Corporate Governance

Intro­duc­tion

Scot­gold Resources Lim­ited (“the Com­pany”) has adopted com­pre­hen­sive sys­tems of con­trol and account­abil­ity as the basis for the admin­is­tra­tion of cor­po­rate gov­er­nance. These poli­cies and pro­ce­dures are sum­marised below. The Board of the Com­pany is com­mit­ted to admin­is­ter­ing the poli­cies and pro­ce­dures with open­ness and integrity, pur­su­ing the true spirit of cor­po­rate gov­er­nance com­men­su­rate with the Company’s needs.

The Board and man­age­ment are com­mit­ted to cor­po­rate gov­er­nance and, to the extent they are applic­a­ble to the Com­pany, have adopted the Ten Essen­tial Cor­po­rate Gov­er­nance Prin­ci­ples and each of the Best Prac­tice Rec­om­men­da­tions as pub­lished by ASX Cor­po­rate Gov­er­nance Council.

The fol­low­ing infor­ma­tion is set out in this web­site (in the order cor­re­spond­ing with the ASX Prin­ci­ples and Recommendations):

• State­ment of Board and Man­age­ment Functions;

• Nom­i­na­tion Com­mit­tee Charter;

• Pol­icy and pro­ce­dure for selec­tion and appoint­ment of new directors;

• Sum­mary of code of con­duct for direc­tors and key executives;

• Sum­mary of pol­icy on secu­ri­ties trading;

• Audit Com­mit­tee Charter;

• Pol­icy and pro­ce­dure for selec­tion of exter­nal audi­tor and rota­tion of audit engage­ment partners;

• Sum­mary of pol­icy and pro­ce­dure for com­pli­ance with con­tin­u­ous dis­clo­sure requirements;

• Sum­mary of arrange­ments regard­ing com­mu­ni­ca­tion with and par­tic­i­pa­tion of shareholders;

• Sum­mary of Company’s risk man­age­ment pol­icy and inter­nal com­pli­ance and con­trol system;

• Process for per­for­mance eval­u­a­tion of the Board, Board com­mit­tees, indi­vid­ual direc­tors and key executives;

• Remu­ner­a­tion Com­mit­tee Char­ter; and

• Cor­po­rate Code of Conduct.

Board Char­ter

1. Role of the Board

   The role of the Board is to pro­vide lead­er­ship for and super­vi­sion over the Company’s affairs.

2. Respon­si­bil­ity of the Board

   The Board is col­lec­tively respon­si­ble for pro­mot­ing the suc­cess of the Com­pany by:

   1. super­vis­ing the Company’s frame­work of con­trol and account­abil­ity sys­tems to enable risk to be assessed and man­aged which includes but is not lim­ited to (a) to (h);

   2. ensur­ing the Com­pany is prop­erly man­aged for exam­ple by:

      1. appoint­ing and remov­ing the man­ag­ing direc­tor of the Company;

      2. rat­i­fy­ing the appoint­ment and, where appro­pri­ate, the removal of the chief finan­cial offi­cer and the Com­pany secretary;

      3. input into and final approval of management’s devel­op­ment of cor­po­rate strat­egy and per­for­mance objectives;

      4. review­ing and rat­i­fy­ing sys­tems of risk man­age­ment and inter­nal com­pli­ance and con­trol, codes of con­duct, and legal compliance;

      5. mon­i­tor­ing senior management’s per­for­mance and imple­men­ta­tion of strat­egy, and ensur­ing appro­pri­ate resources are available;

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

   4. approval of the annual budget;

   5. mon­i­tor­ing the finan­cial per­for­mance of the Company;

   6. approv­ing and mon­i­tor­ing finan­cial and other reporting;

   7. over­all cor­po­rate gov­er­nance of the Com­pany, includ­ing con­duct­ing reg­u­lar reviews of the bal­ance of respon­si­bil­i­ties within the Com­pany to ensure divi­sion of func­tions remain appro­pri­ate to the needs of the Company;

   8. lias­ing with the Company’s exter­nal audi­tors and Audit Com­mit­tee; and

   The Board must con­vene reg­u­lar meet­ings with such fre­quency as is suf­fi­cient to appro­pri­ately dis­charge its respon­si­bil­i­ties (approx­i­mately once every 2–3 months, but more fre­quently as required).

