CLIME PRIVATE LIMITED

(ABN 89 614 090 309)

Interim Financial Report For the period 5 August 2016 to 31 December 2016

Clime Private Limited

Level 7, 1 Market Street Sydney NSW 2000

Telephone: +61 2 8917 2100 Facsimile: +61 2 8917 2155

ACN: 614 090 309 ABN: 89 614 090 309

www.climeprivate.com.au

CLIME PRIVATE LIMITED ABN: 89 614 090 309

GENERAL PURPOSE INTERIM FINANCIAL REPORT

FOR THE PERIOD 5 AUGUST 2016 TO 31 DECEMBER 2016 CONTENTS PAGE Directors’ Report 1 Auditor’s Independence Declaration 3 Interim Financial Report 4 Directors’ Declaration 14 Independent Auditor’s Review Report 15

DIRECTORS’ REPORT for the period ended 31 December 2016 Clime Private Limited

1

Dear Shareholders Your Directors present their report of Clime Private Limited (“Clime Private”) for the period ended 31 December 2016. Directors

The following persons were Directors of Clime Private Limited during the financial period end up to the date of this report: Donald McLay - Chairman (appointed on 5 August 2016) John Abernethy - Director (appointed on 5 August 2016) Biju Vikraman - Director and Company Secretary (appointed on 5 August 2016) Information on Directors

Mr. Donald McLay Director

Experience and expertise Mr. McLay has more than 35 years’ experience within financial markets, investment banking and broad business services. He has previously held executive roles with a number of local and overseas investment managers and investment banking organisations, working in London, Singapore, Auckland and Sydney. Mr. McLay holds a Bachelor of Commerce degree, is a Chartered Accountant, a Chartered Secretary and a Senior Fellow of the Financial Services Institute of Australasia. Mr. McLay is also a director and current chairman of Clime Investment Management Limited.

Mr. John Abernethy Director

Experience and expertise Mr. Abernethy has over 30 years’ funds management experience in Australia having been General Manager Investments of the NRMA. John holds a Bachelor of Commerce (Economics)/LLB from the University of New South Wales. Mr. Abernethy is also a Director of Clime Investment Management Limited and Jasco Holdings Limited.

Mr. Biju Vikraman Director / Company Secretary

Experience and expertise Mr. Vikraman holds a Bachelor of Commerce from the University of Mumbai, India and is an Australian and Indian Chartered Accountant. Mr. Vikraman has over 15 years’ experience in audit and finance and has held senior roles with 4 big Accounting Firms and listed entities within Australia, India and Africa. Mr. Vikraman also holds a Graduate Diploma of Applied Corporate Governance from the Governance Institute of Australia. Mr. Vikraman is also the Finance Manager and Company Secretary of Clime Investment Management Limited.

Principal Activities The Company’s principal activity is the holding of its investments in Jasco Holdings Limited on behalf of its investors. For further information about the company please refer note 1. Review of Operations This is the first year of operation of the company starting from the date of incorporation (being 5 August 2016) to 31 December 2016. The company reported an interim operating profit of $92,125 for the period to 31 December 2016. Dividend No dividend has been paid or recommended by the Directors during or subsequent to the end of the financial period.

DIRECTORS’ REPORT for the period ended 31 December 2016 Clime Private Limited

2

Subsequent Events No matters or circumstances have arisen since the end of the reporting period which significantly affect or may significantly affect the operations of the company, the results of those operations or the state of affairs of the company in the future financial periods. Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 3. Rounding off of amounts In accordance with the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’ report and in the financial report have been rounded to the nearest dollars. This report is made in accordance with a resolution of the Directors and is signed for and on behalf of the Directors by:

Donald McLay John Abernethy Chairman Director Sydney, 14 March 2017

3

An independent New South Wales Partnership. ABN 17 795 780 962. Level 22 MLC Centre, 19 Martin Place, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation

Pitcher Partners is an association of independent firms Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle

An independent member of Baker Tilly International

AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF CLIME PRIVATE LIMITED ABN 89 614 090 309

In relation to the independent auditor’s review for the period ended 31 December 2016, to the best of my knowledge and belief there have been:

(i) no contraventions of the auditor independence requirements of the Corporations Act 2001; and

(ii) no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of Clime Private Limited during the period. S M WHIDDETT Partner PITCHER PARTNERS Sydney 14 March 2017

