Report of the Securities Commission on Aspects of the Affairs of Max Resources Limited

4

ISSUES CONSIDERED IN VOLUME 1

1. Was there significant non-compliance with the requirements of Part II of the Amendment Act in respect of the disclosure of relevant interests in Max's listed securities? In particular, was there significant non-compliance with these requirements by any of the directors of Max, or any persons associated with them?

2. Did Max's directors, in procuring Max to enter into certain transactions in 1996 and 1997, have proper regard to their duties to the Company and the interests of Max's shareholders and creditors, in particular:
   1. the duty to act in good faith and in what they believe to be the best interests of the Company; and

   2. the duty to exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances?