Annual Report 2002 STOCK EXCHANGE FOR THE YEAR ENDED 30 JUNE 2002

Brought to you by Global Reports Chairman’s Report 1

Chief Executive Officer’s Report 5

Financial Statements 8

Directory 16

Member Firms of the Exchange 17

NZSE services and prices 18

Ten year summary 20

The Board is committed to delivering an NZSE entity which encourages and grows New Zealand’s capital markets.

We will continue to work with the Government for the betterment of the market.

Demutualisation will mean that the NZSE is in a far better position to deliver value to New Zealand.

Brought to you by Global Reports CHAIRMAN S REPORT

Simon Allen, Chairman

GLOBAL ECONOMIC PERFORMANCE COMBINED WITH OTHER MAJOR FACTORS INCLUDING THE SEPTEMBER 11 TERRORIST ATTACKS AND GOVERNANCE ISSUES HAVE LED TO POOR PERFORMANCE IN ALL MAJOR MARKETS.

The past year has seen significant changes SUMMARY OF THE YEAR within the capital markets and at the New Ended 30 June 2002 Zealand Stock Exchange. Alongside and partly interdependent with Dollars in thousands 2002 2001 +/– demutualisation, the Board has initiated a Revenue 10,277 9,344 +10% change process within the organisation. Expenses before tax* 9,938 8,066 +23% Significant changes to the Board occurred Surplus/(deficit) –515 747 –169% during the year. Members’ funds 6,503 7,018 –7% As part of our previously signalled move to a commercial Board structure of smaller size * Excluding non-recurring expenses. and with a greater balance of non-broking Directors, three long standing Directors, Eion Edgar, Malcolm Brown and Hamish Taylor stood down and were replaced by three non-broking commercial Directors, Andrew Harmos, Lloyd Morrison and Tim Saunders. A very special note should be made of the significant contribution made by each of those who have stood down. Another major change was the resignation of the Chief Executive, Mr Bill Foster, after thirteen years service to the NZSE and the markets. Bill has made a major contribution and led the NZSE to be one of the lowest cost providers of exchange services in the world. The Board was delighted to appoint Mr Mark Weldon as Chief 1 Executive, effective 4 June 2002.

Brought to you by Global Reports As you will see from Mark’s report he is charged with driving a lot of changes in our markets and setting the strategy and structure of the NZSE to meet the needs of our markets. Under Mark’s guidance, a new structure has been formed and significant new hires have been made. The NZSE has engaged in discussions and consultation on a series of issues including market structures and regulatory issues. The interdependence of many parties in achieving good outcomes for corporates, investors and others who participate in these markets requires the NZSE to develop good working relationships. This is happening. The NZSE has publicised its intention to demutualise, a precursor to many of the changes which are needed to cultivate a healthy New Zealand capital market and a healthy NZSE. The demutualisation vote will be put to members on 16 October 2002. A significant amount of preparatory work has been undertaken by many people in this process. The Board unanimously supports demutualisation. Should the proposal succeed, it will empower the Board to initiate a restructure of the NZSE at a future date. We have previously indicated that this is likely to be in the first quarter of 2003. The Board is committed to delivering an NZSE entity which encourages and grows New Zealand’s capital markets. We are confident that we have gone a long way to establishing the structure and resourcing as a foundation for delivering these outcomes.

Simon Allen Chairman

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Brought to you by Global Reports SOURCES OF INCOME BREAKDOWN OF MEMBERS’ FUNDS During years ended 30 June EXPENDITURE As at 30 June In millions of dollars During years ended 30 June In millions of dollars In millions of dollars 10 10 7

9 9 6 8 8

7 7 5

6 6 4 5 5 3 4 4

3 3 2

2 2 1 1 1

0 0 0 98 99 00 01 02 98 99 00 01* 02 98 99 00 01 02

From members and other sources Other operating costs From listing fees Computer system costs

* Excluding non-recurring expenses

TOTAL ASSETS NUMBER OF TRADES MEMBERSHIP NUMBERS At 30 June During years ended 30 June BY TYPE In millions of dollars In thousands At 30 June Number 10 750 500

9 675 450

8 600 400

7 525 350

6 450 300

5 375 250

4 300 200

3 225 150

2 150 100

1 75 50

0 0 0 98 99 00 01 02 98 99 00 01 02 98 99 00 01 02

Non-current assets Member Firms

Current assets Individual Full Members Individual Associate Members

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Brought to you by Global Reports MARKET CAPITALISATION MARKET INDEX – NZSE40 GROSS INDEX As at quarters' end to 30 June 2001, then months' end to 30 June 2002 As at quarters' end to 30 June 2001, then months' end to 30 June 2002 In billions of dollars

60 4,500

40 3,000

20 1,500

98 99 00 01 02 98 99 00 01 02

MARKET TURNOVER BY VALUE MARKET TURNOVER BY VOLUME By quarters in years ended 30 June. In millions of dollars By quarters in years ended 30 June. In millions of shares

9,000 3,000 8,000 2,500 7,000 6,000 2,000 5,000 1,500 4,000 3,000 1,000 2,000 500 1,000

98 99 00 01 02 98 99 00 01 02

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Brought to you by Global Reports CHIEF EXECUTIVE OFFICER S REPORT

