SKS TECHNOLOGIES GROUP LIMITED — Governance Information 2015

Aug 30, 2015

Rules 4.7.3 and 4.10.31

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity: STOKES LIMITED Financial year ended: ABN/ARBN: 30 JUNE 2015 ABN 24 009 554 929

This Corporate Governance Statement is accurate and up to date as at 4 August 2015 and has been approved by the Board.

The Company's corporate governance policies and charters are all available on the Company's website www.stokes.com.au/corporate-governance

Date: 31 August 2015

Hemant Amin Company Secretary

<sup>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.

ANNEXURE - KEY TO CORPORATE GOVERNANCE DISCLOSURES

We have followed the recommendation in full for the(including those matters expressly reserved to theand information about the respective roles andwhole of the period above. We have disclosedresponsibilities of our board and managementat http://stokes.com.au/corporate-governance/at http://stokes.com.au/corporate-governance/in our Corporate Governance Statement ORboard and those delegated to management):the fact that we follow this recommendation:fact that we follow this recommendation:the fact that we follow this recommendation:Z in our Corporate Governance Statementin our Corporate Governance StatementENT AND OVERSIGHT$\vdots$$\dots$ the$\overline{\mathsf{Z}}$$\overline{\mathsf{D}}$$\overline{\Delta}$

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMIundertake appropriate checks before appointing aeach director and senior executive setting out the termsthose matters expressly reserved to the board andperson, or putting forward to security holders adecision on whether or not to elect or re-elect aA listed entity should have a written agreement withthe respective roles and responsibilities of itsinformation in its possession relevant to aprovide security holders with all materialcandidate for election, as a director; andCorporate Governance Council recommendationthose delegated to management.board and management; andA listed entity should disclose:A listed entity should:director.$\binom{a}{b}$$\Theta$$\binom{a}{b}$$\Theta$1.2$\Box$1.3

3 If you have followed all of the Council's recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

Corporate Governance Council recommendation	$\ddot{\phantom{a}}$ :We have followed the recommendation in full for theof the period above. We have disclosedwhole	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full
accountable directly to the board, through the chair, onall matters to do with the proper functioning of theThe company secretary of a listed entity should be	ordination of all Board business, and communicationwith regulatory bodies, ASX, ASIC and all statutoryfact that we follow this recommendation:The company secretary is responsible for co-and other filings.$\frac{1}{2}$	an explanation why that is so in our Corporatewe are an externally managed entity and thisrecommendation is therefore not applicableGovernance Statement OR
	The company secretary is accountable to the Boardsecretary. The decision to appoint or remove theand all Directors have access to the companycompany secretary is made by the Board.

for the whole of the period above. We have disclosedWe have NOT followed the recommendation in fullີ::	an explanation why that is so in our Corporatewe are an externally managed entity and thisrecommendation is therefore not applicableGovernance Statement OR	The full board attend to process for periodicalevaluation the performance of the board$\Delta$
We have followed the recommendation in full for thewhole of the period above. We have disclosed	the fact that we have a diversity policy that complieshttp://stokes.com.au/corporate-governance/in our Corporate Governance Statementwith paragraph (a):at$\Delta$$\Delta$	the evaluation process referred to in paragraph (a):the information referred to in paragraph (b):our Corporate Governance Statement ORin our Corporate Governance Statement OR[insert location][insert location]$\equiv$atatand
Corporate Governance Council recommendation	disclose as at the end of each reporting period theIndicators", as defined in and published underdiversity set by the board or a relevant committee(1) the respective proportions of men and womenhow the entity has defined "senior executive"and across the whole organisation (includingobjectives for achieving gender diversity and to(2) if the entity is a "relevant employer" underon the board, in senior executive positionsthe Workplace Gender Equality Act, themeasurable objectives for achieving genderof the board in accordance with the entity'sdisclose that policy or a summary of it; andassess annually both the objectives and thecommittee of the board to set measurableentity's most recent "Gender Equalitydiversity policy and its progress towardsrequirements for the board or a relevanthave a diversity policy which includesentity's progress in achieving them;achieving them and either:for these purposes); orA listed entity should:that Act.$\left( a\right)$$\widehat{e}$$\odot$	undertaken in the reporting period in accordancedisclose, in relation to each reporting period,evaluating the performance of the board, itshave and disclose a process for periodicallycommittees and individual directors; andwhether a performance evaluation waswith that process.A listed entity should:$\Theta$$\binom{a}{b}$
	1.5	1.6

