As filed with the Securities and Exchange Commission on June 5, 2000

===============================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

             [ ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
                   (g) OF THE SECURITIES EXCHANGE ACT OF 1934
                                       OR
               [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year ended December 31, 1999
                                       OR
              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 0-13119
                        CORDIANT COMMUNICATIONS GROUP PLC
             (Exact name of Registrant as specified in its charter)

                                     ENGLAND
                 (Jurisdiction of incorporation or organization)

                           121-141 WESTBOURNE TERRACE
                             LONDON W2 6JR, ENGLAND
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class:                              Name of each exchange on which
                                                  registered:

Ordinary shares of 50p each                       New York Stock Exchange, Inc.
represented by American Depositary Shares

                    Securities registered or to be registered
                   pursuant to Section 12(g) of the Act: None

              Securities for which there is a reporting obligation
                   pursuant to Section 15(d) of the Act: None

               Indicate the number of outstanding shares of each
            of the issuer's classes of capital or common stock as of
       the close of the period covered by the annual report: 228,782,839
                                  _____________

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                           Yes /X/          No /_/

Indicate by check mark which financial statement item the registrant has elected
to follow.

                           Item 17 /_/      Item 18 /X/

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<PAGE>

PART I.........................................................................4

Item 1.  Description of Business...............................................4
Item 2.  Description of Property..............................................19
Item 3.  Legal Proceedings....................................................19
Item 4.  Control of Registrant................................................20
Item 5.  Nature of Trading Markets............................................20
Item 6.  Exchange Controls and Other Limitations Affecting Security Holders...21
Item 7.  Taxation.............................................................21
Item 8.  Selected Financial Data..............................................25
Item 9.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations........................29
Item 9A. Quantitative and Qualitative Disclosures About Market Risk...........40
Item 10. Directors and Officers of Registrant.................................42
Item 11. Compensation of Directors and Officers...............................46
Item 12. Options to Purchase Securities from Registrant or Subsidiaries.......48
Item 13. Interest of Management in Certain Contracts..........................66

PART II.......................................................................66

Item 14. Description of Securities to be Registered...........................66

PART III......................................................................66

Item 15. Defaults Upon Senior Securities......................................66
Item 16. Changes in Securities, Changes in
         Security for Registered Securities and Use of Proceeds...............66

PART IV.......................................................................67

Item 17. Financial Statements.................................................67
Item 18. Financial Statements.................................................67
Item 19. Financial Statements and Exhibits....................................67
<PAGE>

INTRODUCTION

          Unless the context otherwise requires, the following definitions shall
have the following meanings in this document:

          "Company" shall mean Cordiant Communications Group plc.

          "Consolidated  Financial  Statements" shall mean audited  consolidated
financial  statements  and notes  thereto of the Company as of December 31, 1999
and 1998 and for each of the years in the three year period  ended  December 31,
1999 included elsewhere herein.

          "Consolidation"  shall mean the share consolidation that occurred as a
result of the Demerger.

          "Cordiant" shall mean Cordiant plc (now called Cordiant Communications
Group plc) and its subsidiaries in relation to the period prior to the Demerger.

          "Cordiant  Ordinary  Shares"  shall  mean  ordinary  shares  of 25p of
Cordiant prior to the Demerger.

          "Demerger" shall mean the demerger on December 14, 1997 by Cordiant of
Saatchi & Saatchi Holdings Limited in accordance with the demerger agreement.

          "Disposed"  operations refers to businesses  demerged from Cordiant to
form the Saatchi & Saatchi Group, Zenith and other businesses disposed of.

          "Group",  "CCG"  and  "CCG  Group"  shall  mean  the  Company  and its
subsidiaries.

          "Ordinary Shares" shall mean ordinary shares of 50p of the Company.

          "Saatchi & Saatchi" or "Saatchi & Saatchi  Group" shall mean Saatchi &
Saatchi plc and, where the context requires, its subsidiaries,  from the date of
the Demerger.

          "Saatchi Ordinary Shares" shall mean ordinary shares of 10p of Saatchi
& Saatchi plc.

          "Zenith"  shall mean Zenith  Media  Holdings  Limited  and,  where the
context requires, its subsidiary undertakings from time to time.

          The Company publishes its consolidated  financial statements in pounds
sterling  ("L").  References to "US dollars" or "$" are to United States dollars
and references to "pounds sterling", "L", "pence" or "p" are to UK currency. The
noon  buying  rate in the  City of New  York  for  cable  transfers  in  foreign
currencies  as  announced  by the Federal  Reserve  Bank of New York for customs
purposes  (the "Noon  Buying  Rate") on  December  31,  1999 was L1.00 to $1.61.
Unless otherwise  specified,  translations  into US dollars contained herein are
made at the Noon Buying Rate on December 31,  1999.  The Noon Buying Rate on May
16, 2000 was L1.00 to $1.50.

          References  in  this  document  to  the  "Companies  Act"  are  to the
Companies  Act  1985,  as  amended,  of  Great  Britain  and  references  to the
"Articles" are to the Company's Memorandum and Articles of Association.


FORWARD LOOKING AND CAUTIONARY STATEMENTS

          This report contains certain "forward looking  statements"  within the
meaning of the Private  Securities  Litigation Reform Act of 1995. These forward
looking  statements  include  statements  in the  "Management's  Discussion  and
Analysis of Financial Conditions and Results of Operations-Industry  Background"
section relating to trends in the advertising and marketing  services  industry,
particularly with respect to anticipated advertising expenditures in the world's
advertising markets. Actual advertising  expenditures may differ materially from
the estimates  contained  therein  depending  on, among other things,  regional,
national and  international  political  and economic  conditions,  technological
changes,  the  availability  of media  and  regulatory  regimes  in the  world's
advertising  markets.  Additionally,  this report  contains a number of "forward
looking  statements"  relating  to  the  Group's  performance,  particularly  in
"Description  of  Business --  Organization  and  Services"  and   "Management's
Discussion and Analysis of Financial  Condition and Results of Operations."  The
Group's actual results could differ materially from those anticipated  depending
on, among other things,  gains to or losses from its client base,  the amount of
revenue  derived from clients,  the Group's  exposure to changes in the exchange
rates of major  currencies  against the pound  sterling  (because a  substantial
portion of its revenues are derived and costs  incurred  outside of the UK), the
general level of advertising  expenditures in the Company's  markets referred to
above and the overall level of economic activity in the Group's major markets as
discussed  above. The Group's ability to reduce its fixed cost base in the short
term is limited and  therefore  its  trading  performance  can be  significantly
affected by variations in the level of its revenues.

<PAGE>

                                     PART I

Item 1.  Description of Business.


GENERAL

          CCG is a global marketing  communications  group. The Group comprises:
Bates  Worldwide,  one of the largest  advertising and marketing  communications
networks in the world; Scholz & Friends, the largest  multinational  advertising
network  headquartered  in Germany;  HP:ICM,  event  conference  and  exhibition
managers;  an 80 percent  shareholding in Diamond Ad Ltd, Korea's second largest
advertising  agency;  a 30  percent  shareholding  in The  Facilities  Group,  a
pre-production  agency; and a 50 percent shareholding in Zenith Media Worldwide,
a global specialist media services and planning agency.

          CCG comprises the ongoing businesses of Cordiant after the Demerger of
the Saatchi & Saatchi Group in December  1997.  Prior to the Demerger,  Cordiant
was the holding company for a group of advertising  and marketing  communication
businesses which included Bates Worldwide..

          The  origins  of Bates  Worldwide  date  back to 1940 when Ted Bates &
Company was founded in New York by Theodore Bates and Rosser Reeves. Ted Bates &
Company  grew  rapidly in the 1960s and 1970s,  developing  a worldwide  network
through acquisitions and organic growth. In 1964, Ted Bates and Company acquired
the largest  advertising agency in Australia,  the George Patterson  Advertising
Agency. In 1985, the German agency Scholz & Friends was acquired.

          In 1986,  Ted Bates  Worldwide was acquired by Cordiant.  Earlier that
year, Cordiant had acquired a US agency, Backer and Spielvogel and, in 1987, the
two agencies were merged to form Backer Spielvogel Bates Worldwide.  The network
was later rebranded Bates Worldwide,  although Scholz & Friends was preserved as
a separately branded advertising agency.

          During the mid 1980s,  Cordiant  also  acquired a number of specialist
marketing  communications  businesses.  In 1985, it acquired  HP:ICM, a business
based in London providing  creative and production  services for conferences and
exhibitions.  In 1987, The Facilities  Group was formed through the amalgamation
of a group of companies providing specialist  advertising production services in
design, print and television.  Following the Demerger, CCG retained a 30 percent
shareholding  in The  Facilities  Group  with the  remainder  held by  Saatchi &
Saatchi.

          In 1988,  Cordiant  formed a single media  buying  operation in the UK
called Zenith Media Buying  Services.  The  operation  was renamed  Zenith Media
Worldwide in 1991 and in 1992 extended its services to include  media  planning.
Following  the  Demerger,  CCG and Saatchi & Saatchi each  retained a 50 percent
shareholding in Zenith, which is accounted for as a joint venture.

          In 1997, 141 Worldwide was established as a separately branded network
within Bates  Worldwide,  specializing  in sales  promotion,  direct  marketing,
interactive media and associated  activities.  Since the Demerger, 141 Worldwide
has expanded rapidly and now operates 57 offices in 47 countries.

          In December 1997,  Saatchi & Saatchi was demerged from Cordiant,  with
the remaining  businesses  renamed CCG. The Demerger was motivated by the desire
to allow CCG to stand on its own and to allow Bates  Worldwide,  to respond more
quickly to client needs and opportunities.

          As a result of the  Demerger,  the  Company  and Saatchi & Saatchi are
separate  publicly  traded  companies and operate  independently  of each other.
Neither  company  has any  interest  in the  shares of the other.  However,  the
Company  and  certain  companies  within  the CCG  Group  entered  into  certain
agreements  and  arrangements  with the  Saatchi & Saatchi  Group and  Zenith to
enable the  Demerger  to be carried  out,  allocate  responsibility  for certain
obligations,  provide for certain transitional arrangements and otherwise define
their relationship following the Demerger.

          In  December   1999,  CCG  acquired  80  percent  of  Diamond  Ad  Ltd
("Diamond"),  the second largest advertising agency in South Korea.  Diamond was
previously the in-house agency for Hyundai Group, and Hyundai have retained a 20
percent   interest  in  Diamond.   The  acquisition  of  Diamond   significantly
strengthens CCG's position in South Korea, the world's 10th largest  advertising
market, and further consolidates its relationship with Hyundai.

          In  March  2000,   CCG  completed  the   acquisition   of  Healthworld
Corporation  ("Healthworld"),  the third largest healthcare  marketing agency in
the world. Healthworld provides multinational pharmaceutical clients with a wide
range of communication  services  including  advertising and promotion,  medical
education,  contract sales,  direct  marketing,  market research and interactive
services. Healthworld has become a new division of Bates Worldwide.

          Also in March 2000, the Group consolidated its interactive  businesses
into a new global brand named CCG.XM.  CCG.XM offers clients  digital  marketing
and e-commerce consulting services and operates 12 offices worldwide.

          The  Group's  principal  corporate  offices  are  located  at  121-141
Westbourne    Terrace,    London    W2   6JR,    England,    telephone    number
011-44-20-7262-4343.  Information  about  the  Group  can be  found  on the  CCG
website, www.ccgww.com.

Strategic Objectives

          At the time of the Demerger,  the Group identified three key strategic
objectives:  that by 2000 it would (i) increase the proportion of Group revenues
attributable to multinational  clients to 40 percent, (ii) increase its business
in North America so that such region would account for 30 percent of the Group's
total revenues and (iii) increase its marketing services operations so that they
would account for 30 percent of the Group's total revenues.

          These objectives were intermediate steps towards developing a business
profile  designed to match the Group's best  performing  competitors in terms of
profitability and growth.

          Having made  significant  progress toward its strategic  objectives in
1999, new three-year  objectives  have been set: that by 2003 the Group will (i)
increase the proportion of Group revenues  attributable to multinational clients
to 45 percent,  (ii)  increase its business in North America so that such region
will account for 40 percent of the Group's total revenues and (iii) increase its
marketing services so that they will account for 50 percent of the Group's total
revenues.

Multinational Business

          CCG possesses a truly global  advertising  network.  Bates  Worldwide,
with 162  offices  in over 75  countries,  has both the  global  reach and local
creative  expertise  to provide the Group's  clients  with a global  competitive
advantage.  While the proportion of revenues coming from  multinational  clients
increased  to 36  percent  in 1999  from  33  percent  in  1998,  CCG's  revenue
contribution  from  multinational  clients  remains  below  that  of  its  major
competitors.  Had the  acquisitions of Diamond and Healthworld been completed on
January 1, 1999, the proportion of revenues  coming from  multinational  clients
would have been 38 percent in 1999.  The Company seeks to exploit  opportunities
to build existing local client relationships into profitable regional and global
partnerships, and to attract new multinational clients by offering an integrated
service on a global basis.

North America

          In 1999, revenue attributable to the Group's North American operations
represented  25 percent  of total  revenues,  up from 24 percent in 1998.  North
America  has  been the  Group's  best  performing  region  in terms of  improved
profitability in 1999.

          Taking  the  industry  as  a  whole,   North  America   accounted  for
approximately 37 percent(1) of worldwide  advertising  expenditure in 1999, with
an even greater  proportion of global spending being controlled from the region.
With approximately 25 percent of the Group's revenues coming from North America,
CCG  is  currently   under-represented   in  this  important  market.   Had  the
acquisitions of Diamond and  Healthworld  been completed on January 1, 1999, the
proportion  of revenues  coming from clients in North America would have been 27
percent. CCG intends to further build its operations in the region to 40 percent
of Group  revenues  by a  combination  of  organic  growth  and  value-enhancing
acquisitions. __________________

(1)  Source:  Merrill  Lynch,   Advertising/Marketing  Global  Industry  Primer,
     February 2000.

Marketing Services

          Although,  according  to  industry  sources,  approximately  half1  of
worldwide  advertising  expenditure is directed towards major media advertising,
the Group  believes  that an increasing  proportion is spent on other  marketing
disciplines such as direct marketing, sales promotion,  consulting and research,
public relations and other  specialist  communications.  The rapidly  increasing
cost  of  traditional  media,  combined  with  clients'  increasing  desire  for
integrated marketing solutions,  suggests that marketing services will grow more
rapidly than  traditional  media  advertising  over the next five years. CCG has
sought to capitalize on these trends by developing  141 Worldwide  into a highly
effective  global network  offering  common  methodologies  in sales  promotion,
direct  marketing,  events  marketing,   interactive  media,  merchandising  and
sponsorship  across the globe. The development of 141 Worldwide has continued at
a  considerable  pace with a further  11 offices  opening in 1999.  The Group is
committed to rapidly developing its marketing services  capabilities through the
expansion of 141  Worldwide as a separate  brand within Bates  Worldwide and via
strategic  acquisitions.  In 1999,  marketing services represented 24 percent of
Group revenues,  an increase of 2 percent over 1998,  towards CCG's target of 50
percent by 2003. Had the  acquisitions of Diamond and Healthworld been completed
on January 1, 1999,  marketing  services  would have  represented  33 percent of
Group revenues in 1999 on a proforma basis.

ORGANIZATION AND SERVICES

          The Group's  operations  consist of  advertising  and other  marketing
services including direct marketing, media services, sales promotion, production
services,  interactive  media and market research.  In 1999, the Group's largest
five  clients  accounted  for 23 percent of  revenues.  The two largest  clients
accounted  for 7 percent and 6 percent,  respectively,  of total  revenues.  The
Group's principal activities are organized as follows:

Organization                           Activities

Bates Worldwide                        Advertising and marketing communications
141 Worldwide                          Marketing services
Healthworld                            Healthcare marketing
CCG.XM                                 Digital marketing
The Decision Shop                      Strategic marketing and research
The Campaign Palace                    Advertising and marketing communications
Scholz & Friends                       Advertising and marketing communications
Diamond(1)                             Advertising and marketing communications
HP:ICM                                 Live communications
Zenith Media Worldwide(2)              Media services
The Facilities Group(3)                Production services

____________________
(1)  Owned 80 percent by the Company, 20 percent by Hyundai Group
(2)  Owned 50 percent by the Company, 50 percent by Saatchi & Saatchi
(3)  Owned 30 percent by the Company, 70 percent by Saatchi & Saatchi


          During 1999,  advertising  services  accounted for 76 percent of CCG's
revenues and marketing services  accounted for 24 percent,  on a reported basis,
and 68 percent and 32 percent respectively on a pro forma basis.

Advertising and Marketing Communications

          The  Group's  advertising  agencies  are  principally  involved in the
creation of advertising and marketing programs for products,  services,  brands,
companies  and  organizations.  These  programs  involve  various  media such as
television,  magazines,  newspapers,  cinema,  radio,  outdoor,  electronic  and
interactive  media,  as  well as  techniques  such as  direct  marketing,  sales
promotion  and design.  The  creation of  advertising  and  marketing  materials
includes the writing,  designing and development of concepts.  When the concepts
have been  approved by the  client,  the agency  supervises  the  production  of
materials necessary to implement that program.  These include film, video, print
and electronic materials, which are produced externally.

          The  agencies  often  perform  a  strategic  planning  function  which
involves  analysis  of  the  particular  product,  service,  brand,  company  or
organization  against its competitors and the market.  The Group's agencies also
evaluate the choice of media to reach the desired  market most  efficiently.  In
the case of global and regional campaigns, the Group's networks, Bates Worldwide
and Scholz & Friends,  plan and coordinate the  implementation  of their program
through their networks of national  agencies.  The Group's agencies are involved
in buying media space and time for their clients. This is executed by Zenith, by
the agencies' in-house teams or sourced from external suppliers.

          Bates Worldwide

          Bates Worldwide is a global  advertising and marketing  communications
network  with  162  offices  in  75  countries.  Expanding  from  a  base  as an
international  advertising network, Bates Worldwide employs the expertise of its
marketing  services  units to serve its clients,  including 141  Worldwide,  its
global marketing services business,  Healthworld,  the international  healthcare
marketing network and CCG.XM, a global interactive and e-commerce  business.  In
1999,  Bates  Worldwide  (including The Campaign  Palace,  141 Worldwide and The
Decision Shop) accounted for 85 percent of CCG's revenues.

          In  today's  media  marketplace,  consumers  are at the  center of the
communications   landscape.   Bates  Worldwide's  aim  is  to  create  marketing
communications  driven by consumer  insight which define distinct and compelling
brand propositions for its clients' products and services.

          Bates Worldwide continued to win significant new business  assignments
in 1999, with growth from many of its largest clients  including  Allied Domecq,
BAT,  General  Motors,   HSBC,  Hyundai,   SEAT,   Warner-Lambert  and  Wendy's.
Assignments from new clients included Baan, Bell South, ESPN, Mercedes, Sony and
TAP Pharmaceuticals. Two significant client losses in 1999 were Avis and EDS.

          Bates  Worldwide  made a number  of  geographic  in-fill  acquisitions
during 1999.  Acquisitions  included Rodergas in Spain,  Cronert in Sweden,  the
acquisition  and merger of LDV in Belgium  with Bates  Belgium  and a 20 percent
interest in Bates  PanGulf.  The Group also took a majority  stake in its Indian
affiliate.

          Healthworld

          Healthworld  is an  international  healthcare  marketing  and contract
sales organization  headquartered in New York. Acquired by CCG in March 2000, as
a new division of Bates Worldwide,  Healthworld  provides its pharmaceutical and
healthcare clients with a comprehensive range of integrated  marketing services,
including  professional  and   direct-to-consumer   advertising  and  promotion,
contract sales,  consulting,  medical  education,  public  relations,  marketing
research, interactive multimedia and database marketing.  Healthworld offers its
clients international  capabilities through its operations in the United States,
France,  Spain and the United Kingdom, and through Healthworld B.V., a worldwide
network of affiliated marketing and communications agencies in 14 countries.

          Healthworld Strategic Solutions was recently formed to offer strategic
consulting  services  both in the United  States and  internationally.  This new
division  specializes  in working with clients early in a product's  life cycle,
providing both  quantitative  and  qualitative  analysis for brand  development,
product positioning, new product assessment and promotional message development.

          During 1999,  Healthworld acquired Falk  Communications,  a healthcare
communications  agency located in New York,  which provides clients with medical
education,  communications and promotional services.  Looking ahead, Healthworld
is  focusing  on further  expanding  its medical  education,  public  relations,
regulatory,  and managed-care capabilities through both acquisitions and organic
growth.

          CCG.XM

          CCG.XM was launched in March 2000 as CCG's  e-business  consulting and
implementation firm. The newly unified brand joins the interactive  resources of
Bates Worldwide and competes with both leading independent  interactive agencies
and the e-commerce units of the major advertising networks. Headquartered in New
York, CCG.XM has 12 offices worldwide  offering  Internet-related  services that
include  strategic  consulting,  digital brand creation,  web site  development,
systems integration and online marketing.

          Worldwide  revenues totaled $15 million in 1999, and further growth is
expected in 2000. Although headquartered in New York, two-thirds of revenues are
earned  outside the United  States.  Relationships  with  clients such as Compaq
(managed from CCG.XM's Singapore office), Unilever (Sydney), Warner-Lambert (New
York), and Cable & Wireless  (London) testify to the geographic span of CCG.XM's
operations. The company plans expansion to new markets and continued development
of its strategic consultancy capabilities in 2000.

          The Campaign Palace

          The Campaign Palace is a full-service  advertising agency operating in
Australia and New Zealand as a separately  branded  creative agency within Bates
Worldwide.

          Part of The Campaign Palace is The Media Palace,  a media planning and
strategy  consultancy.  The Media Palace has a core philosophy that media should
be  a  lead  discipline  in  advertising   developments  and  should  drive  the
communications  process.  The Media Palace  further  enhanced its reputation for
innovative and effective  media planning in 1999,  winning awards in a number of
categories  for  clients  such as  Daewoo,  Nokia and KFC at  Australia's  Media
Federation Awards.

          Scholz & Friends

          Scholz & Friends is the largest German-based  multinational network(2)
with 14 offices operating across Europe.  Scholz & Friends provides clients with
a wide range of marketing communications including advertising, sales promotion,
public relations,  direct marketing,  design,  consulting and interactive media.
Having  previously  owned 90 percent,  CCG acquired the  remaining 10 percent of
Scholz & Friends held by minority shareholders in January 2000. During 1999, the
network accounted for approximately 12 percent of CCG's revenue.

          Scholz & Friends' most  significant  clients include German  companies
such as  DaimlerChrysler,  Deutsche  Telekom,  Frankfurter  Allgemeine  Zeitung,
Lufthansa, Schwarkopf/Henkel and Tchibo.

          During 1999, Scholz & Friends launched Scholz & Friends  Literatur,  a
sales  literature  specialist,  and Plats,  an agency  focused on political  and
government  communications.  Scholz & Friends  also opened new offices in Paris,
Milan and Kiev.

          Scholz & Friends  has  developed  a "family"  system by  dividing  the
agency  into  independent   agency  units.   Each  unit  or  "family"   operates
autonomously  within the  agency,  headed by a managing  director  and  creative
director.  This concept has been extended  across the Scholz & Friends  network,
providing clients with a coordinated response from experienced local management.

          Scholz & Friends' creative  abilities have been recognized by over 150
awards in competitions such as Cannes, the Clio Awards, Epica, Effie, the Moscow
and New York Festivals and ADC.

______________________
(2)  Source: Advertising Age, Agency Report April 2000.

          Diamond

          Diamond  was  established  in 1983 by the  Hyundai  Group  to  provide
Hyundai companies with a full range of advertising and marketing services. Other
industrial  groups  in Korea  have  followed  a similar  strategy  and the three
largest agencies in Korea are each linked to one of the major industrial groups.
CCG  acquired 80 percent of Diamond from Hyundai  Group in December  1999,  with
Hyundai  retaining the remaining 20 percent.  Hyundai has been a major client of
CCG for 15 years and after the acquisition is expected to be the Group's largest
global client.

          Diamond  is  now  the  second   largest   advertising   and  marketing
communications  agency in Korea.  Headquartered  in Seoul, the agency has branch
offices in Pusan  (Korea),  Los Angeles,  Frankfurt and Beijing and employs over
500 staff worldwide.

          Hyundai Group companies currently account for approximately 66 percent
of Diamond's  business.  Significant  clients include Hyundai Motor, Kia Motors,
Hyundai Securities,  Hyundai  Electronics,  Hyundai Engineering and Construction
and Hyundai  Department Store Co Ltd. Diamond also has many non-Hyundai  clients
in Korea including Onse Telecom, Keumkang Chemical, Crown Confectionery and Dong
Won Industries.

          The Korean  economy  and  advertising  market  continues  to make good
progress  and Diamond  and its  clients  intend to  capitalize  on this  growth.
Working in  partnership  with CCG,  Diamond  aims to further  improve its strong
position  in  Korea  by  extending   its  range  of  services,   deepening   its
relationships  with its existing  major clients and  aggressively  targeting new
domestic and international clients.

          Marketing Services

          CCG  has  been  developing  a  number  of its  marketing  services  as
separately  branded  operations.  These businesses have potential higher margins
and faster revenue growth and the Company  expects them to enhance the network's
ability to generate global client  accounts.  The services  provided are set out
below.

          141 Worldwide

          141 Worldwide is a global network  specializing in marketing services,
offering  expertise in a wide range of  activities  including  sales  promotion,
direct  marketing,  event  marketing,  merchandising,  sponsorship,  design  and
interactive media. Launched in 1997 as a separately branded network within Bates
Worldwide,  141  Worldwide  has grown rapidly and now comprises 57 offices in 47
countries.

          The network has over 250  clients  worldwide,  with over 60 percent of
revenues  coming from  multinational  clients.  Significant  clients include 3M,
British American Tobacco, Coca Cola, Heineken, Nokia, Roche and Warner-Lambert.

          141 Worldwide's  international  network operates to standard practices
and a unified  philosophy  utilizing two operating  systems:  the 141 Management
system  is used by the  network  to guide  clients  from  strategic  development
through to the execution of creative work and the 141 Creative Project Flow is a
methodology used to help clients  understand better the creative process used by
the network. There is also a central 141 Networking office in London to transfer
knowledge of the latest research and legislation across the network.

          The development of 141 Worldwide is key to CCG's  strategic  objective
that 50 percent of total Group  revenues be derived from  marketing  services by
the year 2003. The Company  expects  continued  development of the 141 Worldwide
brand from both organic growth and strategic acquisitions.

Strategic Marketing and Research

          The Decision Shop

          The  Decision  Shop is a strategic  marketing  and  research  business
within Bates Worldwide  specializing in brand positioning research,  consultancy
and  econometric  modeling.  The Decision Shop provides  analytical  skills that
assist multinational clients to reposition their key brands for future growth.

          The  Decision   Shop's  work  includes   repositioning   projects  for
multinational  clients and their global  brands.  In all, The Decision  Shop has
conducted  over 100  brand  positioning  studies  around  the  world  using  its
proprietary Brand Essence Programme technology.

          In 1999,  The Decision  Shop  consolidated  its  N-Vision  positioning
program,  an  integrated  solution  in  brand  positioning.  This  followed  the
introduction  of Brand  Health,  a  program  to  assess  the  value to brands of
alternative marketing and communications strategies. Brand Health, which is both
evaluative  and  diagnostic,  is of  increasing  relevance  in the  increasingly
accountable world of marketing communication.

Live Communications

          HP:ICM

          HP:ICM  is  a  leading  specialist   communications  agency  providing
creative and production  consultancy  in the areas of live events,  exhibitions,
film, video, multimedia and brand experience. The agency provides a full service
to its  clients,  from  strategic  and creative  development  through to design,
production and implementation.  HP:ICM provides a complete service to clients to
successfully  operate live events,  embracing  all key supports such as delegate
management,  film and video  production,  graphic design,  print and interactive
media.  The company's end products take many forms,  such as displays at visitor
centers, exhibition stands, conferences, internal corporate television networks,
trans-continental roadshows, multi-media training programs and corporate videos.

Production Services

          The Facilities Group

          Based in central London,  The Facilities  Group provides a broad range
of  technical  and creative  services to clients in the areas of design,  print,
production,  artwork, audio visual,  multimedia and television  production.  The
Facilities Group was created to offer clients a quicker,  more efficient service
by maximizing  the potential of new  technology in the management of advertising
production processes.

          The  Company,  The  Facilities  Group and  entities  in the  Saatchi &
Saatchi Group entered into a  shareholders'  agreement  ("The  Facilities  Group
Agreement") to regulate the  relationship  between the Company and the Saatchi &
Saatchi Group as  shareholders  of The  Facilities  Group.  The Company holds 30
percent of the outstanding  shares of The Facilities Group and Saatchi & Saatchi
holds 70  percent.  The  Facilities  Group  Agreement  makes  provision  for the
operation  of The  Facilities  Group,  including  the  composition  of executive
management and the transfer of shares.

          The  distributable  profits  of The  Facilities  Group will be divided
between  shareholders in the proportions in which The Facilities  Group receives
revenue from clients of each  shareholder.  Revenue of The Facilities  Group not
attributable to clients of either  shareholder  will be divided in proportion to
the shareholdings.  It also contains options whereby one shareholder is entitled
to acquire all of the shares in The Facilities  Group of the  shareholder in the
event  that:  (i) the other  shareholder  becomes  insolvent;  or (ii) the other
shareholder suffers a change in control.

          The Facilities  Group  Agreement will remain in force until (i) either
shareholder  acquires  all of the  shares in The  Facilities  Group  held by the
other,  (ii) an order is made or  resolution is passed for the winding up of The
Facilities  Group or  (iii) a third  party  acquires  all of the  shares  of The
Facilities Group.

Media Services

          Zenith Media Worldwide

          Zenith Media is a leading global media services agency with 69 offices
in 39  countries.  Zenith  provides  clients with  specialized  media  planning,
buying,  evaluation and  coordination,  both in traditional and new media areas.
Zenith provides its services to clients of Bates Worldwide and S&S. In addition,
approximately  67 percent of its revenues were  generated  from Zenith's list of
direct clients in 1999.

          During 1999, new  operations  were opened in Finland,  Greece,  India,
Norway,  Portugal  and  Taiwan,  and in Fort  Lauderdale  and Kansas City in the
United States.

          Zenith  Media  is a  leader  in its  sector  and has in  recent  years
expanded  its  services  to  include  stand-alone  media  operations  in  direct
response,  interactive,  sports marketing and funded programming.  In the United
Kingdom,  two new operations  were  established  in 1999: Zed Media,  delivering
media services to direct response advertisers and Zenith Interactive  Solutions,
providing dedicated online media planning and buying resources and consultancy.

          The Company,  entities  within the Saatchi & Saatchi Group and Zenith,
with  effect  from  the  effective   date  of  the  Demerger,   entered  into  a
shareholders'  agreement (the "Zenith Shareholders'  Agreement") to regulate the
relationship between the Company and the Saatchi & Saatchi Group as shareholders
of Zenith.

          The Zenith  Shareholders'  Agreement makes provision for the operation
of Zenith including: the composition of executive and non-executive  management;
matters that require consent of both shareholders  before they can be undertaken
by Zenith (alteration of capital  structure,  annual business plan and contracts
out of the ordinary  course of its business or not at arm's length  terms);  the
transfer of shares of Zenith;  resolution of disputes both between  shareholders
and Zenith and clients of the shareholders and Zenith.

          Seventy-five  percent of the  distributable  profits of Zenith will be
distributed to shareholders and divided between them in part by reference to the
proportions in which Zenith receives  revenue from clients of each  shareholder.
The remainder may be retained by Zenith.

          The Zenith Shareholders' Agreement prohibits the transfer of shares in
Zenith,  except in  certain  limited  circumstances.  It also  contains  options
whereby one  shareholder  is entitled to acquire all of the Zenith shares of the
other  shareholder  in  the  event  that:  (i)  the  other  shareholder  becomes
insolvent;  (ii) the  other  shareholder  experiences  a change of  control  and
following  which  there is a  material  breach  of any of the terms of the media
services agreement  (described below) to which that shareholder is a party which
either is not capable of remedy or is not remedied within a certain  period;  or
(iii) the other shareholder  terminates the media services agreement to which it
is a party.

          The Zenith  Shareholders'  Agreement  will  remain in force  until (i)
either shareholder  acquires all of the shares in Zenith held by the other, (ii)
an order is made or resolution is passed for the winding up of Zenith or (iii) a
third party acquires all of the shares of Zenith.

     Zenith Media Services Agreements

          CCG and Saatchi & Saatchi entered into a media services agreement with
Zenith.  Under the terms of these  agreements  the  shareholders  each appointed
Zenith as the  exclusive  supplier of media buying,  media  planning and certain
related services for all of the clients, subject to certain exceptions,  of each
shareholder.  The media services agreements also set out the duties of Zenith in
respect of each country in which Zenith operates.

          Each of the media services  agreements  will terminate on December 31,
2000 or on any  subsequent  anniversary  of that date provided  either party has
given to the other not less than 12 months' written notice of such termination.


PERSONNEL

          As of June 1, 2000, CCG employed approximately 7,645 people worldwide.
The success of CCG's advertising and media services businesses, like that of all
communication  groups,  depends  largely  on the skill and  creativity  of their
personnel  and  their   relationships  with  clients.   CCG  believes  that  its
relationships with its employees are good.


ACQUISITIONS & DISPOSALS

          Acquisitions

          During 1999, CCG made the following acquisitions:

          In December  1999,  CCG  acquired  substantially  all of the assets of
Interactive  Edge,  Inc.,  a New York  corporation,  Interactive  Edge,  Inc., a
Connecticut  corporation and Interactive Edge, LLC, a Delaware limited liability
company, all of which were commonly owned by the sellers in the acquisition. The
purchase price for the  acquisition  included an initial payment of $6.1 million
paid by CCG through the  issuance of CCG ADSs having a value of $5.5 million and
$600,000 in cash.  The  acquisition  also provides for an additional  contingent
payment in 2003 of up to a maximum of $18.9  million based on  Interactive  Edge
achieving  certain  revenues  and  operating  margins for the three years ending
December 31, 2002.  The  contingent  payment will be paid  entirely  through the
issuance of CCG ADSs.  CCG has accrued an estimated  total  additional  deferred
consideration payable in CCG ADRs of $18.5 million (L11.5 million).

          In December  1999,  CCG  acquired an 80 percent  interest in the share
capital of Diamond Ad Ltd. The initial  consideration was L14.8 million plus the
assumption of approximately L12 million of debt, and further payments are due in
the years 2000, 2001, and 2002 based on a multiple of average  operating profits
from 1999 to 2001, up to a maximum of L55 million.

          In 1999,  CCG  increased  its existing  interests in Verdino  Bates in
Argentina from 63 percent to 70 percent,  Bates Poland Sp z.o.o. from 60 percent
to 100 percent and in Dr Puttner  Bates  Werebeagentur  GmbH in Austria  from 80
percent  to 100  percent.  The  aggregate  consideration  paid in 1999 for these
transactions was L0.4 million.

          Additionally,  CCG acquired  several small  advertising  and marketing
services companies in Sweden,  Belgium,  Spain, the UK, Germany,  India, Romania
and Finland. The aggregate consideration paid in 1999 for these acquisitions was
L3.7 million in cash,  and  estimated  total  additional  cash  payments of L0.2
million have been accrued.

          During 1998, CCG made the following acquisitions:

          In the US,  The  Criterion  Group,  Inc.,  a company  specializing  in
marketing  for the travel and tourism  industry,  was acquired and renamed Bates
Travel and Tourism,  Inc. Churchill Group, Inc., a public relations company, and
Churchill  Advertising,  Inc., a business to business advertising company,  were
acquired and renamed Bates Churchill Group, Inc. and Bates Churchill Advertising
Group, Inc., respectively.

          In Australia,  a 24.9 percent holding in The Communications  Group Pty
Ltd.  (the  holding  company  for  the  Company's  Australian  businesses),  was
acquired, giving the Group 100 percent control.

          In  Argentina,  the Group's 10 percent  investment in Verdino Bates SA
was increased, at the same time acquiring and merging with it Fernando Fernandez
SA, to give a 63 percent  holding in the merged entity which was renamed Verdino
Bates  Fernando  Fernandez SA. Also, in December  1998,  the Group acquired a 32
percent equity interest in Newcomm Bates SA in Brazil.

          In Europe,  small acquisitions were made of a 50.8 percent interest in
EMC Starke & Gerlach  GmbH,  the holding  company of 141 Germany  Promotion  and
Communication  GmbH, 51 percent of Kontoret As  Reklamebyra  in Norway,  and the
business  of Not Just Film BV in the  Netherlands  which was  merged  into Bates
Nederland BV, renamed Bates Not Just Film BV.

