88 ENERGY LIMITED ACN 072 964 179 (Company)

CORPORATE GOVERNANCE STATEMENT

FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2019

This Corporate Governance Statement is current as at 1 December 2019 and has been approved by the Board of the Company on that date.

This Corporate Governance Statement discloses the extent to which the Company has, during the financial year ending 31 December 2019, followed the recommendations set by the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations - 4th Edition (Recommendations). The Recommendations are not mandatory, however the Recommendations that have not been followed for any part of the reporting period have been identified and reasons provided for not following them along with what (if any) alternative governance practices were adopted in lieu of the recommendation during that period.

The Company has adopted a Corporate Governance Plan which provides the written terms of reference for the Company's corporate governance duties.

Due to the current size and nature of the existing Board and the magnitude of the Company's operations, the Board does not consider that the Company will gain any benefit from individual Board committees and that its resources would be better utilised in other areas as the Board is of the strong view that at this stage the experience and skill set of the current Board is sufficient to perform these roles. Under the Company's Board Charter, the duties that would ordinarily be assigned to individual committees are currently carried out by the full Board under the written terms of reference for those committees.

The Company's Corporate Governance Plan is available on the Company's website at www.88energy.com

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EXPLANATION

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1

The Company has adopted a Board Charter that sets out the specific

(a)

A listed entity should have and disclose a board charter

YES

roles and responsibilities of the Board, the Chair and management and

which sets out the respective roles and responsibilities

includes a description of those matters expressly reserved to the Board

of the Board, the Chair and management, and includes

and those delegated to management.

a description of those matters expressly reserved to the

The Board Charter sets out the specific responsibilities of the Board,

Board and those delegated to management.

requirements as to the Board's composition, the roles and

responsibilities of the Chairman and Company Secretary, the

establishment, operation and management of Board Committees (if

any), Directors' access to Company records and information, details of

the Board's relationship with management, details of the Board's

performance review and details of the Board's disclosure policy.

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1

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

A copy of the Company's Board Charter, which is part of the Company's

Corporate Governance Plan, is available on the Company's website.

Recommendation 1.2

(a)

The Company has guidelines for the appointment and selection

A listed entity should:

YES

of the Board and senior executives in its Corporate Governance

(a)

undertake appropriate checks before appointing a

Plan. The Company's Nomination Committee Charter (in the

Company's Corporate Governance Plan) requires the

director or senior executive or putting someone forward

Nomination Committee (or, in its absence, the Board) to ensure

for election as a Director; and

appropriate checks (including checks in respect of character,

(b)

provide security holders with all material information in

experience, education, criminal record and bankruptcy history

its possession relevant to a decision on whether or not

(as appropriate)) are undertaken before appointing a person, or

to elect or re-elect a Director.

putting forward to security holders a candidate for election, as a

Director. In the event of an unsatisfactory check, a Director is

required to submit their resignation.

(b)

Under the Nomination Committee Charter, all material

information relevant to a decision on whether or not to elect or

re-elect a Director must be provided to security holders in the

Notice of Meeting containing the resolution to elect or re-elect a

Director.

Recommendation 1.3

The Company's Nomination Committee Charter requires the Nomination

A listed entity should have a written agreement with each Director

YES

Committee (or, in its absence, the Board) to ensure that each Director

and senior executive setting out the terms of their appointment.

and senior executive is personally a party to a written agreement with

the Company which sets out the terms of that Director's or senior

executive's appointment.

The Company has had written agreements with each of its Directors and

senior executives for the past financial year.

Recommendation 1.4

The Board Charter outlines the roles, responsibility and accountability of

The Company Secretary of a listed entity should be accountable

YES

the

Company Secretary. In accordance with this, the Company

Secretary is accountable directly to the Board, through the Chair, on all

directly to the Board, through the Chair, on all matters to do with

the proper functioning of the Board.

matters to do with the proper functioning of the Board.

Recommendation 1.5

(a)

The Company has adopted a Diversity Policy which provides a

A listed entity should:

PARTIALLY

framework for the Company to establish, achieve and measure

(a)

have and disclose a diversity policy;

diversity objectives, including in respect of gender diversity. The

Diversity Policy is available, as part of the Corporate

(b)

through its board or a committee of the board set

Governance Plan, on the Company's website.

measurable objectives for achieving gender diversity in

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

the composition of its board, senior executives and

(b)

The Diversity Policy allows the Board to set measurable gender

workforce generally; and

diversity objectives, if considered appropriate, and to continually

(c)

disclose in relation to each reporting period:

monitor both the objectives [if any have been set and the

(i)

the measurable objectives set for that period to

Company's progress in achieving them.

