Rober t Morgan Executive Chairman, Clemenger Group

CHAIRMAN’S REPORT2017 WAS A GREAT YEAR FOR THE CLEMENGER GROUP.

Strong Financial Performance

A big year of Company Achievements and Key Appointments

Media Companies

At Clemenger Group Level, we took some significant initiatives

Some special anniversaries

Clemenger BBDO Melbourne : An astonishing year. Won l i teral ly hundreds of awards including #1 agenc y in the wor ld at Cannes and D&AD. TAC M e e t G ra h a m was rated world ’s #1 most awarded campaign and Snicker ’s H u n g e r i t h m wor ld ’s #5 most awarded campaign by Big Won. I n key appointments Gayle Whi le was promoted to Deputy CEO and Simon Lamplough to Managing Direc tor.

R aydar: Founding Par tner and CEO Darr yl McClay ret i red and Troy Ful ler stepped up and into the role. Agenc y profit was up 50% and had a strong year of new business wins.

99: Wins included Auck land Counci l Group, Auck land Transpor t , Green Cross Health and K iwi Proper ty. NZ Market ing and TRA Research sur veyed the countr y ’s marketers who rated 99 as #1 in NZ for value and #2 for effec t iveness.

Hall & Par tners: Won work with Qantas and MLC. Secured NAB brand track ing for 6th year in a row.

Colenso BBDO: Star ted the year being named world ’s #1 agenc y by Big Won in Januar y 2017. Amazingly, they lost that t i t le to Clemenger BBDO Melbourne 12 months later in Januar y 2018 - but they were st i l l rated world ’s #6. Also rated world ’s #1 at the Caples Awards and world ’s #5 in the Global Effie I ndex. Welcomed Levi S lavin back af ter 5 years overseas, including work ing at BBDO New York , to take on the role of Chief Creat ive O fficer work ing with Creat ive Chairman, N ick Wor thington.

Clemenger BBDO Sydney : 2017 was a reset year for Clemenger BBDO Sydney. At the star t of the year Ben Coulson stepped into the Chief Creat ive Officer role to par tner Managing Direc tor Emily Perrett and at the end of the year N ick Garrett was named joint CEO of Clemenger BBDO Melbourne and Sydney. Creat ively the new Ke e p i n g I t R e a l work for Hungr y Jack ’s was a standout.

Perceptive Group: We welcomed Perceptive Research to the Group in New Zealand dur ing 2017. They have already met many Clemenger Group cl ients and are mak ing a big impac t in New Zealand and across the Tasman. I n 2017 they launched a dedicated Data Science Divis ion and completed a technical upgrade of their Customer Monitor Program.

Mazda1: Mazda and Mazda1 at CHE Proximity celebrated their 40th year par tnership. What an incredible success stor y for both Mazda and the Clemenger Group. We salute Mar t in Gr iffin and his team at Mazda1 who run this business br i l l iant ly.

Traffik: A great growth year, par t icular ly in Melbourne. New business highl ights were Diageo, HP, Sanitar ium, GWF, MLA and Metr icon. Named Popai Exper ient ia l Agenc y of the Year and AdNews Special ist Agenc y of the Year. Won several digita l awards including Befest Gold.

OMD New Zealand: N igel Douglas took the reins as CEO replacing long term lead K ath Watson in late 2017. He has hit the ground running and has won Qantas, S implot , and most recently NZ’s largest retai ler The Warehouse Group, work ing in c lose col laborat ion with PHD.

PHD Austral ia : Named Mumbrel la and B&T Media Agenc y of the Year. Won CUB. Ex tended contrac ts with Uni lever, ANZ, Google, PepsiCo and Pr icel ine.

PHD NZ: Won Spark NZ Telco, Sealord, Reebok and Body Worlds tak ing i t to the top of the NZ media rank ings table. Also won Media Plan of the Year for DB Expor t Sand at Adweek and Agenc y of the Year at Spikes Asia .

Clemenger Group Sydney : We signed the lease on a new premises at H ickson Road, Walsh Bay. An excit ing move af ter 33 years in St Leonards.

