2 Dividend Proposed merger with CCN CHAIRMAN’S REPORT We wanted to ensure that the overall effect  of the New Tax System on Cabcharge and its operations was in line with other businesses.  We hope this issue is now stabilised. After a full and costly independent audit of our system costs following the introduction of the GST, we adjusted the Equalisation Factor downwards from 5.5% to 4.5% on 11 August 2001. On behalf of the Board, I am pleased to present our Annual Report for 2001. The results have exceeded our expectations for the year with a record profit of $12.5m after tax. Turnover and account service fee revenue grew by 14%, crossing the half billion-dollar mark this year to $540m. Cabcharge continues to generate strong cash flows from operations, with earnings before  RL Kermode Executive Chairman On 13 September 2001 Cabcharge announced its intention to make a takeover bid for all shares in Combined Communications Network Limited (CCN). At that date Cabcharge owned 4.8%  of CCN whilst CCN owned 31.3% of Cabcharge. The CCN Board unanimously recommended the offer to CCN Shareholders.  The two companies have a long and inter- related history. This merger, if accepted by shareholders, will position Cabcharge as a full service provider to the Taxi Industry in Australia. The increased size and critical mass will also assist Cabcharge in pursuing a broader range of domestic and international initiatives. Being a Director of both companies I abstained from voting on the recommendations.  more " The Board has recommended payment of a fully franked final dividend of 4.0 cents bringing to  8.0 cents the dividend for the 2001 financial year, an increase from 7.5 cents in 2000. This is in line with our planned dividend payout ratio of around 70 percent. interest, tax, depreciation and amortisation  (EBITDA) up 20% on last year’s $16.9m to $20.2m. However, the results would have been better if we had not experienced some unique difficulties with the introduction of GST as part of the New Tax System on 1 July 2000.  The Taxi Industry, whose fares are regulated  by State Regulators, had a variety of changed fare structures to accommodate across the country. Cabcharge suggested and helped bring in an Equalisation Factor to ensure that we did not breach the spirit of the ACCC’s price exploitation laws.  The cost of this has been horrendous. It exceeded $1.5m in 2001 and will have some minor flowover effect into 2002. We worked closely with the ATO and ACCC to achieve a balanced outcome in the interest of consumers.