(c)

The Board did not set measurable gender diversity objectives for

achieve gender diversity;

(ii)

the entity's progress towards achieving those

the past financial year, because:

(i)

the Board did not anticipate there would be a need to

objectives; and

appoint any new Directors or senior executives due to

(iii)

either:

the limited nature of the Company's existing and

(A)

the respective proportions of men

proposed activities and the Board's view that the existing

and women on the Board, in senior

Directors and senior executives have sufficient skill and

executive positions and across the

experience to carry out the Company's plans; and

whole workforce (including how the

entity has defined "senior executive"

(ii)

the respective proportions of men and women on the

for these purposes); or

(B)

if the entity is a "relevant employer"

Board,

in senior

executive positions

and across the

whole organisation (including how the entity has defined

under

the

Workplace

Gender

"senior

executive" for these

purposes) for the past

Equality Act, the entity's most recent

financial year is disclosed below.

"Gender

Equality

Indicators",

as

defined in the Workplace Gender

Equality Act.

If the

entity

was in

the S&P / ASX

300

Index

at

the

Women

Men

Total

% Female

commencement of the reporting period, the measurable objective

for achieving gender diversity in the composition of its board

Board of Directors

-

3

3

-

should be to have not less than 30% of its directors of each

Other KMP

-

1

1

-

gender within a specified period.

Other Employees

1

2

3

33%

Total Organisation

1

6

7

14%

In addition, an executive office holding below the Board level, this being

the position of Joint Company Secretary, is held by a female contractor

to the Company.

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Recommendation 1.6

(a)

The Company's Nomination Committee (or, in its absence, the

A listed entity should:

YES

Board) is responsible for evaluating the performance of the

Board, its committees (if any) and individual Directors on an

(a)

have and disclose a process for periodically evaluating

annual basis. It may

do

so with

the

aid

of

an

independent

the performance of the

Board, its

committees

and

advisor. The process

for

this is

set

out

in

the

Company's

individual Directors; and

Corporate Governance Plan, which is available on the

(b)

disclose for each reporting period whether

a

Company's website.

performance evaluation

has been

undertaken

in

(b)

The Company's Corporate Governance

Plan requires the

accordance with that process during or in respect of that

Company to disclose whether or not performance evaluations

period.

were conducted during the relevant reporting period. The Board

has developed an informal process for performance evaluation

whereby the performance of all directors is reviewed regularly by

the Chair and Managing Director. The Board as a whole may

then hold a facilitated discussion during which each Board

member has the opportunity to raise any matter, suggestion for

improvement or criticism with the Board as a whole. The Chair

and/or the Managing Director of the Board may also meet

individually with each Board member to discuss their

performance. Non-executive directors may also meet to discuss

the performance of the Chair or the Managing Director. Directors

whose performance is consistently unsatisfactory may be asked

to retire.

The Company has completed performance evaluations in

respect of the Board, its committees (if any) and individual

Directors for the past financial year in accordance with the above

process. Going forward, it is the Company's intention that all

directors will continue to receive individual performance

evaluations at least annually. The Company has completed

performance evaluations in respect of the Board, its committees

(if any) and individual Directors for the past financial year in

accordance with the above process.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

Recommendation 1.7

(a)

The Company's Nomination Committee (or, in its absence, the

A listed entity should:

YES

Board) is responsible for evaluating the performance of the

(a)

have and disclose a process for evaluating the

Company's senior executives on

an

annual basis.

The

Company's Remuneration Committee (or, in its absence, the

performance of its senior executives at least once every

Board) is responsible for evaluating

the

remuneration of

the

reporting period; and

Company's senior executives on an annual basis. A senior

(b)

disclose for each reporting period whether a

executive, for these purposes, means key management

performance evaluation has been undertaken in

personnel (as defined in the Corporations Act) other than a non-

accordance with that process during or in respect of that

executive Director.

period.

