GORAN CAPITAL INC.

              NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS

     NOTICE  IS  HEREBY  GIVEN  that  the  Annual  and  Special  Meeting  of the
Shareholders  of Goran  Capital  Inc.  (the  "Corporation")  will be held at 181
University Avenue, Suite 1101, Toronto,  Ontario, on Wednesday, May 21, 1997, at
10:00 a.m., Toronto time, for the following purposes:

     1. To receive the Annual Report and financial statements for the year ended
December 31, 1996, and the report of the auditor thereon;

     2. To elect Directors;

     3.  To  appoint  an  auditor  and to  authorize  the  Directors  to fix the
auditor's remuneration;

     4. To  consider  and,  if deemed  advisable,  to  confirm,  subject to such
amendments,  variations  and  additions as may be approved at the  Meeting,  new
Bylaw No. 1 enacted by the  Directors  which  repealed  and  replaced the former
general Bylaw and which relates generally to the transaction of the business and
affairs of the Corporation.

     5. To transact such other  business as may properly come before the Meeting
or any adjournment thereof.

     The  accompanying   management  information  circular  provides  additional
information  relating  to the  matters to be dealt with at the Meeting and forms
part of this Notice.

     Shareholders  who are unable to attend the Meeting are  requested  to date,
sign and return the accompanying Form of Proxy in the envelope provided for that
purpose.

     DATED at Toronto, this 27th day of March, 1997.

                                                BY ORDER OF THE BOARD
                                                /s/ ALAN G. SYMONS
                                                CEO and President

March 27, 1997

<PAGE>






Dear Shareholder:

Re:  Supplemental Mailing List

If you wish to have your name added to the  supplemental  mailing  list of Goran
Capital  Inc. so you may  receive  the  Corporation's  quarterly  reports  which
contain interim  unaudited  financial  statements,  please fill in your name and
address in the space  provided  below and return to Adams & Aihoshi  Shareholder
Services Ltd., 461 Alden Road, Unit 33,  Markham,  Ontario,  L3R 3L4,  Telephone
(905) 940-9535.


     NAME:

     Please print

     ADDRESS:



     CITY:



     PROVINCE:                            POSTAL CODE:



I hereby  confirm  that I am the owner of shares  issued by the  above-mentioned
Corporation.


     SIGNATURE:


     DATE:

<PAGE>
                        GORAN CAPITAL INC.


                    MANAGEMENT PROXY CIRCULAR


                     Solicitation of Proxies



     This  Management  Proxy  Circular  is  furnished  in  connection  with  the
solicitation   of  proxies  by  the   management  of  Goran  Capital  Inc.  (the
"Corporation")  for use at the Annual and Special  Meeting  (the  "Meeting")  of
Shareholders  of the  Corporation to be held  Wednesday,  May 21, 1997, at 10:00
a.m., or at any and all adjournments  thereof, for the purposes set forth in the
accompanying notice of the Meeting. It is expected that the solicitation will be
primarily by mail, but proxies may also be solicited personally, by telephone or
by telecopier,  by directors,  officers or regular employees of the Corporation.
The costs of such solicitation will be borne by the Corporation.

                      Revocation of Proxies

     A shareholder who has given a proxy may revoke at any time to the extent it
has not been exercised.  In addition to revocation in any other manner permitted
by law,  a proxy  may be  revoked  by  instrument  in  writing  executed  by the
shareholder or his attorney  authorized in writing,  and deposited either at the
registered  office of the Corporation at any time up to 5:00 p.m. (Toronto time)
on the last business day preceding  the day of the Meeting,  or any  adjournment
thereof,  at which the Proxy is to be used,  or with the Chairman of the Meeting
prior  to  the  beginning  of the  Meeting  on the  day of the  Meeting,  or any
adjournment thereof or in any other manner provided by law.

        Voting of Shares Represented by Management Proxies

     The  persons  named in the  enclosed  form of proxy will vote the shares in
respect of which they are  appointed  by proxy on any ballot  that may be called
for in  accordance  with  the  instructions  thereon.  In the  absences  of such
specifications,  such  shares  will be voted in  favour  of each of the  matters
referred to herein.