Mark Weldon, Chief Executive Officer

CHALLENGES AND OPPORTUNITIES The NZSE is a critical institution. It sits right at the heart of the capital markets and is essential to the growth of New Zealand companies and the New Zealand economy, which if such growth is to occur, will be capital market led. As a stock exchange, the NZSE should have no natural enemies. If it performs well, everybody is better off. However, upon returning to New Zealand, I found that this was not the case. It would be fair to say that the media was ill disposed toward us, and most people I met had a diatribe of past ills they were keen to report. To some extent this represents the overly close brand identity of the NZSE with the market, as well as cultural mistrust generated in 1987, and valid criticism. Going forward we need to recognise and address all these causes, and create the right platform for growth and open communication. The NZSE therefore aims to become one of the most respected companies in the country, attracting top-tier talent and developing a reputation for innovation and leadership. If we do not accomplish these things we will have failed not only ourselves, but the New Zealand economy in general.

THE PAST YEAR During the last year the foundation was set for growth by the decision not to merge with the ASX. As proposed, the merger would have entailed a closure of the NZSE, all trading to be done out of Sydney, and all trades to be done in $A. This would have been a terribly bad outcome for the New Zealand capital markets. Companies would have found it a stepwise function harder to raise capital and receive analyst coverage. Brokers would have been under pressure to rationalise. The penumbra of jobs surrounding the capital markets such as law, accounting and finance would have been largely shipped offshore. Finally, the New Zealand capital markets would have been regulated and constructed from Australia, with little or no regard to the idiosyncrasies of the New Zealand economy, and with little impetus to design custom solutions for this market. Also coming out of the merger was a clear imperative at Board 5 level for change within the NZSE itself. It was largely this imperative that led to my appointment.

Brought to you by Global Reports GOING FORWARD If I was to describe the mandate behind my appointment it would be to work in a collaborative way with all the key stakeholder groups in the New Zealand capital markets, to create and implement a clear set of plans that will put the capital markets in a place from which they can lead the New Zealand economy into and through a new growth phase. As is well known, New Zealand has amongst the lowest proportion of listed equity to GDP among the OECD countries. This is important because it goes to both the size of the opportunity, and the need to be creative in order to solve it. New Zealand did not grow up in the industrial revolution, our economy looks different than the countries we usually compare ourselves to, and we need to adapt our capital markets accordingly. In terms of actual initiatives, there are a tremendous amount of things that we need to pursue. Some of the key initiatives include: Market structure. We have recently put out an initial proposal for a second board that we have provisionally called “AX”. This market will be designed to replace the New Capital Market, and is constructed in such a way that it will appeal to a wide set of new possible constituents, in particular, co-operatives and the small and medium sized companies currently on the so-called ‘unlisted’ market. Products. The NZSE is committed to working with the broking community to develop a liquid derivatives and options market in New Zealand. Initially this would comprise probably just one forward instrument based on a well constructed index. As with all things, however, this will require commitment from brokers to make markets in these products and set prices. Infrastructure and technology. The NZSE infrastructure team, led by Wayne Zander, is involved in various projects, including upgrading to full SWIFT compliance, open access for trading systems, and other potential initiatives involving technology. Marketing, education and communications. There is a very real need for the NZSE to proactively promote the NZ capital markets to both companies and investors. In both cases the NZSE is developing a systematic and sequenced strategy of communications and education to promote growth and proper investing. It may also be the case that the NZSE will change its name to create a new brand image. These initiatives will be led by Melissa Jenner. Customer relations and market development. The NZSE is clearly under attack from the ASIC, the ASX listing rules changes earlier this year are an example of that. To defend against this threat we have to attain and maintain an excellent customer service focus. Geoff Brown is in charge of the Relationship Management and customer service group. This group 6 is also charged with growing the debt market and driving the growth in the AX when it comes on line.

Brought to you by Global Reports Legal and regulatory. Already it has been a busy season in legal and regulatory. We have rewritten most of the Listing and Members’ Rules, and are well underway in developing a securities library to help market participants gain greater clarity into decisions and the decision making process. Elaine Campbell is driving this agenda.

FINANCIAL POSITION In financial terms, the NZSE has had a relatively tough year. Global equity markets have been hit hard, with volumes (and NZSE revenues) falling accordingly. Moreover, significant extraordinary expenses have been incurred related to the demutualisation process. Going forward, we will invest in growth through hiring talent, and look to grow revenues through some of the initiatives outlined above.

DEMUTUALISATION AND THE FUTURE The current proposal to demutualise the NZSE on which Members will vote on 16 October will fundamentally change the way in which the Exchange is structured and set the foundation for the development of the New Zealand capital market. Demutualisation will mean that the NZSE is in a far better position to face competition within our marketplace and have a clearer focus as a commercial, profit driven organisation that has the flexibility to pursue business opportunities through horizontal and vertical integration. The importance of attracting overseas investors back into the New Zealand market, increasing our domestic investor and listed company base and encouraging our own Government to invest in this country in support of the capital markets cannot be overstated. We will continue to work with the Government for the betterment of the market and build on the positive relationship that we have established. As stated at the outset, the NZSE is critical to New Zealand’s future, and together the Exchange and all stakeholders must work for mutually beneficial outcomes that will grow the capital markets and this country.

