2001 Annual Review - Macquarie Bank

2001 Review

Review of business operations
Highlights
Chairman's & MD's Report
Structure
Community
Group Reports
Division Reports
Corporate Governance Statement
Image Library
Concise Report
Directors' Report
Board of Directors
Profit & Loss
Balance Sheet
Cash Flows
Discussion & Analysis
Notes
Directors' Declaration
Independent Audit Report
Investor Information
5 Year Summary
What We Stand For

Directors’ Report

In accordance with a resolution of the Voting Directors (“the Directors”) of Macquarie Bank Limited (“the Bank”), the Directors submit herewith the Balance Sheet as at 31 March 2001 and Statements of Profit and Loss and Cash Flows of the Bank and the entities it controlled at the end of, and during, the financial year ended on that date and report as follows:

Directors

At the date of this report, the Directors of the Bank are:

Executive Directors:

D.S. Clarke, AO, Executive Chairman

A.E. Moss, Managing Director and Chief Executive Officer

M.R.G. Johnson, Deputy Chairman

Non-Executive Directors:

B.N. Kelman, AO, CBE

J.G. Allpass

L.G. Cox, AO

B.R. Martin

H.K. McCann

H.M. Nugent

The Directors each held office as a Director of the Bank throughout the financial year ended 31 March 2001.

Details of qualifications, experience and special responsibilities of Directors at the date of this report are shown in the Schedule hereto.

Directors’ meetings

The number of Board of Directors (“the Board”) meetings and meetings of Committees of the Board and the number of meetings attended by each of the Directors of the Bank during the financial year is summarised in the table below.

Principal activities

The principal activities of the Bank and its controlled entities during the financial year ended 31 March 2001 were those of a full service financial services provider offering a complete range of investment banking, commercial banking and retail financial services in Australia and offshore.

Result

The consolidated operating profit for the financial year ended 31 March 2001 attributable to ordinary equityholders after provision for income tax was $241,964,000 (2000: $210,248,000).

Regular Board Meetings			Special Board Meetings		Committee Meetings
	eligible to attend	attended	eligible to attend	attended	eligible to attend	attended

D.S. Clarke	12	11	2	2	12	12
A.E. Moss	12	12	2	2
M.R.G. Johnson	12	12	2	1
B.N. Kelman	12	11	2	2	5	5
J.G. Allpass	12	11	2	2	11	11
L.G. Cox	12	12	2	2
B.R. Martin	12	12	2	1	1	1
H.K. McCann	12	12	2	2	7	7
H.M. Nugent	12	12	2	2

The Committee meetings held during the financial year were in respect of the Compensation Committee (4), the Nominating Committee (1) and the Board Audit and Compliance Committee (7).

Dividends and distributions

The Bank paid or provided dividends and distributions during the financial year as set out in the table below.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the Bank and its controlled entities that occurred during the financial year under review not otherwise disclosed in this Report of the full consolidated Financial Report.

Review of operations

A review of the operations of the Bank and its controlled entities and the results of those operations for the financial year under review are contained in the Chairman’s and Managing Director’s Report.

Events subsequent to balance date

At the date of this report, the Directors are not aware of any matter or circumstance which has arisen that has significantly affected or may significantly affect the operations of the Bank and its controlled entities, the results of those operations or the state of affairs of the Bank and its controlled entities in the financial years subsequent to 31 March 2001 not otherwise disclosed in this Report or the full consolidated Financial Report.

Likely developments

Disclosure of information relating to the future developments in the operations of the Bank and its controlled entities which would not, in the opinion of the Directors, be prejudicial to the interests of the Bank and its controlled entities is contained in the Chairman’s and Managing Director’s Report.

Directors’ interests and benefits

Other than any benefit that may have been derived from loans provided by and to the Bank or a controlled entity and any amounts received in respect of previously accrued remuneration, no Director has, during the financial year and the period to the date of this report, become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown in the full consolidated Financial Report, or the fixed salary of a full-time employee of the Bank or of a related entity) by reason of a contract made by the Bank or a related entity with the Director, or with a firm of which he/she is a member, or with an entity in which he/she has a substantial financial interest, with the exception of consulting fees paid in the normal course of business totalling $1,068,000 (2000: $332,000) to the legal firm of Allen Allen & Hemsley of which Mr H.K. McCann is a partner. The fees are not significant compared to the Bank’s total legal expenses for the financial year.

Directors’ interests are disclosed in Note 30 to the full consolidated Financial Report – Related Party Information. Directors’ remuneration is disclosed in Note 31 to the full consolidated Financial Report – Remuneration Policy for Directors and Executive Officers and in Note 5 to the Concise Report.