INTERIM FINANCIAL STATEMENTS for the period ended 31 December 2016 Clime Private Limited

4

Clime Private Limited Interim Financial Statements

For the period 5 August 2016 to 31 December 2016

Contents

Interim Financial Report Page

Statement of Profit or Loss and Other Comprehensive Income 5 Statement of Financial Position 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9

Directors’ Declaration 14 Independent Auditor’s Review Report 15

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the period ended 31 December 2016 Clime Private Limited

5

Period ended 31 December

2016 $

Share of profit of associate accounted for using the equity method 92,730 Administration expenses (605)

Profit before income tax

92,125

Income tax expense attributable to operating profit - Profit for the period

92,125

Other comprehensive income 17,366 Total comprehensive income attributable to members of Clime Private Limited

109,491

Earnings per share for profit attributable to the ordinary equity holders of the company:

Basic earnings per share 0.44 cents Diluted earnings per share 0.44 cents The above statement of comprehensive income should be read in conjunction with the accompanying notes.

STATEMENT OF FINANCIAL POSITION As at 31 December 2016 Clime Private Limited

6

31 December 2016

$

ASSETS Current Assets Trade and other receivables 47,116 Total Current Assets 47,116 Non-Current Assets Investments accounted for using the equity method 7,870,308 Total Non-Current Assets 7,870,308 Total Assets 7,917,424 LIABILITIES EQUITY Issued capital 7,807,933 Reserves 17,366 Retained earnings 92,125 Total Equity 7,917,424

The above statement of financial position should be read in conjunction with the accompanying notes.

STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2016 Clime Private Limited

7

Issued capital

Other reserves

Retained earnings

Total

$ $ $ $

Balance as at 5 August 2016 - - - - Profit for the period - - 92,125 92,125 Other comprehensive income for the period net of tax - 17,366 - 17,366

Total comprehensive income for the period net of tax - 17,366 92,125 109,491

Transactions with equity holders in their capacity as equity holders:

- Issue of shares 5,127 - - 5,127 - In-specie distribution of equity accounted investment

from Clime Investment Management Limited

7,802,806

-

-

7,802,806

Balance as at 31 December 2016

7,807,933

17,366

92,125

7,917,424

The above statement of changes in equity should be read in conjunction with the accompanying notes.

STATEMENT CASH FLOWS for the period ended 31 December 2016 Clime Private Limited

8

Period ended 31 December

2016 $

CASH FLOWS FROM OPERATING ACTIVITIES Dividends received from associate 42,594 Net cash inflow provided by operating activities

42,594

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares 5,127 Net payments of inter-company loan (47,721) Net cash used in financing activities

(42,594)

Net increase/(decrease) in cash and cash equivalents - Cash and cash equivalents at beginning of the period - Cash and cash equivalents at end of the period -

The above statement of cash flows should be read in conjunction with the accompanying notes.

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

9

NOTE 1: ORGANISATION Clime Private Limited (“Clime Private”) was incorporated on 5 August 2016, as a wholly owned subsidiary of Clime Investment Management Limited (“CIW”). On 27 October 2016 CIW shareholders approved the separation of CIW’s shareholdings in Jasco Holdings Limited (“Jasco”) via the new subsidiary company Clime Private and in specie distribution of Clime Private shares on a 1 on 1 basis to CIW shareholders by way of a capital reduction. The demerger was to simplify CIW’s structure and to potentially unlock shareholder value. The distribution of Clime Private shares involved a reduction in CIW’s paid up share capital (Contributed equity). This demerger was completed on 11 November 2016.

As a result of this Demerger, the carrying value of the Jasco investment of $7,802,806 at the record date (3 November 2016) was de-recognised from CIW books and was recorded in the books of Clime Private. It is the intention of the Directors of Clime Private to hold this investment on a long term basis. Clime Private as at 31 December 2016 holds an ownership interest in Jasco (ACN 008 636 520) of approximately 20.89%. Jasco is a leading Australian art, design and craft materials wholesaler and distributor.

