GME Resources : Corporate Governance Statement

GME RESOURCES LIMITED

ACN 009 260 315

CORPORATE GOVERNANCE STATEMENT

Dated: 30 June 2018

Adopted by the Board on 26 October 2018.

Overview

The Board has created a framework for managing the Company, including internal controls and a business risk management process. This framework is reflected, in part, in the policies and charters described in this Statement of Corporate Governance.

The Board endorses the 3rd Edition of the ASX Corporate Governance Council Principles and Recommendations and this Statement outlines the Company's compliance with those Principles and Guidelines as amended from time to time.

The Board is responsible for the overall corporate governance of the Company, including the establishing and monitoring of key performance goals. It is committed to attaining standards of corporate governance that are commensurate with the Company's needs. The Company's Board of Directors has reviewed the recommendations outlined by ASX and notes that in the majority of instances the Company is meeting the standard required. In a limited number of instances, the Company has determined not to comply with the standard set out in the recommendations, largely due to the recommendation being considered by the Board to be unduly onerous for a Company of this size. Recommendations which the Company does not comply with are highlighted in this report.

The Company's corporate governance policies are located on the website.

Principle 1: Lay Solid Foundations for Management and Oversight The Company's practice:

The Board considers that the essential responsibility of Directors is to oversee the Company's activities for the benefit of its shareholders, employees and other stakeholders and to protect and enhance shareholder value.

Responsibility for management of the Company's business is delegated to the Managing Director.

The Board takes specific responsibility for:

• • ensuring the Company's conduct and activities are ethical and carried out for the benefit of all its stakeholders;

• • setting the strategic direction of the Company and monitoring the Company's

• • performance against its stated objectives;

• • providing input into and final approval of corporate strategy and monitoring implementation of corporate strategy, business plans and performance objectives;

• • setting the risk profile for the Company and reviewing, ratifying and monitoring

• • systems of risk management;

• • reviewing and monitoring codes of conduct, and legal and regulatory compliance;

• • the appointment of the Company's Managing Director (or equivalent), a right of veto in relation to the appointment of the Chief Financial Officer, Company Secretary and other senior executives, and monitoring senior executives' performance and implementation of strategy;

• • determining appropriate remuneration policies;

• • allocating resources and ensuring appropriate resources are available to management;

• • approving and monitoring the annual budget, progress of major capital expenditure, capital management, and acquisitions and divestitures; and

• • approving and monitoring financial and other reporting.

The Board is responsible for the overall corporate governance of the Company, including the strategic direction, establishing goals for management and monitoring the achievement of these goals.

GME RESOURCES LIMITED

ACN 009 260 315

CORPORATE GOVERNANCE STATEMENT

The Company has adopted a formal Board Charter which is on the Company's website. In broad terms, the Board is accountable to the shareholders and must ensure that the Company is properly managed to protect and enhance shareholders' wealth and other interests. The Board Charter sets out the role and responsibilities of the Board within the governance structure of the Company and its related bodies corporate (as defined in the Corporations Act).

Board Composition

The Constitution of the Company requires a minimum number of three Directors. There is no requirement for any shareholding qualification.

The membership of the Board, its activities and composition is subject to periodic review. The criteria for determining the identification and appointment of a suitable candidate for the Board includes the quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the scope of activities of the Group and the ability to contribute to Board duties and responsibilities.

The background of each Director is set out in the Directors Report section of the Annual Report and on the Company's website.

Retirement, re-election and appointment of new Directors

The constitution of the Company notes that Directors cannot hold office for a period longer than three years without submitting themselves for re-election at the next AGM, one third of the Directors must retire by rotation at each AGM together with any new Directors appointed by the Board during the period since the last general meeting. Retiring Directors are eligible to stand for re-election.

If the Board decides to appoint a new member either to complement the existing members or fill a vacancy, it goes through the process of identifying a wide base of potential candidates with appropriate skills and with a view to meeting the objectives of its Diversity Policy. The Company ensures that all appointments to the Board are appropriately referenced checked in addition to individual criminal and bankruptcy checks. It also ensures that all relevant information is provided to security holders for the purpose of deciding on whether or not to elect or re-elect Directors.

The Company does not have a formal induction process, however, new Directors appointed to the Board are provided with written material incorporating Financial, Corporate and Operating information in relation to the Company. In addition they are provided with a detailed appointment letter outlining the Company's expectations and setting out the requirements of the role as well identifying director interests and potential conflicts.