          During 1997,  Cordiant made the following  acquisitions:  a 51 percent
interest in Grapple Group 141 (Pty) Ltd., a South African company;  a further 25
percent interest in X/M Harrow Pty Limited, an Australian  company,  raising its
holding to 75 percent; and Scholz and Friends GmbH acquired a further 33 percent
interest in Scholz and Friends Dresden GmbH, in Germany,  increasing the Group's
effective holding of Scholz & Friends Dresden to 76.5 percent.

          Disposals

          CCG did not make any disposals in 1999.

          During 1998,  CCG divested  itself of a controlling  interest in Bates
Japan Ltd to retain a 31 percent  share of the company now  operating as a joint
venture and renamed  Saatchi & Saatchi Bates Yomiko KKK.  Neither a profit nor a
loss arose from this restructuring.

          In October  1997,  Cordiant  completed  the sale of National  Research
Group,  Inc.  and  its  subsidiaries  ("NRG").  See  Note  2  in  the  Notes  to
Consolidated Financial Statements.

GEOGRAPHIC COVERAGE

          CCG serves clients in all of the world's major advertising markets.

                   Geographic analysis of CCG revenue in 1999

                                                             Percentage of
                                    Percentage of        worldwide major media
                                     CCG revenue      advertising expenditure(1)
                                     ( percent)               ( percent)
-------------------------------   ------------------ ---------------------------
UK                                       12.0                     5.2
North America                            24.7                    44.5
Continental Europe                       36.3                    23.6
Asia Pacific and Latin America           27.0                    26.7
Total                                   100.0                   100.0

(1) Source: Zenith Media Worldwide,  Advertising Expenditure Forecasts, December
    1999.

          CCG's global reach is reflected in its geographical revenue mix.

          Taking  the  industry  as  a  whole,   North   America   accounts  for
approximately  40 percent of  worldwide  advertising  expenditure.  With only 25
percent  of  its  revenues   coming  from  North   America,   CCG  is  currently
underrepresented  in this important  market.  The Group intends to further build
its operations in this region, with a target of 40 percent of Group revenues set
for the year  2003.  Continental  Europe  is CCG's  largest  region  in terms of
revenue,  representing  approximately 36 percent of Group revenues. Asia Pacific
represents  approximately 27 percent of Group revenues,  with Australasia  alone
representing  approximately  15 percent of Group  revenues.  The  acquisition of
Diamond is expected to further strengthen CCG's presence in Asia Pacific.

COMPETITION

          The   advertising   industry   is  highly   competitive   at  both  an
international  and local level.  CCG's principal  competitors in the advertising
industry  are the  large  multi-national  agencies  based in the US,  the UK and
France as well as smaller agencies which operate in local markets. The principal
competitive  factors include an agency's  reputation,  its creative strength and
quality of client service,  its ability to perceive  clients' needs  accurately,
the  commercial   effectiveness  of  its  ideas,  its  geographic  coverage  and
diversity, its understanding of advertising media and its media buying power. In
addition,  an agency's  ability to maintain its existing clients and develop new
relationships   depends  to  a  significant   degree  on  factors  such  as  the
interpersonal  skills  of  the  individuals  managing  client  accounts.  Normal
practice  in the  industry  is for  agency  contracts  to  have  a  three  month
termination period.

          The Company  believes that the Group is well  positioned to compete in
the  advertising  industry.   From  a  client  perspective,   Bates  Worldwide's
reputation is enhanced by being the original U.S.P.(TM) agency. The Company also
believes that the  combination  of the Group's local  presence and its worldwide
network  provides it with one of the  strongest  operating  formats to implement
advertising strategies on a worldwide basis. Furthermore, the process of clients
consolidating  their business in the  advertising  market will continue to offer
opportunities for Bates Worldwide to win new business.

REGULATION

          Governments,  government agencies and industry  self-regulatory bodies
in the  various  countries  in  which  the  Group  operates  continue  to  adopt
legislation  and  regulations  which  directly  or  indirectly  affect the form,
content and  scheduling of advertising  and other  communications  services,  or
otherwise affect the activities of such businesses and their clients. Certain of
the legislation and regulations  relate to considerations  such as truthfulness,
substantiation,  interpretation of claims made and comparative  advertising.  In
addition,  there is a tendency toward  restrictions or prohibitions  relating to
advertising for such products as pharmaceuticals, tobacco and alcohol.


Item 2.  Description of Property.

          CCG leases all its premises.  The principal  properties  leased by CCG
are as follows:

<TABLE>

<CAPTION>
Location                        Area          Annual Base          Next Rent        Expiration
                               Sq. Ft.       Rental-Millions       Review Date       of Lease

<S>                            <C>               <C>                 <C>                <C>
498 Seventh Avenue             204,000           $6.0                2004              2014
New York, New York
121-141 Westbourne Terrace     62,500            L1.5                 --               2003
London, England
</TABLE>


          In addition,  in respect to Landsdowne House,  Berkeley Square London,
England CCG leases 103,000 square feet at an annual rental of L6.5 million which
is sublet for mainly coterminous  periods as CCG at an average annualized rental
of  approximately  L6.1 million  during 1999. A further 72,000 square feet at an
annual  rental of L3.1  million  is sublet on a  short-term  basis at an average
annualized rental of approximately L1.9 million during 1999.

          At December 31, 1999,  CCG's owned and leased  properties and fixtures
(including furniture and equipment) had a net book value of L21.8 million ($35.1
million).

          CCG  considers  its  offices  and  other  facilities  to  be  in  good
condition.  However,  it has  surplus  office  space  based on the  needs of its
current  business.  At December 31, 1999, L22.3 million ($35.9 million) had been
reserved by the Group for potential costs of surplus space,  primarily in London
and New York City.

          The  following  outstanding  property  guarantees  by CCG companies of
obligations  of  certain  companies  in the  Saatchi  & Saatchi  Group  were not
released in  connection  with the  Demerger:  (i) the Saatchi & Saatchi  Group's
lease of premises at 375 Hudson Street, New York, for a term expiring on January
31, 2013,  at a current  annual base rent of $17.9  million  subject to periodic
rent  reviews;  and (ii) the Saatchi & Saatchi  Group's  lease of premises at 21
Dukes  Road,  London,  for a term  expiring  on October 31, 2016 with a tenant's
right to break on October 31, 2006 with a current  annual base rent is L255,882,
subject  to  periodic  rent  reviews.  Saatchi  &  Saatchi  has  agreed  to give
additional, or in some cases substitute, guarantees and to indemnify CCG against
any liability in its preexisting guarantees.


Item 3.  Legal Proceedings.

          CCG has no material pending legal proceedings.


Item 4.  Control of Registrant.

          The Company is not owned or  controlled  by any  government  or by any
other corporation.

          The  following  table lists,  as of June 1, 2000,  the total number of
Ordinary Shares owned by the Directors and officers of the Company as a group.

<TABLE>

<CAPTION>
                             Identity of
Title of Class               Person or Group                 Amount Owned            Percent of Class

<S>                         <C>                              <C>                      <C>

Ordinary Shares             Directors and officers of the    161,705                   0.06 percent
                            Company as a group
</TABLE>

          There were no  non-beneficial  holdings  of ten percent or more of the
issued Ordinary Share capital of the Company as of June 1, 2000.

Item 5.  Nature of Trading Markets.

          The Company's  Ordinary Shares are quoted on the London Stock Exchange
Limited  (the  "London  Stock  Exchange").  The table below sets forth,  for the
quarters  indicated,  the reported high and low middle market quotations for the
Ordinary  Shares on the London Stock  Exchange based on its Daily Official List.
Such  quotations  have been  translated in each case into US dollars at the Noon
Buying Rate on each of the respective dates of such quotations.

                                           Pence Per             Translated into
                                         Ordinary Share             US Dollars

                                      High          Low       High         Low
1998     First Quarter                123.5         88.5      2.07         1.46
         Second Quarter               135.5        115.5      2.26         1.93
         Third Quarter                133.5        101.5      2.20         1.67
         Fourth Quarter               112.5         95.0      1.86         1.62

1999     First Quarter                167.0        107.5      2.72         1.78
         Second Quarter               193.0        155.5      3.08         2.49
         Third Quarter                198.0        165.0      3.10         2.55
         Fourth Quarter               302.0        172.0      4.88         2.80

2000     First Quarter                406.0        267.0      6.47         4.40
         Second Quarter               386.5        280.0      6.17         4.24
         (through May 16, 2000)

          The Ordinary  Shares  trade in the US on the New York Stock  Exchange,
Inc. in the form of American  Depositary  Shares ("ADSs") which are evidenced by
American Depositary Receipts ("ADRs"). Each ADS represents five Ordinary Shares.
The  depositary  for the ADSs is The Bank of New York  (the  "Depositary").  The
table below sets forth the high and low sales prices for the ADSs as reported in
the New York Stock Exchange-Composite  Transactions.  The Company believes that,
as of May 26, 2000, 4.50 percent of the outstanding  Ordinary Shares,  which are
represented by ADSs,  were held in the US by 625 record holders and 0.13 percent
of the Ordinary Shares were held in the US by  approximately  51 record holders.
CCG  estimates  that,  as of May 26, 2000,  an  additional  15.22 percent of the
Ordinary  Shares are owned  beneficially  by US persons  giving an  aggregate US
holding of 19.85 percent.

                                                     US dollars per
                                                           ADS
                                                 High            Low
1998
      First Quarter                                     10 11/16         7
      Second Quarter                                    12 1/4           9 1/2
      Third Quarter                                     11 13/16         8 1/2
      Fourth Quarter                                    10 3/8           8 1/4

1999
      First Quarter                                     13 5/8           9 1/4
      Second Quarter                                    15 1/2          12 7/16
      Third Quarter                                     15 1/2          12 3/4
      Fourth Quarter                                    24 7/16         14

2000
      First Quarter                                     32 3/8          22
      Second Quarter                                    30 7/8          21 3/16
       (through May 16, 2000)

Item 6.  Exchange Controls and Other Limitations Affecting Security Holders.

          There are no  limitations  on the  rights of  nonresident  or  foreign
persons to hold or vote with Ordinary Shares imposed by the laws of the UK or by
the  Company's  Articles  other than those  which are  customary  and  generally
applicable  to all  shareholders.  In  particular,  Article 151 of the Company's
Articles provides that a member who has no registered  address within the UK and
has not  notified  the  Company in  writing of an address  within the UK for the
service of notice, shall not be entitled to receive notice from the Company.


Item 7.  Taxation.

          The  following is a summary of certain UK tax  consequences  generally
applicable to a beneficial  owner of American  Depositary  Receipts  ("ADRs") or
Ordinary  Shares in the Company  who is  resident  in the United  States and not
resident in the United  Kingdom (a "US  Holder") for the purposes of the current
double taxation convention on income and capital gains between the United States
and the United Kingdom (the "Convention").

          Subject to the following  paragraph,  this summary is based on current
UK tax law and  practice  as of the date of this  filing  and is  subject to any
changes  in UK tax  law  and  practice  (including  changes  in the  Convention)
occurring  after  that  date.  As the  following  discussion  is only a  general
summary,  it does not purport to address all potential tax  consequences for all
types of investors and,  consequently,  its  applicability  will depend upon the
particular circumstances of individual investors.  Investors should,  therefore,
consult  their own tax  advisers  about their UK tax position in relation to the
Company  including  the  particular  tax  consequences  to  them of  owning  and
disposing of ADRs or Ordinary Shares.

          The discussion of UK tax is based on current UK tax law as potentially
amended by the Finance Bill 2000. The Chancellor of the  Exchequer's  Budget was
delivered on March 21, 2000,  containing  proposals for enactment in the Finance
Act 2000.


United Kingdom Taxation of Dividends and Refunds of Tax Credits

          For the purposes of the  Convention and for the purposes of the United
States  Internal  Revenue Code of 1986, as amended (the "Code"),  the holders of
the ADRs  should be  treated  as the owners of the  underlying  Ordinary  Shares
represented  by the American  Depositary  Shares  ("ADSs") that are evidenced by
such ADRs.

          The payment by the  Company of a dividend  in respect of the  Ordinary
Shares generally gives rise to a tax credit in the hands of shareholders who are
UK  resident  individuals  at the  rate of 10  percent  of the  sum of the  cash
dividend and the tax credit.

          Under the Convention, certain US Holders who receive a dividend from a
UK  company  are  entitled  in  certain  circumstances  to claim from the Inland
Revenue  payment  of the tax  credit or part of the tax  credit  (a "Tax  Credit
Refund")  to which a UK  resident  individual  would be  entitled,  subject to a
withholding  tax.  However,  with  the  tax  credit  rate  of  10  percent,  the
withholding tax will eliminate or virtually  eliminate the Tax Credit Refund. In
view of this, the availability of Tax Credit Refunds under the Convention is not
discussed any further in this summary.  US Holders  should consult their own tax
advisers as to the availability or otherwise of Tax Credit Refunds.

          The Convention  further  provides,  subject to various  exceptions and
limitations  set our therein,  that,  although  dividends  paid by a UK resident
company may be taxed in the UK, if the beneficial  owner of such a dividend is a
US Holder,  the tax so charged  is not to exceed the tax  withheld  from the Tax
Credit Refund.

United Kingdom Taxation of Capital Gains

          Holders of ADRs or Ordinary Shares who are US citizens or residents of
the United States for US federal  income tax purposes,  and who are not resident
nor ordinarily  resident in the United Kingdom for UK income tax purposes,  will
not normally be liable to UK taxation of capital  gains  arising on the disposal
or deemed disposal of their ADRs or Ordinary Shares, unless the ADRs or Ordinary
Shares are held in connection with a trade, profession or vocation carried on in
the UK  through a branch or agency or, in certain  circumstances,  their  non-UK
residence is only temporary.  However, US citizens and residents holding ADRs or
Ordinary  Shares may be liable for  taxation of such gains under the laws of the
United States.


United Kingdom Inheritance and Gift Tax

          UK Inheritance Tax ("IHT") is a tax charged,  broadly, on the value of
an  individual's  estate at his death,  upon  certain  transfers of value (e.g.,
gifts) made by  individuals  during their  lifetime and on certain  transfers of
value  involving  trusts and closely  held  companies.  A transfer of value made
during an individual's lifetime may lead to an immediate liability to IHT (e.g.,
a transfer into discretionary  trust), or it may be potentially exempt (e.g., an
outright  gift to  another  individual),  in  which  case it  will  only  become
chargeable  if the donor dies  within 7 years.  The  transfer  of value which is
deemed to occur on death is an immediately chargeable transfer of value. Special
rules  apply to assets held in trusts,  gifts out of which the donor  reserves a
benefit and gifts to or from closely  held  companies,  which are not  discussed
herein.

          Many  chargeable  transfers of value do not in fact result in a charge
to tax  because  IHT is charged at a  "zero-rate"  on  transfers  of value up to
L231,000 (for  chargeable  transfers made on or after April 6, 1999).  The March
2000 Budget has proposed that this should be increased to L234,000 as from April
6, 2000. In simple terms, the value of all immediately chargeable transfers made
within the seven  year  period  before  the  transfer  under  consideration  are
aggregated  with the value of that transfer in determining  whether the limit of
the L231,000 (or L234,000)  "zero-rate band" has been reached.  For transfers of
value which (in accordance with the  aggregation  principle) go beyond the limit
of the zero rate band,  the rates of tax are 20 percent on  lifetime  chargeable
transfers  made more than  seven  years  before  the  death  and 40  percent  on
transfers on, or within the period of three years before,  death (with  modified
rules  applying to transfers  within the period from seven to three years before
death).

          IHT is chargeable  upon the worldwide  assets of  individuals  who are
domiciled  or deemed to be  domiciled  in the  United  Kingdom,  and upon the UK
situate assets of individuals domiciled elsewhere.

          Accordingly,  an individual  who is domiciled in the United States and
is not deemed to be  domiciled  in the United  Kingdom for IHT  purposes is only
within  the scope of IHT to the  extent of his UK  situate  assets.  These  will
include  Ordinary  Shares in the  Company  which are  registered  in the  United
Kingdom.  It is understood to be the Inland  Revenue's  normal practice to treat
ADRs  representing  shares in UK  companies  as assets  situated  in the  United
Kingdom for IHT purposes.

          The rules outlined above will, in many cases, be modified by the US-UK
Convention on  Inheritance  and Gift Taxes.  In general,  an  individual  who is
domiciled  in the US for the  purposes  of that  convention  and who is not a UK
national  will not be  subject to IHT in  relation  to  Ordinary  Shares in a UK
company or ADRs  representing  Ordinary  Shares in a UK company on death or on a
lifetime  gift,  provided that any gift or estate tax due in the USA is paid and
that the  Ordinary  Shares or ADRs are not part of the  business  property  of a
permanent  establishment in the UK or part of the assets of a fixed UK base used
by the holder for the performance of services.

          In the exceptional  case where the Ordinary Shares or ADRs are subject
both to IHT and to US  federal  gift or  estate  tax,  the gift  tax  convention
provides a credits system designed to avoid double taxation.


United Kingdom Stamp Duty and Stamp Duty Reserve Tax

Transfers of Ordinary Shares for a consideration

          UK  stamp  duty  is  payable  ad  valorem  on  certain   documents  or
instruments  conveying or transferring shares or securities  (including Ordinary
Shares in the Company) on sale and UK stamp duty reserve tax ("SDRT") is imposed
on  agreements  for the  transfer of certain  shares and  securities  (including
Ordinary Shares in the Company) for a  consideration  in money or money's worth.
The charge is  normally at the rate of 0.5 percent of the amount or value of the
consideration  given for the  transfer  (with  rounding up, in the case of stamp
duty, to the nearest multiple of L5). Stamp duty and SDRT are generally  payable
by the purchaser but SDRT can in certain circumstances be collected from persons
other than the purchaser (e.g.,  certain brokers and market makers).  The charge
to SDRT is  normally  incurred  on the day  ("the  relevant  day") on which  the
agreement is made or, if later,  becomes  unconditional  and it normally becomes
payable on the seventh day of the month  following that in which it is incurred.
However,  if the SDRT is paid and at any time on or within  six years  after the
relevant day the agreement is completed by a duly stamped transfer,  a claim can
be made within that six year period for repayment of the SDRT and, to the extent
that it has not been paid, the charge will be canceled.

          Consequently, transfers of, or agreements to transfer, Ordinary Shares
in the Company will normally be subject to ad valorem stamp duty or SDRT.

          The  electronic  transfer  system known as CREST permits  shares to be
held in uncertificated  form and to be transferred without a written instrument.
The  absence of a written  instrument  of  transfer  results  in such  paperless
transfers  generally being liable to SDRT rather than stamp duty.  Special rules
apply to the collection of SDRT on paperless transfers settled within CREST.

Transfers of Ordinary Shares into ADS form

          UK stamp duty or SDRT will  normally  be payable  on any  transfer  of
Ordinary Shares to the Depositary or its nominee, or where the Depositary issues
an ADR in respect of Ordinary  Shares hitherto held for another purpose by it or
its nominee. The charge is at the rate of 1.5 percent:

(i)       in the case of a transfer of Ordinary Shares for consideration, of the
          amount or value of the consideration for the transfer, and

(ii)      in  the  case  of  a  transfer  of  Ordinary  Shares  other  than  for
          consideration  and in the case of the  issue of an ADR in  respect  of
          Ordinary Shares hitherto held for another purpose, of the value of the
          Ordinary Shares.

In the case of stamp duty,  the charge is rounded up to the nearest  multiple of
L5.

Transfers of Ordinary Shares within the depositary arrangements

          No UK stamp duty will be payable on an instrument  transferring an ADR
or on a written  agreement to transfer an ADR,  provided that the  instrument of
transfer or the  agreement  to  transfer  is  executed  and remains at all times
outside  the UK.  Where  these  conditions  are not met,  the  transfer  of,  or
agreement to transfer, an ADR could,  depending on the circumstances,  give rise
to a charge to ad valorem stamp duty.

          No SDRT will be payable in respect of an  agreement to transfer an ADR
(whether made in or outside the UK).

Transfers of Ordinary Shares out of ADS form

          Where no sale is  involved,  a  transfer  of  Ordinary  Shares  by the
Depositary or its nominee to the holder of an ADR upon  cancellation  of the ADR
is not subject to any ad valorem stamp duty or SDRT, though it will generally be
subject to a fixed UK stamp duty of L5 per instrument of transfer.  By contrast,
a transfer of, or agreement to transfer,  Ordinary  Shares  underlying an ADR by
the  Depositary or its nominee at the direction of the ADR seller  directly to a
purchaser for a  consideration  may give rise to a liability to ad valorem stamp
duty or SDRT generally by reference to the amount of value of the  consideration
for the transfer.

Gifts of Ordinary Shares

          A transfer of Ordinary Shares for no  consideration  whatsoever is not
chargeable to ad valorem stamp duty or SDRT,  nor would it normally give rise to
the fixed stamp duty of L5 per instrument of transfer.

Item 8.  Selected Financial Data.(3)

          The  selected  financial  data set  forth  below is  derived  from the
Consolidated  Financial  Statements  of  the  Company  and  should  be  read  in
conjunction  with,  and is  qualified  in its  entirety  by  reference  to, such
Consolidated  Financial  Statements,  including the notes thereto. The Company's
Consolidated  Financial Statements as of December 31, 1999 and 1998 and for each
of the years in the three year period ended  December 31, 1999,  which have been
audited by KPMG Audit Plc,  are  included  elsewhere  herein.  The  Consolidated
Financial Statements of the Company are prepared in accordance with UK Generally
Accepted  Accounting  Principles ("UK GAAP") which differ in certain significant
respects  from  US  Generally  Accepted   Accounting   Principles  ("US  GAAP").
Reconciliation  to US GAAP is set forth in Note 37 in the Notes to  Consolidated
Financial  Statements.  The per share data have been translated into dollars per
ADS where appropriate.

          In respect to 1997,  significant  changes  were made to the  Company's
capital structure as a result of the Demerger.  The selected  financial data set
forth below with respect to 1997  reflects the capital  structure in place prior
to the Demerger,  which was appropriate historically to Cordiant and the capital
position,  finance  charges  and tax  liabilities  included  in such data do not
reflect the Group's  capital  position,  finance  charges and tax liabilities in
respect of any of the periods  covered had the Group effected the Demerger prior
to such period. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

<TABLE>
<CAPTION>
                                                                               (In millions, except per share data)

                                                                                      Year Ended December 31,

<S>                                                                  <C>        <C>       <C>       <C>       <C>        <C>
                                                                     1999       1999      1998      1997      1996       1995
                                                                     US$(1)            FIGURES SHOWN IN POUND STERLING
CONSOLIDATED INCOME STATEMENT DATA:(2)
Amounts in Accordance with UK GAAP
     Commission and fee income
        Continuing operations                                         $544.0    335.8      301.8    736.1     754.9       761.1

                                                                   ---------- --------- --------- --------- ---------- ----------
        Total                                                         $544.0     335.8     301.8     736.1    754.9       761.1
                                                                   ---------- --------- --------- --------- ---------- ----------
     Profit (loss) before tax, and minority
     interests-historically reported(3)                                $43.0      32.3      25.9      34.6     41.8       (22.6)
     Adjustment for provisions(4)                                        -         -        (1.2)     (4.7)    (7.0)      (10.2)
                                                                   ---------- --------- --------- --------- ---------- ----------
     Profit (loss) before tax, and minority interests-restated(3)      $43.0      32.3      24.7      29.9     34.8       (32.9)
                                                                   ---------- --------- --------- --------- ---------- ----------
     Net profit (loss)                                                 $24.9      18.6      13.8      10.4     17.2       (47.6)
                                                                   ---------- --------- --------- --------- ---------- ----------
     Net profit (loss) per Cordiant Ordinary Share basic(2)            $0.13       8.2p      6.2p      4.7p     3.9p      (20.5)p
     Net profit (loss) per Cordiant Ordinary Share diluted(3)          $0.13       7.8p      6.2p      4.7p     3.9p      (20.5)p

Approximate Amounts in Accordance with US GAAP
    Profit/(loss) before change in accounting principles(4)           (10.1)      (6.3)      4.6       3.1      5.1       (43.8)
    Cumulative effect of change in accounting principles(5)           (24.0)     (14.9)
                                                                  ------------------------------------------------------------------
    Net profit/(loss)                                                 (34.1)     (21.2)      4.6       3.1      5.1       (43.8)
                                                                  ------------------------------------------------------------------
    Net profit/(loss) per Ordinary Share(2)                          $(0.15)      (9.5)p     2.1p      1.4p     1.1p      (15.0)p
                                                                  ------------------------------------------------------------------
    Net profit/(loss) per ADS(2)                                     $(0.77)     (47.6)p     10.3p     7.0p     5.7p      (74.9)p
                                                                   ---------- --------- --------- --------- ---------- ----------
     Dividends including tax credit
       Per Ordinary Share                                              $0.07       4.5p      3.5p      3.0p     2.6p        -
       Per ADS                                                         $0.36      22.5p     17.5p     15.0p    13.0p        -

</TABLE>

<TABLE>

                                                                                     (In millions)

                                                                                      December 31,
                                                            ------------------------------------------------------------------
                                                               1999       1999       1998       1997       1996       1995
                                                              US$(1)               FIGURES SHOWN IN POUND STERLING
<S>                                                            <C>       <C>        <C>        <C>        <C>        <C>
CONSOLIDATED BALANCE SHEET DATA:
Amounts in Accordance with UK GAAP
Working capital asset (deficiency)                             10.0       (6.2)      11.8        2.8      (59.8)     (25.3)
Total assets                                                  949.3      589.6      386.7      377.8      912.4      992.9
Long term liabilities, including minority interests           297.8      185.0      136.9      123.2      262.6      309.2

Shareholder's deficiency-historically reported                (73.7)     (45.8)     (71.5)     (85.7)    (215.3)    (224.9)
Adjustment for provisions(4)                                    -          -          7.6        8.8       27.5       34.6
                                                            ----------- ---------- ---------- ---------- ---------- ----------
Shareholder's deficiency-restated                             (73.7)     (45.8)     (63.9)     (76.9)    (187.8)    (190.3)
                                                            ----------- ---------- ---------- ---------- ---------- ----------
Approximate Amounts in Accordance with US GAAP
                                                            ------------------------------------------------------------------
Shareholders' funds/(deficiency)                               33.2       20.6       26.6      20.2       24.6         6.8
                                                            ------------------------------------------------------------------

</TABLE>
_________________
(1)  These figures have been  translated into US Dollars at the Noon Buying Rate
     on December 31, 1999 (L1.00-$1.61).
(2)  Per share and per ADS  amounts  have been  adjusted  to  reflect  the share
     consolidation in connection with the Demerger.
(3)  The  profit  (loss)  before  taxes and  minority  interests  reflects:  (a)
     exceptional  costs of Lnil,  Lnil, L2.2 million,  L16.5 million,  and L20.3
     million  that  were  incurred  in  1999,   1998,   1997,  1996,  and  1995,
     respectively;  (b) a profit on disposal of  operations of L20.8 million and
     L17.8  million in 1997 and 1996  respectively;  (c) costs  relating  to the
     fundamental  reorganization  of the  Group as a result of the  Demerger  of
     L33.0  million in 1997  (details of (b) and (c) are set out in Note 2 and 6
     in the  Notes  to  Consolidated  Financial  Statements);  and (d) a loss on
     disposal of operations of L34.3 million in 1995.
(4)  Due  to a  recent  change  in UK  GAAP,  CCG  now  discounts  its  property
     provisions  for the  purposes  of UK GAAP and has  restated  the results of
     prior years as if this  accounting  had been in effect for those years.  In
     connection with this restatement,  the Group determined that certain errors
     had  been  made  in the  prior  years  in  the  determination  of  property
     provisions and  compensation  expense under U.S.  GAAP. As a result,  prior
     year amounts have been restated for the correction of those errors.
(5)  During 1999,  the Group  reviewed its  accounting  for property  provisions
     under U.S.  GAAP and  determined  that it is preerable  under U.S.  GAAP to
     record  property  provisions  on a gross basis  rather than on a discounted
     basis.  The  cumulative  effect of this  change in  accounting  policy  for
     periods through December 31, 1998 was a charge to profit under U.S. GAAP of
     L14.9 million (6.6p per Ordinary Share).


DIVIDENDS

          Dividends   recommended  by  the  Company's  Board  in  respect  of  a
particular  fiscal year are paid in the following fiscal year if approved by the
Company's  shareholders.  The  Company  has  paid  and  proposed  the  following
dividends on the Ordinary Shares in respect of the years indicated:

Year             Dividend per Ordinary Share              Total Dividend Amount
                        (in pence)                      (Pound Sterling million)
1995                       --                                     --
1996                       2.0                                    4.4
1997                       1.2                                    2.7
1998                       1.4                                    3.1
1999(1)                    1.8                                    5.1
____________________
(1)  If approved by the  Company's  shareholders,  such dividend will be paid in
     June 2000.

          Under UK company  law,  the ability to pay a dividend is  dependent on
whether the Company has distributable reserves. At December 31, 1999 the Company
had distributable reserves of L31.4 million.

          The Directors make dividend determinations taking into account the CCG
Group's  results  of  operations,   investment  requirements,  cash  flow  after
repayment of debt and legal and contractual restrictions,  if any. Consideration
is given to the declaration of foreign income dividends, if appropriate.


EXCHANGE RATES

          Fluctuations  in the exchange rate between the pound  sterling and the
US dollar will affect the dollar  equivalent of the pound sterling prices of the
Ordinary  Shares on the London  Stock  Exchange  and as a result,  are likely to
affect  the  market  price of the ADSs in the US.  Such  fluctuations  will also
affect the dollar  amounts  received  by  holders of ADSs on  conversion  by the
Depositary  of cash  dividends  paid in pounds  sterling on the Ordinary  Shares
represented by the ADSs.

          The  following  table  sets  forth,  for the  periods  indicated,  the
average,  high,  low and  period  end Noon  Buying  Rates  for  pounds  sterling
expressed in US dollars per L1.


                 Average*         High          Low          Period End
1995              1.58           1.64          1.53            1.55
1996              1.57           1.71          1.49            1.71
1997              1.64           1.70          1.58            1.64
1998              1.66           1.72          1.61            1.66
1999              1.62           1.68          1.55            1.61
____________________

*    The average of the exchange  rates on the last day of each month during the
     period.

The Noon Buying Rate for pounds sterling on May 16, 2000 was L1.00 = $1.50.


Item 9.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.

GENERAL

          The information in "Management's  Discussion and Analysis of Financial
Condition and Results of  Operations"  concerning  the results of operations and
the financial condition of CCG refers to the Consolidated  Financial  Statements
included in this Form 20-F which are  prepared in  accordance  with UK GAAP.  UK
GAAP differs in certain  significant  respects  from US GAAP.  The  Consolidated
Financial   Statements  contain  a  reconciliation  of  net  profit  (loss)  and
shareholders'  deficit to US GAAP. A discussion of the principal  differences is
set out in Note 37 in the Notes to Consolidated Financial Statements.

          CCG's ongoing  revenue is generated from  commissions and fees paid by
clients.  In each of the last three years,  between 34 and 45 percent of ongoing
revenue was  commission  based and varied with the level of media and production
expenditure.  The  remainder  was derived  from fees which were  project or time
based, as agreed with the client. With certain clients, an additional element of
remuneration  can be earned  by  meeting  certain  performance  criteria  set in
conjunction  with the  client.  Bates  Worldwide,  Scholz & Friends  and Diamond
generally have ongoing  relationships  with their clients which last a number of
years.  In contrast,  the majority of revenue from clients of HP:ICM is based on
project specific  assignments,  although there is often a relationship  with the
same client over many years.

          Revenue in any year is dependent primarily on the level of expenditure
by clients on existing  assignments and to a lesser degree on business gains and
losses.  When  business  is won or lost there is usually a delay of some  months
before  revenue  is  affected.  This is  primarily  because  it is  usual in the
advertising  industry for contracts to have a three month termination clause. In
the case of new  commission  based work the delay is longer as the agency is not
paid  until the  advertisement  has  appeared  in the media.  Additionally,  the
revenues  actually  earned from new business  wins may vary  significantly  from
revenues  anticipated at the outset of any new business win because the level of
expenditure  that a client  ultimately  determines is most  appropriate can vary
significantly from the budgeted amounts.

          The majority of CCG's net  operating  costs are staff related and over
the past  three  years  the  Group's  staff  cost to  revenue  ratio  (including
temporary  staff and  freelancers)  equated to  approximately  58 percent.  When
revenue  growth is slow or declining in any  particular  operating  unit, CCG is
able over time to reduce headcount, although this can result in severance costs.
Conversely,  staffing can be increased to handle sustained  periods of increased
business  activity.  The  remainder  of net  operating  costs  relate  to leased
properties, depreciation and other administrative costs.

          The  profitability  of new business  varies  depending on the terms of
remuneration  negotiated  and on the nature of the  assignment.  In  particular,
profitability  depends on whether revenue is generated by increased  spending on
existing  assignments,  new or existing clients or product categories and on the
number of offices involved in the assignment.

          CCG has offices or  affiliated  agencies in over 70 countries  and its
revenues  and costs are  denominated  in a number of  currencies.  Consequently,
exchange rate  movements  between pounds  sterling and several other  currencies
have an impact on the operating result. CCG's costs are generally denominated in
the same currency as the associated  revenue,  thereby  mitigating the impact of
exchange rate movements on operating profit. At the net profit level, the impact
of exchange  rate  movements  is also  affected by the currency in which debt is
denominated and the countries in which CCG's tax charges arise.

          For  the  purpose  of  this  section,   references   to   "underlying"
performance excludes the effect of exchange rate movements.

          The  prospective  change to UK GAAP for the year ending  December  31,
2000 and its anticipated impact is as follows:

          (i) Financial  Reporting  Standard  ("FRS") 16 (Current Tax) specifies
     how current tax, in particular  withholding tax and tax credits,  should be
     reflected in the  financial  statements.  The Group's  existing  accounting
     policies are consistent with FRS 16.


INDUSTRY BACKGROUND(4)

          Zenith  estimates  that the outlook for  advertising  expenditures  in
major media  (television,  print,  radio,  cinema and  outdoor) is one of stable
growth to 2002.

          Zenith  estimates that worldwide major media  advertising  expenditure
grew by 4.9 percent in 1999. Looking forward, Zenith forecasts nominal growth of
6.4  percent in 2000,  accelerating  to 10.6  percent in 2001 and 6.0 percent in
2002.

__________________
(4)  Expenditure  information  in this  section  is based  solely  on  estimates
     published by Zenith Media  Worldwide  Ltd. (a wholly  owned  subsidiary  of
     Zenith) in its Advertising Expenditure Forecasts,  December 1999.

Conversion to the Euro

          The Group has significant  operations  within the European Union.  The
Group has not encountered any significant problems since the introduction of the
Euro on January 1, 1999 and the associated costs are not material.

LIQUIDITY AND CAPITAL RESOURCES

General

          The Group's  primary  liquidity  sources are cash flows generated from
its operations,  the issuance of equity and its banking facilities.  In November
1999,  CCG  refinanced  the Group's core banking  facilities  with new committed
facilities.  The new  facilities  are to be used to  fund  the  Group's  working
capital  requirements  and the acquisition of Diamond and for general  corporate
purposes.

          The capital  structure  consists  of both  senior debt and equity.  At
December 31, 1999,  the Group's  senior debt  consisted of the new bank facility
(the  "Facility")  of $250  million.  The Facility  provides,  committed  credit
facilities at a rate between  0.7-1.25  percent over LIBOR,  depending  upon the
Group's ability to achieve  certain  financial  ratios.  The Facility is divided
into two equal amounts; i) $125 million maturing in November 2000 with an option
to extend for one  additional  year,  and ii) $125 million  maturing in November
2004.  The Facility  requires the Group to comply with  customary  financial and
other  covenants.  It also contains  provisions  whereby,  on the  occurrence of
certain specified events of default, the amount made available could be declared
immediately due and payable. These events of default include breach of the above
covenants  and cross  default  by certain  companies  in the Group in respect of
indebtedness  over a specified  amount or any change of control of the  Company.
The Facility is secured by guarantees from the principal companies of the Group.

          On December 31, 1999, CCG had drawings of $105 million,  compared with
drawings of  $60 million on December 31, 1998. The primary reason for the higher
drawings were the Group's requirements for acquisition financing during 1999 and
non-recurring capital expenditure relating to an office relocation in the US.