Clemenger BBDO Well ington: Managing Direc tor L iv ia Esterhaz y lef t the agenc yat the star t of 2017 and we were del ighted to appoint Brett Hosk in to this role. Agenc y had a ver y strong per formance at NZ Axis Awards in March winning the Grand Axis, two Grand Pr ix and 8 Golds for the Conscious Crossing campaign for c l ient K iwiR ai l .

Clemenger Brisbane: Won B&T State Agenc y of the Year for second year running. A great effor t in a tough market .

Marketforce: 2017 was a year of change. Long ser ving CEO John Dr iscol l lef t the agenc y and somewhat inevitably, this led to some staff and struc tural changes. J im Gal l subsequently moved into the role of Chairman of Marketforce in addit ion to his role with Redhanded. We are excited about the future of Marketforce under new leadership.

CHE Proximit y : Won B&T and AdNews Austral ian Agenc y of the Year. Won a stack of other global creat ive awards with Cochlear H e a r i n g Te s t i n D i s g u i s e being the standout, being named world ’s #11 most awarded campaign by Big Won. Won a heap of new business including IAG, Velocity, Danone, Lego and RAC V. Ant White promoted to CCO. Under Chr is Howatson's leadership CHE Proximity is an ex traordinar y success stor y.

Redhanded: Wins included I ncitec Pivot (one of the wor ld ’s largest fer t i l i ser manufac turers) , D yno Nobel ( the makers of dynamite) , R apid Spray and Armor Al l (a key auto brand of global giant Spec trum Brands) . Won an Effie for Kubota. ECD and founding par tner Paul Hand ret i red. Stuar t Shepherd stepped up to role of ECD.

Por ter Novel l i Austral ia : Transit ioned to a nat ional struc ture under Peter Kent. Rhys R yan became Managing Direc tor Melbourne and Arj Ganeshal ingam Managing Direc tor Sydney.

Por ter Novel l i New Zealand: MD Strahan Wal l is t ransferred to Por ter Novel l i in the US and Sarah Wil l iams stepped into the role. Key projec ts included BNZ C l o s e d f o r G o o d and B e e r t h e B e a u t i f u l Tr u t h .

Brandworld: H ighl ights included winning the NZ Government ’s ant i - l i t ter campaign and GSK HIV drug projec t . Relaunched Family Health Diar y format, NZ’s leading consumer voice on health issues.

Clemenger Field Marketing: A strong first year with foundation c l ient Telstra under the leadership of Mar ia Papaiacovou.

Creative Ac tivation: New business included Peter ’s Ice Cream, I ngram, Sabrands, San Churro and Cl ipsal . Launched their Route, Petrol and Convenience offer under the brand Super ior Sales Force.

eg+: Reappointed by NAB for 11th year. Won new business f rom Austral ia Post but , a long with Clemenger BBDO Melbourne, lost Mercedes Benz as par t of global review.

justONE: Won the most awards (18) at 2017 NZDM awards including the Supreme Nexus and 6 Golds. Launched PAK’nSAVE S t i c k y C l u b and Fly Buys for Genesis Energy. Won Paper Plus, NZ’s leading books and stat ioner y retai ler.

Quantum: Spent over 1250 hours ta lk ing to Austral ians about issues including law and order, money and finances, health and wel lbeing, disabi l i ty ser vices, cars, tech, water, energy, hor t iculture, agr iculture, tour ism, events, wine, ret i rement, aged care and new business star t-ups.

TK T: Had a big awards year winning at Cannes, AWARD, APAC Effies, Austral ian Effies, Spikes Asia , Tangrams and being named AdNews Smal l Agenc y of the Year (network) . Losing Campbel l Arnott 's in a global pitch was a sad moment for the agenc y and the Group.

Foundation: Progressing wel l under the leadership of Lachlan Jones. Wi l l have to defend long term cl ient Mercedes in late 2018 due to global review process.

