ELDERS LIMITED - Governance Information 2015

==> picture [140 x 57] intentionally omitted <==

16 November 2015

Corporate Governance Statement and Appendix 4G

Please find attached, in accordance with ASX Listing Rules 4.7 and 4.10.3, a copy of Elders Limited (ASX: ELD) Corporate Governance Statement and completed Appendix 4G, for release to the market.

Peter Hastings Company Secretary

==> picture [87 x 38] intentionally omitted <==

Live it.

Elders. Live it. Love it. Corporate Governance Statement 2015

In FY15 the Company reports its governance structure and practices against the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 3rd Edition (ASX Recommendations).

The Company has adopted sound governance practices over many years that are in many instances in advance of the revised ASX Recommendations. This demonstrates our commitment to quality corporate governance that aims for transparency in the way we conduct business.

The Company is pleased to deliver this corporate governance statement which adopts in full the 3rd edition of the ASX Recommendations. It also builds on its existing robust framework to recognise the cyclical review of policies and practices necessary to maintain currency with best market practice and the evolving nature of corporate governance practices. It is our hope that shareholders will benefit from the disclosure of the Company’s governance arrangements to assist them in making informed decisions about their investment choices.

In FY15, the Company has complied with all of the ASX Recommendations. More information on compliance of the Company’s governance practices with the ASX Recommendations can be found in the ASX Listing Rules Appendix 4G that appears on our website at www.elderslimited.com in the Corporate Governance section (along with other complementary information such as key policies and charters discussed in this governance statement).

This Corporate Governance Statement was approved by the Board on 13 November 2015.

Board Charter and the Delegations of Authority to ensure they remain appropriate to the needs of the Company.

1. BOARD STRUCTURE AND OPERATION

Relevant policies and charters:

Board Charter

The Chairman

Company Constitution

The Board Charter prescribes that the Chairman of the Board should be an independent director and details his responsibilities. Hutch Ranck has been non-executive Chairman since 1 May 2014 and is determined by the Board to be independent.

Prudential Criteria
Director Independence Policy
Board Performance Assessment
Director Induction and Ongoing Education

The Board

The Chairman’s role includes:

The Board is ultimately responsible for the governance of the Company. The key responsibilities of the Board include:

providing effective leadership to the Board in all Board matters;
publicly representing the Board’s views to stakeholders;
provide input into, and adopt, the strategic plan and budget of the Company as prepared by management;
promoting effective relations between the Board and management;
monitor performance against the business plan and budget;
leading the process of review of the performance of the Board, Committees and individual directors;
approve and monitor the progress of all material acquisitions, divestments, contracts and capital expenditure;
guiding the setting of agenda items and conduct of Board and shareholder meetings; and
approve debt or equity raisings by the Company;
oversee the audit, compliance, financial and operational risk management functions of the Company;
overseeing succession of nonexecutive directors and the CEO.

Board Composition

oversee the Company’s financial reporting and communication to the Company’s shareholders and the investment community and shareholder- relations generally;

The composition of the Board is determined by the Company’s Constitution and by Board policy, which includes the following requirements:

the number of directors may not be less than 3 and not more than 12 (although the Company will at its 2015 AGM seek approval from shareholders to a constitutional amendment reducing the maximum number of directors to 8);
appoint and remove the Chief Executive Officer (CEO) and determine that person’s remuneration (including termination benefits);
review the performance of the Board as a whole and of individual directors; and
the majority of directors must be independent non-executive directors;
monitor and assess the performance of the CEO and the Company’s senior executive team.
the Chairman should be an independent director; and

The Board has adopted a Board Charter that, in addition to the above • the Board be comprised of directors main responsibilities, defines those who are financially literate and who duties reserved for the Board and its together have an appropriate mix Committees and those that are delegated and depth of skills, experience and to the CEO. knowledge. The Board delegates responsibility for the There are currently five directors day-to-day operation and administration on the Board, comprising four nonof the Company to the CEO, Mr Mark executive directors and the MD/CEO. Allison. The Board monitors the CEO’s The qualifications, experience, special performance on an ongoing basis through responsibilities and period of office of regular management reporting and each director can be found on page 30 through the reporting of the various Board and 31 of the Company’s 2015 Annual Committees. The Company has in place Report. In FY15, Board membership comprehensive Delegations of Authority remained relatively unchanged except under which the CEO and executive for the addition of a new non-executive management operate. The Board regularly director Ms Robyn Clubb who was reviews the obligations set out in the appointed on 21 September 2015.

Appointment of Directors and re-election

The composition of the Board is reviewed on an annual basis coinciding with the Annual General Meeting (AGM) cycle to ensure that the Board has the appropriate mix of expertise and experience.

At each AGM of the Company, one third of directors (other than the managing director and directors who have been appointed since the previous AGM) and any other director who will at the conclusion of the meeting have been in office for 3 or more years and AGMs since they were last elected to office are required to retire and may stand for re-election. The director obliged to retire under this rule in 2015 is Mr J H (Hutch) Ranck who has advised the Nomination and Prudential Committee that he will offer himself for re-election at the forthcoming AGM. The resolution to re-elect Mr Ranck has the support of the Board which considers him to be an independent director.