          The undrawn  element of CCG's  facilities  is required in part to fund
CCG's  cyclical  working  capital  needs and in part to allow CCG to finance any
contingency.  Cyclical  needs  arise each month as a result of country  specific
media payment cycles and from seasonal variations in advertising activity during
the year which affect CCG's cash position.

          The  Group  has  significant   cash  balances  in  its   international
operations. These balances are required primarily to finance the working capital
cycles of the individual  country  operations  and, in certain cases, to provide
the  required  level of working  capital for media  accreditation  allowing  the
agencies  to buy  media on  behalf  of  their  clients.  Although  cash is often
required for local funding purposes,  the Group has a policy of repatriating all
available cash to the center to maximize core liquidity.

          In connection with the Demerger, Zenith entered into an agreement (the
"Zenith  Facility  Agreement")   providing  a  L18.5  million  secured  reducing
multi-currency  revolving credit facility (the "Zenith  Facility").  The Company
and Saatchi & Saatchi provided unlimited guarantees to the lenders in respect of
the Zenith Facility and agreed between  themselves that any liability under such
guarantees is to be shared equally.

          At December 31, 1999 the amount  outstanding under the Zenith Facility
was L5.4 million. These facilities amortize by L2 million in 2000 and L4 million
in 2001, with the balance due in 2002. In addition,  the Zenith Facility will be
reduced by an amount equal to 75 percent of the net proceeds  received  (subject
to a de minimus of $1.5  million per annum) on or  following a sale by Zenith of
any subsidiary (or a material part of the business of any subsidiary).

          The Zenith Facility  Agreement  requires Zenith to comply with various
financial  covenants  relating to gross interest  cover,  maximum gross debt and
gross capital  expenditure.  It also contains provisions whereby,  under certain
specified   events  of  default,   amounts  made  available  could  be  declared
immediately due and payable.  In addition to customary events of default,  these
events include  defaults by certain  companies in the Zenith Group in respect of
indebtedness  over specified limits or in  circumstances  where there has been a
change of control of Zenith.

          Cash Flows from Operating Activities

          Cash  generated  from  operating  activities in 1999 was L50.0 million
compared  with L19.8  million in 1998,  an  increase of L30.2  million.  Of this
increase,  L7.5 million is derived from increased operating profit.  There was a
reduction  in the  payments in respect of  unutilized  property,  which had been
provided for in prior years, for ongoing operations from L7.0 million in 1998 to
L4.8 million in 1999. The payments in respect of unutilized  property in general
represent  the  difference  between the  payments  being made by CCG relating to
excess  space and the  income CCG  receives  from  subletting  that  space.  The
majority  of the  excess  space  arises  from the  restructuring  of the  former
Cordiant businesses in the early 1990s. The balance of L20.5 million increase is
derived from an improved working capital  position,  which resulted in a working
capital  inflow of L10.8  million in the year,  compared to a net  outflow  from
working  capital of L9.0 million in 1998, and increased  depreciation  charge of
L0.7 million.

          In 1998,  cash flow from operating  activities  increased  compared to
1997,  due  to  improved  operating  profits  of  L26.0  million,  offset  by  a
deterioration  in cash flow from working  capital of L8.8  million.  Payments in
respect of unutilized  property,  which had been provided for in previous years,
were L7.0 million in 1998 compared to L19.2 million for Cordiant in 1997.

          Net Cash Outflows Arising from External Demerger Costs

          In 1999,  no material  payments were made in relation to the Demerger.
In 1998,  L8.2 million of external  demerger  costs  incurred and accrued in the
previous year were paid. These payments were made primarily to external advisers
of the Group.

          Cash Outflows from Returns on Investments and Servicing of Finance

          In 1999,  cash  outflows  from net interest  expense and  dividends to
minorities were L7.0 million compared to L4.9 million in 1998. Net interest paid
by the Group  increased  from L2.4 million to L6.0  million,  largely due to the
payment of one-time  fees in November  1999  relating  to  refinancing  the bank
facilities.  Dividends to minorities decreased from L2.5 million to L1.0 million
following the acquisition of the minority interest in Australia.

          In 1998,  consolidated cash outflows were L4.9 million, which showed a
decrease of L7.4  million over 1997,  due to the  refinancing  that  occurred in
connection with the Demerger.

          Cash Flows from Investing Activities

          In 1999, payments for the acquisition of tangible fixed assets, net of
receipts from disposals  amounted to L18.3 million compared with L7.5 million in
1998.  This  increase was  principally  due to one-time  refurbishment  costs in
respect of a relocation in the United States.

          In 1998,  the L7.5 million net payments  for  acquisition  of tangible
fixed assets  reflected a decrease  from L23.2  million in 1997  relating to the
Demerger.

          In 1999,  there was a cash inflow of L0.2 million from the acquisition
and disposal of  miscellaneous  investments  compared  with a net inflow of L0.1
million in 1998.

          Payments  for  the   acquisition  of  investments  in  subsidiary  and
associated  undertakings  in 1999,  net of cash in companies  acquired was L22.2
million compared with L7.0 million in 1998.  Additional  acquisition  costs were
met by the issue of shares with a market value of L3.4 million. Additional costs
of L51.4 million  relating to deferred  consideration  relating to  acquisitions
were also accrued  during the year.  These accruals will result in cash payments
in future years. See Note 2 to the Consolidated Financial Statements.

          There were no proceeds from the sale of  subsidiaries  during 1999 and
1998. A subsidiary,  however, was reclassified during 1998 as an investment in a
joint venture following a share restructuring resulting in an outflow in respect
of net cash balances of L0.4 million in its balance sheet.

          Equity Dividends Paid

          In 1999, a dividend to equity shareholders of L3.1 million was paid in
relation to 1998  profits.  This compares with the dividend of L2.7 million paid
in 1998.

          Cash Flows from Financing Activities

          In 1999,  shares  were issued for cash value of L1.8  million  (1998 -
L0.5 million)  following the exercise of employee  share  options.  The net draw
down of Group  borrowing  facilities was L25.2 million (1998 - L8.6 million) and
repayments of finance lease borrowings was L0.2 million (1998 - L0.2 million).

          In 1999,  the L25.2 million net draw down of loans  consisted of loans
drawn  of  L90.9  million  and  repayments  of L65.7  million  representing  the
refinancing  of the Group's bank  facilities  during the year and the funding of
acquisitions made and capital expenditure incurred in 1999.

          In 1998,  shares  were issued for cash value of L0.5  million  (1997 -
L0.1 million)  following the exercise of employee  share  options.  The net draw
down of Group  borrowing  facilities was L8.6 million (1997 - L17.3 million) and
repayments of finance lease borrowings was L0.2 million (1997 - L0.3 million).


RESULTS OF OPERATIONS(5)

          As CCG has offices or affiliated  agencies in over 70  countries,  its
revenues  and costs are  denominated  in a number of  currencies.  Consequently,
exchange rate movements  between pounds  sterling and several other  currencies,
have an impact on the  results of the Group.  The  Group's  costs are  generally
denominated in the same currency as the associated revenues, however, mitigating
the impact of exchange rate movements on operating profit.

          During 1999, the Company has adopted the new accounting  standards FRS
12  "Provisions,   Contingent   Liabilities  and  Contingent  Assets",   FRS  13
"Derivatives  and  other  Financial  Instruments",  and FRS 15  "Tangible  Fixed
Assets".

          The only  material  impact  of FRS 12,  is that the  Group's  property
provisions  will  be  discounted  to the  present  value  of  future  net  lease
obligations.  The recognition of this discount in this and subsequent years will
be included as a finance item within net interest payable and similar items.

          Under US GAAP long term property  provisions are made on a gross basis
for properties  which are vacant and surplus to requirements  after allowing for
estimated  subrental.  Such provisions were previously  provided on a discounted
basis in the presentation of US GAAP data. As a result,  prior year US GAAP data
has been revised to reflect the use of the gross basis.

          FRS 13 has been  introduced to allow users of financial  statements to
judge the impact of  financial  instruments  on the Group's  risk  profile,  and
evaluate how such risks are managed.  FRS 13  disclosures  are in Note 32 to the
Consolidated Financial Statements.

          FRS 15 codifies existing  practice  relating to the  capitalization of
costs as well as appropriate  depreciation and revaluation policies. The Group's
existing accounting policies are consistent with FRS 15.

____________________
(5)  See Note 37 in the Notes to Consolidated Financial Statements for a summary
     of differences between UK GAAP and US GAAP.

Year Ended December 31, 1999 vs. Year Ended December 31, 1998

          Revenue

          Group revenue  increased by 11 percent to L335.8  million in 1999 from
L301.8 million in 1998. On an underlying basis, revenue increased by 10 percent.

          In the UK  revenues  increased  by 1 percent  to L40.2  million  which
represents 12 percent of Group revenues (1998: 13 percent). The restructuring of
Bates UK, as an integrated agency and management  changes impeded revenue growth
in 1999.

          In North America,  revenues  increased by 16 percent to L83.1 million.
On an underlying  basis the increase was 13 percent.  The region  represented 25
percent of the Group's revenues (1998: 24 percent). The revenue growth reflected
net new business wins and increased spending from existing clients.

          In  Continental  Europe,  revenues  increased  by 12 percent and by 15
percent on an underlying  basis.  This region (which includes  revenues  derived
from Africa and India)  represents 36 percent of the Group's  revenues (1998: 36
percent).  In Bates  Europe,  revenues  increased by 13 percent on an underlying
basis  reflecting  growth  in the  existing  businesses  combined  with  in-fill
acquisitions.  Scholz & Friends performed well with revenue growth of 18 percent
on an underlying basis  reflecting net new business wins and increased  spending
from existing clients.

          Asia Pacific and Latin American  revenues  increased by 11 percent and
by 6 percent on an  underlying  basis.  In 1999,  this region  accounted  for 27
percent of the Group's revenues (1998: 27 percent).  Australasian (Australia and
New  Zealand)  revenues  (approximately  57  percent of Asia  Pacific  and Latin
American  revenues)  decreased by 2 percent on an underlying basis. This decline
reflected reduced spending by existing clients. Asia revenues  (approximately 38
percent of Asia Pacific and Latin American revenue) increased by 9 percent on an
underlying  basis.  The  increase  reflected a mixture of growth  from  existing
businesses as economic growth resumed in the region and from  acquisitions,  net
of divestitures.

          Operating Profit

          Operating profit increased by 29 percent to L33.5 million in 1999 from
L26.0 million in 1998. On an underlying basis, operating profits increased by 29
percent.

          In the UK,  operating  profits  were down 2 percent to L4.4 million in
1999.  This marginal  decrease  reflected  increased  costs  associated with the
restructuring of Bates UK.

          In North America, operating profit grew by 33 percent to L10.9 million
in 1999 (28  percent on an  underlying  basis).  This  profit  growth was driven
principally by the increase in revenues and continued cost control.

          In Continental  Europe,  operating  profit  increased by 24 percent to
L12.5 million in 1999. On an  underlying  basis the increase was 26 percent.  In
Bates Europe,  the increase of 34 percent on an underlying  basis  reflected the
successful  integration  of the recent  acquisitions.  In Scholz & Friends,  the
increase  of 17 percent on an  underlying  basis  primarily  reflected  a strong
conversion of revenue gains into operating profit

          In Asia Pacific and Latin America,  operating  profit  increased by 78
percent  to L5.7  million  in 1999.  On an  underlying  basis  operating  profit
increased by 79 percent. In Australasia, operating profit declined by 70 percent
on an underlying basis. This primarily reflected a combination of lower revenues
and investment costs in its interactive business. In Asia operating profits were
achieved,  from losses in 1998,  giving an operating  margin 7.6  percent.  This
improved  performance  reflected  conversion  of revenue  growth into  operating
profits from existing businesses combined with net acquisitions.


          Operating Margins

          The CCG  operating  margin was 10.0 percent in 1999,  an increase from
8.6 percent in 1998.

          On a geographic basis, operating margins were as follows:

                                               1999                1998
                                              percent             percent
                                          --------------      --------------
UK                                            10.9                 11.3
North America                                 13.1                 11.4
Continental Europe                            10.3                  9.3
Asia Pacific and Latin America                 6.9                  3.9
                                          --------------      --------------
Group                                          10.0                 8.6
                                          --------------      --------------


          Joint Ventures and Associates

          The Group's  share of  operating  profits,  primarily  from Zenith and
Newcomm,  amounted to L4.9 million an increase of 88 percent  over 1998.  Of the
L2.3 million  increase,  52 percent was due to the  acquisition of Newcomm.  The
remainder  primarily  was due to Zenith,  which  achieved  revenue  growth of 16
percent during 1999 combined with a continued improvement in profitability.

Year Ended December 31, 1998 vs. Year Ended December 31, 1997

          To facilitate a more meaningful  comparison,  the 1998 trading results
are compared to the results of ongoing operations in 1997.  "Ongoing" operations
refers to businesses  that remain with the Group  following the Demerger and the
disposal of other businesses and excludes Zenith.

          Revenue

          Revenue  decreased by 2 percent to L301.8  million in 1998 from L308.2
million in 1997. On an underlying basis, revenue increased by 5 percent.

          In the UK  revenues  increased  by 2 percent  to L39.8  million  which
represents 13 percent of Group  revenues  (1997:13  percent).  Lost revenue from
client  losses in 1997 were more than  replaced  by a mixture of client wins and
expansion of existing client relationships.

          In North America revenues  increased by 6 percent and on an underlying
basis by 7 percent.  The region  represents  24 percent of the Group's  revenues
(1997:22  percent).  Approximately  half  of  this  increase  is the  result  of
acquisitions of diversified  services businesses in North America. The effect of
these acquisitions will not be fully reflected until 1999.

          In Continental Europe revenues increased by 3 percent and by 7 percent
on an underlying basis. This region (which includes revenues derived from Africa
and the Middle  East)  represents  36 percent of the Group's  revenues  (1997:34
percent). In Bates Europe revenues increased by 5 percent on an underlying basis
primarily  reflecting  new business  wins which  impacted the second half of the
year. Scholz & Friends continued to perform well with underlying  revenue growth
of 15 percent reflecting a strong performance in the Berlin office and expansion
and development of the international network.

          Asia Pacific and Latin  America  revenues  fell by 15 percent and by 1
percent on an underlying  basis  primarily  due to economic  conditions in South
East Asia. In 1998 this region  accounted for 27 percent of the Group's revenues
(1997:31   percent).   Australasian   (Australia   and  New  Zealand)   revenues
(approximately  63  percent  of Asia  Pacific  revenues)  were  unchanged  on an
underlying basis.

          Greater China (China, Hong Kong and Taiwan) reported revenue growth of
4 percent on an underlying  basis. The worst affected South East Asian economies
represent 8 percent of Asia Pacific and Latin America  revenues and 2 percent of
Group  revenues.  In response to South East  Asia's  contraction  in revenue the
Group has taken  significant  steps to  rationalize  costs,  with overall  staff
levels in Asia being reduced by 16 percent by the end of 1998.

          Trading Profit Before Exceptional Items

          Trading  profit  before  exceptional  items  increased by 6 percent to
L26.0  million  in 1998 from  L24.6  million in 1997.  On an  underlying  basis,
trading profits increased by 15 percent.

          In the UK trading  profits  were down 31  percent  to L4.5  million in
1998. This anticipated  decline reflects the impact of a number of non-recurring
projects on 1997 profits.

          In North America  trading profit grew by 30 percent to L8.2 million in
1998  (also  30  percent  on an  underlying  basis).  This  growth  reflected  a
combination  of  new  business,  cost  control  and  acquisitions.   The  latter
contributed  approximately  one  third  of the  growth  in  underlying  regional
profits.

          In Continental  Europe trading profit increased by 21 percent to L10.1
million in 1998.  On an underlying  basis the increase was 30 percent.  In Bates
Europe the increase of 46 percent on an underlying  basis  reflected  underlying
revenue increases in Germany, Italy and Spain primarily reflecting a significant
pan region  account win and improved  trading  margins.  In Scholz & Friends the
increase of 16 percent on an underlying  basis reflected a strong  conversion of
revenue gains in Berlin being partially  offset by development  costs related to
the international agencies.

          In Asia Pacific and Latin America trading profit declined by 9 percent
to L3.2 million in 1998. On an underlying  basis trading profit  increased by 20
percent.  In Australasia trading profit increased by 25 percent on an underlying
basis.  This  primarily  reflected a tighter  control of costs.  In Asia trading
losses  reflected the reduced revenue  performance and associated  restructuring
costs.

          Trading Margins Before Exceptional Items

          Trading  margin before  exceptional  items was 8.6 percent in 1998, an
increase from 8.0 percent in 1997.

          On a geographic basis trading margins were as follows:

                                             1998                  1997
                                            percent               percent
UK                                           11.3                  16.7
North America                                11.4                   9.3
Continental Europe                            9.3                   7.9
Asia Pacific and Latin America                3.9                   3.6
                                         --------------        -------------
Group                                         8.6                   8.0
                                         ==============        =============


                  Joint Ventures and Associates

          CCG has joint ventures and associates in all four geographic  regions.
The Group's share of operating profits, primarily from Zenith and The Facilities
Group, amounted to L2.6 million.

Exceptional Operating Items and Disposals

          Exceptional  operating expenses for CCG in 1999 and 1998 were Lnil and
Lnil  respectively,  and for  Cordiant  in 1997 were L2.2  million.  In 1997 the
exceptional  expense of L2.2 million  reflected a provision against the goodwill
relating  to ongoing  operations  in  Indonesia,  which was taken in view of the
economic uncertainty in that country.

          Profits on  businesses  disposed  of by CCG were Lnil and Lnil in 1999
and 1998 respectively,  and for Cordiant were L20.8 million in 1997. In 1997 the
profit of L20.8  million  included a profit of L16.5  million on the sale of NRG
and a L4.3 million profit on the sale of shares received as  consideration  when
Cordiant sold its interest in Kobs & Draft Worldwide.

          In 1997  there  were  non-operating  expenses  of  L33.0  million  for
Cordiant due to the fundamental  reorganization of the business to implement the
Demerger.  The amounts payable in relation to the Demerger  including  advisors'
fees,   temporary  staff  and  other  costs  amounted  to  L20.2  million.   The
reorganization  of the Cordiant  head office and its  combination  with the head
offices of Bates  Worldwide  and S&S to form the two successor  operations  cost
L6.7 million. The Demerger also resulted in an inter-group property provision of
L6.1  million.  This  represented  the  difference  between the rent  payable by
Saatchi & Saatchi  and the amount  receivable  from  Zenith for space  sublet to
them.

Net Interest Expense and Similar Items

          Net  interest  expense  and  similar  items for CCG  amounted  to L6.1
million in 1999 and L3.9 million in 1998. The interest  expense for Cordiant was
L8.8 million in 1997.  The increase in 1999 is due to increased  interest  rates
and  a  L1  million   write-off  of  unamortized   bank  fees  relating  to  the
post-Demerger  facility.  The write-off  arose as a result of the refinancing of
the bank  facility.  The  decrease in 1998 is a result of the  Demerger  and the
post-Demerger financing arrangements.

          Despite a minimal  overall  average  net debt  position,  CCG incurs a
substantial  net  financing  charge.  This  is  primarily  attributable  to  the
geographic  distribution  of cash  and  borrowing  resulting  from  the  need to
maintain cash balances for media  accreditation  and for local funding  purposes
and the inclusion of bank fees and similar items in the net finance charge.

Taxation

          In 1999 CCG's tax charge for the year was L10.6 million,  representing
an effective tax rate of 32.8 percent. In 1998 CCG's tax charge for the year was
L9.2 million,  representing  an effective  tax rate of 35.5  percent.  Excluding
disposals,  exceptional items and Demerger costs,  Cordiant's effective tax rate
was 35.7 percent in 1997.

          Since 87 percent of CCG's  business is located  outside the UK, the UK
is not the dominant tax regime for the Group.

          The  improvement  in the  Group's  effective  tax  rate  in  1999  was
principally due to the mix of international profits.

Equity Minority Interests

          Equity minority interests from ongoing businesses were L3.1 million in
1999,  L1.7  million in 1998 and L1.8  million in 1997.  The increase in 1999 is
principally due to the improved  profitability  of the Scholz & Friends network,
which the Group owns 90 percent,  and the  acquisition  in  November  1999 of 80
percent of Diamond in South Korea. The decrease in 1998 reflects the purchase of
the 24.9 percent minority interest in The Communications Group.

Return Attributable to Shareholders

          The  Group's  net  profit  for 1999 was L18.6  million,  resulting  in
earnings  per  share of  8.2p,  and for 1998 was  L13.8  million,  resulting  in
earnings per share of 6.2p.

          Cordiant's  net  profit  for  1997 was  L10.3  million,  resulting  in
earnings per share of 2.3p in 1997. Excluding exceptional items the earnings per
share were 6.3p in 1998 and 5.1p in 1997.  The  earnings  per share  figures are
unadjusted for the share consolidation that took place as part of the Demerger.

          A dividend of 1.8p per share has been  recommended in respect of 1999.
The  comparable  1998 figure was a net  dividend of 1.4p.  Earnings  covered the
recommended dividend 3.6 times in 1999 and 4.4 times in 1998.


Item 9A.  Quantitative and Qualitative Disclosures About Market Risk.

Financial Risk Management

          Group policy relating to the use of financial  instruments,  including
types of instruments used and amounts invested,  is determined by the Board. The
instruments  used by the Group in the year under  review are fixed and  floating
rate  borrowings,  interest rate caps,  forward foreign  currency  contracts and
foreign  currency  swaps.  The main risks  arising  from the  Group's  financial
instruments are interest rate risks, liquidity risks and foreign currency risks.
The Group does not trade in derivatives and does not enter into  transactions of
a  speculative  nature  or  unrelated  to  the  Group's  investment  activities.
Derivatives  are used  only to  manage  the risks  arising  from the  underlying
business activities.

Foreign Exchange

          The Group publishes its  consolidated  financial  statements in pounds
sterling.  The Group's  profits are spread over a variety of currencies with the
largest being the US dollar (32 percent of 1999 operating profit).  As a result,
the Group is subject to foreign  exchange  risk due to the effects  that foreign
currency movements have on the Group's translation of results.

          The  Group  has  significant   and  diverse   investments  in  foreign
operations.  The  Group's  balance  sheet and profit and loss can  therefore  be
materially affected by movements in exchange rates. It is not the Group's policy
to manage  net assets  via  balance  sheet  hedging,  or to hedge  international
profits.  The Group  seeks to  mitigate  the  effect of  currency  exposures  by
borrowing  in the same  currencies  as the  currencies  in which it lends and by
using currency swaps to match the currencies in which it lends. In addition, the
Group uses forward exchange contracts to hedge known cross-currency cash flows.

          The Group's long term debt is denominated  in US Dollars,  and as such
is subject to foreign  exchange  risks due to  currency  movements.  The debt at
December 31, 1999 was US$105 million.

          The following  sensitivity  shows the impact on the reported  value of
long term debt of an  instantaneous  10 percent  change in the foreign  currency
rate between sterling and US Dollar from their levels at December 31, 1999, with
all other variables held constant.

<TABLE>
<CAPTION>

                                                      Impact of a + 10                   Impact of a - 10
                     Fair value reported at           percent movement                   percent movement
                       December 31, 1999              in exchange rate                   in exchange rate
                     Pound Sterling million         Pound Sterling million             Pound Sterling million
<S>                        <C>                              <C>                                 <C>

Long term debt              65.2                            (7.9)                                7.9
</TABLE>


Interest Rates

          The Group is exposed to interest rate fluctuations due to the floating
rate central bank  facility  borrowings.  The  majority of these  floating  rate
liabilities are denominated in sterling or US dollars.  This exposure is managed
via interest rate caps  denominated  in both sterling and US dollars.  The Group
aims to hold interest rate caps to cover the majority of its borrowings and with
a variety of maturities.  The current interest rate caps mature between December
2000 and June 2002.  The Group will renew  these caps on  maturity.  The Group's
weighted average interest rate for 1999 was 6.7 percent.  The Company  estimates
that if the 1999  interest  rates had been 1 percentage  point  higher,  the net
interest expense would have increased by L0.4 million.

          See  Note  32  of  the  Consolidated  Financial  Statements  for  more
information  on the Group's risk profile  which has been  provided in accordance
with FRS 13.

Item 10.  Directors and Officers of Registrant.

          The Directors and Executive Officers of CCG are as follows:
<TABLE>

<CAPTION>
Name                            Position                                                                   Age
<S>                             <C>                                                                        <C>
Michael Bungey                  Director and Chief Executive Officer of the Company and Chairman and       60
                                Chief Executive Officer, Bates Worldwide
Arthur D'Angelo                 Finance Director of the Company                                            48
Jean de Yturbe                  Director, Group President, Bates Worldwide                                 53
Peter M Schoning                Director, Chairman and Chief Executive Officer, Scholz & Friends           54
Charles Scott                   Chairman of the Company                                                    51
Ian Smith                       Director, Group President, Bates Worldwide                                 44
William Whitehead               Director, Group President Bates Worldwide                                  54
Dudley Fishburn                 Non-executive Director                                                     54
Professor Theodore Levitt       Non-executive Director                                                     75
Dr. Rolf Stomberg               Non-executive Director                                                     60
James Tyrrell                   Non-executive Director                                                     59
David F. Ham                    Group Controller                                                           34
Denise Williams                 Company Secretary                                                          42
</TABLE>

Executive Directors

          Charles Scott (51) Chairman:  joined the Board as Finance  Director in
January 1990. He was promoted to Chief Operating  Officer in July 1991 and Chief
Executive  Officer  in  April  1993.  In  January  1995 he was  appointed  Chief
Executive Officer and Acting Chairman,  and in July 1995 was appointed Chairman.
He is a non-executive director of several companies.

          Michael Bungey (60) Chief Executive Officer: became Chairman and Chief
Executive  Officer of Bates  Dorland and Bates Europe in 1988.  He was appointed
President  and  Chief  Operating  Officer  of Bates  Worldwide  in  1993,  Chief
Executive  Officer in April 1994 and Chairman in December 1994. He was appointed
to the Board as Chief Executive Officer of CCG in December 1997.

          Arthur  D'Angelo  (48)  Finance  Director:  joined  Saatchi  & Saatchi
Holdings  USA in 1987 and  joined  Bates  USA in April  1994 as  Executive  Vice
President and Chief Financial  Officer.  He was named Chief Financial Officer of
Bates North America later that year, and was appointed Chief  Financial  Officer
of Bates  Worldwide  in July  1995.  He was  appointed  to the Board as  Finance
Director in December 1997.

          Jean de Yturbe (53) Director:  appointed  President of HDM Europe from
1985 to 1990 and Chief Executive Officer of Eurocom  Advertising  Worldwide from
1990 to 1992. He joined Bates in July 1993 as Chief  Executive  Officer of Bates
France and was named  Chairman of Bates Europe in January 1995. He was appointed
to the  Board in  December  1997  and  appointed  a Group  President  for  Bates
Worldwide in December 1999.

          Peter  Schoning  (54)  Director:  joined  Scholz & Friends  in 1984 as
Managing  Director.  He was  named  Managing  Partner  in  1987.  In 1993 he was
appointed Chief Executive Officer of Scholz & Friends, and since 1995 he has led
the agency as Chairman  and Chief  Executive  Officer.  He was  appointed to the
Board in December 1997.

          Ian Smith (44) Director: joined George Patterson Bates in 1989 and was
named  General  Manager and New Business  Director in 1990.  He became  National
Client Services  Director in 1993 and Managing Director in 1996. He as appointed
to the newly-created  position of President,  International,  Bates Worldwide in
March 1998 and a Group  President for Bates  Worldwide in December  1999. He was
appointed to the Board in January 2000.

          William  Whitehead  (54)  Director:  was named  Executive  Director of
Worldwide  Client  Services at Bates  Worldwide  and Regional  Director of Latin
America for Bates Worldwide in May 1994. In December 1994 he was appointed Chief
Operating  Officer  for  Bates  North  America.  He became  President  and Chief
Operating  Officer of Bates USA in September  1995. In July 1996 he became Chief
Executive  Officer of Bates  North  America.  He was  appointed  to the Board in
December 1997 and became a Group President for Bates Worldwide in December 1999.

Non-Executive Directors

          Dudley Fishburn (54)  Non-executive  Director:  is Associate Editor of
The Economist,  Treasurer of the National Trust, Chairman of the Trustees of the
Open University,  Chairman of HFC Bank plc, a director of Philip Morris Inc. and
a Trustee of the Prison Reform Trust. He was previously Member of Parliament for
Kensington and Executive Editor of The Economist.  He was appointed to the Board
in May 1996.

          Professor  Theodore Levitt (75) Non-executive  Director:  is Edward W.
Carter Professor of Business  Administration,  Emeritus, of the Harvard Business
School,  and formerly Editor of the Harvard  Business  Review.  He serves on the
board of seven Sanford C. Bernstein  Funds,  is a retired  director of eight New
York Stock  Exchange  companies,  and author of numerous  articles  and books on
economics, management and marketing. Professor Levitt was appointed to the Board
in March 1990.

          Dr Rolf Stomberg (60) Non-executive  Director:  worked for The British
Petroleum Company plc from 1970 to 1997 where he was Chief Executive Officer for
B.P. Oil  International  and a B.P. Group Managing  Director.  He is Chairman of
John Mowlem & Company PLC and serves on a number of UK and  continental  boards.
He is also a Visiting Professor at Imperial College  Management  School,  London
and the  Business  School of  Institut  Francais  du  Petrole  in Paris.  He was
appointed to the Board in May 1998.

          James Tyrrell (59) Non-executive  Director: was Group Finance Director
of London  International Group until November 1997, and executive director until
August 1998.  Previously  he was Group Finance  Director of Abbey  National Plc,
prior to which he was Managing  Director of HMV Shops Limited.  He was appointed
to the Board in May 1998.

Executive Officers

          David F. Ham  joined  the  Company  in May  1996 as  Manager  of Group
Reporting.  Prior to that he was Group  Accountant  at Alfred  McAlpine plc from
1994 and spent six years at Coopers & Lybrand.  In 1997, he was appointed  Group
Controller of the Company.

          Denise  Williams  joined the  Company in March 1998 as Deputy  Company
Secretary.  Prior to that she was Group  Secretary at Jacques Vert plc from 1992
to 1998. She was appointed Company Secretary in March 2000.

Re-election of Directors

          The Articles of the Company provide that at the Annual General Meeting
every year, one-third of the Directors for the time being, or if their number is
not three or a multiple  of three then the number  nearest to  one-third,  shall
retire from  office,  the  Directors to retire in each year being those who have
been longest in office  since their last  election,  but as between  persons who
became  Directors on the same day those to retire shall  (unless they  otherwise
agree among  themselves)  be  determined  by lot. A retiring  Director  shall be
eligible for  re-election.  Any Director not  re-elected  at the Annual  General
Meeting shall retain office until the Meeting  appoints  another  person in this
place, or if it does not appoint a replacement, until the end of the Meeting.

Corporate Governance

          The Board is committed to high standards of corporate  governance and,
with the following  exceptions,  has complied with the continuing  provisions as
set out in Section 1 of the Stock  Exchange's  Principles of Good Governance and
Code of Best Practice (the "Combined  Code")  throughout the year ended December
31, 1999:

          (a)  There was no senior independent non-executive director until Rolf
               Stomberg was appointed to that position on March 4, 1999;

          (b)  The   provisions  of  the  Company's   Articles  of   Association
               concerning retirement of directors by rotation do not necessarily
               ensure that all directors  are required to stand for  re-election
               at least every three years. An amendment to the Articles so as to
               comply  with this  requirement  will be  proposed  at the  Annual
               General Meeting on June 13, 2000.

          (c)  The  Board  has  not   considered   the  reduction  of  executive
               directors' contract periods to one year or less.

               A separate  Audit  Committee and a Remuneration  and  Nominations
               Committee   exist,   both  of  which  are  comprised   solely  of
               non-executive   directors.   A  Risk  Management   Committee  was
               established during 1999.

               The Audit Committee was chaired during the year by James Tyrrell.
               The main duties of the Audit Committee are to:

               o Review,  on behalf of the Board,  the financial  statements and
               preliminary and interim results;

               o Review  the  nature  and  scope of the  external  audit and the
               findings of the external auditors;

               o Monitor the adequacy of the Group's system of internal control;

               o Review and direct the internal audit function; and

               o Make  recommendations  to the Board  concerning the appointment
               and remuneration of the external auditors.

               The Audit Committee met on three occasions during 1999.

               The  principal  functions  of the  Remuneration  and  Nominations
               Committee  are to  determine  on  behalf  of the  Board  and  the
               shareholders   the   Company's   broad   policy   for   executive
               remuneration  and  the  remuneration  packages  of the  executive
               directors  and  other  senior   executives.   It  also  considers
               appointments to the Board of Directors and makes  recommendations
               in this respect to the Board.  The Committee,  which met on seven
               occasions in 1999, is chaired by Dudley Fishburn.

               The  Risk  Management   Committee   comprises  a  combination  of
               executive and non-executive  directors.  The Committee is chaired
               by Charles  Scott.  The purpose of the Committee is to assist the
               directors in discharging their responsibilities in respect of the
               internal control aspects of the Combined Code. The main duties of
               the Risk Management Committee are to:

               o Establish a risk-based  approach to  maintaining a sound system
               of internal  control which is embedded in the business  processes
               of the Group;

               o  Review  regular  reports  from  management,   focusing  on  an
               assessment of the significant  risks and the effectiveness of the
               system of internal control in managing those risks;

               o Undertake an annual  assessment of the significant risks facing
               the Group and the internal controls to manage those risks;

               o Undertake an annual review for the purpose of making its public
               statement on internal control; and

               o Review and direct the risk management function.

          The first meeting of the Committee took place in January 2000.

          The  following  table  lists,  as of  June  1,  2000,  the  Directors'
interests in Ordinary  Shares,  Ordinary Share Options and Equity  Participation
Rights.


Directors' Interests

<TABLE>
<CAPTION>
                 Beneficially Owned      Ordinary Share     Equity Participation
                   Ordinary Shares         Options                Rights

<S>                  <C>                      <C>                  <C>
M. Bungey            55,990                   647,020              890,110
A. D'Angelo             960                   216,854              593,401
J. de Yturbe           -                      260,996              593,401
D. Fishburn            -                          -                   -
T. Levitt            18,796                       -                   -
P. Schoning            -                      132,426              593,401
C. Scott*            85,172                   731,905                 -
I. Smith               -                       35,000              415,382
R. Stomberg            -                         -                    -
J. Tyrrell             -                         -                    -
W. Whitehead            787                   222,426              593,401
_________________
</TABLE>
*Includes spouse's interests

Item 11.  Compensation of Directors and Officers.

     In 1999,  the  aggregate  amount of  compensation  paid or accrued  for all
directors and  executive  officers as a group (13 persons) who served during the
year, was L4,262,000  ($6,904,440).  Such compensation was mainly in the form of
salaries and fees and included L126,000 ($204,120) set aside for pension plans.

     The table  below  reports  remuneration  by the  Company for the year ended
December  31,  1999.  The  compensation  for  executive  directors  for 1999 was
approved by the Remuneration Committee.


<TABLE>
<CAPTION>
                             Salary         Bonus      As              Long term       Benefits in      Pension        Total
                                                       percentage      Incentive       kind(1)          costs(2)       remuneration
                                                       of salary       plans

                                                               ALL FIGURES SHOWN IN POUND STERLING

                             '000           '000        %              '000            '000             '000           '000

<S>                          <C>            <C>        <C>             <C>             <C>               <C>            <C>
Year  ended  December
31, 1999
-------------------------
Executive Directors
-------------------------
Michael Bungey (CEO)           480           449           94             14              81              56(3)          1080
-------------------------
Arthur D'Angelo                231           168           73              9               7               8              423
-------------------------
Jean de Yturbe                 235            34           14             14              38              23              344
-------------------------
Alex Hamill                    325           182           56              -               -               3              510
-------------------------
Peter Schoning                 269           557          207             28              10               -              864
-------------------------
Charles Scott (Chairman)       200             -            -              -               6              22              228
-------------------------
William Whitehead              340           194           57              9              36               3              582
-------------------------
Non-executive Directors
-------------------------
Dudley Fishburn                 32             -            -              -               -               -               32
-------------------------
Professor Theodore              25             -            -              -               -               -               25
Levitt
-------------------------
Dr Rolf Stomberg                28             -            -              -               -               -               28
-------------------------
James Tyrrell                   33             -            -              -               -               -               33
-------------------------
</TABLE>

(1)  Benefits in kind typically include company car,  pension,  medical and life
     insurance.  Mr.  Bungey,  who is a UK citizen and has been relocated to the
     US, received an annual travel  allowance for flights between the US and the
     UK for his wife and children.

