GALE PACIFIC LIMITED — AGM Information 2011

Sep 26, 2011

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is given that the 2011 annual general meeting of Gale Pacific Limited ACN 082 263 778 ("Company") will be held at Grand Hyatt Melbourne, Grosvenor Room, Level 8, 123 Collins Street, Melbourne on Friday 28 October 2011 at 11.00 am

BUSINESS

Shareholders are invited to consider the following items of business at the annual general meeting:

Ordinary business

1. FINANCIAL AND RELATED REPORTS

To lay before the annual general meeting the Financial Report of the Company and its controlled entities and the related Directors' and Auditor's Reports for the year ended 30 June 2011 for shareholders to receive and consider.

2. RESOLUTION 1- ADOPTION OF REMUNERATION REPORT (NON-BINDING VOTE)

That the Remuneration Report of the Company and its controlled entities for the year ended 30 June 2011 be adopted.

The vote on this item is advisory only and does not bind the directors or the Company.

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 1 (in any capacity, whether as proxy or as shareholders) by any of the following persons:

• (a) Key Management Personnel; and
• (b) Closely Related Parties of Key Management Personnel.

However, the Company need not disregard a vote if it is:

• (c) cast by a person as a proxy appointed in accordance with the directions of the proxy form that specifies how the proxy is to vote on Resolution 1; and the vote is not cast on behalf of a person described in subparagraphs (a) and (b) above; or
• (d) cast by the chair of the Meeting as proxy appointed in accordance with the directions of the proxy form for a person who is entitled to vote, and such appointment on the proxy form expressly authorises the chair to exercise the proxy even if the resolution is connected directly with the remuneration report; and the vote is not cast on behalf of a person described in subparagraphs (a) and (b) above.

3. RESOLUTION 2- RE-ELECTION OF DIRECTORS

Mr John Murphy retires as a director of the Company by rotation in accordance with rule 7.1(f) of the constitution of the Company and, being eligible, offers himself for re-election.

4. RESOLUTION 3- INCREASE IN DIRECTORS' FEES

To consider and, if thought fit, pass the following resolution as an ordinary resolution:

"That pursuant to and in accordance with Listing Rule 10.17 and for all other purposes, the maximum aggregate Directors' fees payable to non-executive Directors be increased by \$200,000 from \$300,000 per annum to \$500,000 per annum".

Voting Exclusion Statement:

The Company will disregard any votes cast on Resolution 3 by a person appointed as a proxy on the basis of that appointment if:

• (a) the proxy is any one of the following persons:
• i. Key Management Personnel; and
• ii. Closely Related Parties of Key Management Personnel; and
• (b) the appointment does not specify the way the proxy is to vote on Resolution 3.

However, the Company need not disregard a vote if:

• (c) the vote is cast by a person as a proxy appointed in accordance with the directions of the proxy form that specifies how the proxy is to vote on Resolution 3; or
• (d) the vote is cast by the chair of the Meeting as proxy appointed in accordance with the directions of the proxy form for a person who is entitled to vote, and such appointment on the proxy form expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel of the Company.

In accordance with the ASX Listing Rules, the Company will disregard any votes cast on Resolution 3 by any Director of the Company and any associate of a Director. However, the Company need not disregard a vote if it is cast by:

• (e) a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form or;
• (f) the person chairing the Meeting as proxy for a person entitled to vote, in accordance with a direction on a proxy form to vote as the proxy decides.

5. RESOLUTION 4- APPOINTMENT OF NEW AUDITOR OF THE COMPANY

To consider and, if thought fit, pass the following ordinary resolution:

"THAT subject to ASIC consenting to the resignation of Pitcher Partners as auditor of the Company and its controlled entities, for the purposes of section 327B of the Corporations Act and for all other purposes, Deloitte Touche Tohmatsu having been nominated, be appointed as auditor of the Company and its controlled entities with effect from the end of this meeting and that the Directors be authorised to agree their remuneration."

Deloitte Touche Tohmatsu has provided their consent to this appointment subject to ASIC consenting to the resignation of Pitcher Partners as auditor of the Company and its controlled entities and approval by the members.