The applicable processes for these evaluations can be found in

the Company's Corporate Governance Plan, which is available

on the Company's website.

(b) The Company has developed an informal process of performance evaluation whereby an assessment of progress is carried out throughout the year. The Board as a whole may then hold a facilitated discussion during which each Board member has the opportunity to raise any matter, suggestion for improvement or criticism with the Board as a whole. The Chair of the Board may also meet individually with Executive Directors, in this case the Managing Director to discuss their performance. Executive Directors whose performance is consistently unsatisfactory may be asked to retire. The Company has completed an informal performance evaluation in respect of the senior executives (being the Managing Director) for the past financial year in accordance with the applicable processes.

Principle 2: Structure the Board to be effective and add value

Recommendation 2.1

(a)

The Company's Nomination Committee Charter provides for the

The Board of a listed entity should:

PARTIALLY

creation of a Nomination Committee (if it is considered it will

benefit the Company), with at least three members, a majority of

(a)

have a nomination committee which:

whom are independent Directors, and which must be chaired by

(i)

has at least three members, a majority of

an independent Director

whom are independent Directors; and

(ii)

is chaired by an independent Director,

and disclose:

(iii)

the charter of the committee;

(iv)

the members of the committee; and

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

(v)

as at the end of each reporting period, the

(b)

The Company did not have a Nomination Committee for the past

number of times the committee met throughout

financial year as the Board did not consider the Company would

the period and the individual attendances of

benefit from its establishment. In accordance with the

the members at those meetings; or

Company's Board Charter, the Board carries out the duties that

(b)

if it does not have a nomination committee, disclose that

would ordinarily be carried out by the Nomination Committee

under the Nomination Committee Charter, including the

fact and the processes it employs to address Board

following processes to address succession issues and to ensure

succession issues and to ensure that the Board has the

appropriate balance of skills, knowledge, experience,

the Board has the appropriate balance of skills, experience,

independence and knowledge of the entity to enable it to

independence and diversity to enable it to discharge its

discharge its duties and responsibilities effectively:

duties and responsibilities effectively.

(i)

devoting time at least annually to discuss Board

succession issues; and

(ii)

all Board members being involved in the Company's

nomination process, to the maximum extent permitted

under the Corporations Act and ASX Listing Rules.

The Board oversees the appointment and induction process for

directors and the selection, appointment and

succession planning process of the Company's Managing

Director. When a vacancy exists or there is a need

for a particular skill, the Board, determines the selection criteria

that will be applied. The Board will then identify

suitable candidates, with assistance from an external consultant

if required, and will interview and assess the

selected candidates. Directors are initially appointed by the

Board and must stand for re-election at the Company's next

Annual General Meeting of shareholders. Directors must then

retire from office and nominate for re-election at least once every

three years with the exception of the Managing Director.

Recommendation 2.2

Under the Nomination Committee Charter (in the Company's Corporate

A listed entity should have and disclose a Board skills matrix

NO

Governance Plan), the Nomination Committee (or, in its absence, the

setting out the mix of skills that the Board currently has or is

Board) is required to prepare a Board skills matrix setting out the mix of

looking to achieve in its membership.

skills that the Board currently has (or is looking to achieve) and to review

this at least annually against the Company's Board skills matrix to ensure

the appropriate mix of skills to discharge its obligations effectively and to

add value and to ensure the Board has the ability to deal with new and

emerging business and governance issues.

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EXPLANATION

Given the current size and stage of development of the Company the

Board has not yet established a formal board skills matrix. Gaps in the

collective skills of the Board are regularly reviewed by the Board as a

whole, with the Board proposing candidates for directorships having

regard to the desired skills and experience required by the Company as

well as the proposed candidates' diversity of background.