(2)  Mr.  Bungey was a member of the Cordiant  Group Pension  Scheme,  a defined
     benefit  scheme,  during the year.  In addition  to the  amounts  disclosed
     above,  the amount of the  increase  in pension  during the year was L7,407
     (1998:  L7,055). The total annual accrued pension (including  inflation) as
     at December 31, 1999 was L85,185 (1998:  L74,074).  The accrued  benefit is
     that which would be paid annually on retirement based on service to the end
     of the year.  The  transfer  value (net of members'  contributions)  of the
     relevant  increase in accrued  benefit is L117,379  (1998:  L106,464).  The
     pension  figures  quoted last year for Mr. Bungey were  incorrect due to an
     incorrect definition of pensionable salary.  During the year, the ambiguity
     was  resolved  and the  figures  quoted  above  for 1998 and 1999 have been
     calculated based on the correct definition of pensionable salary.

(3)  The  amounts  for  pension  costs  disclosed  in the  executive  directors'
     remuneration are based on the cash cost to the employing company of defined
     contribution schemes.

          The basic  salary  for each  director  is  determined  by taking  into
account an assessment of the director's  experience,  responsibility  and market
value. Salaries are reviewed annually.

          In addition  to salary,  all senior  executives  are  eligible  for an
annual performance-related bonus which is non-pensionable. The bonus is designed
to provide an incentive to achieve and exceed  targets set by the  Committee and
to ensure  that  annual  remuneration  varies in line  with both  corporate  and
personal performance.

          For the year ended  December 31,  1999,  the annual bonus paid to each
executive  director  was a  percentage  of salary  based on (i) with  respect to
Messrs.  Bungey and  D'Angelo,  the  performance  of CCG;  (ii) with  respect to
Messrs.  Hamill,  Whitehead and de Yturbe,  by reference to a combination of the
performance  of CCG and the business  that each director  heads;  and (iii) with
respect to Mr. Schoning, on the performance of Scholz & Friends.

For all executive  directors,  only basic salary is  pensionable.  Their pension
arrangements are as follows:

a)   Mr.  Bungey's  period of pension  accrual under the Cordiant  Group Pension
     Scheme ceased with effect from  December 31, 1999 and he has  subsequently,
     with the consent of the  Trustees,  taken a transfer  value of his benefits
     under the Scheme into a private pension arrangement. He remains a member of
     a small self-administered scheme to which the Company contributes 6 percent
     of his salary plus L15,000 per annum.

b)   Mr. D'Angelo is entitled to an annual pension contribution of $7,500 and is
     also a member of the Bates Advertising USA Inc. 401k plan.

c)   Mr.  de  Yturbe is not a member of any  company  pension  scheme.  However,
     pursuant  to French  legislation,  his salary is  subject to state  pension
     scheme contributions, which are included in the table set forth above.

d)   Mr. Scott receives a Company  contribution  equivalent to 10 percent of his
     salary, which is paid into a personal pension scheme.

e)   Mr.  Whitehead is a member of the Bates  Advertising USA Inc. 401k plan and
     is  also  entitled  to a  pension  from  the age of 60  from  his  previous
     employer, Bates Canada Inc.

Service Agreements

          With the  exception of Peter  Schoning,  no  executive  director has a
service agreement containing a notice period exceeding one year.

          Mr.  Schoning  has a  service  agreement  with CCG in  respect  of his
directorship  of the Company  which may be  terminated at any time on 12 months'
notice.  His underlying  contract with Scholz & Friends includes a notice period
of at least one year  ending on a financial  year end and may not be  terminated
until December 2002.

          With the exception of Mr. Schoning, if an executive director's service
agreement is terminated by the Company  within two years of a change of control,
the executive is entitled to payment based on up to two years' remuneration.

          The  Committee  has  considered  the notice  periods  and  termination
arrangements  in  the  light  of the  Combined  Code  and  believes  that  it is
appropriate for the executive Directors to have service agreements on such terms
taking into account their  seniority  and value to the Company,  and the changes
undergone by the Company in recent years.

          The arrangements for termination of a senior executive's  contract are
decided by the Remuneration and Nominations  Committee after  consultation  with
the  Group's  Chief  Executive  Officer.  In some  cases  the  Remuneration  and
Nominations Committee will recommend a clean break with the individual concerned
and a  one-off  payment  will be made at the time of  termination  based on that
individual's contract. In other cases the Remuneration and Nominations Committee
will  recommend  that the  contractual  entitlement of the individual be paid in
installments following termination.

Non-executive Directors

          The Board of Directors  agrees on the  remuneration  of  non-executive
Directors for their services as members of the Board and its  committees  within
the limits imposed by the Company's  Articles of Association.  The Board retains
discretion   to  approve   additional   payments  for  special   services.   The
non-executive  Directors do not  participate  in any of the incentive or benefit
schemes of the Group.

Item 12.  Options to Purchase Securities from Registrant or Subsidiaries.

Share Schemes Prior to the Demerger and Demerger Schemes

          The  Cordiant  share  schemes  consist of one savings  related  scheme
(described  below) and two  executive  share option  schemes,  specifically  the
Performance  Share Option  Scheme (the  "Performance  Scheme") and the Executive
Share  Option  Scheme  No 2 (the  "Executive  Scheme"  and,  together  with  the
Performance Scheme, the "Share Schemes").

          The  Executive  Scheme was  approved by the Inland  Revenue  under the
terms of the Finance Act 1984 and was intended only for  executives  resident in
the UK. The Performance Scheme was adopted at the Extraordinary  General Meeting
of Cordiant held on March 16, 1995 and was approved by the Inland Revenue on May
1, 1995.  It was intended for  executives  resident  throughout  the world.  The
Shares  Schemes  expired  in April 1994 and March  2000  respectively,  although
existing  options  subsisting at the date of expiration  remain  exercisable  in
accordance with the Share Schemes' terms.

          Options  granted  to  participants  in the  Executive  Scheme  and the
Performance  Scheme (which  includes super  options) were for Cordiant  Ordinary
Shares  at a  price  equivalent  to the  London  Stock  Exchange  middle  market
quotation on the day preceding the date of grant of the options.

          The  performance  targets for options  granted  under the  Performance
Scheme  depend on whether  the option is an ordinary  option or a super  option.
Ordinary  options require the CCG Group's  earnings per share to grow over three
years at 6 percent  more than the growth in the UK Retail  Price  Index over the
same period.  Super options require growth in the CCG Group's earnings per share
which over a five year period would place it in the top quartile of the FTSE 100
companies ranked by growth in earnings per share over the same period.

          No further  options were granted  under these  schemes  following  the
Demerger.  Holders of executive  options  employed by the Company retained their
options under the Share Schemes following the Demerger.

          Holders of  executive  options  under the Share  Schemes  employed  by
Saatchi & Saatchi were  invited to cancel their  options in return for the grant
of replacement options over Saatchi Ordinary Shares. Each replacement option was
for the same number of Saatchi  Ordinary Shares and has the same exercise price,
exercise period and performance  conditions as the relevant existing option. The
intention was that the replacement options be, as far as practicable, equivalent
to the existing options. For Charles Scott,  employees who ceased to be employed
as a result of the Demerger and employees of Zenith and The Facilities Group who
held executive  options under the Share  Schemes,  the same  principles  applied
except that their  replacement  options  were split 50/50  between  options over
Ordinary Shares and options over Saatchi Ordinary Shares.

          Cordiant's  savings related share option scheme ("Sharesave 1995") was
adopted at  Cordiant's  Extraordinary  General  Meeting  held on March 16, 1995.
Inland  Revenue  approval  for  Sharesave  1995 was  obtained  on May 15,  1995.
Eligible employees in the UK were invited to save a fixed amount per month for a
period of five  years and  applied  for an  option at a  predetermined  exercise
price.  The exercise  price was fixed at the date of invitation at a price which
was not less than the  higher of a share's  nominal  value or 80  percent of its
market value at the time. When the option is exercised,  the accumulated savings
and interest/bonus are used to pay the exercise price.

          Under Sharesave 1995,  employees of CCG retained their original number
of  options  without  adjustment  for the share  consolidation  pursuant  to the
Demerger.  Employees of Saatchi & Saatchi who held such  options  also  retained
them but were granted parallel  unapproved  options over Saatchi Ordinary Shares
which are exercisable  with the  accumulated  savings and  interest/bonus  under
Sharesave 1995.  (Sharesave 1995,  together with such parallel schemes being the
"SAYE Schemes")  Employees of Zenith and The Facilities Group had their parallel
options split 50/50 between Ordinary Shares and Saatchi Ordinary Shares.

          The  replacement  options  described  above were granted under schemes
(the "Demerger Schemes") which mirrored, as far as practicable, the terms of the
Share  Schemes to which they  related.  None of the  Demerger  Schemes have been
approved by the Inland Revenue.

          Options under the SAYE Schemes vest with effect from July 1, 2000. The
original options held by employees of Saatchi & Saatchi and The Facilities Group
vested during the year.

Employee Benefits Plans

          CCG  employees are members of a number of pension  schemes  throughout
the world,  but  principally  in the UK and the US. CCG  currently  operates two
principal UK pension  schemes:  a defined  benefits  scheme (the Cordiant  Group
Pension  Scheme) and a defined  contribution  scheme (the  Cordiant  Group Money
Purchase Pension Plan). Since the Demerger,  CCG employees have remained members
of these schemes.

          Employees  of the Saatchi & Saatchi  Group and Zenith  have  continued
their  membership  in both schemes  during the year  pursuant to Inland  Revenue
approval.  The Company and Saatchi & Saatchi have agreed  that,  at the end of a
transitional  period,  Saatchi &  Saatchi's  members  within  the two UK pension
schemes will be given the  opportunity  to transfer to new pension  arrangements
being set up by Saatchi & Saatchi.  A transfer payment determined by the trustee
of the two UK pension schemes,  having taken actuarial  advice,  will be made to
the new Saatchi & Saatchi pension  arrangements in respect of the accrued rights
under the  relevant UK pension  scheme of those  members who request a transfer.
The same  provisions  apply to  employees  of Zenith who are members of CCG's UK
pension schemes.

          The  arrangements  with respect to options under the CCG Share Schemes
are   described  in  "Options  to  Purchase   Securities   From   Registrant  or
Subsidiaries."

          No  options  can be  granted  under a  Demerger  Scheme  other than to
replace an option  which an option  holder  under one of the Share  Schemes  has
agreed to cancel (or, in the case of the SAYE  Schemes,  to run in parallel with
an option under Sharesave 1995).

Ownership Schemes

          Cordiant  operated  "ownership  schemes"  prior to the Demerger  which
allocated  "network  shares" to key executives,  the value of the network shares
increasing or decreasing in line with the network's  performance against target.
These  schemes  have been  replaced  by the  Equity  Participation  Plan and the
Performance Share Option Scheme. Accrued benefits up to the date of the Demerger
were  frozen at 50  percent  of the value at  December  31,  1997 in  respect of
participants in the Equity  Participation Plan and the Performance Option Scheme
and will be paid to executives  in future years in accordance  with the terms of
the schemes.

     Awards to Directors under the ownership schemes were valued as follows:

                      Value at                                    Value at
                   December 31, 1998    1999 Cash Payment     December 31, 1999

                                (VALUES SHOWN IN POUND STERLING)

Michael Bungey         42,726               14,245                28,481
Arthur D'Angelo        25,636                8,546                17,090
Jean de Yturbe         42,726               14,242                28,484
Peter Schoning         56,968               28,484                28,484
Ian Smith              20,443               10,222                10,221
William Whitehead      25,636                8,546                17,090


No awards were made under the schemes during 1999.

New CCG Share Schemes

(a)  The Cordiant  Communications  Group Equity  Participation Plan (the "Equity
     Participation Plan")

      The principal terms of the Equity Participation Plan are set out below.


(i)   Administration

          The Equity  Participation  Plan is  operated in  conjunction  with the
Cordiant  Communications  Group  Employee  Benefit Trust (the "Trust") which was
established at the same time as the Equity Participation Plan.

          The Trustee of the Trust,  in exercising  its  discretion,  takes into
account the recommendations of the Remuneration Committee.

          Further details of the Trust are set out below.

(ii)  Eligibility

          Employees and executive Directors of the Company,  who are required to
devote  substantially  all their  working time to the business of any company in
CCG, are eligible to participate in the Equity Participation Plan.

(iii) Participation in the Equity Participation Plan

          The Trustee invites selected eligible employees and Directors to pay a
certain amount of money (not  exceeding  Ll50,000) to enable them to participate
in the Equity Participation Plan. The payment made by participants to the Trust,
which must be made within 120 days of the award being made, is non-refundable.

          Normally,  awards to participants  will only be made within the period
of 42 days following the announcement of the Company's results for any period or
at any time if the Trustee  determines that exceptional  circumstances  (such as
the recruitment of a senior employee or executive director) so warrant.

          The maximum number of Ordinary  Shares which  participants  may become
entitled  to acquire  will be eight times the number that could have been bought
with the original  investment  at market value on the day  preceding the date of
award.  The exact  number of  Ordinary  Shares  which  may be  acquired  will be
determined by the performance formula described below.

          In March  1999,  a further  award was made  under  the  scheme  over a
maximum of 80,029 shares.  At December 31, 1999, there were 52 participants with
awards over a maximum of 11,114,749 shares.

(iv)  Performance Formula and number of shares vesting

          With the exception of Directors of the Company, the number of Ordinary
Shares that a participant may acquire will be determined by measuring the growth
in  earnings  per  share   ("EPS")  of  CCG  over  a  three  year  period  ("EPS
Performance").  EPS will be the fully  diluted  EPS  calculated  on the basis of
"headline  earnings"  using the Institute of Investment  Management and Research
guidelines  (although the Trustee will have the ability to adjust this figure if
the Trustee considers it appropriate to exclude  exceptional  items, such as the
costs of the Demerger and other significant non-recurring items).

          If EPS Performance is less than the annual percentage growth in the UK
Retail Price Index plus 2 percent (the "Hurdle Rate") then the participant  will
be entitled to acquire 10 Ordinary Shares.

          If EPS Performance is equal to or greater than the Hurdle Rate then:

          (a)  where EPS Performance is 5 percent per annum, 12.5 percent of the
               award  vests,  which is the same number of Ordinary  Shares which
               the participant could have bought with his original investment;

          (b)  where EPS  Performance is 15 percent per annum, 40 percent of the
               award vests, so the  participant  will be entitled to acquire 3.2
               times the number of  Ordinary  Shares  which he could have bought
               with his original investment; and

          (c)  where EPS  Performance is 25 percent per annum,  all of the award
               vests, so the participant will be entitled to acquire eight times
               the number of Ordinary Shares which he could have bought with his
               original investment.

          The percentage of the award that vests for EPS  Performance  between 5
percent  per annum and 15 percent per annum and for EPS  Performance  between 15
percent per annum and 25 percent per annum increases on a straight line basis.

          For  participants  who are Directors of the Company,  only one half of
their awards will vest based on EPS Performance.  The other half of their awards
will vest based on the total  shareholder  return ("TSR") of CCG over a 42-month
period  ("TSR  Performance")  relative  to the TSR of a group of major  publicly
traded  advertising  groups  (the  "Comparator  Group")  over the  same  period.
Initially the Comparator  Group  consisted of the following 10 groups:  CCG, GGT
Group, Grey Advertising,  Havas Advertising,  Omnicom Group, Publicis, Saatchi &
Saatchi,  The Interpublic Group of Companies,  True North Communications and WPP
Group.

          The percentage of the award that vests will be determined by reference
to the ranking attained by CCG as follows:

                                                    Percentage of award
                                                         that vests
Ranking                                                     (%)

1st or 2nd..................................................100
3rd.........................................................75
4th.........................................................50
5th.........................................................25
6th.........................................................18.75
7th.........................................................12.5
8th.........................................................9.375
9th.........................................................3.125
10th........................................................nil

(v)   Acquisition of Ordinary Shares

          Once the  performance  formula  has been  applied  and the  number  of
Ordinary  Shares  determined,  a participant  may acquire one half of the vested
number of Ordinary  Shares.  The remaining  half may only be acquired  after the
fourth  anniversary  of the date the award was made.  Ordinary  Shares cannot be
acquired after the seventh anniversary of the date of the award.

(vi)  Takeover

          In the event of a takeover of the Company prior to the announcement of
the CCG  Group's  results  for its  financial  year  ending in 2000  (the  "2000
results"),  a  participant  who received an award prior to the  announcement  of
CCG's  results for its  financial  year ending in 1998 (the "1998  results")  is
entitled to acquire the number of Ordinary Shares  determined in accordance with
the following provisions:

          (a)  If a takeover had occurred after the date of the award but before
               the announcement of CCG's results for its financial year ended in
               1998 (the "1998  results"),  the participant  would have acquired
               one third of the maximum possible number of Ordinary Shares;

          (b)  If a takeover had  occurred  after the  announcement  of the 1998
               results  but before the  announcement  of CCG's  results  for its
               financial   year  ended  in  1999  (the  "1999   results"),   the
               participant would have acquired:

               (i)  one third of the maximum possible number of Ordinary Shares;
                    plus

               (ii) one third of the number of Ordinary  Shares which would have
                    vested if the EPS  Performance  (and,  if  appropriate,  TSR
                    Performance) for CCG's 1998 financial year had been achieved
                    over the full  three  years of the  performance  measurement
                    period; and

          (c)  if a takeover  occurs after the  announcement of the 1999 results
               but before the announcement of the 2000 results,  the participant
               may acquire:

               (i)  one third of the maximum possible number of Ordinary Shares;
                    plus

               (ii) two  thirds of the  number of CCG  Shares  which  would have
                    vested if the EPS  Performance  (and,  if  appropriate,  TSR
                    Performance)  over CCG's two  financial  years 1998 and 1999
                    had  been   achieved  over  the  full  three  years  of  the
                    performance measurement period.

          Equivalent  provisions  apply for  participants  who  receive an award
          after the announcement of the 1998 results.

(vii) Cessation of employment

          If a  participant  ceases to be employed by CCG or a subsidiary of CCG
before the award  vests  because  of  injury,  disability,  ill  health,  death,
redundancy,  retirement,  because the company which employs him or with which he
holds  office  leaves  CCG or  because  the  business  to which  his  office  or
employment  relates is transferred  outside CCG, or other  circumstances  at the
Trustee's  discretion,  the participant will be entitled to acquire a proportion
of the  maximum  number of Ordinary  Shares  which  would  ultimately  have been
receivable.  For the purpose of  determining  the  proportion  of the award that
vests,  the cessation of employment will be treated as occurring on the next day
on which CCG  announces  its results for its  financial  year.  The  Performance
Formula will then be applied as if the EPS Performance (and, if appropriate, the
TSR  Performance) had been achieved over the full three years of the performance
measurement period.

          A participant  who was granted an award prior to the  announcement  of
the 1998 results would have been able immediately  following such  determination
to acquire:

          (a)  one third of the  number of  Ordinary  Shares so  determined,  if
               cessation had occurred on or before the  announcement of the 1998
               results;

          (b)  two thirds of the number of  Ordinary  Shares so  determined,  if
               cessation had occurred after the announcement of the 1998 results
               but on or before the announcement of the 1999 results; and

will be  entitled  to  receive  all of the  Ordinary  Shares so  determined,  if
cessation occurs after the announcement of the 1999 results.

          Equivalent  provisions  apply for  participants  who  receive an award
after the announcement of the 1998 results.

          However, if a participant ceases employment for other reasons, he will
only be  entitled to receive 10  Ordinary  Shares,  with the result that he will
effectively lose his initial investment.

(viii) Variation of share capital

          The   rights  of   participants   following   any   rights   issue  or
capitalization  issue or other  variation  of share  capital will be adjusted in
such manner as the Trustee may determine  subject to written  confirmation  from
CCG's auditors that such adjustment is in their opinion fair and reasonable.

(ix)  Limits on the Equity Participation Plan

          The number of shares which may be issued or become  issuable  pursuant
to the Equity  Participation  Plan,  when  aggregated  with the number of shares
which may be issued or become issuable under the Performance Share Option Scheme
may not exceed 9.5 percent of the issued share  capital of the Company from time
to time.

(x)   Amendments to the Scheme

          The  Board  has the  power  to  administer,  interpret  and,  with the
concurrence  of the Trustee,  amend the  provisions of the Equity  Participation
Plan. However, no amendment may be made to provisions relating to:

          (a)  the eligibility conditions;

          (b)  the limit rules;

          (c)  the calculation of a participant's  entitlement  under the Equity
               Participation Plan;

          (d)  the terms of the awards or the Ordinary Shares received  pursuant
               to them; or

          (e)  the variation of share capital rule

to the advantage of participants  without the prior approval of the shareholders
in a general meeting (except for minor amendments to benefit the  administration
of the Equity  Participation Plan, to take account of a change in legislation or
to obtain or maintain  favorable tax,  exchange control or regulatory  treatment
for participants or for CCG or for subsidiaries of CCG).

          No amendment to the limits  mentioned  above may be made without prior
approval of the shareholders. No amendment may be made which adversely affects a
participant's  rights  under an award made  prior to the date of such  amendment
without the participant's consent.

(xi)  Pension

          The  benefits  received  under the Equity  Participation  Plan are not
pensionable.

(xii) Termination

          The  Trustee  will  invite  no  further  participation  in the  Equity
Participation Plan after December 15, 2000 and the Board may terminate it at any
time, but the rights of existing  participants will not be affected thereby.

(b)  The Cordiant  Communications  Group  Performance  Share Option  Scheme (the
     "Performance Option Scheme")

          The  principal  terms of the  Performance  Option  Scheme  are set out
below.

(i)   Administration

          The Performance Option Scheme will normally be operated in conjunction
with the Trust.  The Trustee  will,  in  exercising  its  discretion,  take into
account the recommendations of the Remuneration Committee.

          However, the rules provide that the Performance Option Scheme may also
be  operated by CCG,  in which case  references  to the Trust and the Trustee in
this  summary  should be read as being  references  to CCG and the  Remuneration
Committee as appropriate.

          Further details of the Trust are set out below.

(ii)  Eligibility

          Employees and  executive  Directors of the Company who are required to
devote  substantially  all their  working time to the business of any company in
CCG will be eligible to participate in the Performance  Option Scheme.  However,
participants in the Equity Participation Plan will not be eligible to be granted
options under the Performance Option Scheme.

          Participants  in the  Performance  Option  Scheme are  selected at the
discretion of the Trustee.

          Two new awards  were made under the scheme  during the year  whereby a
total of 56 employees were invited to  participate  in the scheme.  Options over
2,126,902 shares were issued subject to salary or bonus sacrifices  amounting to
L319,971. At December 31, 1999, there were 118 participants holding options over
9,126,998 shares.

(iii) Exercise price

          The exercise price for an option will be determined by the Trustee but
may not be less than the higher of the nominal  value of an  Ordinary  Share (if
the option is an option to  subscribe  for an  Ordinary  Shares)  and its market
value.  Market  value  will be taken to be the  middle  market  quotation  of an
Ordinary  Share on the  dealing  day of the London  Stock  Exchange  immediately
preceding  the date of grant as  derived  from the  Daily  Official  List of the
London Stock Exchange.

(iv)  Grant of options

          Normally, options may only be granted by the Trustee within the period
of 42 days following the announcement of CCG's results for any period and at any
time if the  Trustee  determines  that  exceptional  circumstances  (such as the
recruitment of a senior employee or executive Director) so warrant.

          Options will lapse unless the option  holder agrees within 120 days of
the grant of the option to sacrifice an aggregate  amount of salary and/or bonus
(not  exceeding  L50,000) over a period not  exceeding  three years equal to one
eleventh of the aggregate  exercise  price of the Ordinary  Shares under option.
The amount so sacrificed is not offset against the exercise price payable.

(v)   Performance Formula and number of shares vesting

          The number of  Ordinary  Shares to be  acquired  on  exercise  will be
determined by measuring EPS Performance,  as for the Equity  Participation Plan.
The EPS Performance  and the Hurdle Rate for the Performance  Option Scheme will
be the same as for the Equity Participation Plan.

          If EPS Performance is less than the Hurdle Rate then the option holder
will not be entitled to acquire any Ordinary Shares and the option will lapse.

          If EPS Performance is equal to or greater than the Hurdle Rate then:

          (a)  where EPS  Performance is 5 percent per annum,  the option holder
               may exercise his option in respect of 30 percent of the number of
               Ordinary Shares under option;

          (b)  where EPS Performance is 15 percent per annum,  the option holder
               may exercise his option in respect of 65 percent of the number of
               Ordinary Shares under option; and

          (c)  where EPS Performance is 25 percent per annum,  the option holder
               may exercise his option in full.

          The  percentage  of Ordinary  Shares over which the option  holder may
exercise  his  option  for EPS  Performance  between 5 percent  per annum and 15
percent  per annum and for EPS  Performance  between 15 percent per annum and 25
percent per annum increases on a straight line basis.

(vi)  Exercise of options

          Once the  Performance  Formula has been  applied an option  holder may
exercise his option over one half of the number of Ordinary Shares determined by
the  Performance  Formula.  The  remaining  half may only be acquired  after the
fourth anniversary of the date of grant.

          Options may not be  exercised in any event more than seven years after
the date of grant.

(vii) Takeover

          In the event of a takeover of the Company prior to the announcement of
CCG's 2000  results,  an option  holder who was  granted an option  prior to the
announcement  of CCG's  1998  results  is  entitled  to  exercise  his option in
accordance with the following provisions:

          (a)  if a takeover had occurred after the date of the award but before
               the  announcement  of the 1998  results,  the option holder would
               have been able to exercise  his option in respect of one third of
               the number of Ordinary shares under option;

          (b)  if a takeover had  occurred  after the  announcement  of the 1998
               results  but before the  announcement  of the 1999  results,  the
               option  holder  would  have been able to  exercise  his option in
               respect of:

               (i)  one third of the number of  Ordinary  Shares  under  option;
                    plus

               (ii) one third of the  number of  Ordinary  Shares in  respect of
                    which  he  could  have  exercised  his  option  if  the  EPS
                    Performance for the CCG Group's 1998 financial year had been
                    achieved  over  the  full  three  years  of the  performance
                    measurement period; and

          (c)  if a takeover  occurs after the  announcement of the 1999 results
               but  before  the  announcement  of the 2000  results,  the option
               holder may exercise his option in respect of:

               (i)  one third of the number of  Ordinary  Shares  under  option;
                    plus

               (ii) two  thirds of the number of  Ordinary  Shares in respect of
                    which  he  could  have  exercised  his  option  if  the  EPS
                    Performance  over the CCG Group's two  financial  years 1998
                    and 1999 had been  achieved over the full three years of the
                    performance measurement period.

          Equivalent  provisions  apply for option holders granted options after
the announcement of the 1998 results.

(viii) Cessation of employment

          If an  option  holder  ceases  to be  employed  by  the  Company  or a
subsidiary  of CCG  before  his  option  may be  exercised  because  of  injury,
disability, ill health, death, redundancy, retirement, because the company which
employs him or with which he holds office  leaves CCG or because the business to
which his office or  employment  relates is  transferred  outside  CCG, or other
circumstances at the Trustee's discretion, the option holder will be entitled to
exercise his option in respect of a proportion of the number of Ordinary  Shares
under option.  For the purpose of determining  the number of Ordinary  Shares in
respect of which the option  holder may  exercise his option,  the  cessation of
employment  will be treated as  occurring on the next day on which the CCG Group
announces its results for its financial year. The Performance  Formula will then
be applied as if the EPS Performance had been achieved over the full three years
of the performance measurement period.

          An option  holder who was granted an option prior to the  announcement
of  the  1998  results  would  have  been  able   immediately   following   such
determination to exercise his option in respect of:

          (a)  one third of the  number of  Ordinary  Shares so  determined,  if
               cessation had occurred on or before the  announcement of the 1998
               results;

          (b)  two thirds of the number of  Ordinary  Shares so  determined,  if
               cessation had occurred after the announcement of the 1998 results
               but on or before the announcement of the 1999 results; and

will be able to exercise all of the Ordinary Shares so determined,  if cessation
occurs after the announcement of the 1999 results.

          Equivalent  provisions  apply for option holders granted options after
the announcement of the 1998 results.

          However,  if a participant  ceases  employment for other reasons,  his
option will lapse.

(ix)  Variation of share capital

          On a variation of the Company's share capital by way of capitalization
or rights issue,  subdivision,  consolidation or a reduction, the exercise price
and the number of shares  comprised in an option can be varied at the discretion
of the  Trustee  subject  to  certification  from CCG's  auditors  that in their
opinion the variation is fair and reasonable.

(x)   Limits on the Performance Option Scheme

          The number of shares which may be issued or become  issuable  pursuant
to the  Performance  Option Scheme,  when  aggregated  with the number of shares
which may be issued or become  issuable  pursuant  to the  Equity  Participation
Plan,  may not exceed 9.5 percent of the issued  Ordinary  Share  capital of the
Company from time to time.

(xi)  Amendments to the Performance Option Scheme

          The Board of Directors  has the power to  administer,  interpret  and,
with the  approval of the  Trustee,  amend the  Performance  Option  Scheme.  No
amendment may be made to provisions relating to:

          (a)  the eligibility conditions;

          (b)  the limit rules;

          (c)  the variation of share capital rule;

          (d)  the  rules  governing  the terms of the  options  or shares to be
               received by option holders; or

          (e)  the  rules  governing  the  calculation  of the  option  holder's
               entitlements under the Performance Option Scheme

to the advantage of option holders without the prior approval of shareholders in
a general meeting (except for minor amendments to benefit the  administration of
the  Performance  Option Scheme or to take account of a change in legislation or
to obtain or maintain  favorable tax,  exchange control or regulatory  treatment
for option holders, the Company or subsidiaries of CCG).

          No amendment may be made which  adversely  affects an option  holder's
rights under options granted to him prior to the date of such amendment  without
his consent.

(xii) Pension

          The benefits  received  under the  Performance  Option  Scheme are not
pensionable.

(xiii) Termination

          The Trustee will grant no further options under the Performance Option
Scheme after  December 15, 2000 and the Board of Directors  may  terminate it at
any time,  but the  rights  of  existing  option  holders  will not be  affected
thereby.

(c)   The Cordiant Communications Group Employee Benefit Trust (the "Trust")

          The Trust was  established  prior to the Effective Date. The principal
terms of the Trust are as set out below.

         (i)   The Trust is a discretionary  employee benefit trust of which all
               employees of CCG will be potential beneficiaries.

         (ii)  The trustee of the Trust (the "Trustee") is a corporate  trustee.
               Executive  Directors of the Company will not be directors of, nor
               have a direct or indirect interest in, the Trustee.

         (iii) The  main   purpose  of  the  Trust  is  to  operate  the  Equity
               Participation  Plan and the  Performance  Option  Scheme.  Having
               considered   recommendations   received  from  the   Remuneration
               Committee,  the Trustee will make awards (which may or may not be
               in the form of options) under which participants will be entitled
               to acquire Ordinary Shares.  Alternatively  the Trustee may agree
               to deliver  Ordinary Shares following the exercise of awards made
               by CCG.

         (iv)  The Trustee may  purchase  Ordinary  Shares in the market for the
               purpose of awards  made under the Equity  Participation  Plan and
               the  Performance  Option Scheme.  Alternatively,  the Company may
               grant  to the  Trustee  one or  more  options  to  subscribe  for
               Ordinary  Shares.  The exercise price under such options will not
               be less than the middle  market  quotation of Ordinary  Shares as
               derived from the London Stock  Exchange  Daily  Official List for
               the dealing day preceding the date of grant.

         (v)   The Trustee is not permitted to purchase  Ordinary  Shares in the
               market without prior shareholder  approval if such purchase would
               result in the Trust holding  (excluding any Ordinary Shares which
               the Trustee subscribed for) more than 5 percent of the Company.

         (vi)  The Trustee will fund the  acquisition of Ordinary Shares through
               one or more of the following:

               (a)  by non-recourse loan or loans from CCG companies:

               (b)  by contributions from CCG companies; and

               (c)  by   payments   from   the   participants   in  the   Equity
                    Participation Plan and the Performance Option Scheme.

         (vii) The Trustee is required  to waive its right to any  dividends  on
               Ordinary Shares while they are held within the Trust.

(d)  The Zenith Executive Incentive Plan (the "Zenith Incentive Plan")

          The Zenith  Incentive Plan was  established to enable  participants to
acquire  Ordinary  Shares and Saatchi  Ordinary  Shares  through the exercise of
options and/or in certain  circumstances  to be paid a cash bonus. The principal
terms of the Zenith Incentive Plan are set forth below.

          The Zenith  Incentive Plan is operated in conjunction  with the Zenith
Employee  Benefit  Trust  (the  "Zenith  Trust"),  the  Trustee  of  which  (the
"Trustee")   will,  in  exercising  its   discretion,   take  into  account  the
recommendations of the non-executive Directors of Zenith.

          The Trustee can invite  selected  eligible  employees and directors to
invest a certain  amount of money  (not  exceeding  L70,000)  to enable  them to
participate  in the  Zenith  Incentive  Plan.  Awards  will  lapse  unless  such
investment is, at the discretion of the Trustee, either made by a payment to the
Trustee  within 120 days of the award  being made or is made by the  participant
agreeing  to  sacrifice  that  amount of salary  and/or  bonus over a period not
exceeding  three  years.  The  investment  is  non-refundable  and is not offset
against the exercise price payable.

          The non-refundable  investment to be provided by participants who wish
to  participate  in the  Zenith  Incentive  Plan  shall  be one  sixteenth  of a
participant's  maximum  entitlement  under the Zenith  Incentive  Plan. An award
comprises:

          (a)  an  option  over the  same  proportion  of the  total  number  of
               Ordinary  Shares  available for the Zenith  Incentive Plan as the
               participant's maximum entitlement bears to L3.6 million being the
               aggregate  maximum  entitlement  for all  participants  available
               under the Zenith Incentive Plan (the "CCG Option");

          (b)  an option over the same number of Saatchi  Ordinary Shares as the
               number of Ordinary Shares under the participant's CCG Option (the
               "Saatchi Option"); and

          (c)  a  contingent  cash  award  of  up  to  a  participant's  maximum
               entitlement.

          The  exercise  price for the CCG Option and the Saatchi  Option is the
middle market  quotation of the underlying  shares on the day preceding the date
the options are granted.

          The exact number of shares which may be acquired and/or the cash award
payable will be determined by the performance formula described below.

          A participant's  maximum  entitlement will be reduced  proportionately
if, one month  after the end of the third year of the  performance  period,  the
FTSE 100 Index is lower  than on the date the award  was made.  A  participant's
actual  entitlement  will be  determined  by  measuring  the growth in operating
profit (as defined in the rules of the Zenith  Incentive Plan) over a three year
period,  with the base year  being the year  ending  December  31,  1997 for the
initial award ("Operating Profit Performance") as follows:

          (a)  If Operating Profit Performance is less than 5 percent per annum,
               the award lapses;

          (b)  If  Operating  Profit  Performance  is  5  percent  per  annum  a
               participant's  entitlement  will be determined as 12.5 percent of
               his maximum entitlement;

          (c)  if  Operating  Profit  Performance  is 15  percent  per  annum  a
               participant's entitlement will be determined as 40 percent of his
               maximum entitlement; and

          (d)  if Operating Profit Performance is equal to or exceeds 25 percent
               per annum a participant's  entitlement  will be determined as 100
               percent of the maximum entitlement.

          A participant's entitlement in respect of Operating Profit Performance
between 5 percent  per annum and 15 percent per annum and between 15 percent per
annum and 25 percent per annum increases on a straight line basis.

          Awards  will be  satisfied  so far as  possible by the CCG Options and
Saatchi Options becoming exercisable to the same extent. The balance, if any, of
a  participant's  entitlement  will be  satisfied  by the payment of cash by the
Zenith Trust or any company in the Zenith group.

          Once the Performance Formula have been applied,  the extent of vesting
of the CCG Option and the Saatchi  Option  determined  and the cash sum, if any,
quantified,  a  participant  will  be  entitled  to  receive  one  half  of  his
entitlement.   The  remaining  half  can  only  be  acquired  after  the  fourth
anniversary  of the date the award was made. The award will lapse on the seventh
anniversary of the date of grant.

          The Trustee  will be  required to waive its rights to any  dividend on
Ordinary Shares or Saatchi Ordinary Shares while they are held within the Trust.

          During the year, two new invitations  were made to participants in the
scheme resulting in options over a maximum of 61,646 Ordinary Shares.