Mark Weldon Chief Executive Officer

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Brought to you by Global Reports NEW ZEALAND STATEMENT OF FINANCIAL PERFORMANCE STOCK EXCHANGE For the year ended 30 June 2002

30 June 30 June Dollars in thousands Note 2002 2001

REVENUE

Listings ...... 3,069 2,130 Trading, clearing & settlement ...... 3,026 3,224 Sale of market information ...... 2,187 2,273 Market Surveillance Panel recoveries ...... 1,095 587 Members’ fees ...... 284 476 Management fees from NZSE Index Management Ltd...... 262 120 Interest...... 267 348 Other income ...... 87 186 10,277 9,344

EXPENSES

Information technology and computer systems...... 2,668 2,608 Depreciation ...... 1,493 1,258 Staff costs and related expenses...... 1,789 1,089 Office expenses ...... 1,235 1,472 Legal and advisory fees ...... 866 115 Market Surveillance Panel costs ...... 1,133 715 Rent ...... 397 460 Directors’ fees ...... 225 225 Auditor’s remuneration: Audit fee ...... 40 35 Fees for other services...... 92 89 9,938 8,066

Surplus before non-recurring expenses ...... 339 1,278 Non-recurring expenditure ...... 6 (778) (679)

Operating (deficit) surplus before taxation ...... (439) 599 Taxation (expense) credit ...... 7 (76) 148

(Deficit) Surplus for the year ...... (515) 747

NEW ZEALAND STATEMENT OF MOVEMENTS IN MEMBERS’ FUNDS STOCK EXCHANGE For the year ended 30 June 2002

30 June 30 June Dollars in thousands 2002 2001

Members’ funds at beginning of year...... 7,018 6,271 8 (Deficit) surplus for the year...... (515) 747

Members’ funds at end of year...... 6,503 7,018

Brought to you by Global Reports NEW ZEALAND STATEMENT OF FINANCIAL POSITION STOCK EXCHANGE As at 30 June 2002

30 June 30 June Dollars in thousands Note 2002 2001

ASSETS Current assets: Cash at bank...... 53 41 Accounts receivable ...... 2 1,148 1,431 Taxation receivable ...... 268 – Deferred tax...... 7 382 209 Investments...... 3 5,233 4,233 7,084 5,914 Non-current assets...... 4 1,237 1,962 Net assets of Fidelity Guarantee Fund ...... 5 446 446 8,767 8,322

LIABILITIES AND MEMBERS’ FUNDS

Accounts payable...... 1,343 797 Restructuring provision ...... 6 475 – Tax provision ...... – 61 Fidelity Guarantee Fund...... 5 446 446 NZSE Members’ Funds ...... 6,503 7,018 8,767 8,322

These financial statements were authorised for release on 23 July 2002.

S. C. Allen D G Trow Chairman Director

M R Weldon Chief Executive Officer

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Brought to you by Global Reports NEW ZEALAND STATEMENT OF CASH FLOWS STOCK EXCHANGE For the year ended 30 June 2002

30 June 30 June Dollars in thousands 2002 2001

CASH FLOWS FROM OPERATING ACTIVITIES Cash was provided from: Cash received from members and others ...... 10,485 8,662 Net GST received ...... 86 – Interest received ...... 323 347 10,894 9,009 Cash was applied to: Cash paid to suppliers and employees ...... 8,442 7,270 Taxation paid ...... 563 – Net GST paid ...... – 40 9,005 7,310

Net cash inflows from operating activities ...... 1,889 1,699

CASH FLOWS FROM INVESTING ACTIVITIES Cash was provided from: Decrease in bank deposits ...... 1,851 – Decrease in other investments...... – 333 1,851 333 Cash was applied to: Purchase of non-current assets...... 768 424 Increase in other investments ...... 2,960 – Increase in bank deposits ...... – 1,574 3,728 1,998

Net Cash outflows from investing activities ...... (1,877) (1,665)

Net increase in cash held ...... 12 34 Opening cash balance ...... 41 7

Cash at end of the year ...... 53 41

RECONCILIATION OF (DEFICIT) SURPLUS FOR THE YEAR TO NET CASH FLOWS FROM OPERATING ACTIVITIES

(Deficit) Surplus for the year ...... (515) 747 Add non cash items: Depreciation ...... 1,493 1,258 Unrealised loss on investments ...... 109 46

Decrease (increase) in accounts receivable ...... 283 (489) (Increase) decrease in taxation receivable ...... (329) 61 (Increase) in deferred tax...... (173) (209) Increase in accounts payable ...... 546 285 Increase in restructuring provision ...... 475 –

Net cash flows from operating activities ...... 1,889 1,699

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Brought to you by Global Reports NEW ZEALAND NOTES TO THE FINANCIAL STATEMENTS STOCK EXCHANGE For the year ended 30 June 2002

