STRICTLY CONFIDENTIAL

52nd Japan-Australia Joint Business Conference

Arthur Ozeki

13 October 2014

STRICTLY CONFIDENTIAL

01 Introduction to Macquarie

PAGE 3

Introducing Macquarie Global provider of banking, financial advisory, investment and funds management services

New Zealand 3 locations

Australia 9 locations

Africa 2 locations

South America 3 locations

Asia 14 locations

Middle East 2 locations

Europe 12 locations

North America 28 locations Fixed Income,

Currencies and Commodities

Banking Financial Services

Macquarie Capital

Corporate Asset Finance

Macquarie Securities Group

Macquarie Funds Group

Macquarie Group

45-year history

Market Capitalisation of

$A18.6bn 13,900 employees

$A433bn assets under management

A2/A- credit rating

$A851m in Net Profit for FY2013

PAGE 4

A long history of profitability

yrs 2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6

0.4

0.2

0

$Ab

$1,265m

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000 0

Profit Staff number

PAGE 5

Asia is a key part of our 14,000+ global team

Asia Staff: 3,447

of

2,685

Americas

Staff

6,533

Australia

Staff

3,447

Asia

Staff

1,248

Europe, Middle East and Africa

Staff

PAGE 6

Our presence in Asia today

Seoul

Jakarta

Tokyo

Beijing

Taipei Hong Kong

Kuala Lumpur Singapore

Shanghai

Bangkok Manila

Mumbai

Gurgaon

Hsin-Chu

14 locations /11markets $A1,043m FY14 operating income

3,447 Staff ~50%

Global Shared Services

90% Approx. of

country heads are local

16 Membership licensed ac

ross

regional stock exchanges

30m Every day

In Asia

People use infrastructure managed by Macquarie

Key platform cross border trade be

twee

n

ANZ, EMEA & US

STRICTLY CONFIDENTIAL

02 Historical trends in

Australian FDI

PAGE 8

0 20 40 60 80

100 120 140 160 180 200

US

$ bi

llion

s

FDI Inflows into Australia are quite robust

Source: UNCTAD

2013 global FDI trends

Australia: #9 , $49,826m

Japan: #65 , $2,304m

Australia is a key target destination for FDI, ranking 9th among high growth economies such as Mexico and India

Conversely, Japan ranks 65th

Resources remains a large component of FDI into Australia: — Mining (38.6%) — Manufacturing

(14.1%) — Finance & Insurance

(11.2%) — Wholesale & retail

(9.1%)

PAGE 9

Historical FDI into Australia as of 2013 Japan is a major investor into Australia

Source: Department of Foreign Affairs and Trade

US, UK, Japan, Singapore, HK are the top investors into Australia as of 2013

Japan is 3rd after US and UK in FDI stock in Australia as of 2013

In 2013, approximately 34% of total FDI inflow was inward cross border M&A

The most active industries for the inward M&A in 2013 were: — Energy (26.6%) — Mining (20.1%) — Financial Services

(10.0%) — Services (10.0%) — Leisure (4.6%)

Rank Country FDI ($b) % of total M&A M&A % of FDI 1 United States 657.9 26.7% 5.2 0.8% 2 United Kingdom 562.9 22.9% 1.7 0.3% 3 Japan 131.0 5.3% 2.0 1.6% 4 Singapore 60.5 2.5% 1.5 2.4% 5 Hong Kong 51.3 2.1% 3.8 7.3% 6 Switzerland 47.1 1.9% 2.1 4.4% 7 Netherlands 37.0 1.5% 0.1 0.2% 8 China 31.9 1.3% 4.9 15.3% 9 New Zealand 30.1 1.2% 1.0 3.2% 10 Canada 26.9 1.1% 5.7 21.0% 11 Germany 24.2 1.0% 0.0 0.1% 13 Virgin Islands, British 19.6 0.8% 0.0 0.0% 14 United Arab Emirates 17.2 0.7% 0.8 4.4% 15 Malaysia 16.7 0.7% 0.2 1.0% 16 France 15.8 0.6% 0.1 0.5% 17 Luxembourg 15.6 0.6% 0.0 0.0% 18 Republic of Korea 15.1 0.6% 0.3 2.0% 19 India 10.9 0.4% 0.1 0.6% 20 Bermuda 10.4 0.4% 0.1 0.5%