Role of the Company Secretary

The Company Secretary is appointed by and accountable to the Board, through the Chair, on all matters to do with the proper functioning of the Board. The Company Secretary acts on all Committees of the Board.

Each Director is able to communicate directly with the Company Secretary on all matters relating to the functioning of the Board.

Evaluation of Board Performance

The Company does not have a formal process for the evaluation of the effectiveness, processes and structure of the Board. The Chairman reviews the performance of Board Members throughout the year

Evaluation of Senior Executive Performance

The Chairman and the Managing Director undertake a review of the performance of the Group's executives during the year, complying with Recommendation 1.7 of the Corporate Governance Council.

Diversity Policy

The Board has adopted a Diversity Policy as per Recommendation 1.5. The Company is committed to ensuring a diverse mix of skills and talent exists amongst its Directors, officers and employees and is utilised to enhance the Company's performance.

The Board is responsible for monitoring Company performance in meeting the Diversity Policy requirements, including the achievement of diversity objectives.

GME RESOURCES LIMITED

ACN 009 260 315

CORPORATE GOVERNANCE STATEMENT

Gender Diversity

The Board has not at this time, implemented measurable objectives regarding the proportion of females to be employed or appointed to Board positions. The Board will consider the future implementation of gender-based diversity measurable objectives when more appropriate to the size and nature of the Company's operations.

The Board is reviewing its practices with a focus on ensuring the selection process at all levels within the organisation is formal and transparent and that the workplace environment is open, fair and tolerant. Some of the measures to assess the success of the policy are set out below.

Measurable Objectives

Objective

Outcome

Publish and promote a Diversity Policy that encompasses the principals and recommendations of the Corporate Governance Council. Review and amend where appropriate other Company policies to align with the Diversity policy. Monitor the gender mix of the Company and of the Group over time. Structure recruitment and selection processes to recognise value of diversity.

The Board has adopted a Diversity Policy and has posted it on the Company's website. The Board has reviewed Board Committee Charters to ensure they reflect the objectives of the Diversity Policy. The Company does not at this stage have any employees, however will compile a summary of staff including gender and cultural diversity in the future when appropriate. The Company encourages an open selection process which focuses on relevant skills.

Women Employees, Executives and Board Members

The Company and its consolidated entities have no female employees and/or executives.

There are currently no female members of the Board of the Company.

Principle 2: Structure the Board to Add Value

The Company's practice:

Nomination committee

The Company does not currently have a separate nomination committee and as such has not complied with Recommendation 2.1. The duties and responsibilities typically delegated to such a committee are dealt with by the full Board. Given the size and nature of the Company's activities the Board does not believe that any marked efficiencies or enhancements would be achieved by the creation of a separate nomination committee.

The Company does not have a formal induction process, however, new Directors appointed to the Board are provided with written material incorporating Financial, Corporate and Operating information in relation to the Company. In addition they are provided with a detailed appointment letter outlining the Company's expectations and setting out the requirements of the role as well identifying director interests and potential conflicts.

Composition

The Directors have been chosen for their particular expertise to provide the company with a competent and well-rounded decision-making body and which will assist the company and shareholders in meeting their objectives.

As at September 2017, the term in office held by each Director in office at the date of this report is as follows and details of the professional skills and expertise of each of the Directors are set out in the Directors' Report.

Name	Position	Term in Office
Mr Peter Ross Sullivan	Non-Executive Chairman	22 years
Mr Peter Huston	Non-executive Director	1.5 years
Mr James Noel Sullivan	Managing Director	14 years

The Directors meet frequently, both formally and informally, so that they maintain a thorough understanding of the Company's business and ensure that the Company's policies of corporate governance are adhered to.

GME RESOURCES LIMITED

ACN 009 260 315

CORPORATE GOVERNANCE STATEMENT

Education

The Company encourages Directors to maintain their knowledge of the specific matters relating to the Company including: the nature of the business, current issues, corporate strategy. The Company makes its expectations clear concerning the performance of Directors and Directors are given access to and encouraged to participate in continuing education opportunities to update and enhance their skills and knowledge.

Independent professional advice and access to company information

Each Director has the right of access to all relevant Company information and to the Company's executives and, subject to prior consultation with the Chairman, may seek independent professional advice from a suitably qualified advisor at the consolidated entity's expense. The Director must consult with an advisor suitably qualified in the relevant field and obtain the Chairman's approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other board members.

Roles of Chairman and Managing Director

The role of Chairman and Managing Director are exercised by separate individuals, and accordingly the Company complies with Recommendation 2.5 of the Corporate Governance Council.

