VERBREC LIMITED — Governance Information 2017

May 31, 2017

LogiCamms Limited ABN 90 127 897 689

Corporate Governance Statement For the Year Ended 30 June 2016

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Corporate Governance Statement

This Corporate Governance Statement outlines the main corporate governance practices in place for LogiCamms Limited ( Company ) and its subsidiaries ( Group ) throughout the 2016 financial year and is current as at 24 August 2016. The 2016 Corporate Governance Statement was approved by the board on 24 August 2016. The Company has followed the 3[rd] edition of the ASX Corporate Governance Council Principles and Recommendations ( ASX Recommendations ), except to the extent stated otherwise in the Corporate Governance Statement.

Board of Directors

Role of the Board

The Board of Directors of the Company is responsible for the overall corporate governance of the Company and has adopted as a guiding principle that it act honestly, diligently and fairly in accordance with the law and in the interests of the Shareholders with a view to building sustainable value for them, the Company’s employees and other stakeholders in the Company.

The Board endorses the ASX Recommendations, and has adopted corporate governance charters and policies reflecting those recommendations to the extent appropriate having regard to the size and circumstances of the Company. The Company is committed to ensuring that its corporate governance framework promotes and reflects the Company’s focus on transparency, responsibility and accountability.

The Board has delegated responsibility for the operation and administration of the Company to the Managing Director and executive management.

To assist in the execution of its responsibilities the Board has established an Audit and Risk Committee, a Nomination and Remuneration Committee and a Projects Committee. These Committees have charters and operating procedures, which are reviewed on a regular basis.

Copies of the charters for each of the Board Committees and the Company’s corporate governance policies are available on the Company’s website at www.logicamms.com.au/investor-relations/corporate-governance/.

Board charter

The Board has adopted a Board Charter, which sets out the Board's role and responsibilities, the powers that it has reserved for its own consideration and the authority it has delegated to the Managing Director. The Board’s reserved powers and responsibilities as set out in the Board Charter include:

• setting the strategic direction of the Company, establishing goals to ensure that these strategic objectives are met and monitoring the performance of management against these goals and objectives;

• ensuring there are adequate resources available to meet the Company's objectives;

• appointing the Managing Director, evaluating the performance and determining the remuneration of senior executives, including any executive incentive plan, and ensuring that appropriate policies and procedures are in place for recruitment, training, remuneration and succession planning;

• determining the size, composition and structure of the Board and evaluating the performance of the Board and its Directors on an annual basis;

• determining remuneration levels of Directors;

• approving and monitoring financial reporting and capital management;

• approving and monitoring annual budgets;

• approving and monitoring the progress of business objectives;

• ensuring that any necessary statutory licences are held and compliance measures are maintained to ensure compliance with the law and licence(s);

• ensuring that adequate risk management procedures exist and are being used;

• ensuring that the Company has appropriate corporate governance structures in place, including standards of ethical behaviour and a culture of corporate and social responsibility;

• ensuring that the Board is, and remains, appropriately skilled to meet the changing needs of the Company;

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• approving the dividend policy of the Company and authorising payment of dividends; and

• appointing or removing the Company’s external auditors and approving the auditor’s remuneration, upon recommendation from the Audit & Risk Committee.

The Board has delegated to the Managing Director responsibility for the day-to-day management of the Group, and implementation of policies and strategy set by the Board.

Director independence

The Board Charter provides that a majority of the Board must be independent Non-Executive Directors. As at the date of the Corporate Governance Statement, all of the Non-Executive Directors satisfy the criteria for independence as set out in Box 2.3 of the ASX Recommendations. The Board assesses, at least annually, the independence of each Director.

The Company considers that an independent Director is a non-executive Director who is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his or her capacity to bring an independent judgement to bear on issues before the board and to act in the best interests of the Company and its security holders generally. The Board assesses the materiality of any interest, position, association or relationship of Directors on a case-by-case basis.

Director and executive education

The Company has a process to educate new Directors about the nature of the business, current issues, the corporate strategy, the culture and values of the Company, and the expectations of the Company concerning performance of Directors. In addition, Directors are also educated regarding meeting arrangements and Director interaction with each other, senior executives and other stakeholders. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge.

The Company also has a process to educate new senior executives upon taking such positions. The induction program includes reviewing the Company’s structure, strategy, operations, financial position and risk management policies. It also familiarises the individual with the respective rights, duties, responsibilities and roles of the individual and the Board.

Independent professional advice and access to company information

Each Director has the right of access to all relevant Company information and to the Company’s executives and, subject to prior consultation with the Chairperson, may seek independent professional advice from a suitably qualified adviser at the Company’s expense. The Director must consult with an adviser suitably qualified in the relevant field, and obtain the Chairperson’s approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the Director is made available to all other members of the Board.