for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\frac{m_{\phi}}{4}$	evaluation the performance of the senior executivesThe full board attend to process for periodicalŊ	The Company does not have a separate Nominationattend to the matters normally attended to by theactivity that enables the full Board to be able toThe company is of a size and a level of currentattended to by a Nomination Committee.Committee.Ŋ
We have followed the recommendation in full for thewhole of the period above. We have disclosed	the evaluation process referred to in paragraph (a):the information referred to in paragraph (b):in our Corporate Governance Statement ORour Corporate Governance Statement OR[insert location][insert location]$\Xi$$\vec{a}$$\overline{a}$andО	and the processes we employ to address board successionthe information referred to in paragraphs (4) andthe fact that we do not have a nomination committeebalance of skills, knowledge, experience, independenceissues and to ensure that the board has the appropriatethe fact that we have a nomination committee thatand diversity to enable it to discharge its duties andin our Corporate Governance Statement ORour Corporate Governance Statement ORour Corporate Governance Statement ORa copy of the charter of the committee:[If the entity complies with paragraph (b):][If the entity complies with paragraph (a):]complies with paragraphs (1) and (2):responsibilities effectively:[insert location]$[insert,location] % \begin{center} \includegraphics[width=0.6\textwidth]{figures/cdf} \end{center} % \vspace{-1em} \caption{The first two cases we have a result of the corresponding data set. % \label{fig:cdf}$[insert location][insert location]$\Xi$١Ħ.$\ldots$ and$\ldots$ and$\vec{a}$$\vec{a}$ā$\vec{a}$$\ddot{\tilde{\mathbf{C}}}$$\Box$□
Corporate Governance Council recommendation	PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUEundertaken in the reporting period in accordancedisclose, in relation to each reporting period,have and disclose a process for periodicallyevaluating the performance of its seniorwhether a performance evaluation waswith that process.A listed entity should:executives; andê$\widehat{\Xi}$1.7	attendances of the members at those meetings;disclose that fact and the processes it employs toskills, knowledge, experience, independence anddiversity to enable it to discharge its duties andaddress board succession issues and to ensure(5) as at the end of each reporting period, thethat the board has the appropriate balance of(1) has at least three members, a majority ofif it does not have a nomination committee,throughout the period and the individual(2) is chaired by an independent director,whom are independent directors; andnumber of times the committee met(4) the members of the committee; andhave a nomination committee which:(3) the charter of the committee;The board of a listed entity should:responsibilities effectively.and disclose:5$\widehat{c}$ම$\overline{2}$

for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\ddot{\hspace{0.5pt}}$ :	ing the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the control of the cont医中间的	recommend a candidate or panel of candidates withWhen a Board vacancy exists, through whateverwould benefit from the service of a new directorcause, or where it is considered that the Boardwith particular skills, the full board willthe appropriate expertise.$\mathbf{\Omega}$	to bethe Company has not considered expanding theØ Considering the size and a level of current activity,composition of the current board and appoint moreInformation on director's interest is disclosed in theannual report. The board is of the opinion that suchinterest does not compromise the independence ofindependent director in future as the level of it'sZ No directors of Stokes who are consideredThe Company may consider to appoint newbusiness activity increasesindependent:the directordirector.
We have followed the recommendation in full for theof the period above. We have disclosedwhole		our Corporate Governance Statement ORboard skills matrix:[insert location]Ξ.$\cdots$ our$\overline{a}$	the names of the directors considered by the board toand, where applicable, the information referred to inin our Corporate Governance Statement ORin our Corporate Governance Statement ORin our Corporate Governance Statement ORin our Corporate Governance Statement ORthe fact that we follow this recommendation:and the length of service of each director:be independent directors:[insert location][insert location]at [insert location]at [insert location]paragraph (b):$\vec{a}$$\sharp$
Corporate Governance Council recommendation	PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE	diversity that the board currently has or is looking toA listed entity should have and disclose a boardskills matrix setting out the mix of skills andachieve in its membership.	if a director has an interest, position, associationor relationship of the type described in Box 2.3compromise the independence of the director,the nature of the interest, position, associationor relationship in question and an explanationbut the board is of the opinion that it does notA majority of the board of a listed entity should bethe names of the directors considered by theof why the board is of that opinion; andthe length of service of each director.board to be independent directors;A listed entity should disclose:independent directors.$\widehat{\mathbb{C}}$ê$\circledcirc$
		2.2	2.42.3

