Macquarie : Annual report

ANNUAL

REPORT

Macquarie Group

Year ended 31 March 2019

MACQUARIE GROUP LIMITED ACN 122 169 279

50 years of financial service

Macquarie's predecessor organisation, Hill Samuel Australia, opened in Sydney in December 1969 with three staff, capital of $A250,000 and an ambition to provide advisory and investment banking services of an international standard

to the Australian market.

Today Macquarie is a global financial services group operating in 30 markets providing asset management, leasing and asset financing, retail banking and wealth management, market access, commodity trading, investment banking and principal investment.

2019 Annual General Meeting

Macquarie Group Limited's 2019 Annual General Meeting will be held at 10:30 am on Thursday, 25 July 2019 at the Sheraton Grand Sydney Hyde Park, Grand Ballroom, 161 Elizabeth St, Sydney NSW 2000.

Details of the business of the meeting will be contained in the Notice of Annual General Meeting, to be sent to shareholders separately.

Cover image

Macquarie's global headquarters at 50 Martin Place, Sydney is a connected, flexible and sustainable workplace and the largest heritage redevelopment of its size to be awarded a Six Star Green Star Rating from the Green Building Council of Australia. Crowning the building with a new steel-frame glass dome, daylight harvesting reduces energy consumption by 40%.

Table of contents

01

ABOUT

About Macquarie	3
50 years of financial service	6
Letter from the Chairman	8
Letter from the Managing Director and CEO	10
Financial Highlights	12
Operating and Financial Review	14

02

GOVERNANCE

03

DIRECTORS' REPORT

04

FINANCIAL

REPORT

05

Corporate Governance Summary	26
Diversity Report	28
Environmental, Social and Governance	32
Macquarie Group Foundation	42
Risk Management Report	44

Directors' Report	51
Directors' experience and special responsibilities	56
Remuneration Report	62

Contents	102
Income Statements	103
Statements of comprehensive income	104
Statements of financial position	105
Statements of changes in equity	106
Statements of cash flows	108
Notes to the financial statements	109
Directors' declaration	239
Independent auditor's report	240

Additional investor information	246
Ten year history	252
Glossary	253

FURTHER INFORMATION

01

About

Cheonan-Nonsan Expressway, South Korea

Macquarie's MKIF fund is the majority owner of the Cheonan-Nonsan Expressway, an 81.0 km, dual two-lane toll expressway that connects the northwestern and southwestern provinces of South Korea. It has two major tunnels, 44 bridges and seven interchanges. Macquarie is the largest foreign asset manager in South Korea with 36 assets across the infrastructure, renewables and waste management sectors.

About	Governance	Directors' Report	Financial Report	Further Information

About Macquarie

Macquarie (MGL and its subsidiaries, the Consolidated Entity) is a global diversified financial group with offices in 30 markets.

Macquarie Group Limited (MGL, the Company) is listed in Australia and is regulated by the Australian Prudential Regulation Authority (APRA), the Australian banking regulator, as a non-operating holding company of Macquarie Bank Limited (MBL), an authorised deposit-taking institution (ADI). Macquarie's activities are also subject to supervision by various other regulatory agencies around the world.

Founded in 1969, Macquarie now employs over 15,700(1) people globally, has total assets of $A203.2 billion and total equity of $A18.4 billion as at 31 March 2019.

Macquarie's breadth of expertise covers asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities. The diversity of our operations, combined with a strong capital position and robust risk management framework, has contributed to Macquarie's 50-year record of unbroken profitability.

Macquarie acts primarily as an investment intermediary for institutional, corporate, government and retail clients and counterparties around the world, generating income by providing a diversified range of products and services to our clients. We have established leading market positions as a global specialist in a wide range of sectors, including resources and commodities, green energy, conventional energy, financial institutions, infrastructure and real estate and have a deep knowledge of Asia-Pacific financial markets.

Alignment of interests is a longstanding feature of Macquarie's client focused business, demonstrated by our willingness to both invest alongside clients and closely align the interests of our shareholders and staff.

$A2,982m

FY2019 profit

1969

2019

(1)This figure includes staff employed in certain operationally segregated subsidiaries (OSS). Unless otherwise stated, further references to staff data and policies do not include those in OSS.

macquarie.com

Macquarie Group Limited and its subsidiaries  2019 Annual Report

3