MACQUARIE TECHNOLOGY GROUP LIMITED — AGM Information 2002

Nov 26, 2002

Australian Stock Exchange
The Line College of the Second State
MAQ000075

27 November 2002

Australian Stock Exchange Limited Level 6 20 Bridge Street SYDNEY NSW 2000

Attention:

Company Announcements

Via Facsimile: 1300 300 021

Number of pages: $\mathcal{b}$

Dear Sir/Madam

Macquarle Corporate Telecommunications Holdings Limited (MAQ)

Please find enclosed:

• 1. Chairman's Address to Annual General meeting to be held today
• 1. Chief Executive's Address to Annual General meeting to be held today

The presentation slides referred to in each of these addresses are available on the Company's website (www.mct.com.au).

Yours faithfully Albert Koolmees Company Secretary

Macquarie Corporate Telecommunications Holdings Limited ACN 056 712 228

Sydney Level 6, 33 Bligh Street Sydney NSW 2000 Telephone (02) 9201 0000 Facsimile (02) 9201 3588

Melbourne Level 10, 420 St Kilda Road Melbourne VIC 3004 Telephone (03) 9206 6800 Facsimile (03) 9206 6888

Brisbane Level 4, 26 Wharf Street Brisbane QLD 4000 Telephone (07) 3874 2300 Facsimile (07) 3874 2388 Perth

201 Adelaide Terrace East Perth WA 6004 Telephone (08) 9229 0000 Facsimile (08) 9229 0088

Hobart

Level 12, 59 Murray Street Hobart TAS 7000 Telephone (03) 6214 0000 Facsimile (03) 6214 0088

Adelaide

Suite 9, 15 Fullarton Road Kent Town 5A 5067 Telephone (08) 8363 9700 Facsimile (08) 8363 9788

MACOUARIE CORPORATE TELECOMMUNICATIONS HOLDINGS LIMITED

ANNUAL GENERAL MEETING

27 NOVEMBER 2002

SLIDE 1-Macquarie Corporate AGM

WELCOME AND INTRODUCTION

Ladies and gentlemen, welcome to the Annual General Meeting of members of Macquarie Corporate Telecommunications Holdings Limited. There clearly being a quorum present I declare the meeting open.

SLIDE 2 - Board of directors

My name is John Priest, Chairman of Macquarie Corporate Telecommunications Holdings Limited. I would like to introduce you to those seated here with me:

Aidan Tudehope – Co-founder and Chief Operating Officer of Macquarie. Aidan has played a key role in establishing Macquarie's Singapore business and in developing our data hosting strategy.

Robert Kaye – Robert joined the company as a director a year-and-a-half ago. Robert is the former managing director of British Telecom's Australian operations and has more than 40 years experience in the telecommunications and information technology industries.

David Tudehope – Co-founder and Chief Executive Officer of Macquarie. In addition to supervising the general management and strategic direction of the company, David is responsible for our sales and account management functions.

And I'd also like to introduce Albert Koolmees, the Company Secretary.

$SLIDE$ 3 – Today's Agenda

BUSINESS OF MEETING

I'll take a moment now to outline this morning's agenda. First you will hear addresses from me and then from David. We'll give you a brief overview of Macquarie's recent performance and overall business strategy. Then we'll proceed to the ordinary business of the meeting.

ORDINARY BUSINESS

We will consider two items of ordinary business today:

• 1) the receipt of the financial statements and reports; and
• 2) the election of directors in today's case, we will consider my reelection as Chairman

OTHER BUSINESS

There has been no notice of other business validly given by any member under the Corporations Act 2001.

NOTICE OF MEETING

The notice of meeting was sent to all members. Can I take it that the notice of meeting convening this meeting is to be taken as read? Thank you.

