Snowball Financial

Summary of Risk Management Policy and Procedures

Introduction

Risk management is an integral part of good business practice and the Board of Snowball Group Limited (‘Snowball’) is committed to the highest standards of risk management in all aspects of Snowball’s business. Snowball believes that the implementation of an effective risk management system will increase the likelihood that Snowball will be successful in meeting its business and strategic plan objectives and should lead to enhanced stakeholder value. Snowball also notes the need for effective risk management systems under its subsidiaries’ Australian Financial Services Licence obligations.

Key Risk Management Items and Objectives

Snowball acknowledges that risks arise out of uncertainty and have identified the following key risk management items which may expose Snowball to the possibility of economic loss and/or damage to the Company’s reputation:

Changes in the external operating environment;
Breaches of regulatory or contracted obligations;
Complaints;
External enquiries;
Mistakes; and
Physical damage of premises.

The key objectives of the Snowball Risk Management System are as follows:

To develop an organisational risk management philosophy and awareness of risk at all levels of the organisation;
To identify and closely manage and monitor all significant risk exposures;
To apply risk management practices in a systematic and effective manner to reduce the probability of a risk event occurring, and minimise the impact of a risk event; and
To fully integrate risk management practices with other processes such as management reporting, quality improvement and business planning.

Risk Management Policies and Procedures

Snowball has established the Management Compliance Committee, comprised of an external compliance consultant and key executives, to monitor the implementation and operation of Snowball’s Risk Management System.

Snowball has a Risk Management System in place. In addition Snowball has developed policies and procedures which are key components of the Risk Management System. These policies are contained in the following documents:

Group Compliance Manual;
AFSL Advisers Manual;
Financial Services Guide;
Disaster Recovery and Business Continuity Plan;
Statement of System Controls;
Staffing Policies and Procedures Manual;
Communications Strategy;
Handling External Enquiries Policy;
Continuous Disclosure Policy; and
Share Trading Policy.

Within the policies and procedures the following five step approach is consistently applied in managing risk:

Identify and define responsibilities requiring attention under the program;
Allocate executive responsibility for meeting each responsibility;
Set out procedures designed to ensure that responsibilities are met;
Provide for adequate knowledge of staff carrying out procedures; and
Establish monitoring systems to verify adherence to procedures and identify exceptions, with subsequent formal reporting.

Review of Risk Management Policies and Procedures

Snowball recognises the importance of regular review in order to maintain sound risk management policies and procedures. Snowball will formally review risk management policies and procedures on a regular basis, with assistance from external risk management consultants where necessary.

Responsibility and Authority

The Board, with assistance from the Management Compliance Committee, is responsible for ensuring that the company’s risk management procedures are effective. Risk management is a regular Board Meeting agenda item.

Audit Committee Charter

1. The Committee – An Overview

The Audit Committee (Committee) is a committee of the Board of Directors (Board) of Snowball Group Limited and its subsidiary companies (the Group). This Charter sets out the role, composition, authority, responsibilities and operation of the Committee.

The existence of this Committee is considered by the Group to be a key element of its corporate governance program and part of the Group’s commitment to best practice in the area of corporate governance.

Verifying and safeguarding the integrity of the Company’s financial reporting;
Establishing a sound system of risk oversight and management, and, internal control; and
Establishing a sound system of compliance with laws and regulations, internal compliance guidelines, policies, procedures and control systems and prescribed internal standards of behaviour.

The existence of this Committee and the functions performed by it does not purport to diminish the ultimate responsibility of the Board.

2. Membership Requirements and Composition

Membership requirements are as follows:

The Chairman of the committee must not be the Chairman of the Board;
There must be at least 2 members; and
A majority of members must have financial expertise and an understanding of the industry.

The current composition of the Committee is:

3 Non-Executive Directors one of which is independent; and
A Chairman who is not a Chairman of the Board.

The Group notes the ASX Best Practice Recommendation that the Audit Committee should consist of:

Only non-executive directors;
A majority of independent directors;
An independent Chairperson, who is not chairperson of the Board; and
At least three members.

However, in considering the recommendation for a majority of independent directors and an independent chairperson, the Board considers that given the composition of the Board, the existing Audit Committee has the best and most suitable composition to effectively carry out its functions.

The Board will determine from time to time the persons to be members of the Committee. There is no prescribed term for membership of the Committee. Members may be appointed or removed by a resolution of the Board. Membership shall cease upon a members ceasing to be a Director.

3. Access

In fulfilling its responsibilities, the Audit Committee will receive regular reports from management and the external auditors. It will also meet with the external auditors at least twice a year, or more frequently if necessary, and review any significant disagreements between the auditors and management, irrespective of whether they have been resolved. The external auditors have a clear line of direct communication at any time to either the Chairman of the Audit Committee or the Chairman of the Board.

The Audit Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

4. Meetings

The Committee will meet as frequently as it considers necessary to discharge its role effectively (but not less frequently than 2 times per financial year). The Chairman of the Committee will decide upon the timing of the meetings.

The Company Secretary will maintain minutes of the meetings of the Committee which when signed by the Chairman of the Committee constitute a record of the business of the Committee. These signed minutes are circulated to the full Board at the next meeting of the Board which follows the Committee meeting.

The Company Secretary will be responsible, in conjunction with the Chairman, for drawing up and the circulation of agendas and providing any explanatory documentation prior to each meeting.

The Internal and External Audit and members of Snowball management will be invited to attend Committee meetings at the discretion of the Committee.

The Committee will also receive technical input and experience from the Chief Operating Officer and Finance Manager who will be invited to attend all meetings of the Committee.

A quorum will consist of two members of the Committee. A motion shall be passed by a simple majority of votes cast in favour by members present and eligible to vote. In the event of an equal number of votes being cast for or against a motion, the motion will be referred to the Board for resolution (i.e. the Chairman of the Committee does not have a casting vote).

5. Role and Objectives

The primary role of the Committee is to assist the Board in fulfilling its responsibilities relating to verifying and safeguarding the integrity of the Company’s financial reporting and oversee the independence of the external auditors.

In addition the Committee will be available to perform such reviews and inspections as the Board may from time to time direct.

6. Duties and Responsibilities

The main responsibilities of the Audit Committee are to:

Review and report to the Board on the annual full and concise reports, the half-year financial report and all other financial information published by the Group or released to the market;
Considering the appropriateness of the Group’s accounting policies and principles and any changes and methods of application;
Assist the Board in reviewing the effectiveness and efficiency of operations of the Group’s internal control environment;
Oversee the policies and operation of the risk management system;
Recommend to the Board the appointment, removal and remuneration of the external auditors, and review the terms of their engagement, the scope and quality of the audit and the auditor’s independence;
Review the level of non-audit services provided by the external auditors and ensure that it does not adversely impact on auditor independence;
Assessing the internal processes in place for ensuring legal compliance, in particular those responsibilities imposed under the Corporations Act, and other relevant legislation including the ASX Listing Rules;
Referring to the Board matters of significant concern arising from the Committee’s mandate; and
Reviewing and updating this Charter annually.

7. Reporting

The Board will be kept informed of the Committee’s activities as necessary by the Chairman of the Committee. The Chairman will circulate signed minutes of the meetings of the Committee at the next meeting of the Board which follows the Committee meeting.

As appropriate, the Committee will report to the Board on matters relevant to the Committee’s role and responsibilities, including:

Assessment of whether external reporting is consistent with Committee members’ information and knowledge and is adequate for shareholders needs;
Assessment of the management processes supporting external reporting;
Procedures for the selection and appointment of the external auditor and for the rotation of external audit engagement partners;
Recommendations for the appointment or removal of the External Auditor;
Assessment of the performance and independence of the External Auditors and whether the Committee is satisfied that independence of this function has been maintained having regard to the provision of non-audit services;
Assessment of the performance and objectivity of the internal audit function;
The results of its review of risk management and internal compliance and control systems; and
The results of the annual review this Charter.

