Equiniti ezine | June 2012

EZINE > June 2012 inside this issue: tesco's esp portal How employees continue to benefit from new features such as real-time dealing paying dividends How Equiniti has responded to feedback with fresh, innovative ideas open for all Equiniti's Shareview portal is being extended to ordinary shareholders – with added benefits europe in crisis What would happen if the Eurozone collapsed?

We ask the economists orient capital selects equiniti Investor Relations partnership agreed

shareview portal

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esp portal

A drop-in visit from Equiniti’s ESP portal team helped Tesco employees to explore the newly enhanced facility

Real-time, real benefits Equiniti’s ESP Portal experts were earlier this month invited to visit the Tesco plc head offices in Cheshunt and Welwyn Garden City. There they gave employees an update on the ESP portal site and introduced them to some of the new benefits that the portal brings, including real-time dealing.

Since the launch of the portal back in October 2011, Tesco staff have been able to benefit from a number of features. These include viewing their individual SIP, SAYE and ordinary shares via the Tesco-branded website, accessing details of any executive awards, and supplying SAYE maturity and repayment instructions. The site also includes useful online calculators to model potential gains and tax benefits.

In a recent, significant enhancement, the portal now offers SIP real-time dealing, enabling Tesco employees to see real-time quotes of share selling prices before they commit to submitting their sale. Introduced

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esp portal in April this year, real-time dealing gives employees confidence in the sale price of their shares and means they no longer need to wait for shares to be sold the next day. They can also use the portal to view and sell their 2007 Tesco free share award, which has just reached its five-year anniversary.

The Equiniti Team of 4, headed up by Tony Maraio, ESP Senior Service Delivery Manager, were well received during the two employee drop-in sessions, which were held in staff meeting rooms. “We saw a variety of employees, ranging from new starters wanting to know more about Tesco’s SIP and SAYE share plans and how to join them, to employees that had been at Tesco for a number of years, had built up a large pot of Tesco shares, and wanted information on how they could transfer shares into an ISA/ Investment account,” Tony explained.

During the two sessions the team were able to demonstrate how to register for the service and how to navigate through the SIP and SAYE summary pages. They also highlighted some of the online transactions which employees could carry out, including using the real-time dealing service. For any employees who hadn’t used the service

The visit also provided a good opportunity for employees to ask about the process of opening and transferring shares into an ISA or investment account online. recently, they were shown how to use their existing portfolio login details to see the same SIP and SAYE information, but in a more user-friendly way. For those who had forgotten their portfolio password, it was a relatively simple process to navigate through the ‘forgotten password’ screens to reactivate their account. The visit also provided a good opportunity for employees to ask about the process of opening and transferring shares into an ISA or investment account online.

“We were so impressed with the popularity and quality of the drop-in sessions that we have asked Equiniti to provide a couple of further sessions at our Head Office and at our call centre, based in Cardiff,” commented Teresa James, Tesco Share Schemes Manager.

If you would like more information: Please contact your Relationship Manager or Service Delivery Manager. dividends page 4

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dividends

Equiniti has fresh ideas for making its dividend service even more effective for clients. Steve Binstead, Head of Client Task Management, Operations, explains

Responding to feedback pays dividends The payment of dividends to shareholders is one of the most critical, high-profile share registration tasks in the corporate calendar of our clients.

It’s one of the very few occasions in the year when they make payments and send communications to the entire shareholder population.

For shareholders, it is critical that they receive their dividend payment on time; that it meets their chosen method of payment (by cheque, paid direct into bank account, shares); and that it is accompanied with clear and unambiguous information as to how the dividend had been calculated and the tax accounted for.

We pride ourselves on delivering this service to the highest standard for all dividend payments we manage for our clients. In 2011, the Equiniti dividend payment team successfully managed the delivery of more than 1,500 client continued on page 5

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dividends payment tasks. In total, £25bn of payments were made to more than 15m shareholders, of which £22bn was paid direct into shareholder bank accounts via BACS. At the heart of this process is a team of 45 staff with a wealth of dividend experience, who are passionate about providing the very best service they can, over and over again to our clients. In 2011, the Capital Analytics survey scored a rating of over 90% from Equiniti clients regarding our dividend service. We are confident that we will continue to see improved scores in the 2012 survey, later this year.