PAGE 10

Japan has been a consistent investor into Australia

Source: Merger Market

8,372 5,914

33,586 31,383

24,206 24,322

45,526 43,462

26,464 31,135

0 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US

$ m

illio

ns

Others South Africa France Thailand Netherlands South Korea

New Zealand Switzerland Singapore Hong Kong Mexico Japan

China United Kingdom Canada USA

M&A into Australia by country in 2004-2013

Japan has been consistently a large investor into Australia, having invested $22 billion over last 10 years

Other countries that have a track record of inward M&A into Australia include: — United States ($63bn) — Canada ($36bn) — UK ($35 bn) — China ($23 bn) — Mexico ($16 bn) — Hong Kong ($14 bn)

PAGE 11

Recent FIRB applications by country 2012-2013

PAGE 12

M&A into Australia by Japan in 2004-2013 by industry

Japanese M&A into Australia

15 97

3,774

1,710

6,805

2,570 2,929

1,712

0

2000

4000

6000

8000

2004 2005 2006 2007 2008 2009 2010 2011 2012

US

$ m

illio

ns

Industrial automation Agriculture Leisure Computer software Utilities (other) Computer services Services (other) Manufacturing (other) Construction Industrial products and services Chemicals and materials Financial Services Energy Consumer: Foods Mining Consumer: Other

Japanese M&A into Australia has been mainly in food & beverage, materials, energy and service industries

Major deals include: — Kirin – Lion Nathan

(2009, $4,000m) — Mitsui & Co – BHP

Iron Ore (2013, $1,500m)

— Sumitomo Chemical – Nufarm (2010, $1,350m)

— Dai-ichi Life – Tower (2011, $1,200m)

— Asahi – Schweppes (2009, $776m)

PAGE 13

FDI into Australia is an important component to its continued growth and in multilateral and bilateral relationships FDI represents an important and substantial commitment on the part of the investor and provides

longer term bond between nations, institutions and investment stability

In 1975, the Australian Government first formalized its foreign investment policy, which was much more restrictive than what exists today

Liberalization has progressed as evidence of the benefits of foreign investment materialized

Recent bilateral agreements with key trading countries such as Japan and Korea are key to fostering more investment in Australia

FDI is important to support growth

PAGE 14

But Australia ranks high in terms of FDI restrictiveness – Why?

Source: OECD

OECD FDI Regulatory Restrictiveness Index 2013

Despite a high level of FDI, Australia ranks 16th in OECD’s FDI Index which measures how “closed” its policies are toward foreign investment, and is considered “worse than average”

Japan, conversely ranks much better at 35

Question is what is Australia “missing” by perhaps being over-restrictive and what are the issues?

STRICTLY CONFIDENTIAL

03 Australian FDI Regulatory

Framework

PAGE 16

Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) empowers the Australian Treasurer (on advice of the Foreign Investment Review Board (FIRB)) to block (or attach conditions to) proposals considered to be contrary to the national interest

The Australian Competition and Consumer Commission (ACCC) is empowered to prohibit mergers that would have the effect, or be likely to have the effect, of substantially lessening competition in a market

Two key requirements

Key regulatory requirements for FDI

All direct investments in Australia by foreign governments or their agencies must be notified to FIRB, irrespective of size

Foreign persons acquiring a substantial interest (15 per cent or more of the issued shares) in a corporation or control of an Australian business valued at more than $248 million, subject to certain exceptions

No pre-merger notification requirements for ACCC review, but pre-assessment is highly recommended if possible and ACCC can always investigate post-completion

Who needs to apply?

PAGE 17

Record looks strong with few rejections and approx. 95% approved ...

