Annual Report 2003

The North American region comprises the United States of America and Canada.

REGIONAL SUMMARY

During the year, Computershare North America made significant strides. We completed the implementation of SCRIP for the bulk of our North American businesses. We have lowered our operating costs across North America, while maintaining high client satisfaction and loyalty, and we have added new clients, both through direct sales and through strategic acquisitions.

We accomplished all of this despite the difficult market conditions experienced in the US following the burst of the ‘dot com’ bubble and the September 11 attacks. These have continued to affect us, as they have affected Computershare worldwide. US interest rates are at a 40 year low, with the US Federal Reserve making 13 rate cuts in the past two years, directly affecting income from funds held in trust by Computershare.

Many analysts foresee economic recovery in the near future. Even so, we have continued to focus on recessionproofing our North American operation by concentrating on client retention, efficiency and cost containment.

The implementation of SCRIP in North America provided a significant opportunity to not only eliminate the costs of licensing third-party systems, but also to begin implementing a significant regional-wide business process review. This review, which will continue through the 2004 fiscal year, will result in efficiencies across the board that will reduce costs by increasing the speed and accuracy of processing and eliminating unnecessary staffing and facilities expenses.

As areas of the business in North America have gone through this process, we have seen immediate results. Both our plan managers and share registry businesses in North America have not only retained the vast majority of their clients, despite intensifying competition, but both have acquired significant new clients over the course of the year, including The Home Depot®, Abbott Laboratories, The PNC Financial Services Group Inc, and Chicago Mercantile Exchange.

The efficiencies gained through implementation of SCRIP have also enabled us to acquire other companies’ business without the added expense of increased staffing, building our client base and forging new alliances. Our acquisition of Charles Schwab’s employee stock purchase plan business includes not only the acquisition of new clients but also a strategic alliance to provide ongoing equity plan solutions for prospects and clients requesting combined employee stock purchase plan and stock option plan services.

At the end of the year we announced the acquisition of Fifth Third Bancorp’s transfer agency business, which not only brings us 80 new issuer clients but also forges a relationship with a major Midwest commercial bank.

In addition, we have focused this year on improving cash flow, to enable us to reinvest in the business and make strategic acquisitions. We have implemented stringent collection procedures for all our clients, and expect to see greater improvements flowing into FY 2004.

We have also significantly improved our cash position, partly through strict spending controls for fixed assets and information technology, but also largely thanks to the implementation of SCRIP, which eliminated the expense associated with using the SunGard system. Our improved cash position in the US means that not only are we completing the fiscal year with a positive cash position, but that we were able to complete the acquisition of the Fifth Third transfer agency business with no outside financing.

We are now beginning to see the same types of progress in other areas of our North American business. Document Services is effectively expanding beyond supporting our investor services business into sales of commercial printing and mailing services. Analytics has established content licensing and private label agreements with a number of major US firms, including Standard and Poor’s and the American Stock Exchange.

In Canada, the primary focus has been on the implementation of SCRIP for our transfer agency and employee plans businesses. Even so, we have been involved in some major transactions in Canada this year, most notably the Great West Life Company plan of arrangement with Canada Life. This is an extremely complex transaction that began in February 2003 and is due to close in July 2003, and we will see the full revenue benefit of this action in FY 2004.

As the world economy recovers, the relationships and reputation we have been building will lead to greater opportunities for growth. We will focus in FY 2004 not only on continuing to build market share by acquiring new clients, but also on effectively cross-selling to our current client base. The efficiencies we have implemented through SCRIP and through business process review will make us better able to compete both in service and in price in the highly competitive North American marketplace.