Jasco is an unlisted public company that has been operating for 55 years. The company is a profitable, vertically

integrated, arts materials supply company. The two key divisions are retail and wholesale suppliers:

Retail Jasco through its Eckersley’s Art & Craft business (Eckersleys) has 26 art supplies stores, four school supplies divisions, picture framing, easel hire and a business supplies division across Australia. Eckersley's provides artists, craft & design enthusiasts with the resources they need. The stores are located in major shopping locations and they supply artists, students and the general public. Eckersleys fastest sales growth channel has been derived from online sales through its website eckersleys.com.au. Eckersleys supplies school children, art college and University students with their “recommended education kits”. The bulk of Eckersleys sales are derived from selling products supplied by the Jasco wholesale division.

Wholesale Jasco is a wholesaler of leading art & craft brands to its retailer clients. With over 100 local and international suppliers and a sales force across Australia, they represent a large range of brands in art supplies, design materials, crafting and more. Their mission is to provide the most innovative and highest quality art and design products; providing retail partners with full category solutions. Jasco represents some of the world’s leading art brands in Australia and New Zealand, including: Winsor & Newton fine art materials. Liquitex acrylic paint. Conte a Paris high quality crayons, pastel pencils and drawing accessories. In addition to art, design and craft materials, Jasco has a distribution alliance with Pelikan Artline to be the preferred distributor of the entire range of Pelikan Artline brands into the Art & Craft channel. The Pelikan Artline range offers a wide selection of commercial stationery, office equipment and technical drawing products.

Jasco owns its own distribution centres and headquarters based in Sydney and Auckland. Providing national distribution and warehouse capabilities. The main distribution centre is located in St. Mary's, west of Sydney, with 13,000m2 of modern facilities.

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

10

NOTE 2: BASIS OF PREPARATION OF THE INTERIM FINANCIAL REPORT (a) Basis of accounting These general purpose financial statements for the interim reporting period ended 31 December 2016 have been prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. These interim financial statements are prepared in accordance with the historical cost convention with the exception of the valuation of investments.

These condensed interim financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the company as the full financial statements.

Details of Reporting Period The current reporting period is the period beginning from the date of incorporation (5

th August 2016) and ending on

31st

December 2016. As this is the first period of the company’s operations no comparative financial information is provided. (b) Accounting policies The principal accounting policies applied are set out below. (i) Investment in Associates Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights and the power to participate in the financial and operating policy decisions of the entity. Investments in associates are accounted in the financial statements using the equity method of accounting, after initially being recognised at cost. The Company’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Company’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in reserves is recognised in the statement of changes in equity. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends received or receivable from associates in the consolidated financial statements reduce the carrying amount of the investment. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Company. (ii) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. (iii) Income tax

The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on the notional income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

11

NOTE 2: BASIS OF PREPARATION OF THE INTERIM FINANCIAL REPORT (Cont.) (iii) Income tax (Continued)

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and for unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred tax balances attributable to amounts recognised directly in other comprehensive income and equity are also recognised directly in other comprehensive income and equity, respectively. (iv) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments that are not traded in an active market (for example, unlisted securities) is determined using alternative valuation techniques. The Company uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Techniques, such as estimated discounted cash flows, are used to determine fair value of financial instruments. The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments. (v) Dividends A liability is recorded for the amount of any dividend declared on or before the end of the period but not distributed at reporting date. (vi) Earnings per share

- Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the period, adjusted for bonus elements in ordinary shares issued during the period. - Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to potential dilutive ordinary shares. There are no new and revised accounting requirements significantly affecting the interim financial report. The interim financial report was authorised for issue on 14 March 2017.

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

12

NOTE 2: BASIS OF PREPARATION OF THE INTERIM FINANCIAL REPORT (Cont.) (c) Rounding off of amounts In accordance with the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, the amounts in the directors’ report and in the financial report have been rounded to the nearest dollars. NOTE 3: CRITICAL JUDGEMENTS IN APPLYING ACCOUNTING POLICIES The following are the critical judgements that the directors have made in the process of applying the company’s accounting policies and that have the most significant effect on the amounts recognised in the company’s financial statements. (a) Deferred tax assets and liabilities on equity accounted investments The directors believe it to be inappropriate to recognise tax assets and liabilities in relation to the company’s equity accounted investment in Jasco Holdings Limited (“Jasco”). This belief is based on the following: · The company is a long term investor and it is not anticipated that it will sell the investment in Jasco and thus incur

a tax liability associated with the sale. Should individual investors wish to realise their investment in Jasco they have the ability to do so by selling their shares in Clime Private Limited.