The Board Charter prescribes that before a director is recommended for reelection, the Chairman consults with the other directors regarding the director’s effectiveness. Based upon the outcome of these consultations, the Board then determines whether or not to recommend the director for re-election. The Nomination and Prudential Committee assists in this review process.

When a vacancy exists, or when it is considered that the Board would benefit from the services of a new director with particular skills, the Nomination and Prudential Committee selects candidates with appropriate expertise and experience for consideration by the full Board. The Committee also takes into account the assessment of the candidate under the Fit and Proper Policy criteria and may seek advice from external consultants if necessary in selecting candidates for board positions. The Board then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders and re-election at three yearly intervals.

Non-executive director Robyn Clubb, having been appointed since the last AGM, will stand for election in 2015. The Board unanimously supports the election of Ms Robyn Clubb and if elected, considers her to be an independent director having satisfactorily completed fitness and propriety testing conducted under the Fit and Proper Policy.

Formal letters of appointment setting out key terms and conditions of appointment are in place for all directors.

Elders. Live it. Love it. Corporate Governance Statement 2015

ELDERS DIRECTOR SKILLS MATRIX

Essential requirements

The Board considers that each director must have the following essential personal attributes to be suitable to serve as a director of the Company:

High standards of personal integrity and ethical behaviour
Independence of thought
Sound judgement and decision making
Team player
Good listener
Strong interpersonal and communication skills
Active networker
Available to serve the needs of the Company

Skills, Knowledge and Experience

The Board recognizes that each director will not necessarily possess experience in all areas relevant to the Company’s operations so seeks to ensure that its membership includes an appropriate mix of directors with skills, knowledge and experience in agriculture, other relevant industry sectors, general management and finance.

A summary of the Board’s skills, knowledge and experience is set out in the table below:

==> picture [302 x 461] intentionally omitted <==

----- Start of picture text -----

Skill / Knowledge / Experience Out of 5 directors
Leadership and Governance
Organisational governance 4
Government relations 2
Previous ASX NED experience 3
Previous CEO experience 3
Operations
Environment, health and safety 3
Work Health and Safety Committee experience 2
Agribusiness 5
Farmer or producer 2
Sectoral Experience
Livestock 3
Agricultural Chemicals and Fertiliser 2
Grain 2
Banking or Insurance 3
Legal 0
Marketing 2
Sales 2
Finance, Capital Management and Risk
Formal accounting and finance qualifications (CPA or CA) 2
Financial advisory 3
Capital restructuring 2
Audit Committee experience 4
Risk management 4
Risk Committee experience 3
Workout and turnaround expertise 3
People
People & Culture (HR) 2
Remuneration Committee experience 3
Geographic Experience
International markets 4
Asian markets 2
----- End of picture text -----

Fit and Proper Policy

The Company continues to adopt and comply with its fitness and propriety regime given its distribution arrangements with Rural Bank Limited (a prudentially regulated Authorised Deposit Taking Institution) and its own Australian Financial Services Licence. This regime ensures a robust selection process for directors generally consistent with the standards set by APRA. The criteria set down in the Company’s Fit and Proper Policy are available on the Company’s website at www.elderslimited. com.

The policy undertakes a rigorous assessment process and includes, amongst other things, background checks as to the person’s criminal record and bankruptcy history. It also requires verification of work history, reference checking with relevant professional industry bodies and qualification confirmation with issuing institutions. In addition, the policy requires persons to provide declarations relating to various matters such as material personal interests and external directorships held. The assessment is undertaken with the person’s full consent and knowledge.

This process provides the Company with assurance that existing and potential directors and persons appointed to senior executive positions within the Company are able to satisfy appropriate fitness and propriety standards that will enable them to discharge their governance responsibilities. It also serves to protect the Company and the interests of shareholders by minimising risks associated with appointing and employing persons who may not be fit and proper.

near Tamworth, NSW, and its cattle feedlot and abattoir facilities in Indonesia.

Director Independence

The Company has adopted an Independence Policy that is published on the Company’s website. The Policy states that the majority of the Board must comprise independent directors.

In determining whether or not a director is considered independent, the Board will have regard to whether the director:

is a substantial shareholder in the Company;
within the last 3 years, has been an employee of the Company, a material adviser to the Company or a principal or employee of any material adviser to the Company;
is a material supplier to, or a material customer of, the Company;
is directly or indirectly associated with any of the above persons;
is otherwise free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company; and
is of independent character and judgement.

Materiality is assessed on a case-bycase basis, taking a qualitative approach rather than setting strict quantitative thresholds from the perspective of both the Company and the relevant director.

Each of the current non-executive directors is considered by the Board to be independent.

Board and Director Performance Assessment

The Board reviews its own performance and that of its Committees annually. The Chairman also holds individual discussions with each director to discuss their performance on a needs basis. The non-executive directors are responsible for evaluating the performance of the CEO, who in turn evaluates the performance of all other senior executives. The evaluations are based on specific criteria, including the Company’s business performance, whether longterm strategic objectives are being achieved and the attainment of individual performance objectives.

