Global Petroleum : Corporate Governance Statement

To ensure the Company operates effectively and in the best interests of shareholders, having regard to the nature of the Company's activities and its size, the Board has adopted the revised Corporate Governance Principles and Recommendations 3rd Edition (as amended at 1 July 2014) issued by the ASX Corporate Governance Council, subject to the exceptions noted below.

Principles and Recommendations	Adoption Yes/No	If not, Explanation Provided
Principle 1 - Lay Solid Foundations for Management and Oversight
Recommendation 1.1 - Companies should disclose the roles and responsibilities of its board and management, those expressly reserved to the board and those delegated to management.	Yes
Recommendation 1.2 - Companies should undertake appropriate checks prior to the appointment or election of a director and provide shareholders with information relevant to the election of a director.	Yes
Recommendation 1.3 - Companies should have written agreements as to the appointment of directors and senior executives.	Yes
Recommendation 1.4 - The company secretary should be accountable directly to the board, through the chairman, as to the proper functioning of the board.	Yes
Recommendation 1.5 - Companies should have and disclose a diversity policy setting measureable objectives for achieving gender diversity and annually assess and disclose the objectives and progress towards their achievement.	No	Yes
Recommendation 1.6 - Companies should have and disclose processes for evaluating board, committee and director performance, and disclose any performance evaluation undertaken.	Yes
Recommendation 1.7 - Companies should have and disclose processes for evaluating senior executive performance, and disclose any performance evaluation undertaken.	Yes
Principle 2 - Structure the Board to Add Value
Recommendation 2.1 - The board should establish a nomination committee of at least three non-executive directors (the majority being independent), chaired by an independent director, not being the chairman, and disclose the committee charter, qualifications and experience of the committee members and the frequency and attendees of the committee's meetings. If not, companies should disclose its processes that ensure board succession, skills, knowledge, experience, independence and diversity.	No	Yes
Recommendation 2.2 - Companies should have and disclose a board skills matrix setting out the mix of skills and diversity available to the Board.	Yes
Recommendation 2.3 - Companies should disclose their independent directors, any interest, position or association that the Board considers does not compromise independence, and why, and the length of each director's service.	Yes
Recommendation 2.4 - A majority of the Board should be independent directors.	No	Yes
Recommendation 2.5 - Companies should have an independent director as chairman who should not also hold the position of CEO.	Yes
Recommendation 2.6 - Companies should have an induction program for new directors and provide professional development opportunities for directors.	Yes
Principle 3 - Promote Ethical and Responsible Decision-Making
Recommendation 3.1 - Companies should establish a code of conduct and disclose the code or a summary of the code.	Yes
Principle 4 - Safeguard Integrity in Corporate Reporting
Recommendation 4.1 - The board should establish an audit committee of at least three non-executive directors (the majority being independent), chaired by an independent director, not being the chairman, and disclose the committee charter, qualifications and	No	Yes

Principles and Recommendations	Adoption Yes/No	If not, Explanation Provided
experience of the committee members and the frequency and attendees of the committee's meetings.
Recommendation 4.2 - Companies should prior to approval of financial statements receive from the CEO and CFO a declaration that financial records have been properly maintained, the financial statements comply with the accounting standards, give a true and fair view of the financial position based on sound risk management, and that internal controls are operating effectively.	Yes
Recommendation 4.3 - Companies should ensure that their external auditor attends the AGM and is available to answer questions relevant to the audit.	Yes
Principle 5 - Make Timely and Balanced Disclosure
Recommendation 5.1 - Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	Yes
Principle 6 - Respect the Rights of Shareholders
Recommendation 6.1 - Companies should provide information about themselves and their governance on their website.	Yes
Recommendation 6.2 - Companies should design and implement an investor relations program to facilitate communication.	Yes
Recommendation 6.3 - Companies should disclose their policies and processes to facilitate and encourage participation at shareholder meetings.	Yes
Recommendation 6.4 - Companies should give shareholders the option to receive and send messages to the Company and its share registry electronically.	Yes
Principle 7 - Recognise and Manage Risk
Recommendation 7.1 - The board should establish a committee to oversee risk of at least three directors, the majority being independent, chaired by an independent director, and disclose the committee charter, committee members, and the frequency and attendees of the committee's meetings.	No	Yes
Recommendation 7.2 - The board or a board committee should review the company's risk management framework annually as to soundness and disclose in relation to each reporting period whether the review has taken place.	Yes
Recommendation 7.3 - Companies should disclose if they have an internal audit function how the function is structural and what role it performs, and if it does not have an internal audit function disclose that fact and the processes employed for evaluating and continually improving its risk management and internal control processes.	Yes
Recommendation 7.4 - Companies should disclose if they have any material exposure to economic, environmental and social sustainability risks and if so how it manages those risks.	Yes
Principle 8 - Remunerate Fairly and Responsibly
Recommendation 8.1 - The board should establish a remuneration committee of at least three directors, the majority being independent, chaired by an independent director, and disclose the committee charter, members of the committee and the frequency and attendees of the committee's meetings. If the company does not have a remuneration committee that fact should be disclosed and the processes employed for setting directors and senior executives remuneration and ensuring that remuneration is appropriate and not excessive.	No	Yes
Recommendation 8.2 - Companies should separately disclose their policies and practices for remuneration of non-executive and executive directors and senior executives.	Yes
Recommendation 8.3 - Companies which have equity based remuneration schemes	Yes