          The  following  chart  shows as of June 1,  2000 the  total  number of
Ordinary  Shares  subject to  outstanding  options,  the  purchase  price of the
Ordinary Shares pursuant to the options and the expiration date of the options:

<TABLE>
<CAPTION>
                                                                         Exercisable
                                                   Grant     --------------------------------        Option       Number
                    Scheme                         Date      Currently      From          To         Price       of Shares
--------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>       <C>          <C>           <C>           <C>

Executive No. 2 Scheme                            18-Jun-91     Yes       18-Jun-94    18-Jun-01     134.828       142,973
Executive No. 2 Scheme                            06-Sep-91     Yes       06-Sep-94    06-Sep-01     134.828        19,209
Executive No. 2 Scheme                            10-Apr-92     Yes       10-Apr-97    10-Apr-02     107.498*      112,204
Demerger No. 2 Scheme                             18-Jun-91     Yes       18-Jun-94    18-Jun-01     134.828       343,248
Demerger No. 2 Scheme                             10-Apr-92     Yes       10-Apr-95    10-Apr-02     107.498        78,895
Demerger No. 2 Scheme                             10-Apr-92     Yes       10-Apr-97    10-Apr-02     107.498*        6,174
Performance Option Scheme                         03-May-95     Yes       03-May-98    03-May-05      73.113       257,775
Performance Option Scheme                         11-Aug-95     Yes       11-Aug-98    11-Aug-05      94.892       257,774
Performance Option Scheme                         19-Apr-96     Yes       19-Apr-99    19-Apr-06     130.000       365,000
Performance Option Scheme                         19-Apr-96      No       19-Apr-01    19-Apr-03     130.000*      515,000
Performance Option Scheme                         23-Apr-97     Yes       23-Apr-00    23-Apr-07     131.500       697,500
Performance Option Scheme                         23-Apr-97      No       23-Apr-02    23-Apr-07     131.500*      667,500
Demerger Performance Scheme                       03-May-95     Yes       03-May-98    16-Dec-04      73.113        41,462
Demerger Performance Scheme                       03-May-95      No       03-May-00    03-May-02      73.113*      109,926
Demerger Performance Scheme                       11-Aug-95     Yes       11-Aug-98    16-Dec-04      94.892        41,463
Demerger Performance Scheme                       19-Apr-96     Yes       19-Apr-99    16-Dec-04     130.000        98,750
Demerger Performance Scheme                       19-Apr-96      No       19-Apr-01    19-Apr-03     130.000*      248,750
Demerger Performance Scheme                       23-Apr-97     Yes       23-Apr-00    16-Dec-04     131.500       188,750
Demerger Performance Scheme                       23-Apr-97      No       23-Apr-02    16-Dec-04     131.500*      186,250
1995 SAYE Scheme                                  30-Jun-95      No       01-Jul-00    31-Dec-00      64.5p        840,012
Performance Share Option Scheme (PSOS)            18-Dec-97      No       18-Dec-00    18-Dec-04     105.000     5,772,791
Performance Share Option Scheme (PSOS)            14-May-98      No       14-May-01    14-May-05     123.500     1,051,963
Performance Share Option Scheme (PSOS)            11-Mar-99      No       11-Mar-02    11-Mar-06     164.500     1,682,641
Performance Share Option Scheme (PSOS)            11-Aug-99      No       11-Aug-02    11-Aug-06     176.500       155,805
Performance Share Option Scheme (PSOS)            09-Mar-00      No       09-Mar-03    09-Mar-07     358.500     1,330,497
Equity Participation Plan                         18-Dec-97      No       18-Dec-00    18-Dec-04     105.000    10,757,802
Equity Participation Plan                         11-Mar-99      No       11-Mar-02    11-Mar-06     105.000        80,029
Zenith Executive Incentive Plan                   16-Dec-97      No       31-Dec-00    31-Dec-04     109.000     1,047,984
Zenith Executive Incentive Plan                   13-Apr-99      No       13-Apr-01    13-Apr-05     160.500        61,646
Healthworld 1997 Stock Option Plan                21-Nov-97     Yes       02-Mar-00    21-Nov-04     129.000       373,131
Healthworld 1997 Stock Option Plan                21-Nov-97     Yes       02-Mar-00    21-Nov-07     130.000       811,861
Healthworld 1997 Stock Option Plan                21-Nov-97     Yes       02-Mar-00    21-Nov-07     143.000       108,305
Healthworld 1997 Stock Option Plan                26-Feb-98     Yes       02-Mar-00    26-Feb-05     216.000       325,667
Healthworld 1997 Stock Option Plan                26-Feb-98     Yes       02-Mar-00    26-Feb-08     217.000        73,626
Healthworld 1997 Stock Option Plan                26-Feb-98     Yes       02-Mar-00    26-Feb-03     238.000        31,503
Healthworld 1997 Stock Option Plan                26-Feb-98     Yes       02-Mar-00    26-Feb-03     239.000        11,809
Healthworld 1997 Stock Option Plan                23-Jul-98     Yes       02-Mar-00    23-Jul-08     218.000       162,457
Healthworld 1997 Stock Option Plan                24-Jul-98     Yes       02-Mar-00    24-Jul-05     216.000        75,802
Healthworld 1997 Stock Option Plan                23-Sep-98     Yes       02-Mar-00    23-Sep-05     174.000       108,305
Healthworld 1997 Stock Option Plan                15-Dec-98     Yes       02-Mar-00    15-Dec-08     155.000        78,224
Healthworld 1997 Stock Option Plan                15-Dec-98     Yes       02-Mar-00    15-Dec-08     156.000       300,114
Healthworld 1997 Stock Option Plan                19-Jan-99     Yes       02-Mar-00    19-Jan-06     198.000        10,830
Healthworld 1997 Stock Option Plan                26-Feb-99     Yes       02-Mar-00    26-Feb-06     209.000       182,644
Healthworld 1997 Stock Option Plan                19-Apr-99     Yes       02-Mar-00    19-Apr-06     173.000         8,664
Healthworld 1997 Stock Option Plan                27-May-99     Yes       02-Mar-00    27-May-09     189.000        10,829
Healthworld 1997 Stock Option Plan                26-Jul-99     Yes       02-Mar-00    26-Jul-09     167.000       216,609
Healthworld 1997 Stock Option Plan                03-Aug-99     Yes       02-Mar-00    03-Aug-09     180.000       119,132
Healthworld 1997 Stock Option Plan                15-Oct-99     Yes       02-Mar-00    15-Oct-06     213.000        17,328
Healthworld 1997 Stock Option Plan                08-Nov-99      No       08-Apr-01    08-Nov-09     252.000       866,440
                                                                                                                ----------
TOTAL OPTIONS                                                                                                   31,053,053
                                                                                                                ----------
</TABLE>

     Options  marked * are super  options  as defined on page 49. In the
     case of the various  demerger  schemes,  the date of grant shown is that of
     the original option replaced under the demerger scheme.

          Changes  in the  number of  Ordinary  Shares  issuable  under  options
outstanding  under  the  Share  Schemes,   the  Demerger  Schemes,   the  Equity
Participation  Plan,  the  Performance  Option  Scheme,  the  Zenith  Scheme and
Sharesave 1995 during the financial year are as follows:

                                 Executive Schemes                 Sharesave
                                  Ordinary Shares               Ordinary Shares

Balance at beginning of year        26,136,926                      1,291,543
Options exercised                   (1,641,720)                       (24,695)
Options granted                      2,268,577                            -
Option lapsed                         (949,564)                      (186,592)
                                  ----------------               --------------
At year end                         25,814,219                      1,080,256
                                  ================               ==============


          As of June 1, 2000, the number of Ordinary  Shares subject to options,
excluding  phantom options,  granted to the Directors and executive  officers of
the Company was 2,375,350.

          The table below  describes the various  share  options  awarded to the
Directors of the Company as of June 1, 2000.

<TABLE>
                       Executive Directors' Share Options

<CAPTION>
              Original Date       Exercise        Number of            Exercise
                 of Grant           Price           shares              Period
<S>             <C>                <C>             <C>             <C>
M Bungey        03/05/1995           73             67,498         May 98-May 05
                11/08/1995           95             67,497         Aug 98-Aug 05
                18/06/1991          135            137,211         Jun 94-Jun 01
                10/04/1992          107             74,814         Apr 97-Apr 02
                19/04/1996          130            150,000         Apr 01-Apr 03
                23/04/1997          131             75,000         Apr 02-Apr 04
                23/04/1997          131             75,000         Apr 00-Apr 07

A D'Angelo      03/05/1995           73             33,427         May 98-May 05
                11/08/1995           95             33,427         Aug 98-Aug 05
                19/04/1996          130             37,500         Apr 99-Apr 06
                19/04/1996          130             37,500         Apr 01-Apr 03
                23/04/1997          131             37,500         Apr 02-Apr 04
                23/04/1997          131             37,500         Apr 00-Apr 07

J de Yturbe     03/05/1995           73             40,498         May 98-May 05
                11/08/1995           95             40,498         Aug 98-Aug 05
                19/04/1996          130             45,000         Apr 99-Apr 06
                19/04/1996          130             45,000         Apr 01-Apr 03
                23/04/1997          131             45,000         Apr 02-Apr 04
                23/04/1997          131             45,000         Apr 00-Apr 07

P Schoening     03/05/1995           73             21,213         May 98-May 05
                11/08/1995           95             21,213         Aug 98-Aug 05
                19/04/1996          130             17,500         Apr 99-Apr 06
                19/04/1996          130             17,500         Apr 01-Apr 03
                23/04/1997          131             27,500         Apr 02-Apr 04
                23/04/1997          131             27,500         Apr 00-Apr 07

C Scott         03/05/1995           73            109,926         May 00-May 02
                10/04/1992          107             68,605         Apr 95-Apr 02
                10/04/1992          107             10,290         Apr 95-Apr 02
                19/04/1996          130            150,000         Apr 01-Apr 03
                23/04/1997          131             75,000         Apr 00-Dec 04
                23/04/1997          131             75,000         Apr 02-Dec 04
                18/06/1991          135            222,502         Jun 94-Jun 01
                18/06/1991          135             20,582         Jun 94-Jun 01

I Smith         23/04/1997          131             17,500         Apr 02-Apr 04
                23/04/1997          131             17,500         Apr 00-Apr 07

W Whitehead     03/05/1995           73             21,213         May 98-May 05
                11/08/1995           95             21,213         Aug 98-Aug 05
                19/04/1996          130             45,000         Apr 99-Apr 06
                19/04/1996          130             45,000         Apr 01-Apr 03
                23/04/1997          131             45,000         Apr 02-Apr 04
                23/04/1997          131             45,000         Apr 00-Apr 07
</TABLE>

During 1999,  the Ordinary  Shares traded on the London Stock Exchange at a high
of 301.5p, a low of 107p and closed at 293p on December 31, 1999.

During the year,  Arthur  D'Angelo  exercised  options over 50,082 shares,  Alex
Hamill  exercised  options over 54,884  shares and William  Whitehead  exercised
options over 13,721 shares, all at an option price of 107p.

Other than as disclosed  above,  no options  were  granted to, or exercised  by,
serving  directors  during the year,  and no options  lapsed  during the year in
respect of such directors.


Item 13.  Interest of Management in Certain Contracts.

          None.


                                     PART II

Item 14.  Description of Securities to be Registered.

          Not Applicable.


                                    PART III

Item 15.  Defaults Upon Senior Securities.

          None.

Item 16.  Changes in Securities, Changes in Security
          for Registered Securities and Use of Proceeds.

          None.


                                     PART IV

Item 17.  Financial Statements.

          The Company has elected to provide  financial  statements for 1999 and
the related information pursuant to Item 18.

Item 18.  Financial Statements.

          The  Company's  financial  statements  and the  report  thereon by its
Independent Auditor listed below and set forth on  pages F-1 to F-50 herein  are
hereby incorporated by reference into this Item 18.

     (a)  Independent Auditor's Report dated March 7, 2000.

     (b)  Consolidated  balance  sheets of the  Company and  subsidiaries  as at
          December 31, 1999 and 1998.

     (c)  Consolidated  statements of operations,  shareholders'  deficiency and
          other share capital,  total recognized gains and losses and cash flows
          of the Company and subsidiaries for the years ended December 31, 1999,
          1998 and 1997.

     (d)  Notes to consolidated financial statements.


Item 19.  Financial Statements and Exhibits.

     (a)  Financial Statements

          (1)  Consolidated balance sheets of the Company and subsidiaries as at
               December 31, 1999 and 1998. (Page F-5)

          (2)  Consolidated statements of operations,  shareholders'  deficiency
               and other share capital,  total  recognized  gains and losses and
               cash flows of the  Company and  subsidiaries  for the years ended
               December 31, 1999, 1998 and 1997.  (Page F-2, F-3, F-4, F-6, F-7,
               F-8)

          (3)  Notes to consolidated financial statements. (Pages F-9 to F-51)

     (b)  Exhibits

          1.1  Consent of Independent Auditor.

          2.1  Loan Agreement for Facilities of up to  $250,000,000  to Cordiant
               Communications Group plc and others,  arranged by The Bank of New
               York and HSBC  Investment  Bank plc,  dated  November 8, 1999, as
               amended February 15, 2000.

          2.2  Agreement and Plan of Merger dated as of November 9, 1999,  among
               Cordiant  Communications Group plc, Healthworld Acquisition Corp.
               and  Healthworld  Corporation.   (Incorporated  by  reference  to
               Exhibit 2(a) to the Company's  Registration Statement on Form F-4
               (File No. 333-96241).)

          2.3  Amendment  No.  1 to  Agreement  and Plan of  Merger  dated as of
               February  3,  2000,  among  Cordiant  Communications  Group  plc,
               Healthworld   Acquisition  Corp.  and  Healthworld   Corporation.
               (Incorporated  by  reference  to  Exhibit  2(b) to the  Company's
               Registration Statement on Form F-4 (File No. 333.-96241).)

          3.1  Upon the request of the Securities and Exchange  Commission,  the
               Company  hereby agrees to provide the  Commission  with a list of
               subsidiaries of Cordiant Communications Group plc.

<PAGE>

                                   SIGNATURES


          Pursuant to the requirements of Section 12 of the Securities  Exchange
Act of 1934, the registrant  certifies that it meets all of the requirements for
filing on Form 20-F and has duly caused  this annual  report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                               CORDIANT COMMUNICATIONS GROUP PLC


                                                 By:/s/ David F. Ham
                                                    ---------------------------
                                                    NAME:  David F. Ham
                                                    TITLE: Group Controller


Date:  June 5, 2000




________________________

<PAGE>

           CORDIANT COMMUNICATIONS GROUP AND SUBSIDIARIES

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Shareholders of Cordiant Communications Group plc:

We have audited the accompanying balance sheets of Cordiant Communications Group
plc and  subsidiaries  as of  December  31,  1999  and  1998,  and  the  related
consolidated statements of operations,  shareholders' deficiency and other share
capital,  total recognized gains and losses and cash flows for each of the years
in the three year period ended December 31, 1999. These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United Kingdom which are substantially  equivalent to generally  accepted
auditing standards in the United States of America. Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company has
adopted Financial Reporting Standard 12 "Provisions,  Contingent Liabilities and
Contingent  Assets".  As a result  the  Company  has  restated  its  results  of
operations  for the years ended  December  31,  1997 and 1998 and  shareholders'
deficiency at December 31, 1998.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in  all  material   respects,   the  financial   position  of  Cordiant
Communications Group plc and subsidiaries at December 31, 1999 and 1998, and the
results  of their  operations  and their cash flows for each of the years in the
three year period ended December 31, 1999, in conformity with generally accepted
accounting  principles  in the United  Kingdom.

Generally accepted  accounting  principles in the United Kingdom vary in certain
significant respects from generally accepted accounting principles in the United
States of America.  Application of generally accepted  accounting  principles in
the United  States would have  affected  results of  operations  for each of the
years in the  three  year  period  ended  December  31,  1999 and  shareholders'
deficiency at December 31, 1999 and 1998 to the extent  summarized in note 37 to
the consolidated financial statements. As more fuly described in note 37(a), the
reported  amounts  of net  profit  for each of the years in the two year  period
ended  December  31, 1998 and  shareholders'  funds at  December  31, 1998 under
generally  accepted  accounting  principles in the United States of America have
been restated for certain  accounting  errors.  As also described in note 37(a),
the  Company  changed  its  accounting  policy  for  property  provisions  under
generally accepted accounting principles in the United States of America.





                                                    /s/ KPMG AUDIT PLC
                                                    ---------------------------
London, England                                     CHARTERED ACCOUNTANTS
March 7, 2000                                       REGISTERED AUDITOR
<PAGE>

                          CORDIANT COMMUNICATIONS GROUP
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                               Year ended
                                                           December 31, 1999
                                             Notes      (Sterling Pound) million
                                           ---------      ----------------------
Group and share of joint ventures                                2,070.9
Less: share of joint ventures                                     (393.0)
                                                          ----------------------
Group Turnover                                                   1,677.9
                                                          ======================
Group and share of joint ventures                                  351.3
Less: share of joint ventures                                      (15.5)
                                                          ----------------------
Commission and fee income                                          335.8
Operating and administration expenses          3                  (291.9)
Depreciation                                                       (10.4)
                                                          ----------------------
Operating profit                                                    33.5
Share of operating profits:
Joint venture                                                        2.9
Associated undertakings                                              2.0
                                                           ---------------------
Profit before interest and taxation                                 38.4
--------------------------------------------------------------------------------
Net interest payable and
  similar charges - other                      8                    (3.8)
Write-off of bank fees                                              (1.0)
Provisions - imputed interest                                       (1.3)
--------------------------------------------------------------------------------
Total net interest payable and similar charges                      (6.1)
                                                           ---------------------
Profit before taxation                                              32.3
Taxation                                       9                   (10.6)
                                                           ---------------------
Profit after taxation                                               21.7
Minority interests                                                  (3.1)
                                                           ---------------------
Net profit                                                          18.6
Dividend proposed on equity shares                                  (5.1)
                                                           ---------------------
Profit retained for year                                            13.5
                                                           =====================
Net earnings per Ordinary Share
- Basic                                       10                     8.2p
- Diluted                                     10                     7.8p

There is no difference  between the total reported results in the financial year
and that on an historical cost basis.

        See accompanying notes to the consolidated financial statements.

<PAGE>


                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                Year ended
                                                               December 31,
                                                              1998 Restated
                                              Notes          (pound) million
                                           -------------     ---------------
Group and share of joint ventures                                1,847.4
Less: share of joint ventures                                     (281.8)
                                                             ---------------
Group Turnover                                                   1,565.6
                                                             ===============
Group and share of joint ventures                                  316.0
Less: share of joint ventures                                      (14.2)
                                                              --------------
Commission and fee income                                          301.8
Operating and administration expenses         3                   (266.1)
Depreciation                                                        (9.7)
                                                              --------------
Operating profit                                                    26.0
Share of operating profits:
Joint venture                                                        1.4
Associated undertakings                                              1.2
                                                              --------------
Profit before interest and taxation                                 28.6
-------------------------------------------------------------------------------
Net interest payable and
  similar charges - other                     8                     (2.7)
Provisions - imputed interest                                       (1.2)
--------------------------------------------------------------------------------
Total net interest payable
  and similar charges                                                (3.9)
                                                              --------------
Profit before taxation                                               24.7
Taxation                                      9                      (9.2)
                                                              --------------
Profit after taxation                                                15.5
Minority interests                                                   (1.7)
                                                              --------------
Net profit                                                           13.8
Dividend proposed on equity shares                                   (3.1)
                                                              --------------
Profit retained for year                                             10.7
                                                              ==============
Net earnings per  Ordinary Share
-  Basic                                     10                       6.2p
-  Diluted                                   10                       6.2p

               There is no difference between the total reported
       results in the financial year and that on an historical cost basis.

        See accompanying notes to the consolidated financial statements.

<PAGE>

<TABLE>

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>
                                                                              Year ended December 31, 1997
                                                                 ----------------------------------------------------
                                                                     Ongoing          Disposed
                                                                   operations        operations           Total
                                                                    Restated          Restated          Restated
                                                      Notes         (pound)m          (pound)m          (pound)m
                                                    --------      ------------      ------------       -----------
<S>                                                <C>            <C>               <C>                <C>
Turnover                                                              1,576.1          2,630.1          4,206.2
                                                                  ============      ============       ===========
Commission and fee income                                               308.2            427.9            736.1
Operating and administration expenses                   3              (276.2)          (378.1)          (654.3)
Depreciation                                                             (9.6)           (16.6)           (26.2)
                                                                  ------------      ------------       -----------
Operating profit                                                         22.4             33.2             55.6
Profit on disposal of businesses                        2                16.5              4.3             20.8
Fundamental reorganization - demerger                   6              (970.6)           937.6            (33.0)
                                                                  ------------      ------------       -----------
Profit (loss) before interest and taxation                             (931.7)           975.1             43.4
------------------------------------------------------------------------------------------------------------------
Net interest payable and similar charges                8                 3.5            (12.3)            (8.8)
Provisions - imputed interest                                            (0.9)            (3.8)            (4.7)
------------------------------------------------------------------------------------------------------------------
Total net interest payable and similar charges                            2.4            (16.1)           (13.5)
                                                                  ------------      ------------        -----------
Profit (loss) before taxation                                          (929.1)           959.0             29.9
Taxation                                                9                (8.1)            (9.4)           (17.5)
                                                                  ------------      ------------        -----------
Profit (loss) after taxation                                           (937.2)           949.6             12.2
Minority interests                                                       (1.8)            (0.2)            (2.0)
                                                                  ------------      ------------        -----------
Net profit (loss)                                                      (939.0)           949.4             10.2
                                                                  ==============================
Dividend proposed on equity shares                                                                         (2.7)
Dividend on demerger                                                                                      120.7
                                                                                                        -----------
Profit retained for year                                                                                  128.2
                                                                                                        ===========
Net earnings per Cordiant Ordinary Share
   - Basic                                             10                                                   2.3p
   - Diluted                                           10                                                   2.3p
</TABLE>

To assist in the  understanding  of the Group the  Company  has  classified  the
results of CCG into ongoing and disposed operations.

There is no difference  between the total reported results in the financial year
and that on an historical cost basis.

See accompanying notes to the consolidated financial statements.



<PAGE>


                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                           December 31,
                                                                                               1998
                                                                                         1999        Restated
                                                                       Notes           (pound)m      (pound)m
                                                                  --------------------------------------------
<S>                                                                    <C>               <C>          <C>
ASSETS

Current assets:
   Cash and short-term deposits                                                          80.0          62.3
   Short-Term Investments                                               11                7.5           1.5
   Accounts and other receivables, prepayments and accrued income       12/13           336.0         246.3
   Billable production                                                  13               20.7          15.4
                                                                                 -------------------------------
     Total current assets                                                               444.2         325.5
                                                                                 -------------------------------
Long-Term Investments                                                   14               12.4           4.0
Long-term receivables:
   Accounts and other receivables, prepayments and accrued income       12               20.1          18.3
Property and equipment, net                                             15               33.7          22.7
Goodwill                                                                                 79.2          16.2
                                                                                 -------------------------------
     Total assets                                                                       589.6         386.7
                                                                                 ===============================

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
   Bank loans, overdrafts and other loans                               16                7.5          21.7
   Accounts payable, other liabilities and accrued expenses             17              417.3         268.0
   Taxation and social security                                         22               25.6          24.0
                                                                                 -------------------------------
     Total current liabilities                                                          450.4         313.7
                                                                                 -------------------------------

Long-term liabilities:
   Accounts payable, other liabilities and accrued expenses             17               24.6          13.5
   Provision for joint venture deficit                                  18               14.4          14.7
   Property, pension and other provisions                               18               40.6          43.6
   Long-term debt                                                       19               75.8          36.4
   Deferred taxation                                                    21                1.2           2.2
   Taxation                                                             22               22.8          23.9
   Minority interests                                                                     5.6           2.6
                                                                                 -------------------------------
     Total long-term liabilities                                                        185.0         136.9
                                                                                 -------------------------------

     Total liabilities                                                                  635.4         450.6
                                                                                 -------------------------------
Shareholders' deficiency:
   Share capital
     Allotted, called up and fully paid:
       228,782,839 Ordinary Shares of 50p each (1998:
           225,461,044 Ordinary Shares of 50p each)                     23              114.4         112.7
   Share premium                                                                          3.2           2.3
   Merger reserve                                                                         3.4           -
   Shares to be issued                                                                    1.4           1.3
   Special reserve                                                                       25.7          25.7
   Accumulated deficit                                                                 (193.9)       (205.9)
                                                                                 -------------------------------
     Shareholders' deficiency                                                           (45.8)        (63.9)
                                                                                 -------------------------------
Total liabilities and shareholders' deficiency                                          589.6         386.7
                                                                                 ===============================
See accompanying notes to the consolidated financial statements.
</TABLE>


<PAGE>




                          CORDIANT COMMUNICATIONS GROUP
                                AND SUBSIDIARIES


               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                             AND OTHER SHARE CAPITAL

<TABLE>
<CAPTION>
                                                        Years ended December 31, 1999, 1998 and 1997

                                          Premiums
                                          in Excess            Shares   Capital                            Accumulated    Total
                                  Share    of Par    *Merger   to be    Redemption  **Special   Goodwill    Earnings   Shareholders'
                                 Capital   Value     reserve   Issued   Reserve      Reserves   Reserves    (Deficit)   Deficiency

                                                                        (ALL VALUES GIVEN IN POUND STERLING)
                               -----------------------------------------------------------------------------------------------------
<S>                             <C>         <C>       <C>      <C>       <C>           <C>      <C>          <C>           <C>

At January 1, 1997 - as
   previously stated              230.1     137.3       -        -        86.5           -      (235.6)      (433.6)       (215.3)
Prior year adjustment -
   see note 1                       -         -         -        -          -            -         -           27.6          27.6
                               -----------------------------------------------------------------------------------------------------
At December 31, 1998 -
   as restated                    230.1     137.3       -        -        86.5           -      (235.6)      (406.0)       (187.7)
Issues of Ordinary Shares
   net of expenses                  0.1        -        -        -          -            -         -            -             0.1
Net goodwill arising in year        -          -        -        -          -            -        (1.7)         -            (1.7)
Elimination of goodwill
   reserves on demerger             -          -        -        -          -            -       124.1       (124.1)           -
Profit retained for the year        -          -        -        -          -            -         -          128.2         128.2
Translation adjustment              -          -        -        -          -            -         -          (15.8)        (15.8)
Reduction of capital              (119.2)  (137.3)      -        -       (86.5)        25.7        -          317.3            -
                               -----------------------------------------------------------------------------------------------------

At December 31, 1997               111.0       -        -        -         -           25.7     (113.2)      (100.4)        (76.9)
Issues of Ordinary Shares
   net of expenses                   1.7      2.3       -        -         -             -         -            -             4.0
Transfer of Goodwill reserve        -          -        -        -         -             -       113.2       (113.2)           -
Option payments for employee
   share scheme                     -          -        -       1.3        -             -         -            -             1.3
Goodwill arising on
   acquisitions made in
   previous periods                 -          -        -        -         -             -         -           (2.2)         (2.2)
Profit retained for
   the period                       -          -        -        -         -             -         -           10.7          10.7
Reversal of imputed employee
   share scheme cost                -          -        -        -         -             -         -            0.9           0.9
Translation adjustment              -          -        -        -         -             -         -           (1.7)         (1.7)
                               -----------------------------------------------------------------------------------------------------

At December 31, 1998               112.7      2.3        -       1.3       -           25.7        -         (205.9)        (63.9)
Issues of Ordinary Shares
   net of expenses                   1.7      0.9       3.4       -        -            -          -            -             6.0
Option payments for employee
   share scheme                       -        -         -       0.1       -            -          -            -             0.1
Goodwill arising on
   acquisitions made
   in previous periods                -        -         -        -        -            -          -           (3.1)         (3.1)
Profit retained for the period        -        -         -        -        -            -          -           13.5          13.5
Reversal of imputed employee
   share scheme cost                  -        -         -        -        -            -          -            0.9           0.9
Translation adjustment                -        -         -        -        -            -          -           (1.0)         (1.0)
                               -----------------------------------------------------------------------------------------------------

At December 31, 1999               114.4      3.2       3.4      1.4       -           25.7        -         (193.9)        (45.8)
                               =====================================================================================================
</TABLE>


As at December 31, 1999, the Accumulated  Deficit included  cumulative  exchange
translation   losses  of  (pound)29.7   million  (1998:   (pound)28.7   million;
1997:(pound)27.0 million). There is no tax effect of these movements.

*    The creation of the merger  reserve  arose  following the  acquisition,  by
     issue of the Company's  shares, of the Group's 100% interest in Interactive
     Edge LLLC in the United States. Where equity shares are issued at a premium
     in excess of par vlaue in consideration  for such an acquisition,  there is
     relief from the requirement to credit the premium to "Premiums in Excess of
     Par Value".

**   Relates  to the  reduction  of  capital  which  took  place  as part of the
     demerger  in 1997.  The  reserve  is  non-distributable  other than for the
     purposes of paying up shares in a bonus issue of fully paid shares.

See accompanying notes to the consolidated financial statements.


<PAGE>


        CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES


                                            Year ended December 31,
                                   -------------------------------------
                                                      1998         1997
                                         1999       Restated     Restated

                                    ALL VALUES GIVEN IN STERLING POUND (m)

                                      ------------ ------------ -----------
Profit for the financial year            18.6         13.8         10.2
Translation adjustment                   (1.0)        (1.7)       (15.8)
                                     ------------ ------------ -----------
Total recognized gains and
  losses relating to the
  financial year                         17.6         12.1         (5.6)
                                     ============ ============ ===========


See accompanying notes to the consolidated financial statements.
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                               Year ended December 31,
                                         ---------------------------------------
                                  Notes       1999           1998        1997
                                             ALL VALUES IN POUND STERLING (m)
                                         -------------- ------------- ----------
Ongoing operations                          50.0           19.8           5.6
Disposed operations                          -              -            56.1
                                         -------------- ------------- ----------

Net cash inflow from
  operating activities              27      50.0           19.8          61.7
                                         -------------- ------------- ----------

Net cash outflow arising
  from external Demerger costs               -             (8.2)        (13.8)

Returns on investments
  and servicing of finance

Interest received                            1.5            1.9           5.3
Interest paid                               (5.7)          (3.8)        (13.6)
Interest element of finance
  lease rental payments                     (0.1)          (0.1)         (0.1)
Bank fees                                   (1.7)          (0.4)         (1.9)
Dividends paid to minorities                (1.0)          (2.5)         (2.0)
                                         -------------- ------------- ----------

Net cash outflow from returns
  on investments and servicing
  of finance                                (7.0)          (4.9)        (12.3)
                                         -------------- ------------- ----------
Taxation
UK corporation tax paid                     (0.3)          (0.7)          -
Overseas tax  paid                          (6.4)          (7.6)        (15.1)
                                         -------------- ------------- ----------
Tax paid                                    (6.7)          (8.3)        (15.1)
                                         -------------- ------------- ----------

Capital expenditure and
  financial investment

Purchase of tangible fixed assets          (19.4)          (8.7)        (25.8)
Sale of tangible fixed assets                1.1            1.2           2.6
Purchase of other fixed asset
  investments                               (0.5)           -            (0.5)
Sale of other fixed asset
  investments                                0.2            0.1           1.2
                                         -------------- ------------- ----------

Net cash outflow from capital
  expenditure and financial
  investment                               (18.6)          (7.4)        (22.5)
                                         -------------- ------------- ----------
Acquisitions and disposals
Purchase of subsidiary undertakings        (23.6)          (7.5)         (9.3)
Purchase of associated undertakings         (2.4)          (0.2)           -
Cash acquired with subsidiaries              3.8            0.7           0.6
Sale of subsidiary undertakings              -              -            41.6
Cash in businesses sold                      -             (0.4)         (1.1)
Cash in businesses demerged                  -              -           (43.4)
                                         -------------- ------------- ----------
Net cash outflow from acquisitions
  and disposals                            (22.2)          (7.4)        (11.6)
                                         -------------- ------------- ----------
Dividends from associated
  undertakings                               0.8            0.2           -
Dividends from joint ventures                0.9            -             -
Equity dividends paid                       (3.2)          (2.7)         (4.4)
                                         -------------- ------------- ----------

Total net cash outflow before
  financing                                 (6.0)         (18.9)        (18.0)
                                         ============== ============= ==========

Financing activities
Issues of Ordinary Share capital             1.9            0.5           0.1
Net borrowings (loan repayments)            43.7            8.6          17.3
Capital element of finance
  lease rental payments                     (0.1)          (0.2)         (0.3)
                                         -------------- ------------- ----------
Net cash inflow from financing              45.5            8.9          17.1
                                         -------------- ------------- ----------

Increase/(decrease) in cash                 39.5          (10.0)         (0.9)
                                         ============== ============= ==========

See accompanying notes to the consolidated financial statements.


<PAGE>


                          CORDIANT COMMUNICATIONS GROUP
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ACCOUNTING POLICIES

The  preparation  of the  financial  statements  in  conformity  with  generally
accepted  accounting  principles requires the Group's management (as is the case
with the  management of all companies) to make  estimates and  assumptions  that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

The following  paragraphs  describe the significant  accounting policies used in
preparing the consolidated financial statements.

BASIS OF ACCOUNTING

The financial statements have been prepared under the historical cost accounting
rules and in accordance  with  applicable  accounting  standards.  The following
principal  accounting  policies have been applied  consistently  in dealing with
items  which are  considered  material  in  relation  to the  Group's  financial
statements,  except for the adoption of the following new  accounting  standards
FRS 12  "Provisions,  Contingent  Liabilities  and  Contingent  Assets",  FRS 13
"Derivatives  and  other  Financial  Instruments",  and FRS 15  "Tangible  Fixed
Assets".  FRS 16 "Current Tax" will be adopted for the financial  statements for
the year ended December 31, 2000.

CONSOLIDATION

The consolidated  financial  statements  incorporate the financial statements of
Cordiant Communications Group plc and all its subsidiary undertakings made up to
December 31, 1999. All material  intragroup  transactions and balances have been
eliminated on consolidation.

TURNOVER

Turnover  comprises  amounts  billed  to  clients,  excluding  sales  taxes  and
intragroup  transactions.  Billings are usually rendered upon  presentation date
for media  advertising  and upon the  completion of radio,  television and print
production.

REVENUE

Revenue  represents  the fees  and  commissions,  excluding  sales  taxes,  from
services provided to clients, and is recognized generally when work is billed.

PENSION COSTS

Retirement benefits for employees of most companies in the Group are provided by
either  defined  contribution  or defined  benefit  schemes  which are funded by
contributions from Group companies and employees.

The Group's share of  contributions to defined  contribution  schemes is charged
against profits of the year for which they are payable and the cost of providing
defined   benefits  is  charged   against   profit,   in  accordance   with  the
recommendations  of independent  actuaries,  in such a way as to provide for the
liabilities evenly over the remaining working lives of the employees.

EMPLOYEE SHARE SCHEMES

Payments made by participants to acquire options under the Equity  Participation
Plan are  credited to capital as "Shares to be issued."  The  estimated  cost of
awards is expensed as a charge to the profit and loss account on a straight line
basis over the period to which the performance  criteria of the plan relate.  In
compliance with UITF abstract 17: "Employee share schemes",  the periodic charge
to the profit and loss account is credited to  reserves.  On exercise of options
under the plan the cost is transferred from reserves to share capital.

LEASES

Where the Group enters into a lease which entails taking  substantially  all the
risks and rewards of  ownership  of an asset,  the lease is treated as a finance
lease.  The asset is recorded in the balance sheet as a tangible fixed asset and
is depreciated over the shorter of its estimated useful life and the lease term.
Future  installments under such leases, net of finance charges,  are included in
creditors. Rentals payable are apportioned between the finance element, which is
charged to the profit and loss  account as  interest,  and the capital  element,
which reduces the outstanding obligation for future installments.

All other leases are  operating  leases and the rental  charges are taken to the
profit and loss account on a straight line basis over the life of the lease.

GOODWILL

Purchased  goodwill  arising in respect of  acquisitions  before January 1, 1998
(including any additional  goodwill  estimated to arise from contingent  capital
payments),  when FRS 10 was adopted,  was written off to reserves in the year of
acquisition. A charge would be recognized in the Group's profit and loss account
in respect  of any  permanent  diminution  in the value of  goodwill  previously
written  off to  reserves.  Goodwill  written off  directly to reserves  and not
previously  charged to the  Group's  profit  and loss  account  is  included  in
determining the profit or loss on disposal of a subsidiary.