     The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments to or variations of matters  identified
in the Notice of meeting and with  respect to other  matters,  if any,  that may
properly come before the Meeting.  At that date of this Circular,  management of
the corporation knows of no such amendments, variations or other matters to come
before  the  Meeting.  However,  if any  other  matters  that  are not  known to
management  should properly come before the Meeting,  the proxy will be voted on
such matters in accordance with the best judgment of the named proxy.

                        Voting Securities

     The only voting  securities of the  Corporation  currently  outstanding and
entitled to be voted at the Meeting are 5,569,652  common shares,  each of which
carries one vote.

     In accordance with the provisions of the Canada Business  Corporations Act,
the Corporation will prepare a list of the holders of common shares at the close
of  business on the day  immediately  preceding  the day on which  Notice of the
Meeting is given.  Each person named in such list is entitled to vote the shares
shown opposite his name on such list at the Meeting except to the extent that he
has  transferred  ownership  of  any of his  shares  after  that  date  and  the
transferee of those shares  produces  properly  endorsed share  certificates  or
otherwise establishes that he owns the shares and demands not later than 10 days
before the Meeting that his name be included in the list before the Meeting,  in
which case the  transferee  is entitled to vote his shares at the Meeting or any
adjournment thereof.

              Principal Holders of Voting Securities

     To the  knowledge of the  directors  and officers of the  Corporation,  the
following  are the only  persons who  beneficially  own or  exercise  control or
direction  over  more  than  10%  of  the  outstanding   common  shares  of  the
Corporation:

                        Number of Common Shares
                          Beneficially Owned      Percentage
                            Controlled or         of Outstanding
Name                        Directed (1)          Common Shares
Symons International
Group Ltd.(2)               1,646,413             29.6%

G. Gordon Symons              890,167             16.0%

Alan G. Symons                449,183              8.1%

(1)  Reflect ownership as verified by the persons listed as of March 14, 1997.

(2)  Mr. G. Gordon Symons is the controlling shareholder of Symons International
     Group Ltd., a private company. Particulars of Matters to be Acted Upon

     At the Meeting,  shareholders will be asked to elect directors,  to appoint
an auditor and to authorize the directors to fix the auditor's remuneration,  to
confirm new Bylaw No. 1 for the Corporation and to deal with other matters which
may properly come before the Meeting.

                              Election of Directors

     The Articles of the Corporation currently provide for a board consisting of
a minimum of three and a maximum of ten directors.  The board currently consists
of seven Directors until otherwise determined by further resolution of the board
of directors of the Corporation.

     Unless  otherwise   specified  therein,   proxies  received  in  favour  of
management  nominees will be voted for the following  proposed  nominees (or for
substitute  nominees in the event of  contingencies  not known at present) whose
term of office will continue  until the next Annual Meeting of  Shareholders  or
until  they  are  removed  or their  successors  are  elected  or  appointed  in
accordance  with the  Canada  Business  Corporations  Act and the  bylaws of the
Corporation.


                                                  Number of Common
                                                  Shares of the
Name and            Position in    Year First     Corporation
Principal           the            Became         Beneficially
Occupation          Corporation    Director       Owned (1)

G. Gordon           Chairman of    1986              890,167
Symons              the Board
Chairman of the
Board
Goran Capital
Inc.

Alan G.             CEO, President  1986              449,183
Symons (2)          and Secretary
CEO, President
and Secretary
Goran Capital
Inc.

Douglas H.          COO and Vice    1989              197,483
Symons              President
President, Symons
International
Group, Inc.,
Chief Operating
Officer, Goran
Capital Inc.

Ross Schofield      Director        1992                3,800
President
Schofield
Insurance Brokers

David B. Shapira    Director        1989              100,000
President
Medbers, Inc.

James G.            Director        1995                2,000
Torrance,
Q.C. (2)
Partner Emeritus
Smith, Lyons
Barristers &
Solicitors

John K.             Director        1995                  -0-
McKeating (2)
Partner
Vision 2120, Inc.

(1)  Information  as to the  shareholdings  of each nominee has been provided by
     the nominee.

(2)  Member of the Audit Committee.