   The Board may from time to time, del­e­gate some of its respon­si­bil­i­ties listed above to its senior man­age­ment team (except for para­graphs [(a), (b), (f) and (g)] and where any mat­ter exceeds the Mate­ri­al­ity Thresh­old as defined below).

3. Mate­ri­al­ity Threshold

   The Board has agreed on the fol­low­ing guide­lines for assess­ing the mate­ri­al­ity of matters:

   1. Mate­ri­al­ity — Quantitative

      Bal­ance sheet items
      Bal­ance sheet items are mate­r­ial if they have a value of more than 10% of pro-forma net asset.

      Profit and loss items
      Profit and loss items are mate­r­ial if they will have an impact on the cur­rent year oper­at­ing result of 10% or more.

   2. Mate­ri­al­ity — Qualitative

      Items are also mate­r­ial if:

      1. they impact on the rep­u­ta­tion of the Company;

      2. they involve a breach of legislation;

      3. they are out­side the ordi­nary course of business;

      4. they could affect the Company’s rights to its assets;

      5. if accu­mu­lated they would trig­ger the quan­ti­ta­tive tests; or

      6. they involve a con­tin­gent lia­bil­ity that would have a prob­a­ble effect of 10% or more on bal­ance sheet or profit and loss items.

      7. They will have an effect on oper­a­tions which is likely to result in an increase or decrease in net income or div­i­dend dis­tri­b­u­tion of more that 10%.

   3. Mate­r­ial Contracts

      Con­tracts will be con­sid­ered mate­r­ial if:

      1. they are out­side the ordi­nary course of business;

      2. they con­tain excep­tion­ally oner­ous pro­vi­sions in the opin­ion of the Board;

      3. they impact on income or dis­tri­b­u­tion in excess of the quan­ti­ta­tive tests

      4. there is a like­li­hood that either party will default and the default may trig­ger any of the quan­ti­ta­tive tests;

      5. they are essen­tial to the activ­i­ties of the Com­pany and can­not be replaced or can­not be replaced with­out an increase in cost of such a quan­tum as trig­ger any of the quan­ti­ta­tive tests;

      6. the con­tain or trig­ger change of con­trol provisions;

      7. they are between or for the ben­e­fit of related par­ties; or

      8. they oth­er­wise trig­ger the quan­ti­ta­tive tests.

      Any mat­ter which falls within the above guide­lines is a mat­ter which trig­gers the mate­ri­al­ity thresh­old (“Mate­ri­al­ity Threshold”).

4. The Chair­per­son

   The chair­per­son is respon­si­ble for lead­er­ship of the Board, for the effi­cient organ­i­sa­tion and con­duct of the Board’s func­tion and for the brief­ing of all direc­tors in rela­tion to issues aris­ing at Board meet­ings. The chair­per­son is also respon­si­ble for share­holder com­mu­ni­ca­tion and arrang­ing Board per­for­mance evaluation.

5. Inde­pen­dent Directors

   Where the chair­per­son is not an inde­pen­dent direc­tor, the Com­pany will appoint a lead inde­pen­dent direc­tor. The lead inde­pen­dent direc­tor will takeover the role of the chair­per­son when the chair­per­son is unable to act in that capac­ity as a result of his or her lack of independence.

   The inde­pen­dent direc­tors, along with all direc­tors, are respon­si­ble for the review­ing and chal­leng­ing exec­u­tive per­for­mance. They are also respon­si­ble for con­tribut­ing to the devel­op­ment of strategy.

6. The Man­ag­ing Director

   The man­ag­ing direc­tor is respon­si­ble for run­ning the affairs of the Com­pany under del­e­gated author­ity from the Board and to imple­ment the poli­cies and strat­egy set by the Board. In car­ry­ing out his/her respon­si­bil­i­ties the man­ag­ing direc­tor must report to the Board in a timely man­ner and ensure all reports to the Board present a true and fair view of the Company’s finan­cial con­di­tion and oper­a­tional results.