	Corporate Governance Council recommendation	We have followed the recommendation in full for theof the period above. We have disclosedwhole	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\vdots$
2.5	independent director and, in particular, should not beThe chair of the board of a listed entity should be anthe same person as the CEO of the entity.	Z at http://stokes.com.au/corporate-governance/fact that we follow this recommendation:I in our Corporate Governance Statement$\dots$ the	an explanation why that is so in our CorporateGovernance Statement
2.6	A listed entity should have a program for inductingdevelopment opportunities for directors to developnew directors and provide appropriate professionaland maintain the skills and knowledge needed toperform their role as directors effectively.	in our Corporate Governance Statement ORfact that we follow this recommendation:at [insert location]$\dots$ the 1	to enable the Directors in furtherance of their dutiesThere are procedures in place, agreed by the Board,to seek independent professional advice at thecompany's expense.$\overline{\mathsf{D}}$
	PRINCIPLE 3 - ACT ETHICALLY AND RESPONSIBLY
$\frac{1}{2}$	(a) have a code of conduct for its directors, senior(b) disclose that code or a summary of it.executives and employees; andA listed entity should:	at http://stokes.com.au/corporate-governance/In our Corporate Governance Statementour code of conduct or a summary of it:$\overline{a}$	an explanation why that is so in our CorporateGovernance Statement

	Corporate Governance Council recommendation	We have followed the recommendation in full for thewhole of the period above. We have disclosed	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\ddot{\cdot}$
	PRINCIPLE 4 = SAFEGUARD INTEGRITY IN CORPORATE REPORTING
$\frac{1}{4}$	(4) the relevant qualifications and experience ofindependently verify and safeguard the integritythe external auditor and the rotation of the auditif it does not have an audit committee, disclose(1) has at least three members, all of whom are(2) is chaired by an independent director, whoprocesses for the appointment and removal ofnon-executive directors and a majority ofthroughout the period and the individual(5) in relation to each reporting period, thethat fact and the processes it employs thatwhom are independent directors; andattendances of the members at thoseof its corporate reporting, including thenumber of times the committee metthe members of the committee; and(3) the charter of the committee;is not the chair of the board,(a) have an audit committee which:The board of a listed entity should:engagement partner.meetings; orand disclose:T	including the processes for the appointment and removaland the information referred to in paragraphs (4) andthe processes we employ that independently verify andthe fact that we do not have an audit committee andof the external auditor and the rotation of the auditsafeguard the integrity of our corporate reporting,in our Corporate Governance Statement ORin our Corporate Governance Statement ORin our Corporate Governance Statement ORthe fact that we have an audit committee thata copy of the charter of the committee:[If the entity complies with paragraph (b):][If the entity complies with paragraph (a):]complies with paragraphs (1) and (2):at insert locationat [ insert location ]at [insert location]at [insert location]engagement partner:$\ldots$ and$\dot{\overline{\Omega}}$	attend to the matters normally attended to by theactivity that enables the full Board to be able toThe company is of a size and a level of currentZ The Company does not have a separate AuditAudit Committee.Committee.

	Corporate Governance Council recommendation	We have followed the recommendation in full for thewhole of the period above. We have disclosed	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\ddot{\cdot}$
4.2	of the entity and that the opinion has been formed onappropriate accounting standards and give a true andthe basis of a sound system of risk management andrecords of the entity have been properly maintainedfair view of the financial position and performancefinancial period, receive from its CEO and CFO aand that the financial statements comply with theapproves the entity's financial statements for ainternal control which is operating effectively.declaration that, in their opinion, the financialThe board of a listed entity should, before it	at http://stokes.com.au/corporate-governance/the fact that we follow this recommendation:in our Corporate Governance Statement$\overline{\mathsf{D}}$$\overline{\mathbf{D}}$	an explanation why that is so in our CorporateGovernance Statement□
4.3	to answer questions from security holders relevant toits external auditor attends its AGM and is availableA listed entity that has an AGM should ensure thatthe audit	the fact that we follow this recommendation:in our Corporate Governance Statementinsert locationat$\Delta$$\Box$	we are an externally managed entity that does notan explanation why that is so in our Corporaterecommendation is therefore not applicablehold an annual general meeting and thisGovernance Statement OR$\Box$u
	PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1	have a written policy for complying with itscontinuous disclosure obligations under thedisclose that policy or a summary of it.Listing Rules; andA listed entity should:$\Theta$$\binom{a}{b}$	our continuous disclosure compliance policy or a summat http://stokes.com.au/corporate-governance/in our Corporate Governance Statement$\Delta$$\overline{\mathsf{D}}$庄	an explanation why that is so in our CorporateGovernance Statement$\mathcal{L}_{\mathcal{A}}$
	PRINCIPLE 6 - RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1	itself and its governance to investors via its website.A listed entity should provide information about	information about us and our governance on ourat http://stokes.com.au/corporate-governance/website:$\overline{\mathsf{N}}$	an explanation why that is so in our CorporateGovernance Statement
6.2	investor relations program to facilitate effective two-A listed entity should design and implement anway communication with investors.	at http://stokes.com.au/corporate-governance/the fact that we follow this recommendation:in our Corporate Governance Statement$\Delta$$\Delta$	an explanation why that is so in our CorporateGovernance Statement$\Box$

