Statement of Corporate Governance Practices

The Company’s Board of Directors (“the Board”) believes that sound corporate governance practices are essential to the well-being of the Company and its Shareholders, and that these practices should be reviewed regularly to ensure that they are appropriate.  In establishing corporate governance practices, the Board has reviewed, among other things, the guidelines for effective corporate governance contained in National Instrument 58-201 – Corporate Governance Guidelines (the “NI 58-201”) issued by the Canadian securities regulators and other relevant regulations regarding corporate governance practices.

Board of Directors

The Board of Directors is comprised of a majority of independent directors, which facilitates its exercise of independent supervision over management.  The composition of independent and non-independent directors is as follows:

• Gary Filmon – Chairman (independent)
• Donald Streuber (independent)
• Gary Buckley (independent)
• Duncan Jessiman – Executive Vice-Chairman (non-independent)
• Allan McLeod (independent)
• Michael Pyle (non-independent)
• Edward Warkentin (independent)
• William Wehrle (non-independent)
• Brad Bennett (independent)

Mandate of the Board

The by-laws of the Corporation provides that the Board must act honestly and in good faith with a view to the best interests of the Company and in connection therewith must exercise the degree of care, diligence and skill that a reasonably prudent Director would exercise in comparable circumstances.  The duties and standard of care of the Directors are intended to be in line with those as outlined in The Corporations Act (Manitoba).  The Company is required to have a minimum of 3 Directors and a maximum of 10 Directors.  The Directors are to supervise the activities and manage the affairs of the Company.  Currently, the Board of Directors is comprised of nine Directors.  The Company has six committees, an Audit Committee, a Compensation Committee, a Corporate Governance Committee, an Aviation Sector Committee, a Manufacturing Sector Committee, and a Disclosure Committee,

Relationship Between the Board and Management

The Directors have in place appropriate structures to ensure that they can function independently of management.  The responsibilities of the Chairman of the Board include overseeing the Directors’ discharge of their responsibilities.  The Chairman of the Board is the Hon. Gary Filmon, P.C., O.M.

The President and Chief Executive Officer of the Company is responsible for the overall administration and management of the Company and its subsidiaries. All major policy decisions relating to the Company and its subsidiaries are made by the Directors or a committee thereof.  Each subsidiary of the Company has its own management team that is responsible for the day-to-day management of each respective subsidiary.

Audit Committee

All nominees to the Audit Committee are required to be independent Directors and financially literate as required by relevant stock exchange or securities commission governance policies.  The Audit Committee consists of the following Directors:  Gary Filmon, Gary Buckley and Don Streuber (chair), each of whom is an independent Director and financially literate.  The mandate of the Audit Committee is set forth in the Audit Committee Charter.

Compensation Committee

The purpose of the Compensation Committee is to assist the Directors in fulfilling their responsibilities in relation to fixing the compensation of the Chief Executive Officer, officers that report directly to the Chief Executive Officer (“Senior Executives”) and overseeing the plans for (i) compensation, development and retention of employees, (ii) succession planning for Senior Executives, and (iii) general compensation and human resource policies and issues.

The Company has adopted a charter for the Compensation Committee which sets out the composition of the Compensation Committee as well as its responsibilities, duties, principles and procedures.

The members of the Compensation Committee are Gary Buckley (chair), Allan McLeod, Edward Warkentin and William Wehrle.

Governance Committee

The purpose of the Governance Committee is to assist the Directors in fulfilling their responsibilities in relation to:

(a) development of, and compliance with, corporate governance policies and procedures;

(b) recommending candidates for election as Directors and its committees; and

(c) assessing the management, development and effective performance of the Directors, its committees, and its respective mandates and charters, and orientation, education and development of Directors.

The Governance Committee performs the duties as set out in its charter, as well as such other duties as may be appropriate under governing law and stock exchange rules, or as may be delegated to the Governance Committee by the Directors from time to time.

The Company has adopted a charter for the Governance Committee which sets out the composition of the Governance Committee as well as its responsibilities, duties, principles and procedures.

The members of the Governance Committee are Donald Streuber, Gary Filmon and Duncan Jessiman (chair).

Aviation Sector Committee

The purpose of the Aviation Sector Committee is to act as a board of advisors to the Operating Subsidiaries in the aviation sector of the Company.

The Company has adopted a charter for the Aviation Sector Committee which sets out the composition of the Aviation Sector Committee as well as its responsibilities, duties, principles and procedures.

The members of the Aviation Sector Committee are Mike Pyle (chair), Duncan Jessiman, Donald Streuber, Sam Anderson, William Wehrle and Haydn Acheson.

Manufacturing Sector Committee

The purpose of the Manufacturing Sector Committee is to act as a board of advisors to the Operating Subsidiaries in the manufacturing sector of the Company.

Exchange has adopted a charter for the Manufacturing Sector Committee which sets out the composition of the Manufacturing Sector Committee as well as its responsibilities, duties, principles and procedures.

The members of the Manufacturing Sector Committee are Duncan Jessiman (chair), Michael Pyle, Gary Filmon, Al Davis and Ray Moher.

Disclosure Committee

The Disclosure Committee is currently comprised of two Directors and the Chief Financial Officer:  Duncan Jessiman, Michael Pyle and Adam Terwin.  The composition of the Disclosure Committee will be determined on an annual basis by the Chief Executive Officer.  The purpose of the Disclosure Committee is to establish controls and procedures to ensure the Disclosure Policy of the Company is being followed throughout the organization.  The Disclosure Committee meets as frequently as circumstances require, and as the members deem necessary or appropriate, to carry out its responsibilities.

Board Information

The information which management provides to the directors of Exchange is critical.  Directors of Exchange must have confidence in the data gathering, analysis and reporting functions of management.  The Directors of Exchange believe they are provided with all necessary information and with a sufficient amount of information to facilitate effective decision making.  The Company continually monitors the nature of the information requested by and provided to them in order to enable them to determine whether they can be more effective in identifying problems and opportunities for the Company and its Subsidiaries.

Insider Trading Policy