7. Role and Respon­si­bil­ity of Management

   The role of man­age­ment is to sup­port the man­ag­ing direc­tor and imple­ment the run­ning of the gen­eral oper­a­tions and finan­cial busi­ness of the Com­pany, in accor­dance with the del­e­gated author­ity of the Board.

   Man­age­ment is respon­si­ble for report­ing all mat­ters which fall within the Mate­ri­al­ity Thresh­old at first instance to the man­ag­ing direc­tor or if the mat­ter con­cerns the man­ag­ing direc­tor then directly to the chair­per­son or the lead inde­pen­dent direc­tor, as appropriate.

Nom­i­na­tion Com­mit­tee Charter

1. Com­po­si­tion

   The Nom­i­na­tion Com­mit­tee com­prises the full Board.

2. Role

   The role of the Nom­i­na­tion Com­mit­tee is to deter­mine the state of direc­tor nom­i­nees for elec­tion to the Board, to iden­tify and rec­om­mend can­di­dates to fill casual vacancies.

3. Oper­a­tions

   The full Board con­venes as the com­mit­tee at least once a year and oth­er­wise as required. Min­utes of all meet­ings of the com­mit­tee are to be kept. Com­mit­tee meet­ings will be gov­erned by the same rules as set out in the Company’s con­sti­tu­tion, as they apply to meet­ings of the Board.

4. Respon­si­bil­i­ties

   The respon­si­bil­i­ties of the Nom­i­na­tion Com­mit­tee are:

   • to imple­ment processes to assess the nec­es­sary and desir­able com­pe­ten­cies of Board mem­bers includ­ing, expe­ri­ence, exper­tise, skills and per­for­mance of the Board and its committees;

   • to pro­vide new direc­tors with an induc­tion to the Company;

   • to pro­vide all direc­tors with access to ongo­ing edu­ca­tion rel­e­vant to their posi­tion in the Company;

   • advise the Board on new appoint­ments and assist with selec­tion of new Board members;

   • pro­vide a suc­ces­sion plan for direc­tors, the chief exec­u­tive and man­ag­ing director;

   • eval­u­ate and advise the Board on the per­for­mance of the chief exec­u­tive and the man­ag­ing director;

   • review time required for non-executive direc­tors to per­form their duties;

   • eval­u­ate and report to the Board on the per­for­mance and effec­tive­ness of the Board to facil­i­tate the direc­tors ful­fill­ing their respon­si­bil­i­ties in a man­ner that serves the inter­ests of shareholders;

   • pro­duce a list of indi­vid­u­als rec­om­mended for nom­i­na­tion for elec­tion to the Board at the annual meet­ing of shareholders;

   • before rec­om­mend­ing an incum­bent, replace­ment or addi­tional direc­tor, review his or her qual­i­fi­ca­tions, includ­ing capa­bil­ity, avail­abil­ity to serve, con­flicts of inter­est, and other rel­e­vant factors;

   • assist in iden­ti­fy­ing, inter­view­ing and recruit­ing can­di­dates for the Board;

   • annu­ally review the com­po­si­tion of each com­mit­tee and present rec­om­men­da­tions for com­mit­tee mem­ber­ships to the Board as needed;

   • peri­od­i­cally review the com­pen­sa­tion paid to non-employee direc­tors for annual retain­ers (includ­ing Board and com­mit­tee chairs) and meet­ing fees, if any, and rec­om­mend any adjust­ments. No mem­ber of the Com­mit­tee will act to fix his or her own com­pen­sa­tion except for uni­form com­pen­sa­tion to direc­tors for their ser­vices as such.

Pol­icy and Pro­ce­dures for selec­tion and appoint­ment of new Directors

The Board reviews its com­po­si­tion on an annual basis to ensure that the Board has the appro­pri­ate mix of exper­tise and expe­ri­ence. When a vacancy exists or the Board con­sid­ers it would ben­e­fit from the ser­vices of a new direc­tor with par­tic­u­lar skills, can­di­dates are to be iden­ti­fied, with advice from an exter­nal con­sul­tant if nec­es­sary. The Board will then appoint the most suit­able can­di­date who must stand for re-election at a gen­eral meet­ing of shareholders.