Board Charter and Role of Officers

1. Introduction

The Board of Directors (Board), working with senior management, is responsible to shareholders for the overall corporate governance of the company and its controlled entities (the Group) including its strategic direction, establishing goals for management and monitoring the achievement of these goals. The Directors’ overriding objective is to increase shareholder value within an appropriate framework which protects the rights and interests of shareholders and ensures the Group is properly managed.

The Board delegates responsibility for day-to-day management of the Company to the Managing Director.

2. Role and Powers

The Board of Snowball Group Limited is responsible for:

Setting the criteria for Board membership and reviewing the composition of the Board;
Establishing the long term goals of the Group, and working with management to develop strategic and business plans to achieve those goals;
Monitoring implementation of the Group’s strategic and business plans and its financial performance;
Appointing and assessing the performance of, the Managing Director and the Chief Operating Officer;
Ensuring that there is an effective internal control environment and appropriate monitoring activities in place to identify and manage any significant risks facing the Group;
Approving major corporate initiatives;
Approving the Group’s annual and half-year financial reports;
Enhancing and protecting the reputation of the Group;
Reporting to shareholders and the market; and
The annual review of this charter.

In performing these responsibilities the Board should at all times:

Act in a manner designed to create and continue to build value for shareholders; and
Act in accordance with the law.

The Board’s powers include the ability to:

Appoint new Directors to the Board in accordance with the Constitution;
Initiate and adopt corporation plans, commitments and actions;
Initiate and adopt changes in accounting principles and practices;
Provide advice and counsel to the Managing Director;
Instruct and review the actions of any Board Committee and of the Managing Director;
Make recommendations to shareholders;
Meet from time to time in the absence of management; require the attendance of the Company’s auditor either with or without management being present;
Act as to all other corporate matters not requiring shareholder approval;
Determine the dividend policy and declare dividends to shareholders; and
Issue or buy-back of shares.

The Board may delegate to its Committees or a Director or another person, authority to perform any of its functions or exercise any of its powers subject to the Board’s ultimate responsibility for oversight.

3. Board Membership

The Chairman of the Board is at all times to be a Non-Executive Independent Director (see section 4 below). The Board notes the ASX Corporate Governance Council’s Best Practice Recommendation that a majority of the Board should be independent Directors. However, in considering this recommendation, the Board has taken into account the size of the Group, its current stage of development and the historical relationship between the Group and the non-independent non-executive directors.

The Board’s aim is to have a Board with an appropriate mix of executive and non-executive directors as well as an appropriate mix of relevant expertise and experience. Currently, the Board comprises two executive directors, one of which is the Managing Director, and three non-executive directors, one of which is the Chairman and he is considered independent (see section 4 below).

The Board’s composition is subject to review in the following ways:

The Company’s constitution provides that all directors other than the Managing Director are required to be re-elected by shareholders at least every three years and at least one-third of such directors must retire at each annual general meeting; and
The composition of the Board is reviewed annually by the Board to ensure that it has available an appropriate mix of skills and experience to ensure the interests of shareholders are served.

4. Independence

An Independent Director is a Non-Executive Director who:

is not a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
within the last three years has not been employed in an executive capacity by the Company or another Group member, or been a Director after ceasing to hold any such employment;
within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another Group member, or an employee materially associated with the service provider;
is not a material supplier or customer of the Company or other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;
has no material contractual relationship with the Company or another Group member other than as a Director of the Company;
has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Directors’ ability to act in the best interests of the Company; and
is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of the Company.

5. Meetings

The procedure for convening meetings of the Board and for the conduct of meetings is specified in the Company’s Constitution. Ad hoc Board meetings are convened to address Board issues when it is not practical to organise a full Board meeting.

Each director must declare any potential conflict of interest in relation to any matter for Board consideration, and must not participate in discussions or resolutions pertaining to any matter in which that director has a material personal interest.

6. Board Committees

The Board may from time to time establish Committees to assist it in carrying out its responsibilities. These Committees shall perform the activities specified in written Charters adopted by the Board for each particular Committee and such other matters as the Board may consider appropriate.

The Board has established the following Committees:

Audit Committee; and
Remuneration Committee.

7. Board Access to Information and Independent Professional Advice

All Directors have unfettered access to any Company records and information they consider necessary to fulfil their responsibilities. Directors also have access to the Company Secretary and other senior management to seek explanations and information. Directors receive regular detailed financial and operational reports and may request elaboration or explanation of those reports at any time.

In fulfilling their duties, each director, committee of the Board and the Board collectively, dealing with corporate governance matters, has the right to obtain independent professional advice at the Company’s expense, subject to prior written approval by the Chairman of the Group. While the Chairman’s prior approval is needed, it may not be unreasonably withheld.

8. Assessment

The Board evaluates its overall performance and that of the non-executive directors by assessing the Group’s ability to identify and progress opportunities for growth and by reference to the Group’s performance in relation to the specific strategic and financial objectives set out in the Group’s business plans and budgets.

The Board also evaluates the performance of the Audit and Remuneration Committees by reference to the published responsibilities for each Committee.

The Board undertakes the annual performance evaluation of itself, the Audit Committee and Remuneration Committee by:

comparing the performance of the Board, Audit Committee and Remuneration Committee with the requirements of their respective Charters;
setting forth the goals and objectives of the Board, Audit Committee and Remuneration Committee for the upcoming year; and
effecting any improvements to the Board, Audit Committee and Remuneration Committee Charters that are necessary or desirable.

If the Board determines it necessary, it may engage an external expert to assist with the Board Performance Evaluation.

At least annually, the Board, via the Remuneration Committee, sets quantifiable objectives to be achieved by the Managing Director and the Chief Operating Officer. The objectives are consistent with the Group’s strategic objectives and are linked to the at-risk component of the executives’ remuneration. The performance of the Managing Director and the Chief Operating Officer are measured against these objectives.

9. Delegation

The Board determines the scope of authority (and any limits on that authority) which is delegated to the Managing Director or any other officer.

Responsibility for implementing the strategic direction and for managing the day to day operations of the Group is delegated to the Managing Director. The Managing Director consults with the Chairman, in the first place, on matters which are sensitive, extraordinary or of a strategic nature.

Clear lines of communication are to be established between the Chairman and the Managing Director to ensure that the responsibilities and accountabilities of each are understood.

10. Role of Officers

Managing Director

The Managing Director will not also be the Chairman.

The Managing Director is responsible for running the affairs of the Group under delegated authority from the Board, and for implementing the policies and strategy set by the Board. In carrying out his 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 Group’s financial position and operational results.

The role of the senior management team is to support the Managing Director and implement the running of the general operations and financial business of the Group in accordance with the delegated authority of the Board.

Each of the Managing Director and Chief Operating Officer will state in writing to the Board that:

the Group’s financial reports and accompanying notes represent a true and fair view in all material respects of the Group’s financial condition and operational results and are in accordance with relevant accounting standards;
the statement referred to in paragraph (a) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
the Group’s risk management and internal compliance and control system is operating efficiently and effectively in all material respect.

Chairman

The Chairman is an independent director appointed by the Board and will not also be the Managing Director. The Chairman is responsible for:

leadership of the Board;
chair Board meetings and shareholder meetings;
efficient organisation and conduct of the Board’s function;
briefing all Directors in relation to issues arising at Board meetings;
facilitating effective contribution by all Directors;
overseeing that membership of the Board is skilled and appropriate for the Group’s needs;
promoting constructive and respectful relations between Board members and between the Board and management;
reviewing corporate governance matters with the Company Secretary and reporting on those matters to the Board; and
monitoring Board performance.

