Cape Range : Corporate Governance Statement

Cape Range Limited

Corporate Governance Statement 31 December 2021

For personal use only

This Corporate Governance Statement of Cape Range Limited (the 'company ') has been prepared in accordance with the 4th Edition of the Australian Securities Exchange's ('ASX') Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council ('ASX Principles and Recommendations') and is included in the company's website pursuant to ASX Listing Rule 4.10.3. This listing rule requires the company to disclose the extent to which it has followed the recommendations during the financial year, including reasons where the company has not followed a recommendation and any related alternative governance practice adopted.

The company's ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations to the relevant disclosures in either this statement, our website or Annual Report, is contained on our website atwww.caperange.com.au.

Both this Corporate Governance Statement and the ASX Appendix 4G have been lodged with the ASX. This statement has been approved by the company's Board of Directors ('Board') and is current as at 28 March 2022.

The ASX Principles and Recommendations and the company's response as to how and whether it follows those recommendations are set out below.

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1 - A listed entity should disclose:

• (a) the respective roles and responsibilities of its board and management; and

• (b) those matters expressly reserved to the board and those delegated to management.

The company's board maintains the following roles and responsibilities:

• • being accountable for the performance of the company;

• • providing leadership and setting the strategic objectives of the company;

• • appointing the Chair and, if the company has one, the Deputy Chair and/or the "senior independent director";

• • appointing, and when necessary replacing, the Chief Executive Officer ('CEO') and other senior executives including the company secretary;

• • assessing the performance of the CEO and overseeing succession plans for senior executives;

• • overseeing management's implementation of the company's strategic objectives;

• • approving operating budgets and major capital expenditure;

• • overseeing the integrity of the company's accounting and corporate reporting systems, including the external audit;

• • overseeing the company's process for market disclosure of all material information concerning the company that a reasonable person would expect to have a material effect on the price or value of the company's securities;

• • ensuring that the company has in place an appropriate risk management framework and setting the risk parameters within which the Board expects management to operate;

• • approving the company's remuneration framework;

• • monitoring the effectiveness of the company's governance practices; and

• • reporting to and communications with shareholders.

The Board has delegated the day-to-day management of the company to the CEO and other senior executives ('management'). The company's management is responsible for the following:

• • implementing the strategic objectives set by the Board;

• • operating within the risk parameters set by the Board;

• • operational and business management of the company;

• • managing the company's reputation and operating performance in accordance parameters set by the Board;

• • day-to-day running of the company;

• • providing the Board with accurate, timely and clear information to enable the Board to perform its responsibilities; and

• • approving capital expenditure (except acquisitions) within delegated authority levels.

Senior executives have their roles and responsibilities defined in specific position descriptions.

Cape Range Limited

Corporate Governance Statement 31 December 2021

Recommendation 1.2 - A listed entity should:

• (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and

  For personal use only

• (b) provide security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

Before appointing a director, or putting forward to shareholders a director for appointment, the company undertakes comprehensive reference checks that cover elements such as the person's character, experience, employment history, qualifications, criminal history, bankruptcy history, and disqualified officer status. Directors are required to declare each year that they have not been disqualified from holding the office of director by the Australian Securities and Investments Commission ('ASIC').

An election of directors is held each year. A director that has been appointed during the year must stand for election at the next Annual General Meeting ('AGM'). Directors are generally appointed for a term of three years. Retiring directors are not automatically re-appointed.

The company provides to shareholders for their consideration information about each candidate standing for election or re-election as a director that the Board considers necessary for shareholders to make a fully informed decision. Such information includes the person's biography, which includes experience and qualifications, details of other directorships, adverse information about the person that the Board is aware of including material that may affect the person's ability to act independently on matters before the Board, and whether the Board supports the appointment or re-election.

Recommendation 1.3 - A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.

The terms of the appointment of a non-executive director include such matters as the term of their appointment, time commitment envisaged, required committee work and other special duties, requirements to disclose their relevant interests which may affect independence, corporate policies and procedures, indemnities, and remuneration entitlements.

The company has put in place specific agreements for each director.

Executive directors and senior executives, when appointed, will be issued with service contracts which detail the above matters as well as the person or body to whom they report, the circumstances in which their service may be terminated (with or without notice), and any entitlements upon termination.

Recommendation 1.4 - The company secretary of a listed entity should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The company secretary reports directly to the Board through the Chair and is accessible to all directors. The company secretary's role, in respect of matters relating to the proper functioning of the Board, includes:

• • advising the Board and its committees (if applicable) on governance matters;

• • monitoring compliance of the Board and associated committees with policies and procedures;

• • coordinating all Board business;

• • retaining independent professional advisors;

• • ensuring that the business at Board and committee meetings is accurately minuted; and

• • assisting with the induction and development of directors.

Cape Range Limited

Corporate Governance Statement 31 December 2021

Recommendation 1.5 - A listed entity should:

• (a) have and disclose a diversity policy

  For personal use only

  Proportion of	Proportion
  women	of men
  On the Board	0%	100%
  In senior executive positions	67%	33%
  Other	67%	33%
  Across the whole organisation	57%	43%

• (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and

• (c) disclose in relation to each reporting period:

  • (1) the measurable objectives set for that period to achieve gender diversity;

  • (2) the entity's progress towards achieving those objectives; and

  • (3) either:

    • (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or

    • (B) if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under that Act.

The company has a diversity policy, although the Board has determined that no specific measurable objectives will be established until the number of employees and level of activities of the company increases to a level sufficient to enable meaningful and achievable objectives to be developed.

