macquarie.com.au  2014 Annual Financial Report  Macquarie Group Limited and its subsidiaries  continued  Directors’ Report for the financial year ended 31 March 2014  The principal activity of the Company during the financial  year ended 31 March 2014 was to act as a non-operating  holding company (NOHC) for the Consolidated Entity.  The activities of the Consolidated Entity were those of a  financial services provider of banking, financial, advisory,  investment and funds management services. In the opinion  of the Voting Directors, there were no significant changes to  the principal activities of the Consolidated Entity during the  financial year under review not otherwise disclosed in this  report.  Profit attributable to ordinary equity holders was $A1,265  million for the year ended 31 March 2014, up 49 per cent  from $A851 million in the prior year.  Net operating income of $A8,132 million for the year ended  31 March 2014 increased 22 per cent from $A6,657 million  in the prior year. Key drivers of the change from the prior  year were:  The financial report for the financial years ended 31 March  2014 and 31 March 2013, and the results herein, have been  prepared in accordance with Australian Accounting  Standards.  The consolidated profit after income tax attributable to  ordinary owners for the financial year ended 31 March 2014  was $A1,265 million (2013: $A851 million).  Subsequent to year end, the Directors have announced a  final ordinary dividend of $A1.60 per share, 40 per cent  franked based on tax paid at 30 per cent ($A509 million in  aggregate). The final ordinary dividend is payable on 2 July  2014.  On 13 January 2014, the Company distributed the majority  of its investment in Sydney Airport stapled securities to its  ordinary shareholders through a special dividend and capital  reduction (SYD distribution). The special dividend component  of the distribution was $1.1563 per share, 40 per cent  franked ($A389 million in aggregate).  On 12 December 2013, the Company paid an interim  ordinary dividend of $A1.00 per share 40 per cent franked  ($A336 million in aggregate) in respect of the financial year  ended 31 March 2014.  On 2 July 2013, the Company paid the final dividend of  $A1.25 per share 40 per cent franked ($A419 million in  aggregate) in respect of the financial year ended 31 March  2013.  No other ordinary dividends or distributions were declared or  paid during the financial year by the Company.  There were no other significant changes in the state of the  affairs of the Consolidated Entity that occurred during the  financial year under review not otherwise disclosed in this  report.  40  Dividends and distributions  Result Principal activities Review of operations and financial result  Financial position  – A 25 per cent increase in net interest income to  $A1,705 million for the year ended 31 March 2014 from  $A1,367 million in the prior year primarily due to higher  interest bearing asset volumes across the Group  combined with reduced funding margins.  – A 14 per cent increase in fee and commission income  to $A3,853 million for the year ended 31 March 2014  from $A3,379 million in the prior year, driven by:  – increased base fees of $A1,289 million for the year  ended 31 March 2014, up 26 per cent from  $A1,019 million in the prior year primarily due to an  increase in assets under management (AUM) that  was largely driven by favourable currency and  market movements, acquisitions and positive fund  flows across Macquarie Funds;  – increased mergers and acquisitions, advisory and  underwriting fees of $A809 million for the year  ended 31 March 2014, up 23 per cent from $A659  million in the prior year, mainly due to improved  equity capital markets which benefited Macquarie  Capital; and  – increased brokerage and commissions income of  $A903 million for the year ended 31 March 2014,  up 11 per cent from $A811 million in the prior year  reflecting improved client activity in cash equities  across most regions, partially offset by the sale of  Macquarie Private Wealth Canada.  – A 27 per cent increase in net trading income to  $A1,570 million for the year ended 31 March 2014 up  from $A1,234 million in the prior year, mainly driven by  improved trading conditions for Fixed Income,  Currencies and Commodities, particularly in  commodities markets, and improved trading conditions  and market sentiment for Macquarie Securities.  – A 46 per cent increase in other operating income and  charges to $A855 million for the year ended 31 March  2014 from $A585 million in the prior year. The increase  was mainly due to:  – the gain on SYD distribution of $A228 million, while  the prior year included a gain on change of  ownership interests of $A121 million where  Macquarie was required to re-measure ownership  interests due to the loss of control or significant  influence in certain investments; State of affairs 