Company Secretary

The Board is supported by the Company Secretary who is accountable to the Board through the Chairman on all corporate governance matters. The Company Secretary is responsible for:

monitoring compliance with Board policy and procedures;
coordinating the completion and despatch of the Board agenda and briefing materials;
organising Board meetings and director attendance;
providing a point of reference for all dealings between Board and management; and
ensuring the Group complies with its requirements under the Corporations Act regarding registered office, annual returns and notices to be lodged with the Australian Securities and Investments Commission (ASIC).

11. Communication with the Group’s Management

The Directors have the right to meet with any manager in the Group, however, the usual form of communication between the Directors and the Group’s management would be via the Chairman and through the Managing Director.

Code of Conduct

Introduction

The Code of Conduct (‘the Code’) sets out our Principles and Practices which have been designed to promote integrity, ethical behaviour and accountability to reflect the core values of the Company.

Snowball’s core values are:

To comply with all applicable laws, to act with integrity in all dealings with clients, employees, shareholders, regulators and markets whilst maintaining a strong sense of social responsibility;
To be professional, with a focus on quality service and the development and implementation of carefully selected services that meet the needs of all clients, employees and shareholders;
To be reliable, and satisfy all our stakeholder groups by delivering consistent results; and
To and continue to foster and develop our relationships with all of the Company’s stakeholders.

Snowball has developed and adopted this Code to enhance our performance and corporate reputation.

We are dedicated to delivering outstanding performance for clients, employees and shareholders, whilst maintaining a strong sense of corporate social responsibility. In this regard it is essential that all staff demonstrate the highest ethical conduct when dealing with fellow clients, employees, shareholders and the community. Ethics are guidelines or principles that help us make decisions when the correct action is unclear. Our professionalism should be valued and maintained at all times, and the Board endeavours to ensure that the directors and employees of the Group act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities.

The Board and senior executives of Snowball are committed to promoting the Company’s core values and implementing its core Principles and Practices as stated in this Code and encourage employees to understand them and comply with them. To this end, employees should seek guidance or further information on any matters that they are unclear on.

Application

The Code applies to all employees, Directors and officers of Snowball and its subsidiary companies (the Group).

The general principles outlined in this Code complement existing Group policies and represent the minimum standards expected of those representing Snowball internally and in the wider community. The principles will be applied by employees of Snowball in their relationships with each other, their employer and everyone they deal with in their work.

In this regard, the company has identified the following key stakeholders:

Clients

Employees

Shareholders

Industry regulators and lobby groups

Government Bodies

Competitors

The community as a whole / members of the public.

Principles and Practices

Respecting the law and act accordingly

We conduct ourselves in a manner that preserves the integrity of any laws under which we operate by:

Familiarising ourselves with applicable laws and regulations that apply to our work including the Group’s Constraints on Securities Trading Policy and Continuous Disclosure Policy and where applicable, any obligations under our Financial Services Licence;
Seeking advice and clarification on applicable laws if we are unsure of our obligations; and
Notifying the Chief Operating Officer or Managing Director immediately of any potential or possible breaches of laws.

Respectful treatment of others

We care about the way in which we get results and we treat each other with respect and dignity by:

Valuing our colleagues;
Maintaining a safe and fair work environment;
Valuing diversity and treating everyone with dignity and respect, regardless of their role or individual differences;
Encouraging cooperation in all who work with us and not tolerating threats or acts of violence or intimidation; and
Understanding and responding to the needs of our clients and stakeholders.

Honesty, fairness and integrity in our dealings with others

We promote integrity and ensure that we are always fair and honest in our dealings by:

Not acting in ways which may cause others to question our commitment to the Group;
Appropriately managing confidentiality;
Not using coercive or misleading practices or falsifying or wrongfully withholding information;
Not placing ourselves in situations where our private interests could conflict directly or indirectly with our obligations to the Group, or where a conflict of interest may appear to exist; and
Not taking advantage of corporate opportunities for personal gain or accepting benefits such as gifts or entertainment that could create an obligation.

Responsible use of Snowball’s property

We use Company property responsibly by:

Not using any confidential information for personal gain, ensuring not to disclose confidential information without authorisation and ensuring this obligation is maintained even after we cease employment;
Not using the Group’s funds, securities or assets to provide illegal benefits for ourselves or others;
Protecting the intellectual property of the Group;
Only using other property, such as equipment, for Company business in a safe and responsible manner; and
Only using resources owned by the Group (such as computers) for permitted personal use.

Personal accountability for actions and their consequences

We recognise that all actions have consequences and that we are personally accountable for such actions. We therefore take personal responsibility for issues over which we have control and for the manner in which these are achieved and we seek positive outcomes in all that we do.

We ensure that we act in a professional and ethical manner at all times so as not to compromise the respect and confidence our clients and colleagues have for us.

Conflicts of Interest

Snowball employees must avoid situations or transactions in which their own interests conflict, or might be seen to conflict, with the interests of the Group. This will ensure that the interests and reputation of the company and staff are protected against potential accusations of inappropriate behaviour and that our clients’ loyalty and trust in the Group is maintained.

Gifts and Benefits

It is considered wrong for Snowball employees to ask for, or appear to expect gifts or benefits from clients, colleagues, subordinates or others with whom they may come into contact with in the course of their employment with Snowball.

A gift or benefit may influence, or appear to influence, the business judgment of an employee and may create, or appear to create, a conflict of interest. (Further information relating to Conflicts of Interest and Gifts and Benefits can be found in the AFSL Advisers Manual.)

Compliance with the Code

The Board, management and all employees of the Group are committed to maintaining this Code. Each individual has responsibility for complying with the Code. Disciplinary measures may be imposed for violations of this Code.

Any employee, who considers that any unlawful or unethical behaviour or any breach of a law or regulation may have occurred, must deal with such an incident in accordance with the Company’s Complaints and Exceptions Policy located within the Group Compliance Manual. The employee needs to immediately report the matter to the executive to whom they chiefly work. In the absence of that executive, the matter is reported to the Compliance Manager or the Chief Operating Officer. After such a report, the executive will immediately assess the soundness of the concern. If the executive agrees that a breach may have occurred, or is uncertain, the matter must be raised with the Chief Operating Officer on the day that the matter arises or as soon as practicable.

No employee will be adversely treated in raising legitimate concerns and all information provided to the Company will be treated as confidential by Company management and the employee during investigation and prior to confirmation of a breach. The Company will also maintain the anonymity of employees who report such behavior in good faith.

Communications Strategy

The Group is committed to providing shareholders and the market with relevant and timely information concerning its operations, with a view to assisting shareholders in assessing the Group’s performance and encouraging their effective participation at Members’ Meetings. It does this by:

Continuously reporting developments through the ASX Companies’ Announcements Platform;
Reporting through the Annual Report;
Releasing appropriate information on its website;
Providing shareholders with the opportunity to submit questions by phone, in writing, as well as over the Internet; and
Requesting the attendance of the Group’s external auditor at the Annual General Meeting to answer questions about the audit and the preparation and content of the auditor’s report.

This Strategy was authorised by the Board of Directors of Snowball on 22 September 2006 and remains current until otherwise varied by further Board authorisation. Only the Board can alter this policy.

Constraint on Securities Trading System

Introduction

This document records the Constraint on Securities Trading System by which it is intended Directors and employees of Snowball Group Limited (“the Company”) will comply with restrictions on them under the Corporations Act 2001 when trading in the Company’s securities (shares and options). The System comprises Policies prescribing processes and procedures (Annexures 1 and 2 to this document), an internal control (Annexure 3) and an audit function. Accountabilities of Directors and employees are specified in the Policies set-out in Annexures 1 and 2. Terms used below are defined in the Policy.