FIRB approvals 2007-2013

Source: FIRB Annual Report 2012-2013

Outcome 2007-08

No. 2008-09

No. 2009-10

No. 2010-11

No. 2011-12

No. 2012-13

No. Approved unconditionally 1,656 2,266 2,672 4,606 4,900 5,535

Approved with conditions 6,185 3,086 1,729 5,687 5,803 7,196

Total approved 7,841 5,352 4,401 10,293 10,703 12,731

Rejected 14 3 3 43 13 -

Total decided 7,855 5,355 4,404 10,336 10,716 12,731

Withdrawn 521 341 167 390 534 466

Exempt 172 125 132 139 170 145

Total considered 8,548 5,821 4,703 10,865 11,420 13,322

PAGE 18

... Across many industries

2.00% 3.00%

17.00%

30.00%

0.17% 12.00%

0.55%

35.00%

FY2012

Agriculture, forestry & fishing

Finance & insurance

Manufacturing

Mineral exploration & development

Resource processing

Services

Tourism

Real estate (incl off-the-plan)

FIRB approvals by sector – 2012/13

PAGE 19

While rejection rates are very low, data does suggest room for improvement

A number of investment applications to the FIRB are never fully assessed, as they are withdrawn from the review process (approx. 4%)

In the last three years, of those approved, over half were only conditionally approved The data only shows where applications have been made; likely to be cases where investments are

commercially justified but never put forward for review Lack of transparency, predictability and consistency about decisions and what constitutes “national

interest” can lead to potential investors choosing to invest elsewhere — No ability to seek legal, judicial or other explanation

Any investment by a foreign government or agency must be reviewed, regardless of size Public sentiment or opposition can itself become a relevant factor in assessing national interest

concerns

What are the issues?

PAGE 20

Regulatory approval participants

Treasurer (Decision Maker)

Assistant Treasurer

(Delegate of Treasurer – non controversial applications)

General Manager , Foreign Investment Division (Delegate of Treasurer – minor matters)

The Treasury (Government Department)

Foreign Investment Division (Policy advice to Government)

Secretariat to FIRB (Advisory)

Foreign Investment Review Board (FIRB)

(Advisory only)

Other Government Agencies

(input)

PAGE 21

Approval period comprises a 40 day period (30 day examination period and additional 10 day notification period)

Government may extend indefinitely depending upon circumstances, seeking additional information The FIRB may offer an informal extension as an alternative, by allowing an applicant to withdraw and

resubmit an application thereby restarting the 30-day clock One issue is that the process is highly consultation-oriented, with no clear “driver” to push process

forward

Review Period

Review period and consultation can be long

In the examination of large or otherwise significant proposals, State and Commonwealth Government departments may be consulted strictly on a confidential basis

Consultation with States and Commonwealth Government departments

PAGE 22

What are the considerations?

Investments should not be contrary to the “national interest”

No hard and fast rules as to what constitutes “national interest”, decided on a case-by-case basis

Government balances potential sensitivities against benefits of foreign investment, and typically considers: – National security – Competition – Impact on Government policies

(including tax and environment) – Impact on general economy

and community – Character of investor – Independence

Specific rules apply to sensitive sectors, including media, telecommunications, banking, transport, defence, and uranium.

PAGE 23

Shell acquisition of Woodside (2001) Singapore Exchange acquisition of Australian

Securities Exchange (2011) Archer Daniels Midlands acquisition of

GrainCorp (2013)

Notable transactions blocked by FIRB

Examples of situations that were blocked or had significant undertakings

Arms length off-take arrangements Divestiture of certain assets Relisting of the Australian Stock Exchange

within 3 years Australian CEO and CFO or directors Reduced ownership over time Australian incorporated entity with offices and

principal place of business in Australia Australian operational control Operations to remain in Australia

Examples of selected undertakings

China Minmetals / OZ Minerals (2009) Yancoal / Felix Resources (2009) SABMiller / Fosters (2011) Shandong Ruyi / Cubbie Group (2012)

Notable transactions approved with conditions

PAGE 24

Areas of FIRB sensitivities

Sector

— Uranium miner

— Media

— Military supply / training

— Strategic mineral assets

— Airports / airlines

— Banking

— Strategic ports

— Telcos

— Iron ore miner

— Major diversified miner

— Diamond miner

— Residential real estate

— Shipping

— General resources

— Other ports

— Agricultural

— Forestry

— Hospitals / schools

— Childcare

— Other infrastructure

— Non-strategic mineral assets

— Manufacturing / industrial

— Commercial real estate

Ownership Interest in

Australian Target

— 100% — 49.9% — JV with Aust. Partner (< 50%)