	Corporate Governance Council recommendation	We have followed the recommendation in full for thewhole of the period above. We have disclosed	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\ddot{\cdot}$
6.3	processes it has in place to facilitate and encourageA listed entity should disclose the policies andparticipation at meetings of security holders.	at http://stokes.com.au/corporate-governance/encouraging participation at meetings of securityour policies and processes for facilitating andin our Corporate Governance Statementholders:$\overline{\mathsf{v}}$$\Delta$	hold periodic meetings of security holders and thiswe are an externally managed entity that does notan explanation why that is so in our Corporaterecommendation is therefore not applicableGovernance Statement OR$\Box$
6.4	option to receive communications from, and sendA listed entity should give security holders thecommunications to, the entity and its securityregistry electronically.	at http://stokes.com.au/corporate-governance/the fact that we follow this recommendation:in our Corporate Governance Statement	an explanation why that is so in our CorporateGovernance Statement⊔
	PRINCIPLE 7 - RECOGNISE AND MANAGE RISK
7.1	fact and the processes it employs for overseeingcommittees that satisfy (a) above, disclose that(5) as at the end of each reporting period, the(1) has at least three members, a majority ofthroughout the period and the individualhave a committee or committees to oversee(2) is chaired by an independent director,the entity's risk management framework.whom are independent directors; andattendances of the members at thosenumber of times the committee met(4) the members of the committee; andif it does not have a risk committee or(3) the charter of the committee;The board of a listed entity should:risk, each of which:meetings; orand disclose:$\binom{a}{b}$$\Theta$	committees that satisfy (a) and the processes we employand the information referred to in paragraphs (4) andthe fact that we have a committee or committees tooversee risk that comply with paragraphs (1) and (2):the fact that we do not have a risk committee orat http://stokes.com.au/corporate-governance/in our Corporate Governance Statement ORin our Corporate Governance Statement ORfor overseeing our risk management framework:and a copy of the charter of the committee:in our Corporate Governance Statement[If the entity complies with paragraph (b):][If the entity complies with paragraph (a):]at [insert location]insert locationinsert locationatat$(5)$ :$\overline{\mathsf{D}}$$\Delta$	an explanation why that is so in our CorporateGovernance Statementu

for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full$\ddots$	an explanation why that is so in our CorporateGovernance Statement	an explanation why that is so in our CorporateGovernance Statement$\Box$	The Company does not have any material exposureto economic, environmental and socialsustainability risksŊ
We have followed the recommendation in full for theof the period above. We have disclosedwhole	that such a review has taken place in the reportingreviews the entity's risk management framework at leastannually to satisfy itself that it continues to be sound:fact that board or a committee of the boardour Corporate Governance Statementour Corporate Governance Statementperiod covered by this Appendix 4G:$\Xi$$\dots$ the f$\equiv$$\ldots$ and $\ldots$$\Delta$$\Delta$	how our internal audit function is structured and whatfact that we do not have an internal audit functioncontinually improving the effectiveness of our riskin our Corporate Governance Statement ORand the processes we employ for evaluating andat http://stokes.com.au/corporate-governance/in our Corporate Governance Statementmanagement and internal control processes:[If the entity complies with paragraph (b):][If the entity complies with paragraph (a):]at [insert location]role it performs:$\dots$ the f$\Delta$	whether we have any material exposure to economic,environmental and social sustainability risks and, if wedo, how we manage or intend to manage those risks:our Corporate Governance Statement OR[insert location]$\Xi$at
Corporate Governance Council recommendation	at least annually to satisfy itself that it continuesreview the entity's risk management frameworkdisclose, in relation to each reporting period,The board or a committee of the board should:whether such a review has taken place.to be sound; and$\binom{a}{b}$$\Theta$	function is structured and what role it performs;if it does not have an internal audit function,if it has an internal audit function, how theevaluating and continually improving thethat fact and the processes it employs foreffectiveness of its risk management andinternal control processes.A listed entity should disclose:ð$\binom{a}{b}$$\Theta$	material exposure to economic, environmental andA listed entity should disclose whether it has anysocial sustainability risks and, if it does, how itmanages or intends to manage those risks.
	7.2	7.3	7.4