OMD Austral ia : New business wins included NSW Government, S implot , Tr ipAdvisor, Qantas I nternat ional and most recently Belong. McDonald ’s added QLD and NT, mak ing the account nat ional . Ex tended long-term relat ionships with Beiersdor f, Telstra , Luxott ica and Hanes. Mumbrel la and B&T Employer of Year. Peter Horgan moved into the role of CEO of the Omnicom Media Group ANZ, Aimee Buchanan became OMD CEO and Dianne R ichardson returned to Austral ia f rom New York to take up the role of Melbourne MD.

Clemenger Group Recruitment: Now has 7 staff embedded in our businesses across Austral ia and New Zealand and looks af ter more than 50% of the Group’s recruitment requirements, saving the Group near ly $2 mi l l ion a year !

Clemenger Universit y : Was held again in conjunc t ion with Melbourne Business School and was our best program ever.

Diversit y : We ac t ively drove Divers i ty in it iat ives in conjunc t ion with Agenc y Circ le led by our Clemenger BBDO Sydney Managing Direc tor, Emily Perrett .

Group cl ients: More and more of our c l ients are benefit ing from our abi l i ty to br ing together Group companies with different best- in- c lass special isat ions.For example, Spark (Colenso BBDO, 99, PHD, Creat ive Ac t ivat ion) ; Fonterra (Colenso BBDO, Por ter Novel l i NZ, R aydar) ; Foodstuffs NZ (Colenso BBDO, 99, justONE) ; Frucor (Colenso BBDO, Por ter Novel l i NZ, R aydar, OMD); DB Brewer ies (Colenso BBDO, Por ter Novel l i NZ, R aydar) ; Telstra (CHE Proximity, Clemenger BBDO Melbourne, Creat ive Ac t ivat ion) ; NAB (Clemenger BBDO Melbourne, eg+, Quantum, Hal l & Par tners, GRA Cosway) ; Myer (Clemenger BBDO Melbourne, eg+, CHE Proximity, GRA Cosway) .

I t was pleasing to see some of our leaders celebrate employment anniversar ies. Ubaldo Mer l ino, Managing Direc tor of eg+ celebrated his 30th year with the Group. Les Timar, CEO of GRACosway and I mogen R andel l , Managing Direc tor of Quantum, both celebrated 20 years with us. And, Gerard Feehan, Managing Direc tor of Creat ive Ac t ivat ion celebrated his 10th anniversar y.

I n 2017 we celebrated a 40 year re lat ionship with Mazda in Austral ia

N i c k G a r r e t tC E O, C l e m e n g e r B B D O

S y d n e y a n d M e l b o u r n e

L e v i S l a v i nC C O, C o l e n s o B B D O

P e t e r K e n tC E O, P o r t e r N o v e l l i

A u s t r a l i a

P e t e r H o r g a nO M G A N Z , C E O

U b a l d o M e r l i n oM a n a g i n g D i r e c t o r, e g +

Tr o y F u l l e rM D, R a y d a r

B e n C o u l s o nC C O, C l e m e n g e r B B D O

S y d n e y

S a r a h W i l l i a m sM D, P o r t e r N o v e l l i

N Z

A i m e e B u c h a n a nO M D A u s t r a l i a , C E O

L e s T i m a rC E O, G R A C o s w a y

B r e t t H o s k i nM D, C l e m e n g e r B B D O

We l l i n g t o n

A n t W h i t eC C O, C H E P r o x i m i t y

R h y s R y a nM D, P o r t e r N o v e l l i

M e l b o u r n e

N i g e l D o u g l a sO M D N Z , C E O

I m o g e n R a n d e l lM a n a g i n g D i r e c t o r, Q u a n t u m

E m i l y P e r r e t tM D, C l e m e n g e r B B D O

S y d n e y

S t u a r t S h e p h e r dE C D, R e d h a n d e d

A r j G a n e s h a l i n g a mM D, P o r t e r N o v e l l i

S y d n e y

D i a n n e R i c h a r d s o nO M D M e l b o u r n e , M D

G e r a r d F e e h a nM D, C l e m e n g e r G r o u p

R e t a i l A c t i v a t i o n D i v i s i o n

G a y l e W h i l eD e p u t y C E O, C l e m e n g e r B B D O

M e l b o u r n e

S i m o n L a m p l o u g hM D, C l e m e n g e r B B D O

M e l b o u r n e

C h r i s H o w a t s o nC E O, C H E P r o x i m i t y

I am pleased to say that in 2017, we had a strong result financial ly.