Code of Con­duct for Direc­tors and Key Executives

A code of con­duct has been adopted by all direc­tors and employ­ees. It requires all busi­ness affairs to be con­ducted legally, eth­i­cally and with integrity. The code pro­vides for report­ing of any breach of the code by others.

Pol­icy on Secu­ri­ties Trading

The Board has adopted a pol­icy and pro­ce­dure on deal­ing in the Company’s secu­ri­ties by direc­tors, offi­cer and employ­ees which pro­hibits deal­ing in the Company’s secu­ri­ties when those per­sons pos­sess inside infor­ma­tion. It also requires the chair­per­son of the Com­pany to be noti­fied when trad­ing of secu­ri­ties in the Com­pany occurs.

Audit Com­mit­tee Charter

1. Com­po­si­tion of the Audit Committee

   • The com­mit­tee shall com­prise non exec­u­tive Directors.

   • At least one mem­ber is to have sig­nif­i­cant, recent and rel­e­vant finan­cial experience.

2. Role of the Audit Committee

   • To mon­i­tor the integrity of the finan­cial state­ments of the Com­pany, review­ing sig­nif­i­cant finan­cial report­ing judgments.

   • To review the Company’s inter­nal finan­cial con­trol sys­tem and, unless expressly addressed by a sep­a­rate risk com­mit­tee or by the Board itself, risk man­age­ment systems.

   • To mon­i­tor and review the effec­tive­ness of the Company’s inter­nal audit functions.

   • To make rec­om­men­da­tions to the Board in rela­tion to the appoint­ment of the exter­nal audi­tor and to approve the remu­ner­a­tion and terms of engage­ment of the exter­nal auditor.

   • To mon­i­tor and review the exter­nal auditor’s inde­pen­dence, objec­tiv­ity and effec­tive­ness, tak­ing into con­sid­er­a­tion rel­e­vant pro­fes­sional and reg­u­la­tory requirements.

   • To develop and imple­ment pol­icy on the engage­ment of the exter­nal audi­tor to sup­ply non-audit ser­vices, tak­ing into account rel­e­vant eth­i­cal guid­ance regard­ing the pro­vi­sion of non-audit ser­vices by the exter­nal audit firm.

3. Oper­a­tions

   • The com­mit­tee meets at least bi-annually, with fur­ther meet­ings on an as required basis.

   • Min­utes of all meet­ings of the com­mit­tee are to be kept.

   • Com­mit­tee meet­ings will be gov­erned by the same rules, as set out in the Com­pany con­sti­tu­tion as they apply to the meet­ings of the Board.

4. Resources

   • The Com­pany is to pro­vide the com­mit­tee with suf­fi­cient resources to under­take its duties, includ­ing pro­vi­sion of edu­ca­tional infor­ma­tion on account­ing poli­cies and other finan­cial top­ics rel­e­vant to the Com­pany and such other rel­e­vant mate­ri­als requested by the committee.

5. Report­ing to the Shareholders

   • The direc­tors’ report is to con­tain a sep­a­rate sec­tion that describes the role of the com­mit­tee and what action it has taken.

6. Respon­si­bil­i­ties

   • Respon­si­bil­i­ties of the com­mit­tee are as set out in the Audit Com­mit­tee Respon­si­bil­i­ties Calendar.

Pol­icy and Pro­ce­dures for selec­tion of Exter­nal Audi­tor and rota­tion of Audit Engage­ment Partners

1. Respon­si­bil­ity

   The Board is respon­si­ble for the ini­tial appoint­ment of the exter­nal audi­tor and the appoint­ment of a new exter­nal audi­tor when any vacancy arises. Any appoint­ment made by the Board must be rat­i­fied by share­hold­ers at the next annual gen­eral meet­ing of the Company.