for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full		attend to the matters normally attended to by theactivity that enables the full Board to be able toThe company is of a size and a level of currentThe Company does not have a separateRemuneration Committee.Remuneration Committee.$\overline{\mathbf{z}}$	attend to the matters normally attended to by theactivity that enables the full Board to be able toThe company is of a size and a level of currentThe Company does not have a separateRemuneration Committee.Remuneration Committee.$\overline{\mathbf{z}}$
We have followed the recommendation in full for theof the period above. We have disclosedwhole		senior executives and ensuring that such remuneration isthe information referred to in paragraphs (4) andlevel and composition of remuneration for directors andfact that we have a remuneration committee thatcommittee and the processes we employ for setting theour Corporate Governance Statement ORin our Corporate Governance Statement ORin our Corporate Governance Statement ORfact that we do not have a remunerationa copy of the charter of the committee:[If the entity complies with paragraph (a):][If the entity complies with paragraph (b):]complies with paragraphs (1) and (2):appropriate and not excessive:[insert location][insert location][insert location][insert location]$\ldots$ the fäE.đ$\dots$ the f$\vec{a}$$\vec{a}$$\ldots$ and$\ldots$ and$\dot{c}$$\square$	regarding the remuneration of non-executive directorsand the remuneration of executive directors and otherseparately our remuneration policies and practicesour Corporate Governance Statement OR[insert location]senior executives:$\Xi$$\vec{a}$
Corporate Governance Council recommendation	PRINCIPLE 8 - REMUNERATE FAIRLY AND RESPONSIBLY	executives and ensuring that such remunerationdisclose that fact and the processes it employsif it does not have a remuneration committee,(5) as at the end of each reporting period, the(1) has at least three members, a majority ofthroughout the period and the individual(2) is chaired by an independent director,whom are independent directors; andattendances of the members at thosefor setting the level and composition ofnumber of times the committee methave a remuneration committee which:(4) the members of the committee; andremuneration for directors and senior(3) the charter of the committee;is appropriate and not excessive.The board of a listed entity should:meetings; orand disclose:$\widehat{a}$ව	A listed entity should separately disclose its policiesand practices regarding the remuneration of non-executive directors and other senior executives.executive directors and the remuneration of
		$\overline{8}$	$\frac{2}{3}$

	Corporate Governance Council recommendation	We have followed the recommendation in full for theof the period above. We have disclosedwhole	for the whole of the period above. We have disclosedWe have NOT followed the recommendation in full
ွ့	which limit the economic risk of participatingpermitted to enter into transactions (whetherthrough the use of derivatives or otherwise)(a) have a policy on whether participants are(b) disclose that policy or a summary of it.A listed entity which has an equity-basedremuneration scheme should:in the scheme; and	in our Corporate Governance Statement ORour policy on this issue or a summary of it:at [insert location]$\Box$	The Company does not have any equity basedremuneration scheme

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Stokes Limited ("Stokes" or "the Company") is responsible for the corporate governance of the economic entity. The Board guides and monitors the business and affairs of Stokes on behalf of the shareholders by whom they are elected and to whom they are accountable.

To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines and accountability as the basis for the administration of corporate governance.

CORPORATE GOVERNANCE DISCLOSURES

The Board and management are committed to good corporate governance and have followed the "Principles of good Corporate Governance and Best Practice Recommendations" issued by the Australian Securities Exchange ("ASX") Corporate Governance Council to the extent that they are applicable to the company.

In summary, Stokes departs from the Guidelines in four key areas:

• First, the majority of the Board is not deemed to be independent Directors. There are currently no independent directors on the Company"s board of directors. This is a departure from Recommendation 2.1;
• Second, Stokes does not have a separate Nomination Committee. This is a departure from Recommendation 2.4. The full Board attends to the matters normally attended to by a Nomination Committee;
• Third, Stokes does not have a separate Remuneration Committee. This is a departure from Recommendation 8.1. The full Board attends to the matters normally attended to by a Remuneration Committee. Remuneration levels are set by the company in accordance with industry standards to attract suitable qualified and experienced Directors and senior executives; and
• Fourth, Stokes currently does not have a separate audit committee. This is a departure from Recommendation 4.1. The company is of a size and a level of current activity that enables the full Board to be able to attend to the matters normally attended to by the Audit Committee.

ROLE OF THE BOARD

The key responsibilities of the Board include:

• appointing, evaluating, rewarding and if necessary the removal of senior management;
• development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
• monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the company;
• overseeing the management of business risks, safety and occupational health, environmental issues and community development;
• satisfying itself that the financial statements of the company fairly and accurately set out the financial position and financial performance of the company for the period under review;
• satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and financial and other reporting; including reporting under listing rules 3.19A and 3.19B and section 205G of the Corporations act 2001, are in place and functioning appropriately.
• assuring itself that appropriate audit arrangements are in place;

CORPORATE GOVERNANCE STATEMENT (continued)

• ensuring that the company acts legally and responsibly on all matters and assuring itself that the company has adopted, and that the company"s practice is consistent with, a number of guidelines, being:
  • Directors and Executive officers Code of Conduct;
  • Dealings in Securities; and
  • Reporting and Dealing with Unethical Practices.
• reporting to and advising shareholders.