Purchased  goodwill  arising from  acquisitions on and after January 1, 1998 has
been  capitalized as an intangible fixed asset. The directors are of the opinion
that the intangible  fixed assets of the Group have an indefinite  economic life
and as such the goodwill related to acquisitions to date, is not amortized,  but
is subject to annual review for impairment. This is due to the durability of the
Group's brand names, their ability to sustain long-term  profitability and CCG's
commitment to develop and enhance their value. The acquisitions of the Group are
intended to enhance the long-term value of the Group's networks.  The individual
circumstances of each subsequent acquisition the Group makes will be assessed to
determine the appropriate treatment of any related goodwill.

The  financial  statements  depart from the  specific  requirement  of companies
legislation  to amortize  goodwill  over a finite period in order to give a true
and fair view. The directors consider this to be necessary for the reasons given
above.  Because of the indefinite  life of these  intangible  assets,  it is not
possible to quantify the impact of this departure.

PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated  at  historical   cost  less   accumulated
depreciation.  Additions,  improvements  and  major  renewals  are  capitalized.
Maintenance  repairs and minor  renewals are  expensed as incurred.  The cost of
property and equipment less the estimated residual value is written off by equal
annual installments over the expected useful lives of the assets as follows:

Freehold and long leasehold properties:        50 years
Short leasehold properties with terms
  of less than 50 years:                       Period of lease
Furniture and equipment:                       Between 4 and 10 years
Motor vehicles:                                4 years

JOINT VENTURES AND ASSOCIATED UNDERTAKINGS

The Group's share of the profits less losses of all  significant  joint ventures
and associated  undertakings is included in the Group profit and loss account on
a gross equity and equity accounting basis  respectively.  The carrying value of
significant  joint  ventures and  associated  undertakings  in the Group balance
sheet is calculated by reference to the Group's equity in the net assets of such
undertakings.

BILLABLE PRODUCTION

Billable production is valued at the lower of cost and net realizable value, and
comprises mainly outlays incurred on behalf of clients.

DEFERRED TAXATION

Deferred taxation is provided at the anticipated tax rates on timing differences
arising  from the  inclusion  of items of income  and  expenditure  in  taxation
computations  in periods  different from those in which they are included in the
financial  statements,  to the extent  that it is probable  that a liability  or
asset will crystallize in the foreseeable future.

No provision is made for deferred tax on unremitted overseas earnings unless the
Group expects them to be remitted.

PROPERTY PROVISIONS

The Group has adopted FRS 12 "Provisions,  Contingent Liabilities and Contingent
Assets".  In accordance with this standard,  the Group's property provisions are
discounted  to the  present  value of future net lease  obligations  and related
costs of leasehold  property (net of estimated  sublease income) where the space
is vacant or currently not planned to be used for ongoing  operations.  In order
to comply with FRS 12 in its primary set of accounts,  prepared under UK GAAP, a
prior year  adjustment  was made in accordance  with FRS 3 "Reporting  Financial
Performance".  The impact of the prior year adjustment is to restate the results
of prior years to those which would have arisen if the new  standard has applied
in those years. The recognition of this change on the brought forward  provision
has been treated as a restatement  of opening  reserves as at January 1, 1997 of
(pound)27.6  million.  The  periodic  unwinding of the discount is treated as an
imputed  interest  charge and is disclosed  under net financial  items vacant or
currently not planned to be used for ongoing  operations.  The charge in 1999 is
(pound)1.3 million (1998: (pound)1.2 million; 1997: (pound)4.8 million).

FOREIGN CURRENCIES

The Group has  adopted FRS 13  "Derivatives  and Other  Financial  Instruments".
Refer to note 32 for all related disclosures.  Profit and loss accounts and cash
flow  statements  in foreign  currencies  are  translated  into  sterling at the
average  rate during the year,  with the year end  adjustment  to closing  rates
being  taken to  reserves.  Assets and  liabilities  in foreign  currencies  are
translated using the rates of exchange ruling at the balance sheet date.


DERIVATIVES

Interest rate swaps

The net interest  paid or received  under  interest rate swaps is recorded on an
accruals basis and included  within net interest in the profit and loss account.
The notional amounts of interest rate swaps are recorded off balance sheet.

Interest rate caps

The Group  manages  interest  rate  exposure via interest  rate caps,  which are
accounted for on an accruals basis.

Forward exchange contracts

Forward exchange  contracts are used by the Group to hedge known  cross-currency
cash flows.  These instruments are accounted for as hedges from the inception of
the contract. Where the instrument is used to hedge against future transactions,
gains and losses are  recognised at the inception of the hedge in the profit and
loss account.

Exchange gains and losses

Gains and losses on revaluation and maturity of forward  exchange  contracts are
taken to the profit and loss  account at the same time as the  exposure  that is
being hedged and are offset against the foreign exchange gains and losses on the
related financial assets and liabilities.

Gains  or  losses  on   translation  of  the  opening  net  assets  of  overseas
subsidiaries  and those  arising from the  retranslation  of  long-term  foreign
currency borrowings used to finance foreign currency  investments,  are taken to
reserves.

All other exchange differences are taken to the profit and loss account.

If the  underlying  exposure  changes,  or  ceases  to exist,  the  contract  is
terminated  and the exchange  gain or loss on  termination  is recognised in the
profit and loss account immediately.

Finance costs  associated with debt issuances are charged to the profit and loss
account over the life of the issue.

The Group's  principal  trading  currencies  and the exchange rates used against
(pound) sterling are as follows:

                               AVERAGE RATE                      CLOSING RATE
                  --------------------------------------- ---------------------
                      1999         1998         1997         1999         1998
                  ------------- ------------ ------------ ------------ --------
US Dollar            1.62          1.66         1.64         1.61          1.66
French Franc         9.97          9.77         9.55        10.55          9.29
Deutschmark          2.97          2.91         2.84         3.14          2.77
Australian Dollar    2.51          2.64         2.21         2.46          2.71
Spanish Peseta        253           247          240          268           236
Italian Lira        2,942         2,877        2,790        3,113         2,743


NOTE 2 - ACQUISITIONS, DISPOSALS AND CONTINGENT AND DEFERRED CAPITAL PAYMENTS*

Acquisitions

(a)  1999

In December  1999, CCG acquired  substantially  all of the assets of Interactive
Edge,  Inc., a New York  corporation,  Interactive  Edge,  Inc.,  a  Connecticut
corporation and Interactive Edge, LLC, a Delaware limited liability company, all
of which were  commonly  owned by the sellers in the  acquisition.  The purchase
price for the  acquisition  included an initial  payment of $6.1 million paid by
CCG through the issuance of CCG ADSs having a value of $5.5 million and $600,000
in cash. The acquisition also provides for an additional  contingent  payment in
2003 of up to a maximum of $18.9 million  based on  Interactive  Edge  achieving
certain  revenues and operating  margins for the three years ending December 31,
2002. The contingent  payment will be paid entirely  through the issuance of CCG
ADSs.  CCG has accrued an  estimated  total  additional  deferred  consideration
payable in CCG ADRs of $18.5 million ((pound)11.5 million).

____________________

* Where applicable in this Note,  translation from local currency is made at the
  rates at which the transactions were concluded.

In December  1999,  CCG acquired an 80% interest in the share capital of Diamond
Ad Ltd. The initial  consideration was (pound)14.8  million and further payments
are due in the  years  2000,  2001,  and 2002  based on a  multiple  of  average
operating  profits in 1999 to 2001, to a maximum of (pound)82.1  million.  As at
December 31, 1999 these further payments,  based upon management's forecasts are
estimated at (pound)25.8 million.

In October  1999,  the previous 63% holding in Verdino Bates SA in Argentina was
increased by the acquisition of an additional 7%, for (pound)nil consideration.

In November 1999,  the previous 60% holding in Bates Poland Sp z.o.o.  in Poland
was increased by the  acquisition of an additional  40%, for (pound)0.1  million
consideration.

In November  1999,  the previous 80% holding in Dr Puttner  Bates  Werebeagentur
GmbH in Austria was  increased  by the  acquisition  of the  remaining  20%, for
(pound)0.3 million consideration.

During 1999,  CCG  acquired a 100% holding in Cronert in Sweden,  55% holding in
LdV in Belgium,  75% holding in Rodergas and Promopoma in Spain, 100% holding in
Blue Skies Ltd in United  Kingdom,  50% holding in Appel Grafik GmbH in Germany,
100% holding in Bates Clarion in India, 51% holding in Bates Romania in Romania,
and 100% holding in Sarkka in Finland.  The  consideration  paid in 1999 for all
these acquisitions was (pound)3.7 million in cash and estimated total additional
payments of (pound)0.2 million have been accrued.


(b)  1998

In November  1998,  the purchase of the  remaining  24.9% of The  Communications
Group Pty Ltd, the holding  company of its Australian  subsidiaries,  previously
held by management,  was completed.  The  acquisition was effective from July 1,
1998.  The cost of  acquisition  was  (pound)6.7  million,  of which  (pound)3.3
million  was paid in cash and  (pound)3.4  million by the issue of  shares.  The
agreement  provides for a further  payment in 2000 based on the profits for 1998
and 1999.

In July  1998,  Bates  Advertising  USA,  Inc.  acquired  the whole of the share
capital of The Criterion Group,  Inc.,  renamed Bates Travel and Tourism,  Inc..
The initial payment was US$1.9 million ((pound)l.2 million) and further payments
are due in the years 1999,  2000 and 2001 based on the  average  profits for the
preceding  three years.  Estimated total  additional  payments of US$4.3 million
((pound)2.6 million) have been accrued.

In October 1998, Bates  Advertising  USA, Inc.  acquired the whole of the issued
share capital of Churchill  Advertising  Group,  Inc.  renamed  Bates  Churchill
Advertising  Group,  Inc., and Churchill  Group,  Inc.,  renamed Bates Churchill
Group,  Inc..  The  acquisition  was  effective  from July 1, 1998.  The initial
payment was US$1.3 million ((pound)0.8  million) and further payments are due in
the years 1999,  2000, 2001 and 2002 based on the average revenue of the 4 years
ended June 30,  2002.  Estimated  total  additional  payments of US$5.4  million
((pound)3.3 million) have been accrued.

In October  1998,  the previous 10% holding in Verdino Bates SA in Argentina was
increased by the acquisition of an additional 80%. Subsequently Verdino Bates SA
acquired the whole of the share capital of Fernando Fernandez SA in exchange for
a 30%  share of  Verdino  Bates SA with  which it has been  merged.  The  merged
company  has been  renamed  Verdino  Bates  Fernando  Fernandez  SA. The capital
restructuring  reduces  CCG's  holding  to  63%.  The  initial  payment  for the
additional shares was (pound)1.4 million and this is adjustable based on average
profits for the years  1997-1999.  Put and call options have been granted for an
additional 7% of the shares.

During 1998, CCG acquired 50.8% holding in EMC Starke & Gerlach GmbH in Germany,
51% holding in Kontoret As  Reklamebyra  in Norway and 100%  holding in Not Just
Film  in  The  Netherlands.  The  consideration  paid  in  1998  for  all  these
acquisitions  was  (pound)0.7  million in cash and with  further  consideration,
which is not yet quantifiable.

Disposals

The profit (loss) on disposal of businesses is discussed by year below:

(a)  1999

No disposals took place in 1999.

(b)  1998

No disposals took place in 1998.

The  share  capital  of  Bates  Japan  Ltd was  restructured  during  the  year,
converting it from a wholly-owned  subsidiary to a 31% joint venture  investment
in the renamed  Saatchi & Saatchi Bates Yomiko KKK. No profit or loss arose as a
result of this.

(c)  The profit on disposal of businesses in 1997

The profit on disposal of businesses in 1997 of  (pound)20.8  million arose from
the sale of NRG and the disposal of the Interpublic  Group of Companies  ("IPG")
shares  received by Cordiant due to clauses in the sale agreement of KDW in 1995
(see (c) below).

In October 1997,  CCG sold NRG for a gross cash  consideration  of $53.1 million
((pound)32.4   million).   The  gross   consideration   included  $13.1  million
((pound)8.0  million)  payable to certain of NRG's  directors  under terms of an
agreement  entered into in 1995.  Net assets  disposed of were estimated at $7.5
million  ((pound)4.6  million).  After  accounting for provisions  totaling $5.4
million  ((pound)3.3   million)  for  additional  tax,   professional  fees  and
determination  of the  disposed  balance  sheet,  the  profit  on sale was $27.1
million ((pound)16.5 million).



Contingent and Deferred Capital Payments

The Group may make  capital  payments in future  years as a result of  contracts
entered into to acquire  additional  interests in  subsidiaries  and  associated
companies.  Such payments are  contingent  on the levels of profits  achieved by
those  companies and may be partially paid by the issue of shares at the Group's
option.   In  addition,   the  Group  is  committed  to  pay  certain   deferred
consideration  payments.  CCG estimates that, at the rates of exchange ruling at
December 31, 1999, the total contingent payments  (including  interest) that may
be made are as follows:

                                  1999         1998
                                (pound)m     (pound)m
                               ------------ ------------
Due within 1 year                 33.4          4.1
Due within years 2-5              18.0          6.4
                               ------------ ------------
                                  51.4         10.5
                               ============ ============


Demerger

On December 14, 1997,  Saatchi and Saatchi  Holdings  Limited was demerged  from
Cordiant  plc in  accordance  with the  demerger  agreement  with the  remaining
business  renamed  Cordiant  Communications  Group plc (CCG). As a result of the
demerger  CCG and Saatchi and Saatchi  Holdings  Limited are  separate  publicly
traded companies and operate independently of each other.

NOTE 3 - OPERATING AND ADMINISTRATIVE EXPENSES

Operating and administrative  expenses from continuing  operations  included the
following:

<TABLE>
<CAPTION>
                                                                        Year ended December 31,
                                                             ----------------------------------------------
                                                                 1999            1998            1997
                                                               (pound)m        (pound)m        (pound)m
                                                             -------------- ---------------- --------------
<S>                                                              <C>            <C>               <C>
Staff and associated costs (see note 7)                          184.4           168.9           407.3
Hire of plant and machinery - operating leases (see note 26)       1.9             1.6             2.9
Hire of other assets - leasehold property net of sublease
   income (see note 26)                                           18.7            17.2            47.7
Loss(profit) on sale of tangible fixed assets                      0.1            (0.1)           (0.8)
Goodwill written off                                                -              0.2             2.2
Auditor's remuneration, including expenses                         1.0             1.0             2.6
Auditor's remuneration, other than audit fees*                     0.4             0.3             0.4
Other administrative expenses, including exceptional items        85.4            77.0           192.0
                                                             -------------- ---------------- --------------
                                                                 291.9           266.1           654.3
                                                             ============== ================ ==============
</TABLE>


*In  1997 in  addition  to  non-audit  fees  paid to our  auditor  shown  above,
additional  fees of  (pound)6.8  million  relating  to work  in  respect  of the
Demerger are included in the fundamental  reorganization cost (see note 6). Work
performed primarily included due-diligence, work associated with the circular to
shareholders  relating to the demerger and the listing  particulars of Saatchi &
Saatchi, and advice on the fundamental reorganization of CCG.

CCG made  charitable  donations  in the  United  Kingdom  of  (pound)97,000  and
(pound)14,000  in the years  ended  December  31,  1999 and 1998,  respectively.
Cordiant made charitable donations in the United Kingdom of (pound)58,000 in the
year ended December 31, 1997.

NOTE 4 - EXCEPTIONAL OPERATING ITEMS

Included  in  Operating  and  Administrative  Expenses  in Note 3 above  are the
following exceptional items:

                         Total      Total     Ongoing      Disposed     Total
                         1999       1998      operations   operations    1997
                        (pound)m   (pound)m   (pound)m     (pound)m    (pound)m
                        --------   --------   ----------   ---------   --------
Goodwill written off       -          -          2.2           -          2.2
                        ========   ========   ==========   =========   ========


The  goodwill  written  off relates to the Group's  Indonesian  subsidiary.  The
decision was taken in view of the economic uncertainty in that country.

NOTE 5 - DISCONTINUED OPERATIONS

All the  Group's  operations  throughout  1999 and 1998 were  considered  by the
directors to be ongoing.


NOTE 6 - FUNDAMENTAL REORGANIZATION - DEMERGER

In order to implement the Demerger,  inter-group debt and subsidiaries had to be
eliminated.  This was carried out by sale,  assignment,  waiver or other  means.
Surpluses and losses arising from these transactions are shown below.

<TABLE>
<CAPTION>
                                                                             Ongoing      Disposed
                                                Total 1999     Total 1998   operations   operations    Total 1997
                                                (pound)m       (pound)m     (pound)m      (pound)m       (pound)m
                                              --------------- ------------- ------------ ------------ -------------
<S>                                           <C>              <C>          <C>           <C>          <C>
Surplus (loss) on inter-group debt                  -               -         875.0       (1,011.8)      (136.8)
Surplus on transfer of subsidiaries                 -               -          72.7           64.1        136.8
Amounts payable in relation to the demerger         -               -          16.3            3.9         20.2
Head office reorganization                          -               -           6.6            0.1          6.7
Inter-group property provisions                     -               -            -             6.1          6.1
                                              --------------- ------------- ------------ ------------ -------------
Fundamental reorganization - demerger               -               -         970.6         (937.6)        33.0
                                              =============== ============= ============ ============ =============
</TABLE>


Amounts  payable in relation to the Demerger  include  external  advisors' fees,
temporary staff and other costs.

Property  provisions,  which  have no cash  impact,  arose  as a  result  of the
Demerger and  represented  the  difference  between  rental payable by Saatchi &
Saatchi and the amounts receivable from Zenith for space sublet to them.

NOTE 7 - EMPLOYEES


Average number of employees of CCG by geographic area:

                                                  Year ended December 31,
                                             ----------------------------------
                                                 1999        1998       1997
                                             ----------- ----------- ----------
UK                                               520         523        509
North America                                    941         882        914
Continental Europe                             1,850       1,676      1,565
Asia Pacific and Latin America                 1,842       1,823      1,672
                                             ----------- ----------- ----------
Ongoing operations                             5,153       4,904      4,660
Disposed operations                                -           -      5,938
                                             ----------- ----------- ----------
                                               5,153       4,904     10,598
                                             =========== =========== ==========


                              Total   Total    Ongoing      Disposed     Total
                              1999    1998    operation    operations     1997
                              ------------------------------------------------
                                        ALL VALUES IN POUND STERLING (m)
                              ------------------------------------------------
Wages and salaries            163.2   150.0    156.1        204.5        360.6
Social security costs          16.5    14.5     15.6         18.7         34.3
Pension costs - see Note 25     4.7     4.4      4.5          7.9         12.4
                              ------  ------   ------       ------       ------
                              184.4   168.9    176.2        231.1        407.3
                              ======  ======   ======       ======       ======



<PAGE>


NOTE 8 - NET INTEREST AND SIMILAR CHARGES

                                                   Year ended December 31,
                                          --------------------------------------
                                             1999           1998         1997
                                          ----------     ----------    ---------
                                               ALL VALUES IN POUND STERLING (m)

Interest payable and similar charges:
On bank loans, overdraft facilities
  and other loans
required to be repaid within five years       4.9            3.6           13.4
On capitalized leases and hire purchase       0.1            0.1            0.1
On other loans                                 -              -             0.4
Bank fees                                     0.7            0.7            1.9
Foreign exchange                              0.2            0.3             -
                                             -------       -------        ------
                                              5.9            4.7           15.8
                                             -------       -------        ------
Interest receivable and similar items:
On cash and deposits                         (1.5)          (1.7)          (5.3)
Note interest                                  -            (0.1)          (0.3)
Foreign exchange                               -              -            (1.4)
                                             --------      -------        ------
                                             (1.5)          (1.8)          (7.0)
                                             --------      -------        ------
Group net interest payable                    4.4            2.9            8.8
Net interest receivable
- Joint ventures                             (0.5)          (0.1)            -
- Associated undertakings                    (0.1)          (0.1)            -
                                             --------      -------        ------
Net interest payable and similar items        3.8            2.7            8.8
                                             ========      =======        ======


NOTE 9 - TAXES ON INCOME

Taxes on income were made up as follows:

                                                      Year ended December 31,
                                             -----------------------------------
                                               1999           1998        1997
                                             ---------      --------     -------
                                               ALL VALUES IN POUND STERLING (m)
UK corporation tax:
Currently payable                               0.1           1.3           0.7
Relief for overseas tax                        (0.1)         (0.1)         (0.5)
Deferred                                         -             -            0.2
                                              ---------     ---------    -------
                                                 -            1.2           0.4
Overseas taxation:
Currently payable                               9.5           5.7          17.9
Deferred                                       (0.7)          1.4          (0.8)
                                              ---------     ---------    -------
Group taxation                                  8.8           8.3          17.5
Joint ventures                                  1.1           0.5            -
Associated undertakings                         0.7           0.4            -
                                              ---------     ---------    -------
Tax on ordinary activities                     10.6           9.2          17.5
                                              =========     =========    =======


<PAGE>


The above  charges  reconcile as follows with the  standard UK  corporation  tax
rates:

<TABLE>
<CAPTION>

                                                         Year ended December 31,
                                              ----------------------------------------------
                                                   1999            1998           1997
                                              ---------------- -------------- --------------
                                                       ALL VALUES IN POUND STERLING (m)
<S>                                               <C>              <C>           <C>
Tax charge in financial statements                (10.6)           (9.2)         (17.5)
Tax charge on pre-tax profit at
30.25% (1998: 30.75%, 1997: 31.5%)                  9.8             7.6            9.4

                                              ---------------- -------------- --------------
Difference                                         (0.8)           (1.6)          (8.1)
                                              ================ ============== ==============

Deferred tax credits not available                 (0.4)            2.3            6.0
Permanent differences between expenditures
  charged in arriving at income and
  expenditures allowed for tax purposes:
    UK                                             (1.3)           (1.8)           0.6
    US                                             (0.6)            0.1           (0.5)
    Rest of World                                  (0.8)           (1.1)           0.7
    Demerger                                         -               -           (10.4)
    Goodwill                                         -               -            (0.7)
    Unrelieved profit/(losses)                      4.4            (1.3)           3.1
   Difference between UK and overseas
     standard tax rates                            (2.7)           (1.8)          (4.0)
Other items                                         0.6             2.0           (2.9)
                                              ---------------- -------------- --------------
Difference above                                   (0.8)           (1.6)          (8.1)
                                              ================ ============== ==============
</TABLE>

The components of profit before taxation are as follows:

                                        Year Ended December 31,
                             ----------------------------------------------
                                  1999            1998           1997
                             ---------------- -------------- --------------
                                      ALL VALUES IN POUND STERLING (m)

Domestic (UK)                      3.1              3.0          (17.0)*
Foreign                           29.2             21.7           51.6
                             ---------------- -------------- --------------
                                  32.3             24.7           34.6
                             ================ ============== ==============


* The loss before taxation in the UK in 1997 incorporated (pound)26.5 million of
  the fundamental reorganization expense of (pound)33.0 million (see note 6).

At  December  31,  1999,  the Group had  (pound)108  million of  operating  loss
carryforwards  expiring  between  2000 and  2010.  Additionally,  the  Group had
(pound)30 million of operating loss carryforwards, which had no expiration date.
It is possible that all or part of the  operating  loss  carryforwards  expiring
between  2000 and 2010 may be  restricted  or  eliminated  under any of  several
statutory/regulatory  provisions or judicially-created doctrines.  Moreover, the
operating  loss  carryforwards  are  generally  only  available to offset future
income of the Group within the tax jurisdiction  where the operating loss arose,
and are not transferable between jurisdictions.



<PAGE>


NOTE 10 - EARNINGS PER ORDINARY SHARE

Basic earnings per Ordinary Share has been calculated on earnings of (pound)18.6
million  (1998:   (pound)13.8  million,  1997:  (pound)10.3  million)  based  on
226,583,809 shares (1998:  222,436,033 shares;  1997:  443,852,410 shares) being
the weighted average number of Ordinary Shares in issue during the periods.  The
number of Ordinary  Shares in issue in 1997 has not been adjusted to reflect the
Consolidation  following the Demerger. The Company believes that as the earnings
for 1997 include the demerged  businesses for  substantially the whole year, the
number of Cordiant  Ordinary Shares in issue in 1997 used to calculate  earnings
per Cordiant  Ordinary  Share should  remain  unaltered.  The number of Ordinary
Shares in issue at December 31, 1999 was 228,782,839 (1998: 225,461,044).

Share options  outstanding under the employee share schemes are considered to be
common stock equivalents, and are included in the earnings per share calculation
only when they are dilutive. Diluted earnings per ordinary share have been based
on 239,578,425 shares (1998: 223,337,644 shares; 1997: 445,868,612).

Earnings per share on the nil  distribution  (earnings  exclude any  irrevocable
advance  corporation tax (ACT) and any unrelieved  overseas tax arising from the
payment or proposed  payment of dividends) and fully diluted bases have not been
disclosed as they are not materially different.

NOTE 11 - SHORT-TERM INVESTMENTS

Short-term  investments  comprised  overseas unlisted  investments of (pound)1.1
million and cash  deposits of (pound)6.4  million.  In 1998,  overseas  unlisted
investments of (pound)0.7 million and cash deposits of (pound)0.8 million.

NOTE 12 - ACCOUNTS AND OTHER RECEIVABLES, PREPAYMENTS AND ACCRUED INCOME

                                                  1999               1998
                                                (pound)m           (pound)m
                                          ------------------- ------------------
Due within one year:
Trade receivables (net of
  allowances for doubtful debts)                 303.4               212.8
Amounts due from joint ventures
  and associated undertakings                      1.2                 1.1
Other receivables                                 12.0                 9.9
Prepayments and accrued income                    19.4                22.5
                                          ------------------- ------------------
                                                 336.0               246.3
                                          =================== ==================
Due after one year:
Other receivables                                  3.2                 4.7
Prepayments and accrued income                    16.9                13.6
                                          ------------------- ------------------
                                                  20.1                18.3
                                          =================== ==================


Reference  should be made to Note 13 concerning  the amounts of  allowances  for
doubtful debts for each of the years presented.

NOTE 13 - VALUATION AND QUALIFYING ACCOUNTS


<TABLE>
<CAPTION>
                                                    Balance at        Additions
                                                     beginning        charged to                          Balance
                                                     of period        costs and                          at end of
                  Description                                          expenses        Deductions*        period
                  -----------
                                                  ---------------- ----------------- ---------------- ----------------

                                                                    ALL VALUES IN POUND STERLING (m)

<S>                                                  <C>               <C>               <C>             <C>
Year ended December 31, 1999:
   Allowance for doubtful accounts (deducted
   from accounts receivable)                            7.5             3.7               -              11.2

   Allowance for non-recoverable billable
   production (deducted from billable production)       2.1              -               (1.4)            0.7
------------------------------------------------- ---------------- ----------------- ---------------- ----------------
Year ended December 31, 1998:
   Allowance for doubtful accounts (deducted
     from accounts receivable)                          7.3             0.2               -               7.5
   Allowance for non-recoverable billable
   production (deducted from billable production)       3.2              -               (1.1)            2.1
------------------------------------------------- ---------------- ----------------- ---------------- ----------------
Year ended December 31, 1997:
   Allowance for doubtful accounts (deducted
   from accounts receivable)                           18.0              -              (10.7)**          7.3
   Allowance for non-recoverable billable
   production (deducted from billable                   4.6              -               (1.4)**          3.2
   production)
------------------------------------------------- ---------------- ----------------- ---------------- ----------------
</TABLE>

*    Substantially  represents amounts utilized against specific  nonrecoverable
     billable production and bad debts arising during the periods.

**   The deductions in 1997 include  demerged  allowances of (pound)8.1  million
     for doubtful accounts  and(pound)2.0  million for  nonrecoverable  billable
     production.

NOTE 14 - LONG-TERM INVESTMENTS

<TABLE>
<CAPTION>

                                          Associated undertakings
                                     ----------------------------------
                                         Share of
                                         tangible net     Share of                      Long term
                                           assets         Goodwill          Total       investments      Total
                                     ----------------- ---------------- ------------- ------------- ------------
                                                         ALL VALUES IN POUND STERLING (m)
<S>                                   <C>                <C>              <C>            <C>           <C>

COST OR VALUATION
At beginning of year                        3.1              -                3.1           0.8           4.0
Additions                                   0.2              7.4              7.6           0.5           8.1
Disposals                                   -                -                -            (0.1)         (0.1)
Share of retained profit                    0.4              -                0.4           -             0.4
                                     ----------------- ---------------- ------------- ------------- ------------
At end of year                              3.7              7.5             11.2           1.2          12.4
                                     ================= ================ ============= ============= ============
</TABLE>

The Group's  investment in Zenith and Saatchi & Saatchi Bates Yomiko (S&SBY) are
joint  ventures,  and  are  represented  by a net  deficit  and  disclosed  as a
provision (see Note 18).



<PAGE>


NOTE 15 - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
                                          Leasehold     Leasehold     Information
                             Freehold     property      property       technology     Furniture and       Motor
                             property      - long        - short       equipment     other equipment    vehicles        Total
                            ------------ ------------ -------------- --------------- ---------------- -------------- -------------
                                                          ALL VALUES IN POUND STERLING (m)
<S>                          <C>           <C>          <C>            <C>             <C>              <C>             <C>
COST
At beginning of year              -            0.3         20.9           28.6            32.5              3.6           85.9
Translation adjustment            -            -            -              0.6             -               (0.1)           0.5
Additions                         -            -            7.1            7.1             6.3              0.6           21.1
Companies acquired                1.4          -            -              0.7             1.0              0.1            2.9
Disposals                        (0.3)         -          (10.8)          (1.8)          (12.5)            (0.9)         (26.3)
                            ------------ ------------ -------------- --------------- ---------------- -------------- -------------
At end of year                    0.8          0.3         17.2           35.2            27.3              3.3           84.1
                            ------------ ------------ -------------- --------------- ---------------- -------------- -------------
DEPRECIATION
At beginning of year              -            0.2         16.2           18.8            25.4              2.6           63.2
Translation adjustment            -            -            0.1            0.5             -                -              0.6
Charge for the year               -            -            2.0            5.1             2.8              0.5           10.4
Disposals                         -            -          (10.6)          (0.2)          (12.3)            (0.7)         (23.8)
                            ------------ ------------ -------------- --------------- ---------------- -------------- -------------
At end of year                    -            0.2          7.7           24.2            15.9              2.4           50.4
                            ------------ ------------ -------------- --------------- ---------------- -------------- -------------
NET BOOK VALUE
At beginning of year              -            0.1          4.7            9.8             7.1              1.0           22.7
                            ============ ============ ============== =============== ================ ============== =============
At end of year                    0.8          0.1          9.5           11.0            11.4              0.9           33.7
                            ============ ============ ============== =============== ================ ============== =============
Net book value of assets
held under finance leases
included above
At beginning of year                 -            -            -           0.3             0.1              -              0.4
                            ============ ============ ============== =============== ================ ============== =============
At end of year                       -            -            -           0.1             0.2              -              0.3
                            ============ ============ ============== =============== ================ ============== =============
</TABLE>

Net book  value  of land and  buildings  at end of year  was(pound)10.4  million
(1998:(pound)4.8 million).

Depreciation attributable to owned property and equipment was(pound)10.3 million
(1998:(pound)9.5  million);  and depreciation  attributable to assets held under
finance leases was(pound)0.1 million (1998:(pound)0.2 million).

At  December  31,  1999 the  commitments  in respect of capital  expenditure  on
properties,  furniture and equipment was (pound)0.4  million  (1998:  (pound)0.2
million).



<PAGE>




NOTE 16 - BANK LOANS, OVERDRAFTS AND OTHER LOANS

                               Balance at end of     Weighted average
                                     period           interest rate
                               ------------------- ---------------------

                                     Year ended December 31, 1999
                                   (pound)m                 %
                               ------------------- ---------------------
Bank loans and overdrafts            7.5                   7.9
                               =================== =====================
                                     Year ended December 31, 1998
                                   (pound)m                 %
                               ------------------- ---------------------
Bank loans and overdrafts           21.7                   6.1
                               =================== =====================

An amount of (pound)3.3  million  (1998:  (pound)2.0  million)  included in bank
loans and  overdrafts is secured by guarantees  from and charges over the assets
of the Company and a number of its subsidiaries.

NOTE 17 - ACCOUNTS PAYABLE, OTHER LIABILITIES AND ACCRUED EXPENSES

<TABLE>
<CAPTION>

                                                                   December 31, 1999            December 31, 1998
                                                              ----------------------------- --------------------------
                                                                Due Within     Due After     Due Within    Due After
                                                                 one year       one year      one year     one year
                                                                            ALL VALUES IN POUND STERLING (m)
                                                              --------------- ------------- ------------- ------------
<S>                                                            <C>            <C>           <C>            <C>

Accounts payable                                                    293.2           -            185.0          -
Amounts payable:  Associated companies and joint ventures             5.4           -              7.6          -
Payments on account                                                  27.0           -             25.8          -
Finance leases                                                        0.5           0.2            0.2          0.2
Proposed dividends - equity shareholders                              5.1           -              3.1          -
Accruals and deferred income                                         69.0           -             31.9          0.7
Other payables                                                       17.1          24.4           14.4         12.6
                                                              --------------- ------------- ------------- ------------
                                                                    417.3          24.6          268.0         13.5
                                                              =============== ============= ============= ============
</TABLE>

An amount of  (pound)5.3  million  (December  31, 1998:  (pound)3.5  million) is
included  in  accounts   payable  as  secured  by  related  trade   receivables.
Liabilities under finance leases are secured on the assets leased.



<PAGE>


NOTE 18 - PROPERTY, PENSION AND OTHER PROVISIONS
<TABLE>
<CAPTION>

                                                                 Pensions
                                                               and similar
                                                    Property    employment                                 Joint
                                                    Restated   obligations       Other        Total     ventures
                                                                   ALL VALUES IN POUND STERLING (m)
                                                 ------------ ------------- ----------- ------------ ------------
<S>                                                <C>         <C>           <C>         <C>          <C>

GROSS PROVISION - PREVIOUSLY STATED
At beginning of year                                  33.2         17.2           0.8       51.2         14.7
Translation                                            0.2          0.5           -          0.7          -
Profit and loss account                                -           (0.9)          0.7       (0.2)        (0.3)
Utilized                                              (4.8)         -             -          4.8          -
                                                 ------------ ------------- ----------- ------------ ------------
At end of year                                        28.6         16.8           1.5       46.9         14.4
                                                 ------------ ------------- ----------- ------------ ------------
DISCOUNT
At beginning of year (prior year adjustment -
see Note 1)                                            7.6          -             -          7.6          -
Profit and loss account                               (1.3)         -             -         (1.3)         -
                                                 ------------ ------------- ----------- ------------ ------------
At end of year                                         6.3          -             -          6.3          -
                                                 ------------ ------------- ----------- ------------ ------------
NET BOOK VALUE
At beginning of year                                  25.6         17.2           0.8       43.6         14.7
                                                 ============ ============= =========== ============ ============
At end of year                                        22.3         16.8           1.5       40.6         14.4
                                                 ============ ============= =========== ============ ============
</TABLE>

Property  provisions relate to future payments on vacant properties and assigned
leases, and are analyzed by year as follows:

                                1999         1998
                              (pound)m     (pound)m
                             -----------  ------------
Under one year                    3.6         4.5
One to two years                  3.5         3.1
Two to five years                 7.2         8.7
Over five years                   8.0         9.3
                             -----------  ------------
                                 22.3        25.6
                             ===========  ============


Provisions for joint venture deficit:
The Group share of net liabilities of Zenith and S&SBY is shown below.

                                               1999        1998
                                             (pound)m    (pound)m
                                           ----------- ------------
Fixed assets                                   1.7         1.7
Current assets                                84.4        81.9
                                           ----------- ------------
Share of gross assets                         86.1        83.6
                                           ----------- ------------
Liabilities due within one year              (99.9)      (97.0)
Liabilities due after one year                (0.6)       (1.3)
                                           ----------- ------------
Share of gross liabilities                  (100.5)      (98.3)
                                           ----------- ------------
Share of joint venture net liabilities       (14.4)      (14.7)
                                           =========== ============


<PAGE>


NOTE 19 - LONG-TERM DEBT

                                              1999              1998
                                            (pound)m          (pound)m
                                       ------------------ ----------------
Bank loans                                    75.8               36.4
                                       ================== ================


An amount of  (pound)65.2  million  (1998:  (pound)36.4  million) of the Group's
borrowings  is secured by  guarantees  from and  charges  over the assets of the
Company and a number of its subsidiaries.

In November 1999, CCG refinanced the Group's core banking  facilities,  with new
committed facilities of US$250 million ((pound)155 million),  which replaces its
existing core facilities. The Group's core banking facilities are to be used for
the acquisition of Diamond Ad Ltd, costs and expenses  related to the Diamond Ad
Ltd and Healthworld  Corporation  Inc. (see Note 27)  acquisitions,  and for the
Group's ongoing working capital requirements.