Chairperson

The Board Chairperson, Mr Peter Watson is considered by the Board to be independent. The Chairperson is responsible for leadership of the Board, and for the efficient organisation and conduct of the Board’s function.

Company Secretary

The Company Secretary is accountable directly to the Board, through the Chairperson, on all matters to do with the proper functioning of the Board. Paul Bowker is the Company Secretary and Director – Corporate Development. Paul’s qualifications and experience are set out in the 2016 Directors’ Report on page 18.

Composition of the Board

The Board of the Company currently comprises three Non-Executive Directors and one Executive Director, being the Managing Director. Profiles of each Director, including details of the period of office held by each Director, their qualifications and experience, and the year of their last election at an AGM, are included in the 2016 Directors’ Report on pages 16 & 17.

Non-Executive Directors

Peter Watson

Peter Wall

Richard Robinson

Executive Directors

Steve Banning

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Board renewal and succession planning

As a team, the Board brings together a broad range of qualifications and a diversity of experience to provide strategic guidance for, and effective oversight of, management. The Nomination and Remuneration Committee regularly reviews the Board succession plan to ensure that an appropriate mix of skills, experience and diversity on the Board is maintained.

The Board has in place a skills matrix and regularly assesses the balance of skills, knowledge, diversity and experience of its current Directors, which will support the effective functioning of the Board with regard to the strategic direction of the Company. The current skills and experience held within the Board are as follows:

Sector Experience	Number of Directors (out of 4)
Hydrocarbons	3
Minerals and Metals	3
Infrastructure	4
Geographic Experience
Australia	4
New Zealand	2
PNG	3
Functional Experience
Listed Company Experience	4
Finance	3
Risk Management	4
Corporate Governance	4
Human Resources	3
Legal	3
Technology	3

In FY 2015, the Board appointed a new independent Non-Executive Director, Mr Richard Robinson. Details regarding his qualifications and experience are set out in the 2016 Directors’ Report on page 17.

Director appointment and election

The Constitution requires a minimum number of three Directors. The maximum number of Directors is fixed by the Board but may not be more than 10, unless the members of the Company in general meeting resolve otherwise.

The relevant provisions in the Constitution, the ASX Listing Rules and the Corporations Act determine the terms and conditions relating to the appointment, election and termination of Directors. All Non-Executive Directors are subject to reelection by rotation every three years with at least one director subject to re-election each year. The Managing Director is not subject to re-election by rotation.

All new Directors are provided with a formal letter detailing the key terms of their appointment. Appropriate checks are undertaken by the Company before appointing a person as a Director and recommending that person for election (including character, experience, education, criminal record and bankruptcy history checks). All material information that is relevant to the decision of whether or not to elect or re-elect a Director is provided to shareholders in the notice of AGM.

Board performance evaluation

The performance of the Board, its committees and individual directors is reviewed by the Chairperson each year. As part of the performance evaluation process, the Chairperson holds discussions with each individual Director. A performance evaluation was undertaken in accordance with this process in FY 2016.

On a periodic basis, the performance of the Board, the Board committees and individual directors is assessed by an independent external facilitator. The last externally facilitated Board review took place in 2014.

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Senior executive performance evaluation

The performance of the Managing Director and Senior Executives is conducted on an annual basis through an interview process with the Board as well as through external advisors (as required) and industry benchmarking. A performance evaluation was undertaken in accordance with this process in FY 2016.

Remuneration

Details regarding the Company’s policies and practices in relation to the remuneration of the Non-Executive Directors, the Managing Director and the senior executives are set out in the 2016 Remuneration Report, which starts at page 25 in the 2016 Annual Report.

Conflict of interest

In accordance with the Corporations Act and the Constitution, Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes a significant conflict exists, the Director concerned will not receive the relevant papers and will not be present at the Board meeting whilst the matter is being considered.

Board Committees

The Board has established the following Committees:

• Audit and Risk Committee;

• Nomination and Remuneration Committee; and

• Project Committee.

Each Committee operates under a charter approved by the Board, which sets out its role, responsibilities, composition and structure. The Committee charters are reviewed annually. The Committee charters are available at http://www.logicamms.com.au/investor-relations/corporate-governance/.

Details of Committee meetings held during FY 2016 and attendances at those meetings by the Committee members are set out in the 2016 Directors’ Report on page 18.

An overview of the responsibilities and composition of the Board Committees is set out below.

