REA : Corporate Governance Statement & Appendix 4G

Corporate Governance Statement 2018

Introduction

REA Group Ltd (REA Group or Company) is committed to being ethical, transparent and accountable. We believe this is essential for the long term performance and sustainability of our Company and supports the interests of our shareholders. The REA Group Board of Directors (Board) is responsible for ensuring that the Company has an appropriate corporate governance framework to protect and enhance Company performance and build sustainable value for shareholders. This corporate governance framework acknowledges the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (ASX Principles and Recommendations) and is designed to support our business operations, deliver on our strategy, monitor performance and manage risk.

ASX Corporate Governance Council's Corporate Governance Principles and Recommendations

This Corporate Governance Statement addresses the recommendations contained in the 3rd edition of the ASX Principles and Recommendations and is available on our website atwww.rea-group.com/corporate-governance. Unless otherwise indicated, the information contained in this statement is true for the whole of the 2018 financial year commencing on 1 July 2017.

This statement should be read in conjunction with the Investor sections of the REA Group website and with our Directors' Report, including the Remuneration Report, on pages 44 to 55 of our 2018 Annual Report, available atwww.rea-group.com.

ASX Principles and Recommendations

Principle 1: Lay solid foundations for management and oversight

The Board

Charter

The Board's Charter outlines the roles and responsibilities and describes those matters expressly reserved for the Board's determination and those matters delegated to management.

The REA Group Chief Executive Officer (CEO) has responsibility for the day-to-day management and administration of REA Group, and is supported in this function by the executive team. The CEO manages REA Group in accordance with the strategy, plans and delegations approved by the Board.

The Board comprises directors who bring an appropriate range of skills, experience, expertise and diversity, together with a proper understanding of, and competence to deal with, current and emerging issues to guide the business. Further, directorsare expected to effectively review and challenge the performance of management.

A copy of the REA Group Board Charter is available on the Company's website.

Responsibilities

The Board retains full responsibility for overseeing and appraising the Company's strategies, policies and performance. To assist the Board with discharging its responsibilities, it has established the following committees:

• 1. Audit, Risk and Compliance (ARC) Committee; and

• 2. Human Resources (HR) Committee.

From time to time, the Board may form other Committees or request Directors to undertake specific extra duties.

The Board is responsible for ensuring that management's objectives and activities are aligned with the expectations and risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved, including:

• 1. Approval of REA Group's corporate strategy and performance objectives, which are designed to meet stakeholders' needs and manage business risk;

• 2. Approving initiatives and strategies designed to ensure the continued growth and success of the entity;

• 3. Supervise the implementation of budgets by senior management;

• 4. Monitoring progress against budget - via the establishment and reporting of both financial and non-financial key performance indicators; and

• 5. Implementation of the Company's risk framework, including setting risk appetite and implementing systems to ensure risk is appropriately managed.

Other functions reserved to the Board include:

• 1. Selecting, appointing, removing and planning the succession of the CEO;

• 2. Approving any dividends and the annual and half-year financial reports;

• 3. Approving and monitoring the progress of major capital expenditure, capital management and acquisitions and divestitures;

• 4. Ensuring that any significant risks that arise are identified, assessed, appropriately managed and monitored; and

• 5. Reporting to shareholders.

Company Secretary

Sarah Turner is the Company Secretary of REA Group and is a member of the Executive Leadership Team. Ms Turner's qualifications and experience are set out in the Directors' Report on page 41 of the Company's 2018 Annual Report.

The Company Secretary is accountable to the Board, through the Chair, on all matters to do with the proper functioning of the Board. The formal reporting line of the Company Secretary is through the CEO.

All directors have access to the Company Secretary.

Appointment

Before electing or re-electing (as the case may be) a candidate as a director, REA Group undertakes appropriate background checks (including checks as to the candidates character, experience, education, criminal record and bankruptcy history) to determine that candidate's suitability. Where a candidate stands for election or re-election (as the case maybe) at an AGM, the Board will include in the notice of meeting for that AGM all material information which is known to the Board and which is relevant to a decision on whether or not to elect or re-elect a director.

Objectives

A target of 50% women at the senior level (Senior Manager, Executive Manager, Sales Director, Executive Leadership Team)

by 2020

Regular engagement with REA staff on diversity and inclusion strategy and priorities.