2. Selec­tion Criteria

   Manda­tory cri­te­ria
   Can­di­dates for the posi­tion of exter­nal audi­tor of the Com­pany must be able to demon­strate com­plete inde­pen­dence from the Com­pany and an abil­ity to main­tain inde­pen­dence through the engage­ment period. Fur­ther the suc­cess­ful can­di­date must have arrange­ment in place for the rota­tion of the audit engage­ment part­ner on a reg­u­lar basis.

   Other cri­te­ria
   Other than the manda­tory cri­te­ria men­tioned above, the Board may select an exter­nal audi­tor based on cri­te­ria rel­e­vant to the busi­ness of the Com­pany such as expe­ri­ence in the indus­try in which the Com­pany oper­ates, ref­er­ences, cost and any other mat­ters deemed rel­e­vant by the Board.

3. Review

   The Board will review the per­for­mance of the exter­nal audi­tor on an annual basis.

Pol­icy and Pro­ce­dure for com­pli­ance with Con­tin­u­ous Dis­clo­sure Requirements

Detailed com­pli­ance pro­ce­dures for ASX List­ing Rule dis­clo­sure require­ments have been adopted by the Com­pany. It appoints an offi­cer of the Com­pany to be respon­si­ble for com­pli­ance. It is detailed in its appli­ca­tion cov­er­ing the fol­low­ing areas:

• appoint­ment of the respon­si­ble offi­cer and descrip­tion of his/her duties

• iden­ti­fies area of risk for the Company

• pro­vides guide­lines for:

  • - iden­ti­fy­ing dis­clo­sure material

  • - mon­i­tor­ing share price movements

• guide for use of trad­ing halts

• guide for deci­sion mak­ing process

• details on record keeping

• edu­ca­tion of Board and management

• con­fi­den­tial­ity

• release of dis­clo­sure material

• updat­ing of com­pli­ance procedures

Arrange­ments regard­ing com­mu­ni­ca­tion with and par­tic­i­pa­tion of Shareholders

The Com­pany main­tains a web­site at www.scotgoldresources.com.

Under the head­ing “Investor” the Com­pany makes the fol­low­ing infor­ma­tion avail­able on a reg­u­lar and up to date basis:

• com­pany announce­ments (for the last year);

• notices of meet­ings and explana­tory materials;

• annual and half year reports; and

• bro­ker reports and pre­sen­ta­tions (for the last year).

Share­hold­ers and the gen­eral pub­lic can sub­scribe to receive this infor­ma­tion directly in the “Mail­ing List” sec­tion of the Company’s website.

Company’s Risk Man­age­ment Pol­icy and Inter­nal Com­pli­ance and Con­trol System

The Com­pany has devel­oped a frame­work for risk man­age­ment and inter­nal com­pli­ance and con­trol sys­tems which cov­ers organ­i­sa­tional, finan­cial and oper­a­tional aspects of the Company’s affairs. It appoints the man­ag­ing direc­tor as being respon­si­ble for ensur­ing the sys­tems are main­tained and com­plied with.

Process for Per­for­mance Eval­u­a­tioin of the Board, Board Com­mit­tees, Indi­vid­ual Direc­tors and Key Executives

There is a reg­u­lar process to enable the chair­per­son to dis­cuss and eval­u­ate with each direc­tor his con­tri­bu­tion to the Board of the Com­pany and to enable that direc­tor to com­ment on all facets of the oper­a­tion of the Board. In addi­tion, exec­u­tives are sub­ject to for­mal annual reviews (or more fre­quently at the dis­cre­tion of the Board). The Board con­sid­ers that this process is ade­quate in view of the size and scale of the Company’s operations.

Remu­ner­a­tion Com­mit­tee Charter

1. Com­po­si­tion

   The Remu­ner­a­tion Com­mit­tee shall com­prise the full Board.

2. Role

   The Remu­ner­a­tion Committee’s role is to dis­charge the Board’s respon­si­bil­i­ties in rela­tion to remu­ner­a­tion of the Company’s exec­u­tives includ­ing share and ben­e­fit plans.

3. Oper­a­tions

   The Com­mit­tee meets at least twice a year and oth­er­wise as required. Min­utes of all meet­ings of the com­mit­tee are to be kept and a report of actions taken at a sub­se­quent meet­ing of the full Board. Com­mit­tee meet­ings will be gov­erned by the same rules as set out in the Company’s con­sti­tu­tion, as they apply to meet­ings of the Board.