Dated 26 September 2011

By order of the Board of Gale Pacific Limited

Sophie Karzis, Company Secretary

VOTING INFORMATION

Voting by proxy

• (a) A shareholder entitled to attend and vote at the annual general meeting may appoint one proxy or, if the shareholder is entitled to cast 2 or more votes at the meeting, 2 proxies, to attend and vote instead of the shareholder.
• (b) Where 2 proxies are appointed to attend and vote at the meeting, each proxy may be appointed to represent a specified proportion or number of the shareholder's voting rights at the meeting.
• (c) A proxy need not be a shareholder of the Company.
• (d) A proxy may be an individual or a body corporate. If a body corporate is appointed, the proxy form must indicate the full name of the body corporate and the full name or title of the individual representative of the body corporate for the meeting.
• (e) A proxy form accompanies this notice. If a shareholder wishes to appoint more than 1 proxy, they may make a copy of the proxy form attached to this notice. For the proxy form to be valid it must be received together with the power of attorney or other authority (if any) under which the form is signed, or a (notarially) certified copy of that power of authority by 11.00 am (Melbourne time) on 26 October 2011:
• by post at GPO Box 242, Melbourne, Victoria 3001; or
• by personal delivery at Yarra Falls, 452 Johnston Street, Abbotsford, Victoria, 3067; or
• by facsimile: Australia 1800 783 447, overseas +61 3 9473 2555; or
• Custodian voting For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions.

Voting and other entitlements at the annual general meeting

A determination has been made by the Board of the Company under regulation 7.11.37 of the Corporations Regulations 2001 that shares in the Company which are on issue at 7.00 pm (Melbourne time) on 26 October 2011 will be taken to be held by the persons who held them at that time for the purposes of the annual general meeting (including determining voting entitlements at the meeting).

EXPLANATORY NOTES TO NOTICE OF ANNUAL GENERAL MEETING

1. Financial and related reports

The 2011 Annual Report contains the Directors' Reports, the Financial Reports and the Remuneration Report. The Company's 2011 annual report is available from the Company's website (www.galepacific.com).

2. Adoption of Remuneration Report

Shareholders are asked to adopt the Company's Remuneration Report. The Remuneration Report is set out in the 2011 annual report and is available from the Company's website (www.galepacific.com).

The Remuneration Report:

• describes the policies behind, and the structure of, the remuneration arrangements of the Company and the link between the remuneration of executives and the Company's performance;
• sets out the remuneration arrangements in place for each director and for certain members of the senior management team; and
• explains the differences between the basis for remunerating non-executive directors and senior executives, including the Chief Executive Officer and executive director.

If a 'no' vote of 25% or more of the shareholders voting on the item is received, the Board will take into account comments made at the AGM on the Company's Remuneration Report and will include a report of actions taken by the Board accordingly in the Company's next Annual Report.

3. Re-election of directors

Please refer to the 2011 annual report for information about Mr Murphy.

Recommendation

The Board, with Mr Murphy abstaining, recommends that shareholders vote in favour of Mr Murphy's re-election.

4. Increase in Directors' Fees

Resolution 3 seeks shareholder approval for the purposes of Listing Rule 10.17 and for all other purposes, for the Company to be authorised to increase the aggregate amount of fees available to be paid to Non-Executive Directors by \$200,000 from \$300,000 per annum to an aggregate amount of \$500,000 per annum. Therefore, if Resolution 3 is passed, the maximum amount that may be paid to the Non-Executive Directors as a whole is \$500,000 per annum.

Each Non-Executive Director who is remunerated will be paid a fixed sum.

The Board considers that it is reasonable and appropriate at this time to seek an increase in the remuneration pool for Non-Executive Directors for the following reasons:

• a) expected growth of the Company and increased responsibilities for Non-Executive Directors;
• b) Non-Executive Directors fees may in the future need to be increased to retain Directors;
• c) to attract new Non-Executive Directors of a calibre required to effectively guide and monitor the business of the Company; and
• d) to remunerate Non-Executive Directors appropriately for the expectations placed upon them by the Company and the regulatory environment in which it operates.

The Board does not propose any further increases in non-executive remuneration for the current financial year. However, an additional director, with appropriate skills and qualifications, may be added to the Board. An increased remuneration pool will allow the Board to continue to retain and attract appropriately qualified directors and provide the Board with flexibility to manage any future changes in its membership and composition, as appropriate.

The remuneration of each Director for the year ended 30 June 2011 is detailed in the Company's 2011 Annual Report.

5. Appointment of new auditor of the Company

Pitcher Partners has, by notice in writing to the Company, notified the Company that it resigns as auditor of the Company and its controlled entities with effect from the end of this Annual General Meeting. The resignation is subject to the consent of ASIC which Pitcher Partners has applied for in accordance with section 329(5) of the Corporations Act.

On the assumption that ASIC consents to Pitcher Partners resignation as auditor, IWPE Nominees Pty Ltd, as a member of the Company, has nominated Deloitte Touche Tohmatsu of 550 Bourke Street, Melbourne VIC 3000 to act as auditor of the Company and its controlled entities with effect from the end of this Annual General Meeting. In accordance with section 328B(3) of the Corporations Act, a copy of the notice of nomination is attached to this notice of meeting. Deloitte Touche Tohmatsu has consented to act as auditor of the Company and its controlled entities.

