Heemskirk Consolidated : Corporate Governance Statement and Appendix 4G

17 January 2017

2016 Corporate Governance Statement and ASX Appendix 4G Key to Disclosures of Corporate Governance Principles and Recommendations

Heemskirk Consolidated Limited (ASX:HSK) submits the attached 2016 Corporate Governance Statement and Appendix 4G (Key to Disclosures of Corporate Governance Principles and Recommendations) in accordance with ASX Listing Rules 4.7.3, 4.7.4 and 4.10.3.

The Company's 2016 Corporate Governance Statement, Appendix 4G and other ancillary corporate governance related documents can also be found at the following URL on the Company's website:

http://www.heemskirk.com/pages/view/corporate_governance

The Board of Directors of Heemskirk Consolidated Limited has approved this Corporate Governance Statement.

Heemskirk Consolidated Limited Level 17, 303 Collins Street

Melbourne Victoria 3000

T: [phone]

F: [phone]

E: [e-mail]

HEEMSKIRK CONSOLIDATED LIMITED ABN 18 106 720 138

Level 17, 303 Collins Street Melbourne Vic 3000 PO Box 96 Collins Street West Melbourne Vic 8007 t + 61 3 9614 0666 f + 61 3 9614 4466

E: [e-mail] www.heemskirk.com

2016 Financial Year Heemskirk Consolidated Limited

ABN: 18 106 720 138

Corporate Governance Statement Introduction

The Board of Directors is committed to maintaining high standards of safety, performance and corporate governance for Heemskirk Consolidated Limited (Company or Heemskirk) and the entities it controls (Group or Heemskirk Group). Good corporate governance is having a set of core values and behaviours that underpin the Group's activities and ensure transparency, accountability and protection of the interests of stakeholders - including shareholders, personnel, suppliers and communities in which the Group operates.

The Board of Directors supports the Corporate Governance Principles and Recommendations (3rd Edition, released in March 2014) (ASX Principles and Recommendations) developed by the ASX Corporate Governance Council (Council). Throughout the reporting period, being the year ended 30 September 2016, the Company's practices are largely consistent with the ASX Principles and Recommendations. The Board considers that the implementation of a small number of ASX Principles and Recommendations is not appropriate, for the reasons set out below in relation to the items concerned. The Board uses its best endeavours to ensure that exceptions to the ASX Principles and Recommendations do not have a negative impact on the Company and the best interests of shareholders as a whole.

As required by the ASX Listing Rules, this Corporate Governance Statement (CGS) discloses the extent to which the Company has followed the ASX Principles and Recommendations during the Reporting Period, as summarised below.

The Company has also prepared an "ASX Appendix 4G - Key to Disclosures" (which reports on the Company's compliance with each of the ASX Principles and Recommendations) - this has been lodged with the CGS on ASX and may be viewed and downloaded from the Company's website (details below).

A copy of the ASX Principles and Recommendations can be found on the ASX website at the following URL: http://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf

The Company's latest Annual Report (and other ASX market announcements and releases) may be viewed and downloaded from the Company's website at the following URL: http://www.heemskirk.com/

The Corporate Governance page of the Heemskirk website contains most of the charters, codes and policies which are referred to in this CGS, at the following URL: http://www.heemskirk.com/pages/view/corporate_governance

The names of the Non-Executive Directors currently in office and their qualifications and experience are stated in the Company's latest Annual Report.

Principle 1 - Lay solid foundations for management and oversight

1. Board of Directors - Role and Responsibilities

   In general the Board is responsible for, and has the authority to determine, all matters relating to policies, procedures & practices, management, safety performance and operations of the Company. The Board is also responsible for the overall corporate governance of the Company and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole.

   The Board also ensures that the Company complies with all of its contractual, statutory and any other legal and regulatory obligations. The Board has the final responsibility for the successful operation of the Company. Where the Board considers that particular expertise or information is required which is not available from within the Board, appropriate external advice may be taken and reviewed prior to a final decision being made.

   Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the matters set out below, subject to delegation to the Chief Executive Officer and Senior Management as specified elsewhere in this Statement or as otherwise appropriate:

2. the formulation and approval of the strategic direction, objectives and goals of the Company;

3. the prudential control the Company's finances and operations, and monitoring the financial performance of the Company;

4. the resourcing, review and monitoring of the Chief Executive Officer;

5. ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;

6. the identification of significant business risks and ensuring that such risks are adequately managed;

7. ensuring the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market; and

8. the establishment and maintenance of appropriate ethical standards.

9. The Board absorbed the functions of the Audit & Risk and the Remuneration & Nomination Committees in 2014, however, the Board refers to matters in those respective Charters in their final decision making.

10. Senior Management - Role and Responsibilities

    The role of Senior Management is to deliver the strategic direction and goals determined by the Board.

    The Board has delegated to the Chief Executive Officer and through the Chief Executive Officer to other Senior Executives, responsibility for the day-to-day management of the Group, which includes:

11. management of the Group's operations and finances;

12. reporting to the Board on matters including the Group's safety performance, operations and financial

    performance;

13. recommending Group strategy, budgets, plans, policies and risk management systems to the Board; and

14. determining Group policies, other than those reserved for the Board.

15. Senior Management may also be delegated responsibility for other matters under policies adopted by the Board.

16. Board Nominations

    The Board will consider nominations for appointment or election of Directors that may arise from time to time, having regard to the skills and experience required by the Company (as detailed in the Board Skills Matrix referred to in Section 2.3 below) and procedures outlined in the Company's Constitution and the Corporations Act 2001 (Cth).

    The Company undertakes appropriate checks before appointing a person or putting forward to shareholders a candidate for election as a Director. Candidates are assessed through interviews, meetings and background and reference checks (which may be conducted both by external consultants and by Directors) as appropriate.

    The Company gives shareholders all material information in its possession relevant to the decision on whether or not to elect (or re-elect) a Director, either in the Notice of Meeting at which the election of the Director is to be held, or by including in the notice a clear reference to the location on the Company's website, Annual Report or other document lodged with ASX where the information can be found.

17. Terms of Appointment - Directors and Senior Executives

    Each new Non-Executive Director will receive a letter formalising their appointment and outlining the material terms of their appointment. Non-Executive Directors of the Company have not been appointed for fixed terms.

    Senior Executives will generally have written employment agreements with the Company setting out their duties, obligations and remuneration. The present Senior Executives are experienced company executives and are well aware of the requirements of their positions, including their roles and responsibilities and their duties as directors/officers of the Company. Their remuneration has been determined by the Board.

    The remuneration paid/payable to the Company's 'key management personnel' (which, during the 2016 year included Peter Bird and Mark Connors) is outlined within the Remuneration Report in the Company's latest Annual Report.

    The Company's Constitution requires one third of the Directors (other than any Managing Director) or, if that is not a whole number, the whole number nearest to one third, to retire at each Annual General Meeting (AGM). The Director(s) who retire under this rule are those who have held office the longest since last being elected or appointed. If two or more Directors have been in office for the same period, those Directors may agree which of them will retire. A Director appointed by the Board since the last AGM and subject to retirement and re-election at the following AGM is also not taken into account in determining the number of Directors who must retire by rotation.

    The initial appointment and last re-election dates of each current Director are listed below.

    Director	First Appointed	AGM last Re-elected
    Garry Cameron	24 February 2011	25 February 2016
    John Taylor	9 May 2011	20 February 2014
    Peter McKenna	23 March 2016	To stand for election at the AGM on 23 February 2017

18. The Company Secretary

19. The Company Secretary is appointed by the Board and is responsible for developing and maintaining the