WPP PLC

Annual / Quarterly Financial Statement • Dec 31, 2011

WPP Air 1 Limited

Reports and Financial Statements for the year ended
31 December 2011

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REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

CONTENTS

	PAGE
DIRECTORS AND OTHER INFORMATION	$\overline{2}$
DIRECTORS' REPORT	$3 - 4$
STATEMENT OF DIRECTORS' RESPONSIBILITIES	5
INDEPENDENT AUDITOR'S REPORT	$6 - 7$
STATEMENT OF ACCOUNTING POLICIES	8
PROFIT AND LOSS ACCOUNT	9
BALANCE SHEET	10
NOTES TO THE FINANCIAL STATEMENTS	$11 - 15$

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DIRECTORS AND OTHER INFORMATION

DIRECTORS	P. Richardson T. Lenders J. Condren J. P. Donnelly D. Haugh
SECRETARY	D. Haugh
REGISTERED OFFICE	6 Ely Place Dublin 2
AUDITORS	Deloitte & Touche Chartered Accountants and Registered Auditors Deloitte & Touche House Earlsfort Terrace Dublin 2.
SOLICITORS	A & L Goodbody Solicitors International Financial Services Centre North Wall Quay Dublin 1.
BANKERS	BNP Paribas Dublin Branch 5 Georges Dock International Financial Services Centre Dublin 1.
	National Irish Bank International Corporate Banking National House 1 Airton Close Tallaght Dublin 24.

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DIRECTORS' REPORT

The directors present their report and the audited financial statements for the year ended 31 December 2011.

PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND PRINCIPAL RISKS AND UNCERTAINTIES

The company is an intermediate holding company within the WPP plc group.

RESULTS AND DIVIDENDS

The profit and loss account for the year ended 31 December 2011 and the balance sheet at that date are set out on pages 9 and 10 respectively.

The directors do not propose payment of a dividend.

DIRECTORS AND SECRETARY

The present directors are listed on page 2.

DIRECTORS' AND SECRETARY'S INTERESTS

The directors and secretary who held office at 31 December 2011 had the following interest in the share capital of the ultimate parent company WPP plc at the beginning and end of the year.

		WPP plc Ordinary Shares of £1 Each		Share Options WPP PLC
	31/12	01/01	31/12	01/01
T. Lenders			1,125	1,375
J. Condren	1.731	1.731	625	750
P. Richardson	535,790	494,790	-
JP. Donnelly	2,454	18,861	10,803	9,908
D. Haugh	6,908	6,820	750	750

POST BALANCE SHEET EVENTS

There were no significant post balance sheet events.

BOOKS OF ACCOUNT

To ensure that proper books and accounting records are kept in accordance with Section 202 of the Companies Act. 1990, the directors have employed appropriately qualified accounting personnel and have maintained appropriate computerised accounting systems. The books of account are located at the company's registered office at 6 Elv Place, Dublin 2.

DIRECTORS' REPORT

AUDITORS

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Deloitte & Touche, Chartered Accountants, continue in office in accordance with Section 160 (2) of the Companies Act, 1963.

Signed on behalf of the Board:

Director

$39/8$ poin Date:

$\mu$ Difector

STATEMENT OF DIRECTORS' RESPONSIBILITIES

Irish company law requires the directors to prepare financial statements for each financial vear which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing those financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently; $\bullet$
• make judgements and estimates that are reasonable and prudent; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the $\bullet$ company will continue in business.

The directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish statute comprising the Companies Acts, 1963 to 2012. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Deloitte & Touche Chartered Accountants & Registered Auditors

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP AIR 1 LIMITED

We have audited the financial statements of WPP Air 1 Limited for the year ended 31 December 2011 which comprise the Profit and Loss Account, the Balance Sheet, Statement of Accounting Policies and the related Notes 1 to 13. These financial statements have been prepared under the accounting policies set out in the Statement of Accounting Policies.

This report is made solely to the company's members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The directors are responsible for preparing the financial statements, as set out in the Statement of Directors' Responsibilities in accordance with applicable law and accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland (Generally Accepted Accounting Practice in Ireland).

Our responsibility, as independent auditor, is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, and are properly prepared in accordance with Irish statute comprising the Companies Acts, 1963 to 2012. We also report to you whether in our opinion: proper books of account have been kept by the company; whether, at the balance sheet date, there exists a financial situation requiring the convening of an extraordinary general meeting of the company; and whether the information given in the Directors' Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purpose of our audit and whether the company's balance sheet and profit and loss account are in agreement with the books of account.

We also report to you if, in our opinion, any information specified by law regarding directors' remuneration and directors' transactions is not disclosed and, where practicable, include such information in our report.

We read the Directors' Report and consider the implications for our report if we become aware of any apparent misstatement within it. Our responsibilities do not extend to other information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we evaluated the overall adequacy of the presentation of information in the financial statements.