Periodically, the Board conducts a review of its performance with the aid of an external provider. A formal board review was conducted in FY15 with the assistance of an external facilitator. The process involved:

Overall Board evaluation
Evaluation of the performance of the Chairman and each Committee Chairman
Evaluation of the performance of each director
Evaluation of Committee performance

Each of the standing Board Committees also reviewed their performance in FY15, the results of which were provided to the Board for assessing the effectiveness of each of those committees in conjunction with the Chairperson of the relevant committee.

The Nomination and Prudential Committee assists in regularly reviewing and making recommendations to the Board on appropriate processes for reviewing the performance of the Board.

Director Induction and Training

All new directors are given a detailed briefing on key board issues, including appropriate background documentation coordinated by the Company Secretary and by the CEO on the nature of the Company’s business and its key drivers.

Directors undertake training and development on an “as needs” basis. Directors are also regularly briefed on the Group’s businesses and on industry, technical and legislative issues impacting the Group. Directors aim to have at least one meeting a year in conjunction with a tour of one of the Company’s operations. At all other times, non-executive directors are encouraged to visit the Company’s operations.

Access to Management and Independent Professional Advice

All directors have complete access to senior management through the Chairman, CEO and Company Secretary at all times and may seek information from the Company’s External and Internal Auditors provided that all such enquiries are first advised to the Chairman and the CEO.

Directors may obtain independent, professional advice, at the Company’s expense, on matters relevant to the Company’s affairs to assist them in carrying out their duties as directors, subject to providing prior notice to the Chairman.

Company Secretary

Under the Board Charter, the Company Secretary is accountable to, and reports directly to, the Board (through the Chairman where appropriate) on all governance matters. All Directors have unfettered access to the Company Secretary. Under the Company’s Constitution a Company Secretary is appointed by the directors. The Company also has a joint Company Secretary to serve the Board on occasion when the need arises or when the Company Secretary takes a leave of absence. This ensures that the Board is appropriately supported in governance and administration matters at all times.

In FY15, directors conducted board meetings (outside of its traditional Adelaide head office) at its domestic owned cattle feedlot (Killara) situated

Elders. Live it. Love it. Corporate Governance Statement 2015

Board meetings

During the financial year, Directors held 19 Board meetings. The attendance of Directors at Board meetings is set out in the Directors’ Report on page 33 of the Company’s 2015 Annual Report.

Where directors are unable to attend meetings either in person or by telephone (e.g. if they are overseas) the Chairman or the CEO endeavours to canvass their views on key matters prior to the meeting in order to represent their views at the meeting.

The CFO has a standing invitation to attend all Board meetings. Relevant senior executives and management are invited on occasion to give presentations and inform the Board of important issues and developments within their area of responsibility.

The Chairman sets the agenda for each meeting, in conjunction with the Company Secretary and CEO. All directors are welcome to suggest to the Chairman that particular items of business be included in the agenda. Standing items at all full scheduled Board meetings include Non-Executive Director only and Non-Executive Director and CEO only sessions, declarations of interest, and continuous disclosure. Papers are distributed to all Directors in advance of the meetings.

2. BOARD COMMITTEES

Relevant Charters:

Nomination and Prudential Committee
Remuneration and Human Resources Committee
Audit, Risk and Compliance Committee
Work Health and Safety Committee

A copy of each Charter can be found on the Company’s website at www.elderslimited.com

Purpose

To increase the effectiveness of the Board’s functioning and to allow the Board to spend additional and more focused time on specific issues, the Board has four standing committees, being the Nomination and Prudential Committee, the Remuneration and Human Resources Committee, the Audit, Risk and Compliance Committee and the Work Health and Safety Committee.

Membership and attendance

Each of the Board Committees, other than the Nomination and Prudential Committee (which includes the CEO as a member), is comprised solely of independent Non-Executive Directors. The CEO has a standing invitation to attend all Board Committee meetings – except where the relevant Committee is discussing the CEO’s employment arrangements or non-executive director only sessions are being held – and may participate in discussions on matters concerning the main Board but has no voting rights with respect to such matters. Other senior executives are regularly invited to attend Board Committee meetings where the Committee Chairman believes that person’s attendance would be useful and relevant.

The members of each Board Committee during the financial year are set out below.

Each Board Committee has a formal Charter which details the Committee’s role and responsibilities.

The main responsibilities of each Board Committee are detailed further in this report.

Attendance by directors at Board and Committee meetings held during the financial year are detailed in the Directors’ Report section of the Company’s 2015 Annual Report on page 33.

Board Committee meetings

Board Committee meetings are held at scheduled intervals during the year, with additional meetings convened as required.

The Board Committees are scheduled to meet a day prior to the board meeting. Following each Committee meeting, the Board receives a report from that Committee Chairman on its deliberations, conclusions and recommendations. Minutes of each Board Committee meeting are formally approved at the subsequent Board Committee meeting. Prior to their approval, draft minutes are circulated to all committee members for review. As membership on each of the Board Committees is currently comprised of all the non-executive directors, committee minutes are not included separately in Board papers.

Other ad hoc committee meetings are convened as and when required to consider matters of special importance or to aid the efficient functioning of the Board.

Work Health and Safety Committee

The Board continued its commitment to the Company’s vision that nothing is so important it cannot be done safely. The Work Health and Safety Committee (WHS Committee) exists to assist the Board in meeting this vision.

