Best Execution Policy

HOLST has always accepted the obligation to advise clients in their best interest and to execute their instructions in the best way we can. In recent years we have done that through ASX Limited, and for transactions in overseas securities through appropriate exchanges overseas. The introduction of Chi-X as an alternative exchange has meant that ASIC as regulator of all markets in Australia requires us to adopt a 'Best Execution Policy' and to publish this to you. What follows is a formal statement of our policy. As a client reading this policy you can regard yourself as a 'Retail Client' unless you meet the 'Wholesale Client' definition located at the end of this document. BEST EXECUTION POLICY 1. BEST EXECUTION OBLIGATION Under Chapter 3 of the ASIC Market Integrity Rules (Competition in Exchange Markets) 2011 F.W. Holst & Co. Pty Ltd ('HOLST') is required to have in place a 'Best Execution Policy' and take all reasonable steps to obtain the best possible result for our clients when executing, receiving and transmitting client orders where such orders relate to equity market products. The obligation to obtain the best possible execution outcome for our clients is referred to in this policy as the "Best Execution" obligation. The way in which HOLST provides Best Execution to you may differ depending on whether you are a retail client or a wholesale client. By Best Execution we mean achieving the best outcome for our clients. 2. SCOPE Our best execution policy applies whenever we receive an order from a client for execution on the client's behalf. Prior to 31 October 2012, HOLST has chosen to rely on the 12-month transitional arrangement and will rely only on ASX TradeMatch platform to meet the Best Execution obligation. HOLST may execute trades on ASX's other trading platforms or Chi-X market at some future stage before 31 October 2012. We encourage our clients to refer to this page (www.holst.com.au/best) to keep up to date with HOLST's future plans in this regard. Other than by updating the website, we may also notify you of changes via our usual HOLST publications. You can also discuss the matter with your Adviser. 3. BEST EXECUTION POLICY 3.1 Receiving client orders When HOLST receives orders in relation to equity market products on your behalf, HOLST will take all reasonable steps to obtain the best possible outcome for its clients. Best Execution will be achieved in accordance with this policy and is designed to obtain on a consistent basis the best possible result for execution of your orders, subject to and taking into account the nature of your orders, the priorities you place upon us in filling those orders and the nature of relevant markets. 3.2 Executing client orders HOLST will generally give price a higher relative importance when obtaining the best possible outcome for orders executed on your behalf. However, depending on the type of client (Wholesale or Retail) HOLST may also take into consideration a range of different factors, including the need for timely execution, availability of price improvement, the liquidity of the market (which may make it difficult to execute an order), price of the equity market product, speed, likelihood of execution and settlement, potential price impact, execution certainty, the size of the order and the nature of the financial transaction including whether or not such transactions are executable on a regulated market. 3.3 Transmitting of client orders All orders that HOLST receives from its clients are transmitted directly to the order book of the relevant securities exchange and are executed in a manner where we will take all reasonable steps to achieve Best Execution, in accordance with this policy, taking account of the factors noted above at 3.2 (if applicable) and any specific instructions received from you as part of the order, as applicable 3.4 Best outcome for a Retail Client For a Retail Client the best outcome means the best Total Consideration – in other words, the purchase or sale price after brokerage and GST. This will mean that HOLST will always attempt to obtain the best total consideration for your order unless you instruct us otherwise. 3.5 Best outcome for a Wholesale Client For a Wholesale Client the best outcome may occur as a result of price, cost, total consideration, speed, likelihood of execution or any other relevant factor, or any combination of those factors. It may also occur as a result of HOLST following a specific or standing instruction you have provided to us. 4. SPECIFIC INSTRUCTIONS To the extent that you provide us with specific instructions in relation to your order or any part of it HOLST will act on your instructions and, in doing so, you may not necessarily receive the best outcome in relation to Best Execution. If you require your order to be executed in a particular manner you must clearly state your desired method of execution when you place your order. If you give your order orally, HOLST's preferred method of being contacted, we must record those instructions. You can provide your