However it is important that we do not stand still. We continue to review feedback from clients and our own internal reviews to see how we can further improve the dividend payment service. As a result, we are working on delivering a number of improvements in the second half of 2012, including:

Funding letter

We have improved the funding letter to provide clients with clearer, more concise information about their dividend funding arrangements. A pilot study has been carried out and we’ve received positive feedback about the changes.

Single point of contact

We have received consistent feedback from clients about how they would like a single point of contact for all aspects of the dividend payment and we are committed to move towards this model in the second half of 2012. This will be achieved through the allocation of a dedicated dividend planner through the life of a dividend payment for every client.

Document proofing & sign off

We have started to manage our own dividend documentation design here at Equiniti rather than relying on third parties to create and proof documents. This gives us the opportunity to reduce the timescales for document production and provide proofs to clients for review and sign off earlier in the dividend cycle. We are also looking at how we can manage the document proofing process electronically and remove the need for paper proofs to be passed backwards and forwards between ourselves, our clients and our third-party printers. As well as reducing timescales, this will also provide a more accurate proofing process as we move away from manually amending documents.

Dividend timetable

We have enhanced the dividend timetable and service levels to provide more transparency of the end-to-end dividend planning cycle and the key activities that must be delivered.

Quicker feedback

All feedback that is generated by the surveys and benchmarking exercises are looked at by the dividend team and acted upon. However this feedback can be received several months after the receipt of the dividend. We would therefore like to include a simple survey as part of the dividend timetable itself, so that the feedback received is ‘real time’ and more relevant to the dividend task that has just completed. This will enable us to engage with clients much quicker on any issues experienced.

These changes will be introduced gradually in the second half of 2012 as part of the ongoing continuous improvement cycle that Equiniti is committed to. We will continue to listen, review and improve everything we do.

If you would like more information: please contact Steve Binstead or your relationship Manager Steve.Binstead@Equiniti.com shareview page 6

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shareview

Equiniti is extending access to its Shareview portal to ordinary shareholders – and functionality continues to be enhanced

ESP Portal benefits opening to all Following the successful launch of the award-winning ESP Portal in 2011, Equiniti is looking to extend the functionality and flexibility found in this platform to ordinary shareholders. Shareview is Equiniti’s market-leading shareholder self-service portal, allowing shareholders to manage their portfolios in a secure online environment.

Shareview’s latest evolution was launched in 2009 and enhanced Equiniti’s provision ofshareholder self-service. It provides a consolidated portfolio where users can manage in real time their user details for Equiniti administered shares and can also add in other investments to provide a holistic view of their investments.

“Shareview already offers a market leading online service but we are looking to further extend this by building in some of the learning from the ESP Portal project, particularly the real-user feedback from the usability labs,” continued on page 7

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shareview

Our aim is that this focus on usability will remove the barriers that still exist for a small population of shareholders making transactions online. says Kevin Hepburn, Head of Web at Equiniti.

“Whilst working through the 24-month delivery of the ESP Portal project, one of the most valuable learning points for us was the importance of involving real end-users in the design process. The key user journeys from the ESP Portal were tested in usability labs with employees from some of our key clients. We’re looking to build elements of what we learned from this into Shareview, looking at account creation and management, and how we demystify some of the complexity of owning and managing shares.”

Equiniti is also keen to keep Shareview at the forefront of technology with its partners Microsoft. The portal framework runs on a bespoke SharePoint 2010 content management system that is Microsoft’s Enterprise CMS which

allows Equiniti to offer new functionality, such as enhanced personalisation and management of content. It also provides enhanced single sign-on functionality that will allow tighter integration of Shareview with other shareholder and employee web offerings.

“Our aim is that this focus on usability will remove the barriers that still exist for a small population of shareholders making transactions online,” says Kevin. “We work hard with our clients to promote online self-service. Once you get over the initial inertia of creating an account, shareholders quickly become used to the benefits and immediacy of being able to manage their holdings online and in real time.