4. Respon­si­bil­i­ties

   The respon­si­bil­i­ties and func­tions of the Remu­ner­a­tion Com­mit­tee are as follows:

   • review the com­pet­i­tive­ness of the Company’s exec­u­tive com­pen­sa­tion pro­grams to ensure:

     1. the attrac­tion and reten­tion of cor­po­rate officers;

     2. the moti­va­tion of cor­po­rate offi­cers to achieve the Company’s busi­ness objec­tives; and

     3. the align­ment of the inter­ests of key lead­er­ship with the long-term inter­ests of the Company’s shareholders;

   • review trends in man­age­ment com­pen­sa­tion, over­see the devel­op­ment of new com­pen­sa­tion plans and, when nec­es­sary, approve the revi­sion of exist­ing plans;

   • review the per­for­mance of exec­u­tive management;

   • review and approve chair­per­son and man­ag­ing direc­tor goals and objec­tives, eval­u­ate chair­per­son and man­ag­ing direc­tor per­for­mance in light of these cor­po­rate objec­tives, and set chair­per­son and man­ag­ing direc­tor com­pen­sa­tion lev­els con­sis­tent with com­pany philosophy;

   • approve the salaries, bonus and other com­pen­sa­tion for all senior exec­u­tives, the com­mit­tee will rec­om­mend appro­pri­ate salary, bonus and other com­pen­sa­tion to the Board for approval;

   • review and approve com­pen­sa­tion pack­ages for new cor­po­rate offi­cers and ter­mi­na­tion pack­ages for cor­po­rate offi­cers as requested by management;

   • review and approve the awards made under any exec­u­tive offi­cer bonus plan, and pro­vide an appro­pri­ate report to the Board;

   • review and make rec­om­men­da­tions con­cern­ing long-term incen­tive com­pen­sa­tion plans, includ­ing the use of share options and other equity-based plans. Except as oth­er­wise del­e­gated by the Board, the com­mit­tee will act on behalf of the Board as the “Com­mit­tee” estab­lished to admin­is­ter equity-based and employee ben­e­fit plans, and as such will dis­charge any respon­si­bil­i­ties imposed on the com­mit­tee under those plans, includ­ing mak­ing and autho­ris­ing grants, in accor­dance with the terms of those plans; and

   • review peri­odic reports from man­age­ment on mat­ters relat­ing to the Company’s per­son­nel appoint­ments and practices.

Cor­po­rate Code of Conduct

1. Intro­duc­tion

   This code of con­duct sets out the stan­dard which the Board, man­age­ment and employ­ees of the Com­pany are encour­aged to com­ply with when deal­ing with each other, share­hold­ers and the broader community.

2. Com­mit­ment of the Board and Man­age­ment to Cor­po­rate Code of Conduct

   The Board and man­age­ment approve and endorse this code of con­duct and sup­port the code and all it strives to achieve.

   The Board and man­age­ment encour­age all staff to con­sider the prin­ci­ples of the code and use them as a guide to deter­min­ing how to respond when act­ing on behalf of the Company.

3. Respon­si­bil­i­ties to Share­hold­ers and the Finan­cial Com­mu­nity Generally

   The Com­pany aims:

   1. to increase share­holder value within an appro­pri­ate frame­work which safe­guards the rights and inter­ests of the Company’s share­hold­ers and the finan­cial com­mu­nity; and

   2. com­ply with sys­tems of con­trol and account­abil­ity which the Com­pany has in place as part of its cor­po­rate gov­er­nance with open­ness and integrity.

4. Respon­si­bil­i­ties to Clients, Cus­tomers and Consumers

   The Com­pany is to com­ply with all leg­isla­tive and com­mon law require­ments which affect its busi­ness. Any trans­gres­sion from the applic­a­ble legal rules is to be reported to the man­ag­ing direc­tor as soon as a per­son becomes aware of such a transgression.