Committee membership

		Remuneration and
	Audit, Risk and	Human Resources	Nomination and	WHS
	Compliance Committee	Committee	Prudential Committee	Committee
J H Ranck	Member	Member	Chairman	Chairman
M C Allison1	-	-	Member	-
I Wilton	Chairman	Member	Member	Member
J A Jackson	Member	Chairman	Member	Member
R Clubb2	Member	Member	Member	Member

1 Non-voting on Board matters.

2 Ms Clubb was appointed a member of each committee on 21 September 2015

Role

oversight of FY15 Safety Engagement Campaign, Stand Up Speak Up

The Committee’s objectives are to:

ensure the appropriate policies and procedures are in place to assist the Company to meet its statutory obligations and the Board’s commitment to health and safety;
continued analysis of the Company’s obligations under WHS laws; and
continued focus on high risk activities undertaken by Elders.
ensure appropriate policies, procedures and systems are in place to effectively manage, measure and improve WHS activities; and

Nomination and Prudential Committee

Objective

The Board’s objective in relation to Board nomination and review is to ensure that:

oversee the provision by management of a healthy and safe working environment and culture for all employees, contractors, clients and other visitors to the Company’s work premises.
the Company has adopted selection, appointment and review practices that result in a board:
with an effective composition, size, mix of skill sets, experience and commitment to adequately discharge its responsibilities and duties and add value to the Company and its shareholders;

The Committee meets its objectives by discharging the responsibilities set out in its charter, namely reviewing and making recommendations to the Board on:

the plans and targets for WHS management;
that has a proper understanding of, and competence to deal with, the current and emerging issues of the businesses of the Company; and
cultural initiatives designed to build and foster WHS leadership and demonstration of appropriate WHS behaviours consistently at all levels;
that can effectively review and challenge the performance of management and exercise independent judgement.
Company performance in relation to WHS matters;
the adequacy, integrity and effectiveness of management processes and procedures used to manage WHS as well as the performance of the Company’s WHS function and management;
shareholders and other stakeholders understand and have confidence in the Company’s selection, appointment and review practices.

Responsibilities

The Committee’s principal responsibilities are to regularly review and make recommendations to the Board on:

the adequacy, integrity and effectiveness of Company management’s processes for ensuring and monitoring compliance with WHS statutory and reporting obligations;

• the necessary and desirable competencies of members of the Board and its committees;

the internal process for determining and managing key WHS risk areas, particularly compliance with laws, regulations, standards and best practice guidelines;
appropriate processes for the review of the performance of the Board and its committees;
appropriate policies with respect to the maximum period of service and retirement age for directors;
the impact of changes and emerging issues in WHS legislation, community expectations, research findings and technology;
appropriate succession plans for directors and the CEO;
reports by Company management directors and the CEO; on WHS performance and issues • the appropriate size of the Board so as
including reports on material WHS to encourage efficient decision-making; issues associated with the Company’s operations; and • recommendations for the appointment
operations; and • recommendations for the appointment (including re-appointment in the case
• WHS issues associated with the of directors retiring by rotation) and
operations on Company controlled removal of directors of the Company;
sites (including, if feasible, visits to those sites). • the scope and content of letters
those sites). • the scope and content of letters of appointment of non-executive
Key Activities During the Year directors; skills development and
The Committee oversaw the following continuing education programs for
significant activities during the reporting directors of the Company; and
period:
appropriate induction procedures designed to allow new directors
development and implementation of Safety Strategy FY15

to participate fully and actively in board decision-making at the earliest opportunity and the effectiveness of those procedures.

Remuneration and Human Resources Committee

Objective

The Board’s objective is to ensure that the Company has adopted remuneration and human resources policies that meet the needs of the Company and encourage a performance oriented culture.

A summary of the Company’s remuneration policies and practices is set out in the Remuneration Report commencing on page 36 of the Company’s 2015 Annual Report.

The CEO has a standing invitation to attend Committee meetings but must leave the meeting during those periods in which consideration is being given to his employment arrangements.

The Company notes that the composition of the Remuneration and Human Resources Committee meets the requirements of Recommendation 8.1 of the ASX Recommendations.

Role

The objectives of the Committee are to:

ensure appropriate policies and procedures are in place to assess the remuneration levels of the CEO, executive management, the Company’s employees generally and the Board;
ensure appropriate policies and procedures are in place to attract and retain the Chairman, Non-Executive Directors, Executive Directors, CEO and executive management;
ensure the Company (which includes all subsidiaries and, as appropriate, associated companies) adopts, monitors and applies appropriate remuneration policies and procedures that align with the creation of shareholder value;
engage and motivate directors and senior executives to pursue the long-term growth and success of the Company;
ensure a clear relationship between business performance and the key performance indicators and remuneration of the CEO and executive management;
align executive incentive awards with the creation of shareholder value;
ensure that the Company’s human resources strategy, policies and procedures are appropriate to the Company’s needs and clearly designed and executed; and
to achieve diversity in the Company’s

Elders. Live it. Love it. Corporate Governance Statement 2015

workplaces and on the Board and to achieve equal treatment of employees and Directors regardless of sex, race, age, disability, religion, sexual orientation or family responsibilities.