— < 15%

— Diversity of ownership

FIRB sensitivity HIGH LOW

PAGE 25

Areas of FIRB sensitivities (cont’d)

Governance

— Control — Appoint all directors — Non-Aust management team — Board meetings outside Australia

— Director appointments consistent with shareholding

— A proportion of Independent Directors

— Economic interest only — No Director appointments — Retain Aust mgmt team — Board meetings in Australia

Target

— No growth plans/reduced production — Monopoly — Defence/National security significance — Environmental significance

— Growth plans/increased production

— Significant competition — Create Australian jobs — Increase Australian

Government revenues

Acquirer

— Offshore incorporated — Customer of target — Access to price setting process — Off-take agreements

(resources sector)

— Australian incorporated — Independent of target — Not customer of target

Political issues — Community/ minor party concern — Comply with Australian Industrial Relations Laws

FIRB sensitivity HIGH LOW

PAGE 26

Requests for FIRB approval should take the following into consideration

Investors should meet with FIRB prior to announcement or lodgement of application on a confidential basis — Investors should travel to Canberra to meet and discuss proposals with FIRB — This will help the identification of features of the proposed transaction that are likely to be areas

of FIRB sensitivity and areas that the FIRB would like further clarification Investors should not take a narrow, legalistic approach to the guidelines as this can delay the

process. The foreign investment regime is a mixture of law and policy FIRB do not like surprises or being pressured (e.g., aggressive media campaigns) Strategic use of Government Affairs and Public Relations consultants is recommended for sensitive

or major proposals

FIRB approval tips

PAGE 27

Free trade agreement with Japan – July 2014

Raising of thresholds for investments requiring FIRB approval by entities incorporated in Japan (A$248 million to A$1,078 million – the same as for US, New Zealand and soon Korea investors)

Lowering of thresholds does not apply to investments in agriculture or foreign government investors — Agriculture becoming area of focus as witnessed by Sumitomo’s acquisition of Emerald Grain

(2014) and Mitsubishi’s acquisition of Olam Grains (2014)

China also being given consideration for raising of threshold for private sector investments

JAEPA impact on FIRB approval

Wall crossing

Conflict check

Embargo Client onboarding

Commercial approval

Workspace setup

Mandate Deal update

PAGE 28

FIRB and ACCC are supportive of FDI

Investors and advisors tend to focus on the “worst case” scenario and reputations can be influenced by selective difficult or complex cases but these are rare instances

The Australian regulatory regime, while characterized by uncertainty in some respects, can also be considered “light touch” compared with other jurisdictions

The FIRB process, however, can be long and early interaction with regulators is key Anti-trust should also be addressed early on where possible As in any jurisdiction, political factors will influence outcomes Japanese entities have historically deployed significant capital and resources into Australia, with few

if any issues JAEPA will foster further investment into Australia

In summary

Wall crossing

Conflict check

Embargo Client onboarding

Commercial approval

Workspace setup

Mandate Deal update

STRICTLY CONFIDENTIAL

04 A Japanese Perspective

PAGE 30

Top 10 target countries of Japanese outbound M&As 2009-2013 (US$m)

Japan has been investing heavily across the globe

Target regions of Japanese outbound M&As 2009-2013 (US$m)

Source:: Mergermarket

USA 107,892

50%

Switzerland 17,960

8%

United Kingdom 16,507

8%

Australia 15,541

7%

Ireland (Republic)

13,746 6%

Thailand 10,804

5%

India 9,639 4%

Brazil 9,156 4%

France 7,918 4%

Canada 7,877 4%

North America 115,769

41%

Europe 77,092 27%

Asia Pacific 53,627 19%

Latin America 19,350

7%

South Asia 9,658 4%

Africa 3,699 1%

Middle East 1,325 1%

Russia 1,157 0%

PAGE 31

Outbound M&A by Asian Countries 2009-2013

Japan and China lead Asia outbound M&A

Source: Dealogic

Japan and China have been the largest investors in outbound M&A in the last several years

Japan accounted for around 30%-40% of total outbound M&A

China’s has been consistently increasing its investment volumes over the last 5 years