Purpose & Scope of System

The purpose of the System is to ensure compliance by Directors and employees, with the securities trading constraints/restrictions under the Corporations Act 2001. Directors and Employees are “Restricted Persons” where it may be assumed they have inside information and, as a result, any trading by Restricted Persons may embarrass or reflect badly on them or on Snowball (even if they have no actual inside information at the time). This Policy is designed to avoid the possibility that misconceptions, misunderstandings or suspicions might arise.

Policy – Processes and Procedures

In order to meet the purpose of the System, it is necessary for the Company to establish and maintain processes and procedures. The processes and procedures adopted by the Company are set-out in the Constraint on Securities Trading Policy set out in Annexure 1 for Directors and the Constraint on Securities Trading Policy set out in Annexure 2 for employees. The Policies have been approved by the Board of Directors of the Company. The Policies prescribe the necessary behaviour of Directors and employees for the purposes of ensuring compliance with the securities trading obligations.

Internal Control

As a check that the restrictions/constraints within the Policies are being observed, it will be necessary for executive managers and selected employees to sign a Constraint on Securities Trading Obligation Statement. This Statement is incorporated in the Management Compliance Questionnaire and will be distributed to all managers listed on the Questionnaire for execution every Quarter. The relevant excerpt of the Management Compliance Questionnaire is set out in Annexure 3.

Audit and Review of the System

The System will be audited annually to establish whether the internal control is being complied with, and reviewed annually to establish whether it is meeting its purpose over time.

Accountabilities

To give effect to the System, the Policies set-out specific restrictions/constraints for each Director and employee.

In addition, the Company Secretary as owner of the System, must ensure that:

there is an audit and review of the System each year; and
any discrepancies found or changes recommended as a result of the audit and review are referred to the Board each year.

The audit and review will have three purposes:

to check whether the control as prescribed by this System document is in place and is effective;
to check that the System is achieving its purpose over time; and
to check that the underlying statutory rules have not changed, or if they have changed, to determine how the Policy should be amended accordingly.

The Company Secretary and Managing Director are accountable for making suggestions over time to the Board of Directors as to how the System may be improved.

System Authorisation

This System has been authorised by the Board of Directors of the Company. Only the Board can alter the System.

Signed as a true record of the Constraint on Securities Trading System as established by the Board of Directors of the Company on 22 September 2006.

ANNEXURE 1

Constraint on Securities Trading by Directors

1. Introduction

1.1 This Policy imposes constraints on Directors of Snowball Group Limited (“Company”) dealing in securities of the Company. It also imposes disclosure requirements on Directors.

1.2 This Policy was adopted by the Board on 22 September 2006.

2. Application

2.1 This Policy applies only to Directors of the Company. Employees who are not Directors of the Company are subject to a separate Policy in relation to trading in securities.

3. Objectives

3.1 The objectives of this Policy are to:

minimise the risk of Directors of the Company contravening the laws against insider trading;
ensure the Company is able to meet its reporting obligations under the ASX Listing Rules; and
increase transparency with respect to trading in securities of the Company by Directors.

3.2 This Policy binds Directors unless there is a specific exemption by the Board.

4. Dealing in Securities - Legal and Other Considerations

4.1 Sections 1042B to 1043O of the Corporations Act 2001 deal with the prohibition on insider trading.

4.2 Section 1043A of the Act prohibits persons who are in possession of price sensitive information in relation to particular securities that is not generally available to the public from:

dealing in the securities; or
communicating the information to others who might deal in the securities.

4.3 The central test of what constitutes price sensitive information is found in section 1042A. It provides that the insider trading and continuous disclosure rules apply to information concerning a company that a reasonable person would expect to have a material affect on the price or value of securities in the Company (“price sensitive information”).

4.4 A reasonable person would expect information to have a material effect on the price or value of securities in the Company if the information would, or would be likely to, influence a person who commonly acquires these types of securities in deciding whether or not to acquire or dispose of securities in the Company.

4.5 Directors of the Company will from time to time be in a situation where they are in possession of price sensitive information that is not generally available to the public. Examples are the period prior to release of annual or half-yearly results to Australian Stock Exchange (“ASX”) and the period during which a major transaction is being negotiated.

4.6 The risk of contravention of insider trading laws in relation to information concerning public companies was substantially reduced in 1994 with the introduction of the continuous disclosure regime. Under that regime, public companies are required to disclose all price sensitive information immediately to the ASX, except in limited circumstances. The test of what constitutes price sensitive information under the insider trading laws and under the continuous disclosure requirements are effectively identical. As a consequence, at least in theory, there is no risk of Directors contravening insider trading laws as all relevant information will already have been disclosed.

4.7 There are a number of limitations and qualifications to the above. They include:

the ASX Listing Rules and the Corporations Act permit companies to not disclose certain information, for example in the situation where an acquisition is being negotiated and remains confidential;
information may be known to a particular Director but not yet by the Company as a whole (ie the Board);
the Company may not have yet complied with its continuous disclosure obligations in relation to a particular event or circumstance – there will always be some element of delay in doing so; and
Directors will generally have a better feel for the performance of the Company than the public.

In these types of situations there is still potential for contravention. There is also the potential for an appearance of contravention even if there has not been actual contravention. This could reflect poorly on the Company as well as on the Director concerned.

4.8 Another circumstance that must be guarded against is where one or more Directors are aware of an event or circumstance and the remaining Directors are not yet aware. In such a circumstance it is important that no Director deals in securities because:

there is a risk that they will be found to have been guilty of insider trading even if they had no intention of committing a contravention; and
of the potential for such circumstances to reflect badly on the Company.

4.9 The advice of the Chairman should be sought prior to any dealings taking place, and steps should be taken to ensure that the Chairman is apprised of all relevant considerations by the Continuous Disclosure Officer appointed under ASX Listing Rule 1.1, condition 12.

5. Policy - Dealing in Securities

5.1 Directors must not deal in securities of the Company unless:

a Trading Window has been declared under paragraph 5.1 or 5.2, or they have received clearance to trade under paragraph 5.3;
they have satisfied themselves that they are not in possession of any price sensitive information that is not generally available to the public;

5.2 The Chairman will generally allow Directors to deal in securities of the Company as a matter of course (unless there is in existence price sensitive information that has not been disclosed because of an ASX Listing Rule exception) in the following Trading Window periods:

within the period of 6 weeks after the release of annual or half yearly results; and
within the period of 6 weeks after the Annual General Meeting.

Directors should wait at least 1 hour after the relevant release so that the market has had time to absorb the information.

5.3 Trading in company shares by Directors is permitted to occur outside the Trading Window periods listed in paragraph 5.2 if the Chairman, after consultation with the other Directors, deems that the market is fully informed (for example following a significant event or announcement) and the Chairman declares a Special Trading Window. The Company Secretary will be responsible for informing staff of the date of commencement and finalisation of the Trading Window.

5.4 The periods mentioned in paragraph 5.2 and 5.3 are not the only times in which Directors may deal in securities, and the approval of the Chairman must also be sought to deal in securities outside those times. If a Director makes a reasonable request to trade outside the Trading Windows such a request must include confirmation that they do not hold any inside information. This policy recognises that the market may make assumptions that Restricted Persons (such as Directors) hold inside information, at times when they do not hold such information. Therefore there is the potential for the market to perceive trading by Directors as insider trading. So as not to create an impression in the market of inappropriate trading, even if there is none, it would be unusual for the Chairman to grant approval in the period of 6 weeks prior to the release of financial results or the issue of a prospectus. In such circumstances the Chairman will only give approval after making appropriate enquiries.

5.5 Directors will not at any time engage in short-term trading in securities of the Company.

5.6 Directors must not communicate price sensitive information to a person who may deal in securities of the Company. In addition, a Director should not recommend or otherwise suggest to any person (including a spouse, relative, friend, trustee of a family trust or Directors of a family company) the buying or selling of securities in the Company.