Interest is payable on each  advance  under the  facilities  at a rate per annum
based on the aggregate of LIBOR and a margin of between 0.75% and 1.5% per annum
depending upon the Group complying with certain financial covenants.

At December 31, 1999, the Group's senior debt consisted of the new bank facility
(the  "Facility")  of $250  million.  The  Facility  provides  committed  credit
facilities  at a rate between  0.7-1.5  percent over LIBOR,  depending  upon the
Group's ability to achieve  certain  financial  ratios.  The Facility is divided
into two equal amounts; i) $125 million maturing in November 2000 with an option
to extend for one  additional  year,  and ii) $125 million  maturing in November
2004.  The Facility  requires the Group to comply with  customary  financial and
other  covenants.  It also contains  provisions  whereby,  on the  occurrence of
certain specified events of default, the amount made available could be declared
immediately due and payable. These events of default include breach of the above
covenants  and cross  default  by certain  companies  in the Group in respect of
indebtedness  over a specified  amount or any change of control of the  Company.
The Facility is secured by guarantees from the principal companies of the Group.

NOTE 20 - GUARANTEES AND CONTINGENT LIABILITIES

(pound)67.4  million  (1998:(pound)37.6  million) of the Group's  borrowings are
secured by guarantees from and charges over the assets of the Group.

The Company has also guaranteed the operating lease commitments (all relating to
leasehold  property)  of  certain  subsidiary  undertakings.  The leases are for
various  periods up to the year 2013 and the total  obligations  at December 31,
1999  amounted to  (pound)147.3  million  (1998:  (pound)152.9  million)  and in
addition the Company has given other  guarantees  in respect of  liabilities  of
subsidiary  undertakings  incurred in the normal course of business amounting to
(pound)12.6 million (1998: (pound)27.3 million).

Cordiant  gave a number of  guarantees  in respect of  obligations  of Saatchi &
Saatchi  companies  which remain in force.  Saatchi & Saatchi has  undertaken to
indemnify CCG for any liability under these guarantees.  They include guarantees
of operating lease commitments  related to a leasehold property in New York. The
lease  expires in the year 2013 and the total  obligations  at December 31, 1999
were (pound)183.2 million (1998: (pound)189.5 million).

CCG and  Saatchi & Saatchi  have  each  guaranteed  Zenith's  bank  facility  of
(pound)18.5  million and have agreed  between  themselves  to share  equally any
liability arising therefrom.  Borrowings drawn down under the Zenith facility at
December 31, 1999 were (pound)5.4 million (1998: (pound)5.1 million).

Other  guarantees  given by the Group to third  parties  amounted to  (pound)6.0
million at December 31, 1999 (1998: (pound)4.9 million).



<PAGE>


At December 31, 1999, the Group had the following  other  commitments in respect
of capital  expenditure and  non-cancelable  operating  leases for the following
year:

                                             1999       1998
                                           (pound)m   (pound)m
                                         ----------- ----------
Capital expenditure committed
  but not provided for                       0.4         0.2
                                         =========== ==========


<TABLE>
<CAPTION>
                                                           Land and
                                                           buildings
                                                  Gross    provisions      Net        Other        1999       1998
                                                                       ALL VALUES IN POUND STERLING (m)
                                                ---------- ------------ ----------- ----------- ----------- ----------
<S>                                             <C>         <C>          <C>         <C>         <C>          <C>
Non-cancelable operating lease which expire:
Within one year                                       3.9        -           3.9         0.6         4.5         2.6
Within two to five years                              8.4       (1.1)        7.3         1.0         8.3         9.2
Over five years                                      16.8       (2.5)       14.3         0.1        14.4        13.7
                                                ---------- ------------ ----------- ----------- ----------- ----------
                                                     29.1       (3.6)       25.5         1.7        27.2        25.5
                                                ========== ============ =========== =========== =========== ==========
</TABLE>

Of the above  operating  lease  property  commitments,  an amount of (pound)10.2
million is recoverable from subtenants (1998: (pound)8.2 million).


NOTE 21 - DEFERRED TAXATION

                                                  1999        1998
                                                (pound)m    (pound)m
                                               ----------- ----------
Provisions for overseas deferred taxation         1.2         2.2
                                               =========== ==========

The Group has no material  deferred  tax  liabilities  unprovided  in respect of
accelerated capital allowances.

Unremitted  earnings  of  subsidiaries  which  have been or are  intended  to be
permanently   reinvested  to  meet  media   accreditation  and  working  capital
requirements,  exclusive  of amounts  which if remitted in the near future would
result in little or no tax by operation of relevant statutes normally in effect,
aggregated (pound)69 million (1998: (pound)63 million).



<PAGE>


Under US GAAP temporary  differences at the appropriate tax rate at December 31,
1999 and 1998 are as follows:

                                               Asset/(liability)
                                         ----------------------------
                                              1999          1998
                                            (pound)m      (pound)m
                                         ------------- --------------
DEFERRED TAX ASSET
Accrued property rental expense                7.1           7.9
Accrued compensation                           5.6           4.7
Capital loss carryforwards                     9.6          10.1
Operating loss carryforwards*                 51.0          47.1
Other                                          8.6           9.2
                                         ------------- --------------
Total deferred tax assets                     81.9          79.0
Valuation allowance                          (81.9)        (79.0)
                                         ------------- --------------
Net deferred tax asset                         -             -
                                         ============= ==============
DEFERRED TAX LIABILITIES
Other                                        (1.2)         (2.2)
                                         ------------- --------------
Net deferred tax liabilities                 (1.2)         (2.2)
                                         ============= ==============


*    See Note 9 for a discussion  of potential  restrictions  on operating  loss
     carryforwards.

There are no  material  differences  between  UK GAAP and US GAAP.  A  valuation
allowance is provided to reduce the deferred tax assets to a level which,  based
on the weight of available evidence,  will more likely than not be realized. The
net deferred  asset reflects  management's  estimate of the amount which will be
realized based on this criteria.

The net change in the  valuation  allowance  for deferred tax assets during 1999
amounted to an increase of (pound)2.9 million.

NOTE 22 - TAXATION

This largely represents  corporation tax liabilities due to be paid in more than
one year from the date of the financial  statements.  Tax  liabilities due to be
settled in less than one year are included under current liabilities.


NOTE 23 - SHARE CAPITAL

                                                           December 31,
                                                       1999           1998
                                                     (pound)m       (pound)m
                                                   --------------- -------------
Authorized share capital of the Company                150.5          150.5
                                                   =============== =============
Allotted, called up and fully paid:
228,782,839 Ordinary Shares of 50p each
(1998: 225,461,044 Ordinary Shares of 50p each)        114.4          112.7
                                                   =============== =============

During the year the Company issued 1.7 million  Ordinary  Shares of 50p each for
consideration  of (pound)1.9  million pursuant to receipt of notices to exercise
options from employees of the Group. In addition, the Company issued 1.7 million
Ordinary Shares of 50p each for a total  consideration of (pound)4.1  million in
respect of the acquisition of Interactive Edge LLC.

NOTE 24 - EMPLOYEE SHARE SCHEMES

Changes in the number of CCG Ordinary Shares issuable under options  outstanding
under the Company's  executive share option schemes during the three year period
ended December 31, 1999 were as follows:

CCG Ordinary Shares:                        Year ended December 31,
                                   1999              1998                1997
                                 -------------    ------------      -----------
At beginning of year              26,136,926        28,045,239       12,589,854
Options exercised during year     (1,641,720)         (499,877)        (159,692)
Options issued during year         2,268,577         1,523,078       26,037,467
Options lapsed during year          (949,564)       (2,931,514)      (1,064,485)
Options canceled during year         -                   -           (9,357,905)
                                 -------------    -------------     ------------
At end of year                    25,814,219        26,136,926        28,045,239
                                 =============    =============     ============
Exercisable at end of year         1,714,021
                                 =============    =============     ============
Weighted average exercise price          114p
                                 =============    =============     ============

Changes in the number of CCG Ordinary Shares issuable under options  outstanding
under  Sharesave  1995 during the three year period ended December 31, 1999 were
as follows:

CCG Ordinary Shares:                           Year ended December 31,
                                       1999           1998              1997
                                    ---------       ---------        -----------
At beginning of year                1,291,543       1,624,662         1,963,435
Options exercised during year         (24,695)        (84,612)          (13,211)
Options issued during year               -              -               196,117*
Options lapsed during year           (186,592)       (248,507)         (325,562)
                                    ---------       ----------       -----------
At end of year                      1,080,256       1,291,543          1,624,662
                                    =========       ==========       ===========
Exercisable at end of year                nil
                                    =========       ==========       ===========

*    These are parallel  options issued in connection  with the Demerger and are
     not  reflected in the total  options  outstanding  at the year end, as they
     will be  exercisable  in lieu of,  and not in  addition  to,  the  original
     options.



<PAGE>


Options  outstanding  at December  31,  1999 under the  Company's  share  option
schemes are shown below:

                                   Date of    Number of   Exercise     Scheme
                                   grant       shares       price    Exercisable
---------------------------------- --------- ----------- --------- -------------
---------------------------------- --------- ----------- --------- -------------
Number 2 Scheme                    Jun 1991     155,869      134p    To Jun 2001
                                   Sep 1991      34,302      134p    To Sep 2001
                                   Apr 1992     112,204*     107p    To Apr 2002
---------------------------------- ---------  ----------   ------   ------------
Demerger Number 2 Scheme           Jun 1991     343,248      134p    To Jun 2001
                                   Apr 1992       6,174*     107p    To Apr 2002
---------------------------------- ---------  ----------   ------   ------------
Sharesave                          Jun 1995    1,080,256     64p     Jul 2000 to
                                                                        Dec 2000
---------------------------------- ---------  ----------   ------   ------------
Performance Option Scheme          May 1995      257,775     73p     To May 2005
                                   Aug 1995      257,774     95p     To Aug 2005
                                   Apr 1996      365,000    130p     To Apr 2006
                                   Apr 1996      515,000*   130p     Apr 2001 to
                                                                        Apr 2003
                                   Apr 1997      722,500    131p     Apr 2000 to
                                                                        Apr 2007
                                   Apr 1997      692,500*   131p     Apr 2002 to
                                                                        Apr 2004
---------------------------------- ---------  ----------  ------    ------------
Demerger Performance Option Scheme May 1995       41,462     73p     To Dec 2004
                                   May 1995      109,926*    73p     May 2000 to
                                                                        May 2002
                                   Aug 1995       41,463     95p     To Dec 2004
                                   Apr 1996       98,750    130p     To Dec 2004
                                   Apr 1996      248,750*   130p     Apr 2001 to
                                                                        Apr 2003
                                   Apr 1997      195,000    131p     Apr 2000 to
                                                                        Dec 2004
                                   Apr 1997      186,250*   131p     Apr 2002 to
                                                                        Apr 2004
---------------------------------- ---------  ----------  ------    ------------
Performance Share Option Scheme    Dec 1997    5,962,254    105p     Dec 2000 to
                                                                        Dec 2004
                                   May 1998    1,294,468    124p     May 2001 to
                                                                        May 2005
                                   Mar 1999    1,714,471    164p     Mar 2002 to
                                                                        Mar 2006
                                   Aug 1999      155,805    176p     Dec 2001 to
                                                                        Dec 2005
---------------------------------- ---------  ----------  ------    ------------
Equity Participation Plan          Dec 1997   11,034,720    105p     Dec 2000 to
                                                                        Dec 2004
                                   Mar 1999       80,029    105p     Mar 2002 to
                                                                        Mar 2006
---------------------------------- ---------  ----------  ------     -----------
Zenith Executive Incentive Plan    Dec 1997    1,047,984    109p     Dec 2000 to
                                                                        Dec 2004
---------------------------------- ---------  ----------  ------     -----------
                                   Apr 1999     961,646   160p       Apr 2002 to
                                                                        Apr 2006


o    Further details together with the performance targets for the above schemes
     are set out on pages 47 to 64.

o    The options marked * are super options.

o    Exercise prices have been rounded to the nearest penny.

o    In the case of the  various  demerger  schemes,  the date of grant shown is
     that of the original option replaced under the demerger scheme.



<PAGE>


NOTE 25 - POST RETIREMENT BENEFITS

The Group operates a number of pension schemes throughout the world.

o    The majority of the schemes are  externally  funded and the assets are held
     in separately administered trusts or are insured.

o    None of the  externally  funded schemes holds  investments  in, or has made
     loans to, the Company or any of its subsidiary undertakings.

o    The major schemes,  which cover the majority of scheme members, are defined
     contribution schemes.

o    Following the  Demerger,  the Group has only one material  defined  benefit
     scheme with active membership,  the Cordiant Group Pension Scheme.  This UK
     scheme was closed to new members in 1990 with new employees after that date
     joining a defined contribution  scheme.  Employees of Saatchi & Saatchi and
     Zenith remain members of the scheme under  transitional  arrangements.  The
     latest actuarial  valuation,  based on the attained age method and assuming
     an investment  return of 8% and salary  increases of 6%, was carried out as
     at 1 April  1999 when the  actuarial  value of  investments  in the  scheme
     were(pound)27.7  million  and the level of funding  was 91.2%.  The deficit
     will be funded by the Group over the  remaining  service  lives of existing
     employees.    Employer's    contributions    to   the    scheme   in   1999
     were(pound)0.2million.    Contributions    and   expense   are   based   on
     recommendations of a qualified actuary.

o    In addition  to pension  schemes  the Group  operates an unfunded  deferred
     compensation  plan under which  salary  sacrifices  are deferred and accrue
     interest until the accumulated benefit is fully withdrawn. The cost of this
     during the year was (pound)0.3  million  (1998:  (pound)0.3  million).  The
     accumulated  fund at  December  31,  1999  was  (pound)3.3  million  (1998:
     (pound)3.0  million)  which is  included in  provisions  for  pensions  and
     similar employment obligations (note 18).

o    The pension expense for the year was as follows:

                                           1999          1998           1997
                                         (pound)m      (pound)m       (pound)m
                                      ------------ --------------- ------------
Defined benefit schemes                    0.2           0.3           1.4
Defined contribution schemes               4.5           4.1          11.0
                                      ------------ --------------- ------------
                                           4.7           4.4          12.4
                                      ============ =============== ============


<PAGE>


NOTE 26 - LEASES

The Group leases certain properties and equipment under operating leases.

Minimum  payments for operating  leases,  before  provisions for vacant property
(see Note 18), having initial or remaining non-cancelable terms in excess of one
year are as follows:

                                                     Sublease
                                    Minimum           Rental             Net
                                   Payments           Income          Payments
Years Ending December 31           pound)m           (pound)m        (pound)m
--------------------------      ------------------ ---------------- ------------
2000                                  30.8             9.5              21.3
2001                                  28.5             9.2              19.3
2002                                  26.4             9.0              17.4
2003                                  23.4             8.4              15.0
2004                                  21.2             9.0              12.2
Thereafter                           159.1            83.0              76.1
                                ------------------ ---------------- ------------
Total minimum lease payments         289.4           128.1             161.3
                               ================== ================ =============

Total expense for all operating leases was:

                                              Year ended December 31,
                               -------------------------------------------------
                                     1999              1998             1997
Net operating lease expense        (pound)m          (pound)m         (pound)m
                               ------------------ ---------------- -------------
Total operating lease expense        24.8             21.8             65.2
Sublease rental income               (4.2)            (3.0)           (14.6)
                               ------------------ ---------------- -------------
Net operating lease expense          20.6             18.8             50.6
                               ================= ================ ==============


NOTE 27 - CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL INFORMATION

Reconciliation of trading profit to net cash flow from operating activities

<TABLE>
<CAPTION>

                                                         Year ended December 31,
                                                -------------------------------------------
                                                  1999             1998          1997
                                                (pound)m         (pound)m      (pound)m
                                                --------------- ------------- -------------
<S>                                               <C>             <C>           <C>
Trading profit                                    33.5            26.0          55.6
Depreciation                                      10.4             9.7          26.2
Loss/(profit) on sale of tangible fixed assets     0.1            (0.1)         (0.8)
(Increase)/decrease in billable production        (4.7)            2.0          (5.5)
Increase in receivables                          (30.0)           (1.4)        (35.3)
Increase/(decrease) creditors                     45.5            (9.6)         38.5
Utilization of property provisions                (4.8)           (7.0)        (19.2)
Non-cash item - goodwill write-off                 -               0.2           2.2
                                                --------------- ------------- -------------
Net cash inflow from operating activities         50.0            19.8          61.7
                                                =============== ============= =============
</TABLE>


<PAGE>


Analysis of changes in net funds
<TABLE>
<CAPTION>
                                                                                        Exchange &
                                                At Jan 1,                Acquisitions     non cash       At Dec 31,
                                                 1999      Cash flows        *           movements        1999

                                                                ALL VALUES IN POUND STERLING (m)
                                              ---------- ------------  -------------   -------------   ------------
<S>                                            <C>        <C>           <C>             <C>             <C>
Cash at bank and in hand                          62.3        16.0          -              1.7             80.0
Cash deposits - current asset investments          0.8         5.5          -              0.1              6.4
Bank overdrafts                                  (21.2)       18.0          -               -              (3.2)
                                              ---------- ------------ -------------    -------------   ------------
Cash                                              41.9        39.5          -              1.8             83.2
                                              ---------- ------------ -------------    -------------   ------------
External debt due within one year                 (0.5)       (2.0)        (1.7)          (0.1)            (4.3)
External debt due after one year                 (36.4)      (28.2)       (10.2)          (1.0)           (75.8)
Finance leases                                    (0.4)       (0.3)         -              -               (0.7)
                                              ---------- ------------ -------------    -------------   ------------
                                              ---------- ------------ -------------    -------------   ------------
Financing                                        (37.3)      (30.5)       (11.9)          (1.1)           (80.8)
                                              ---------- ------------ -------------    -------------   ------------
Net funds                                          4.6         9.0        (11.9)           0.7              2.4
                                              ========== ============ =============    =============   ============
</TABLE>

<TABLE>
<CAPTION>
                                                                          Acquisitions    Exchange &
                                                At Jan 1,                     and          non cash      At Dec 31,
                                                 1998       Cash flows     disposals *    movements         1998

                                                                   ALL VALUES IN POUND STERLING (m)
                                              ----------  ------------   -------------    -------------   ------------
<S>                                            <C>         <C>            <C>              <C>              <C>
Cash at bank and in hand                           61.7        2.6              -           (2.0)            62.3
Cash deposits - current asset investments            -         0.8              -             -               0.8
Bank overdrafts                                    (7.7)     (13.4)             -           (0.1)           (21.2)
                                              ----------  ------------   -------------    -------------   ------------
Cash                                               54.0      (10.0)             -           (2.1)            41.9
                                              ----------  ------------   -------------    -------------   ------------
External debt due within one year                  (0.7)       0.7            (0.5)           -              (0.5)
External debt due after one year                  (28.4)      (9.3)            1.1           0.2            (36.4)
Finance leases                                     (0.2)       0.2              -           (0.4)            (0.4)
                                              ----------  ------------   -------------    -------------   ------------
                                              ----------  ------------   -------------    -------------   ------------
Financing                                         (29.3)      (8.4)            0.6          (0.2)           (37.3)
                                              ----------  ------------   -------------    -------------   ------------
Net funds                                          24.7      (18.4)            0.6          (2.3)             4.6
                                              ==========  ============   =============    =============   ============
</TABLE>


*    Excluding cash and overdrafts

<TABLE>
<CAPTION>
                                                                              Exchange &
                                    At Jan 1,                                  non cash      At Dec 31,
                                     1997       Cash flows     Demerger        movements         1997

                                                       ALL VALUES IN POUND STERLING (m)
                                  ----------   -----------   -------------    -------------  -------------
<S>                                 <C>         <C>            <C>              <C>             <C>
Cash at bank and in hand             113.7       (41.6)          -              (10.4)          61.7
Bank overdrafts                      (47.8)       40.7           -               (0.6)          (7.7)
                                  ----------  ------------   -------------    -------------   ------------
Cash                                  65.9        (0.9)          -              (11.0)          54.0
                                  ----------  ------------   -------------    -------------   ------------
External debt due within 1 year       (5.0)        3.2           0.6              0.5           (0.7)
External debt due after 1 year       (88.9)      (20.5)         83.8             (2.8)         (28.4)
Finance leases                        (0.5)        0.3           0.2             (0.2)          (0.2)
                                  ----------  ------------   ------------     -------------   ------------
Financing                            (94.4)      (17.0)         84.6             (2.5)         (29.3)
                                  ----------  ------------   ------------     -------------   ------------
Net funds                            (28.5)      (17.9)         84.6            (13.5)          24.7
                                  ==========   ============ ============      =============   ============
</TABLE>


On  December  14,  1997,  the net  assets of Saatchi & Saatchi  and Zenith  were
demerged.  On  demerger,  they had net  debt of  (pound)41.2  million.  Net cash
amounting  to  (pound)43.4  million  is shown  as an  outflow  in the cash  flow
statement,  external debt of (pound)84.6  million is included in the analysis of
movement in net debt above.


The effects of the acquisitions of subsidiaries in 1999

Owing to the timing of the  acquisitions  in the year ended  December  31, 1999,
their  results  did not have a  material  impact  on the  Group's  turnover  and
operating  profit  for the year and they have  consequently  not been  disclosed
separately on the face of the consolidated profit and loss.

The aggregate  revenue and operating  profit included in the Group's results for
the year ended  December 31, 1999 in respect of  acquisitions  in the  financial
year were (pound)9.6 million and (pound)2.6 million respectively.

<TABLE>
<CAPTION>
                                          Acquisitions                                Acquisitions
                                            (pound)m                                     (pound)m
                                        -----------------                          ----------------
<S>                                      <C>            <C>                         <C>
Goodwill capitalized                          60.4      Loans and finance leases          11.9
Goodwill transferred to reserves               3.1      Creditors                         68.1
Tangible fixed assets                          2.9      Minorities                         0.4
Work in progress                               0.6      Cost of acquisitions
Debtors                                       70.4      - cash (net)                      19.8
Current investments                            4.4      - CCG shares issued                4.1
                                                        - accruals                        37.5
                                        -----------------                          ----------------
                                             141.8                                       141.8
                                        =================                          ================
</TABLE>

Goodwill  of  (pound)3.1  million has been  written off  directly to reserves in
respect  of  adjustments   made  to  estimates  of  deferred   consideration  on
acquisitions made prior to January 1, 1998.

The effects of the acquisitions and disposal of subsidiaries in 1998


<TABLE>
<CAPTION>
                                    Acquisitions        Disposals                           Acquisitions  Disposals
                                   (pound)m             (pound)m                              (pound)m     (pound)m
                                   --------------     -----------                          ------------- ---------
<S>                                 <C>                <C>                                  <C>           <C>

Goodwill capitalized (net)          16.4                 -   Loans and finance leases         0.2         (0.8)
Goodwill transferred to reserves     4.6               (2.4) Creditors                        9.0        (15.5)
Tangible fixed assets                0.7               (0.5) Provision for joint venture
                                                             deficit                           -           1.0
Work in progress                     0.6               (1.1) Minorities                      (0.7)          -
Debtors                              7.2              (13.3) Cost of acquisitions
Cash in companies disposed of         -                (0.4) - cash (net)                     6.8           -
Cash received                         -                 2.4  - CCG shares issued              3.4           -
                                                             - investments                    0.4           -
                                                             - accruals                      10.4           -
                                   -------------- -----------                              ------------- ----------
                                    29.5              (15.3)                                 29.5        (15.3)
                                   ============== ===========                              ============= ==========
</TABLE>

The effects of disposals relate mainly to the reclassification of Bates Japan as
a joint venture following a capital  restructuring during the year which created
neither a profit nor a loss. Goodwill of (pound)4.6 million has been written off
directly to reserves in respect of  adjustments  made to  estimates  of deferred
consideration on acquisitions made prior to January 1, 1998.


<PAGE>


The effects of the acquisition of Diamond Ad Ltd in 1999.

The  following  table sets out the book  values of the  identifiable  assets and
liabilities of Diamond Ad Ltd acquired and their fair value to the Group:

<TABLE>
<CAPTION>

                                                                                          Accounting       Provisional
                                                                            Fair Value     policy          fair value
                                                             Book value    adjustments    alignment          to Group
                                                  Notes      (pound)m       (pound)m      (pound)m          (pound)m
                                               ---------- -------------- -------------- --------------- --------------
<S>                                             <C>         <C>            <C>            <C>             <C>

FIXED ASSETS
Tangible                                           b          1.4            -             (0.2)            1.2
Investments                                                   0.4            -              -               0.4

CURRENT ASSETS
Work in progress                                   b          0.7            -             (0.1)            0.6
Debtors                                            a        100.3          (16.1)           -              84.2
Investments                                        b          4.6            -             (0.2)            4.4
Cash                                                          6.4            -              -               6.4
                                                          ----------- -------------- --------------- --------------
TOTAL ASSETS                                                113.8          (16.1)          (0.5)           97.2
                                                          ----------- -------------- --------------- --------------
CREDITORS
Creditors                                          b        (93.9)           -             (0.3)          (94.2)
Provisions                                                   (2.0)           -              -              (2.0)
Deferred tax                                       b          5.1            -             (5.1)            -
                                                          ----------- -------------- --------------- --------------
TOTAL LIABILITIES                                           (90.8)           -             (5.4)          (96.2)
                                                          ----------- -------------- ------------------------------
NET ASSETS                                                   23.0          (16.1)          (5.9)            1.0
                                                          ----------- -------------- ---------------

Minority interest                                                                                           (0.2)
Goodwill                                                                                                    41.4
                                                                                                      --------------
                                                                                                            42.2
                                                                                                      ==============
Satisfied by:
Consideration paid                                                                                          16.4
Contingent earnout payments                                                                                 25.8
                                                                                                      --------------
Total consideration                                                                                         42.2
                                                                                                      ==============
</TABLE>


Material  adjustments  necessary  to restate the net assets of Diamond Ad Ltd in
accordance with the accounting policies of CCG and fair value adjustments:

a    Fair value adjustment to debtors reflects the write off of a debtor balance
     relating to the previous sale of a business by Diamond Ad Ltd, deemed to be
     irrecoverable at the point of acquisition by CCG.

b    Adjustments to align Diamond Ad Ltd accounting policies with those of CCG.

Net cash outflows in respect of the acquisition comprised:

                                                        1999
                                                     (pound)m
                                                  -------------
Cash consideration                                     16.4
Cash at bank and in hand acquired                      (6.4)
Bank overdrafts acquired                               13.5
                                                  -------------
Total                                                  23.5
                                                  =============




<PAGE>


The effects of the acquisition of Diamond Ad Ltd in 1999.



An amount of (pound)nil  has been charged to the Group's profit and loss account
in respect of costs incurred in re-organising, restructuring and integrating the
acquisition  in the period from  effective  date of acquisition of December 1 to
December 31, 1999.

Diamond  Ad Ltd  incurred  a loss  after  taxation  and  minority  interests  of
(pound)14.0  million in the year  ended  December  31,  1999  (1998:  (pound)6.0
million loss) after taking account of losses  incurred by and on the disposal of
certain  assets  and  businesses  not  acquired  by CCG,  of which a  profit  of
(pound)1.9  million  arose in the period from  December 1, 1999 to December  31,
1999. The unaudited  summarized profit and loss account and unaudited  statement
of total  recognized  gains  and  losses  for the year from  January  1, 1999 to
December 31, 1999,  extracted from local  management  accounts,  and shown under
Korean GAAP, and on the basis of the accounting policies of Diamond Ad Ltd prior
to the acquisition, are as follows:

PROFIT AND LOSS ACCOUNT                                          1999
                                                               (pound)m
                                                           --------------
TURNOVER                                                        259.5
Cost of sales                                                  (234.1)
                                                           --------------
GROSS PROFIT                                                     25.4
Other operating expenses (net)                                  (37.4)
                                                           --------------
OPERATING LOSS                                                  (12.0)
Finance charges (net)                                            (2.0)
                                                           --------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                     (14.0)
Tax on loss on ordinary activities                                 -
                                                           --------------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION                      (14.0)
Minority interests                                                 -
                                                           --------------
LOSS FOR THE FINANCIAL YEAR                                     (14.0)
                                                           ==============


The profit and loss  account  above is stated  after the losses  incurred on the
disposal of assets prior the acquisition by CCG on December 13, 1999.

Statement of total recognized gains and losses

                                                                1999
                                                              (pound)m
                                                           --------------
Loss for the financial year
and total recognized gains and                                (14.0)
losses relating to the year                                ==============



<PAGE>


NOTE 28 - OPERATIONS BY GEOGRAPHIC AREA

<TABLE>
<CAPTION>
                                                                                            Asia Pacific
                                                      United        North     Continental       and
                                                     Kingdom      America      Europe      Latin America     Total
                                                    (pound)m     (pound)m     (pound)m       (pound)m      (pound)m
                                                   ------------ ------------ ------------ ---------------- ----------
<S>                                                 <C>          <C>           <C>         <C>              <C>
Year ended December 31, 1999:
Commission and fee income                             40.2         83.1        121.9         90.6            335.8
Operating profit                                       4.4         10.9         12.5          5.7             33.5
Total assets employed                                 40.7        123.7        111.5        313.7            589.6
Net liabilities (assets) before financial items       41.8         19.5         (6.8)       (11.9)            42.6
Depreciation expense                                   1.6          2.8          3.0          3.0             10.4
Additions to properties, furniture, etc.               0.9         10.3          5.3          4.6             21.1

Year ended December 31, 1998:
Commission and fee income                             39.8         71.8        108.4        81.8             301.8
Operating profit                                       4.5          8.2         10.1         3.2              26.0
Total assets employed                                 44.2        104.7         95.8       142.0             386.7
Net liabilities (assets) before financial items       48.4         10.6         (5.9)       12.8              65.9
Depreciation expense                                   1.7          2.9          2.6         2.5               9.7
Additions to properties, furniture, etc.               2.0          1.6          3.2         2.2               9.0

Year ended December 31, 1997:
Commission and fee income                            115.4        268.7        203.3       148.7             736.1
Trading profit                                        14.0         29.2         12.1         2.5              57.8
Exceptional operating expense                          -            -            -           2.2               2.2
Operating profit                                      14.0         29.2         12.1         0.3              55.6
Total assets employed                                 41.2         83.2         92.4       161.0             377.8
Net liabilities (assets) before financial items       73.1         20.1         (1.4)       12.5             104.3
Depreciation expense                                   6.0         11.0          4.8         4.4              26.2
Additions to properties, furniture, etc.               4.4          8.3          4.5         7.5              24.7
</TABLE>




<PAGE>


ONGOING GEOGRAPHIC ANALYSIS

To  enable  a  fuller  understanding  of  the  trading  performance   additional
geographic analysis of ongoing operations is provided below:

<TABLE>
<CAPTION>

                                                                                    Asia Pacific
                                             United        North     Continental        and
                                             Kingdom      America       Europe     Latin America     Total
                                                       ALL VALUES IN POUND STERLING (m)
                                           ------------ ------------ ------------- --------------- -----------
<S>                                         <C>          <C>         <C>           <C>              <C>
Year ended December 31, 1999:
Commission and fee income                    40.2         83.1        121.9          90.6           335.8
Operating profit                              4.4         10.9         12.5           5.7            33.5
Depreciation expense                          1.6          2.8          3.0           3.0            10.4

Year ended December 31, 1998:
Commission and fee income                    39.8         71.8        108.4         81.8            301.8
Operating profit                              4.5          8.2         10.1          3.2             26.0
Depreciation expense                          1.7          2.9          2.6          2.5              9.7

Year ended December 31, 1997:
Commission and fee income                    39.0         67.7        105.0         96.5            308.2
Trading profit                                6.5          6.3          8.3          3.5             24.6
Exceptional operating expense                  -            -            -            2.2              2.2
Operating profit                              6.5          6.3          8.3          1.3             22.4
Depreciation expense                          1.8          2.8          2.4          2.6              9.6
</TABLE>


The directors  consider  that there is only one  continuing  business  activity,
namely  advertising and marketing  services,  and that it is more appropriate to
show a geographic  analysis of revenue than turnover,  which reflects the manner
in which the  Directors  manage the Group's  operations.  Revenue by  geographic
destination is not materially different from revenue by geographic origin.

The Group's  customers are located  throughout the world.  During 1999, 1998 and
1997 no clients  accounted for more than 10% of either CCG's ongoing  revenue or
Cordiant's revenue.

Turnover between segments is not material.

Geographical   analysis  of  Group  share  of  joint   ventures  and  associated
undertakings operating profits:

                                                    1999          1998
                                                  (pound)m      (pound)m
                                               -------------   --------------
UK                                                  3.7             2.2
Continental Europe                                   -              0.1
Asia Pacific and Latin America                      1.2             0.3
                                               -------------   --------------
                                                    4.9             2.6
                                               =============   ==============


<PAGE>


The following countries contribute individually to over 10% of Group Revenues:
<TABLE>
<CAPTION>
                                              Revenue                                     Long lived assets
                      --------------------------------------------------------- --------------------------------------
                            1999                1998               1997                1999               1998
                          (pound)m            (pound)m           (pound)m            (pound)m           (pound)m
                      ------------------ ------------------- ------------------ ------------------- ------------------
<S>                      <C>               <C>                 <C>                 <C>                 <C>

UK                            40.2               39.8              101.1               3.2               4.0
US                            79.4               67.9              245.1              12.1               3.9
Australia                     48.7               48.7               70.7               4.3               4.6
Germany                       43.7               36.3               40.5               3.4               1.3
--------------------- ------------------ ------------------- ------------------ ------------------- ------------------
</TABLE>


NOTE 29 - DIRECTORS' EMOLUMENTS

The total  emoluments,  pension costs and fees for the year ending  December 31,
1999 were(pound)4,147,000  (1998:  (pound)2,924,957) of which(pound)118,000 were
fees (1998:(pound)231,146).

The emoluments,  excluding  pension  contributions,  of the Chairman and highest
paid UK Director, were:

Year ended December 31, 1999
Charles Scott (Chairman and highest paid UK Director): (pound)226,000
Year ended December 31, 1998
Charles Scott (Chairman and highest paid UK Director): (pound)169,165


NOTE 30 - DIRECTORS' INTERESTS

The  interests  of the  directors  who  were in  office  at the  year end in the
Company's  share  capital  appearing in the register  maintained  by the Company
pursuant to Section 325 of the Companies Act of 1985 were as set out below.


<TABLE>
<CAPTION>
                                                                          Ordinary share options and equity
                                    Beneficially owned ordinary shares          participation rights
                                      December 31,         December 31,        December 31,     December 31,
                                          1999               1998                1999               1998
                                   ---------------- -------------------- ------------------- ----------------
<S>                                 <C>              <C>                   <C>                 <C>
M Bungey                                 55,990           55,990            1,537,130          1,537,130
A D'Angelo                                  960              960              810,255            860,337
J de Yturbe                                   -                -              854,397            854,397
D Fishburn                                    -                -                    -                   -
A Hamill(1)                           1,669,562        2,949,562              867,255            922,139
T Levitt                                 18,796           18,796                    -                   -
P M Schoning                                  -                -              725,827            725,827
C Scott(2)                               85,172           85,172              731,905            731,905
R Stomberg                                    -                -                    -                   -
J Tyrrell                                     -                -                    -                   -
W Whitehead                                 787              787              815,827            829,548
---------------------------------- ---------------- -------------------- ------------------- ----------------
</TABLE>

(1)  For disclosure purposes, Mr Hamill is deemed to be interested in all of the
     1,669,562  shares held by TCG Employee  Investment  Pty Ltd. His beneficial
     interest  is  limited  to  approximately  13.2% of the  shares  held by TCG
     Employee  Investment  Pty Ltd at any given  time.  On 7 January  2000,  TCG
     Employee Investment Pty Ltd disposed of 563,468.

(2)  Includes options and shares in spouse's name.

The directors'  interests in the Company's  share capital have not changed since
December 31, 1999.



NOTE 31 - RELATED PARTIES

During 1999, 1998 and 1997  transactions in the ordinary course of business with
associated companies were as follows:

                                                 1999       1998
                                               (pound)m   (pound)m
                                             ----------- ----------
              Media services                      182.1      214.0
              Production                           13.8        9.5
                                             ----------- ----------
                                                  195.9      223.5
                                             =========== ==========


The year end balances  with  associated  companies are disclosed in Notes 12 and
17.

Contracts of significance which were entered into by the Group during 1999, 1998
and 1997 in which the directors of a subsidiary company had a material interest,
details of which are given in Note 2, were as follows:

In August 1999,  the Group  acquired a 100%  interest in Bates Clarion in India,
for  consideration of INR17.0 million  ((pound)0.2  million).  Bates Clarion was
previously an affiliate.

