DISCLAIMER This PDF is an exact copy of the Annual Report and Accounts of London Stock Exchange Group plc as provided to shareholders. The audit report is set out on page 114. The maintenance and integrity of the London Stock Exchange Group plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. International expansion. Diversification. Growth. Annual Report 31 December 2014 Welcome to our annual report Who we are London Stock Exchange Group is a diversified international market infrastructure and capital markets business sitting at the heart of the world’s financial community. The Group operates a broad range of international equity, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, Europe’s leading fixed income market; and Turquoise, a pan-European equities MTF. Through its platforms, the Group offers international business and investors unrivalled access to Europe’s capital markets. Post trade and risk management services are a significant part of the Group’s business operations. In addition to majority ownership of multi-asset global CCP operator, LCH.Clearnet Group, the Group operates CC&G, the Italian clearing house; Monte Titoli, the European settlement business; and globeSettle, the Group’s newly established central securities depository based in Luxembourg. The Group is a global leader in indexing and analytic solutions. FTSE and Russell Indexes offer thousands of indices that measure and benchmark markets around the world. The Group also provides customers with an extensive range of real time and reference data products, including SEDOL, UnaVista, Proquote and RNS. The Group is a leading developer of high performance trading platforms and capital markets software for customers around the world, through MillenniumIT. Since December 2014, the Group has owned Russell Investments, an investment management business. Headquartered in London, with significant operations in North America, Italy, France and Sri Lanka, the Group employs approximately 4,700 people. Further information on London Stock Exchange Group can be found at: www.lseg.com London Stock Exchange Group plc 10 Paternoster Square London EC4M 7LS Telephone +44 (0)20 7797 1000 Registered in England and Wales No. 5369106 London Stock Exchange Group plc Annual Report December 2014 1 STRATEGIC REPORTSTRATEGIC STRATEGIC REPORT Financial highlights 2 An overview of our business, the markets and Operational highlights 3 regulatory environment in which we operate, Overview of Group activities 4 and strategy and statements from our Chairman What we do: our business model 6 and our Chief Executive. More detail on each of our Market position and outlook 8 divisions, our performance, how we consider our Chairman’s statement 14 wider responsibilities and the principal risks that Chief Executive’s statement 16 could affect our business. Strategy in action 18 Executive management team 20 Introduction to segmental review 22 Capital Markets 24 Post Trade Services 29 Information Services 34 Technology Services 38 Our wider responsibility 40 Financial review 42 Risk management oversight 50 Principal risks and uncertainties 54 Sign-off for the Strategic Report is provided in the Directors’ Report on page 112 GOVERNANCE GOVERNANCE Board of Directors 62 An introduction to our Board of Directors, our Corporate governance 64 approach to corporate governance, the reports Report of the Nomination Committee 73 of committees to the Board and how we reward Report of the Audit Committee 74 performance, along with other statutory and Report of the Risk Committee 78 regulatory information. Directors’ remuneration report 80 Directors’ report 110 Statement of directors’ responsibilities 113 Independent Auditor’s report to the members of London Stock Exchange Group plc 114 GROUP FINANCIAL STATEMENTS GROUP FINANCIAL STATEMENTS Consolidated income statement 118 Detailed financial information setting out our Consolidated statement of performance for the reported 9 month period comprehensive income 118 and financial position at year end. Balance sheets 119 Cash flow statements 120 Statements of changes in equity 121 Notes to the financial statements 122 SHAREHOLDER INFORMATION SHAREHOLDER SHAREHOLDER INFORMATION Glossary 164 A glossary of terms used in this report and Financial calendar 166 other information for shareholders. Investor relations 167 2 Strategic report London Stock Exchange Group plc Annual Report December 2014 Financial highlights The Group has changed its financial year end to 31 December. As a consequence, this report shows audited results for 9 months to 31 December 2014. To provide further