3,153 15,768 15,513 39,643

9,758 10,534 13,794 9,651

10,493

8,453 1,586 1,938 4,150

4,229

1,609 20,997

23,890 24,422

13,692

24,953 21,581

32,115 29,587 19,314

20,041

36,433

49,857 54,041 57,116 67,966

27,597

35,903

83,608

110,857

52,085

0

50,000

100,000

150,000

200,000

250,000

300,000

2009 2010 2011 2012 2013

US$

milli

ons

Others Korea Taiwan Singapore HK China Japan

PAGE 32

Japan has $95 trillion in cash/deposits

Japanese financial institutions continue to have large balances of financial assets

Japan has one of the lowest costs of capital in the world and banks are avid lenders

Japan continues to have significant resources

Balance of financial assets (as of September 2014)

Asia stock market comparison (as of August 2014)

Balance of cash/deposit (as of September 2014)

0

1

2

3

4

5

$US

tr

Source: World Federation of Exchanges (market cap as of end of Aug 2014)

Source:“Flow of Fund Accounts” (Bank of Japan, September 2014) Source:“Flow of Fund Accounts” (Bank of Japan, September 2014)

Segment ($US b) % Private Banks 66,353 69.6% Households 15,785 16.6% Private nonfinancial corporations 8,751 9.2% Insurance and pension funds 1,777 1.9% Private nonprofit institutions serving households 1,273 1.3% Social security funds 782 0.8% Local governments 756 0.8% Other financial intermediaries 382 0.4% Central government 127 0.1% Overseas 39 0.0% Public nonfinancial corporations -107 -0.1% Central bank -241 -0.3% Financial auxiliaries -401 -0.4% Total 95,276 100.0% Subtotal - Financial Investors 2,559 2.7%

-20,000

0

20,000

40,000

60,000

80,000

100,000

120,000

Fina

ncia

l In

stitu

tions

Priv

ate

nonf

inan

cial

co

rpor

atio

ns

Pub

lic n

onfin

anci

al

corp

orat

ions

Cen

tral

gove

rnm

ent

Loca

l go

vern

men

ts

Soc

ials

se

curit

y fu

nds

Hou

seho

lds

Priv

ate

nonp

rofit

In

stitu

tions

svs

hou

seho

lds

Ove

rsea

s

New others

Other liabilities

Investments

Accounts receivable/payable Trade credits and foreign trade credits Deposits money

Insurance and pension reserves Equity

Securities

Loans

Currency and deposits

PAGE 33

Bilateral Investment Treaties

Japan is seeking agreement with many Asian countries

Other Investment Agreements In Force Signed (not in force) Bangladesh Colombia Cambodia Iraq China Kuwait Egypt Mozambique Hong Kong, China SAR Myanmar Korea, Republic of Papua New Guinea Lao People’s Democratic Republic Saudi Arabia Mongolia Pakistan Peru Russian Federation Sri Lanka Turkey Uzbekistan Vietnam

ASEAN –Japan FTA Japan-Malaysia EPA

ASEAN-Japan Framework Agreement Japan-Mexico EPA

Australia-Japan EPA Japan-Mongolia EPA

Australia-Japan Framework Agreement Japan-Peru EPA

Brunei-Japan EPA Japan-Philippines EPA

Chile-Japan EPA Japan-Singapore EPA

China-Japan-Korea trilateral investment agreement Japan-Switzerland EPA

India-Japan EPA Japan-Thailand EPA

Indonesia-Japan EPA Japan-Vietnam EPA

PAGE 34

Japan and Australia enjoy a strong partnership

Japan has consistently been in the top 5 countries for sourcing investment into Australia Japan has not seen rejections nor major issues in terms of investment into Australia, but many have

also been minority investments Australia and Japan enjoy a strong strategic and long-standing relationship New EPA/FTA will provide a welcome change for Japanese seeking to invest in Australia Japan will see increased competition for investment in Australia, but enjoys a very low cost of capital Challenge for Japanese investors longer term will be in terms of exercising appropriate governance,

especially for control investments

Japan will continue to be a major investor in Australia

STRICTLY CONFIDENTIAL

52nd Japan-Australia Joint Business Conference

Arthur Ozeki

13 October 2014