1. STATEMENT OF ACCOUNTING POLICIES The financial statements presented here are of the reporting entity the New Zealand Stock Exchange (“the Exchange”) and its Fidelity Guarantee Fund. These financial statements are presented in compliance with the Financial Reporting Act 1993. The directors have considered that the information relating to the 100% owned subsidiary NZSE Index Management Limited is better presented by applying the “Equity Method” in accordance with Statement of Standard Accounting Practice (SSAP) 8 “Accounting for Business Combinations”. The financial statements have been prepared on the basis of historical cost with the exception of certain items for which specific accounting policies are identified. (i) Non Current Assets and Depreciation. All non current assets are initially recorded at cost. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount. Non current assets have been depreciated on a straight line basis at the following rates: – Computer equipment and software: over three years – Furniture, fittings and equipment: over five years – Leasehold improvements: over unexpired portion of lease (ii) Taxation. Tax expense is based on accounting surpluses, adjusted for the permanent differences between accounting and tax rules. The impact of all timing differences between accounting and taxable income is recognised as a deferred liability or asset. This is the comprehensive basis for the calculation of deferred tax under the liability method. A deferred tax asset, or the effect of losses carried forward that exceeds the deferred tax liability, is recognised in the financial statements only where there is virtual certainty that the benefit of timing differences, or losses, will be utilised. (iii) Goods and Services Tax (GST). The Statement of Financial Performance and Statement of Cash Flows have been prepared so that all components are stated exclusive of GST. All items in the Statement of Financial Position are stated net of GST, with the exception of receivables and payables, which include GST invoiced. (iv) Financial instruments. Financial Instruments carried in the statement of financial position include cash and bank balances, investments, accounts receivable and accounts payable. Investments are stated at market value, except for the investment in NZSE Index Management Ltd, which is included at cost of $100, and any resultant gain or loss is recognised in the statement of financial performance. Accounts receivable are carried at estimated realisable value after providing against debts where collection is doubtful. (v) Statement of cash flows. The following are the definitions of the items used in the statement of cash flows: (1) Operating activities include all transactions and other events that are not investing or financing activities. (2) Investing activities are those activities relating to the acquisition, holding and disposal of property, furniture and equipment and of investments. Investments can include securities not falling within the definition of cash. (3) Cash is considered to be cash on hand and current accounts in banks, net of bank overdrafts. (vi) Operating leases Operating lease rentals are charged to the Statement of Financial Performance as they fall due. 11 (vii) Changes in accounting policies There have been no material changes to accounting policies during the year. All accounting policies have been applied on bases consistent with those used in previous years.

Brought to you by Global Reports NEW ZEALAND NOTES TO THE FINANCIAL STATEMENTS (continued) STOCK EXCHANGE

2. ACCOUNTS RECEIVABLE Included in accounts receivable is a management fee receivable from NZSE Index Management Limited amounting to $261,440 (2001 $390,011).

3. INVESTMENTS, AT MARKET VALUE

Dollars in thousands Interest rates Maturities 2002 2001 Bank deposits 5.3% Call – July 2002 1,751 3,602 Fixed interest securities 6.5% – 10.8% 2003 – 2010 3,482 631 5,233 4,233

4. NON-CURRENT ASSETS Book value Book value Accumulated 30 June 30 June Dollars in thousands Cost depreciation 2002 2001

Computer equipment ...... 5,020 3,788 1,232 1,920 Furniture & equipment ...... 158 154 4 20 Leasehold improvements ...... 102 101 1 22 5,280 4,043 1,237 1,962

5. NZ STOCK EXCHANGE FIDELITY GUARANTEE FUND There has been no change to the Fund during the year. The accumulated funds are represented by funds with the Exchange. The operation of the Fidelity Guarantee Fund is governed by Rules 25(1) – 25(10) of the New Zealand Stock Exchange Rules. The Rules give the Board of the Exchange the power to levy members in any one year up to a maximum of $1,000,000. The liability of the Fund for any one particular failure is limited to $500,000 or such greater amount as may be determined from time to time by the Board. The maximum amount payable to any one claimant in respect of a failure is limited to $20,000 or such greater amount as the Board may determine.

6. NON-RECURRING EXPENDITURE The Exchange has committed to plans to demutualise its structure. This process has commenced by 30 June 2002 and is expected to be completed in the next financial period. Provision has been made in the current year for the estimated full amount of the costs associated with this. The costs are separately disclosed, as they are non-recurring in nature.

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Brought to you by Global Reports NEW ZEALAND NOTES TO THE FINANCIAL STATEMENTS (continued) STOCK EXCHANGE

7. TAXATION Dollars in thousands 2002 2001 Income tax Operating (deficit) surplus before tax ...... (439) 599 Permanent differences Non-taxable income ...... (243) (437) Prior period adjustment...... (3) Non-deductible expenditure ...... 917 972 232 1,134

Tax at 33% ...... 76 374 Tax effect of losses now available to be recognised ...... – (356) Timing differences now recognised ...... – (166)

Income tax recognised in Statement of Financial Performance...... 76 (148) Comprising: Current tax ...... 201 61 Deferred tax...... (125) (209) 76 (148)

Deferred tax Balance at beginning of year ...... 209 – Prior period adjustment...... 48 – Movement during the year ...... 125 209

