer serviceacross all of our client interfaces is hugely important to Computershare.


http://www.ico.gov.uk


IVRs have come a long way since their introduction as call management and call routing tools. Computershare has invested significantly, designing IVR solutions that are truly interactive and provide a response to a range of shareholder issues.


Computershare’s IVR provides information toshareholders 24 hours a day, 7 days a week, withthe ability to provide both specific and genericinformation. The system can provide specificholding balances and payment details, and caneven arrange for one of five different forms tobe posted out to the shareholders’ registeredaddress. It can also provide information on shareprices or any current activity that yourshareholders may need to be aware of.

Our aim is to provide callers with afunctionality-rich avenue to self-fulfil theirrequirements without the need to talk to anagent. From a service perspective, this resultsin an immediacy and accuracy of response, as the caller will get exactly what they needwithout having to wait in a queue, speak to aperson unnecessarily, or call only when thecentre is open.

In the eight months from 1 October 2005 to 31 May 2006, nearly 291,000 people had theirquery answered by the IVR system ■

Interactive Voice Response (IVR)

Feature: Call Management CONTENTSPREVIOUS NEXT ><


Feature: Environmental Responsibility


Update on eTreeTM

It’s great to see more and more companiesrecognising the environmental and costbenefits of participating in eTree.

> Slough Estates International> Unilever plc> Filtrona plc> BHP Billiton plc> St James’s Place plc> Reckitt Benckiser> Wellington Underwriting plc> Rio Tinto plc> Quintain Estates & Development plc

REGISTRATIONS LAST QUARTERRegistrations for the last quarter January toMarch 2006 totalled 1,267, translating into anenvironmental contribution of 1,267 trees. Thisis equivalent to 1.75 acres of woodland plantedthroughout the UK at various sites includingWales, Hampshire and Livingston.

Computershare is delighted to welcome the following new members to eTree’s growing list of supporting member companies in the last quarter.

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CLIENT CAMPAIGNS FROM JANUARY TOMARCH 2006Slough Estates InternationalManual capture forms were included as aninsert to Slough Estates’ annual mailing on 20 January. This was an introductorypersonalised campaign to introduce itsshareholders to eTree and to encourage themto switch to eComms.

“Since the launch of eTree, 311 trees have beenplanted by Slough Estates, equivalent to thenumber of shareholders who have registeredfor eCommunications. This represents an areaof 0.52 ha of land that will be reforested.”

Source: Slough Estates International Corporate SocialResponsibility Report 2005

Filtrona plcAwareness Flyers were included as an insert toFiltrona’s Annual Report Mailing to introduceeTree and encourage their shareholders tomake the switch to eComms. A link is alsobeing provided on the Electronic ProxyAppointment site through to the eTreeregistration site and Filtrona’s website atwww.filtrona.com



http://www.etreeuk.com

www.filtrona.com


Unilever plcAwareness flyers were included as an insertwith Unilever’s AGM mailing.

Wellington Underwriting plcA personalised letter to shareholders wasinserted with annual mailing.

Kesa Electricals plcAwareness flyers were included as an insertwith Kesa’s annual mailing.

St James’s PlaceSt James’s Place has so far had nearly 230trees planted as a result of their participationin the eTree project. Jayne Meacham, St James’s Place Deputy Company Secretarysaid: “We were surprised and delighted by theresponse to the eTree Communication that wesent out with our Annual Report. As acompany, we recognise our responsibility to the environment and eTree is the perfect wayto involve our shareholders.”

DID YOU KNOW?

One million acres of forest are lost to

city growth each year.

The amount of oxygen produced by an acre of

trees per year equals the amount consumed

annually by 18 people.

260Ibs of oxygen produced each year

by one tree.

Shade trees can make buildings up to

20 degrees cooler in the summer.

Source: www.treesaregood.com

eTree North America received a significantaccolade earlier this year when they won the2005 ETERNE Award from The Tree CanadaFoundation. This prize has been awarded since1993 and is given to companies whosesponsorship of the Tree Canada Foundationexemplifies the very best in environmentalstewardship.

HOW CAN MY COMPANY GET INVOLVED?After you have signed up for eTree, there are anumber of campaigns available for you to helppromote eTree to your shareholders:

> New shareholder pack> Promotion on company website> Annual Report Article> AGM booth> Awareness postcard> Branded envelopes> Targeted mail> Outbound call campaign.

For more information on any of the campaigns,please contact your Account Manager.