Audit and Risk Committee

The Audit and Risk Committee is responsible for:

• reviewing the integrity and adequacy of the Company’s financial reporting process;

• reviewing the adequacy of the Company’s risk management framework (including the Risk Management Policy and Risk Management Plan adopted by the Company as set out below);

• overseeing the Company’s compliance programs;

• approving the terms of engagement for the external auditor and internal auditor;

• assessing the performance and independence of the external auditor and the internal audit function;

• overseeing the process and procedures for the selection, appointment and removal of the external auditor (including the rotation of the external audit partner) and the internal auditor;

• making recommendations to the Board for the appointment or (if necessary) the removal of the external auditor and the head of the internal audit function; and

• making recommendations to the Board in relation to the Group insurance policies and financing arrangements.

Composition

The Audit and Risk Committee is comprised of:

• at least three members;

• only Non-Executive Directors;

• a majority of independent directors; and

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• an independent Chair who is not Chair of the Board.

The Audit and Risk Committee members are Peter Wall (Chair), Peter Watson and Richard Robinson. Their qualifications and experience are set out in the 2016 Directors’ Report on pages 16 &17.

The Company’s external auditor, internal auditor, the Managing Director, Chief Financial Officer, Company Secretary may attend Audit and Risk Committee meetings by invitation.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee is responsible for reviewing and making recommendations to the Board in relation to:

• the Group’s remuneration policies and practices, including those of the Managing Director and executive management;

• Board appointments and re-elections;

• Board and senior executive succession plans; and

• Board composition, competencies and diversity.

The Nomination and Remuneration Committee is also responsible for overseeing Director training and education programs, and the performance evaluation process for the Board, Board Committees and individual Directors.

Composition

The Nomination and Remuneration Committee is comprised of:

• at least three members;

• a majority of independent directors; and

• an independent Chair who is not the Board Chair.

The Nomination and Remuneration Committee members are Peter Wall (Chair), Peter Watson and Richard Robinson.

Project Committee

The Project Committee is responsible for reviewing and making recommendations to the Board in relation to the development and delivery of Major Projects (i.e. projects which have a project delivery model classification of A+ and are of high significance to the Company). This includes:

• reviewing and making recommendations regarding the delivery of proposed new Major Projects and Major Projects that are underway;

• overseeing the delivery of Major Projects, including making recommendations in relation to project and contract variations, strategies and actions relating to the implementation and progress of Major Projects, and reviewing project pro-forma updates;

• monitoring and evaluating risk management systems in place; and

• reviewing and evaluating the post implementation report of completed Major Projects, and making recommendations to the Board regarding outcomes.

Composition

The Projects Committee is comprised of:

• at least two Non-Executive Directors and up to four other members (who may be Company employees), all of whom are appointed by the Board to the Committee; and

• an independent Chair that is a Non-Executive Director.

The Projects Committee members are Richard Robinson(Chair), Peter Watson, Peter Wall, Steve Banning, Paul Bowker and Geoff Jenkins.

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Risk management

Risk Management Framework

The Group has a number of internal risk oversight and management policies and internal compliance and control systems which comprise the Group Risk Management Framework, including the Company’s Risk Management Policy. The Risk Management Policy sets out the processes to understand and manage the uncertainties facing the Company in order to mitigate and limit loss and to also enable potential gains from opportunities created through an evaluation and management of risk considerations. To achieve these objectives, LogiCamms is committed to implementing and embedding the following within the Company:

• An effective Risk Management Framework consistent with ISO 31000:2009 for identifying, assessing and managing risks, in line with our risk appetite, in order to support the achievement of our business objectives.

• Compliance with applicable laws, regulations and governance standards in areas in which we operate.

• A standard approach to the management of risk and to the acceptable levels of risk throughout the business.

• Processes and systems to empower our staff to proactively identify and address risk issues and events.

• Identification, management and reporting on key business risks across the organisation.

• Providing risk management information and training programs.

• Developing measures to assess the effectiveness of risk management practices, monitoring performance and take steps to continuously improve.

The Audit and Risk Committee has reviewed the Company’s Risk Management Framework in the year ended 30 June 2016, and considers that the Company’s Risk Management Framework continues to be sound and that the Company is operating within the risk appetite set by the Board.

A copy of the Risk Management Policy is available at http://www.logicamms.com.au/investor-relations/corporategovernance/.

Risk profile, management and control

Risks identified by the Audit and Risk Committee or Management are raised and discussed regularly at Board meetings with the aim of identification, assessment and appropriate management of those risks.

Details of the material business risks which may impact on the Group are set out in the Operating and Financial Review section of the 2016 Directors’ Report on pages 13 - 18. The Board does not consider that the Company has a material exposure to environmental or social sustainability risks.