6. Notification of Dealings in Securities – Legal and Other Considerations

6.1 ASX Listing Rules 3.19A and 3.19B require the Company to notify dealing in securities by Directors within 5 business days therefore Directors must notify the Company of any dealings in securities within 3 business days in order to allow the Company time to prepare the necessary notification to the ASX. Three appendices are included in the Listing Rules for the purpose of this notification, being Appendix 3X Initial Director’s Interest Notice, Appendix 3Y Change of Director’s Interest Notice and Appendix 3Z Final Director’s Interest Notice.

6.2 Under Section 205G of the Corporations Act 2001, Directors also have an obligation to notify the ASX within 14 days of acquiring or disposing of a relevant interest in any securities of the Company. This is an obligation of the Director, not the Company. However if the Company has lodged the relevant ASX notification as set out in paragraph 6.1, the Director is then relieved from his / her obligation to notify the ASX.

7. Policy – Notification of Dealing in Securities

7.1 Before trading in Snowball’s securities during the Trading Windows, Directors must notify the Company Secretary of their intention to trade in securities and confirm they do not hold inside information.

7.2 Directors must advise the Company Secretary immediately on acquiring or disposing of a relevant interest in any securities in the Company and must then provide details of the change to their relevant interests and any other relevant matters in writing within 3 business days of the completion of the trade in Snowball.

8. Explanation of Terms

8.1 For the purposes of this policy:

“deal in securities” means buy or sell shares, options or other securities in the Company, or enter into transactions in relation to shares, options or other securities in the Company. It includes procuring another person to do any of these things;
“price sensitive information” has the meaning given in paragraph 4.3; and
“an associate of a Director” is a spouse, partner or child of the Director, any party (body corporate, trust or person) which is financially dependant on the Director, a party who acts or will act in concert with a Director, or a ‘relevant interest’ of the Director as defined in the Listing Rules.

8.2 For the purposes of paragraph 5.1, Directors “dealing” includes associates of Directors dealing in securities, and it is incumbent on each Director to ensure that an associate does not deal in circumstances where the dealing could be attributed to the Director concerned.

9. Notification

9.1 Any contravention of this Policy must immediately be reported to the Chairman who will decide on the appropriate course of action required and may consult with other Board members.

10. Dividend Reinvestment Plan / Employee Share Plan

10.1 The Trading Window restriction does not restrict the participation in any Dividend Reinvestment Plan or Employee Share Plan enacted by the Company, however any shares issued under a Plan cannot be traded during any restriction period.

This Policy was authorised by the Board of Directors of the Company on 22 September 2006 and remains current until otherwise varied by further Board authorisation. Only the Board can alter this Policy.

         ………………………………………………
         Andrew Brown
         Chairman

ANNEXURE 2

Constraint on Securities Trading by Employees

1. Introduction

1.1 This Policy imposes constraints on executive managers or equivalent and all other employees of Snowball Group Limited (SNO) dealing in securities of Snowball (“the Company”).

1.2 This Policy was adopted by the Board on 22 September 2006.

1.3 This Policy binds all executive managers or equivalent and all other employees of the Company.

2. Definitions

2.1 An executive manager or equivalent is any employee of Snowball whose role title includes “executive manager” or who is deemed to be an executive manager by the Managing Director.

2.2 “All other employees” refers to any full time/part time staff member or consultant to the Company who is not a Director or an executive manager.

2.3 “All employees” includes any person employed by the Company in a full time, part time or consulting basis.

3. Explanation of Terms

3.1 For the purposes of this Policy:

“deal in securities” means buy or sell shares, options or other securities in the Company, or enter into transactions in relation to shares, options or other securities in the Company. It includes procuring another person to do any of these things;
“price sensitive information” has the meaning given in paragraph 5.3.

4. Application

4.1 Directors are subject to a separate Policy in relation to trading in securities.

5. Dealing in Securities - Legal and Other Considerations

5.1 Sections 1042B to 1043O of the Corporations Act 2001 deal with the prohibition on insider trading.

5.2 Section 1043A of the Act prohibits persons who are in possession of price sensitive information in relation to particular securities that is not generally available to the public from:

dealing in the securities; or
communicating the information to others who might deal in the securities.

5.3 The central test of what constitutes price sensitive information is found in section 1042A. It provides that the insider trading and continuous disclosure rules apply to information concerning a company that a reasonable person would expect to have a material affect on the price or value of securities in the Company (“price sensitive information”).

6. Policy- Dealing in Securities

Trading Windows

6.1 Under this Policy, employees are generally allowed to deal in securities of the Company as a matter of course (unless there is in existence price sensitive information that has not been disclosed because of an ASX Listing Rule exception) in the following Trading Window periods:

within the period of 6 weeks after the release of the annual or half yearly results; and
within the period of 6 weeks after the Annual General Meeting.

but only after waiting 1 hour after the relevant release so that the market has had time to absorb the information.

6.2 Trading in company shares by all employees is permitted to occur outside the Trading Window periods listed in paragraph 6.1 if the Chairman, after consultation with the other Directors, deems that the market is fully informed (for example following a significant event or announcement) and the Chairman declares a Special Trading Window. The Company Secretary will be responsible for informing staff of the date of commencement and finalisation of the Trading Window.

6.3 Clearance to trade in the Company’s securities outside the Trading Window periods mentioned in paragraph 6.1 and 6.2 must be obtained by all employees from the Chairman or the Company Secretary. This policy recognises that the market may make assumptions that Restricted Persons (such as employees) hold inside information, at times when they do not hold such information. Therefore there is the potential for the market to perceive trading by Restricted Persons as insider trading. So as not to create an impression in the market of inappropriate trading, clearance will generally only be granted in unusual circumstances, and not generally be given in the period 6 weeks prior to the release of the annual or half yearly results, or the issue of a prospectus or when an announcement to the market is pending. If a reasonable request is made to trade outside the Trading Windows such a request must include confirmation that the employee does not hold any inside information.

Practical Steps

6.4 The Chief Executive Officer and Chief Operating Officer must not deal in securities of the Company unless:

a Trading Window has been declared under paragraph 6.1 or 6.2, or they have received clearance to trade under paragraph 6.3;
they have satisfied themselves that they are not in possession of any price sensitive information that is not generally available to the public;
they have advised the Chairman of their intention to do so; and
the Chairman has indicated that there is no impediment to them doing so.

6.5 If the Chief Executive Officer or Chief Operating Officer is also a Director of the Company, the Constraint on Securities Trading by Directors Policy, as set out in Annexure 1, will apply to that person.

6.6 An executive manager or equivalent must not deal in securities of the Company unless:

a Trading Window has been declared under paragraph 6.1 or 6.3, or they have received clearance to trade under paragraph 6.2;
they have satisfied themselves that they are not in possession of any price sensitive information that is not generally available to the public;
they have advised the Company Secretary of their intention to do so; and
the Company Secretary has informed the Chairman and the Chairman has indicated that there is no impediment to them doing so.

6.7 If an executive manager or equivalent is also a Director of the Company, the Constraint on Securities Trading by Directors Policy, as set out in Annexure 1, will apply to that person.

6.8 All other employees must not deal in securities of the Company unless:

a Trading Window has been declared under paragraph 6.1 or 6.3, or they have received clearance to trade under paragraph 6.2;
they have satisfied themselves that they are not in possession of any price sensitive information that is not generally available to the public; and
they advise the Company Secretary of any dealings in securities of the Company once the transaction is complete (they are not required to inform the Company Secretary of their intention to deal in securities prior to the transaction commencing).

6.9 The Company Secretary will report any dealings in securities of the Company by all other employees to the Chairman.

6.10 If any other employee is also a Director of the Company, the Constraint on Securities Trading by Directors Policy, as set out in Annexure 1, will apply to that employee.