MINUTES OF THE PREVIOUS GENERAL MEETING

The minutes of the previous general meeting of members of the company, which was the Annual General Meeting held on 30 November 2001, were approved by the Board and signed by the Chair of that general meeting in accordance with the provisions of section 251A of the Corporations Act 2001. The original minutes are tabled and there are copies of those minutes available for inspection by any member wishing to see them.

CHAIRMAN'S ADDRESS

$SLIDE$ 4 – Chairman's Address

We'll now move on to our review of Macquarie's performance in 2002 and its business strategy moving forward. You have already read a good deal about this in our annual report.

$SLIDE$ 5 – 2002 Financial Performance (A)

The 2002 financial year was a challenging one for Macquarie Corporate $-$ as it was for most of the information technology and telecommunications sector. Business conditions within the IT&T industry remain subdued. And needless to say, we are all operating in an overall environment of great economic uncertainty.

Despite these tough conditions, we are making significant progress in becoming a more efficient, productive and customer-focused company. We are increasingly encouraged by the underlying strength of our operating businesses and believe we are establishing a solid foundation for future growth.

In 2002 Macquarie reported an annual EBITDA loss of \$15.6 million $- a$ result that was in line with the guidance we had provided to the market back in March, when we announced our interim results.

Most of that EBITDA loss was incurred when we decided to take a \$10 million, one-off, non-cash provision against the carrying value of the Intellicentre – our data hosting facility in Sydney.

The provision reflects a prudent, conservative approach to the value of the facility. It also reflects our expectations that ongoing weakness in the IT&T sector will continue to push out further into the future the returns we originally expected in our data hosting business.

While waiting for the much-anticipated industry turnaround, we are working hard to continually develop new ways to address customer needs and improve service delivery in data hosting and across all of our businesses – while keeping a tight lid on costs.

$SLIDE$ 6 – 2002 Financial Performance (B)

As a whole, Macquarie generated service revenue of \$228.4 million in 2002, a 4% increase over last year. The size of the increase is indicative of the generally flat trading results experienced by most companies in the industry.

Given the challenging economic conditions, we have made it a priority to be disciplined in our spending and investments.

As you know, we have made significant investments in the past two years $$ not only to establish the data hosting business but also to create our Government Business Services unit and to launch our first overseas operation in Singapore. That capital expenditure program is now essentially complete. In 2002, we incurred capital expenditures of only \$8.6 million, which represents less than 4% of our service revenue. We expect a similar low level of capital expenditure in the current 2003 financial year.

Our balance sheet remains strong. At the close of the 2002 financial year, we had a cash position of \$26 million, along with an additional \$1.4 million in bank term deposits. We had a positive operating cash flow of \$1.2 million in 2002. We have no debt.

Our EBITDA result improved by \$2.1 million $- a 12\%$ increase over 2001. But that improvement was offset by higher depreciation charges and lower interest income, resulting in a loss after tax of \$17.7 million.

SLIDE 7- Operational Overview

From an operational standpoint, we have developed a good mix of voice, data and on-line services that are closely aligned with the increasingly complex communications needs of our corporate and government customers.

In our traditional Voice Services business, we have made substantial progress in reducing carrier costs, which represent our biggest single expense. These reductions have largely been achieved through the successful implementation of our network alliance with PowerTel, contributing to a \$2.2 million increase in the underlying profitability of our voice business from the first half to the second half of 2002.

But price competition remains intense, which continues to put pressure on voice revenue. We are therefore seeking ways to better align our carrier costs and operating expenses with the voice services we provide to our customer base.

In Data Services, revenue was up nearly 33% in 2002, primarily due to strong sales of data networking products and contributions from our emerging data hosting business.

The clear trend is that Data Services will generate an ever-greater percentage of Macquarie's total revenue in the future, as we continue to supplement our traditional voice services with higher-value data and on-line services. This shift from voice to data mirrors the increasing importance of data communications for our customers.

Two of the new businesses we launched last year $-$ Government Business Services and Singapore - are off to a fast start in their first year of operation.