The Board Charter requires the disclosure of each Board member's

qualifications and expertise. Full details as to each Director and senior

executive's relevant skills and experience are available in the

Company's Annual Report.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

Recommendation 2.3

(a)

The Board Charter requires the disclosure of the names of

A listed entity should disclose:

YES

Directors considered by the Board to be independent. The

(a)

the names of the Directors considered by the Board to

Company has disclosed those Directors it considered to be

independent in its Annual Report. The current Board composition

be independent Directors;

includes 2 Non-Executive Directors (both of who are considered

(b)

if a Director has an interest, position or relationship of

to be independent), Mr Stephen Staley and Mr Michal Evans.

the type described in Box 2.3 of the ASX Corporate

The Board has considered the guidance to Principle 2 and in

Governance Principles and Recommendations (4th

particular the relationships affecting independent status. In its

Edition), but the Board is of the opinion that it does not

assessment of independence, the Board considers all relevant

compromise the independence of the Director, the

facts and circumstances. Relationships that the Board will take

nature of the interest, position or relationship in question

into consideration when evaluating independence are whether a

and an explanation of why the Board is of that opinion;

Director:

and

• is a substantial shareholder of the Company or an officer of, or

(c)

the length of service of each Director

otherwise associated directly with, a substantial shareholder of

the Company;

• is employed, or has previously been employed in an executive

capacity by the Company or another Company member, and

there has not been a period of at least three years between

ceasing such employment and serving on the Board;

• has within the last three years been a principal of a material

professional advisor or a material consultant to the Company or

another Company member, or an employee materially

associated with the service provided;

• is a material supplier or customer of the Company or other

Company member, or an officer of or otherwise associated

directly or indirectly with a material supplier or customer; or

• has a material contractual relationship with the Company or

another Company member other than as a Director.

(b)

There are no independent Directors who fall into this category;

(c)

The Company's Annual Report discloses the length of service of

each Director, as at the end of each financial year.

Recommendation 2.4

The Company's Board Charter requires that, where practical, the

A majority of the Board of a listed entity should be independent

YES

majority of the Board should be independent. The Board currently

Directors.

comprises a total of 3 directors, of whom 2 are considered to be

independent. As such, independent directors currently comprise the

majority of the Board.

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Recommendation 2.5

The Board Charter provides that, where practical, the Chair of the Board

The Chair of the Board of a listed entity should be an independent

YES

should be an independent Director and should not be the CEO/Managing

Director and, in particular, should not be the same person as the

Director.

CEO of the entity.

The Chair of the Company during the past financial year, Mr Michael

Evans is an independent Director and is not the CEO/Managing Director.

Recommendation 2.6

In accordance with the Company's Board Charter, the Nominations

A listed entity should have a program for inducting new Directors

YES

Committee (or, in its absence, the Board) is responsible for the approval

and for periodically reviewing whether there is a need for existing

and review of induction and continuing professional development

programs and procedures for Directors to ensure that they can

directors to undertake professional development to maintain the

effectively discharge their responsibilities. The Company Secretary is

skills and knowledge needed to perform their role as Directors

responsible for facilitating inductions and professional development

effectively.

including receiving briefings on material developments in laws,

regulations and accounting standards relevant to the Company.

Principle 3: Instil a culture of acting lawfully, ethically and responsibly

Recommendation 3.1

(a)

The Company and its subsidiary companies (if any) are

A listed entity should articulate and disclose its values.

YES

committed to conducting all of its business activities fairly,

honestly with a high level of integrity, and in compliance with all

applicable laws, rules and regulations. The Board, management

and employees are dedicated to high ethical standards and

recognise and support the Company's commitment to

compliance with these standards.

(b)

The Company's values are set out in its Code of Conduct (which

forms part of the Corporate Governance Plan) and are available

on the Company's website. All employees are given appropriate

training on the Company's values and senior executives will

continually reference such values.

Recommendation 3.2

YES

(a)

The Company's Corporate Code of Conduct applies to the

A listed entity should:

Company's Directors, senior executives and employees.

(a)

have and disclose a code of conduct for its Directors,

(b)

The Company's Corporate Code of Conduct (which forms part

senior executives and employees; and

of the Company's Corporate Governance Plan) is available on

(b)

ensure that the Board or a committee of the Board is

the Company's website. Any material breaches of the Code of

Conduct are reported to the Board or a committee of the Board.

informed of any material breaches of that code.

Recommendation 3.3

YES

The Company's Whistleblower Protection Policy (which forms part of the

Corporate Governance Plan) is available on the Company's website.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

A listed entity should:

Any material breaches of the Whistleblower Protection Policy are to be

(a)

have and disclose a whistleblower policy; and

reported to the Board.

(a)

ensure that the Board or a committee of the Board is

informed of any material incidents reported under that

policy.