specific instructions in writing, however, please note, email is not always reliable and there may be time delays in receiving such instructions. When you provide HOLST with a specific instruction as to the execution of an order that cannot be carried out in accordance with our Best Execution Policy, our Best Execution Policy will not apply and we will execute your order in accordance with your specific instructions. Our Financial Services Guide sets out that when instructing us by email you should send a copy of the instruction to orders@holst.com.au. If you are a Wholesale Client and you give us standing instructions for all of your orders we will periodically review them to ensure they remain appropriate for you. 5. EXECUTION VENUES HOLST has chosen to rely on the 12-month transitional arrangement and will rely on ASX TradeMatch platform to meet the Best Execution obligation until HOLST decides or begins executing trades on the Chi-X market and or any other ASX market platform. 6. IDENTIFICATION OF ORDER BOOKS For equity market products traded within Australia's domestic financial market trading is presently conducted on the Central Limit Order Book ('CLOB') of the ASX so execution is subject to price-time priority on ASX. 7. MONITORING AND REVIEW HOLST will monitor the effectiveness of our Best Execution policy and arrangements to identify and, where appropriate, correct any deficiencies. HOLST will carry out the review and assessment above at least annually or whenever a material change occurs that affects our ability to obtain the best result for you. We will notify you of any material changes to our Best Execution policy and arrangements. 8. DEFINITIONS Retail Client means a person who is a Retail Client within the meaning of subsection 761G (1) of the Corporations Act. A client other than a Wholesale Client Wholesale Client is where it is evident to HOLST that any of the following apply: (a) The price or value of the transaction entered into by the client is $500,000 or more; (b) The financial product or service provided to the client is provided for use in connection with a business that is not a small business; (c) The client does not receive the financial product or service for use in connection with a business, and a qualified accountant certifies that the client has: (i). net assets of at least $2.5 million; or (ii). a gross income for each of the last two financial years of at least $250,000 a year, (d) The client is a professional investor (as defined in s9 of the Corporations Act); or (e) The client is a sophisticated investor (as defined in s761GA) of the Corporations Act with demonstrated experience in using financial services and investing in financial products Total Consideration means: (a) For a buy order, the purchase price paid by the client in respect of performance of a client order plus transaction costs. (b) For a sell order, the sale price received by the client in respect of performance of a client order less transaction costs. Standing Instruction means an instruction (order) which remains in force until specifically changed or withdrawn. Order means an instruction to buy or sell a financial equity market product which is accepted by HOLST for execution and which gives rise to contractual or agency obligations to you. Implicit in the instruction received will be the understanding that you are relying on HOLST to protect your interests in relation to the pricing or other aspects of the transaction that may be affected by how we execute the order. This includes where a trade is not immediately executable, where we are given price and/or time discretion as to the manner of execution and exact terms of the transaction and where the trade can be executed and booked to your account without the need for further reference to you. Central Limit Order Book ('CLOB') An electronic list of buy orders and sell orders, maintained by or on behalf of a market operator, on which those orders are matched with other orders in the same list. Orders in the central limit order book are matched continuously in price time priority with single price auctions facilitating the opening and closing sessions. Equity Market Product means: (a) A share in a body; (b) A financial product referred to in subparagraph 764A(1)(b)(i) or subparagraph 764A(1)(ba)(i) of the Corporations Act; (c) A right (whether existing or future and whether contingent or not) to acquire, by way of issue, the following under a rights issue: (i) A share covered by paragraph (a); or (ii) A financial product covered by paragraph (b); or (d) A CHESS Depository Interest, admitted to quotation on the Listing Market. Relevant Statutory Regulations and Requirements This policy should be read in conjunction with the following regulations/policies: • ASIC Market Integrity Rules (Competition in Exchange Markets) 2011 • ASIC Regulatory Guide 223 • Corporations Act Chapter 7 Definitions ASIC means Australian Securities & Investment Commission. ASX means Australian Securities Exchange Limited and related entities. Last updated on 28 October 2011.