insight, we also show information on a calendar 12 month basis (unaudited). Adjusted total income* Adjusted operating profit* £ million £ million 1,381.1 558.0 514.7 1,213.1 479.9 1,043.9 1,096.4 441.9 430.2 417.5 814.8 852.9 341.1 674.9 Mar Mar Mar Mar 9m Dec 12m Dec 12m Dec Mar Mar Mar Mar 9m Dec 12m Dec 12m Dec 2011 2012 2013 2014 2014 2013 2014 2011 2012 2013 2014 2014 2013 2014 Operating profit Adjusted earnings per share (pence)* £ million 103.3 358.5 348.4 353.1 97.0 98.6 329.4 346.0 92.6 96.5 283.0 75.6 242.1 67.9 Mar Mar Mar Mar 9m Dec 12m Dec 12m Dec Mar Mar Mar Mar 9m Dec 12m Dec 12m Dec 2011 2012 2013 2014 2014 2013 2014 2011 2012 2013 2014 2014 2013 2014 Basic earnings per share (pence)* Dividends per share (pence)* 193.6 27.2 28.4 24.7 26.1 22.5 80.4 56.4 63.0 64.2 56.5 37.9 Mar Mar Mar Mar 9m Dec 12m Dec 12m Dec Mar Mar Mar Mar 9m Dec 2011 2012 2013 2014 2014 2013 2014 2011 2012 2013 2014 2014 12 months 12 months 9 months 12 months Dec 2014 Dec 2013 12 months Dec Period ended Dec 2014 Mar 2014 unaudited unaudited Variance % Adjusted total income* £1,043.9m £1,213.1m £1,381.1m £1,096.4m 26% Adjusted operating profit* £417.5m £514.7m £558.0m £479.9m 16% Operating profit £242.1m £353.1m £346.0m £329.4m 5% Adjusted profit before tax* £368.2m £445.9m £491.7m £412.7m 19% Profit before tax £191.0m £284.3m £277.9m £262.2m 6% Adjusted basic earnings per share* 75.6p 98.6p 103.3p 96.5p 7% Basic earnings per share 37.9p 63.0p 56.5p 64.2p (12%) * London Stock Exchange Group uses non-GAAP performance measures as key financial indicators as the Board believes these better reflect the underlying performance of the business. Adjusted operating profit, adjusted total income, adjusted profit before tax and adjusted basic earnings per share all exclude amortisation and impairment of purchased intangibles and goodwill, non-recurring items and unrealised losses/gains at LCH.Clearnet (£0.1 million gain in the 9 months to December 2014, £3.5 million loss in 12 months to March 2014, £0.5 million loss in 12 months to December 2014 and £2.9 million loss in 12 months to December 2013). Adjusted earnings per share and dividends have been restated for the year ended 31 March 2014, and prior years, for the September 2014 rights issue. Strategic report Highlights 3 Operational highlights REPORTSTRATEGIC The Group is delivering on its strategy, leveraging its range of products and services and further diversifying its offering through Group Adjusted Total Income by segment* new product development and strategic investments. A few £ million 12 months to examples of the progress being made are highlighted below: 9 months to 31 Dec 2014 31 Dec 2014 unaudited Capital Markets 2 4 9 . 1 3 3 3 . 2 Capital Markets — Revenues for calendar year 2014 increased by 12 per cent to Post Trade Services £333.2 million (2013: £296.8 million). Primary Markets saw a CC&G and Monte Titoli 94.7 129.1 seven year high in new issue activity with 219 new companies Post Trade Services admitted, including AA, the largest UK capital raising IPO of LCH.Clearnet 2 8 4 . 6 3 8 9 . 4 the year Information Services 281.0 373.0 — UK cash equity average daily value traded increased 15 per cent and average daily number of trades in Italy increased 16 per cent Technology Services 47.3 66.0 GOVERNANCE — Average daily value traded on Turquoise, our European cash Other (including Russell equities MTF, increased 42 per cent to €3.7 billion per day Investment Management) 87.2 90.4 and share of European trading increased to over 9 per cent Information Services — In Fixed Income, MTS cash and BondVision value traded — Revenues for calendar year 2014 increased by 10 per cent increased by 32 per cent, while MTS Repo value traded to £373.0 million, with good growth from FTSE and other increased by 3 per cent information products Post Trade Services – CC&G and Monte Titoli — The Group completed the acquisition of Frank Russell Company — Revenues for calendar year 2014 increased by 3 per cent in in December 2014. Russell Indexes contributed £10.0 million constant currency terms. In sterling terms revenues declined revenue for the period from acquisition date by 2 per cent to £96.5 million — FTSE increased its China offering, with continued development — CC&G cleared 69.7 million equity trades, up 16 per cent of the FTSE China Index series, the leading benchmark for and 39.0 million derivative contracts up 20 per cent GROUP FINANCIAL STATEMENTS Chinese linked ETFs — Monte Titoli is the largest CSD entering the first wave of TARGET2- — FTSE published a statement of compliance with the IOSCO Securities from June 2015.