The Committee meets its objectives by reviewing and making recommendations to the Board on:

appropriate policies for compensation arrangements for the CEO, executive management, the Company’s employees generally and the Board itself;
the remuneration package for the CEO;
KPIs relevant to the remuneration of the CEO and the performance of the CEO against those KPIs;
the CEO’s recommendations with respect to the remuneration of executive management;
the CEO’s plans for the remuneration of employees in general;
the annual remuneration review applying generally across the Company;
the competitiveness and appropriateness of the Company’s remuneration policies and practices;
remuneration of Company employees by gender;
human resources policies and procedures to ensure alignment between remuneration and shareholder value creation;
remuneration of directors;
employee share, option and rights schemes and other performance incentive programs;
recruitment, retention, retirement and termination policies and benefits;
Company superannuation arrangements;
human resources strategy, policies and procedures (but not work health and safety);
employment contracts for all directors, the CEO and those executive management contracts which are outside normal parameters;
organisational development, including training and education;
succession planning for executive management;
policies regarding diversity, including measurable objectives for achieving diversity;
policies regarding equal treatment of employees;
policies regarding workplace behaviour expected of employees; and
disclosures in the Company’s annual report on remuneration matters.

Key Activities During the Year

The Committee oversaw the following significant activities during the reporting period:

performance against measurable diversity objectives; and
ongoing review and simplification of the remuneration arrangements, policy and structure for the Group.

Audit, Risk and Compliance Committee

Objective

The Board is concerned to ensure the integrity of the Company’s financial reporting, its management of risk and its legal, regulatory and policy compliance. The Audit, Risk and Compliance Committee assists the Board in achieving this objective.

At least one member of the Committee is required by the Committee Charter to be a qualified accountant or other financial professional with experience of accounting and financial matters. Mr Wilton, an independent director, is a Certified Practicing Accountant and Chairman of the Committee since April 2014.

Details of the members’ qualifications can be found on page 30 and 31 of the Company’s 2015 Annual Report.

The CEO, CFO and the Head of Risk, Safety and Assurance all have standing invitations to attend (and are expected to attend) meetings of the Committee. In addition, the audit engagement partner from the Company’s auditors also has a standing invitation to attend the meetings of the Committee.

Responsibilities

The Audit, Risk and Compliance Committee assists the Board to meet its oversight responsibilities in relation to the Company’s:

financial statements and financial reporting;
financial risk management processes, accounting and control systems;
internal and external audit arrangements;
compliance with legal, regulatory and internal policy requirements; and
risk management programmes.

The Committee does this by discharging its responsibilities set out in its charter, namely:

monitoring the effectiveness of the Company’s financial reporting and internal control policies and its procedures for the identification, assessment, reporting and management of financial risks;
approving the appointment of the head of internal audit;
approving the terms of reference of the internal audit department, requiring advice of the planned programme of audits and the reason for any change or delay in the programme;
reviewing the management of financial matters and the freedom allowed to the internal auditors;
reviewing reports on the Company from the internal auditors;
considering and making recommendations to the Board about the appointment and retirement of the Company’s external auditors, and ensuring that the audit partner from the firm providing audit services is rotated in accordance with all applicable regulation and Company policy;
meeting with the external auditors (including in the absence of management);
reviewing any auditor’s letters addressed to management and management’s responses;
approving the scope of the audit, the terms of the annual audit engagement letter and audit fees;
monitoring the independence, objectivity and performance of the External Auditors;
monitoring the nature and quantum of non-audit services provided by the External Auditor, including the amount of fees paid for such services;
reviewing any recommendations made by the External Auditor;
coordinating internal and External Auditors and reviewing and approving any integrated audit plans;
monitoring the consistency and application of accounting policies;
reviewing the Company’s statutory half and full year financial statements;
monitoring the effectiveness of the Company’s compliance programme;
reviewing specific policies, systems and processes for addressing compliance with applicable laws and Company policy;
reviewing the Company’s material corporate governance policies including the Delegations of Authority

and the Financial Risk Management Policy;

receiving reports from management regarding compliance with laws;
receiving recommendations from management on compliance policies, systems and processes relating to significant legal, compliance or regulatory matters;
overseeing the Company’s process for dealing with the reporting of unacceptable conduct;
overseeing the Company’s policies, processes and frameworks for identifying, analysing and addressing complaints and reviewing material complaints;
assessing the adequacy of the Company’s internal risk control systems;
reviewing and approving at least annually, the Company’s Risk Management Framework, including risk appetite, and processes for identifying and monitoring significant areas of risk for the Company;
reviewing and assessing management information systems and internal control systems;
regularly reviewing the Company’s risk profile; and
reviewing the corporate insurance program and risk coverage.

Key Activities During the Year

The Committee provided oversight over the following key activities during the course of the year:

The preparation of the statutory financial accounts of the company, including the review of those accounts and the application of accounting policies in accordance with Australian Accounting Standards
a tender process including those major audit practices with competence to provide audit services to the Company and subsequent selection of PricewaterhouseCoopers as the Company’s auditor from the date of resignation of Ernst & Young and shareholder approval.
The approval and performance of the internal audit plan and related assurance activities designed to assess the effectiveness of the Company’s internal control environment
Periodic assessments of the significant risks of the Company; and
Review, update and approval of the Risk Management Policy and Framework.