     Each of the foregoing nominees has held the principal  occupation indicated
above during the past five years except: (i) Alan G. Symons who prior to June 4,
1992,   was  the  President  of  both  Symons   Capital  Fund  Ltd.  and  Symons
International  Group Ltd.;  and (ii) David B.  Shapira who prior to 1995 was the
President of Morse Jewellers Inc.

         Directors' and Officers' Remuneration

     The aggregate  remuneration paid by the Corporation and its subsidiaries to
its five  highest  paid  employees  or  Officers,  including  the  three  inside
Directors, during the financial year ended December 31, 1996 was $1,643,492, all
in the form of salary, bonus and consulting fees.

     In 1996,  the  Corporation's  directors  received  (i) a flat annual fee of
$10,000  for each  Director;  and (ii) a $1,000  meeting  fee for each  board or
committee meeting attended.

          Interest of Insiders in Material Transactions

     Reference is made to the 1996 Annual Report,  sent to each shareholder with
this Management Proxy Circular, and to Note 14, Related Party Transactions.

    Indebtedness of Officers and Directors of the Corporation

The  following  directors and officers of the  Corporation  were indebted to the
Corporation  in  amounts  exceeding  $10,000  during  the  financial  year ended
December  31,  1996,  on  account  of loans to  purchase  common  shares  of the
Corporation  and its  affiliates  certain of which were pursuant to the Employee
Share Purchase Plan (see below):

<PAGE>
Name and
Municipality of     Date of         Largest Blance    Present
Residence           Loan            During Period     Balance

G. Gordon Symons    June 27, 1986   $148,000          $148,000
Bermuda             June 30, 1986   $200,000          $200,000
                    May 31, 1988    $ 51,729 (US)     $ 51,729 (US)

Alan G. Symons      June 30, 1986   $ 40,172          $ 29,772
Indianapolis,       February 25,
Indiana             1986            $ 27,309 (US)     $ 27,309 (US)

Douglas H. Symons   June 30, 1986   $ 15,000          $ 15,000
Indianapolis,       February 25,
Indiana             1986            $  2,219 (US)     $  2,219 (US)

     The  foregoing  loans  dated June 27,  1986 and June 30,  1986 made for the
purchase of common shares of the Corporation require that the shares acquired be
pledged for the benefit of the  Corporation  as security until these amounts are
fully paid.  The other loans are each  unsecured.  The loans dated prior to 1988
are payable on demand and are interest free. The loans dated in 1988 are payable
on demand and bear interest at 90 day T-Bill rates.

     Mr. G.  Gordon  Symons has an  unsecured  loan in the amount of $70,000 not
relating to the  purchase  of common  shares of the  Corporation.  This loan was
taken out on January 2, 1988,  is  payable on demand and is  interest  free.  In
November,  1990,  the  Corporation  loaned  Douglas H. Symons $39,377 (U.S.) for
acquisition  of a residence.  This loan bears  interest at prime plus 1% and has
accrued an unpaid interest of $21,168.  In February,  1997, Mr. G. Gordon Symons
repaid  in full the U.S.  mortgage  note  principal  amount of  $277,502  (U.S.)
supported by a residential collateral mortgage,  originally taken out on October
3, 1988.

                 Executive Compensation

     The Corporation had five Executive Officers during 1996. The aggregate cash
compensation  paid by the Corporation and its subsidiaries to the  Corporation's
Executive Officers including  salaries,  fees,  commissions and bonuses,  during
1996 was  $1,643,492.  The  aggregate  value of  compensation,  other  than that
referred  to above,  paid to  Executive  Officers  during  1996 does not  exceed
$10,000 times the number of Executive Officers.

     Table  1  sets  forth  certain  compensation   information,   paid  by  the
Corporation and its subsidiaries,  to the Corporation's  Chief Executive Officer
and each of the Corporation's  other Executive Officers during the Corporation's
three most recently completed fiscal years.