The Government business is winning major contracts at both the Federal and State levels. It was operating on an EBITDA-profitable basis by the end of the 2002 financial year.

Our new Singapore business is also quickly building a strong customer base among Singaporean corporations, which are taking advantage of deregulation and switching to value-added service providers like Macquarie. Our Singapore business also exited the 2002 financial year on an EBITDAprofitable basis.

SLIDE 8 - Looking Ahead in 2003

Looking to the year ahead, we are hoping to see further evidence that the IT&T sector is on the road to stabilisation and eventual recovery.

In the meantime, we are working hard to enhance our performance on all levels. We have undertaken a comprehensive strategic planning process to improve the marketing and delivery of all of our services. That process has sharpened our ability to identify, target and win new customers $-$ and then retain those customers by delivering exceptional value to them.

We also continue to be focused and disciplined in seeking ways to enhance productivity, increase efficiency and streamline internal processes – all in an effort to work smarter, improve profitability and create greater value for customers and shareholders.

An important milestone to come in 2003 is the launch of our new mobile service, which we announced in August. It represents the final piece in our full-service offering. David will talk a bit more about this new business in a moment.

We are also pleased to announce today that the Board will be appointing, effective January 1, Dr Jane Craig as Macquarie's third non-executive director. Dr Craig has extensive business, consulting and university teaching experience in Australia, Asia and the United States.

She currently works as a management consultant for a number of private and public sector clients, specialising in strategy development and organisational design. She is also the Director of Entrepreneurship and Growth at the Australian Graduate School of Management.

We look forward to having Jane join us in the new year. We are certain she will make a valuable contribution to Macquarie.

As I look to the future, I am encouraged by the overall strength of Macquarie's business $-$ and by the steady improvements I see in our underlying operating performance, despite the tough business environment.

I am excited by the prospect of working with my fellow directors, the senior management team and all of Macquarie's staff to keep building on the positive momentum that is emerging in our business.

On behalf of the Board, I wish to thank all of our shareholders for your continuing support and I look forward to serving you in the future.

Now I'd like to turn it over to David, who will cover some additional points on operations and strategy.

CHIEF EXECUTIVE'S ADDRESS

SLIDE 9- Chief Executive's Address

As most of you know, Macquarie celebrated its 10^th anniversary in 2002. It's an important milestone in our history. It's also a testament to Macquarie's ability to adapt and perform in an industry that has experienced an amazing amount of change $-$ in terms of technology, competition and deregulation $$ over the past decade.

SLIDE 10 – Macquarie's Strategic Transition

As industry dynamics have changed, so too has our business strategy. As many of you are aware, we started in the early 1990s as a provider of fixedline voice services to Australian corporate customers. A few years later we made a major expansion into data networking services to handle our customers' growing email and data traffic.

Over the past two years we have undergone our most dramatic transformation of all – highlighted by the development of our Intellicentre data hosting facility and our entry into promising new markets for Australian government and Singaporean corporate business.

SLIDE 11 - Macquarie's Positioning Statement

So what exactly is Macquarie today? We position ourselves to customers as "the next generation integrated IT and telecommunications carrier that transforms your voice, data and on-line complexities into solutions."

In other words, we offer our customers a comprehensive and truly integrated information technology and telecommunications service. This encompasses everything from basic fixed-line voice services to complex data hosting services for customers that wish to outsource their data and on-line activities to Macquarie.

These high-value, high-margin data hosting and on-line services complement our established voice and data networking offerings. They enable us to provide a multi-dimensional service to the growing number of customers that rely on Macquarie to handle the majority of their IT&T needs. Many of these were originally voice-only customers that have progressively moved their data and on-line business to Macquarie.

You may have noticed that this year's annual report highlights three major companies that illustrate the success of this strategy. Freedom Group, the large furniture retailer, and Murdoch Magazines, the publisher of many popular magazines and books, are among the many Australian companies that now buy a combination of voice, data and on-line services from Macquarie.