Balance at end of year ...... 382 209 Imputation Credit account Balance at beginning of period ...... – – Income tax paid ...... 563 – Credits attached to dividends paid...... – –

Balance at end of period ...... 563 –

8. FINANCIAL INSTRUMENTS (i) Fair value. The fair value of these instruments is considered to be equivalent to the value as reflected in the Statement of Financial Position. (ii) Credit risk. The maximum credit risk as defined in New Zealand Financial Reporting Standard 31 “Disclosure of information about financial instruments” associated with the financial instruments held by the Exchange is considered to be the value reflected in the Statement of Financial Position. The risk of non-recovery of these amounts is considered to be minimal. The Exchange does not require collateral or other security to support financial instruments with credit risk. (iii) Interest rate risk. The Exchange is exposed to interest rate risk in that future interest rate movements will affect cash flows and the market value of fixed interest and other investment assets.

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Brought to you by Global Reports NEW ZEALAND NOTES TO THE FINANCIAL STATEMENTS (continued) STOCK EXCHANGE

9. COMMITMENTS The Exchange has commitments, which are not recognised in the financial statements, for property lease rentals for existing office space:

Dollars in thousands 2002 2001

Up to 1 year ...... 94 306 1 – 2 years ...... – 81 94 387

10. NZSE INDEX MANAGEMENT LIMITED This wholly owned subsidiary company is responsible for the management of the NZSE10 Index Fund (TeNZ). The financial performance of the company for the year ended 30 June 2002 was:

Dollars 2002 2001

Revenue received...... 483,673 396,034 Expenses paid ...... 483,673 396,034

Operating surplus for the year...... – –

The financial position of the company as at 30 June 2002 was: Issued capital ...... 100 100 Liabilities: Accounts payable ...... 15,886 21,794 Management fee payable ...... 261,440 390,011 277,426 411,905

Assets: Cash at bank...... 178,310 62,552 Funds on deposit...... 99,116 349,353 Accounts receivable ...... – – 277,426 411,905

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Brought to you by Global Reports NEW ZEALAND AUDITORS’ REPORT STOCK EXCHANGE

PricewaterhouseCoopers 113-119 The Terrace PO Box 243 , New Zealand AUDITORS’ REPORT TO THE MEMBERS OF THE Telephone +64 4 462 7000 NEW ZEALAND STOCK EXCHANGE Facsimile +64 4 462 7001

We have audited the financial statements on pages 8 to 14. The financial statements provide information about the past financial performance and cash flows of the New Zealand Stock Exchange (the “Exchange”) for the year ended 30 June 2002 and its financial position as at that date. This information is stated in accordance with the accounting policies set out on page 11.

DIRECTORS’ RESPONSIBILITIES The Exchange’s Directors are responsible for the preparation and presentation of financial statements which give a true and fair view of the financial position of the Exchange as at 30 June 2002 and its financial performance and cash flows for the year ended on that date.

AUDITORS’ RESPONSIBILITIES We are responsible for expressing an independent opinion on the financial statements presented by the Directors and reporting our opinion to you.

BASIS OF OPINION An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial statements. It also includes assessing: (a) the significant estimates and judgements made by the Directors in the preparation of the financial statements; and (b) whether the accounting policies are appropriate to the circumstances of the Exchange, consistently applied and adequately disclosed. We have conducted our audit in accordance with generally accepted auditing standards in New Zealand. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. We have no relationship with or interests in the Exchange other than in our capacities as auditors and tax advisers.

UNQUALIFIED OPINION We have obtained all the information and explanations we have required. In our opinion: (a) proper accounting records have been kept by the Exchange as far as appears from our examination of those records; and (b) the financial statements on pages 8 to 14: (i) comply with generally accepted accounting practice in New Zealand; and (ii) give a true and fair view of the financial position of the Exchange as at 30 June 2002 and its financial performance and cash flows for the year ended on that date. Our audit was completed on 23 July and our unqualified opinion is expressed as at that date. 15

Chartered Accountants Wellington

Brought to you by Global Reports NEW ZEALAND DIRECTORY STOCK EXCHANGE As at 30 June 2002

Simon C Allen, BSc, BCom, ANZSIA, Chairman, Geoffrey T Ricketts, LLB (Hons), Solicitor, Donald G Trow, BCom, FCA, University Member NZSE, 44; Chief Executive, ABN 56; Consultant Russell McVeagh McKenzie Professor, 65; Chairman Advisory AMRO New Zealand Ltd, Chairman AMS New Bartleet & Co, Chairman Royal & Sun Committee to the Statutory Manager Zealand Ltd, Director ABN AMRO Australia Alliance Insurance (New Zealand) Ltd, of the Equiticorp group of companies, Ltd, ABN AMRO Craigs Ltd. Lion Nathan Ltd, Director Spotless Group Director Ryman Healthcare Ltd. Ltd, Todd Corporation Ltd and Taylors Campbell M Stuart, BCom, ACA, Deputy Group Ltd. Mark R Weldon, Dr Jurisprudence Chairman, Member NZSE, 37; Managing (Columbia), MEcon (First Class Hons), BCom, Director, UBS Warburg NZ Equities Ltd. Timothy E C Saunders, BCom, MBA, BA, Chief Executive Officer Company Director, 60; Chairman Feltex Neil J Craig, B Ag Comm (Econ), Member Carpets Ltd, Solid Energy (NZ) Ltd, David L Lawson, ANZIM, Secretary. NZSE, 51; Managing Director, ABNAMRO Director AFFCO Holdings Ltd, Allied Craigs Ltd. Finance Ltd, Calan Healthcare Properties Trust, Capital Properties New Zealand Ltd, Andrew W Harmos, LLB (Hons), BCom, Challenger Financial Services, Contact Solicitor, 43; Energy Ltd, LEK Consulting Ltd, Pyne H R Lloyd Morrison, LLB (Hons), Company Gould Corporation Ltd, Northington Director, Chairman H R L Morrison & Co Ltd, Partners Ltd. Director, H R L Morrison & Co (Australia) William R Trotter, Member NZSE, 44; PTY Ltd, Ltd, Morrison & Co Managing Director, First NZ Capital Infrastructure Management Ltd, Trustpower Equities Ltd. Ltd, Wellington International Airport Ltd, Ltd.