6.11 An employee must not at any time engage in short-term trading in securities of the Company.

6.12 An employee must not communicate price sensitive information to a person who may deal in securities of the Company.

6.13 In addition, an employee must not recommend or otherwise suggest to any person (including a spouse, relative, friend, trustee of a family trust or Directors of a family company) the buying or selling of securities in the Company.

Queries

6.14 If an employee has any query about the application of this Policy, he or she should consult the Company Secretary.

Contravention

6.15 A trade in any securities by a person who is in possession of price sensitive information not publicly available could contravene the Corporations Act 2001 and expose the person to civil and criminal penalties.

6.16 A contravention of this Policy by an employee may result in disciplinary action.

6.17 Any contravention of this Policy must immediately be reported to the Company Secretary who must in turn advise the Chairman who will make a decision on the appropriate course of action required and may consult with other Board members.

7. Dividend Reinvestment Plan / Employee Share Plan

7.1 The Trading Window restriction does not restrict the participation in any Dividend Reinvestment Plan or Employee Share Plan enacted by the Company, however any shares issued under a Plan cannot be traded during any restriction period.

         ………………………………………………
         Andrew Brown
         Chairman

ANNEXURE 3

Constraint on Securities Trading Obligation Statement

(Contained within the Management Compliance Questionnaire)

4	CONTINUOUS DISCLOSURE AND CONSTRAINT ON SECURITIES TRADING	True	False
a	I am aware of the terms of the Continuous Disclosure Policy of the Group.
b	I am aware of the terms of the Constraints on Securities Trading System of the Group.
c	I have received adequate advice from the Company to support my understanding of the Policies.
d	I have given the people who report to me an adequate opportunity to become aware of and understand the terms of the Policies.
e	To the best of my knowledge and belief, in so far as the operations and affairs of the Company pertain to my area of responsibilities within the Group, the Company has complied with its continuous disclosure obligations as set out in the Policy for the period.
f	To the best of my knowledge and belief, in so far as the operations and affairs of the Company pertain to my area of responsibilities within the Group, the Company has complied with its share trading obligations as set out in the Policy for the period.

Continuous Disclosure System

Introduction

This document records the Continuous Disclosure System by which it is intended to ensure Snowball Group Limited (“the Company”) will meet its continuous disclosure obligations under the Listing Rules of the Australian Stock Exchange (“ASX”) and under the Corporations Act. The System comprises a Policy prescribing processes and procedures (Annexure 1 to this document), an internal control (Annexure 2) and an audit function. Accountabilities of staff are specified in the Policy. Terms used below are defined in the Policy.

Purpose of System

The purpose of the System is to ensure compliance with the continuous disclosure obligations of the Company under the Listing Rules and under the Corporations Act (which are broadly equivalent to those under the Listing Rules) over time.

Policy – Processes and Procedures

In order to meet the purpose of the System, it is necessary for the Company to establish and maintain processes and procedures. The processes and procedures adopted by the Company are set-out in the Continuous Disclosure Policy set out in Annexure 1. The Policy has been approved by the Board of Directors of the Company. The Policy prescribes the necessary work behaviour of employees within the Company for the purposes of ensuring compliance with the disclosure obligations.

Internal Control

As a check that the restrictions/constraints within the Policies are being observed, it will be necessary for executive managers and selected employees to sign a Compliance with Disclosure Obligations Statement. This Statement is incorporated in the Management Compliance Questionnaire and will be distributed to all managers listed on the Questionnaire for execution every Quarter. The relevant excerpt of the Management Compliance Questionnaire is set out in Annexure 3.

Audit and Review of the System

The System will be audited annually to establish whether the internal control is being complied with, and reviewed annually to establish whether it is meeting its purpose over time.

Accountabilities

To give effect to the System, the Policy sets out specific accountabilities for each employee and the Continuous Disclosure Manager (the Managing Director) and the Continuous Disclosure Officer (the Company Secretary).

In addition, the Company Secretary, as owner of the System, must ensure that:

there is an audit and review of the System each year; and
any discrepancies found or changes recommended as a result of the audit and review are referred to the Board each year.

The audit and review will have three purposes:

to check whether the control as prescribed by this System document is in place and is effective;
to check that the System is achieving its purpose over time; and
to check that the underlying Listing Rules and statutory rules have not changed, or if they have changed, to determine how the Policy should be amended accordingly.

The Managing Director and Company Secretary are responsible for making suggestions over time to the Board of Directors as to how the System may be improved.

System Authorisation

This System has been authorised by the Board of Directors of the Company. Only the Board can alter this System.

Signed as a true record of the Continuous Disclosure System as established by the Board of Directors of the Company on 22 September 2006.

ANNEXURE 1

Continuous Disclosure System Policy

1. Introduction

1.1 This Policy has been issued by the Board of Directors of Snowball Group Limited (“the Company”). It binds all employees of the Company.

1.2 The purpose of this Policy is to prescribe the work behaviour of employees within the Company so that the the Company meets its continuous disclosure obligations under the Australian Stock Exchange (“ASX”) Listing Rules and under the Corporations Act. This Policy sets out processes and procedures which are intended to ensure compliance with the disclosure obligations.

1.3 All employees must comply with this Policy at all times.

2. Defined Terms used in this Policy

2.1 In this Policy, terms used have the following meanings:

“Potential Disclosure Information” means any information within the Company which may need to be disclosed under the ASX Listing Rules (Listing Rule 3.1).
“Continuous Disclosure Manager” (CDM) means the Managing Director of the Company.
“Continuous Disclosure Officer” (CDO) means the Company Secretary or in his / her absence, the Managing Director.
“Disclosure Information” means any information within the Company which the CDM or CDO have determined must be disclosed to the ASX under the Listing Rules.

3. Background

3.1 Listing Rule 3.1 of the ASX Listing Rules obliges the Company to immediately provide to the ASX, any information that it becomes aware of and that a reasonable person would expect to have a material affect on the price or value of Company’s listed shares and options.

3.2 In particular, Listing Rule 3.1 states:

Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information.

3.3 The sort of information which may be covered by the above includes:

Financial performance and significant changes in financial performance
A change in board composition or senior executive positions
Mergers, acquisitions/divestments, joint ventures or changes in the asset base of the Company or Group
Significant developments regarding new projects or ventures
Events regarding the Company’s shares or options or the issue of new securities
Major new contracts, or changes to such contracts
The completion of new alliances
The Company entering into new areas of expertise, production or geographic location
The solvency or otherwise of major counter-parties
Industry issues (such as a change of legislation) which may have a material impact on the Group’s earnings or operations or assets
Major litigation (threatened or actual)
An investigation of the Group by a statutory authority, if applicable.

A Company becomes aware of such information when any of its officers become aware of it. Information falls within the Listing Rule if a reasonable person would expect it to have a material effect on the price or value of securities. This is judged by reference to whether it would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to acquire or dispose of the Company’s securities. The accounting concepts of materiality are irrelevant.

4. Exceptions

4.1 The Listing Rule has one exception. Information need not be disclosed to the ASX where:

a reasonable person would not expect the information to be disclosed; and
the information is confidential and the ASX has not formed the view that the information has ceased to be confidential; and
one or more of the following applies:
1. It would be a breach of a law to disclose the information;
2. The information relates to an incomplete proposal or negotiation;
3. The information comprises matters of supposition or is insufficiently definite to warrant disclosure;
4. The information is generated for internal management purposes of the entity; or
5. The information is a trade secret.

4.2 If information within the Company satisfies the above conditions, the Company is not obliged to make a disclosure of the information to the ASX.

5. Judgement as to Whether Information is Disclosable

5.1 There are significant judgements which will need to be made within the Company to ensure that an appropriate assessment is made of the relevant information, to see whether it must be disclosed, or whether it falls within the exception. How this is dealt with within the Company is explained below.