Visit www.etreeuk.com to find out more ■

Update on eTree

Feature: continued CONTENTSPREVIOUS NEXT ><


http://www.treecanada.ca

http://www.treesaregood.com



News


The Scene

CODASCISYS’ DAVE BELMONT NAMEDCOMPANY SECRETARY OF THE YEAR 2006CODASciSys, the AIM-listed provider of ITsoftware and services and client ofComputershare, is a delighted recipient of theICSA Company Secretary of the Year award.Dave Belmont was presented with the trophy at a ceremony hosted by BBC presenter, Declan Curry.

Dave’s award was based on his manyachievements as Company Secretary, includingreplacing three pension schemes with one newone, introducing a new Executive share plan,selling £200,000 worth of software andassisting in four successful acquisitions.

Commenting on his award, Dave said: “I’mdelighted to have been given this award. Itdemonstrates to me that people recognise thatinnovation in business administration is just asvalid when it comes from an AIM-listed companylike CODASciSys as when it comes from muchlarger enterprises.”

COMPUTERSHARE AND GEORGESON KEEP SANCTUARY GROUP TURNINGGeorgeson Shareholder recently worked with the Sanctuary Group to help it to weather apotentially contentious vote aimed at restructuring and refinancing the Group by way of a Placingand an Open Offer. By contacting shareholders and producing a report displaying voting intentions,Georgeson were able to help Sanctuary in getting all resolutions passed by a resounding 99.47%.The Sanctuary Group plc is a leading developer of music intellectual property rights and managesartistes as diverse as James Blunt, Guns N' Roses and Groove Armada.

Philip Ranger, Managing Director of Sanctuary Group praised Georgeson for the work that they didsaying: “The speed and efficiency displayed by Georgeson allowed us to achieve our objectives infull. A big thank you to all involved!”


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CONTENTSPREVIOUS NEXT ><News: continued


The Scene

NEW LOOK AND FEEL FORCOMPUTERSHARE AND GEORGESONYou may have noticed a new look and feel to thisissue of ‘Insight’. This is due to a global brandrefresh that is currently being rolled out for theComputershare Group. The Computersharelogo and the corporate purple remain but thereis a new look and feel for the group as a wholewhich will become apparent in communicationsand literature, and through our brand values:‘Certainty, Ingenuity, Advantage’.

As part of the Computershare group,Georgeson has undergone a total rebrand, withthe logo and look and feel being changed tosynchronise with the rest of the group.Georgeson is a wholly owned subsidiary ofComputershare plc and the only publicly tradedproxy solicitation firm. The company is one ofthe most highly regarded global proxy solicitorsin the business.

The main change to the logo has been made to the ‘g’ descender which now incorporates the three curves from the Computershare ‘C’, to highlight awareness of the Georgeson/Computershare relationship.

www.georgeson.com

strength of Computershare’s global capabilitiesand the potential for Canadian companies toaccess foreign investment through a soleprovider.

Unique to Computershare’s global registrationservice is the ability to place securities in twoor more markets simultaneously, giving issuersand market participants the benefit of rapidcrossborder settlement of transactions.

For further information please contact ChrisGuy at [email protected]

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COMPUTERSHARE CELEBRATES ITS 100TH UK DEPOSITORY INTEREST CLIENTComputershare is delighted to announce thatIthaca Energy Inc. has become our 100th UKdepositary interest client. Ithaca is an explorationand development company, focused on theexploration and development of oil and gasreserves in the North Sea.

Ithaca engaged Computershare to support itssimultaneous listing on the London StockExchange’s AIM and Toronto Stock Exchange’sVenture Exchange, which successfully executedon Tuesday 6 June. This partnership signifies the


http://www.georgeson.com

mailto:[email protected]

http://www.georgeson.com

News: continued


ELECTRONIC DIVIDEND REGISTRATION – THESMARTER WAY TO ELECT ONLINE

This new service allows shareholders to makedividend elections for DRIP and Scrip schemeselectronically, rather than through the traditionalpaper-based method. Participating shareholderscan receive an email notification of entitlementbut can also still receive a paper notification ifthey wish. CREST members can elect via theCREST system and other holders can elect on theweb by registering as an Investor Centremember. When available, this service also allowsshareholders to specify electronically thecurrency that they would like their cashdividends to be paid in, or to specify part share,part cash election.

COMPUTERSHARE WINS JOHN MENZIES’REGISTRY BUSINESSComputershare is delighted to announce thatJohn Menzies plc, the international logisticscompany, has recently transferred its registrybusiness to us.