STRUCTURE OF THE BOARD

Directors of Stokes are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with or could reasonably be perceived to materially interfere with the exercise of their unfettered and independent judgment.

An independent director is a non-executive director (that is, is not a member of management) and:

• is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company;
• within the last three years has not been employed in an executive capacity by the company or its subsidiaries, or been a director after ceasing to hold any such employment;
• is not a principal or employee of a professional advise to the company or its subsidiaries whose billings are a material amount of the adviser"s total revenue;
• is not a significant supplier or customer of the company or its subsidiaries, or an officer of or otherwise associated directly or indirectly with a significant supplier or customer. A significant supplier is defined as one whose revenues from the company are a material amount of the supplier"s total revenue. A significant customer is one whose amounts payable to the company are a material amount of the customer"s total operating costs;
• has no material contractual relationship with the company or its subsidiaries other than as a director of the company;
• has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director"s ability to act in the best interests of the company;
• is 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.

In accordance with the definition of independence above, there are currently no directors of Stokes who are considered to be independent:

There are procedures in place, agreed by the Board, to enable the Directors in furtherance of their duties to seek independent professional advice at the company"s expense.

The term in office held by each director is as follows:

Name	Term
Peter Jinks	No Contract
Greg Jinks	No Contract
Con Scrinis	No Contract

When a Board vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the service of a new director with particular skills, the full board will recommend a candidate or panel of candidates with the appropriate expertise.

The Board then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.

The company secretary is responsible for co-ordination of all Board business, and communication with regulatory bodies, ASX, ASIC and all statutory filings and is accountable to the Board and all Directors have access to the company secretary. The decision to appoint or remove the company secretary is made by the Board

CORPORATE GOVERNANCE STATEMENT (continued)

STRUCTURE OF THE BOARD (continued)

Remuneration and Nomination Committee

The Board has not established a formal Remuneration or Nomination Committee. The full Board attends to the matters normally attended to by a Remuneration and a Nomination Committee. Remuneration levels are set by the company in accordance with industry standards to attract suitable qualified and experienced Directors and senior executives.

For full discussion of the company"s remuneration philosophy and framework and the remuneration received by Directors and executives in the current period please refer to the Remuneration Report, which is contained within the Director"s Report.

There is no scheme to provide retirement benefits to Non-Executive Directors other than superannuation as required by law.

The Board is responsible for determining and reviewing compensation arrangements for the Directors themselves.

Audit and Risk Management Committee

The Board has not established an Audit and Risk Management Committee. The full Board attends to the matters normally attended to by such a Committee.

The Board acknowledges that when the size and nature of the company warrants an Audit and Risk Management Committee that the Committee will operate under a Charter approved by the Board. It is the Board"s responsibility to ensure that an effective internal control framework exists within the company. This includes internal controls to deal with both the effectiveness and efficiency of significant business processes, the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial information as well as non-financial considerations such as the benchmarking of key performance indicators.

The Board will delegate responsibility for establishing and maintaining a framework of internal control and ethical standards to the Audit and Risk Management Committee.

The company"s policy is to appoint external auditors who clearly demonstrate independence. The performance of the external auditor is reviewed annually by the Board. The auditors have a policy of rotating the audit partner at least every 5 years. External auditor attends its AGM and is available to answer questions from security holders relevant to the audit.

RISK MANAGEMENT

The Board recognises that the identification and management of risk, including calculated risk taking, is an essential part of creating long term shareholder value. The identification and management of risk by the Board will continue to be monitored. However, until such time as a business or project is acquired by the company, specific risks related to that business or project are currently unknown.

The company will undertake a comprehensive due diligence process, in consultation with its external legal and other advisors prior to making any acquisitions. The preparation of a comprehensive risk management matrix will be prepared once a suitable acquisition has been identified.

The equivalent of the CEO and CFO provide written assurance to the board on an annual basis that to the best of their knowledge and belief, the declaration provided by them in accordance with Section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in relation to financial reporting risks.

The assurances from the equivalent of the CEO and CFO can only be reasonable rather than absolute due to factors such as the need for judgement and possible weaknesses in control procedures.

Any material changes in the company"s circumstances are released to the ASX and included on the company"s website.