The policy aims to provide a work environment where employees have equal access to career opportunities, training and benefits. It also aims to ensure that employees are treated with fairness and respect, and are not judged by unlawful or irrelevant reference to gender, age, ethnicity, race, cultural background, disability, religion, sexual orientation or caring responsibilities. This commitment will enable the company to attract and retain employees with the best skills and abilities.

The respective proportion of women and men in the company including its subsidiaries ('consolidated entity') as at 31 December 2021 was:

For this purpose, the Board defines a senior executive as a person who makes, or participates in the making of, decisions that affect the whole or a substantial part of the business or has the capacity to affect significantly the company's financial standing. This therefore includes all senior management and senior executive designated positions as well as senior specialised professionals.

As no entity within the consolidated entity is a 'relevant employer' for the purposes of the Workplace Gender Equality Act 2012 on the basis that no entity employs 100 or more employees in Australia, there are no Gender Equality Indicators to be disclosed.

Recommendation 1.6 - A listed entity should:

• (a) have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

• (b) disclose, for each reporting period, whether a performance evaluation was undertaken in accordance with that process during or in respect of that period.

The Board reviews its performance, as well as the performance of individual committees (if applicable) and individual directors (including the performance of the Chairman as Chairman of the Board). The use of an external facilitator may be utilised periodically to assist in the review process.

The company has not conducted a formalised review process for the year ended 31 December 2021. The Board and senior executives are working very closely and regular feedback, as to the respective effectiveness and contributions made by all parties, is discussed in a frank and forthright manner as a part of the Board and management undertakings. This practice is deemed appropriate and also provides contemporary feedback as to individual performance and is likely to continue on an ongoing basis until the nature of the company's activities demand a change to this process

Cape Range Limited

Corporate Governance Statement 31 December 2021

Recommendation 1.7 - A listed entity should:

• (a) have and disclose a process for evaluating the performance of its senior executives at least once every reporting period; and

  For personal use only

• (b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

Assessment of the performance of senior executives is to be undertaken at least once every reporting period.

Such assessment was undertaken during the reporting period and appropriate personnel changes implemented. The Board, however, did not conduct a formalised performance assessment of the Board or senior management.

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

Recommendation 2.1 - The board of a listed entity should:

• (a) have a nomination committee which:

  • (1) has at least three members, a majority of whom are independent directors; and

  • (2) is chaired by an independent director, and disclose:

  • (3) the charter of the committee;

  • (4) the members of the committee; and

  • (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

• (b) if it does not have a nomination committee, disclose that fact and the processes it employs to address board succession issues and to ensure that the board has the appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

Given the level of activity of the company throughout the year, the Board assumed the duties and responsibilities typically delegated to a risk committee, remuneration committee and nomination committee. As such, a nomination committee has not yet been established.

A description of the procedures for the selection and appointment of new directors and the re-election of incumbents is contained within the Corporate Governance Plan which is maintained at the company's website.

The roles and responsibilities of the Board include the following:

• • identification of skills and competencies required for the Board and related committees;

• • nomination, selection and performance evaluation of directors and senior executives; and

• • designing of succession plans and induction programs for directors.

Cape Range Limited

Corporate Governance Statement 31 December 2021

Recommendation 2.2 - A listed entity should have and disclose a board skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve in its membership.

For personal use only

Leadership	Represents the company positively amongst stakeholders and external parties; decisively acts
ensuring that all pertinent facts considered; leads others to action; proactive solution seeker.
Ethics and integrity	Awareness of social, professional and legal responsibilities at individual, company and community
level; ability to identify independence conflicts; applies sound professional judgement; identifies
when external counsel should be sought; upholds Board confidentiality; respectful in every
situation.
Communication	Effective in working within defined corporate communications policies; makes constructive and
precise contribution to the Board both verbally and in written form; an effective communicator with
executives.
Negotiation	Negotiation skills which engender stakeholder support for implementing Board decisions.
Corporate	Experienced director that is familiar with the mechanisms, controls and channels to deliver
governance	effective governance and manage risks.
5

The Board's skills matrix indicates the mix of skills, experience and expertise that are considered necessary at Board level for optimal performance of the Board. It is therefore used when recruiting new directors and assessing which skills need to be outsourced based on the attributes of the current Board members. The existence of each attribute is assessed by the Board as either, High, Medium or Low.

Skill category

Description of attributes required

Level of importanceExistence in Board

Risk and complianceIdentification of key risks to the company related to each key area of operations. Monitoring of risks, satisfy compliance issues and knowledge of legal and regulatory requirements.

High

HighFinancial and audit

Analysis and interpretation of accounting and finance issues including assessment and resolution of audit and financial reporting risks, contribution to budgeting and financial management of projects and company, assessing and supervising capital management.

High

HighStrategic

Development of strategies to achieve business objectives, oversee implementation and maintenance of strategies, and identification and critical assessment of strategic opportunities and threats to the company.

High

HighOperating policies

Key issue identification representing operational and reputational risks and development of policy responses and parameters within which the company should operate.

MediumMediumInformation technology

Knowledge of IT governance including privacy, data management and security.

High

High

Executive management

Performance assessments of senior executives, succession planning for key executives, setting of key performance hurdles, experience in industrial relations and organisational change management programmes.

Medium

MediumAge and gender

Board aims for equal gender representation and range of experienced individuals to contribute towards better Board outcomes.

Low

LowThe current Board believes that its membership adequately represents the required skills as set out in the matrix. External consultants may be brought it with specialist knowledge to address areas where this is an attribute deficiency in the Board.

In addition to the specific areas that are required at Board level identified in the matrix above, all members of the Board are assessed for the following attributes before they are considered an appropriate candidate.

Board Member Attributes