Ways in which the Company seeks to minimise its risks include:

• capital and operational expenditure is approved via detailed budgets signed off by the Board with performance reviewed monthly, and forecasts revisited regularly;

• occupational health and safety standards are stringently managed throughout the business;

• business transactions are properly authorised and executed;

• attracting and retaining quality and ethical personnel through recruitment practices, training and annual performance reviews; and

• consideration of environmental obligations and compliance.

Internal audit

The internal audit function provides an independent assessment of the appropriateness of the Company’s Risk Management Framework and governance systems. The results of the assessments are reported to the Audit and Risk Committee. The Committee also monitors management’s response to recommendations arising from such assessments. Internal audit plans are reviewed by the Committee to ensure that they address key areas of risk, with appropriate coordination with the external auditor.

Management assurance

Prior to the approval of the financial statements, the Board has received from the Managing Director and the Chief Financial Officer a declaration in writing that, in their opinion:

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• (i) the financial records of the Company have been properly maintained;

• (ii) the financial statements for the financial year ended 30 June 2016 give a true and fair view of the Group’s financial condition and performance, and comply with the relevant accounting standards; and

• (iii) that this opinion has been formed on the basis of a sound system of risk management and internal control, which is operating effectively in all material respects.

Ethical standards

All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment.

Code of conduct

The Group has adopted a Code of Conduct which aims to develop a consistent understanding of, and approach to, the desired standards of conduct and behaviour of the Directors, officers, employees and consultants in carrying out their roles for the Group. A copy of the Code of Conduct is available on the Company’s website at www.logicamms.com.au/investorrelations/corporate-governance/.

Securities Dealing Policy

The Company has adopted a Securities Dealing Policy which sets out the restrictions that apply to all employees (including all Directors, executives and senior managers) in relation to dealing in Company securities. Under the policy, all employees are prohibited from dealing in the Company’s securities at any time if they are in possession of inside information. Employees are also restricted from dealing in Company securities during certain “closed periods”. Dealings in Company securities are generally permitted during specified trading windows, provided that the employee is not in possession of inside information. However, the Directors, executives and senior managers must not deal in Company securities at any time without obtaining the prior approval of the Chairman (or, in his absence, the Board or Managing Director).

The policy also restricts employees from entering into agreements or transactions which operate to limit the economic risk of their holdings in Company securities.

The Securities Dealing Policy is available at http://www.logicamms.com.au/investor-relations/corporate-governance/.

Continuous Disclosure Policy

The Company has adopted a Disclosure Policy which sets out the Company’s approach to complying with its continuous - disclosure obligations. A copy of the Disclosure Policy is available at http://www.logicamms.com.au/investor - relations/corporate governance/.

Communication with shareholders

The Company’s objective is to communicate with its shareholders to ensure they are informed of all material information relating to the Company, and to promote shareholder involvement in the Company.

The Company’s communications strategy promotes the communication of information to shareholders through the distribution of the annual report, half-year reports, and all announcements through the ASX. All releases provided to ASX are posted on the Company’s website, and made available on the Company website immediately after release to the market. The Company also provides other information about itself and its governance on the Company website.

The Board encourages the participation of shareholders at the Annual General Meeting to seek to ensure a high level of accountability and discussion in relation to the Company’s performance. Shareholders are encouraged to participate in the Annual General Meeting through asking questions and making comments. Executives of the Company, including the Managing Director and Chief Financial Officer on occasion meet with analysts and investors. Any presentations made are released to the ASX.

• The Company receives enquiries from shareholders through the Company website (http://www.logicamms.com.au/contact us/), and responds directly to shareholders.

Shareholders also have the option to receive key communications from, and send communications to the Company and its share registry electronically.

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The external auditor attends the annual general meetings to answer questions concerning the conduct of the audit, the preparation and content of the auditor’s report, accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.

Diversity

The Board is committed to putting in place a policy in relation to diversity on the Board and in the Group’s senior executive and other positions ensuring appropriate gender, age, ethnic and cultural diversity. Due to historical factors, such as the size of the Company, scale of operations and availability of resources, a diversity policy has not previously been in place. However, it is intended that a diversity policy will be adopted that includes:

• a process to achieve the appropriate mix of skills and diversity in the Company;

• measurable objectives in relation to diversity; and

• appropriate representation of women employees in the Company, in senior executive positions and on the Board.

WGEA Report

The Company is required under the Workplace Gender Equality Act 2012 to report its Gender Equality Indicators as at 31 March each year. The Company’s 2016 Workplace Gender Equality Agency Report is available to view here .

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