<PAGE>


TABLE 1:  SUMMARY COMPENSATION TABLE


                                        Annual            Long-
                                      Compensation         Term Awards
                                                         Securities
                                                 Other   Under Options
                       Salary        Bonus       Annual  Granted (#)   All Other
Name and               US $          US $        Comp-   Note C        Compensa-
Principal              Note A        Note A      ensa-                 tion US $
Position        Year                             US $
                                                 Note B

G. Gordon       1996   $171,000(h)   $393,945    NIL       51,524    $170,799(E)
Symons          1995   $175,000        70,000    NIL       18,946      25,272(D)
Chairman        1994   $150,000      $ 36,611    NIL       15,000      21,425(D)

Alan G.         1996   $242,786(f)   $143,333(g) NIL       51,399      Note B
Symons          1995   $148,077      $ 42,893    NIL       18,945      Note B
                1994   $142,361      $ 55,810    NIL       15,000      Note B

Douglas H.      1996   $195,973(I)   $ 50,000    NIL      $54,333      Note B
Symons          1995   $149,982      $100,000    NIL      $ 9,473      Note B
                1994   $150,041      $ 14,000    NIL      $15,000      Note B

Gary P.         1996   $ 55,418(I)   $28,000(I)  NIL            0      Note B
Hutchcraft      1995   $    N/R          N/R     NIL          N/R      N/R
Vice President  1994   $    N/R          N/R     NIL          N/R      N/R
and Treasurer

David L. Bates  1996   $ 95,162(I)   $97,076(I)  NIL     $  3,165      Note B
Vice President  1995   $ 63,237          -0-     NIL      $   -0-      Note B
and General     1994         N/R         N/R     NIL          N/R      N/R
Counsel

-----------
     N/R Not required.

     Note A Salary  and bonus are  stated in U.S.  dollars  as the  majority  of
payments are actually made in U.S. dollars.

     Note B Aggregate  amounts not greater than the lesser of $50,000 and 10% of
the total of the annual salary and bonus.

     Note  C  No  stock  appreciation  rights  (SAR's),  restricted  shares,  or
restricted  share  units were  granted  during  any of the past three  completed
fiscal years.

     Note D Imputed interest on interest-free stock purchase loan.

     Note E  Consulting  fees paid to  companies  owned by Mr. G. Gordon  Symons
including  $52,411 paid to such companies by the Company's 67% owned subsidiary,
Symons International Group, Inc.

     Note F Includes $142,786 paid by Symons International Group, Inc.

     Note G Includes $133,333 paid by Symons International Group, Inc.

     Note H Amount paid by a subsidiary of the Company.

     Note I Amount paid by Symons International Group, Inc.

<PAGE>

                    Employee Share Option Plan

      The  Corporation  has a Share  Option Plan (the  "Plan").  Under the Plan,
common shares equal to 10% of the number of common shares  outstanding from time
to time have been reserved for issuance.  The terms,  conditions and limitations
of options  granted  under the Plan are  determined by the board of directors of
the Corporation  with respect to each option,  within certain  limitations.  The
exercise  price  per  share  shall be the  closing  price on The  Toronto  Stock
Exchange on the date of grant of the  option.  The  exercise  price per share is
payable in full on the date of exercise.  Options granted under the Plan are not
assignable.

      During  1996,  options to purchase a total of 213,986  common  shares were
granted to Executive  Officers  and  Directors  pursuant to the Plan,  excluding
options granted and subsequently canceled during the year.

      Including the options referred to above, there are outstanding  options to
purchase a total of 527,399 common shares as of December 31, 1996, at an average
price of $8.29.

TABLE 2:  OPTION GRANTS DURING 1996

                                                    Market Value
                          % of Total                of Securities
             Securities   Option                    Underlying
             Under        Granted To   Exercise     Options on the
             Options      Employees    or Base      Date of Grant   Expiration
Name         Granted (#)  1996         Price        ($/Security)    Date
                                  ($/Security)

G. Gordon    51,524       24.1%        $16.50       $16.50          May 12, 2006
Symons

Alan G.      51,399       24.0%        $16.50       $16.50          May 12, 2006
Symons

Douglas      54,333       25.6%        $16.50       $16.50          May 12, 2006
H. Symons

David L.      3,165        1.5%        $16.50       $16.50          May 12, 2006
Bates

Dennis G.    20,000        9.4%        $16.50       $16.50          May 12, 2006
Daggett

Thomas F.    20,000        9.4%        $16.50       $16.50          May 12, 2006
Gowdy