“We’re also aware that the way shareholders choose to access our sites is changing and that people want to be able to access their accounts and information not just from the desktop but from a number of devices,” he adds. “We see between 5 and 10% of traffic to Shareview originating from mobile devices and we work hard to ensure our sites work across a range of mobile devices and operating systems. The new technology we’re deploying with Shareview 2012 will allow us to incorporate

a more responsive design across a number of sites that will optimise the page you are looking at for the device you are looking at it on.”

For more information If you would like further information on this subject, please contact your Relationship Manager.

eurozone page 8

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eurozone

The break-up of the world’s largest trading bloc was until recently an almost unthinkable scenario. With many economists arguing that it is now more a case of ‘when’ than ‘if’, journalist Perry Gourley looks at what the implications could be

What would happen if the Eurozone collapses?

From the rhetoric being used to describe the potential impact of a Eurozone collapse, global leaders can hardly be accused of attempting to play down fears.

World Bank president Robert Zoellick has said Europe is facing a “Lehmans’ moment” in reference to the 2008 collapse of the US financial services giant which sparked global financial panic.

Billionaire investor George Soros warned it would be “catastrophic not only for Europe but also for the global financial system”, adding that Eurozone crisis was more serious and more threatening than the last global crash.

In the UK, business secretary Vince Cable predicts a “massive economic impact” if the crisis worsens. Robert Chote, the head of the UK Office of Budget Responsibility, worries that continued on page 9

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eurozone the UK may not recover from a break-up for “a very long time” and that a worst case scenario would “permanently hamper the economy”.

10% wiped off GDPs

While there appears to be a consensus that a break-up of the Eurozone would be very painful, there is much debate among economists about the scale of the impact.

According to Douglas McWilliams, chief executive of the Centre for Economics and Business Research, the crucial factor is how any break-up happens.

“If it is an orderly, planned break-up we estimate it would cost $300bn, equivalent to two per cent of the region’s gross domestic product,” he said.

“But in a disorderly collapse, the costs would spiral to $1 trillion, with some countries having 10 per cent wiped off their GDP.” McWilliams said a banking crisis would be the key problem. The withdrawal of weaker countries from the Euro would lead to loan defaults and many of the banks involved would have to take capital hits.

“Those most affected would need refinancing and possibly nationalising,” he warned.

If it is an orderly, planned break-up we estimate it would cost $300bn, equivalent to two per cent of the region’s gross domestic product, but in in a disorderly collapse, the costs would spiral to $1 trillion.

While the UK banks may not be exposed as others, the impact would mean they have less to lend to the domestic business sector which in turn would stifle recovery.

A ‘real economy’ crisis would also develop as spending by both the public and private sector across the Eurozone contracted sharply.

As the UK’s biggest trading partner, that would have a major impact on exports.

“Those companies with significant exposure to international trade would be badly affected,” predicted McWilliams.

He also warned of the potential impact on equity markets.

“If there was a very sharp slowdown, prices of primary products such as oil and minerals would come under a lot of pressure as they tend to be very highly geared to growth in the world economy. A large part of the FTSE100 is made up of companies in that sector,” he pointed out.

McWilliams believes that a break-up of the Eurozone at some stage is inevitable, arguing that fault lines such as the lack of competitiveness and unsustainable levels of spending by some countries meant the common currency was doomed. continued on page 10

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eurozone While none of the near-term scenarios ahead are attractive, McWilliams believes some are decidedly worse than others.

“The choice is between a period of austerity followed by the impact of the end of the euro and then some eventual recovery – or facing the trauma of the end of the euro early and then starting to get the recovery underway.

“The worst of all worlds is to have two or three years of paralysis and then to have the same break-up as you could have had last week.

“The hit will be extremely painful but at least then you are at ‘ground zero’ and you can start to move into recovery mode. By say 2025, it is about as certain as anything can be in economics that the European economy will be in better shape if it faces up to the trauma

The worst of all worlds is to have two or three years of paralysis and then to have the same break-up as you could have had last week.

of breaking up the euro now rather than in a few years time.”

Travel sector threatened

While major exporting sectors such as industrial machinery, cars and chemicals would be among the hardest hit by a breakup, a number of other industries are seen as being at high risk.