Recommendation 3.4

YES

A listed entity should:

The Company's Anti-Bribery and Anti-Corruption Policy (which forms

(a)

have and disclose an anti-bribery and corruption policy;

part of the Corporate Governance Plan) is available on the Company's

and

website. Any material breaches of the Anti-Bribery and Anti-Corruption

(b)

ensure that the Board or committee of the Board is

Policy are to be reported to the Board.

informed of any material breaches of that policy.

Principle 4: Safeguard the integrity of corporate reports

Recommendation 4.1

(a)

The Company's Corporate Governance Plan contains an Audit

The Board of a listed entity should:

PARTIALLY

and Risk Committee Charter that provides for the creation of an

(a)

have an audit committee which:

Audit and Risk Committee with at least three members, all of

whom must be non-executive Directors, and majority of the

(i)

has at least three members, all of whom are

Committee must be independent Directors. The Committee must

non-executive Directors and a majority of

be chaired by an independent Director who is not the Chair.

whom are independent Directors; and

(ii)

is chaired by an independent Director, who is

The Company did not have an Audit and Risk Committee for the

not the Chair of the Board,

past financial year as the Directors do not view that the size of

and disclose:

the Company warrants a separate Audit Committee.

(iii)

the charter of the committee;

In accordance with the Company's Board Charter, the Board

(iv)

the relevant qualifications and experience of

carries out the duties that would ordinarily be carried out by the

the members of the committee; and

Audit and Risk Committee under the Audit and Risk Committee

(v)

in relation to each reporting period, the number

Charter including the following processes to independently verify

of times the committee met throughout the

the integrity of the Company's periodic reports which are not

audited or reviewed by an external auditor, as well as the

period and the individual attendances of the

members at those meetings; or

processes for the appointment and removal of the external

auditor and the rotation of the audit engagement partner:

(b)

if it does not have an audit committee, disclose that fact

(i)

the Board devotes time at annual Board meetings to

and the processes it employs that independently verify

fulfilling the roles and responsibilities associated with

and safeguard the integrity of its corporate reporting,

maintaining the Company's internal audit function and

including the processes for the appointment and

arrangements with external auditors; and

removal of the external auditor and the rotation of the

audit engagement partner.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

(ii)

all members of the Board are involved in the Company's

audit function to ensure the proper maintenance of the

entity and the integrity of all financial reporting.

The Board is of the view that the experience and professionalism

of the persons on the Board is sufficient to ensure that all

significant matters are appropriately addressed and actioned.

Further, the Board does not consider that the Company is of

sufficient size to justify the appointment of additional directors for

the sole purpose of satisfying this recommendation as it would

be cost prohibitive and counterproductive.

Recommendation 4.2

The Company's Audit and Risk Committee Charter requires the

The Board of a listed entity should, before it approves the entity's

YES

Managing Director and CFO (or, if none, the person(s) fulfilling those

functions) to provide a sign off on these terms.

financial statements for a financial period, receive from its CEO

and CFO a declaration that the financial records of the entity have

The Company has obtained a sign off on these terms for each of its

been properly maintained and that the financial statements

financial statements in the past financial year.

comply with the appropriate accounting standards and give a true

and fair view of the financial position and performance of the

entity and that the opinion has been formed on the basis of a

sound system of risk management and internal control which is

operating effectively.

Recommendation 4.3

The Company ensures that the corporate reports it releases are

A listed entity should disclose its process to verify the integrity of

YES

reviewed by Management and provided to the Board to ensure the

financial and technical content is accurate, balanced and

any periodic corporate report it releases to the market that is not

understandable. Where appropriate, information contained in corporate

audited or reviewed by an external auditor.

reports is referenced to supporting documents and sources.

Further, in accordance with Section 295A of the Corporations Act 2001

and Recommendation 4.2 of the ASX Corporate Governance Principles

and Recommendations, the Managing Director and CFO make

declarations to the Board that the Company's financial records have

been properly maintained in accordance with the Act and that the

financial statements comply with accounting standards and give a true

and fair view of the financial position and performance of the Company

and that the above statement is founded on a sound system of risk

management and internal control and that the systems which are

operating effectively in all material respects in relation to financial

reporting risks.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

Principle 5: Make timely and balanced disclosure

Recommendation 5.1

(a)

The Company's Corporate Governance Plan details the

A listed entity should have and disclose a written policy for

YES

Company's Continuous Disclosure policy.

complying with its continuous disclosure obligations under listing

(b)

The Corporate Governance Plan, which incorporates the

rule 3.1.