Continued on next page/

Members of Deloitte Touche Tohmatsu

6

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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF WPP AIR 1 LIMITED

Opinion

In our opinion the financial statements:

• give a true and fair view, in accordance with Generally Accepted Accounting Practice in Ireland, of the state of the affairs of the company as at 31 December 2011 and of the result for the year then ended; and
• have been properly prepared in accordance with the Companies Acts, 1963 to 2012.

We have obtained all the information and explanations we considered necessary for the purpose of our audit. In our opinion proper books of account have been kept by the company. The company's balance sheet and its profit and loss account are in agreement with the books of account.

In our opinion the information given in the Directors' Report is consistent with the financial statements.

The net assets of the company, as stated in the balance sheet, are more than half the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2011 a financial situation which. under Section 40(1) of the Companies (Amendment) Act, 1983, would require the convening of an extraordinary general meeting of the company.

$2\mathcal{L}_{\gamma}$ $2-62$ Philip Barton

For and on behalf of Deloitte & Touche Chartered Accountants and Registered Auditors Dublin

Date: 3. August 201

STATEMENT OF ACCOUNTING POLICIES

BASIS OF PREPARATION AND ACCOUNTING CONVENTION

The financial statements have been prepared on a going concern basis under the historical cost convention and in accordance with applicable accounting standards generally accepted in Ireland and Irish Statute comprising the Companies Acts, 1963 to 2012. Accounting standards generally accepted in Ireland in preparing financial statements giving a true and fair view are those published by the Institute of Chartered Accountants in Ireland and issued by the Accounting Standards Board.

The ultimate parent company, WPP plc prepares consolidated financial statements. The company is therefore exempt under the European Communities (Companies : Group Accounts) Regulations, 1992 from the requirement to prepare consolidated financial statements. Accordingly the information contained in these financial statements relates to the company as an individual undertaking and not as a group.

TAXATION

Corporation tax is provided on taxable profits at current rates.

Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in years different from those in which they are recognised in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in the years in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets are only recognised when it is more likely than not the asset will be recoverable in the foreseeable future out of suitable taxable profits from which the underlying timing differences can be recovered.

FINANCIAL ASSETS

Financial asset investments are stated at cost less provision for impairment.

TRANSLATION OF FOREIGN CURRENCY

Foreign currency transactions arising from operating activities are translated from local currency into euro at the exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the period end are translated at the year end exchange rate. Foreign currency gains and losses are credited or charged to the profit and loss account as they arise.

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2011

	Notes
		2011 €'000	2010 €'000
Operating expenses		(23)	(40)
GROSS LOSS		(23)	(40)
Interest expense			(1)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION	2	(23)	(41)
Taxation charge on loss on ordinary activities	3		(6)
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION	8	(23)	(47)

There are no other recognised gains or losses in the period other than the loss attributable to the shareholders of the company. All results are derived from continuing operations.

The financial statements were approved by the Board of Directors on ................................... behalf by:

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BALANCE SHEET AS AT 31 DECEMBER 2011

	Notes	2011 €'000	2010 €'000
FIXED ASSETS
Financial assets	4	5,276,565	5,276,565
CURRENT ASSETS
Debtors Cash at bank and in hand	5	54 1	12
		55	12
CREDITORS: (Amounts falling due within one year)	6	(251, 414)	(251, 348)
NET CURRENT LIABILITIES		(251, 359)	(251, 336)
TOTAL ASSETS LESS CURRENT LIABILITIES		5,025,206	5,025,229
CAPITAL AND RESERVES
Called-up share capital Profit and loss account - (deficit)	$\overline{7}$ 8	5,025,300 (94)	5,025,300 (71)
SHAREHOLDERS' FUNDS	9	5,025,206	5,025,229

The financial statements were approved by the Board of Directors on ...................................

Director

Q Drector

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

$\ddagger$ . EMPLOYEES

$2.$

$3.$

Other than the directors, the company had no employees during the current year.

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Staff costs during the period (including directors)	2011 €'000	2010 €'000
Wages Social welfare costs	28 3	25 3
	31	28
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION	2011 €'000	2010 €'000
The loss on ordinary activities before taxation, all of which arises on continuing activities, is stated after charging:
Auditor's remuneration Directors' remuneration	9 31	9 28
TAXATION CHARGE ON LOSS
ON ORDINARY ACTIVITIES	2011 €'000	2010 €'000
Current tax:
Corporation tax Under provision in prior period		$6\phantom{1}6$
Current tax charge for the year		6
Loss on ordinary activities before tax	(23)	(41)
Loss on ordinary activities multiplied by the standard rate of tax of 12.5%	(3)	(5)
Effects of: Expenses not allowed for tax purposes	3	5

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

FINANCIAL ASSETS 4.	2011 €'000	2010 €'000
Investment in subsidiary undertakings:
Balance at beginning of year Additions during year Disposals	5,276,565 $\blacksquare$	5,276,565
Balance at end of year	5,276,565	5,276,565