3. INTERNAL AUDIT FUNCTION

Relevant policies and charters: Internal Audit charter

The internal audit function operates under a Board-approved charter and has a direct reporting line to the Audit, Risk and Compliance Committee and a functional reporting line through the Company Secretary. The structure includes three in-house internal auditors and the out-sourcing of engagements when technical or specialist advice is required. The internal audit plan is aligned to the Company’s risk profile and approved by the Audit, Risk and Compliance Committee annually, with a three year horizon. Coverage includes four key components, including corporate process, branch compliance program, Australian Financial Services Licence compliance program and Board and management requests.

4. EXTERNAL AUDIT INDEPENDENCE POLICY

Relevant policies and charters: Non-Audit Services Policy

The Company has in place a policy that:

details the Group’s position in respect of the key issues which may impair, or appear to impair, external audit independence;
details the internal procedures implemented to ensure the independence of auditors; and
establishes a framework that enables the Audit, Risk and Compliance Committee to evaluate compliance with the policy and report to the Board on compliance.

The key principles of the policy are:

An auditor is not independent if:
an employment relationship exists or could be deemed to exist, between the Company and the auditor, its officers or former officers, employees or former employees or certain relatives;
a financial relationship exists between the auditor and the Company; and
certain non-audit services (including information technology and human resources services) are provided to the Company by the auditor.
In relation to the provision of other nonaudit services the following guidelines must be followed:
management must consider the actual, perceived and potential impact upon the independence of external audit prior to engaging external audit to undertake any nonaudit service;
the outsourcing of any internal audit project to the external auditors or the undertaking of any joint internal/ external audit review will require prior Audit, Risk and Compliance Committee approval;
the Audit, Risk and Compliance Committee must consider whether the provision of such non-audit services is compatible with maintaining the external auditor’s independence, by obtaining assurance and confirmation that the additional services provided by the external auditor are not in conflict with the audit process. In order to assist with this assessment, management will provide the Audit, Risk and Compliance Committee with details of the amount of non-audit services undertaken by the external auditors as a proportion of all audit and non-audit engagements entered into by the Group for the period; and
as a general rule, the Company does not utilise external auditors for internal audit purposes or consulting matters, other than services which are in the nature of audit, such as review of tax compliance and acting as independent accountants in connection with prospectuses.

The Audit, Risk and Compliance Committee is responsible for ongoing review of the External Audit Independence Policy and reports to the Board on the continuing suitability of the policy and recommended changes to the existing policy as and when required.

Elders. Live it. Love it. Corporate Governance Statement 2015

5. RISK MANAGEMENT

Relevant policies and charters:

Risk Management Policy and Framework
Management Risk Committee Charter
Financial Risk Management Policy
Tax Risk Management Policy

The Board reviews its Risk Management Policy and Framework annually to assist the Company in achieving its risk management objectives. These include ensuring the Elders’ assets are protected against financial loss, business risks are identified and properly managed, legal and regulatory obligations are satisfied, and business risks are appropriately monitored by the Board.

Such a review was conducted by the Board in the 2015 financial year.

Under the Risk Management Policy the Board is responsible for oversight of the risk management process and framework. Senior executive management has primary responsibility for identification and management of material risks within the Elders’ businesses and is accountable to the Board for designing, implementing and monitoring the process of risk management and integrating it into the day to day activities of the Elders’ businesses. Business Unit Managers are responsible for monitoring and managing key business risks for their respective businesses. All personnel are responsible for managing risks in their respective areas.

The Audit, Risk and Compliance Committee is responsible for assessing the effectiveness of internal processes for determining and managing key risks and compliance obligations while the WHS Committee is responsible for assessing the effectiveness of internal process for determining and managing key WHS risks.

Management Risk Committee

The Management Risk Committee (MRC) meets quarterly and assists the Audit, Risk and Compliance Committee and the Board in the application of the Company’s Risk Management Policy and monitoring of compliance with the Policy.

Membership

The MRC comprises the CEO, the Company’s senior executives, Company Secretary and senior risk personnel. Specialist support to the committee is provided by internal experts as required, including the General Counsel and General Manager Credit.

The MRC reports to the Board through the Audit, Risk and Compliance Committee. Minutes of each MRC meeting are also

included in the papers to the Audit, Risk and Compliance Committee.

Responsibilities

The Committee operates under the Risk Management Policy and is responsible for:

oversight of the risk management process;
reviewing and monitoring the Company’s risk profile;
considering and where appropriate making recommendations to the Board with respect to risk appetite, risk framework and policy;
establishing, approving and reviewing corporate risk management strategy in line with the Risk Management Policy;
reviewing and monitoring adherence to the Company’s risk management framework;
reviewing management credit committee functions;
monitoring the risk management activities of of the Company through receipt and consideration of risk reports;
overseeing compliance by the Company with applicable regulatory obligations and significant related internal policies;
providing regular advice to the Audit, Risk and Compliance Committee about MRC activities and making appropriate recommendations;
approving the corporate insurance program; and
providing an escalation point for identification of matters (material business risks) to be drawn to the attention of the CEO, Board Audit, Risk and Compliance Committee or Board.

