SHAREHOLDER RIGHTS

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

Communication – Brainytoys Limited strongly supports the belief that shareholders, as the owners of the Company, should have access to timely and relevant information.

Releases by the Company to the ASX are immediately placed on the Company website (www.brainytoys.com). This information includes downloadable copies of all reports released by the Company as well as notices of meetings.

Brainytoys Limited's website contains press releases, broker reports, and Company presentations.

Brainytoys Limited encourages all interested parties, not only shareholders, to receive Company information electronically. The Company website has a specific “Add me to your Mailing List” link to encourage and assist this.

Meetings of Shareholders – It is a requirement of Brainytoys Limited that a representative of the audit firm is in attendance at the Company’s Annual General Meeting to answer any shareholder questions. Brainytoys Limited Management are also available for meetings of shareholders to answer any questions about aspects of the Company’s operations.