Our revenue was up +9% to $470.5 mi l l ion. Our profit af ter tax was up +9% to $47.0m. Our EBITDA was $71.6 mi l l ion.

I n Austral ia there were par t icular ly strong results f rom Clemenger BBDO Melbourne, CHE Proximity, Por ter Novel l i , GRACosway/GRAEver ingham, Marketforce, Redhanded and Creat ive Ac t ivat ion.

I n New Zealand we had equal ly strong results f rom Colenso BBDO, R aydar, Perceptive and Clemenger BBDO Wel l ington.

We also benefited from a couple of ‘one offs’ that helped our overal l result .

This resulted in our share pr ice increasing from $3.16 to $3.36. Our div idend wi l l be 13 cents per share. This is a good result for a l l our shareholders, including approximately 350 local shareholders in Austral ia and New Zealand.

Al l in a l l , 2017 was a great year for the Clemenger Group and I would l ike to thank al l our people who worked so hard to make this possible and al l of our c l ients for placing their t rust in us.

I n an industr y that is changing and evolving ex tremely quick ly, we managed to have one of our best years ever.

We wi l l continue to be successful i f we do the best work for our c l ients by having the best avai lable ta lent in our industr y.

Whi lst we need to continual ly adapt and change, these core values remain more relevant than ever.

CONCISE FINANCIAL REPORT 2017

The Concise Financial Report and Auditors' Report contained within this document represent a Concise Report. The full financial report of Clemenger Group Limited for the year ended 31 December 2017 and the Auditors' Report thereon will be sent, free of charge, to members upon request. Members wishing to receive the full financial report and Auditors' Report may arrange for a copy by contacting Adrian Ciabotti on 03 9869 4206.

The Concise Report contained within this document has been derived from the full consolidated financial report of Clemenger Group Limited for the year ended 31 December 2017 and cannot be expected to provide as full an understanding of the financial performance, financial position and cash flows of the Group as the full financial report.

Franking credits of $1.3m will arise from the 12th instalment of tax payable for the Clemenger tax consolidated group.

3. Registered officeClemenger Group Limited474 St Kilda RoadMelbourne Victoria 3004

4. Changes in the state of affairsAs at 31 December 2017 the Group was owned 26.33% (31 December 2016: 26.33%) bydirectors and staff in the consolidated Group and 73.67% (31 December 2016: 73.67%) byPortview Holdings Australia Pty Ltd (31 December 2016: Portview Holdings Australia Pty Ltd).

5. Subsequent eventsThere have been no events subsequent to balance date of 31 December 2017 until the date of this report.

6. Basis of preparation of the concise financial reportThe concise financial report has been prepared in accordance with the requirements of theCorporations Act 2001 and Accounting Standard AASB 1039 Concise Financial Reports.The presentation currency is Australian dollars.

7. RoundingThe Group is a kind referred to in ASIC Corporations (Rounding in Financial/Directors'Reports) Instruments 2016/191 ("the Instrument") and in accordance with this Instrument,all financial information presented in Australian dollars has been rounded to the nearestthousand unless otherwise stated.

8. OtherThe financial report of Clemenger Group Limited for the year ended 31 December 2017 wasauthorised for issue in accordance with a resolution of the Directors on 19 March 2018.