TABLE 3: AGGREGATED OPTION EXERCISES
         DURING 1996 AND FINANCIAL YEAR-END OPTION VALUES

                                                              Value of
                                               Unexercised    Unexercised In-
                      Securities               Options at     The-Money Options
                      Acquired     Aggregate   FY-End (#)     Exercisable/
                      On           Value       Exercisable/   Unexercisable
Name                  Exercise     Realized    Unexercisable

G. Gordon Symons      92,500       $1,513,250   273,470/0     $6,129,230/0
Alan G. Symons        49,383       $  761,856    85,344/0     $  982,775/0
Douglas H. Symons     33,333       $  493,995    94,855/0     $1,524,787/0


           Composition of the Compensation Committee

     The following Goran Directors served as members of the Board's Compensation
Committee  during  1996:  J. Ross  Schofield,  Douglas  H.  Symons  and James G.
Torrance.  At its  meeting  on  March  19,  1997,  the  Board  reconfigured  the
Compensation Committee to consist of Messrs. Schofield,  Shapira and and Douglas
H. Symons.  Mr. Douglas H. Symons was Chief Operating Officer and Vice President
of the Corporation throughout 1996. The role of the Compensation Committee is to
review the total  compensation  of the  Corporation's  Executive  Officers in an
effort  to  ensure  that  the  Corporation   attracts  and  retains  the  talent
commensurate with its business objectives.

                 Report On Executive Compensation

      The Corporation's  Executive  Compensation Policy (the "Policy") considers
an individual's  experience,  market conditions  (including  industry  surveys),
individual performance and overall financial performance of the Corporation. The
Company's  total  compensation  program for  officers  includes  base  salaries,
bonuses and the grant of stock options  pursuant to the  Company's  stock option
plan. The Company's primary objective is to achieve above-average performance by
providing the opportunity to earn above-average total compensation (base salary,
bonus, and value derived from stock options) for above-average performance. Each
element of total compensation is designed to work in concert.  The total program
is  designed  to  attract,  motivate,  reward and retain the  management  talent
required to serve  shareholder,  customer  and employee  interests.  The Company
believes that this program also motivates the Company's  officers to acquire and
retain  appropriate  levels  of  stock  ownership.  It is  the  opinion  of  the
Compensation  Committee  that the total  compensation  earned  by the  Company's
officers during 1996 achieves these  objectives and is fair and  reasonable.  At
its meeting on March 19, 1997,  the Board of  Directors of the Company  voted to
retain an independent  compensation consultant to review the Company's executive
compensation plan and to make recommendations concerning the compensation levels
and type necessary to achieve the Company's stated objectives.

      Compensation  is comprised of base salary,  annual cash incentive  (bonus)
opportunities,  and  long-term  incentive  opportunities  in the  form of  stock
options. Individual performance is determined in relation to short and long-term
objectives that are established and maintained on an on-going basis. Performance
to these objectives is formally  reviewed annually and base salary adjusted as a
result.  Bonus rewards are provided upon the  attainment of corporate  financial
performance  objectives as well as the individual's direct  responsibilities and
their attainment of budget and other objectives.

      The Policy also strives to  establish  long-term  incentives  to Executive
Officers  by  aligning  their   interests   with  those  of  the   Corporation's
shareholders through award opportunities that can result in the ownership of the
Corporation's common stock.

<PAGE>

COMPARISON OF FIVE YEAR CUMULATIVE
TOTAL RETURN OF GORAN CAPITAL INC.
WITH TSE 300

[Graph Omitted]
                1991     1992     1993      1994     1995    1996
GNC             $100     $886     $1,572    $2,443   $3,933  $9,108
TSE300          $100     $ 98     $  134    $  134   $  155  $  195

Performance Graph

     The graph shown above compares the total cumulative  shareholder return for
$100 invested in common shares of GNC on December 31, 1990,  with the cumulative
total  return of the TSE 300 Stock  Index  for the six most  recently  completed
financial years.

                      Appointment of Auditor

     Unless  otherwise  instructed,  the persons  named in the enclosed  Form of
Proxy  intend  to vote  for the  appointment  of  Schwartz,  Levitsky,  Feldman,
Chartered  Accountants  as auditor of the  Corporation  to hold office until the
next  annual  meeting  of  shareholders.  Schwartz  Levitsky  Feldman  was first
appointed
auditor of the Corporation in 1990.