Details relating to subsidiary undertakings are as follows:

Name	Nature of business	Holding ℅	Registered office 2011	Carrying Value €'000
WPP Air 3 Limited	An intermediate holding company within the WPP plc group	100%	6 Ely Place, Dublin 2	251,265
Lexington International BV	An intermediate holding company within the WPP plc group	100%	Wilhelminaplein 10, 3072D Rotterdam, Netherlands	5,025,300

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2011

4. FINANCIAL ASSETS (CONTINUED)

The capital and reserves at the end of the year and the profit for the financial period of the direct subsidiary undertakings were as follows:

	Profit/(loss) for the year €'000/£'000	Capital and Reserves €'000/£'000
WPP Air 3 Limited	(€16)	€251,225
Lexington International BV	£604,700*	£7,722,400*

*(Unaudited)

The principal indirect subsidiary undertakings of the company are:

	Country of Incorporation
Grey Global Group, Inc.	US
J. Walter Thompson Company, Inc.	US
GroupM Worldwide, Inc.	US
The Ogilvy Group, Inc.	US
Young & Rubicam, Inc.	US
TNS Group Holdings Ltd	UK

The company indirectly holds controlling interests in the issued share capital of these undertakings with the exception of those specifically identified in the annual report of WPP plc.

The company's indirect investment in principal associates and joint ventures at 31 December 2011 included:

	%	Country of
	Owned	Incorporation
Asatsu-DK	24.3	Japan
CHI & Partners Limited	49.9	UK.
Chime Communications PLC	17.5	UK.
CTR Market Research Co. Ltd	46.0	China
Dentsu, Young & Rubicam Inc.	49.0	Japan
GIIR, Inc.	27.9	Korea
High Co S.A.	34.1	France
Ibope Latinoamericana SA	41.8	Brazil
oOh!media Group Limited	23.8	Australia
Scangroup Limited	31.8	Kenya
Singleton, Ogilvy & Mather (Holdings)	33.3	Australia
Pty Limited
Smollan Holdings (Proprietary) Limited	33.0	South Africa
STW Communications Group Limited	20.6	Australia
The Jupiter Drawing Room Pty Limited	49.0	South Africa
The Grass Roots Group PLC	44.8	UK.

A more detailed listing of the operating subsidiary undertakings, associates and joint ventures is given in the annual report of WPP plc, copies of which are available on www.wpp.com.

In accordance with Section 154 of the Companies Act, 1963 and because the company is a wholly owned subsidiary, no group financial statements have been prepared for the company and its subsidiaries. In the opinion of the directors the value to the company of the unlisted investments is not less than the book amount shown.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2011

$\sim$ $\sim$

5.	DEBTORS	2011 €'000	2010 €'000
	Amounts owed by group undertakings	54	12
6.	CREDITORS (Amounts falling due within one year)	2011 €'000	2010 €'000
	Amounts owed to group undertakings Accruals	251,399 15 251,414	251,331 17 251,348
7.	CALLED-UP SHARE CAPITAL	2011 €'000	2010 €'000
	Authorised: 10,000,000,000 ordinary shares of €1 each	10,000,000	10,000,000
	Allotted, called-up and fully paid: 5,025,300,001 ordinary shares of €1 each	5,025,300	5,025,300
8.	PROFIT AND LOSS ACCOUNT	2011 €'000	2010 €'000
	At beginning of year Loss for the year	(71) (23)	(24) (47)
	At end of year	(94)	(71)
9.	RECONCILIATION OF MOVEMENT OF SHAREHOLDERS' FUNDS	2011 €'000	2010 €'000
	Shareholders' funds at beginning of year Loss for the financial year Issue of ordinary share capital	5,025,229 (23)	5,025,276 (47)
	Shareholders' funds at end of year	5,025,206	5,025,229

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) FOR THE YEAR ENDED 31 DECEMBER 2011

10. GUARANTEES

The Company has provided guarantees amounting to $65,829$ m (2010: $64,088$ m) during the period in respect of bonds and Euro commercial notes issued by fellow group companies.

The company has provided a guarantee to a fellow group company which underwrites the redemption obligations of 3.746m redeemable preference shares of stg£1 each in WPP Holdings UK Limited.

GROUP MEMBERSHIP $11.$

The company is a wholly owned subsidiary of WPP plc, a company incorporated in Jersey. Copies of the financial statements of WPP plc are available at www.wpp.com or can be obtained from 6 Ely Place, Dublin 2. Ireland.

$12.$ POST BALANCE SHEET EVENTS

There were no significant post balance sheet events.

$13.$ RELATED PARTY TRANSACTIONS

The company has availed of the exemption contained in FRS 8 "Related Party Disclosures" in respect of disclosures of transactions with group undertakings.