Continuous Disclosure policy, is available on the Company's

website.

Recommendation 5.2

YES

Under the Company's Continuous Disclosure Policy (which forms part of

A listed entity should ensure that its board receives copies of all

the Corporate Governance Plan), all members of the Board receive

material market announcements promptly after they have been made.

material market announcements promptly after they have been

made.

Recommendation 5.3

YES

All substantive investor or analyst presentations were released on the

A listed entity that gives a new and substantive investor or analyst

ASX Markets Announcement Platform ahead of such presentations.

presentation should release a copy of the presentation materials

on the ASX Market Announcements Platform ahead of the

presentation.

Principle 6: Respect the rights of security holders

Recommendation 6.1

Information about the Company and its governance is available in the

A listed entity should provide information about itself and its

YES

Corporate Governance Plan which can be found on the Company's

website.

governance to investors via its website.

Recommendation 6.2

The Company has adopted a Shareholder Communications Strategy

A listed entity should have an investor relations program that

YES

which aims to promote and facilitate effective two-way communication

facilitates effective two-way communication with investors.

with investors. The Strategy outlines a range of ways in which

information is communicated to shareholders and is available on the

Company's website as part of the Company's Corporate Governance

Plan.

Recommendation 6.3

The Company's Security Holder Communication Policy addresses

A listed entity should disclose how it facilitates and encourages

YES

security holder attendance at Security Holder Meetings.

participation at meetings of security holders.

Shareholders are encouraged to participate at all general meetings and

AGMs of the Company and provides Shareholders with the opportunity

to participate in shareholder meetings by allowing voting in person, by

proxy or online.

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

Recommendation 6.4

All resolutions at securityholder meetings were decided by a show of

A listed entity should ensure that all substantive resolutions at a

NO

hands because it was not practical to conduct a poll based on the

meeting of security holders are decided by a poll rather than by a

number of shareholders attending and the proxies received i.e. the

Company determined that conducting a poll would not change the

show of hands.

outcome of the resolution given the proxies were overwhelmingly in

favour of the resolutions.

Going forward, it is the intention for all substantive resolutions at

securityholder meetings to be decided by a poll rather than a show of

hands if the proxies received "for" and "against" a resolution are close.

Recommendation 6.5

YES

The Company encourages the use of electronic communication and

A listed entity should give security holders the option to receive

offers Security Holders the option to receive and send electronic

communication to the Company and its share registry where possible.

communications from, and send communications to, the entity

and its security registry electronically.

The Shareholder Communication Strategy provides that security holders

can register with the Company to receive email notifications when an

announcement is made by the Company to the ASX, including the

release of the Annual Report, half yearly reports and quarterly reports.

Links are made available to the Company's website on which all

information provided to the ASX is immediately posted.

Shareholders queries should be referred to the Company Secretary at

first instance.

Principle 7: Recognise and manage risk

RECOMMENDATIONS (4TH EDITION)

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EXPLANATION

Recommendation 7.1

(a)

The Company did not have an Audit and Risk Committee for the

The Board of a listed entity should:

PARTIALLY

past financial year as the Directors do not view that the size of

(a)

have a committee or committees to oversee risk, each

the Company warrants a separate Risk Committee. All matters

that might properly be dealt with by the Risk Committee are dealt

of which:

with by the full Board. The Company's Corporate Governance

(i)

has at least three members, a majority of

Plan contains an Audit and Risk Committee Charter that

whom are independent Directors; and

provides for the creation of an Audit and Risk Committee (if

(ii)

is chaired by an independent Director,

deemed appropriate in the future) with at least three members,

and disclose:

all of whom must be non-executive Directors, and majority of the

(iii)

the charter of the committee;

Committee must be independent Directors. The Committee must

be chaired by an independent Director who is not the Chair.