                          The New Bylaw

     At its meeting on March 19, 1997, the Board of Directors of the Corporation
approved and adopted a new Bylaw relating to the transaction of the business and
affairs of the Corporation.  The action of the board in approving and adopting a
new Bylaw made it effective  immediately.  However,  absent  confirmation by the
Shareholders,  the new Bylaw lapses on the earlier of March 19, 1998 or the date
of the Corporation's  next shareholderm  meeting.  The following is a summary of
the principle  provisions  of the new Bylaws,  a copy of which will be furnished
upon request.

              Summary of Principal Bylaw Provisions

     The Bylaws provide that,  unless otherwise  determined by Board resolution,
any contract or documents  requiring  execution by the Corporation may be signed
by any  Director or Officer of the  Corporation  and that a document so executed
shall  be  binding  upon  the  Corporation  without  further   authorization  or
formality.  The Board has the further power to  specifically  delineate which of
its Directors or Officers may execute certain  contracts or documents.  Further,
if so authorized by a resolution of the Board,  such  signatures or the affixing
of the corporate seal may be done mechanically or  electronically  with the same
binding effect as if such were an original signature.

     Except as otherwise  determined by a resolution  of the Board,  all persons
authorized  to sign  contracts  or documents  on behalf of the  Corporation  may
execute and deliver  instruments of proxy or otherwise vote securities  owned by
the Corporation.

     Subject  to a contrary  resolution  of the  Board,  the Board may,  without
shareholder authorization, borrow money on the credit of the Corporation, issue,
reissue, sell or pledge debt obligations of the Corporation,  give a guaranty on
behalf of the  Corporation to secure  performance of an obligation and mortgage,
hypothecate,  pledge  or  otherwise  create a  security  interest  in all or any
property  of the  Corporation,  owned or  subsequently  acquired,  to secure any
obligation of the Corporation.

     An individual may be a member of the Board of Directors of the  Corporation
as long as such individual is 18 years of age or greater,  of sound mind, and is
not  bankrupt.  The number of Directors  required to constitute a quorum for the
transaction  of  business  at a meeting of the Board shall be 51% or more of the
Directors  or the  minimum  number of  Directors  required  by the  Articles.  A
Director  shall serve a term of office from the date of election until the close
of the Annual Meeting of Shareholders next following his election or appointment
or until his successor is elected or  appointed.  The  resignation  of any Board
member  becomes  effective  at the  time a  written  resignation  is sent to the
Corporation,  or at the time specified in the  resignation,  whichever is later.
Directors  may be  removed  by the  Shareholders  by a  resolution  at a special
meeting and a vacancy  created by the removal of a Director may be filled at the
meeting of Shareholders at which the Director is removed.

Directors may attend meetings by telephone or other communication facilities.

     The Chairman of the Board shall be Chairman of any meeting of Directors and
any questions  arising at a meeting of Directors  shall be decided by a majority
of the votes cast at such  meeting.  In the case of a tie,  the  Chairman of the
meeting shall be entitled to cast the deciding vote.

     In lieu of a meeting,  the Directors may act by a written resolution signed
by all Directors  entitled to vote as if such resolution had been presented at a
meeting of the Directors.

     The Board may appoint at least three (3) of its members, from time to time,
to act as the Audit  Committee  of the Board.  A majority  of the members of the
Audit Committee shall not be Officers or employees of the Corporation. The Audit
Committee  shall review the annual  financial  statements of the Corporation and
report thereon to the Directors before such financial statements are approved by
the Directors.

     The Board may, by  resolution,  appoint  from among their number any one or
more other committees.

     From time to time,  the  Directors  may appoint a Chairman of the Board,  a
President,  one or more  Vice  Presidents  (to which  title  may be added  words
indicating seniority or function),  a Secretary,  a Treasurer,  a Controller and
such other Officers as the Directors may by resolution determine. Any Officer so
appointed may be removed by the Directors at their pleasure without prejudice to
the rights of any such person.

