Clime Investment Management : Chairman's Address to Shareholders

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Clime Investment Management Limited

2021 ANNUAL GENERAL MEETING

CHAIRMAN'S ADDRESS

Welcome to Clime's 2021 Annual General Meeting.

In this address, I will present the financial results of Clime Investment Management Limited (the Company) and its controlled entities (Clime) for the financial year ended 30 June 2021.

I will also discuss the recent Board renewal process undertaken for the Group.

I will then introduce Annick Donat (Clime Group CEO) to update you on the year to date and to outline some of our plans for remainder of FY22.

Clime Group's reported profit of $3.8 million (after depreciation of right-of-use assets and finance costs) before tax and non-cash amortisation charges on intangible assets for FY21, which was 280% higher than the result for FY20. The result benefitted from a 32% lift in revenue to $15.75 million.

The dividends paid to shareholders for FY21 was 2.5 cents per share fully franked.

Total Gross Assets under Management and Advice (a key performance indicator) stood at $5.3 billion as at 30 September 2021. Subject to market moves and completion of some corporate initiatives, it is expected that this figure will reach a new high as at 31 December.

In particular, and based on announcements today, we expect Clime's FUM to reach approximately $1.3B by 31 December.

When shareholders look at our reported results for FY21, I encourage them to review the results pre amortisation charges. In FY21 the Company had a "non-cash" amortisation charge of approximately $600k.

Also, I draw shareholders attention to three other factors effected the reported profits in FY21.

Clime Investment Management Limited

Level 12, 20 Hunter Street, Sydney NSW 2000 Australia | PO Box H90, Australia Square, NSW 1215

ABN 37 067 185 899 P 02 8917 2100 F 02 8917 2155 W www.clime.com.au T @climeinvest

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Clime Investment Management Limited

First, the Company received some $0.46 million from government COVID19 support. This support did offset some fixed costs (for example office rent) that could not be negotiated away, even though our offices were periodically closed due to lockdowns.

Second, the Company benefitted from strong investment returns generated on the balance sheet which amounted to $1.1 million. These returns can be volatile and are chiefly driven by mark to market gains or losses from our investment in Clime Capital Limited shares.

Finally, your Company was required to the expense significant "one-off" or "non-recurring costs" of $0.8 million that were mainly caused by legal costs and expenses due to changes of senior management.

A significant proportion of these costs related to the departure of former executives that amounted to hundreds of thousands of dollars.

I regard these costs as unacceptable. In my opinion it is arguable that some aspects of employment law in Australia have drifted too far in favour of highly paid employees over their employers. Further, the legal system has developed significant cost imposts for employers in seeking to merely protect their business and the rights of their owners.

In spite of these costs, it was a pleasing result for financial year 2021.

Board Renewal for Clime

I am pleased to report that your company undertook an extensive and externally conducted Board renewal process that was recently completed with the appointments of Susan Wynne, Dr Michael Kollo, Claire Bibby and Ronni Chalmers.

Each of the new Directors come with both unique and extensive experiences. Our external consultant has done an exceptional job in structuring a finely balanced Board that will appropriately support - the CEO and executive in their endeavours.

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Clime Investment Management Limited

Their impressive resumes have been attached to the AGM papers, and I will ask each of them to talk briefly when we consider their nomination for reappointment to the Board.

I would like to thank both Peter Beaumont and Brett Spork who retired from the Board at the completion of the renewal process. Over the year that they served, they were confronted by a whole range of issues including the deliberation and appointment of both a new Clime Chairman and CEO. I believe they served shareholders very well in their roles.

The current year

As stated earlier, our Group CEO will report to you shortly on developments in the company and in particular the intended utilisation of the $4 million of capital that was raised from shareholders recently.

The capital has added to your Company's balance sheet strength, and I can report that the liquidity in the Company's balance sheet today approximates $14 million.

In coming months, Capital will be utilised to consolidate our Western Australian Private wealth offer, and to develop Madison Financial Group's licensing operations both in Northern NSW and South East QLD. Also, the Company is in advanced discussions to deploy capital to acquire a majority position in a highly complementary funds management business, as notified to the ASX this morning

Recently your Company actively supported the growth in its listed investment company, Clime Capital Limited (CAM) through a rolling and extended convertible note issuance. A convertible note raising of an additional circa $16 million has grown the portfolio size of CAM.

It is pleasing to report that Madison licensee growth has occurred so far in FY22, even as the overall market for Advisers has declined across Australia.

Madison is an Australian Financial Services Licensee, who provide professional services and governance oversight to authorised Financial Advice Practices. These services are provided to approximately 65 firms, comprising circa 75 Advice professionals, with over $4 billion under advice on behalf of their clients.

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Clime Investment Management Limited

Madison and Clime fit very well together to create a significant and highly regarded, compliant and integrated wealth manager - acutely aware of our responsibilities to act with our clients' interests first and foremost.

The Clime Group now offers investor education, advice, and investment opportunities to a substantially increased number of retail and wholesale clients. We are committed to delivering excellent service and providing great outcomes for all our clients in the belief that our success is absolutely linked to theirs.

Before introducing our CEO, I would like to thank our executive team and staff for their dedication and commitment over the course of FY21 and since. Over the last year and particularly under the leadership of our CEO Annick Donat, the two teams, Clime and Madison, have come together as one.

I would also like to thank our shareholders for their continued support and in particular their confidence in Clime Group through the recent capital raising.

I now invite shareholders to ask questions.

John Abernethy - CHAIRMAN

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Clime Investment Management Limited

CEO Address

Annick Donat, Chief Executive Officer

Thank you, John, and good morning, everyone. Thank you for taking the time to attend Clime's Annual General Meeting.

As Clime's CEO, I understand the importance of sharing financial results and strategic objectives. I will continue to provide our results in the coming quarters and years, committed to progressing our Company.

This is the first of what I hope will be many AGMs where I will share with you the growth objectives and progress of Clime. A presentation was lodged with the ASX earlier this morning which provides additional information about our financial performance.

I feel it is important to share with you why I accepted the role of CEO, and why I believe in our Company.

When Madison Financial Group, where I was the CEO, integrated with Clime, John Abernethy and members of the leadership team spoke only of their responsibility to create value for their clients and shareholders. This was not simply in a monetary sense, it was a core way of operating the business and aligning to our values of Integrity, Transparency and Conviction.

I hold the same fundamental belief, having worked with amazing Advisers and clients over 3 plus decades.

Helping people make better financial decisions to create an environment whereby they have certainty of their position is a guiding principle and a significant part of my life - it always has been.

We are responsible for other people's money, and it is not something we take for granted

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