Principles and Recommendations	Adoption Yes/No	If not, Explanation Provided
should have a policy on whether participants are permitted to enter transactions (such as derivatives or otherwise) which limit the economic risk of scheme participation, and disclose the policy or a summary.
Recommendation 8.4 - Companies should provide the information indicated in the Guide to reporting on Principle 8.	Yes

Principle 1 - Lay Solid Foundations for Management and Oversight

1. Role of the Board and Management

   The Board of Directors of Global Petroleum Limited is responsible for its corporate governance, that is, the system by which the Group (Global Petroleum and its subsidiaries) is managed. The Board represents shareholders' interests in continuing a successful business, which seeks to optimise medium to long-term financial gains for shareholders. By not focusing on short-term gains for shareholders, the Board believes that this will ultimately result in the interests of all stakeholders being appropriately addressed when making business decisions.

   The Board is responsible for ensuring that the Group is managed in such a way to best achieve this desired result. Given the current size and operations of the business, the Board currently undertakes an active, not passive role.

   The Board is responsible for evaluating and setting the strategic directions for the Group, establishing goals for management and monitoring the achievement of these goals. The Board is also responsible for supervising for the day-to-day management of the Group undertaken by the Managing Director.

   The Board has sole responsibility for the following:

   • Appointing and removing the Managing Director and any other executives and approving their remuneration;

   • Appointing and removing the Company Secretary / Chief Financial Officer and approving their remuneration;

   • Determining the strategic direction of the Group and measuring performance of management against approved strategies;

   • Review of the adequacy of resources for management to properly carry out approved strategies and business plans;

   • Adopting operating and capital expenditure budgets at the commencement of each financial year and monitoring the progress by both financial and non-financial key performance indicators;

   • Monitoring the Group's medium term capital and cash flow requirements;

   • Approving and monitoring financial and other reporting to regulatory bodies, shareholders and other organisations;

   • Determining that satisfactory arrangements are in place for auditing the Group's financial affairs;

   • Reviewing and ratifying systems of risk management and internal compliance and control, codes of conduct and compliance with legislative requirements; and

   • Ensuring that policies and compliance systems consistent with the Group's objectives and best practice are in place and that the Company and its officers act legally, ethically and responsibly on all matters.

   The Board has formalised the respective roles and responsibilities of the Board and management in a Board Charter (incorporating a Role Statement, a Corporate Governance Statement and a Directors' Code of Conduct). A copy of the Board Charter is available on this website. The Board's role and the Group's corporate governance practices are being continually reviewed and improved as required.

2. Probity Checks for Director Appointments

   The Company has probity processes in place (in accordance with the Board Charter) to confirm the appropriateness of candidates for appointment and election as Directors. The results of these processes are made available to shareholders when recommending a candidate for election as a Director.

3. Written Agreements for Director Appointments

   The Company has written agreements (in accordance with the Board Charter) with each Director and the Managing Director setting out the terms of their appointment.

4. Company Secretary Reporting

   The Company Secretary (in accordance with the Board Charter) reports directly to the Board, through the Chairman, as to the proper functioning of the Board.

5. Diversity Policy

   Currently the Company has only one employee, the Managing Director/Chief Executive Officer. Since the Company does not have a significant staff size, the Board as a whole is responsible for ensuring that diversity principles are considered in matters of staff selection and in ensuring that all legislation promoting gender and ethnic diversity and equal opportunity are observed. As the Company grows and staff numbers increase the Board will set measurable objectives for the promotion of diversity within its Board and staff.

6. Evaluating Board and Director Performance

   The Company has a process for periodically evaluating (in accordance with the Board Charter) its Board and Director performance and annually discloses the results of that evaluation each reporting period.

7. Evaluating Senior Executive Performance

The Company has a process for periodically evaluating (in accordance with the Board Charter) its MD/CEO performance and discloses the results of that evaluation each reporting period.

Principle 2 - Structure the Board to Add Value

2.1 Nomination Committee

A nomination committee has not been formed under recommendation 2.1. The Board as a whole considers the composition of the Board and appointment of new Directors, including the mix of skills, knowledge and experience required for the proper function of the Board. The Board identifies suitable candidates to fill vacancies as they arise.

If the Group's activities increase in size, nature and scope, the size of the Board will be reviewed periodically to determine if a Nominations Committee is required for the Board to properly perform its responsibilities and functions.

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 quality of the individual, background of experience and achievement, compatibility with other Board members, credibility within the Group's scope of activities, intellectual ability to contribute to the Board duties and physical ability to undertake the Board duties and responsibilities.

Directors are initially appointed by the full Board subject to election by shareholders at the next annual general meeting. Under the Company's Constitution the tenure of Directors (other than Managing Director, and only one Managing Director where the position is jointly held) is subject to reappointment by shareholders not later than the third anniversary following his or her last appointment. Subject to the requirements of the Corporations Act 2001 (Cth), the Board does not subscribe to the principle of a compulsory retirement age and there is no maximum period of service as a Director. A Managing Director may be appointed for any period and on any terms the Directors think fit and, subject to the terms of any agreement entered into, the Board may revoke this appointment according to the terms of this agreement.