     In the event that a Director or Officer is party to a material  contract or
proposed  material  contract with the Corporation or has a material  interest in
any person who is a party to a material  contract or proposed  material contract
with the Corporation,  such Director or Officer shall disclose in writing to the
Corporation  the  facts  of same  and,  if a  Director,  shall  not  vote on any
resolution to approve such contract or transaction.

     The Bylaws provide that every Director or Officer of the Corporation  shall
be indemnified by the  Corporation to the maximum extent  provided by applicable
law.

     Subject to the Articles of Incorporation, the Directors, by resolution, may
issue any or all of the  unissued  shares in the capital of the  Corporation  to
such  persons and for such  consideration  as the  Directors  may  determine  by
resolution.

     The Bylaws authorize, but do not require, the Board to declare dividends of
the  Corporation  and the Directors  may, by  resolution,  fix in advance a date
preceding  by not more than fifty (50) clear  days,  the date for the payment of
any dividend or the making of any  distribution  or for the issue of any warrant
or other evidence of right to acquire securities of the Corporation.

     The  Directors  shall  set the  date and time  for the  Annual  Meeting  of
Shareholders and, by resolution, may call a special meeting of the Shareholders.
All meetings of Shareholders  shall be held at the  Corporation's  offices or at
such other place within Canada as the Directors from time to time may determine.
Notice of such meeting of Shareholders  shall be given to the  Shareholders  not
less than  twenty-one  (21),  nor more than fifty  (50) days  before the date on
which such meeting is to be held.

     The  Secretary of the  Corporation  is directed to send a form of proxy and
Management Information Circular to each Shareholder concurrently with the notice
of a meeting  of  Shareholders.  The quorum  necessary  for the  transaction  of
business  at any  shareholders'  meeting  shall be two (2)  persons  present and
entitled  to vote not less than 51% of the  Shares  entitled  to be voted at the
meeting.  At each meeting of Shareholders,  every question shall be decided by a
majority of the votes duly cast thereon (including those cast by proxy).

     Any Shareholder entitled to vote at a meeting of Shareholders may submit to
the Corporation a notice of any proposal that such  Shareholder  wishes to raise
at the  meeting and may discuss at the meeting any matter in respect of which he
would have been entitled  under  applicable  law to submit a proposal.  Where so
required by applicable  law, the  Management  Information  Circular  prepared in
respect to the meeting shall sit out or be accompanied by such a proposal.

                       Directors' Approval

     The contents of this information circular and the sending thereof have been
approved by the Board of Directors of the Corporation.

                                            March 27, 1997
                                            /s/  Alan G. Symons
                                               President and CEO
<PAGE>
                        GORAN CAPITAL INC.

           STATEMENT OF CORPORATE GOVERNANCE PRACTICES

                       Symbols:  TSE - GNC
                                 NASDAQ - GNCNF


New Guidelines

     In February,  1995, the Toronto Stock Exchange  ("TSE")  announced that all
companies  with a  year-end  on or after  June 30,  1995  would be  required  to
describe  their  practices  of  corporate   governance  with  reference  to  TSE
Guidelines  previously  published.  Goran  conforms  with the  majority of these
Guidelines except as noted below:

     "Corporate  Governance"  is the  process and  structure  used to direct and
manage the  business  and affairs of the  Corporation  to achieve  shareholders'
objectives.  The  shareholders  of the  Corporation  elect the directors who, in
turn,  are  responsible  for  overseeing  all  aspects of the  operation  of the
Corporation,  appointing  management  and ensuring  that the business is managed
properly, taking into account the interests of the shareholders.

     The Guidelines suggest that the chairman of the board of directors not be a
member of management and state that members of the board's nominating  committee
should be exclusively non-management directors. In this respect, the Corporation
does not  comply.  The  Corporation  currently  does not  have a  nominating  or
corporate  governance  committee.  Further,  the knowledge and  experience of G.
Gordon Symons, the founder of the Corporation and its current chairman, are very
important to the  Corporation  and the board.  Further,  it is believed that the
best interests of the Corporation's shareholders,  the Corporation and the board
would not be properly served with either Mr. Symons relinquishing his management
function or the board appointing a different chairman.

     The board of the Corporation is currently comprised of seven members,  four
of whom are  "unrelated"  within the meaning of the guidelines and this majority
of unrelated  directors allows the board the independence of management which is
a fundamental cornerstone of the TSE Guidelines.