6. Corporations Act Equivalent Provisions

6.1 The Corporations Act 2001 has an equivalent provision to Listing Rule 3.1: section 674(2). Under that section, if the Company has information that is “not generally available”, which a reasonable person would expect, if it were generally available, to have a material effect on the price or value of Snowball’s securities, the Company must immediately notify the ASX. Under section 676(2), information is generally available if it consists of “readily observable matter”, or it has been made known (or would be likely to have been made known) to persons who commonly invest in securities of a kind whose price or value might be affected by the information, and since it was so made known, a reasonable period has lapsed.

6.2 Information is also generally available if it is a deduction, conclusion or inference made or drawn from public information: section 676(3).

7. Penalties and Offences

7.1 If the Company fails to comply with the continuous disclosure obligations, it can be suspended from the ASX. Further, the Company may face criminal liability and civil penalties, including imprisonment for relevant officers (a criminal liability arises if the relevant officer had an awareness or knowledge). Accordingly, the disclosure obligations under the Listing Rules must be treated by all employees with the utmost seriousness.

7.2 Under the CLERP 9 amendments to the Corporations Act 2001, ASIC is able to issue infringement notices for less serious breaches of continuous disclosure obligations by entities. During the investigation process prior to issuing an infringement notice, ASIC will look at the adequacy of Company’s internal controls and whether any professional advice was sought or complied with. ASIC will also look at whether the alleged breach was remedied immediately. Initially, breaches result in publication of the breach and recommended fines up to $100,000 for both the Company and /or individual.

7.3 Any employee who does not comply with this Policy will be subject to disciplinary procedures.

8. Release of Information to the Market Only after Release to the ASX

8.1 Under Listing Rule 15.7, the Company must not release information publicly until it has given the information to the ASX and the ASX has acknowledged to the Company that the ASX has released it to the share market.

9. Procedures and Processes

9.1 Employees who become aware of Potential Disclosure Information should refer the information to the CDO who will then decide whether disclosure is required under the Listing Rules.

9.2 The CDM or CDO will communicate with the Chairman regarding continuous disclosure matters and will advise the market if that is the appropriate course of action. In determining whether or not disclosure of information is required, the CDO may also confer with the ASX.

9.3 Only the CDO or his/her delegate is authorised to communicate with the ASX, unless the CDM or the Board directs otherwise. The Company may decide to release the information, after it has been posted on the ASX website, through media or stakeholder releases, or in some other way. In such cases, the CDM will circulate the information to the Board prior to its release. The form of the release must be approved by the CDO prior to its release to ensure that the terms of the release are consistent with the announcement made to the ASX and the information posted on the Company’s website.

10. Briefing to Analysts and Releasing Information Generally

10.1 The Company may from time to time decide to give selective briefings to analysts or institutional investors on the Company’s operations or developments. These can only be conducted by the Chairman, CDM or the CDO. Other employees of the Company may attend and make presentations at such briefings, but only if the Chairman, CDM or CDO are present.

10.2 In conducting the briefings, the terms of this Policy must at all times be complied with. In particular, such discussions and meetings must deal only with information which has been previously disclosed. If a briefing will contain information not previously released to the ASX, then the information to be discussed at the briefing must be released to the ASX prior to the briefing.

10.3 Apart from such information, if considered appropriate, those conducting the discussions and meetings may also cover long term strategy, Company history, vision and goals, management philosophy and the strength and depth of management, competitive advantages and risks, previously disclosed material and non-material information, industry trends, and issues, assumptions underlying earnings forecasts, but not the forecast per se.

10.4 Directors or executives giving presentations or conducting roadshows must follow the above directions.

10.5 Because of Snowball’s obligations to notify the ASX before giving information to any other party, the Policy recognises that Snowball will not release price sensitive information under an embargo arrangement.

10.6 The CDO must be immediately informed of any inadvertent disclosure of Disclosure Information made during a briefing. The CDO must advise the Board immediately and take steps to correct the inadvertent disclosure.

10.7 Generally, Snowball will not respond to market speculation and rumours unless required to do so by law or the ASX.

11. Media Speculation

11.1 Only the Chairman, CDM and CDO are authorised to speak to the media or analysts on any matter concerning the Company. If there are factual errors giving rise to speculation or rumour in the media and the ASX queries the Company because it considers that there is or is likely to be a false market in the Company’s securities, the Company will immediately respond to correct any errors through disclosures to the ASX. Disclosures to the ASX will follow procedures set out in this Policy.

12. Earnings Forecasts

12.1 The release of earnings forecast information will generally be at the recommendation of the CDM or CDO and must always be approved by the Board.

12.2 Snowball is required (under the Corporations Act and the Listing Rules) to publicly correct its earnings forecasts, or other projections, that may affect its share price, before advising or responding to analysts or institutions.

12.3 Comments on material changes to the forecast can only be made to persons outside the Company, including analysts or institutions, if the Company has previously publicly announced the changes.

12.4 As a result of analysts forecasts or other information which differ materially from the Company’s disclosed earnings forecasts (as varied from time to time), the ASX may determine that a false market in the Company’s securities has been created. In this circumstance the ASX may query the Company and require it to release Disclosure Information which confirms the Company’s latest forecasts, corrects the false market and which identifies any other relevant information.

13. Media Enquiries etc

13.1 From time to time, the media will enquire about the Group or will wish to run articles about the Group in magazines or newspapers, or on television or radio segments. Only the Chairman, CDM and CDO are authorised to give such interviews. Those interviews must be conducted in a manner which ensures compliance with this Policy, namely that no Disclosure Information can be disclosed to the public through the interview or the article unless it has first been disclosed to the ASX pursuant to the Listing Rules and pursuant to this Policy.

14. Shareholders

14.1 An existing shareholder may contact the Company seeking a wide range of information about the Company and its operations. For example, a shareholder may ask about information which is not publicly available such as:

the early release of financial data;
the likelihood of a dividend being declared for the financial year; or
rumours about proposed business strategies and operations.

14.2 Only the Chairman, CDM and CDO are entitled to disclose information about the Company to a shareholder and must at all times act in accordance with this Policy.

15. Trading Halt

15.1 It is conceivable that from time to time the Company may wish to request a halt in the trading of its securities due to, for example, an imminent major announcement which will have a material impact on its share price. A decision to request a trading halt from the ASX can only be made following authorisation from the Board. The CDM and CDO are accountable for referring circumstances likely to give rise to the need for a trading halt request to the Board in order that a judgement can be made as to whether a directors meeting should be convened to authorise the request for a trading halt.

16. Accountabilities

16.1 To give effect to this Policy, the following accountabilities will apply and must be observed at all times:

16.2 Each executive/senior manager must:

be familiar with the terms of this Policy;
ensure that he/she does not release any Disclosure Information direct to the public;
if disclosing Disclosure Information to a third party required in the course of negotiations with that party, ensure that the third party executes a confidentiality agreement restricting its right to use that information and obliging it not to release the information;
immediately advise the CDO (or CDM in the event that the CDO is not available) of any information they believe to be Potential Disclosure Information; and
if requested to do so by the CDO, sign the Statement regarding compliance with the Policy contained in the Management Compliance Questionnaire.

16.3 Each employee must:

be familiar with the terms of this Policy;
seek guidance from the CDO if they do not understand any aspect of this Policy, or their obligations under this Policy; and
immediately advise their manager if they become aware of any information they believe to be Potential Disclosure Information.