Founded in 1833, John Menzies has twooperating divisions, Menzies Distribution andMenzies Aviation. Today the company is aninternational operation with businesses inEurope, North and South America, South EastAsia, Australasia and Africa.

“I am confident that Computershare’sprofessionalism and robust operating platformwill ensure both the Company’s needs andthose of our shareholders will be fully met.”Wai Wong, Assistant Company Secretary, John Menzies ■

SECURITY LETTER FACILITY INTRODUCED IN RESPONSE TO INCREASE INSHAREHOLDER FRAUD

Computershare has introduced a new facility to help counteract the growing trend ofshareholder -related fraud and identity theft.This growing problem was highlighted recentlyby a High Court ruling involving Lloyds TSBRegistrars, Halifax Brokers and two FTSE 100issuers.

Issuers who sign up to the new facility will beable to benefit from an increased level ofsecurity. Whenever a shareholder logs achange of address, a security letter isautomatically generated which is sent to boththe new and old addresses. This provides anearly warning for shareholders who may havebeen targeted by a fraudster trying to changetheir address without their knowledge. Theletter also features an international freephonetelephone number for shareholders to call ifthey believe they have been a victim of afraudulent address change.

Over 25% of Computershare clients havealready signed up to our new security letterfacility. If you have not done so or you wouldlike further information, please contact yourAccount Manager.

CONTENTSPREVIOUS<

The Scene


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Lead Article: Global Capital Markets Group


into an execution phase. While the ‘final bell’ isclearly still a few rounds away, very credibleglobal business partnerships are rapidly beingforged. Witness situations such as NASDAQbecoming a 24% shareholder of the LondonStock Exchange (LSE) and the NYSE Group(itself only recently created as a publiccompany) signing a definitive agreement withEuronext for a ‘merger of equals’ creating‘NYSE Euronext’, as high-profile examples ofglobalisation. There is a widespread predictionthat further amalgamations will occur overtime, extending the consolidation across othertime zones.

The full effect of these developments is still notclear, yet they’ve sparked plenty of interest(and in some cases concern) in many aboardroom. What might these developmentsmean for UK plcs listed on the LSE, apart fromaccess to a deeper liquidity pool? Will acombined NYSE Euronext actively seek topoach domestic UK listings from the LSE tooffer a combined listing or integrated tradingservice on both sides of the Atlantic? WillNASDAQ, assuming it subsequently acquires

YOUR WORLD IN PERSPECTIVESophisticated capital structures; investoractivism; increased governance and compliancepressures; complex, changing legal andregulatory frameworks; reduced flexibility inidentifying and communicating with investors;and stock exchange mergers are just a few ofthe pressures for the corporate issuer.

Globalisation is a reality in today’s financialmarkets for all companies, regardless of sizeand whether or not they are listed on multiplemarkets. Companies are battling to capturecapital from local and international investors,while institutional capital efficiently flows inand out of markets at a keystroke. The need forissuers to openly engage with investors,particularly active investors such as hedgefunds, has never been greater.

The need for a global service provider is alsonow more important than ever before.

HEATED EXCHANGESIt is clear from daily press coverage thatmergers and takeovers of major stockexchanges are no longer just strategicambitions; proposed transactions are moving

In this article, Paul Conn, President of Computershare’s Global Capital Markets Group,delivers a view on the seismic changes unfolding in the major equities markets in the UK,Europe and across the Atlantic, and how Computershare’s global solution is equippingissuers to quickly adapt.

Business without bordersDelivering certainty in an uncertain world

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the LSE, try to migrate plc ADR listings fromthe NYSE Group to offer a similar transatlanticservice for those non-US companies that itdoes not currently service today? Will NYSEEuronext later seek to acquire LSE, or toestablish a rival equities exchange in London,as was reported in The Financial Times on 19 June 2006? Will ADR structures changeover the medium to longer term? Will it bepossible to integrate the liquidity pools of thesemarkets, while keeping local regulations inplace? While there is still plenty of jockeyingamong the European and New York-basedexchanges, the longer-term ramifications ofthis type of transaction will be wide reachingover time, even though in the short term,change is likely to be downplayed.