In November  1999,  the Group  acquired the remaining 20% interest in Dr Puttner
Bates, in Austria, for consideration of ATS5.8 million ((pound)0.3 million).

In November 1999, the Group acquired the remaining 40% interest in Bates Poland,
for consideration of POZ0.7 million ((pound)0.1 million).

In November  1999,  the Group acquired a further 7% interest in Verdino Bates in
Argentina, for no consideration.

In  November  1998,  the Group  acquired  the  remaining  24.9%  interest in The
Communications Group in Australia,  for initial  consideration of A$16.9 million
((pound)6.2 million).

In October 1998,  the Group  acquired a further 75% interest in Verdino Bates SA
or Argentina, for consideration of ARP2.3 million ((pound)1.4 million).

In March 1997,  Cordiant made a deferred payment of (pound) 0.4 million relating
to the acquisition in 1996 of the minority  interest in BSB Saatchi & Saatchi MC
Limited in Poland.

In July 1997,  Cordiant  acquired a 51% interest in the share capital of Grapple
Group 141 (Pty) Ltd for consideration of R1.8 million ((pound) 0.2 million).

In November 1997, Cordiant acquired a further 25% minority interest in the share
capital of X/M Harrow Pty Ltd in  Australia.  Estimated  cash  payments of A$0.6
million (pound) 0.3 million) will be made in 2000.

In December  1997  Cordiant  acquired a further 33% interest in Scholz & Friends
Dresden  GmbH in  Germany.  Deferred  consideration  of (pound)  2.2  million is
payable in 2000.

During 1997 Cordiant made deferred  payments  totaling  FFR31.3  million (pound)
Sterling  2.9  million)  relating  to the  acquisition  in 1996 of the  minority
interest in Saatchi & Saatchi Advertising SA in France.

During  1997  Cordiant  made  deferred   payments   totaling   Pts1.206  million
((pound)5.0  million)  relating  to the  acquisition  in  1994  of the  minority
interest in Grupo Bates SA in Spain.

In October 1997,  Cordiant sold NRG. NRG provided services to the film industry.
Consideration  of (pound) 24.4 million was received which was after  deducting a
fee of (pound) 8.0 million payable to certain of NRG's directors under the terms
of an agreement entered into in 1995.

NOTE 32 - DERIVATIVES AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Set out below is an outline of the objectives,  policies and strategies  pursued
by the Group in relation to financial instruments:

FINANCIAL INSTRUMENTS - GROUP POLICY

The Group  finances  its  operations  by a mixture of  retained  earnings,  bank
borrowings  and  fixed  rate  long-term  loans.  The  bank  borrowings  comprise
borrowings under the central US$250 million  ((pound)155  million) bank facility
and other  short-term  bank  overdraft  borrowings.  All bank  borrowings  incur
floating rates of interest.

Group policy  relating to the use of financial  instruments,  including types of
instruments  used  and  amounts  invested,  is  determined  by  the  Board.  The
instruments  used by the Group in the year under  review are fixed and  floating
rate  borrowings,  interest rate caps,  forward foreign  currency  contracts and
foreign  currency  swaps.  The main risks  arising  from the  Group's  financial
instruments are interest rate risks, liquidity risks and foreign currency risks.
The Group does not trade in derivatives and does not enter into  transactions of
a  speculative  nature  or  unrelated  to  the  Group's  investment  activities.
Derivatives  are used  only to  manage  the risks  arising  from the  underlying
business activities.

INTEREST RATE RISK

The Group is exposed to interest  rate  fluctuations  due to the  floating  rate
central  bank  facility   borrowings.   The  majority  of  these  floating  rate
liabilities are denominated in sterling or US dollars.  This exposure is managed
via interest rate caps  denominated  in both sterling and US dollars.  The Group
aims to hold interest rate caps to cover the majority of its borrowings and with
a variety of maturities.  The current interest rate caps mature between December
2000 and June 2002. The Group will renew these caps on maturity.

LIQUIDITY RISK

The Group's  objective is to maintain a balance between  continuity of financing
and flexibility through the use of borrowings with a range of maturities.

FOREIGN CURRENCY RISK

The Group has significant  and diverse  investments in foreign  operations.  The
Group's  balance sheet and profit and loss can therefore be materially  affected
by  movements  in exchange  rates.  It is not the  Group's  policy to manage net
assets via balance sheet hedging, or to hedge international  profits.  The Group
seeks to mitigate  the effect of currency  exposures  by  borrowing  in the same
currencies as the  currencies in which it lends and by using  currency  swaps to
match the currencies in which it lends.

The following  numerical  disclosures relate to the Group's financial assets and
financial  liabilities  as defined in FRS 13  "Derivatives  and Other  Financial
Instruments".

For the  purpose  of the  disclosures,  which  follow in this  note,  short-term
debtors and creditors,  which arise directly from the Group's operations,  apart
from the currency disclosures,  have been excluded as permitted under FRS 13. As
defined, short-term intergroup debtors, creditors, financing, pensions and other
post-retirement  benefit  assets and  liabilities  that fall within the scope of
SSAP24 are also excluded from the analysis.  The disclosures  therefore focus on
those financial  instruments,  which play a significant medium to long term role
in the financial risk profile of the Group. An analysis of the carrying value of
all financial  assets and  liabilities  is given in the fair value table on page
F-44.

INTEREST RATE MANAGEMENT

Foreign  exchange  and  interest  rate  exposures  are managed  centrally by the
Group's  treasury  operations based in London and New York. The Board determines
policies governing the use of financial instruments.

Interest  rate  management  is  undertaken  to ensure  that the  majority of the
Group's  borrowing  requirements  is  protected  from  significant  increases in
interest  rates.   Targets  for  minimum  liquidity  against  committed  banking
facilities are managed on a daily basis,  and performance is regularly  reported
to the Board.

Net interest  paid or received on interest  rate swaps is included in the profit
and loss account on an accruals basis.

As permitted by FRS13,  the Group has not disclosed  comparatives  since this is
the first year that FRS 13 has been applied.

The counterparties to the Group's financial  instruments are major international
financial  institutions.  It is Group practice to monitor the financial standing
of these  counterparties on an on-going basis. The Group does not anticipate any
material adverse effect on its financial position resulting from its involvement
in  the  agreements,  nor  does  it  anticipate  non-performance  by  any of its
counterparties.

INTEREST RATE PROFILE

The  interest  rate  profile  of the  financial  liabilities  of the Group as at
December 31, 1999 was:

<TABLE>
<CAPTION>

                                              Floating rate          Fixed rate       Financial liabilities
                               Total            financial            financial            on which no
                                               liabilities           liabilities        interest is paid

Currency                                                ALL VALUES IN POUND STERLING (m)
------------------------- ----------------- ------------------- --------------------- ----------------------
<S>                           <C>             <C>                    <C>                <C>

Sterling                          49.6             49.6                 -                     -
US dollars                        28.1             16.2                 -                    11.9
Korean won                        15.9              -                  13.4                   2.5
Other                              8.5              4.2                 0.7                   3.6
                          ----------------- ---------------- --------------------- ----------------------
Total                            102.1             70.0                14.1                  18.0
                          ================= ================ ===================== ======================
</TABLE>



    FIXED RATE FINANCIAL LIABILITIES     Weighted average      Weighted average
                                          interest rate      period to maturity
    Currency                                    %                  months
    ------------------------------------ ----------------    -------------------
    Korean won                                 8.0                  20
    Other                                     11.6                  37
                                         ----------------    -------------------
    Total                                      8.1                   20
                                         ================    ===================


The  floating  rate  financial  liabilities  comprise  bank  borrowings  bearing
interest  at fixed rates in advance  for  periods  ranging  from one week to six
months by reference to LIBOR for the sterling and US dollar liabilities,  or the
applicable  inter-bank  offer  rates  or  prime  lending  rates  for  all  other
liabilities.

The financial liabilities on which no interest is paid, are liabilities relating
to  committed  future  acquisition  payments  due after one year.  The  weighted
average period to maturity of these liabilities is 28 months.

The Group is exposed to interest rate  fluctuations  on the above  floating rate
bank borrowings. The interest rate exposure on the central borrowings is managed
via interest rate caps  denominated  in both sterling and US dollars.  The Group
aims to hold interest rate caps to cover the majority of its borrowings and with
a variety of maturities.  The current interest rate caps mature between December
2000 and June 2002. The Group will renew these caps on maturity.

The interest  rate profile of the  financial  assets of the Group as at December
31, 1999 was:


<TABLE>
<CAPTION>
                                                                                        Financial assets
                                              Floating rate          Fixed rate            on which no
                               Total         financial assets     financial assets    interest is received
Currency                     (pound)m           (pound)m             (pound)m              (pound)m
------------------------- ----------------- ------------------- --------------------- ----------------------
<S>                         <C>               <C>                <C>                    <C>

Sterling                      5.7                 4.5                 -                     1.2
US dollars                   14.9                14.9                 -                     -
Korean won                    1.8                 -                   1.8                   -
Other                         2.4                 1.3                 -                     1.1
                          ----------------- ------------------- --------------------- ----------------------
Total                        24.8                20.7                 1.8                   2.3
                          ================= =================== ===================== ======================
</TABLE>


FIXED RATE FINANCIAL ASSETS          Weighted average        Weighted average
                                      interest rate         period to maturity
Currency                                    %                     months
-----------------------------     --------------------      --------------------
Korean won                                 4.1                      2
                                  ====================      ====================


The floating rate financial  assets comprise  primarily  short-term money market
deposits  bearing  interest at rates fixed on an overnight basis by reference to
LIBOR for sterling and US dollar assets, or the applicable  inter-bank reference
rates for all other financial assets. The remainder comprises loans to employees
and other third parties, on which interest is fixed quarterly on an arm's length
basis by reference to the appropriate interbank rate.

The financial  assets on which no interest is paid comprise  interest free loans
and fixed asset  investments.  The  weighted  average  period to maturity of the
interest  free  loans is 12  months.  There is no  weighted  average  period  to
maturity  for the fixed  asset  investments  since  these are held on an ongoing
basis.

CURRENCY EXPOSURES

The Group's currency exposures,  in other words, those  transactional  exposures
that give rise to the net currency gains and losses recognised in the profit and
loss account,  comprise the financial  assets and financial  liabilities  of the
Group which are not  denominated  in the  functional  currency of the individual
operating  entity to the extent these are not matched.  As at December 31, 1999,
after taking into account currency swaps and forward contracts, the Group had no
material currency exposures.

The Group enters into foreign  currency  contracts  primarily for the purpose of
hedging the  remaining  known  cross-currency  cash flows.  Certain other items,
which could  materially  impact the Group's profit and loss account if unhedged,
are also covered by foreign currency contracts.  Foreign exchange contracts with
a total value of (pound)6.8 million were outstanding at December 31, 1999 (1998:
(pound)23.0  million). It is Group policy to hedge only known, certain exposures
and not to speculate on foreign currency movements.

MATURITY OF FINANCIAL LIABILITIES

The maturity profile of the Group's financial liabilities,  excluding short-term
creditors as defined, at December 31, 1999 were as follows:

                                                    (pound)m
    -------------------------------------------- --------------
    Expiring within one year                            7.8
    Expiring within one to two years                    6.0
    Expiring within two to five years                  88.2
    Expiring after five years                           0.1
                                                 --------------
                                                      102.1
                                                 ==============


BORROWING FACILITIES

The  Group  has  various  borrowing  facilities  available  to it.  The  undrawn
committed  facilities  available  at  December  31, 1999 in respect of which all
conditions precedent had been met at that date were as follows:

                                                    (pound)m
    -------------------------------------------- --------------
    Expiring within one year                           70.7
    Expiring within two to five years                  19.4
                                                 --------------
                                                       90.1
                                                 ==============


The Group had committed  central bank  facilities of  (pound)155.3  million,  of
which  (pound)65.2  was  drawn  at  December  31,  1999.  Of  these  facilities,
(pound)77.6  million  matures in one year and  (pound)77.7  million matures in 5
years.  This maturity  profile is expected to provide the Group with  sufficient
liquidity over the period of the facility.

Group borrowings  outside the central bank facility are uncommitted  borrowings,
and as such could become repayable on demand.  A total of (pound)3.2  million of
such  borrowings  were  outstanding  at December  31,  1999.  An  allowance  for
repayment of uncommitted borrowings is made on the central committed facility.

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES

Set out below is a  comparison  by  category  of the book  values of the Group's
financial assets and liabilities as at December 31, 1999:

<TABLE>
<CAPTION>
                                                                              Book values         Fair values
                                                                               (pound)m            (pound)m
                                                                          -------------------- ------------------
<S>                                                                          <C>                 <C>
Primary instruments held to finance the Group's operations:
Short-term borrowings and current portion of long-term borrowings               (7.5)                 (7.5)
Long-term borrowings                                                           (75.9)                (75.9)
Cash deposits                                                                   21.0                  21.0
Other financial liabilities                                                    (18.7)                (18.7)
Other financial assets                                                           3.8                   3.8
----------------------------------------------------------------------------------------------- -----------------
Derivative instruments held to manage the interest rate and currency profile:
Interest rate caps                                                                  -                  0.4
------------------------------------------------------------------------- --------------------- -----------------
</TABLE>


Market  values have been used to  determine  the fair value of swaps and forward
foreign exchange contracts, this analysis,  however, provided an immaterial fair
value  disclosure.  The fair values of interest  rate caps have been  calculated
using  indicative  bank  valuations of applicable  contracts  outstanding  as at
December 31, 1999.

HEDGES

As detailed  above,  the Group had various  interest  rate and foreign  exchange
hedging contracts outstanding at the year end in relation to underlying currency
and interest rate  exposures.  The Group had no material  unrecognized  gains or
losses on such hedges at either December 31, 1999 or December 31, 1998.

NOTE 33 - PRINCIPAL SUBSIDIARIES

Except where  otherwise  indicated,  the Company  indirectly  owned 100% of each
class of the issued shares of the  subsidiary  undertakings  listed  below.  All
these subsidiary  undertakings are advertising and marketing services companies.
The  country  of  operation  and   registration  of  the  principal   subsidiary
undertakings were as follows:

England               Bates Dorland Ltd.
                      The Facilities Group Ltd.
                      (30% Ordinary)
                      Zenith Media Holdings Ltd.
                      (50% Ordinary)

Australia             The Communications Group Pty Ltd.

Denmark               Bates Gruppen AS

Germany               Scholz & Friends GmbH (90%  Ordinary)  Subsequent  to year
                      end the Group acquired the remaining 10%, refer note 34.

Korea                 Diamond Ad Ltd (80% Ordinary)

Norway                Bates Gruppen AS

Spain                 Grupo Bates SA

US                    Bates Advertising USA, Inc.

In the opinion of the Company, these undertakings principally affect the results
and assets of the Group.  In addition to the  companies  shown above,  the Group
also holds investments in other subsidiaries and associated undertakings. A full
list of subsidiaries,  joint ventures and associated  undertakings will be filed
with the Registrar of Companies.

As provided for in the Zenith  shareholders'  agreement 75% of the distributable
profits of Zenith will be distributed to  shareholders  and divided between them
in part by reference to the  proportions in which Zenith  receives  revenue from
clients of each shareholder. The remainder will be retained in Zenith.

NOTE 34 - SUBSEQUENT EVENTS

There have been no material subsequent events, except as disclosed below:

o As at December 31, 1999,  one of the joint  venture  partners had sold its 31%
interest in SSBY Japan.  However,  at the date of signing  CCG's  accounts,  the
Group was still negotiating with the remaining joint venture partner,  as to the
final ownership structure. Consequently, CCG accounting for this company has not
been changed, and will be finalised once renegotiations with the remaining joint
venture partner have been concluded.

o On January 1, 2000,  the Group  acquired the remaining 10% in Scholz & Friends
Hamburg, for a total consideration of DEM9.0 million ((pound)2.9 million).

o On  March  1,  2000,  acquisition  of  100%  of  Healthworld  Corporation  for
consideration of US$209.0 million  ((pound)129.2  million),  was approved by CCG
shareholders and CCG issued 39.4 million new Ordinary shares on March 3, 2000 to
Healthworld  shareholders.  Immediately after completion,  Healthworld employees
also held exercisable options over 6.4 million CCG shares. This acquisition will
be accounted for using acquisition accounting.

NOTE 35 - NATURE OF BUSINESS

The Group is a  multi-national  advertising  and  marketing  services  business.
Ninety-eight  percent  of  the  Group's  ongoing  revenue  is  generated  by its
advertising  networks. An analysis of revenue and assets by geographic region is
set out in Note 28 to the consolidated financial statements.

NOTE 36 - COMPANIES ACT 1985

The Consolidated  Financial  Statements do not constitute  "statutory  accounts"
within the meaning of the Companies Act 1985 of England and Wales for any of the
three years ended December 31, 1998.  Statutory  accounts for 1996 and 1997 have
been filed with the United  Kingdom's  Registrar  of  Companies;  the  statutory
accounts for 1998 will be filed following the Company's  Annual General Meeting.
The auditor has reported on these accounts.  Their reports were  unqualified and
did not contain statements under Section 237(2) or (3) of that Act.

NOTE 37 - UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The consolidated  financial  statements have been prepared in accordance with UK
generally  accepted  accounting  principles  (UK GAAP)  which  differ in certain
significant respects from US generally accepted accounting principles (US GAAP).
A  description  of the  significant  differences  between  UK GAAP  and US GAAP,
including  presentation  of differences, that are applicable to the Group is set
out below:

(A) US GAAP information and change in accounting policy under US GAAP

As  described  in  note  1, in 1999  for  purposes  of the UK GAAP  consolidated
financial  statements,   the  Group  adopted  FRS  12  "Provisions,   Contingent
Liabilities  and  Contingent  Assets" to account  for  property  provisions.  In
adopting  FRS 12, the Group has  restated its  historical  financial  statements
prepared  under UK GAAP to  disclose  the  results of the prior years had FRS 12
been in effect for those years. In connection with this  restatement,  the Group
determined that certain errors had been made in prior years in the determination
of property provisions and compensation  expense under US GAAP. As a result, the
financial  statements  undre US GAAP have been restated for all prior years. The
impact of these changes on the net profit and shareholders'  funds under US GAAP
as previously reported as as follows:

                                                 Year ended December 31

Net profit under US GAAP -- Restated              1998              1997
                                                  ----              ----
                                                   Lm                Lm
                                                   --                --

Net profit applicable to Ordinary shareholders,
as previously reported                             4.8               6.8

Adjustments to correct errors related to:
        Property Provisions                       (0.9)             (3.6)
        Compensation expense                       0.7               0.1
                                                  -----             -----
Net profit attributable ot Ordinary shareholders,
as restated                                        4.6               3.1
                                                  =====             =====
Earnings per share
        Basic                                      2.1p              1.4p
        Diluted                                    2.1p              1.4p

                                                 Year ended December 31,
Equity shareholders' funds - Restated
                                                           1998
                                                           ----
                                                            Lm
                                                            --
Equity shareholders' funds, as previously reported         10.6

Adjustments to correct errors related to:
        Property provisions                                 7.3
        Compensation expense                                0.7
                                                          -----
Equity shareholders' funds, as restated                    18.6
                                                          =====


During  1999,  the Group  also  reviewed  its  accounting  policy  for  property
provisions  under US GAAP and concluded  that it is preferable  under US GAAP to
record property  provisions on a gross basis rather than on a discounted  basis.
The cumulative  effect of this change in accounting  policy for periods  through
December  31,  1998  was a charge  to  profit  under US GAAP for the year  ended
December  31, 1999 of L14.9  million  (6.6p per Ordinary  share).  The pro forma
impact for the years ended  December  31, 1998 and 1997,  and as at December 31,
1998 assuming that this change had been applied  retrovactively,  is provided as
additional disclosure.


(B) DIVIDENDS

Under UK GAAP,  ordinary  dividends  proposed  are  provided  for in the year in
respect of which they are  recommended by the Board of Directors for approval by
the  shareholders.  Under US GAAP,  such  dividends  are not  provided for until
declared by the Board of Directors.
<PAGE>


(C) GOODWILL AND US PURCHASE ACCOUNTING

Under US GAAP,  goodwill  (which  excludes all  contingent  capital  payments of
approximatedly L46.0 million in 1999 and approximately L5.8 million in 1998) and
identifiable  intangible  assets acquired are capitalized and amortized  against
income; identified intangible assets acquired in business combinations which are
accounted for under the purchase method, are being amortized over their economic
lives which range from three to 20 years and the  remaining  goodwill  amortized
over 40 years. In addition to systematic amortization, management also review on
an annual basis the carrying value of goodwill and identifiable  intangibles for
impairment by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the assets exceed the fair value of the assets.

Under UK GAAP,  purchased  goodwill  arising in respect of  acquisitions  before
January 1, 1998  (including  any  additional  goodwill  estimated  to arise from
contingent  capital  payments),  when FRS 10 was  adopted,  was  written  off to
reserves in the year of acquisition.  A charge would be recognized in respect of
any  permanent  diminution  in the  value of  goodwill  previously  written  off
directly to reserves.  Purchased  goodwill arising from acquisitions on or after
January 1, 1998 has been  capitalized as an intangible fixed asset and amortized
over its useful  economic  life.  As the  Directors  are of the opinion that the
intangible  fixed  assets of the Group have an  indefinite  economic  life,  the
goodwill has not been  amortized but is subject to annual review for  impairment
by a comparison of the discounted future net cash flows expected to be generated
by the asset.

In the case of certain  acquisitions,  the  allocation of the purchase  price to
identifiable  intangible  assets is preliminary and is subject to change pending
the inalization of the allocation by the Company

Under UK GAAP the gain or loss on disposal is calculated after taking account of
goodwill previously written off to reserves for acquisitions prior to January 1,
1998.  Under US GAAP the gain or loss on disposal  is  calculated  after  taking
account  of  any  related  unamortized   goodwill  and  intangible  assets.  For
acquisitions  on or after  January 1, 1998 the profit or loss on disposal  under
both US and UK GAAP is calculated  after taking account of unamortized  goodwill
and intangible assets.

(D) DEFERRED TAXATION

UK GAAP requires that no provision for deferred  taxation  should be recorded if
there is  reasonable  evidence  that such  taxation  will not be  payable in the
foreseeable  future.  Deferred  tax  assets  are only  recognized  when they are
expected to be  recoverable  without  replacement  by  equivalent  deferred  tax
assets.

US GAAP requires full  provision of deferred  taxation  liabilities  and permits
deferred tax assets to be  recognized if their  realization  is considered to be
more likely than not. There are no deferred  taxation  differences  presented in
the  reconciliation  below  because the Company has net  deferred tax assets and
considers that it is more likely than not that they will not be recovered.

(E) COMPENSATION COSTS

Under UK GAAP the  Company  does not  recognize  any  compensation  for  certain
performance based share options.  Under US GAAP compensation expense is recorded
for all  performance  based share options over the vesting period for the excess
of the market price of underlying shares over the exercise price.



<PAGE>


(F) LONG TERM PROPERTY PROVISIONS

Under US GAAP,  provisions are made on a gross basis for  properties,  which are
vacant and surplus to  requirements  after  allowing  for  estimated  sub-rental
income.  Such provisions were previously  provided on a discounted  basis in the
presentation of US GAAP.

Under UK GAAP, the Group's property  provisions are discounted using a risk free
rate to the present value of future net lease  obligations  and related costs of
leasehold  property (net of estimated  sublease income and certain risk factors)
where the  space is vacant or  currently  not  planned  to be used for  on-going
operations.  The  periodic  unwinding  of the  discount is treated as an imputed
interest charge.

(G) PROPERTY LEASES

Under US GAAP, total rental  payments,  inclusive of increases in rental charges
specified in the lease, are recognized on a straight-line basis over the term of
the lease. Under UK GAAP, these increases have been recognized when payable.

(H) EMPLOYEE SHARE SCHEMES

The Company has adopted SFAS 123, Accounting for Stock-Based Compensation, which
permits  entities to recognize as expense over the vesting period the fair value
of all  stock-based  awards on the date of grant.  Alternatively,  SFAS 123 also
allows  entities to continue to apply the  provisions  of APB Opinion No. 25 and
provide pro forma net income and pro forma  earnings per share  disclosures  for
share  option  grants made in 1995 and future  years as if the  fair-value-based
method  defined in SFAS 123 had been  applied.  The  Directors  have  elected to
continue  to apply the  provisions  of APB  Opinion No. 25 and provide pro forma
disclosure provisions of SFAS 123. Accordingly, compensation expense is recorded
on the date of grant only if the current  market price of the  underlying  stock
exceeded the exercise price.  Under SFAS 123 the calculation of the option value
is  made  using  an  acceptable   pricing  model  to  include  certain  expected
parameters.


                                                    Year ended December 31,
                                                  -----------------------------
                                                            1998      1997
                                                  1999    Restated   Restated
                                                  -----------------------------
Net (loss)/profit
  in (pound) million          - as reported        (6.3)     7.7        4.3
                              - Proforma           13.6      7.7        3.0

Earnings per share
  in pence          Basic     - as reported       (2.8)p    3.5p       1.9p
                    Diluted   - as reported       (2.8)p    3.4p       1.9p
                    Basic     - Proforma            6.0p    3.5p       1.4p
                    diluted   - Proforma            5.7     3.4p       1.3p


If the  compensation  cost of the options had been determined  based on the fair
value at the grant dates for 1999 and 1998 consistent with the method prescribed
by SFAS No. 123,  the  Company's US GAAP net profit and earnings per share would
have been adjusted to the revised amounts  indicated  above. The revised amounts
were  determined  based on employee  share  scheme  awards in 1995 to 1999 only.
Compensation  cost is  recognized  over the  expected  life of the option  (i.e.
between 3.5 and 6.5 years). The revised amounts for compensation cost may not be
indicative  of the effects on net  earnings  and  earnings  per share for future
years.  Under SFAS No. 123, the weighted average fair value of each option grant
is estimated to be 62.8p,  34.8p and 33.6p for options  granted  during the year
ended  December 31, 1999,  year ended  December 31, 1998 and year ended December
31,  1997,  respectively.   The  fair  values  have  been  estimated  using  the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions used for grants in 1999, 1998 and 1997, respectively; dividend yield
of nil and nil per cent,  expected  volatility of 33%, 26% and 22% in 1999, 1998
and  1997,  respectively,  risk-free  interest  rate of 4.7%,  5.8% and 6.9% and
expected lives of between 3.5 and 6.5 years.

(I) CASH FLOWS

The  Consolidated  Cash Flow Statement is prepared in accordance  with Financial
Reporting  Standard  No. 1  (revised)  `Cash Flow  Statements'  ("FRS  1").  Its
objectives and principles are similar to those set out in SFAS 95. The principal
difference  between the standards  relates to  classification.  Under FRS 1, the
Group  presents its cash flows for: (a) operating  activities;  (b)  exceptional
non-operating items; (c) dividends from associated undertakings;  (d) returns on
investments and servicing of finance; (e) taxation:  (f) capital expenditure and
financial investment;  (g) acquisition and disposals;  (h) equity dividend paid;
and (i) financing. SFAS 95 requires only three categories of cash flow activity:
(a) operating;  (b) investing;  and (c) financing.  Cash flows from  exceptional
non-operating  items,  dividends  from  associated   undertakings,   returns  on
investments  and servicing of finance,  and taxation  shown under FRS 1 would be
included as operating  activities  under SFAS 95. The payment of dividends would
be included as a financing  activity under SFAS 95.  Changes in bank  overdrafts
are  included  within cash  equivalents  under FRS 1 and would be  considered  a
financing  activity  under  SFAS  95.  Under US GAAP,  capital  expenditure  and
financial   investment  and  acquisitions  and  disposals  are  reported  within
investing activities.  Had bank overdrafts been shown as a financing activity in
the  Consolidated  Cash Flow Statement the overdrafts  (drawn) repaid would have
been (pound)18 million and (pound)(13.4) million in the years ended December 31,
1999  and 1998  respectively.  Under UK  GAAP,  short-term  investments  include
short-term  money  market  deposits of L6.4  million in 1999 and L0.8 million in
1998 that would be classsified as cash equivalents under US GAAP.

(J) Joint ventures and associated undertakings

US  GAAP  requires  the  disclosure  of  summarized  financial  information  for
investments in joint ventures and  associated  undertakings  accounted for under
the equity method, as follows:

                                        Joint                 Associated
                                       Venture               Undertakings
                                       -------               -------------

Commission and fee income               64.0                    30.2
Operating profit                         7.8                     5.5
Net profit                               1.3                     4.2
Group share of operating profit          2.9                     2.0
                                       ======                  =======
Total current assets                   172.4                    33.2
Other assets                             4.9                     4.7
                                      -------                  -------
                                       177.3                    37.9
                                      ========                ========

Total current liabilities              205.5                    24.9
Other liabilities                        2.4                     1.9
Shareholders' funds (deficiency)       (30.6)                   11.1
                                     --------                 --------
                                       177.3                    37.9
                                     =======                  ========

(K) Statement of comprehensive income

Under UK GAAP, the Company  presents a statement of Total  Recognized  Gains and
Losses,  which is  equivalent  to a Statement of  Comprehensive  Income under US
GAAP.

(L) PROSPECTIVE ACCOUNTING CHANGES

The US Financial  Accounting Standards Board has issued SFAS 133, Accounting for
Derivative  Instruments  and  Hedging  Activities.  This  statement  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments imbedded in other contracts, and hedging activities. SFAS
133  requires  an entity  to  recognize  all  derivatives  as  either  assets or
liabilities  in the balance sheet and measure those  instruments  at fair value.
This statement,  as amended, is effective for the Company's year ending December
31, 2001. The Company has not determined the effect of the adoption of SFAS 133.

The Company  does not believe that the effect of the adoption of FRS 16 "Current
Taxation" for UK GAAP purposes in the year ending December 31, 2000 as described
in Note 1 will be material.

Effects on net earnings of differences between US and UK GAAP
<TABLE>
<CAPTION>
                                                                                  Year ended December 31,
                                                                                              Restated     Restated
                                                                                  1999          1998         1997
                                                                                   Lm            Lm           Lm
<S>                                                                               <C>            <C>          <C>
Profit for the year in conformity with UK GAAP                                     18.6           13.8         10.4

US GAAP Adjustments:
Amortization of goodwill and other intangibles                          (b)        (7.3)          (6.3)        (9.5)
Straight lining of property leases                                      (f)         -              -           (1.0)
Compensation costs                                                      (d)       (18.9)          (1.0)        (0.3)
Amortization of discount on property provisions                         (c)         1.3           (1.9)         3.5
                                                                              ------------- ------------- ------------

Net (loss)/profit applicable to Ordinary shareholders
    in conformity with US GAAP before cumulative
    effect of change in accounting principle                                       (6.3)           4.6          3.1
                                                                                  ========       ========      =======

Cumulative effect of change in accounting principle                               (14.9)           -            -
                                                                               ------------      ---------     --------

Net (loss)/profit applicable to Ordinary shareholders
    in conformity with US GAAP                                                    (21.2)           4.6          3.1
                                                                              ============= ============= ============

Net (loss)/profit per Ordinary share-basic                                         (9.5)p          2.1p         1.4p
                                                                              ------------- ------------- ------------

Average number of Ordinary shares (in millions)                                   226.6          222.4        221.9

Net (loss)/profit per Ordinary share-diluted*                                     (9.5)p           2.1p         1.4p
                                                                              ------------- ------------- ------------

Average number of Ordinary shares - diluted (in millions)*
                                                                                  239.6          233.3        222.9
</TABLE>
*    Potential common stock  equivalents have been excluded from the computation
     of diluted net (loss)/profit per Ordinary share,  because to do so would be
     anti-dilutive for the 1999 information presented.
<PAGE>

Cumulative effect on shareholders'  funds (deficiency) of differences between US
and UK GAAP
<TABLE>
<CAPTION>
                                                                                                            1998
                                                                                             1999         Restated
                                                                                              Lm             Lm
<S>                                                                                          <C>            <C>
Equity shareholders' deficiency in conformity with UK GAAP                                   (45.8)         (63.9)

US GAAP adjustments
Dividends                                                                                      5.1            3.1
Goodwill and US purchase accounting in respect of acquisitions
                                                                                              61.5           69.1
Earnouts in pre-1/1/98 goodwill                                                                6.1            3.0
Discount on property provisions                                                               (6.3)           7.3
                                                                                         -------------- --------------

Equity shareholders' funds in conformity with US GAAP                                         20.6           18.6
                                                                                         ============== ==============

</TABLE>

The following pro forma reconciliation to US GAAP is presented assuming that the
change in accounting policy for properly provisions, as described in note 37(a),
had been applied retroactively, with all prior periods restated.


<PAGE>

EFFECTS ON NET EARNINGS OF DIFFERENCES BETWEEN US AND UK GAAP
<TABLE>
<CAPTION>
                                                                              Year ended December 31,
                                                                        -------------------------------------
                                                                                        1998         1997
                                                                           1999       Restated     Restated
                                                                         (pound)m     (pound)m     (pound)m
                                                                        ------------ ------------ -----------
<S>                                                                      <C>           <C>          <C>
Profit for the year in conformity with UK GAAP                              18.6         13.8         10.4
US GAAP ADJUSTMENTS:
Amortization of goodwill and other intangibles                   (b)        (7.3)        (6.3)        (9.5)
Straight lining of property leases                               (f)         -            -           (1.0)
Compensation costs                                               (d)       (18.9)        (1.0)        (0.3)
Amortization of discount on property provisions                  (e)         1.3          1.2          4.7
                                                                        ------------ ------------ -----------
NET (LOSS)/PROFIT APPLICABLE TO ORDINARY SHAREHOLDERS
   IN CONFORMITY WITH US GAAP                                               (6.3)         7.7          4.3
                                                                        ============ ============ ===========

Net (loss)/profit per Ordinary Share - basic                                (2.8)p        3.5p         1.9p
Average number of Ordinary Shares (in millions)                            226.6        222.4        221.8
Net (loss)/profit per Ordinary Share - diluted *                            (2.8)p        3.4p         1.9p
Average number of Ordinary Shares - diluted (in millions) *                226.6        223.3        221.8

</TABLE>

*    Potential  common stock equivalents have been excluded from the computation
     of diluted net (loss)/profit per Ordinary share,  because to do so would be
     anti-dilutive for the 1999 information presented.


<TABLE>
<CAPTION>
CUMULATIVE EFFECT ON SHAREHOLDERS' FUNDS (DEFICIENCY) OF DIFFERENCES
BETWEEN US AND UK GAAP -- Pro Forma                                                                    December 31,
                                                                                     ------------------------
                                                                                                     1998
                                                                                        1999       Restated
                                                                                      (pound)m     (pound)m
                                                                                     ------------ -----------
<S>                                                                                   <C>          <C>
Equity shareholders' deficiency in conformity with UK GAAP                              (45.8)       (63.9)
US GAAP ADJUSTMENTS:
Dividends                                                                    (a)          5.1          3.1
Goodwill and US purchase accounting in respect of acquisitions               (b)         61.5         69.1
Earnouts in pre 1/1/98 goodwill                                              (b)          6.1          3.0
Discount on property provisions                                              (e)         (6.3)        (7.6)
                                                                                     ------------ -----------
EQUITY SHAREHOLDERS' FUNDS (DEFICIENCY) IN CONFORMITY WITH US GAAP                       20.6          3.7
                                                                                     ============ ===========
</TABLE>
<PAGE>


                                  EXHIBIT INDEX

Exhibit        Description

1.1            Consent of Independent Auditor

2.1            Loan Agreement for Facilities of up to  $250,000,000  to Cordiant
               Communications Group plc and others,  arranged by The Bank of New
               York and HSBC  Investment  Bank plc,  dated  November 8, 1999, as
               amended February 15, 2000.

2.2            Agreement and Plan of Merger dated as of November 9, 1999,  among
               Cordiant  Communications Group plc, Healthworld Acquisition Corp.
               and  Healthworld  Corporation.   (Incorporated  by  reference  to
               Exhibit 2(a) to the Company's  Registration Statement on Form F-4
               (File No. 333-96241).)

2.3            Amendment  No.  1 to  Agreement  and Plan of  Merger  dated as of
               February  3,  2000,  among  Cordiant  Communications  Group  plc,
               Healthworld   Acquisition  Corp.  and  Healthworld   Corporation.
               (Incorporated  by  reference  to  Exhibit  2(b) to the  Company's
               Registration Statement on Form F-4 (File No. 333.-96241).)

3.1            Upon the request of the Securities and Exchange  Commission,  the
               Company  hereby agrees to provide the  Commission  with a list of
               subsidiaries of Cordiant Communications Group plc.