• > Continued inclusion of gender targets as part of REA's commitments.

• > Continued diversity and inclusion engagement metrics gathered in bi-annual engagement survey - Engagement data led to targeted initiatives that have seen a 2% upward shift in diversity and inclusion related metrics YOY. 90% of employees now indicating they feel comfortable to be themselves at REA and 94% feeling that REA invests in creating a diverse and inclusive culture (Australian engagement survey data as at 1 June 2018).

• > Continued engagement with the LGBTIQ community in relation to support, connection and inclusion via the internal 'Spectrums of Equality' group.

All directors and senior executives are appointed pursuant to formal letters of appointment setting out the key terms and conditions of the appointment (including the time commitment envisaged, remuneration and other duties). Director appointment letters also include further details regarding committee responsibilities, directors' duties and responsibilities, board performance evaluation, confidentiality of information, the Board's policy on obtaining independent advice, disclosure of interests and matters affecting independence and entering into deeds of indemnity, insurance and access.

Diversity

The Board and Executive Leadership Team are committed to workforce diversity and inclusion, and consider it an investment in the creation of a sustainable business capable of delivering long term shareholder value.

REA Group's Diversity and Inclusion Policy includes requirements for the Board to establish measurable objectives towards achieving gender equality and a diverse and inclusive culture. The Board assesses and reports annually the diversity and inclusion objectives and the progress towards achieving them. A copy of the Diversity and Inclusion Policy is available on the REA Group website.

Below is a summary of progress achieved against REA's diversity and inclusion objectives in the 2018 financial year:

Achievements in 2018

>Approximately 46% of senior level roles are held by women as at 30 June 2018 (an increase of 4% YOY).

> 42% of the executive team are women as at 30 June 2018 (remained steady YOY)

Objectives

Reviewing and developing policies and practices to reflect a strong commitment to diversity and inclusion and retaining primary carers.

Investing in a strategy to reach talented women in technology in Australia and New Zealand.

>

> Recruitment practices in technology including targeted LinkedIn campaigns, amended wording in job advertisements and hiring for values over technical skills in order to bring more women into the talent pipeline. This has seen a shift in female representation in tech from 19% in December 2017 (when the Women in Tech Program was launched) to 24.4% in May 2018.

Incorporating gender diversity and inclusion into our people practices.

Achievements in 2018

>Evolved our diversity policy to reflect a sharpened focus on promoting inclusive behaviours.

• > Continued Domestic Violence Sensitivity training for people managers including provision of 'Manager Guidelines' for people leaders dealing with disclosures of violence. Achieved White Ribbon Accreditation.

• > Continued to actively promote a LGBTIQ inclusive environment through community meetups, events such as 'Wear it Purple' Day and in particular a strong emphasis on mental health support during the Marriage Equality campaign.

• > All employees participated in a flex e-learning module and new managers receive targeted training on making flex work within their teams.

• > Encouragement of parental leave for both men and women resulting in continued growth in employees on parental leave from 104 in FY17 to 130 in FY18.

• > Continued to review employee talent data with a gender lens resulting in a commitment to 50:50 male, female representation within organisational talent programs.

Launched three-pronged approach aimed at driving better gender diversity in tech:

• 1. Springboard to Tech - personalised program aimed at supporting women to transition into a technical career.

• 2. Accelerated Leadership Program - supports current women in technology at REA by exposing them to topics that are important in successfully leading in senior manager or executive positions in technology.

• 3. Mentoring Program - exposes current women in technology at REA to other professionals in the business. Builds connections that provide guidance in areas such as career advice, commercial acumen, influencing and feedback skills.

>Tracking gender statistics through the Workplace Gender Equality Agency (WGEA) which includes statistics on the gender diversity at REA Group on the board, senior executive and manager levels, as well as across the whole organisation. Website can be accessed here:www.wgea.gov.au/sites/default/files/public_reports

> Continued inclusion of gender metrics in scorecards for executives and their direct reports.