· The company is a conduit for dividends paid by Jasco to the shareholders of Clime Private Limited. As such the

profits the company will generate will be equivalent to the dividends it receives from Jasco. These dividends will be fully franked and as a result Clime Private will not incur a tax liability on this income as the tax has already been paid on these earnings.

The directors believe that this accounting treatment is consistent with the recognition and measurement criteria in AASB 112 Income Taxes. NOTE 4: INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD The company holds one investment which is a significant shareholding in Jasco Holdings Limited (“Jasco”). As a result of this shareholding Clime Private Limited (“Clime Private”) has significant influence but not control of Jasco and so accounts for this investment using the equity method (refer Note 2 (b)(i)). Clime Private is a long term investor in Jasco and it is not anticipated that it will sell this investment; rather Clime Private will act as a conduit for dividends paid by Jasco to the shareholders of Clime Private. Significant transactions associated with the Jasco investment for the period are as follows: Period ended

31 December 2016

$

Recognition of Jasco investment $7,802,806

Receipt of interim dividend from Jasco $(42,594)

Recognition of share of profit for the period $92,730

Recognition of share on increase in reserves $17,366

Carrying Value of Jasco Investment $7,870,308

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

13

NOTE 5: DIVIDENDS No dividend has been paid or recommended by the Directors during or subsequent to the end of the financial period. NOTE 6: ISSUING OF EQUITY SECURITIES Period ended

No. of Shares

31 December 2016

$

Issue of shares 100 100

In-specie distribution of shares to shareholders of Clime Investment Management 50,274,900 5,027

In-specie distribution of Jasco investment from Clime Investment Management - 7,802,806

50,275,000 7,807,933

NOTE 7: SEGMENT INFORMATION Due to the nature of the Company’s operations and current size of the Company, for management reporting purposes, the chief operating decision makers (being the Board of Directors) currently consider and report on the company’s operating results and financial position as one reportable operating segment. Refer to the statement of profit or loss and other comprehensive income for the Company’s results. NOTE 8: EVENTS OCCURRING AFTER THE REPORTING DATE No matters or circumstances have arisen since the end of the period which significantly affected or may significantly affect the operations of the company, the results of those operations, or the state of affairs of the company in future financial periods.

NOTE 9: CONTINGENT LIABILITIES AND COMMITMENTS The company had no contingent liabilities or commitments as at 31 December 2016.

DIRECTORS’ DECLARATION for the period ended 31 December 2016 Clime Private Limited

14

The Directors declare that: (a) in the directors’ opinion, the financial statements and notes set out on pages 5 to 13 are in accordance with

the Corporations Act 2001; and

(i) comply with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001; and

(ii) give a true and fair view of the financial position of the company as at 31 December 2016 and of its

performance for the period ended on that date. (b) In the Directors’ opinion, there are reasonable grounds, at the date of this declaration, to believe that the

Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors’ and is signed for and on behalf of the Directors’ by:

Donald McLay John Abernethy Chairman Director Sydney, 14 March 2017

14

An independent New South Wales Partnership. ABN 17 795 780 962. Level 22 MLC Centre, 19 Martin Place, Sydney NSW 2000 Liability limited by a scheme approved under Professional Standards Legislation

Pitcher Partners is an association of independent firms Melbourne | Sydney | Perth | Adelaide | Brisbane| Newcastle

An independent member of Baker Tilly International

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF CLIME PRIVATE LIMITED ABN 89 614 090 309 Report on the Interim Financial Report We have reviewed the accompanying interim financial report of Clime Private Limited (“the company”), which comprises the statement of financial position as at 31 December 2016, statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the period ended on that date, a statement of significant accounting policies, other selected explanatory notes and the directors’ declaration. Directors’ Responsibility for the Interim Financial Report The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: “Review of a Financial Report Performed by the Independent Auditor of the Entity”, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporation Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2016 and its performance for the period ended on that date; and complying with Accounting Standard AASB 134: “Interim Financial Reporting” and the Corporations Regulations 2001. As the auditor of Clime Private Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of the interim financial report consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF CLIME PRIVATE LIMITED ABN 89 614 090 309

15

Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Clime Private Limited is not in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the company’s financial position as at 31 December 2016 and of

its performance for the period ended on that date; and (ii) complying with Accounting Standard AASB 134: Interim Financial Reporting and Corporations

Regulations 2001. S M WHIDDETT PITCHER PARTNERS Partner Sydney 14 March 2017