A particularly good example of the growing reach of our strategy is Emerson Process Management, a multinational manufacturing and technology firm that was also highlighted in the annual report. Not only is Emerson a voice. data and on-line customer in Australia, but their regional Asia-Pacific operation has recently become a voice customer in Singapore as well.

SLIDE 12 – Macquarie in Singapore

The success of our new Singapore business – which represents Macquarie's first overseas expansion – has been very encouraging. In its first full year of operation, the business generated revenue of \$6.7 million.

Singapore quickly emerged from its establishment phase and built strong momentum throughout 2002. Although it recorded an EBITDA loss of \$1.9 million in 2002, the business exited the financial year on an EBITDAprofitable basis.

We entered the Singapore market in the early days of deregulation – much as we did in Australia 10 years ago – and have made an immediate impact with Singaporean corporates. They are attracted to our sophisticated billing and consulting services, which are differentiating factors that set us apart from the former monopolist carrier in that market.

The success of our Singapore business received important recognition just last week at the prestigious Austrade-Austcham Export Awards in Singapore. We were proud just to be named one of the finalists in the Business Services category – along with Lend Lease and J.B. Were, two

great Australian companies. We were absolutely delighted to actually win the Business Services award, which was given in recognition of our rapid growth in Singapore and our commitment to the Singapore market.

SLIDE 13 - Government Business Services

Our Government Business Services group has also made a big impact here in Australia by winning significant voice and data services contracts with Federal and State government departments.

In its first year of operation, Government Business Services generated \$14.4 million in revenue. The business had an EBITDA loss of \$1.1 million for the year, but like Singapore, exited the 2002 financial year as EBITDAprofitable.

The new government business has been a natural extension of our successful sales and marketing efforts in the corporate market. Macquarie is on the approved tender panels for the Federal Government and the New South Wales and Queensland State Governments, and we're actively pursuing additional contract opportunities in those areas.

SLIDE 14 – Macquarie Corporate Mobile

As John mentioned earlier, we will be adding an important component to our full-service offering in the coming months with the launch of Macquarie Corporate Mobile - our first mobile telephony service for Australian corporate and government customers.

The new mobile service, which will become available late in the 2002 calendar year, will be integrated with our existing voice, data and on-line services to create an even more powerful service for our customers.

The mobile business is an attractive one because it requires only limited capital investments during its start-up phase. It will also enable us to capitalise on one of our traditional strengths – our ability to offer tailored. transparent billing and value-added consulting services that can help customers monitor call usage and control call costs.

The recent implementation of mobile number portability was also a big factor in convincing us to launch a mobile service at this time. It is now much easier and convenient for corporate customers to switch their mobile service to Macquarie because their employees can keep their old numbers. This significantly enhances market opportunities for new entrants in the mobile business.

SLIDE 15 - Macquarie's Outlook

As Macquarie moves into its second decade, I'm pleased to say that our transformation into an integrated IT&T carrier – one that offers a full range of voice, data, online and now mobile services – is essentially complete.

Making this transformation has been a major challenge for our company. We have invested significant amounts of time, energy and capital in this effort. Unfortunately, these efforts have come amidst a prolonged downturn in the

IT&T industry – one that continues to delay the returns we originally expected from some of our new business initiatives.

But Macquarie is now able to provide customers with a broader range of superior services than ever before. We are already seeing clear evidence that customers are responding positively to our enhanced offering, which is contributing to positive trends in our underlying operational performance.

As we execute and implement our strategy, we are increasingly confident we will be in a strong competitive position to take advantage of any broad industry rebound or any upswing in $IT&T$ spending that may develop.

In closing, I'd like to offer special thanks to the entire staff of Macquarie for their loyalty, dedication and hard work over the years. I'd also like to thank you, our shareholders, for your continued interest in and support of our company.

SLIDE 16 – Macquarie Corporate AGM