(iv)

the members of the committee; and

(b)

The Company did not have an Audit and Risk Committee for the

(v)

as at the end of each reporting period, the

past financial year. The Board is of the view that the experience

number of times the committee met throughout

and professionalism of the persons on the Board is sufficient to

the period and the individual attendances of

ensure that all significant matters are appropriately addressed

the members at those meetings; or

and actioned. Further, the Board does not consider that the

(b)

if it does not have a risk committee or committees that

Company is of sufficient size to justify the appointment of

satisfy (a) above, disclose that fact and the process it

additional directors for the sole purpose of satisfying this

employs for overseeing the entity's risk management

recommendation as it would be cost prohibitive and

framework.

counterproductive. The Board is responsible for overseeing the

establishment and implementation of effective risk management

and internal control systems to manage the Company's material

business risks and for reviewing and monitoring the Company's

application of those systems. Major risk categories reported

include operational risk, environmental risk, sustainability,

statutory reporting and compliance, financial risks (including

financial reporting, treasury, information technology and

taxation), and market related risks.

RECOMMENDATIONS (4TH EDITION)

COMPLY

EXPLANATION

Recommendation 7.2

(a)

The Audit and Risk Committee Charter requires that the Audit

The Board or a committee of the Board should:

YES

and Risk Committee (or, in its absence, the Board) should, at

(a)

review the entity's risk management framework at least

least annually, satisfy itself that the Company's risk management

framework continues to be sound and that the Company is

annually to satisfy itself that it continues to be sound and

operating with due regard to the risk appetite set by the Board.

that the entity is operating with due regard to the risk

The Board

is responsible for

reviewing

the Company's

risk

appetite set by the Board; and

management framework and overseeing the establishment and

(b)

disclose in relation to each reporting period, whether

implementation of effective risk management and internal control

such a review has taken place.

systems to manage the Company's material business risks and

for reviewing and monitoring the Company's application of those

systems. The Board devotes time at quarterly Board meetings to

fulfilling the roles and responsibilities associated with overseeing

risk and maintaining the entity's risk management framework

and associated internal compliance and control procedures.

(b)

Risk framework reviews may occur more or less frequently than

annually as necessitated by changes in the Company and its

operating environment. Given the operations of the Company

have not materially changed over the past 12 month period, a

risk framework review has not taken place during the transitional

financial year ended 31 December 2019.

Recommendation 7.3

(a)

The Audit and Risk Committee Charter provides for the Audit and

A listed entity should disclose:

YES

Risk Committee (and in its absence, the Board) to monitor and

(a)

if it has an internal audit function, how the function is

periodically review the need for an internal audit function, as well

as assessing the performance and objectivity of any internal

structured and what role it performs; or

audit procedures that may be in place.

(b)

if it does not have an internal audit function, that fact and

(b)

The Company did not have an internal audit function for the past

the processes it employs for evaluating and continually

financial year. As set out in Recommendation 7.1, the Board is

improving the effectiveness of its governance, risk

responsible

for overseeing

the

establishment

and

management and internal control processes.

implementation of effective risk management and internal control

systems to manage the Company's material business risks and

for reviewing and monitoring the Company's application of those

systems.

Recommendation 7.4

The Audit and Risk Committee Charter requires the Audit and Risk

A listed

entity should disclose whether it has any material

YES

Committee (or, in its absence, the Board) to assist management to

exposure to environmental or social risks and, if it does, how it

determine whether the Company has any potential or apparent exposure

manages or intends to manage those risks.

to environmental or social risks and, if it does, put in place management

systems, practices and procedures to manage those risks.

RECOMMENDATIONS (4TH EDITION)

COMPLY

EXPLANATION

The Company's Corporate Governance Plan requires the Company to

disclose whether it has any potential or apparent exposure to

environmental or social risks and, if it does, put in place management

systems, practices and procedures to manage those risk.

Where the Company does not have material exposure to environmental

or social risks, report the basis for that determination to the Board, and

where appropriate benchmark the Company's environmental or social

risk profile against its peers.

The Company discloses this information in its Annual Report.

