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## Notes to the financial statements for the financial year ended 31 March 2014 continued 

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(1) The overall impact of the SYD distribution was that of a share repurchase at fair value, therefore no adjustment has been made to financial year ended 31 March 2013. Refer to note 5 - Dividends and distributions paid or provided for. (2) 

The Convertible Preference Securities have been included in diluted earnings per share weighted for the period through their date of redemption, to the extent to which they were dilutive based on the conversion features measured at their date of redemption. 

## Options 

Options granted to employees under the Macquarie Group Employee Share Option Plan (MGESOP) are considered to be potential ordinary shares and have been included in the calculation of diluted earnings per share to the extent to which they are dilutive. The exercise price used in this assessment incorporates the fair value of options yet to be recognised as an expense in the future. 

Included in the balance of weighted average options are 32,847 (2013: 2,372) options that were converted, lapsed or cancelled during the period. There are a further 64,635 (2013; 8,806,873) options that have not been included in the balance of weighted average options on the basis that their adjusted exercise price was greater than the average market price of the Company’s fully paid ordinary shares for the financial year ended 31 March 2014 and consequently, they are not considered to be dilutive. 

The Company has suspended new offers under the MGESOP under the remuneration arrangements which were the subject of shareholder approvals obtained at a General Meeting of MGL in December 2009. The last grant of options under the MGESOP was on 8 December 2009. Currently MGL does not expect to issue any further options under the MGESOP. 

## Macquarie Group Employee Retained Equity Plan 

In December 2009, the Company’s shareholders approved the implementation of the Macquarie Group Employee Retained Equity Plan (MEREP). 

Vested MEREP awards are considered to be ordinary shares and have been included in the determination of basic and diluted earnings per share from their date of vesting. 

Unvested MEREP awards are considered to be potential ordinary shares and have been included in the calculation of diluted earnings per share to the extent they are dilutive. Included in the balance of weighted average unvested MEREP awards are 3,884,630 (2013: 1,874,531) awards that were vested, lapsed or cancelled during the period. As at 31 March 2014, a further 48,518 (2013: 68,591) MEREP awards have not been included in the balance of weighted average unvested MEREP awards on the basis that they are not considered to be dilutive. 

## Exchangeable Shares 

The exchangeable shares on issue (refer note 28—Contributed Equity) are considered to be ordinary shares and have been included in the determination of basic and diluted earnings per share from their date of issue. 

## Retention Securities and Options 

Retention securities and options are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share from their date of issue. The fair value of these securities and options are amortised over the vesting period. 