16.4 The CDO of the Company must:

advise employees of the procedure to report Potential Disclosure Information;
deal expeditiously with any Potential Disclosure Information brought to his / her attention;
discuss Potential Disclosure Information brought to his / her attention with the CDM to determine if the Potential Disclosure Information amounts to Disclosure Information;
if it is decided that the information is disclosable or there is a material doubt about whether the Potential Disclosure Information amounts to Disclosure information, then the CDO must refer the information to the Chairman;
in conjunction with the Board, determine if any Potential Disclosure Information is information which is required to be disclosed to the market and act upon the instructions of the Board;
ensure the Management Compliance Questionnaire (confirming compliance with this Policy) is issued every quarter;
ensure that a log or register of executed Management Compliance Questionnaires is kept;
Ensure that a register of Statements released to the market is kept;
ensure that all disclosure matters raised at Board level are recorded in the Board Meeting Minutes;
comply with the processes and procedures under this Policy relating to:
1. the briefing of analysts and institutional investors; and
2. the making of announcements in relation to earnings expectations.
continue to advise all employees on matters relating to continuous disclosure;
ensure that there are educational materials incorporated into the Snowball induction program to be completed by all new employees within the Company;
ensure this Policy, once adopted, is distributed to all existing employees;
provide targeted employees with an opportunity to understand and be familiar with the requirements of this Policy;
ensure all employees have ready access to this Policy;
where continuous disclosure information has been lodged with the ASX, ensure that upon the ASX acknowledging receipt of the Disclosure Notice, the Notice is posted on the Company’s website;
keep a log or register of all disclosures made to the ASX;
take enquiries from the ASX from time to time, notify the CDO immediately of those enquiries, and respond to such enquiries in consultation with the CDO.

17. Queries

17.1 If any employee has any query about his or her accountabilities under this Policy, or in general about the continuous disclosure obligations, he or she should contact the CDO.

This Policy was authorised by the Board of Directors of Snowball on 22 September 2006 and remains current until otherwise varied by further Board authorisation. Only the Board can alter this Policy.

         ………………………………………………
         Andrew Brown
         Chairman

ANNEXURE 2

Continuous Disclosure Obligation Statement

(Contained within the Management Compliance Questionnaire)

4	CONTINUOUS DISCLOSURE AND CONSTRAINT ON SECURITIES TRADING	True	False
a	I am aware of the terms of the Continuous Disclosure Policy of the Group.
b	I am aware of the terms of the Constraints on Securities Trading System of the Group.
c	I have received adequate advice from the Company to support my understanding of the Policies.
d	I have given the people who report to me an adequate opportunity to become aware of and understand the terms of the Policies.
e	To the best of my knowledge and belief, in so far as the operations and affairs of the Company pertain to my area of responsibilities within the Group, the Company has complied with its continuous disclosure obligations as set out in the Policy for the period.
f	To the best of my knowledge and belief, in so far as the operations and affairs of the Company pertain to my area of responsibilities within the Group, the Company has complied with its share trading obligations as set out in the Policy for the period.

Handling Shareholder Enquiries Policy

1. Introduction

1.1 The Company has obligations to disclose certain information to the Australian Stock Exchange, so that this information is then available to shareholders and the investing public.

2 Enquiries

2.1 From time to time people will seek to obtain information which is not readily available to the investing public by telephoning the Company’s offices or employees directly. These people may include:

shareholders;
the media;
potential investors in the Company;
researchers and analysts; and
others.

2.2 The law imposes obligations on when and how a Company’s personnel can disclose information.

3 Prohibition on Release of Information

3.1 Disclosing information may unintentionally cause the Company to breach the law. Accordingly, the handling of shareholder enquiries needs to be regulated.

3.2 Only the Chairman, Managing Director and COO/Company Secretary are authorised to release information to any third party.

3.3 No employee may release any information to any third party except in accordance with the Continuous Disclosure Policy of the Company. See in particular paragraphs 10-14 of that Policy.

3.4 Any employee who is unclear of his/her obligations or has any queries should contact the Company Secretary.

This Policy was authorised by the Board of Directors of Snowball on 22 September 2006 and remains current until otherwise varied by further Board authorisation. Only the Board can alter this Policy.

Remuneration Committee Charter

1. The Committee – An Overview

The Remuneration Committee (Committee) is a committee of the Board of Directors (Board) of Snowball Group Limited and its subsidiary companies (the Group). This Charter sets out the role, composition, authority, responsibilities and operation of the Committee.

The Committee supports the full Board and essentially acts in a review and advisory capacity. The Committee is considered to be a more efficient forum than the full Board for focusing the Group on appropriate remuneration policies which are designed to meet the needs of the Group and to enhance corporate and individual performance.

The existence of this Committee and the functions performed by it does not purport to diminish the ultimate responsibility of the Board.

2. Membership Requirements and Composition

The current composition of the Committee is:

3 Non-Executive Directors one of which is independent; and
A Chairman who is not a Chairman of the Board and who is not an independent director.

The Group notes the ASX Best Practice Recommendation that the Remuneration Committee should consist of:

A minimum of three members;
A majority of independent directors; and
Be chaired by an independent director.

However, in considering the recommendation for a majority of independent directors and an independent chairperson, the Board considers that given the composition of the Board, the existing Remuneration Committee has the best and most suitable composition to effectively carry out its functions.

3. Access

In fulfilling its responsibilities, the Remuneration Committee will ensure that the Committee, the Board and management are provided with sufficient information to ensure informed decision-making. The Remuneration Committee may seek input from individuals on remuneration policies, but no individual should be directly involved in deciding his/her remuneration.

4. Meetings

The Committee meets as frequently as it considers necessary to discharge its role effectively (but not less frequently than 2 times per financial year). The Chairman of the Committee shall decide upon the timing of the meetings.

The Chairman of the committee maintains minutes of the meetings of the Committee which when signed by the Chairman constitute a record of the business of the Committee. These signed minutes are circulated to the full Board at the next meeting of the Board which follows the Committee meeting.

The Chairman shall be responsible for drawing up and the circulation of agendas and providing any explanatory documentation prior to each meeting.

Executive Directors and Senior Management will be invited to attend Committee meetings at the discretion of the Committee.

A quorum shall consist of two members of the Committee. A motion shall be passed by a simple majority of votes cast in favour by members present and eligible to vote. In the event of an equal number of votes being cast for or against a motion, the motion will be referred to the Board for resolution (i.e. the Chairman of the Committee does not have a casting vote).

5. Role and Objectives

The primary role of the Committee is to assist the Board in fulfilling its responsibilities relating to:

ensuring that the level and composition of remuneration is sufficient and reasonable; and
driving executive performance which is consistent with achieving the Company’s objectives.

In addition the Committee is available to perform such reviews and inspections as the Board may from time to time direct.

6. Duties and Responsibilities

The main responsibilities of the Remuneration Committee are to:

Advise the Board on remuneration policies and practices generally;
Make specific recommendations on remuneration packages and other terms of employment for:
- Non-Executive Directors;
- The Managing Director; and
- The Chief Operating Officer
having regarding to individual performance, relevant comparative information, and if appropriate, independent expert advice;
Advise the Board in relation to remuneration packages which, as well as base salaries, may include the following:
- retirement entitlements (not related to non-executive directors);
- termination entitlements;
- performance related incentives (short term and long term); and
- fringe benefits.
Set quantifiable objectives to be achieved by the Managing Director and the Chief Operating Officer consistent with the Group’s strategic objectives and linked to the at-risk component of the executives’ remuneration;
Assess the performance of the Managing Director and the Chief Operating Officer against the predetermined quantitative and qualitative objectives;
Make recommendations to the Board in relation to the terms of issue of equity-based remuneration to employees as a part of their individual package or a wider staff incentive and retention scheme and ensure that any such issues are made in accordance with the ASX Listing Rules;
Reviewing any transactions between the Group and the directors, or any interest associated with the directors, to ensure the structure and the terms of the transaction are in compliance with the Corporations Act 2001 and are appropriately disclosed; and
Reviewing this Charter annually.

Remuneration of non-executive directors is determined by the Board within the maximum amount approved by the shareholders from time to time.

7. Reporting

As appropriate, the Committee will report to the Board on matters relevant to the Committee’s role and responsibilities.