During the year ended 31 December 2017, the Group’s economic interest changed as follows:- GRA Everingham Pty Ltd – Increased from 59.99% to 64.99%- Marketforce Pty Ltd – Increased from 80% to 100%- Perceptive Group Ltd – Increased from 0% to 60%- Red Handed Creative Pty Ltd – Increased from 70% to 100%- Proximity Auckland Ltd – Decreased from 100% to 0% (business amalgamated with Colenso BBDO Ltd)- Proximity Wellington Ltd – Decreased from 100% to 0% (business amalgamated with Clemenger BBDO Ltd)- Touchcast Ltd – Decreased from 100% to 0% (business amalgamated with Clemenger BBDO Ltd)

Notes to the Concise Financial Statements

Robert Stanley MorganDirector

Jonathan Brett IsaacsDirector

Directors’ Declaration

Melbourne19 March 2018

Consolidated statement of financial position as at 31 December 2017

Consolidated statement of comprehensive income for the year ended 31 December 2017

Consolidated statement of changes in equity for the year ended 31 December 2017

Consolidated statement of cash flows for the year ended 31 December 2017

Consolidated statement of profit or loss for the year ended 31 December 2017

The Directors declare that:

- The concise financial report of the consolidated entity for the year ended 31 December 2018is in accordance with Accounting Standard AASB 1039 Concise Financial Reports, and

- The financial statements and specific disclosures included in this concise financial reporthave been derived from the full financial report for the year ended 31 December 2017.

On behalf of the Board

Payables

Owners ofthe parent

Formula as described by the Company’s constitution

Net assets after translating 31 December 2017 New Zealand assets and liabilities at the year-end rate of exchange for the applicable financial year.

Less: Dividend to be proposed.

Add: 8 times average net profit after tax attributable to parent company shareholders for the last three years.

Divided by: the number of shares on issue at 31 December 2017.

Share Price Calculation$’000

Capital 23,210Reserves (18,643) Retained Earnings 259,630Subtotal (excludes minorities) 264,197Less: Annual Dividend 22,815Dividend per share (cents) 13.00 centsAdjusted Net Assets 241,382FY December 2017 Profit after tax 47,007FY December 2016 Profit after tax 43,030FY December 2015 Profit after tax 40,503Average PAT x 8 348,107Capitalisation (Average PAT + Net Assets) 589,489Numbered Issued Shares 175,500,000Share Valuation $3.36

Clemenger Group Limited and controlled entitiesValuation of shares as at 31 December 2017

Concise Financial Report

The Concise Financial Report does not contain all the disclosures required by Australian Accounting Standards in the preparation of the Financial Report. Reading the Concise Financial Report and this Auditor’s Report thereon, therefore, is not a substitute for reading the Financial Report and our auditor’s report thereon.

The Financial Report and our auditor’s report thereon

We expressed an unmodified audit opinion on the Financial Report in our auditor’s report dated 19 March 2018.

Responsibility of the Directors for the Concise Financial Report

The Directors are responsible for:

• preparing the Concise Financial Report in accordance with Australian Accounting Standard AASB1039 Concise Financial Reports and the Corporations Act 2001

• implementing necessary internal control to enable the preparation of the Concise Financial Reportthat is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility for the audit of the Concise Financial Report

Our responsibility is to express an opinion on whether the Concise Financial Report, including the discussion and analysis, in all material respects, complies with Australian Accounting Standard AASB 1039 Concise Financial Reports based on our procedures, which were conducted in accordance with Australian Auditing Standard ASA 810 Engagements to Report on Summary Financial Statements.

KPMG Gordon Sangster

Partner

Melbourne

19 March 2018

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Independent Auditor’s Report

To the shareholders of Clemenger Group Limited

Report on the audit of the Concise Financial Report

Opinion

We have audited the Concise Financial Report of Clemenger Group Limited (the Company) and its controlled entities (the Group) as at 31 December 2017 and for the year ended on that date.

In our opinion, the accompanying Concise Financial Report, including the discussion and analysis of the Company, complies with Australian Accounting Standard 1039 Concise Financial Reports.

The Concise Financial Report comprises:

• Consolidated statement of financial position as at 31December 2017

• Consolidated statement of profit or loss,Consolidated statement of comprehensive income,Consolidated statement of changes in equity, andConsolidated statement of cash flows for the yearthen ended

• Discussion and analysis

• Related notes.

The financial statements, listed above, and related notes are derived from the financial report of the Company for the year ended 31 December 2017 (the Financial Report).

The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Concise Financial Report section of our report.

We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Concise Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.