During 2014 the MRC reviewed Elders’ top material business risks and reported to the Audit, Risk and Compliance Committee and the Board on the effectiveness of the Company’s management of those material business risks.

CEO and CFO Certification of Financial Statements

In connection with the financial reports of the Company for the financial year ended 30 September 2015, the Board received from the CEO and the CFO a declaration provided under section 295A of the Corporations Act 2001 stating that, in their opinion:

The financial records of the Company have been properly maintained in accordance with section 286 of the Corporations Act 2001;
The financial statements, and the notes referred to in paragraph 295(3)(b) of the Corporations Act 2001 comply with the accounting standards;
The financial statements and notes give a true and fair view of the financial position and performance of the consolidated group;
the declaration provided is based on a sound system of risk management and internal control; and
that the system is operating effectively in all material respects in relation to financial reporting risks.

Financial Risk Management Policy

The Company has a formal Financial Risk Management Policy for management of liquidity and funding, commodity, currency, interest rate and basis risks.

The primary objective of this Policy is to manage the risk of financial loss to Elders measured in terms of impact on earnings arising from unfavourable movements in the financial and commodity markets.

The Board is provided with reports on compliance with the Policy, including on an immediate basis in the case of material breaches.

6. CONDUCT AND ETHICS

Relevant policies:

Code of Conduct
Securities Dealing Policy
External Disclosure and Market Communications Policy
Fraud Policy
Whistleblower Policy
Diversity Policy
Discrimination, Bullying and Harassment Policy
Workplace Health & Safety Policy

Copies of each of these documents can be found on the Company’s website at www.elderslimited.com

Code of Conduct

The Board has adopted a code of conduct that details standards for acceptable practices by Elders and Elders People, and the behaviour and responsibilities expected of them. Elders People means all Directors, Employees, Agents, Contractors and Consultants, regardless of seniority, of or to a company in the Elders Group.

The Code exists to ensure that all Elders People act in the best interests of Elders, manage any potential conflicting interests, act in the best interests of their customers and colleagues (absent any conflict with their duties to Elders), ensure all business is undertaken safely, fairly, honestly, and ethically, maintain confidentiality, comply with company policy and behave in accordance with the underpinning values of Elders.

The Board is committed to promoting conduct and behaviour that is honest, fair, legal and ethical and respects the rights of the Company’s shareholders and other stakeholders, including clients and customers, suppliers, creditors and employees.

The Board has also adopted a Whistleblower Policy to encourage and facilitate disclosure of unacceptable conduct, including fraud or illegal activity, occurring in the Company. The Policy and the associated reporting process address the issues associated with alleged improper conduct including reporting, responsibility, confidentiality and effective investigation. The Fraud Policy also underpins the Whistleblower Policy and processes, and the Code.

The Code of Conduct is reviewed annually to ensure compliance with its legal obligations and ethical principles.

Securities Dealing Policy

The Board believes non-executive directors and employees should own the Company’s securities to further

align their interests with the interests of other shareholders. Details of directors’ shareholdings in the Company can be found on page 48 of the Company’s 2015 Annual Report.

The Company’s Securities Dealing Policy prescribes trading windows during which directors and employees may trade in the Company’s securities. Trading windows run for 6 weeks from announcement of the Company’s full year results and half year results, 6 weeks from the Company’s AGM and for the duration of an offer period of any pro-rata issue of securities by the Company.

Directors or staff must not deal in the Company’s securities during any periods other than a trading window or at any time when that staff member or director is in possession of unpublished information that, if generally available, might materially affect the price of the Company’s securities. Prior to dealing in a window, a director or senior executive must seek clearance from the Company Secretary, or if the Company Secretary wishes to trade, the Chairman.

The Securities Dealing Policy also prohibits contractors from trading in the Company’s securities if they are in possession of price-sensitive information.

Continuous Disclosure and Communication with Shareholders

The Board is committed to timely disclosure of information and communicating effectively with its shareholders. The External Disclosure and Market Communications Policy is designed to implement effective communication strategies to enable timely disclosure of both market sensitive information and other information enabling both shareholders and prospective new investors to make informed investment decisions. The policy includes processes to ensure that Directors and management are aware of, and fulfil, their obligations.

The Company communicates with its shareholders and the investment markets through a number of channels, including the ASX announcements platform and its website. The website in particular is useful in assisting shareholders to easily access information relating to:

briefings on Company developments and events;
information released to the ASX by way of an announcement;
historical market announcements, annual reports and briefings of half and full year results for a limited number of years; and
electing to receive ASX and media announcements electronically as they are posted on the Company’s website.

Further engagement with the investment community occurs by way of:

interaction by senior management with members of the investment community and financial and business media through a variety of forums including results briefings, ‘one on one’ meetings and discussions; and
provision of background and technical information to institutional investors, market analysts and the financial and business media to support announcements made to the ASX and announcements made about the Company’s on-going business activities.

Each of the above means of engagement takes place in the context of the Company’s External Disclosure and Market Communications Policy described below.