DISCIPLINARY COMMITTEE MARKET SURVEILLANCE PANEL NZSE OFFICE J A L Gibson, QC, Chairman W J Falconer, LLB, CNZM, Chairman Level 9, ASB Bank Tower G C Gould, CA, ACIS P C Brook, BCom, CA, Deputy Chairman 2 Hunter Street C T Horton, CBE, JP B J Brown, LLB (Hons) P O Box 2959 G J Clatworthy, JP, Independent Member J A Cimino, BCA Wellington P E Leloir, LLB, Secretary, Disciplinary D Clifford, BA, LLB (Hons) NEW ZEALAND Committee G R W France, BCom, CA DX SP23501 P L Hays, BCom, FCA, FAMINZ (Arb), ACCM Telephone (04) 472 7599 COMPLAINTS COMMITTEE T P McGuinness, BCA, ANZSIA Facsimile (04) 473 1470 D J Turkington, BCA (Econ), MCom (Econ), Rt Hon Sir Ian L McKay, KNZM, BA, LLB, PhD FCIArb, FAMINZ(Arb) Internet http://www.nzse.co.nz G T H Bourke J P H Oldfield, LLB (Hons), VUW, LLM Email [email protected] (London) MEMBERSHIP APPEAL A Paterson, FCA NZSE TELEPHONE SHARE PRICE COMMITTEE D M Wood, MA (Hons), FNZSIA INFORMATION SERVICES J A L Gibson, QC, Chairman P E Leloir, LLB, Secretary, Market Market summary: G C Gould, CA, ACIS Surveillance Panel Telephone (09) 377 7061 C T Horton, CBE, JP (Auckland free dial area) P E Leloir, LLB, Secretary, Membership NEW CAPITAL MARKET Telephone (04) 499 6174 Appeal Committee Internet http://www.ncm.co.nz (Wellington free dial area) Email [email protected] Telephone (03) 379 9955 16 NZSE DEBT MARKET (Christchurch free dial area) Internet http://www.debtmarket.co.nz On line service: Email [email protected] Telephone 0900 49 000 (call charge 65 cents per minute)

Brought to you by Global Reports NEW ZEALAND MEMBER FIRMS STOCK EXCHANGE as at date of publication