Recommendation

On the assumption that ASIC consents to Pitcher Partners resignation as auditor and Deloitte Touche Tohmatsu has not given written notice to the Company withdrawing its consent to act as auditor of the Company and its controlled entities, the Directors recommend Members vote in favour of Resolution 4 appointing Deloitte Touche Tohmatsu to act as auditor of the Company and its controlled entities with effect from the end of this Annual General Meeting

IMPORTANT INFORMATION

Shareholders are advised that The Federal government has recently introduced the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 (Cth) (the Act), which came into effect on 1 July 2011. The Act amends the Corporations Act 2001 (Cth) (the Corporations Act) by including new provisions relating to directors' appointment, remuneration matters and proxy voting.

This Notice of Meeting does not propose to include details of all these changes, and will only address the changes which are relevant to this Notice of Meeting.

Remuneration Report- 'Two Strikes' Rule

The Act has introduced the new sections 250U-250Y into the Corporations Act, otherwise known as the 'two strikes' rule. The 'two strikes rule' will be applicable to the Company's upcoming 2011 Annual General Meeting, as well as all future Annual General Meetings.

The 'two strikes' rule gives shareholders the opportunity to 'spill' a company's board of directors, where certain directors will be required to stand for re-election (Board Spill), if the resolution to approve the Company's remuneration report receives 'No' votes of 25% or more at two successive AGMS. It should be noted that the test for the 25% trigger is at least 25% of the eligible votes actually cast on the resolution, not at least 25% of the votes entitled to be cast. The first Board Spill could potentially occur at the Company's 2012 AGM. A summary of the process of the 'two strikes' rule is as follows:

• a. if a "No" vote of 25% or more is cast on the resolution to adopt the company's remuneration report, the Company's subsequent remuneration report must outline the Board's proposed action in response, or state any reason for inaction.
• b. if a "No" vote of 25% or more is cast on the resolution to adopt the subsequent remuneration report at the next AGM (the Second AGM), an ordinary resolution must be proposed at the Second AGM to determine if a general meeting should be convened where the Directors must stand for re-election (Spill Resolution).
• c. If the Spill Resolution is passed at the Second AGM with 50% or more of eligible votes cast, a general meeting must be convened within 90 days of the Second AGM, where all individuals who were Directors when the Directors' Report was considered at the Second AGM (excluding the Managing Director) will be required to stand for re-election (Spill Meeting).
• d. The Directors standing for re-election will cease to hold office immediately before the end of the Spill Meeting. Any new Directors elected at the Spill Meeting will automatically hold office at the end of the Spill Meeting.
• e. The Act seeks to avoid a complete Board Spill by requiring that a minimum of three Directors must remain on the Board after the Spill Meeting. In the event that no candidate, or only one candidate, is re-elected to the Board by way of ordinary resolution (leaving one or both Directorial position/positions on the Board unfilled), the Act prescribes that the minimum of three positions will be occupied by:
• i. the Managing Director (who is exempt from standing for re-election at the Spill Meeting); and
• ii. the two candidates standing for re-election at the Spill Meeting who receive the highest percentages of votes in favour of their re-election, even this percentage is less than 50%.

• f. Should two or more candidates have the same percentages of votes, then the Managing Director and any re-elected Director will have the power to choose which candidate will be re-appointed as Director. It should be noted that an appointment by choice under these circumstances must be confirmed at the Company's next AGM, failing which the appointment of that Director will cease at the conclusion of the Company's next AGM.

• g. If a Director survives the Spill Meeting, his/her term of office will run as if the cessation and appointment at the Spill Meeting had not happened.

• h. The Act additionally provides for a 're-setting' mechanism, with the effect that a Spill Resolution may only be considered by shareholders at every second AGM.

Amendments to proxy voting

The Act introduces new prohibitions on Key Management Personnel and their Closely Related Parties from voting their shares (or voting undirected proxies) on, amongst other things, remuneration matters and Spill Resolutions.

However, the chair of a meeting may vote an undirected proxy (i.e. a proxy that does not specify how it is to be voted), provided the shareholder who has lodged the proxy has given informed consent, in the form of an express voting direction to the chair to exercise the undirected proxy, even if the resolution is connected with the remuneration of a member of Key Management Personnel (Informed Consent).

In the event that shareholders wish to vest their undirected votes in the chair of the meeting, they should note that a chair may not vote undirected proxies on a remuneration related resolutions unless the shareholder gives Informed Consent. Shareholders may provide Informed Consent by ticking the relevant box on the proxy form.