Principle 8: Remunerate fairly and responsibly

Recommendation 8.1

(a)

The Company did noT have a Remuneration Committee for the

The Board of a listed entity should:

PARTIALLY

past financial year. The Company's Corporate Governance Plan

(a)

have a remuneration committee which:

contains a Remuneration Committee Charter that provides for

the creation of a Remuneration Committee (if it is considered it

(i)

has at least three members, a majority of

will benefit the Company), with at least three members, a

whom are independent Directors; and

majority of whom are be independent Directors, and which must

(ii)

is chaired by an independent Director,

be chaired by an independent Director.

and disclose:

(b)

The Company did not have a Remuneration Committee for the

(iii)

the charter of the committee;

past financial year as the Board did not consider the Company

(iv)

the members of the committee; and

would benefit from its establishment, and does not currently have

one. In accordance with the Company's Board Charter, the

(v)

as at the end of each reporting period, the

Board carries out the duties that would ordinarily be carried out

number of times the committee met throughout

by the Remuneration Committee under the Remuneration

the period and the individual attendances of

Committee Charter including the following processes to set the

the members at those meetings; or

level and composition of remuneration for Directors and senior

(b)

if it does not have a remuneration committee, disclose

executives and ensuring that such remuneration is appropriate

that fact and the processes it employs for setting the

and not excessive:

level and composition of remuneration for Directors and

(i)

the Board devotes time at an annual Board meeting to

senior executives and ensuring that such remuneration

assess the level and composition of remuneration for

is appropriate and not excessive.

Directors and senior executives; and

(ii)

periodically benchmarks the Company's remuneration

against its peers.

RECOMMENDATIONS (4TH EDITION)

COMPLY

EXPLANATION

Recommendation 8.2

The Company's Corporate Governance Plan requires the Board to

A listed entity should separately disclose its policies and practices

YES

disclose its policies and practices regarding the remuneration of

Directors and senior executives, which is disclosed in the remuneration

regarding the remuneration of non-executive Directors and the

remuneration of executive Directors and other senior executives.

report contained in the Company's Annual Report.

Recommendation 8.3

(a)

The Company had an equity-based remuneration scheme during

A listed entity which has an equity-based remuneration scheme

YES

the past financial year. The Company has adopted an Incentive

should:

Option Scheme whereby options are issued to eligible

(a)

have a policy on whether participants are permitted to

participants

including

Directors and

Key Management

Personnel. A

summary

of the Incentive

Option Scheme is

enter into transactions (whether through the use of

disclosed in the Notice of Meeting lodged with ASX on 16 March

derivatives or otherwise) which limit the economic risk

2018. The objective of the Scheme is to attract, motivate and

of participating in the scheme; and

retain key Directors, employees and contractors and it is

(b)

disclose that policy or a summary of it.

considered by the Company that the adoption of the Scheme and

the future issue of Options under the Scheme provides selected

participants with the opportunity to participate in the future

growth of the Company. In addition, the Company has adopted

a Performance Rights Plan (PRP) whereby Performance Rights

during the financial year. The objective of the PRP is to provide

the Company with a remuneration mechanism, through the issue

of securities in the capital of the Company, to motivate and

reward the performance of the Directors and employees in

achieving specified performance milestones within a specified

performance period. A summary of the PRP is disclosed in the

Notice of Meeting lodged with ASX on 13 September 2018.

The Company did have a policy on whether participants are

permitted to enter into transactions (whether through the use of

derivatives or otherwise) which limit the economic risk of

participating in the equity schemes outlined above. The

Company's Remuneration Committee Charter states that, the

Remuneration Committee, (or in the absence of one, the Board)

is required to review, manage and disclose the policy (if any) on

whether participants are permitted to enter into transactions

(whether through the use of derivatives or otherwise) which limit

the economic risk of participating in the scheme. The

Remuneration Committee Charter also states that the

Remuneration Committee (and in its absence, the Board) must

review and approve any equity-based plans.

RECOMMENDATIONS (4TH EDITION)

COMPLY

EXPLANATION

(b)

A copy of the Remuneration Committee Charter is contained in

the Corporate Governacne Policies provided on the Company's

website.

Recommendation 9.1

A listed entity with a director who does not speak the language in

Not applicable

which board or security holder meetings are held or key corporate

documents are written should disclose the processes it has in

place to ensure the director understands and can contribute to

the discussions at those meetings and understands and can

discharge their obligations in relation to those documents.

Recommendation 9.2

Not applicable

A listed entity established outside Australia should ensure that

meetings of security holders are held at a reasonable place and

time.

Recommendation 9.3

Not applicable

A listed entity established outside Australia, and an externally

managed listed entity that has an AGM, should ensure that its

external auditor attends its AGM and is available to answer

questions from security holders relevant to the audit.

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88 Energy Limited published this content on 26 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 February 2020 04:52:05 UTC