Corporate Governance

The Board of Engin is responsible for the leadership and direction of the Company, including strategy, financial budgets and business goals. The Board monitors the Company's progress towards achieving these goals by means of management reports presented at monthly meetings, or as required in the case of special investigations.

The Directors meet regularly with the senior executives to review operating results, forecasts, approve strategic initiatives and major expenditures. Particular emphasis is placed on the need for compliance with legislation in areas such as Trade Practices and the Corporations Law.

Board Committees

The Board has formed three Committees: Audit, Compensation and Nomination. The Managing Director sits only on the Nomination Committee as a full member but attends the meetings of the other Committees by invitation.

The Audit & Risk Committee monitors business and financial risks and ensures the integrity of the Company's financial statements by meeting with accounting staff and the external auditor. It is also responsible for monitoring the Company's compliance with legislative requirements.

The Compensation Committee is responsible for reviewing the compensation of the Managing Director and senior executives to ensure that they are rewarded in accordance with market rates. In due course, this Committee will also make recommendations to shareholders regarding non-executive Directors' fees. The Nomination Committee is responsible for the nomination of additional Directors. It is intended that this Committee will meet as required.

Share Holdings

The Company has adopted a sharetrading policy which allows Directors and nominated senior staff to trade in the Company's securities only with the approval of the Board and the Managing Director in the case of senior staff, and generally only in the six-week period following the release of the Company's half yearly and yearly results to Australian Stock Exchange and after the Annual General Meeting. Senior staff also require the approval of the board and executive directors.

Independent Advice

With the prior approval of the chairman, each Director has the right to seek independent legal and other professional advice at the company's expense concerning any aspect of the company's operations or undertakings in order to fulfil their duties and responsibilities as directors.

Continuous Disclosure

The Board is committed to ensuring that price sensitive information is released to Australian Stock Exchange in accordance with continuous disclosure requirements.

All reports made to the Australian Stock Exchange are made available on the company's internet site at www.engin.com.au

Risk Management

The Board is responsible for the Company's system of internal controls. The Board constantly monitors the operational and financial aspects of the Company's activities and, through the Audit Committee, the Board considers the recommendations and advice of external and internal auditors and other external advisers on the operational and financial risks that face the Company. The Board ensures that recommendations made by the external and internal auditors and other external advisers are investigated and, where considered necessary, appropriate action is taken to ensure that the Company has an appropriate internal control environment in place to manage the key risks identified.

Code of Conduct

As part of the Board's commitment to the highest standard of conduct, the Company adopts a code of conduct to guide executives, management and employees in carrying out their duties and responsibilities. The code of conduct covers such matters as:

• responsibilities to shareholders;
• compliance with laws and regulations;
• relations with customers and suppliers;
• ethical responsibilities;
• employment practices; and
• responsibilities to the environment and the community.

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