Security	Payment Date	Payment Type	$	In Respect of Year ended/Period

Ordinary Shares	4 Jul 2000	Final	89,336,002	31 Mar 00	Paid
	20 Dec 2000	Interim	71,840,441	31 Mar 01	Paid
	3 Jul 2001	Final	91,451,651	31 Mar 01	Provided

Macquarie Income	17 Apr 2000	Periodic	7,349,808	17 Jan – 16 Apr 2000	Paid
Securities	17 Jul 2000	Periodic	7,609,096	17 Apr - 16 Jul 2000	Paid
	16 Oct 2000	Periodic	7,878,360	17 Jul – 15 Oct 2000	Paid
	15 Jan 2001	Periodic	8,127,673	16 Oct 2000 – 14 Jan 2001	Paid
	17 Apr 2001	Periodic	6,404,822	15 January – 31 March 2001	Provided

Converting	15 Jun 2000	Periodic	5,550,150	15 Dec 1999 – 14 Jun 2000	Paid
Preference Shares	15 Dec 2000	Periodic	5,550,150	15 Jun– 14 Dec 2000	Paid
	15 Jun 2001	Periodic	3,245,178	15 Dec 2000 – 31 Mar 2001	Provided

No other dividends or distributions have been recommended, declared or paid during the financial year.

Directors’ indemnification

Under the Bank’s Constitution, the Bank indemnifies all past and present Directors and Secretaries of the Bank, including at this time the Directors named in this report and the Secretaries, against every liability incurred by them in their respective capacities unless:

–

the liability is owed to the Bank or to a related body corporate

–

the liability did not arise out of conduct in good faith

–

the liability is for a pecuniary penalty order or a compensation order under the Corporations Law and

–

in the case of a liability for legal costs, the costs are incurred in relation to a liability excluded above, the person is found guilty, grounds for a court order in proceedings by the Australian Securities and Investments Commission or a liquidator are established, or the court denies relief to the person in the relevant proceedings.

Following approval by shareholders at the 1998 Annual General Meeting, the Bank entered into a Deed of Access, Indemnity and Insurance dated 4 August 1998, which protects Directors acting as Directors during their term of office and after their resignation (except where an individual engages in conduct involving a lack of good faith). Under the Deed, the Bank agrees to:

(a) indemnify a current or past Voting Director to the full extent of the indemnity given in relation to officers of the Bank under its Constitution in force from time to time;

(b) take out and maintain a company reimbursement insurance policy and make available to Directors a Directors’ and Officers’ insurance policy (each policy to be in an amount and on terms and conditions appropriate for a reasonably prudent company in the Bank’s position) for seven years after the Director ceases to be a Director of the Bank;

(c) lend funds to a Director to cover the Director’s legal costs in defending a claim, repayable when the outcome of the proceedings is determined (where the outcome results in the Director having an indemnity for such legal costs, the loan will be repayable from the amount paid by the Bank to the Director under the indemnity); and

(d) grant access to Directors to all Board papers for at least seven years after the Director ceases to be a Director of the Bank, and access to other documents if the documents were in the Bank’s possession at the time the Director was a Director and where it is not contrary to the Bank’s interest for the documents to be provided.

In addition, following the approval of shareholders at the 1999 Annual General Meeting, the Bank made an Indemnity and Insurance Deed Poll on 30 July 1999. The benefit of the undertakings made by the Bank under the Deed Poll have been given to each of the Directors and Secretaries of the Bank, its wholly-owned subsidiaries and certain other companies where the Director or Secretary is acting as such at the specific request of the Bank or of a wholly-owned subsidiary of the Bank. The Deed Poll provides for the same indemnity and insurance arrangements for those persons with the benefit of the Deed Poll as for the Deed of Indemnity, Access and Insurance described above. However, the Deed Poll does not provide for access to documents of the Bank.

Share options

Information on the Bank’s share option scheme and options granted during or since the end of the financial year is contained in Note 34 to the full consolidated Financial Report – Employee Equity Participation.

No person holding an option has or had, by virtue of the option, a right to participate in a share issue of any other corporation.

No unissued shares, other than those referred to above, are under option as at the date of this report.

Environmental regulations

The Directors have assessed whether there are any significant environmental regulations that apply to the Bank and its controlled entities and have concluded that, where applicable, the Bank and its controlled entities are in compliance.

Financial Report

The full consolidated Financial Report of the Bank and its controlled entities for the financial year ended 31 March 2001, which is accompanied by an unqualified Independent Audit Report, is included in the 2001 Financial Report book. All references to notes to the full consolidated Financial Report are in this book, which will be provided to shareholders upon request and without charge.

Rounding of amounts

In accordance with Australian Securities & Investments Commission Class Order 98/0100 amounts in the consolidated Financial Report and Concise Report have been rounded off to the nearest thousand dollars unless otherwise indicated.

D.S. Clarke
Director

A.E. Moss
Director

Sydney
24 May 2001

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