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Remuneration policy

1. Introduction

1.1 Remuneration in respect of directors and executives of the Company is overseen by the nomination and remuneration committee, a committee of the board of directors of ApplyDirect Limited ACN 123 129 162 (the Company) (Committee).

1.2 The objective of the Committee is to help the board of directors of the Company (Board) to ensure that the Company:

(a) has coherent remuneration policies and practices to attract, motivate and retain executives and directors who will create value for shareholders and who are appropriately skilled and diverse;

(b) observes those remuneration policies and practices;

(c) fairly and responsibly rewards executives having regard to the Company and individual performance, the performance of the executives and the general external pay environment; and

(d) integrates human capital and organisational issues into its overall business strategy.

2. Principles

In order to fulfil the role of the Committee set out above, the members of the Committee must refer to the following principles when developing recommendations to the Board regarding remuneration:

(a) motivating the directors and management to pursue the Company's long-term growth and success;

(b) demonstrating a clear relationship between the Company's overall performance and the performance of individuals; and

(c) complying with all relevant legal and regulatory provisions.

3. Remuneration packages

3.1 Remuneration may incorporate fixed and variable components with both a short-term and long-term focus.

3.2 In respect of executive remuneration (which for the avoidance of doubt includes both directors and executive management), remuneration packages should include an appropriate balance of fixed and variable performance based remuneration and may contain any or all of the following:

(a) fixed remuneration – this should:

(i) be reasonable and fair;

(ii) take into account the Company's legal and industrial obligations and labour market conditions;

(iii) be relative to the scale of the Company's business;

(iv) reflect core performance requirements and expectations; and

(v) take into account incumbent skills and experience;

(b) variable performance-based remuneration – this should:

(i) take into account individual and corporate performance; and

(ii) be linked, where appropriate, to clearly-specified performance targets and, if so linked, the performance targets ought preferably be:

(A) aligned to the Company's short and long-term performance objectives; and

(B) appropriate to its circumstances, goals and risk appetite;

(c) equity-based remuneration – this can include options or performance shares and is especially effective when linked to hurdles that are aligned to the Company's longer-term performance objectives. It should also take into account executive performance. However, programs should be designed so that they do not lead to 'short-termism' on the part of senior executives or the taking of undue risks; and

(d) termination payments – these should be agreed in advance, and any agreement should clearly address what will happen in the case of early termination. There should be no payment for removal for serious misconduct. Employment contracts for executives (including directors) should have regard to the maximum amount that can be paid under the termination provisions under the Corporations Act 2001 (Cth), and in particular the maximum amount that can be paid without requiring shareholder approval.

3.3 In respect of non-executive director remuneration, remuneration packages may contain cash fees, superannuation contributions and non-cash benefits in lieu of fees (such as salary sacrifice into superannuation or equity) and may contain any or all of the following:

(a) fixed remuneration – this should reflect the time commitment and responsibilities of the role;

(b) equity-based remuneration – depending on the level of cash based remuneration and the circumstances of the Company, non-executive directors may receive an allocation of fully-paid ordinary shares, options or performance rights (subject to any shareholder necessary in accordance with the Corporations Act and/or ASX Listing Rules) linked, as appropriate, performance / time hurdles that are aligned to the Company's longer-term performance objectives. Importantly, any equity-based allocation must take account of the overall remuneration of the director, the remuneration paid to non-executive directors of comparable ASX listed companies, the Company's circumstances and must not lead to or promote 'short-termism' on the part of the non-executive director or the taking of undue risks; and

(c) termination payments – non-executive directors should not be provided with retirement benefits other than superannuation.

(d) termination payments – these should be agreed in advance, and any agreement should clearly address what will happen in the case of early termination. There should be no payment for removal for serious misconduct. Employment contracts for executives (including directors) should have regard to the maximum amount that can be paid under the termination provisions under the Corporations Act 2001 (Cth), and in particular the maximum amount that can be paid without requiring shareholder approval.

3.4 Remuneration will be reviewed on at least an annual basis with consideration given to individuals' performance and their contribution to the Company's success (against measurable key performance indicators), external market relativities, shareholders' interests and desired market positioning.

4. Assessing remuneration

4.1 The Committee will make a recommendation to the Board regarding the remuneration of executives having regard to various factors including performance and any recommendations made by the Chief Executive Officer of the Company and its executives, compensation consultants, and internal and external legal, accounting or other advisers.

4.2 The Committee will also make a recommendation to the Board regarding the remuneration of non-executive directors having regard to, amongst other things, any recommendations made by compensation consultants, and internal and external legal, accounting or other advisers.

4.3 No member of the Committee may be involved in a decision relating to their own remuneration.

5. Review and changes to this policy

The Committee will review this policy annually or as often as it considers necessary.

6. Approved and adopted

This policy was approved and adopted by the Board on 24 November 2015.

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