ABN AMRO Craigs Ltd Direct Broking Ltd Garlick & Co. Ltd Macquarie Equities Tauranga, Box 13-155 Wellington, Box 1790 Wellington, Box 2098 New Zealand Ltd Tel: (07) 577-6049; Tel: (04) 499-6655; Tel: (04) 470-0200. Wellington, Box 991 Tel: (04) 462-4999; Hamilton, Box 1282 Auckland, Box 109-098 Giffney & Jones Tel: (07) 838-1818; Tel: (09) 523-5230. Auckland, Auckland, Box 2006 Tel: (09) 357-5908; Rotorua, Box 1148 Ellis Bros. Pvte Bag MBE N349 Tel: (07) 348-1860; Auckland, Box 33 940 Tel: (09) 524-9149. Christchurch, Box 13186 Gisborne, Box 153 Tel: (09) 486-7700. Glendinning & Tel: (06) 868-1155; Tel: (03) 366-8851. Esam Cushing Glendinning Auckland, Box 1196 & Company Palmerston North, McDouall Stuart Tel: (09) 919-7400; Hastings, Box 241 Box 1848 Securities Ltd Takapuna, Box 33352 Tel: (06) 876-8129. Tel: (06) 358-7103. Wellington, Box 1886 Tel: (09) 486-6567; Tel: (04) 472-2716. First NZ Capital Gould Steele & Co. New Plymouth, Box 8011 Equities Ltd Wellington, Box 1739 Munro Hubbard & Co. Tel: (06) 759-0015; Wellington, Box 3394 Tel: (04) 472-8211. Timaru, Box 502 Wanganui, Box 4287 Tel: (03) 684-8200. Tel: (04) 474-4400; Greenslades Ltd Tel: (06) 348-5522; Auckland, Box 5333 Dunedin, Box 5545 NZIJ Stockbrokers Ltd Invercargill, Box 1246 Tel: (09) 302-5500. Tel: (03) 477-5900; Wellington, Box 5398 Tel :(03) 214-9939; Tel: (04) 499-3592. First New Zealand Oamaru, Box 453 Gore, Box 317 Tel: (03) 434-9716; Tel: (03) 208-9310; Securities Limited Rose Capital Wellington, Box 396 Christchurch, Box 1094 Queenstown, Box 360 Whangarei, Box 573 Tel: (04) 496-5310. Tel: (03) 366-7973; Tel: (03) 441-8404. Tel: (09) 438-1988; Auckland, Box 5003 Nelson, Box 210 Ross, Sinclair & Co Wellington, Box 10556 Tel: (09) 307-5710; Tel: (03) 546-7621; Tel (04) 472-4484. Ashburton, Box 184 Nelson, Box 114 Invercargill, Box 880 Tel: (03) 308-7042. ABN AMRO Equities NZ Ltd Tel: (03) 548-8319. Tel: (03) 218-4167. Auckland, Box 3464 Salomon Smith Barney Hamilton Hindin Greene Tel: (09) 358-7500. Forsyth Barr Ltd New Zealand Ltd Wellington, Box 5266 Christchurch, Box 10 Wellington, Box 1821 Access Brokerage Ltd Tel: (04) 499-7464; Tel: (03) 379-8420. Tel: (04) 460-5000; Wellington, Box 1293 Dunedin, J.P. Morgan Securities Auckland, Box 3429 Tel: (04) 473-4644. Private Bag 1999 NZ Ltd Tel: (09) 307-4600. Tel: (03) 477-7464; ASB Securities Ltd Auckland, Box 5092 Somerset Smith Partners Auckland, Box 35 Invercargill, Box 28 Tel: (09) 356-1300. Napier, Box 90 Tel: (09) 374-8800. Tel: (03) 218-8807; JBWere (NZ) Ltd Tel: (06) 835-3126; Baldwin Smith & Co. Christchurch, Auckland, Box 887 Thames, Box 313 Blenheim, Box 140 Box 13542 Tel: (09) 357-3200; Tel: (07) 868-6658; Tel: (03) 365-4244; Tel: (03) 579-3523. Wellington, Box 29 Taupo, Box 1146 Lower Hutt, Box 30243 Tel: (04) 472-8238; Tel: (07) 378-1058. John Chapman Tel: (04) 566-6816; Taupo, Box 749 Christchurch, Box 2655 UBS Warburg Tel: (07) 378-7150. Napier, Box 1179 Tel: (03) 364-5610; Tel: (06) 835-3111; NZ Equities Ltd Dunedin, Box 5949 Auckland, Box 45 Clavell Equities Palmerston North, Tel: (03) 477-8800. Tel: (09) 913-4800. Auckland, Box 1917 Box 912 Tel: (09) 309-1553. Tel: (06) 356-9223. Brian P. Kreft Winstanley & Dickson Christchurch, Box 900 Blenheim, Box 678 Deutsche Securities Forsyth Barr Frater Tel: (03) 379-8434. Tel: (03) 577-7410. New Zealand Ltd Williams Ltd Auckland, Box 6900 Auckland, Box 97 Lawrence Millton W M G Yovich & Co. Tel: (09) 351-1600. Tel: (09) 303-2473; & Howarth Whangarei, Box 925 DF Mainland Securities Ltd Hamilton, Box 152 Christchurch, Box 90 Tel: (09) 438-8532. Tel: (03) 379-3433. Auckland, Tel: (07) 838-9389; Young & Co. Pvte Bag 99912 Tauranga, Box 13547 L R Singleton & Co. Palmerston North, 17 Tel: 0800 624 652; Tel: (07) 578-2737. Hastings, Box 247 Box 1144 Wellington, Level 2, Tel: (06) 876-6663. Tel: (06) 358-4029. 70 The Terrace Tel: (04) 499-4449.

Brought to you by Global Reports NEW ZEALAND NZSE SERVICES AND PRICES STOCK EXCHANGE

MARKET PUBLICATIONS North New Australia America Europe Zealand NZ$ NZ$ NZ$ NZ$ Daily Memo, twice daily, contains all company announcements, annual price: 2,040.00 2,110.00 2,140.00 1,500.00 Supplementary Sales Report, daily data, annual price: 1,500.00 1,550.00 1,600.00 960.00 Weekly Diary, weekly, summarises all announcements, plus statistics, annual price: – e-mail version 500.00 500.00 500.00 500.00 – printed version 700.00 720.00 740.00 640.00 Monthly Turnover of Securities Report, annual price: 145.00 165.00 170.00 140.00 Quarterly Report, summarises market performance in quarter, annual price: 150.00 160.00 165.00 140.00 The Fact Book, annual for 31 December years, per copy: 35.00 40.00 45.00 30.00 The Fact Book Supplement, 31 March Summary for Tax Purposes, per copy: 20.00 25.00 30.00 15.00 Listing Rules, per printed copy and registration for updates: 110.00 120.00 135.00 100.00

All of the above prices include GST, where applicable, and delivery and handling. Delivery is by standard post, document exchange or, in the case of overseas, courier post. Fax delivery is available for an additional charge. A copy of the Market Information Services’ Products and Services Guide is available on request. Listing rules are available at no charge from our website.