CORPORATE GOVERNANCE STATEMENT (continued)

BEST PRACTICE RECOMMENDATION

Outlined below are the 8 Essential Corporate Governance Principles as outlined by the ASX and the Corporate Governance Council. The company has complied with the Corporate Governance Best Practice Recommendations except as identified below:

Corporate Governance Policy	Action Taken and reasons if not adopted
Lay solid foundation for management and oversight	Adopted.
Principle 1: Recognise and publish the respective roles andresponsibilities of the board and management
1.1 Formalize and disclose the functions reserved to the board andthose delegated to management	The company"s Corporate Governance Policiesincludes a Board Charter, which discloses thespecific responsibilities of the Board
1.2 Disclose the process for evaluating the performance of seniorexecutives.	The Board monitors the performance of seniormanagement including measuring actualperformance against planned performance.
1.3 Provide the information indicated in "Guide to reporting onPrinciple 1".	The company has provided details of anydepartures from Principle 1 in this AnnualReport
Structure the board to add value	Adopted except as follows:
Principle 2: Have a board of an effective composition, size andcommitment to adequately discharge its responsibilities and duties
2.1 A majority of the Board should be independent.	Stokes does not comply with thisrecommendation as none of the Directors areindependent.
2.2 The chairperson should be an independent Director.	The Chairperson is not an independent directorof the company.
2.3 The roles of chairperson and Managing Director should not beexercised by the same individual	The roles of the chairperson and ManagingDirector are not exercised by the sameindividual.
2.4 The board should establish a nomination committee.	The company is not of a size to justify having aNomination Committee. Matters typicallydealt with by such a Committee are dealt withby the full Board.
2.5 Disclose the process for evaluating the performance of the board,its committees and the individual directors.	The Board has adopted a policy to assist inevaluating board performance.
2.6 Provide the information indicated in "Guide to Reporting onPrinciple 2".	The specified information, including details ofany departures from principle 2 has beenprovided in this Annual Report.

CORPORATE GOVERNANCE STATEMENT (continued)

BEST PRACTICE RECOMMENDATION (continued)

Corporate Governance Policy	Action Taken and reasons if not adopted
Actively promote ethical and responsible decision-making	Adopted.
Principle 3: Promote ethical and responsible decision - making
Establish a code of conduct to disclose the code or a summary of thecode as to:
the practices necessary to maintain confidence in the company"sintegrity.	The company"s Corporate Governance Policiesinclude a Directors" and Executive officer"s
the practices necessary to take into account their legal obligations andreasonable expectations of their stakeholders.	Code of Conduct Policy, which provides aframework for decisions and actions in relationto ethical conduct in employment.
the responsibility and accountability of individuals for reporting orinvestigating reports of unethical practices.
Establish a policy concerning diversity and disclose the policy or asummary of that policy. The policy should include requirements forthe board to establish measurable objectives for achieving genderdiversity and for the board to assess annually both the objectives andprogress in achieving them.	Diversity includes, but is not limited to, gender,age, ethnicity and cultural background. TheCompany is committed to diversity andrecognises the benefits of, and arising from,employee and Board diversity and theimportance of benefiting from all availabletalent.
	The diversity policy outlines requirements forthe Board to develop measurable objectives forachieving diversity and annually assess both theobjectives and the progress in achieving thoseobjectives
Disclose in each annual report measurable objectives for achievinggender diversity set by the board in accordance with the diversitypolicy and progress towards achieving them.	The diversity policy outlines requirements forthe Board to develop measurable objectives forachieving diversity and annually assess both theobjectives and the progress in achieving thoseobjectives. Accordingly, the Board hasdeveloped the following objectives regardinggender diversity and aims to achieve theseobjectives over the next fiveyears as Director and senior executive positionsbecome vacant and appropriately qualifiedcandidates becomeavailable:
Disclose in each annual report the proportion of women employees inthe whole organisation, women in senior executive positions andwomen on the board.	ActualNumber%Women on the Board00Women in senior Management roles 00Women employees in the group4 16

CORPORATE GOVERNANCE STATEMENT (continued)

BEST PRACTICE RECOMMENDATION (continued)

