Main Contents

Key financial details Chairman and Managing Director’s Report Vale: David Clarke Macquarie - the global specialist Regional Activity About Macquarie - Macquarie Securities Group - Macquarie Capital - Macquarie Funds Group - Fixed Income, Currencies and Commodities - Corporate and Asset Finance Group - Banking and Financial Services Group - Real Estate Banking Division - Central functions Macquarie Group Foundation Corporate Governance Statement Diversity Sustainability Risk Management Report

Directors’ Report - Remuneration Report - Schedule 1 - Schedule 2 Financial Report - Income statements - Statements of comprehensive income - Statements of financial position - Statements of changes in equity - Statements of cash flows Notes to the financial statements Directors’ declaration Independent audit report 10 year history Investor information GRI index and independent review Glossary

Remuneration Report Contents

Executive summary Introduction 1 Macquarie’s remuneration framework remains sound and is continuing to deliver against Objectives 1.1 Macquarie’s remuneration framework has undergone incremental changes 1.2 Remuneration arrangements continue to play a critical role in delivering results for shareholders 1.2.1 Relative performance has been reasonably strong but under pressure 1.2.2 Staff retention is increasingly challenging 2 However, some remuneration-related challenges need to be addressed 2.1 Continued focus on governance by Governments and regulators 2.2 Strong competition for talent 3 Therefore, Macquarie is enhancing its remuneration arrangements while ensuring its overall remuneration approach remains in place 3.1 The remuneration structure continues to emphasise performance-based remuneration 3.2 Remuneration is linked to the drivers of shareholder returns 3.3 Direct long-term alignment with shareholder interests is emphasised 3.3.1 Profit share arrangements – delivery of profit share 3.3.2 Investment of retained profit share 3.3.3 Income on invested retained profit share

3.3.4 Release of retained profit share – normal vesting 3.3.5 Forfeiture of retained profit share whilst employed – ‘Malus’ 3.3.6 Early vesting and release of retained profit share 3.3.7 Disqualifying events 3.3.8 Tax events 3.3.9 Minimum shareholding requirement for Executive Directors 3.3.10 Staff share plans encourage broader staff equity participation – Employee share plan 3.3.11 Performance share units (PSUs) 3.3.11.1 Determination and allocation of the PSUs 3.3.11.2 Vesting Schedule 3.3.11.3 Performance hurdles for Executive Committee PSUs 3.3.12 Options, while discontinued, remain outstanding 3.3.12.1 General terms of option arrangements 3.3.12.2 Performance hurdles for Executive Committee options 3.3.13 No special contractual termination payments 3.4 Strong governance has been exercised 3.4.1 Strong Board oversight exists to ensure sound overall remuneration governance 3.4.2 Risk is assessed as part of the profit share allocation process

3.4.3 An independent remuneration review has been undertaken 3.5 Non-Executive Directors continue to be recognised for their role 3.5.1 Non-Executive Director remuneration policy 3.5.2 Board and Committee fees 3.5.3 Minimum shareholding requirement for Non-Executive Directors Appendices: Key Management Personnel disclosures Appendix 1: Key Management Personnel Appendix 2: Remuneration disclosures Appendix 3: Share and option disclosures Appendix 4: Loan disclosures Appendix 5: Other disclosures

Financial Report Contents

Income statements Statements of comprehensive income Statements of financial position Statements of changes in equity Statements of cash flows Notes to the financial statements 1. Summary of significant accounting policies 2. Profit for the financial year 3. Segment reporting 4. Income tax expense 5. Dividends and distributions paid or provided for 6. Earnings per share 7. Due from financial institutions 8. Cash collateral on securities borrowed and reverse repurchase agreements 9. Trading portfolio assets 10. Loan assets held at amortised cost 11. Impaired financial assets 12. Other financial assets at fair value through profit or loss 13. Other assets 14. Investment securities available for sale 15. Intangible assets 16. Life investment contracts and other unitholder investment assets 17. Interests in associates and joint ventures accounted for using the equity method 18. Property, plant and equipment

19. Investments in subsidiaries 20. Deferred income tax assets/(liabilities) 21. Non-current assets and disposal groups classified as held for sale 22. Due to financial institutions 23. Cash collateral on securities lent and repurchase agreements 24. Trading portfolio liabilities 25. Debt issued at amortised cost 26. Other financial liabilities at fair value through profit or loss 27. Other liabilities 28. Provisions 29. Capital management strategy 30. Loan capital 31. Contributed equity 32. Reserves, retained earnings and non-controlling interests 33. Notes to the statements of cash flows 34. Related party information 35. Key Management Personnel disclosure 36. Employee equity participation 37. Contingent liabilities and commitments 38. Capital and other expenditure commitments 39. Lease commitments 40. Derivative financial instruments 41. Financial risk management

42. Average interest bearing assets and liabilities and related interest 43. Fair values of financial assets and liabilities 44. Audit and other services provided by PricewaterhouseCoopers 45. Acquisitions and disposals of subsidiaries and businesses 46. Events after the Reporting Period Directors’ declaration Independent audit report