Skills and Experience

The skill sets currently on the Company's Board include technical, financial, legal, managerial, corporate, and commercial.

The Board is presently comprised of three members, two of whom are Non-executive and one Executive Director. At this stage of the Company's development the Board believes that there is an appropriate mix of skills, experience, expertise and diversity on the Board. In the coming years as the Company assesses development options additional expertise may be required and at that time further consideration will be given to ensuring the Board has an appropriate mix of skills and diversity.

Independence

Corporate Governance Council Recommendation 2.4 requires a majority of the Board to be independent Directors. The Corporate Governance Council defines independence as being free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of unfettered and independent judgement. In accordance with this definition, the Company currently has no independent Directors.

The Board is of the view that, given the Company's size, the Board's current composition was the best structure for the Company's objectives during the period.

Principle 3: Promote Ethical and Responsible Decision Making The Company's practice:

Ethical Standards

The Company has a formal Code of Conduct as per Recommendation 3.1. This code outlines how Directors and employees of the Company and its related bodies corporate are to behave when conducting business. A full copy of this Code of Conduct is available on the Company's website.

The Company is committed to the highest level of integrity and ethical standards in all business practices. Directors and employees must conduct themselves in a manner consistent with current community and corporate standards and in compliance with all legislation.

All Directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company.

Securities Dealings

There is no requirement for Directors to hold Company securities.

Securities Trading Policy

The Board is committed to ensuring that all Directors and employees comply with their legal obligations as well as conducting their business in a transparent and ethical manner. All Directors and employees (including their

GME RESOURCES LIMITED

ACN 009 260 315

CORPORATE GOVERNANCE STATEMENT

immediate family or any entity for which they control investment decisions), must ensure that any trading in securities issued by the Company is undertaken within the framework set out in the Securities Trading Policy.

The Securities Trading Policy does not prevent Directors or employees (including their immediate family or any entity for which they control investment decisions) from participating in any share plan or share offers established or made by the Company. However, Directors or employees are prevented from trading in the securities once acquired if the individual is in possession of price sensitive information not generally available to all security holders.

Additional restrictions are placed on trading by Directors, Executives and other key management personnel, as determined by the Chairman and Company Secretary from time to time (Key Management Personnel (KMP)). KMP and their associated parties are at all times prohibited from dealing in the Company's securities during prescribed 'closed' periods. The Company has nominated closed periods to be during the week prior to the release of the Company's Quarterly Reports (including the Appendix 5B) unless exceptional circumstances apply. KMP's must also obtain written consent from the Chairman or Company Secretary prior to trading in the Company's securities.

The Securities Trading Policy also includes a clause prohibiting Directors and Executives from entering into transactions in associated products which operate to limit the economic risk of security holdings in the Company over unvested entitlements.

In accordance with Listing Rules, a director must notify the ASX within 5 business days after any change in the director's relevant interest in securities of the Company or a related body corporate of the Company.

A director must notify the Company Secretary in writing of the requisite information within 2 business days in order for the Company Secretary to make the necessary notifications to ASIC and ASX as required by the Corporations Act and the ASX Listing Rules.

Principle 4: Safeguard Integrity in Financial Reporting The Company's practice:

Audit and Risk Management Committee

The Board has not created a separate audit and risk management committee as, in the opinion of the Directors, the scope and size of the Company's operations do not warrant it.

As such the Company is not in strict compliance of the Council's Recommendation 4.1.

The Board as a whole are responsible for:

• • reviewing internal control and recommending enhancements;

• • monitoring compliance with Corporations Act 2001, Securities Exchange Listing Rules, matters outstanding with auditors, Australian Taxation Office, Australian Securities and Investment Commission and financial institutions;

• • improving the quality of the accounting function, personnel and processes;

• • reviewing external audit reports to ensure that where major deficiencies or breakdowns in controls or procedures have been identified, appropriate and prompt remedial action is taken by management;

• • liaising with the external auditors and ensuring that the annual audit and half-year review are conducted in an effective manner; and

• • reviewing the performance of the external auditors on an annual basis.

Audit and Compliance Policy

The Board imposes stringent policies and standards to ensure compliance with all corporate financial and accounting standards. Where considered appropriate, the Company's external auditors, professional advisors and management are invited to advise the Board on these issues and the Board meets to consider audit matters prior to statutory reporting.

The Company requires that its auditors must not carry out any other major area of service to the Company and should have expert knowledge of both Australian and international jurisdictions.

The Board assumes responsibility to ensure that an effective internal control framework exists within the entity. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the