Although market research group Euromonitor believes a Greece exit in itself would have a relatively small impact on the travel and tourism sector, the macroeconomic impact of a wider Eurozone disintegration would be “catastrophic”.

It argues consumers and businesses would drastically cut their travel budgets and prices would plummet. An unplanned break-up could see numbers of tourists drop by as much as 11 per cent and their spending by more than 17 per cent.

In a worst-case scenario, budgets for air travel would be cut by almost 20 per cent as companies slashed spending and tourists cancelled holiday plans or switched to trains and buses to save money.

Euromonitor also predicts significant consolidation across the sector with

independent businesses struggling to access funding and making them potential takeover targets for larger rivals.

UK property prices, particularly high-end real estate in London, would also be hit hard by a collapse, according to the Fathom Consulting for Development Securities consultancy.

Although a complete break-up of the Eurozone may lead to an initial flight towards safe havens and lead to a short-term rise in demand, it predicts that would soon ebb away.

“In our judgment, a collapse of the single currency area could ultimately produce a 50 per cent fall in the value of prime central London property,” it warned.

While the short term impact on the UK economy would inevitably be damaging, Roger Bootle of Capital Economics has argued that such a seismic event would also provide a “massive political opportunity” to reshape Europe for the better.

“The peripheral countries would recover and the German-led northern bloc would be forced to stimulate domestic demand.

The result would be stronger growth across Europe,” he predicted.

It all makes for a very gloomy best-case continued on page 11

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eurozone scenario – never mind the worst-case one. In times of economic downturn, there are usually tales of businesses and entrepreneurs who have triumphed but in the event of a fullblown Eurozone collapse, it’s hard to imagine anyone standing to gain, other than baillifs and pawnbrokers.

So what can UK businesses do to prepare for the worst? It really comes down to vigiliance and planning. “The economic events of the past three or four years have underlined the importance of strong risk management and forward planning,” says Darren Smith, Head of Compliance and Risk at Equiniti. “There is nothing any single business can do to prevent a major economic downturn but they can protect their customers, staff and assets to some extent by preparing for the worst-case scenario.” If recent events from Lehmans to RBS and from Dublin to Athens prove anything, it’s that complacency is no longer an option.

For more information If you would like further information on this subject, please contact your Relationship Manager.

There is nothing any single business can do to prevent a major economic downturn but they can protect their customers, staff and assets to some extent by preparing for the worst-case scenario.

Darren Smith, Head of Compliance and Risk

investor analytics page 12

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investor analytics Equiniti is delighted to announce an outsourcing partnership for investor relations with Orient Capital

orient capital selects Equiniti for OUTSOURCING Equiniti are pleased to announce a new outsourcing partnership with Orient Capital. This partnership combines Equiniti’s access to live register movements and proxy voting instructions as Registrar and the depth of knowledge and personal service of our Investor Analytics department with Orient Capital’s acknowledged capability in share register analysis and expert investor relations systems. The partnership will enable Equiniti to successfully expand our added value services we can offer to clients in the investor relations space.

Working together, Equiniti and Orient Capital will offer a suite of enhanced investor relations services to Equiniti clients encompassing: ■■ share ownership analysis ■■ m anagement of s793 disclosure notices and responses ■■ m aintenance of s808 registers (Register of Interests)

■■ integrated

online shareholder reporting via Selector and Orient Capital’s miraqle platform Looking to the future this partnership will further develop our product offering by developing a range of unique investor relations products and services for Equiniti share registration clients, setting Equiniti apart from its competitors and demonstrating our commitment to deliver value enhancing services.

John Parker, Managing Director, Shareholder Solutions said: “After an extensive review of Equiniti’s investor relations services provided by its Investor Analytics department, Equiniti is pleased to announce an outsourcing partnership with Orient Capital. Partnering with Orient Capital ensures our clients receive the highest quality of share register analysis services, integrated with online reporting and investor contact management functionality.”

Partnering with Orient Capital ensures our clients receive the highest quality of share register analysis services John Parker, Managing Director

For more information If you would like further information on this subject, please contact your Relationship Manager.