5. Employ­ment Practices

   The Com­pany will employ to vacant posi­tions the best avail­able staff with the skills and expe­ri­ence required to carry out the func­tions of those positions.

   The Com­pany will ensure a safe work place and main­tain proper occu­pa­tional health and safety prac­tices com­men­su­rate with the nature of the Company’s busi­ness and activities.

6. Respon­si­bil­ity to the Community

   The Com­pany will recog­nise, con­sider and respect envi­ron­men­tal issues which arise in rela­tion to the Company’s activ­i­ties and com­ply with all applic­a­ble legal requirements.

7. Respon­si­bil­ity to the Individual

   The Com­pany recog­nises and respects the rights of indi­vid­u­als and to the best of its abil­ity will com­ply with the applic­a­ble legal rules regard­ing pri­vacy, priv­i­leges, pri­vate and con­fi­den­tial information.

8. Oblig­a­tions Rel­a­tive to Fair Trad­ing and Dealing

   The Com­pany will deal with oth­ers in a way that is fair and will not engage in decep­tive practices.

9. Con­flicts of Interest

   The Board, man­age­ment and employ­ees must not involve them­selves in sit­u­a­tions where there is a real or appar­ent con­flict inter­est between them as indi­vid­u­als and the inter­est of the Com­pany. Where a real or appar­ent con­flict of inter­est arises the mat­ter should be brought to the atten­tion of the Chair­per­son in the case of a board mem­ber or the man­ag­ing direc­tor, the man­ag­ing direc­tor in the case of a mem­ber of man­age­ment and a super­vi­sor in the case of an employee, so that it may be con­sid­ered and dealt with in an appro­pri­ate man­ner for all concerned.

10. Com­pli­ance with the Code

    Any breach of com­pli­ance with this code is to be reported directly to the man­ag­ing direc­tor or chair­per­son, as appropriate.

11. Peri­odic Review of Code

    The Com­pany will mon­i­tor com­pli­ance with the code peri­od­i­cally by liais­ing with the Board, man­age­ment and staff espe­cially in rela­tion to any areas of dif­fi­culty which arise from the code and any other ideas or sug­ges­tions for improve­ment of the code. Sug­ges­tions for improve­ments or amend­ments to the code can be made at any time by pro­vid­ing a writ­ten note to the man­ag­ing director.

12. Incor­po­ra­tion of Code of Con­duct for Executives

    The Code of Con­duct for Exec­u­tives forms part of this Cor­po­rate Code of Con­duct. It pro­vides as follows:

    All Exec­u­tives will:

    1. Actively pro­mote the high­est stan­dards of ethics and integrity in car­ry­ing out their duties for the Company.

    2. Dis­close any actual or per­ceived con­flicts of inter­est of a direct or indi­rect nature of which they become aware and which they believe could com­pro­mise in any way the rep­u­ta­tion or per­for­mance of the Company.

    3. Respect con­fi­den­tial­ity of all infor­ma­tion of a con­fi­den­tial nature which is acquired in the course of the Company’s busi­ness and not dis­close or make improper use of such con­fi­den­tial infor­ma­tion to any per­son unless spe­cific autho­ri­sa­tion is given for dis­clo­sure or dis­clo­sure is legally mandated.

    4. Deal with the Company’s cus­tomers, sup­pli­ers, com­peti­tors and each other with the high­est level of hon­esty, fair­ness and integrity and to observe the rule and spirit of the legal and reg­u­la­tory envi­ron­ment in which the Com­pany operates.

    5. Pro­tect the assets of the Com­pany to ensure avail­abil­ity for legit­i­mate busi­ness pur­poses and ensure all cor­po­rate oppor­tu­ni­ties are enjoyed by the Com­pany and that no prop­erty, infor­ma­tion or posi­tion belong­ing to the Com­pany or oppor­tu­nity aris­ing from these are used for per­sonal gain or to com­pete with the Company.

    6. Report any breach of this code of con­duct to the chair­per­son, who will treat reports made in good faith of such vio­la­tions with respect and in confidence.

    This Code of Con­duct is in addi­tion to the Cor­po­rate Code of Con­duct which has been adopted by the Board of the Company.