Strictly Confidential

Acquisition of Kapish & Operations Update

May 2016

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The information contained in this presentation prepared by The Citadel Group Limited (ASX:CGL) is not investment or financial

product advice and is not intended to be used as the basis for making an investment decision. This presentation has been

prepared without taking into account the investment objectives, financial situation or specific needs of any particular person.

Potential investors must make their own independent assessment and investigation of the information contained in this

presentation and should not rely on any statement or the adequacy or accuracy of the information provided.

To the maximum extent permitted by law, none of the CGL Group of Companies, its directors, employees or agents accepts

any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of the

information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the

accuracy, completeness or correctness, likelihood of achievement or reasonableness of any forecasts, prospects, statement or

returns contained in this presentation. Such forecasts, prospects, statement or returns are by their nature subject to significant

uncertainties and contingencies. Actual future events may vary from those included in this presentation.

The statements and information in this presentation are made only as at the date of this presentation unless otherwise stated

and remain subject to change without notice.

Important Notice and Disclosure F

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This acquisition is a key step in CGL’s growth strategy that further strengthens its managed

service offerings

Citadel has entered into a binding agreement to acquire Kapish, a successful

Australian software and services company.

Acquisition consideration is approximately $17.5 million, equating to a multiple of

5x FY16 sustainable EBITDA.

The consideration is payable over the next 25 months, with the initial payment of

approximately $12.25 million funded from available cash and two additional

payments totalling up to $5.25 million across tranches two and three (Yr1 70%,

Yr2 15%, Yr3 15%).

The initial payment will be made upon financial close of the acquisition, which is

expected to occur on or before 30 June 2016.

Forward 12 month acquisition multiple of circa 4.4x FY17e EBITDA

The company has approximately 180 clients across local and state government

agencies.

Strong annuity-style revenue base due to its unique IP in the content management

and software integration space.

Kapish is one of only two Australian Gold Business Partners for the HPE

TRIM/Records Manager suite of document and records management solutions.

Vendor and management team committed to staying on post-acquisition.

Expected to generate approximately $4m in sustainable EBITDA in FY17.

Transaction Overview

1. Sustainable EBITDA represents known contract and repeatable non-contract revenue.

Acquisition of Kapish

Kapish Overview

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Introducing Kapish

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Transaction highlights

PJAS overview

Strategic rationale

Key outcomes for

CGL

Overview of Kapish

• Small private IT Service and Product specialising in the support of HP Trim and Records Manager.

• Kapish has ~20 people and generates 70% of revenue out of Victoria. Kapish is…

• Deepen CGL’s expertise and capability in the Knowledge Management market specialising in

Electronic Content and Document & Records Management Services (EDRMS).

• Kapish has ~ 70% of revenue in annuity contracts and this % is growing.

• Kapish has developed IP in the form of add-on & plug-in applications enhancing HP Trim.

• Kapish has complementary capabilities and minimal client overlap with CGL.

• Immediate opportunities in both Federal and State government.

• Direct bolt on to CGL core capability in Knowledge & Information management.

• Defensive strategy: HP Trim could bid directly against Objective in the DoD account; CGL now able to

maintain the service and support for both products.

• Business growth has been good but limited by access business development resources

• Deeper penetration of EDRMS managed services in local & state government.

• Move to cloud.

• Focused Sales and Marketing campaign to expand the existing exposure.

• Adapt the IP applications for both Objective and Microsoft SharePoint suites.

• Penetration of Corporate, Health and Education markets.

Acquisition

Objective

Why is

Kapish

attractive?

Strategic

Rationale

How do we

make money?

• A Managed Services business with Diverse IT & Knowledge Management

capabilities and sustainable annuity based annual revenues of over ≈A$20m by

year 3 with 10%+ cash based income margin

Success for

CGL =

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Australian EDRMS Environment

Market dominated by 3 main players

CGL plus Kapish CGL – Existing In-house

Objective HP Trim Microsoft

SharePt

Sales

Capability

Design

Capability

Implementation &

Integration

Managed Service

Capability

Unique IP and

Products

Objective HP Trim Microsoft

SharePt

Sales

Capability

Design

Capability

Implementation &

Integration

Managed Service

Capability

Unique IP and

Products

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CGL Strategic Rationale

• Minimal overlap in Federal Government Departments:, CGL is strong in Defence, & Secured Agencies.