Our analysis suggests that these marketchanges may impact certain clearing andsettlement arrangements. There are manyfactors driving this, such as European marketconsolidation and harmonisation, developmentof international linkages between clearinghouses and competition between clearinghouses seeking to clear trades conductedthrough these new mega-markets. A glimpse ofthis was seen in the otherwise seeminglyinnocuous announcement made by the LondonStock Exchange on 24 May 2006 that it wantsto foster a competitive environment forclearing of trades executed on its exchange.How this might later impact settlement andregistration arrangements for plc issuers, if atall, is not yet clear, though the announcementsays trades will settle in CREST.

The focus on who trades your securities, wherethey are traded and how they are held orregistered will become even more important, aswill the need for issuers to seamlessly connectwith investors across different market systems.

FORCING A GLOBAL DIALOGUE Corporate governance initiatives are stilldriving changes to laws, regulations andpractices while directives continue to surfacefrom European harmonisation initiatives. At thetime of writing, the UK Company Law ReformBill is exercising the minds of interested parties,especially issuers. Currently before Parliament,the Bill has been targeted by brokers seeking to

include amendments to obligate issuers toenfranchise and communicate with beneficialshareholders.

In the US, the NYSE has recently released areport on proxy voting following a review by anexpert industry panel. Many aspects of the USsystem are now being debated across industry,such as whether to give issuers the right toidentify and directly communicate with theirbeneficial shareholders (since a majority ofshares are held in street name) and to open upthe beneficial shareholder communicationssystem. Currently communications have to beeffected through brokers and otherintermediaries.

We anticipate that shareholdercommunications, enfranchisement and proxyvoting will all remain focal points over the next12–36 months.

The deployment of e-communications solutionsis important if a) investors are to receive timelyand effective communications from issuers,and b) issuers are to capture the full financialbenefit from reduced production costs forannual reports and accounts, as has beenproposed in both the UK and the US.

Dematerialisation efforts are also back in primefocus on both sides of the Atlantic. ICSA hasreleased a framework for achievingdematerialisation in the UK market. In the US,

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while optional dematerialisation has been inplace for some time, the framework is to bemandated in the next 18 months, though it willstill be possible for investors to opt out andreceive physical stock certificates.

Computershare has been a long-standingadvocate of market changes that protect andenhance the interests of our local and globalclients. Our international experience andpresence enables us to actively engage andinfluence industry regulations, often utilisingthe experience gained in one market toeffectively impact on another.

The financial world is definitely becomingsmaller as the capital markets become moreintegrated. This trend is unlikely to stop anytime soon.

BUILDING A BUSINESS WITHOUT BORDERSOver the past five years, Computershare hasbecome both the world’s largest and leadingprovider of investor services. Through severalsuccessful acquisitions and integrations with acontinued focus on technology, Computershareis at the forefront of delivering seamlesssolutions to issuers and their stakeholdersworldwide. Our expertise in the capital marketsenables us to provide services across bordersthat improve administrative efficiencies.

The prime focus of our growth and solutiondevelopment has centred on issuers, theirstakeholders and the challenge of removing

barriers to efficient servicing of theseimportant stakeholder groups. Whether a smallregional issuer or a large global corporationwith multiple stock exchange listings, clientscan benefit from direct access to our full suiteof interconnected services specifically tailoredto your particular requirements. Our client andshareholder numbers have grown to 14,000issuers and 90 million investors. Heavilycommitted to technology, we spend overAU$100 million annually on technologyservices, including substantial expenditure onresearch and development.

In the UK context, our strategy is clearlydesigned to support plcs with their domesticand international servicing requirements, bethat in the area of share registration, employeeplan management, investor relations, mergersand acquisitions advice and execution, or proxysolicitation. Many of our plc clients haveinvestor services needs in the US. Recentexamples of companies that have worked withComputershare on cross-border solutions areBritish Airways plc and Unilever plc (both inconjunction with Citigroup’s ADR Division).Another example is the Standard Lifedemutualisation where the company’smembers and future shareholders needservicing in the UK, Ireland, Germany, Austriaand Canada.

We are also putting our global experience andservice platform to work in helping foreigncompanies list in London. A recent example of

this was the simultaneous IPO of Ithaca Energyon the TSX Venture Exchange and London’sAIM market. This was a celebrated transactionas it represented Computershare’s 100thdepositary interest listing into London by anon-UK company.

We firmly believe that a global service business supported by a common technologyplatform offers clients more choices and bettersolutions than fragmented offerings providedby different agents in different markets.Interestingly, some of our competitors continue to take the view that bilateralbusiness alliances provide a better solution for multinational issuers. We respect their view.However, we know that the opposite is truebased on our own experiences. How can two(or more) non-aligned service providers servicea multinational company more effectively,unless they share the same motivations,business priorities and obligation to the client?How can they deliver sophisticated or integratedservices without a common technology platformor network? How do they fund their collectiveR&D for global development? Who owns theresultant intellectual property? And perhapsmost importantly, who takes primaryresponsibility and indemnifies the client forservices provided?