In light of the new legislative requirements, the Company recommends that shareholders consider the following options to ensure the validity of their votes:

• a. that shareholders direct proxies on a remuneration related resolution instead of leaving them undirected; or
• b. that shareholders nominate a proxy who is not a member of Key Management Personnel or any of their Closely Related Parties to vote on a remuneration related resolution; or
• c. that shareholders who wish to vest their undirected proxies in the chair on a remuneration related resolution ensure that they follow instructions provided on the proxy form in order to provide Informed Consent.

DEFINITIONS

Closely Related Party (of a member of KMP of an entity) has the definition given to it by section 9 of the Corporations Act, and means:

• a) a spouse or child of the member; or
• b) a child of the member's spouse; or
• c) a dependant of the member or of the member's spouse; or
• d) anyone else who is one of the member's family and may be expected to influence the member, or be influenced by the member, in the member's dealings with the entity; or
• e) a company the member controls; or
• f) a person prescribed by the regulations for the purposes of this definition (nothing at this stage).

Key Management Personnel or KMP means those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

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000001 ⁰⁰⁰ GAP MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Lodge your vote:

By Mail:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Alternatively you can fax your form to (within Australia) 1800 783 447 (outside Australia) +61 3 9473 2555

For Intermediary Online subscribers only (custodians) www.intermediaryonline.com

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Proxy Form

*L000001*

For your vote to be effective it must be received by 11:00am Wednesday 26 October 2011

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Appointment of Proxy

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate "Certificate of Appointment of Corporate Representative" prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

Turn over to complete the form

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SRN/HIN: I9999999999

PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

FLAT 123	MR SAM SAMPLE 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030	Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a broker (reference number commences with 'X') should advise	I9999999999
	Proxy Form	your broker of any changes. Please mark	I 9999999999 I ND to indicate your directions
	STEP 1 Appoint a Proxy to Vote on Your Behalf		XX
	I/We being a member/s of Gale Pacific Limited hereby appoint
	the Chairman OR of the meeting		 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).
	to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Gale Pacific Limited to be held at Grand Hyatt Melbourne, Grosvenor Room, Level 8, 123 Collins Street, Melbourne on Friday, 28 October at 11:00am and at any adjournment of that meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. If the Chairman of the Meeting is your proxy (or becomes your proxy by default), you authorise the Chairman to exercise your proxy on Items 2 and 4 even though the items are connected directly or indirectly with the remuneration of a member of key management personnel. For Items 2 and 4, this authority is also subject to you marking the box in the section below. Important for Items 2 and 4: If the Chairman of the Meeting is your proxy and you have not directed the Chairman how to vote on Items 2 and 4 below, please mark the box in this section. If you do not mark this box and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on Items 2 and 4 and your votes will not be counted in computing the required majority if a poll is called on this
	item. The Chairman of the Meeting intends to vote undirected proxies in favour of Items 2 and 4 of business.	I/We acknowledge that the Chairman of the Meeting may exercise my proxy even if the Chairman has an interest in the outcome of this Item and that votes cast by the Chairman, other than as proxy holder, would be disregarded because of that interest.
	 STEP 2 Items of Business	PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.
	ORDINARY BUSINESS
	Item 2 Adoption of Remuneration Report (Non-binding vote)
	Item 3 Re-election of Director - Mr John Murphy
	Item 4 Increase in Directors' Fees
	Item 5 Appointment of new auditor of the company

The Chairman of the Meeting intends to vote all available proxies in favour of each item of business.

Individual or Securityholder 1	Securityholder 2			Securityholder 3
Sole Director and Sole Company Secretary	Director			Director/Company Secretary
Contact Name		Contact Daytime Telephone		Date	/	/

000001 ⁰⁰⁰ GAP MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Dear Securityholder,

We have been trying to contact you in connection with your securityholding in Gale Pacific Limited. Unfortunately, our correspondence has been returned to us marked "Unknown at the current address". For security reasons we have flagged this against your securityholding which will exclude you from future mailings, other than notices of meeting.

Please note if you have previously elected to receive a hard copy Annual Report (including the financial report, directors' report and auditor's report) the dispatch of that report to you has been suspended but will be resumed on receipt of instructions from you to do so.

We value you as a securityholder and request that you supply your current address so that we can keep you informed about our Company. Where the correspondence has been returned to us in error we request that you advise us of this so that we may correct our records.

You are requested to include the following;

• Securityholder Reference Number (SRN);

• ASX trading code;

• Name of company in which security is held;

• Old address; and

• New address.

Please ensure that the notification is signed by all holders and forwarded to our Share Registry at:

Computershare Investor Services Pty Limited GPO Box 2975 Melbourne Victoria 3001 Australia

Note: If your holding is sponsored within the CHESS environment you need to advise your sponsoring participant (in most cases this would be your broker) of your change of address so that your records with CHESS are also updated.

Yours sincerely

Gale Pacific Limited