     Another guideline states that position descriptions should be developed for
the  board  and for the chief  executive  officer  which  delineate  and  define
management's  responsibilities.  The segregation of duties and  responsibilities
between  the board  and its  chief  executive  officer  have been  traditionally
understood but have not been formalized.

     The Corporation has a significant  shareholder and the percentage of shares
held by  individuals  or entities who are not directly or indirectly  related to
the Corporation's significant shareholder is less than 50%. Yet, the Corporation
has a majority of its directors who are unrelated directors.  The number of such
directors  more than  fairly  reflects  the  investment  in the  Corporation  by
shareholders  other  than the  significant  shareholder  and  those  persons  or
entities  directly  or  indirectly  related  to  the  significant   shareholder.
Therefore,  the unrelated directors (and the board as a whole) are in a position
to fairly represent minority shareholders.

Mandate Of The Board

     The  responsibility of the  Corporation's  board of directors is to oversee
the conduct of the Corporation's business and to supervise management. The board
discharges its responsibilities  either directly or through its committees.  The
board met four times during 1996 and also acted  through the medium of unanimous
written consent.

     The  board  has  three  committees.  All of these  committees  (except  the
executive committee) have a majority of members who are unrelated directors.

     During 1996, the audit committee was comprised of Alan G. Symons,  David B.
Shapira,  John K. McKeating and James G.  Torrance.  At its meeting on March 19,
1997, the Board selected Messrs. Torrance, McKeating and Alan G. Symons to serve
on the Board's Audit  Committee.  Its principal  responsibilities  are to review
annual  audited  financial  statements  prior to  submission  to the  board  for
approval,  review the nature and scope of the annual audit,  evaluate  auditors'
performance,  review  fees and make  recommendations  as to the  appointment  of
auditors  for the ensuing  year and review the  adequacy of internal  accounting
control procedures and systems.

     During 1996, the compensation committee was comprised Douglas H. Symons, J.
Ross  Schofield  and James G.  Torrance.  At its meeting on March 19, 1997,  the
Board selected Messrs. Schofield,  Shapira and Douglas H. Symons to serve on the
Board's  compensation  committee.  Its role is to review the  performance of the
chairman  and  chief  executive  officer  as  regards  compensation,   determine
compensation practices for the officers of the Corporation,  periodically review
the Corporation's  long-range plans and policies for recruiting,  developing and
motivating personnel,  and to make recommendations to the board concerning stock
option grants.

Decisions Requiring Prior Approval Of The Board

     In general,  the  management  of the  Corporation  is  empowered to run the
business on a  day-to-day  basis.  The board  approves  the annual  business and
strategic plan and reviews  performance  against those plans on an interim basis
throughout the year. The board,  of necessity,  would approve any action leading
to a material change in the nature of the business of the Corporation, including
any  acquisition or disposition of a significant  operating unit. The board also
approves key  borrowing  and  financing  decisions.  The board also appoints the
officers of the  Corporation,  determines  directors'  compensation and declares
dividends (if any).

Recruitment Of New Directors

     Currently,  if  vacancies  should  occur on the board,  the board seeks and
receives input from individual board members and reviews the  qualifications  of
prospective  members while taking into  consideration  current board composition
and the Corporation's  needs. It is anticipated that a nominating committee will
be formed by the board in the near future.

Measures For Receiving Shareholder Feedback

     The board has requested  management to make it aware, on an on-going basis,
of any significant shareholder concerns which are communicated to management.

The Board's Expectation Of Management

     The board expects  management to operate the Corporation in accordance with
prudent  business  practices  and  the  direction  of the  board.  The  goal  of
management,  the Corporation and the board is to protect and enhance shareholder
value while managing the  Corporation in a prudent manner as a fiduciary for the
Corporation's shareholders.  Management is expected to provide regular financial
and operating  reports to the board and to make the board aware of all important
issues and major  business  developments,  especially  those which have not been
anticipated.  Consistent  with its  previously  enunciated  goal,  management is
expected to seek out opportunities  for business  acquisitions and expansion and
to forward  appropriate  recommendations  to the board for its  action.