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CHANGING THE BUSINESS LANDSCAPE – A GLOBAL REGISTER™ – POSITIONING THE FUTUREComputershare’s Global Capital Markets group,in partnership with Computershare‘sTechnology Services division and keygeographic Computershare Investor Servicesbusiness units, have designed and delivered arange of solutions to allow issuers to meet theincreasing demands of the global market.

For example, to enable issuers to trulycapitalise on our global capabilities and to ease the challenges of global corporateadministration, Computershare has developedweb-based tools to access integrated globaland local registers, backed by intuitivereporting features such as the ability to drilldown into any local market and any individualshareholder record, anywhere in the world, atany time, and from any location. The idea forour Global Register™ solution was conceivedfrom these basic requirements.

The Global Register, depicted in the diagram,encompasses an integrated registration servicespanning multiple jurisdictions, generallyencompassing two or more major time zones.With six major components, including newsettlement tools, the global service can bestreamlined and managed from the country inwhich you are headquartered, and is fullysupported by a global relationship and serviceteam. Through our partnership with Citigroup,we can also include ADR listings. >>

The Global Register will always be offered inconjunction with Portis™, the world’s mostadvanced global, web-based shareholderreporting system.

PORTISPortis is a web-based interface that drawstogether and consolidates information fromcomponent registers in each country. Itprovides global search capabilities to identify ashareholder or employee holder recordanywhere in the world. Fundamental to itsfunctionality is integrated top-holder reportingfor the top 200 holders across all registers, as

well as integrated reporting across all registersfor issued capital balancing.

If you would like more information regardingour Global Register solution or Portis, pleasecontact your Account Manager.

RELATED DEVELOPMENTSOur ability to configure Computershare’sportfolio of global products and services iscentral to the philosophy underpinning ourGlobal Register solution, and its applicabilitygoes far beyond just share registration.Examples of recent developments include:

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> In partnership with Citigroup, we aredeveloping the ability to offer local currencypayments to investors who live outside theissuer's home market. This service willenable investors to receive dividend andinterest payments in their home currenciesthrough a cheque or a wire transfer. Thisservice, available to both local andmultinational issuers, will also be extendedto sale proceeds for share plans and latercorporate action payments. The capabilityoffers not only convenience and speed butalso savings for the investor, particularly forlow-value payments for which the cost toclear foreign-currency-denominatedcheques sometimes exceeds the value ofthe cheque itself. If you would like to knowmore about this service, please contact yourAccount Manager.

> X-Settle – a web-based service for brokers andother market users, which electronicallytransfers securities between countries tofacilitate cross-border settlement. Coupledwith the establishment of our globaltransactions unit, we are now able to rapidlymove securities between markets, often withinhours. This is a crucial component in gainingsupport from brokers, other intermediariesand investors who conduct international trade.X-Settle was recently deployed betweenAustralia and the UK markets, and betweenCanada and the UK, and will be rolled outprogressively to all Computershare markets.

If you would like to know more about either of these services, please contact yourAccount Manager.

CONCLUSIONThe old adage that change is the only constantcould not be more appropriate in today‘s globalcapital markets. For issuers, especially multinationals, complex and evolving marketstructures will continue to pose challenges tobuilding and sustaining a successful two-wayrelationship with a diverse investor population.

Despite these uncertainties, issuers can takecomfort from the fact that Computershare’sglobal solutions are purposely built to giveissuers efficient access to these global markets,while simultaneously easing the burden ofadministration and eliminating the need toemploy multiple service providers.

Irrespective of whether these major stockexchanges consolidate (or other exchangecombinations occur), Computershare's businessmodel is flexible enough to deliver certainty inan uncertain world.

HOW CAN WE HELP? To find out how Computershare can help solveyour global service needs, please feel free tocontact your local Account Manager or theGlobal Capital Markets team. If you wish todiscuss some of the broader changes takingplace in the markets and how these changesmight affect you or your shareholders, pleasedon’t hesitate to contact the Global CapitalMarkets team directly. In the UK, this [email protected] [email protected] We‘d bedelighted to work these issues through withyou and your team.

Paul ConnPresident, Global Capital Markets [email protected]

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