OTHER PUBLICATIONS • Code of Practice • How to Invest in the Stockmarket • Investor Protection (a guide to the rules and regulations governing investment markets) • Annual Reports of the Exchange and Market Surveillance Panel • “Welcome” from the NZSE • The New FASTER Way to Buy and Sell Shares • Capital for New Growth Business • Common Shareholder Number (CSN) • The NZSE Debt Market These are generally available on our website or on request (there may be a charge).

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Brought to you by Global Reports NEW ZEALAND NZSE SERVICES AND PRICES (continued) STOCK EXCHANGE

ELECTRONIC INFORMATION SERVICES Information relating to charges for receiving electronic data direct from the NZSE. The following charges apply from 1 January 2002 Access Charges Royalty Charges Connection Charges Public Broadcast – Price Information $1,000 per month Applicable Available on – Announcement text $1,000 per month Applicable application Gateway Interactive Facilities charge plus an Info Applicable Subscribers cost charge of $0.002 up to a max of $0.05 per message – End of Day, not for publication $400 per month Not applicable Data Extracts – End of Day, for publication $400 per month Not applicable No specified charges for internet distribution – Intra-day and End of Day $800 per month Applicable

Royalties are payable for onward distribution of real-time NZSE information that is distributed within 20 minutes of its provision by the NZSE. Index values and announcement headlines are excluded and may be distributed as soon as they are made available. Where information consists of Price Information then a royalty of $0.002 (0.2 cents) applies to each and every data-point that is distributed to a subscriber. Where information consists of the Announcement Text then a royalty of $0.03 (3 cents) applies for every 1,000 characters distributed to a subscriber. Where subscribers are uniquely identified then a maximum royalty amount may be applied to that subscriber for all royalties due within a calendar month. These maximums are currently set at $10 for Price Information and $20 for Announcement Text. Where a subscriber subscribes to Price Information and Announcement Text then a maximum of $75 may be applied for all three. Note: 1. Prices are quoted in New Zealand dollars exclusive of GST. 2. An administration charge applies at the time of connecting to any of the services. 3. Connection charges (data communications costs) may vary depending on the point and type of connection requested.

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Brought to you by Global Reports NEW ZEALAND TEN YEAR SUMMARY STOCK EXCHANGE

Dollars in thousands 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993

INCOME Listing fees 3,069 2,130 2,116 2,063 1,972 1,701 1,731 1,769 1,732 1,679 Members’ subscriptions, fees and charges 3,310 3,700 3,378 2,364 3,101 955 2,040 1,620 2,861 1,973

EXPENDITURE Computer development costs 493 397 282 212 629 927 501 598 624 554 Computer operating costs 2,175 2,211 2,079 2,021 1,852 1,573 1,873 1,512 1,389 1,412 Other operating costs 7,270 5,458 5,502 4,172 3,811 4,043 3,490 2,820 2,645 2,621 Net operating surplus (deficit) 339 1,278 1,033 562 1,111 (1,318) 101 123 1,048 697 Net increase (decrease) in Fidelity Fund – – – – (3) (1) 199 23 112 (881) Total Members’ funds 6,503 7,018 6,271 5,238 4,677 3,565 4,883 4,782 4,659 3,611 Accumulated funds of Fidelity Fund 446 446 446 446 446 449 450 251 228 116 Total assets (including Fidelity Fund) 8,767 8,322 7,229 7,744 5,532 4,365 5,571 5,254 5,773 3,941

2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 Membership Individual Full Members 267 282 279 273 275 267 213 195 172 157 Individual Associate Members 183 166 143 147 135 124 Members firms1 40 42 41 41 41 44 20 20 19 17 Number of listed companies New Zealand: Equity security listing 138 130 132 133 133 128 131 138 131 114 Debt security listing 14 9 10 11 14 14 14 11 11 9 Overseas: Equity security listing 69 77 82 81 83 76 60 62 57 53 Number of trades 2 607,601 705,977 694,419 692,969 559,178 470,826 430,668 381,726 520,077 288,842 Market turnover ($million) 2 19,338 30,300 26,785 27,699 22,741 15,340 12,758 13,688 14,364 7,595 Market capitalisation ($million) 2 44,247 43,873 49,655 51,069 43,560 56,786 48,908 45,428 43,296 33,003

1 Prior to 1997, figures are for Company Members only. 2 2001 figures have been revised.

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Brought to you by Global Reports Brought to you by Global Reports The New Zealand Stock Exchange is the national corporate body representing its stockbroker members. It was established by the Sharebrokers Amendment Act 1981.

• The purpose of the Exchange is to provide and operate an efficient market for the raising of capital for listed companies and the trading of securities, including shares and fixed interest securities such as bonds and Government stock. It is also responsible for maintaining professional standards among its members and among listed companies.

• The Exchange is funded from fees paid by its members, listed companies and charges for information services.

• Trading takes place on screens which are part of a national computer system.

• The Exchange is a full member of the World Federation of Exchanges (WFE) and the East Asian and Oceanian Stock Exchanges Federation (EAOSEF).

Brought to you by Global Reports