Corporate Governance Policy	Action Taken and reasons if not adopted
Establish a policy concerning trading in company securities bydirectors, senior executives and employees and disclose the policy or asummary of that policy	The Company"s Corporate Governance Policiesincludes a Dealing in Securities Policy whichprovides comprehensive guidelines on tradingin the company"s securities.
Provide the information indicated in 'Guide to Reporting on Principle3"	The company has provided details of anydepartures from principle 3 in this AnnualReport.
Safeguard integrity in financial reporting
Principle 4: Establish a structure to independently verify andsafeguard integrity in financial reporting	Adopted except as follows:
The Board should establish an audit committee.	The company is not of a size to justify having aseparateAuditandRiskManagementCommittee. However, matters typically dealtwith by such a Committee are dealt with by thefull Board
Structure the audit committee so that it consists of:Only non-executive directorsA majority of independence directors	Not applicable
An independent chairperson who is not the chairperson on the Board
The audit committee should have a formal operating charter.	Not applicable
Provide the information indicated in the "Guide to reporting onPrinciple 4".	The company has provided details of anydepartures from principle 4 in this annualReport
Promote timely and balanced disclosure	Adopted.
Principle 5: Make timely and balance disclosure of all material mattersconcerning the company
Establish written policies and procedures designed to ensurecompliance with ASX Listing Rule disclosure requirements and toensure accountability at a senior management level for thatcompliance and disclose those policies or a summary of those policies.	The company has a Continuous DisclosurePolicy which is designed to ensure compliancewith the ASX Listing Rules requirements ondisclosure and to ensure accountability at aboardlevelforcomplianceandfactualpresentationofthecompany"sfinancialposition.
Provide the information indicated in the "Guide to reporting onPrinciple 5".	The company will provide details of anydepartures from Principle 5 in its AnnualReport.

CORPORATE GOVERNANCE STATEMENT (continued)

BEST PRACTICE RECOMMENDATION (continued)

Corporate Governance Policy	Action Taken and reasons if not adopted
Respect the rights of shareholders	Adopted.
Principle 6: Respect the rights of shareholders and facilitate theeffective exercise of those rights
Design and disclose a communications policy to promote effectivecommunication with shareholders and encourage effectiveparticipation at general meetings and disclose the policy or a summaryof the policy.	The company"s Corporate Governance Policiesincludes a Shareholder Communications Policywhich aims to ensure that the shareholders areinformed of all material developments affectingthe company"s state of affairs.
Provide the information indicated in the "Guide to reporting onPrinciple 6".	The company has provided details of anydepartures from Principle 6 in its Annual Report
Recognise and manage risk	Adopted.
Principle 7: Establish a sound system of risk oversight andmanagement and internal control
The Board or appropriate Board committee should establish policieson risk oversight and management of material business risk anddisclose a summary of those policies.	The company"s Corporate Governance Policiesincludes a Risk Management Policy which aimsto ensure that all material business risks areidentified and mitigated. The Board identifiesthe company"s "risk profile" and is responsiblefor overseeing and approving risk managementstrategies and policies, internal compliance andinternalcontrols.TheCompany"sRiskManagementpolicyisavailableonthecompany"s website
The Board should require management to design and implement therisk management and internal control system to manage thecompany"s material business risks and report to it on whether thoserisks are being managed effectively. The Board should disclose thatmanagement has reported to it as to the effectiveness of thecompany"s management of its material business risks.	The Board requires that the Managing Directordesigns and implements continuous riskmanagement and internal control systems andprovides reports at relevant times.
The Board should disclose whether it has received assurance from thechief executive officer (or equivalent) and the chief financial officer(or equivalent) that the declaration provided in accordance withsection 295A of the Corporations Act is founded on a sound riskmanagement and internal control and that the system is operatingeffectively in all material respects in relation to the financial reportingrisks.	The board seeks, at the appropriate times, theserelevantassurancesfromtheindividualsappointed to perform the role of ManagingDirector and the Chief Operating Officer.
Provide the information indicated in the "Guide to reporting onPrinciple 7".	The company has provided details of anydepartures from Principle 7 in this AnnualReport.

CORPORATE GOVERNANCE STATEMENT (continued)

BEST PRACTICE RECOMMENDATION (continued)

Corporate Governance Policy	Action Taken and reasons if not adopted
Remuneration fairly and responsibly	Adopted except as follows:
Principle 8: Ensure that the level and composition of remuneration issufficient and reasonable and that its relationship to corporate andindividual performance is defined
The board should establish a remuneration committee.	The company in not of a size to justify having aseparate remuneration committee. However,matters typically dealt with by such acommittee are dealt with by the full Board.
The remuneration committee should be structured so that it:consists of a majority of independent directors;is chaired by an independent director; andhas at least three members.	Not applicable.
Clearly distinguishes the structure of non-executive director"sremuneration from that of executive directors and senior executives.	The board distinguishes the structure of nonexecutive Director"s remuneration from that ofexecutive Directors and senior executives. Thecompany"s Constitution provides that theremuneration of non-executive Directors will benot more than the aggregated fixed sum by ageneral meeting of shareholders.