REMUNERATION

Introduction

Under the ASX Listing Rule 4.10, companies are required to disclose in their Annual Report the extent to which they have followed the best practice recommendations of the ASX Corporate Governance Council.

Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the Company are achieved, how risk is monitored and assessed, and how performance is optimised.

Good corporate governance structures encourage companies to create value and provide accountability and control systems commensurate with the risks involved.

Brainytoys Limited’s Policy

The Board has a Remuneration Committee consisting of two Directors.

The role of the Remuneration Committee is to review remuneration packages and policies applicable to the executive officers. However shareholders must approve any changes to directors’ remuneration.

Non-executive Directors, from recommendations provided by the Chairman and from data provided by remuneration consultants, determine the remuneration of senior executives.

Remuneration levels are competitively set to attract the most qualified and experienced Directors and senior executives. The Remuneration Committee and the Chairman obtain independent advice on the appropriateness of remuneration packages.

Remuneration packages do not have guaranteed equity based components or performance based components.

Directors: An agreement exists between each Director and the Company to cover access to books, indemnity, and disclosure of share trading and retirement benefits. Upon cessation of the Director’s holding office as a director of the Company, for any reason, the Director shall be entitled to a pension or lump sum payment (which includes a Superannuation retiring allowance, superannuation gratuity or similar payment) in respect of past services rendered by the Director to the Company from the Director’s initial appointment date, the value of which is equal to the maximum amount ascertained in accordance with the formula set out in section 200G (2) (b) of the Corporations Act (or any successor of that sections).

Disclosure: The Company discloses full remuneration details of each Director and executive officers of the Company in its annual report each year. In addition, any options or shares issued to these or any other employees of the Company are disclosed in the Annual Report each year.