External Disclosure and Market Communications Policy

Under this Policy the Company has instituted (and monitors) procedures designed to ensure:

the Company’s compliance with continuous disclosure obligations contained in applicable ASX Listing Rules and the Corporations Act 2001. Procedures followed to achieve this include the maintenance of a Disclosure Committee comprised of senior management to consider disclosure issues (where circumstances permit, in conjunction with the Chairman of the Board), the communication of disclosure requirements and procedures to senior management together with procedures to facilitate the timely flow of relevant information to the Disclosure Committee;
the timely release and dissemination of information (within the requirements of continuous disclosure obligations) necessary for the formation of an informed and balanced view of the Company;
information disclosed in investor or media briefings is not “market sensitive”. If market sensitive information is inadvertently disclosed during a briefing it will immediately be released to the market at large through the ASX; and
that stakeholders have equal opportunity, subject to reasonable means, to access information issued externally by the Company. This is addressed through a broad range of media including the Company’s website, audio, audio-visual or slide

Elders. Live it. Love it. Corporate Governance Statement 2015

webcasts of the Company’s AGM and full year and half year results briefings (which are announced in advance to the market and also archived and available for viewing or listening on the Company’s website).

Significant investor briefings (other than the AGM and the half and full year result briefings which are webcast and stored as video or audio on the Company’s website) are generally held by recorded telephone conference which requires registration so that attendees’ details can be recorded.

The Company generally allows investors to access the recorded facility by telephone for a short period after the event (usually 7 days) and thereafter to obtain a copy of the transcript or digital audio recording.

The Board is also concerned to ensure that shareholders participate effectively in general meetings and to this end:

the Company has adopted in all substantial respects the ASX Recommendations for communication with shareholders and improving

shareholder participation at general meetings; and

• it is a term of engagement of the Company’s external auditors (and required under the Corporations Act 2001) that they attend the Company’s AGM and are available to answer questions about the conduct of the audit of the Company, the preparation and content of the auditor’s report, the accounting policies adopted by the Company in respect of the relevant reporting period, and their independence in relation to the conduct of the audit.

Discrimination, Bullying and Harassment

Elders is committed to providing an environment that is free from discrimination, harassment, workplace bullying and victimisation and will not tolerate such behaviour under any circumstance. This commitment extends to a workplace that promotes equal opportunity and fair treatment of staff,

contractors, visitors and customers.

The policy defines procedures for investigating and dealing with complaints, including the use of impartial contact officers to receive and advise on complaints.

Work Health and Safety

Elders maintains a work health and safety management system, inclusive of corporate standards, policies and procedures. This system reflects the requirements of work health and safety legislation and is monitored and evaluated to ensure its integrity and effectiveness.

We strongly believe that nothing done in the course of employment is so important that it cannot be done safely. The Board and officers of Elders are committed to running an integrated work health and management system based on best practice and continuous improvement to provide a safe and healthy environment for employees, contractors, clients and visitors.

Diversity

Our Diversity Policy sets out the key elements of what makes a diverse organisation, as well as the values and benefits that stem from incorporating diversity into business practices. The Board endorsed measurable diversity objectives in FY12, and our progress in achieving them is detailed below.

Objective 1:

Increase the representation of women in management positions as follows:

	FY15 Target	Actual Sept 15	Gap in # of female	FY16 Target	# additional female
			leaders compared		leaders to achieve
			to FY15 target		FY16 target
Senior Executives	15%	8%	1	15%	1
Senior Managers	25%	22%	1	25%	1
Middle Managers	12%	5%	3	15%	4
Managers	13%	9%	7	15%	11

The talent pipeline for manager level positions is strong, with women representing 31% of supervisor cohort; this outperforms the internal target of 24%.

Objective 2:

Strengthen the talent pipeline by increasing women’s participation in development and mentoring programs and target 50/50 gender balance in the trainee intake.

In 2015 we achieved progress in increasing women’s participation in development initiatives which strengthen the talent pipeline for leadership and non-traditional positions, with the launch of the following programs:

Development Program	Female participation
Graduate Agronomy	33%
Mentoring	50%
Emerging Leaders	54%

These programs are designed to build the capability, experience and confidence of women in the business as well as broaden their internal networks to support career progression.

The Elders’ Livestock and Wool Traineeship program continued in 2015, with recruitment focused on a 50:50 gender balance through the shortlisting and selection processes; the two intakes achieved 25% female representation.

Objective 3:

Maintain the percentage of female non-executive Board directors at 25% or more through to 30 September 2016. This objective was met as at year end with the appointment of Robyn Clubb as a non-executive director.

==> picture [87 x 38] intentionally omitted <==

Live it.

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Introduced 01/07/14 Amended 02/11/15

Name of entity

ELDERS LIMITED

ABN / ARBN 34 004 336 636	Financial year ended:
34 004 336 636	30 September 2015

Our corporate governance statement[2] for the above period above can be found at:[3]

 This URL on our website: http://www.elderslimited.com/about-us/corporate-governance

The Corporate Governance Statement is accurate and up to date as at 13 November 2015 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date:

13 November 2015

Name of ~~Director or~~ Secretary authorising Peter Hastings lodgement:

1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection.

See chapter 19 for defined terms 2 November 2015

Page 1