The Company has tracked well against its diversity and inclusion measures, including:

1. Focusing on increasing female representation in IT roles:

With consistently low levels of women entering into IT study in Australia, REA Group has continued to invest heavily in a strategy to increase female representation in IT at all levels. REA Group has continued to focus on recruiting female talent at a graduate level (over 50% of our 2019 graduate cohort are women) as well as focusing on bringing in women from non technical backgrounds, equipping existing technical women with leadership skills and creating a culture of mentoring for women in IT.

• 2. Continued focus on increasing the number of part time roles: Steady progress has been made in normalising a culture of flex with a significant increase in the number of part time roles in REA from 48 in FY17 to 76 in FY18.

• 3. Retaining talent through continued support of new parents to return to work: During FY18, we have continued to support new parents with 'Keeping in Touch Days' and our annual 'Family Day' event. As a result of some of these initiatives, we have seen return from parental leave rates remained steady at 90% in FY18.

Evaluation of the Board

In accordance with the Board Charter, the performance of the Board is reviewed annually by the Chairman, assisted by the HR Committee. The Chair of the HR Committee makes recommendations to the Board on the process for the evaluation of the performance of the Board, its committees and directors. The evaluation of Board performance is intended to review the Board's role; review Board and Committee processes to support that role; and review the Board's performance. The performance of the Board Committees and individual directors is also reviewed as part of this process.

The Board aims to review its performance annually (including its performance against the requirements of its Charter), the performance of the Committees and the performance of individual Directors, including the performance of the Chairman as Chairman of the Board.

These performance reviews are conducted both internally and, on a periodic basis, externally with the assistance of a facilitator. The most recent review, which was conducted internally during the year and led by the Chairman, reviewed the Board, Committee and Director performance. The process comprised an internal questionnaire to obtain the Directors' views as to what currently works well and the areas for improvement together with a whole of Board discussion, led by the Chairman, reviewing the results of the questionnaire.

The Board considers the appointment or retirement of directors, where appropriate, and with regard to the size of the Company. The director concerned does not participate in the decision.

After considering the results of the performance review, the Board determined to endorse the Directors who will stand for re-election at the 2018 AGM.

Evaluation of senior executives

The HR Committee, together with the CEO, reviews and makes recommendations to the Board on the guidelines for evaluation of senior executive performance.

The performance of senior executives is reviewed regularly against both quantitative and qualitative indicators. The CEO conducts an annual performance assessment that involves an assessment of each senior executive's performance against specific and measurable qualitative and quantitative performance criteria which is shared and discussed with the HR Committee. The performance criteria against which the executives are assessed are aligned with the financial and non-financial objectives of the Company.

A performance evaluation for senior executives took place during the year by the CEO in accordance with the process referred to above. Further details of the performance assessment are

set out in the Remuneration Report on pages 44 to 55 of the 2018 Annual Report.

Principle 2: Structure the Board to add value

HR Committee

The Board has delegated the functions of a nomination committee, being the review of Board composition and management succession, to the HR Committee.

The HR Committee reviews and makes recommendations to the Board on the appropriate size and composition of the Board; the appropriate criteria for appointment of independent non-executive directors; and on the appointment and removal of directors. The HR Committee Charter is available on the Company's website.

The HR Committee consists of a majority of independent directors, is chaired by an independent director, and has at least three members, one being the Chairman of the Board.

The members of the HR Committee during the year and up to the date of this statement are:

• > Ms Kathleen Conlon (Chair of the Committee)

• > Mr Roger Amos

• > Mr John McGrath (resigned 16 January 2018)

• > Mr Richard Freudenstein

• > Mr Nick Dowling (appointed 9 May 2018)

• > Mr Hamish McLennan (Chairman of the Board)

The CEO also attends HR Committee meetings at the invitation of theCommittee.

Responsibilities

The responsibilities of the HR Committee relating to Board nomination and composition are to review and make recommendations to the Board on:

• 1. The appropriate size and composition of the Board;

• 2. The appropriate criteria (necessary and desirable competencies) for appointment of independent non-executive directors;

• 3. Board membership, including appointment, re-election and retirement/removal of directors;

• 4. The terms and conditions of appointment to and retirement from the Board; and

• 5. Social, environmental and ethical impact of business activities and investments.

The HR Committee met 5 times in the 2018 reporting period. Details of meeting attendance for members of the HR Committee are set out in the directors' report on page 32 of the Company's annual report.