Kapish has 9% of Revenue in Federal, none of which overlap.

• Ability to present a Vendor Agnostic approach to managed services for every EDRMS opportunity.

• Health & Education markets are relatively immature for Content & EDRMS.

• Becoming more focused is on privacy/secure information environments.

• Managed Services of EDRMS creates a foundation for a broader IT managed services play.

• 1 of 2 HPE tier 1 partners (Optus being the second).

• CGL expertise is deep in Objective and to a lesser extent Microsoft SharePoint.

• HP Trim and Objective are built specifically for large enterprise offering significant opportunity for

Managed Services and Support.

• HP Trim and Objective have an advantage over SharePoint in Secured Environments.

• Private Co with 2 founders both want to stay and grow the business.

• Strong early growth, but the business / founders have reach the point where additional help is required.

• Priced at 5X EBITDA gives CGL immediate arbitrage and there is more upside through deferred

payments.

EDRMS- share

of wallet

Transferable

Capabilities for

Healthcare &

Education

Deep

Domain

Expertise

Transaction

Dynamics

Combined capabilities address immediate opportunities in Local, State and

Federal Government

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People and Advisory

Integration and

Technology

Private Sector Education

Lockheed Martin Australia

Tatts Group

Australian Federal Police

Leading Australian Telco

Defence &

Secure Agencies

Australian Government

Department of Defence

Australian Government

Department of Defence

Australian Government

Department of Defence

Government

Australian Government

Solicitor

Health Sector

Knowledge Management

Strategic Rationale

Kapish capabilities add depth to Knowledge Management division

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Revenue Profile

Revenue By State Revenue By Sector

Top Customers

Customer 1 8.4%

Customer 2 5.8%

Customer 3 3.2%

Customer 4 3.0%

Customer 5 2.6%

Customer 6 – 10 10.7%

Customer 11 – 20 17.4%

Customer 21 – 206 48.9%

• ~50% of revenue from 20 customers potential to improve margin through reducing customer

• ~70% of revenue in Victoria – opportunity to expand nationally

• Local government focus (~50%) Fed and State Govt. opportunity

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Trading Update

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Transaction highlights

Strategic rationale

Increased investment in filosoph-e strengthens knowledge management capabilities

In a related strategic move, Citadel increased its long-standing investment in filosoph-e to 50%.

The company has established pedigree with enterprise content management in secure environments.

Coupled with the acquisition of Kapish, Citadel can more actively target new markets and new clients

applying ‘cloud first’ and software-as-a-service directives.

Further contract wins with Technology clients proves high levels of trust

Recent wins with Monash University and Defence are both progressing well.

Citadel has also been awarded several new contracts with law enforcement agencies.

Earlier investments in R&D are also proving fruitful, with Citadel shortlisted for a number of large

contracts leveraging the company’s IP to authenticate identities, and manage and distribute information

across sensitive and secure environments.

Trading Update (1) F

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Transaction highlights

Strategic rationale

Continued growth in Health division evidences quality of service delivery

Successfully signed a 3 year contract renewal out to 2019 (+ 2x1 year options) with Pathology North

Includes complex laboratory information systems, database integration work, and the delivery and

support of new capabilities, including with blood management (e-Blood).

e-Blood is a proprietary, best-of-breed product for blood supply chain management and governance that

significantly reduces wastage and error rates relative to other products in the market.

This win builds on Citadel's increasing presence in the health sector, including with:

– Queensland Health pathology results into its integrated electronic Medical Record (ieMR) project;

– Eastern Health for enhancements enabling foreign specimen labels to be used for electronically ordered specimens. Citadel is the first supplier in Australia to provide this feature;

– Bi-directional interfaces between AUSLAB software and HealthRFID’s ControlPoint solution. Another first of its type in Australia that synchronises patient demographics, ordering, cross-match information and reporting, thus providing hospitals and patients with improved accuracy around their samples and transfusion treatments.

Going forward, Citadel will continue to explore acquisitions where appropriate to support its known

organic growth opportunities.

Trading Update (2) F

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Mark McConnell, Executive Director Tel: +61 2 6124 0800 Mark.McConnell@citadelgroup.com.au Andrew Burns, Chief Financial Officer / Company Secretary Tel: +61 2 6124 0800 Andrew.Burns@citadelgroup.com.au

Investor/Media Inquiries

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