INTRODUCTION

Thundelarra Exploration Limited ("Company") has adopted a Corporate Governance Manual which forms the basis of a comprehensive system of control and accountability for the administration of corporate governance. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company’s needs.

To the extent they are applicable to the Company, the Board has adopted the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations ("Principles & Recommendations"). To read the ASX Principles & Recommendations refer to the information detailed below.

The Company is pleased to make the following information on its corporate governance practices available on this website. 

Charters

Board

Audit Committee

Nomination Committee

Remuneration Committee

Policies and Procedures

Policy and Procedure for Selection and (Re)Appointment of Directors

Process for Performance Evaluation

Policy on Assessing the Independence of Directors

Policy for Trading in Company Securities (summary)

Code of Conduct (summary)

Policy on ASX Listing Rule Compliance (summary)

Compliance Procedures (summary)

Procedure for the Selection, Appointment and Rotation of External Auditor

Shareholder Communication Strategy

Risk Management Policy (summary)

BOARD CHARTER

1. Role of the Board

The role of the Board is to provide leadership for and supervision of the Company’s senior management.  The Board provides the strategic direction of the Company and regularly measures the progression by senior management of that strategic direction.

2. Role of Senior Management

Those who have the opportunity to materially influence the integrity, strategy and operation of the Company and its financial performance are considered to be part of senior management. 

The role of senior management is to progress the strategic direction provided by the Board.  In particular, the chief executive officer, or equivalent, is responsible for the day-to-day activities of the Company in advancing the strategic direction.

3. Responsibilities of the Board

The Board is collectively responsible for promoting the success of the Company by:

(a)                overseeing the Company, including its control and accountability systems;

(b)                appointing the chief executive officer, or equivalent, for a period and on terms as the directors see fit and, where appropriate, removing the chief executive officer, or equivalent;

(c)                ratifying the appointment and, where appropriate, the removal of senior executives, including the chief financial officer and the company secretary;

(d)                ensuring the Company's Policy and Procedure for Selection and (Re)Appointment of Directors is reviewed in accordance with the Company's Nomination Committee Charter;

(e)                reviewing the Company's policies on risk oversight and management, internal compliance and control, Code of Conduct, and legal compliance;

(f)                 satisfying itself that senior management has developed and implemented a sound system of risk management and internal control in relation to financial reporting risks and reviewed the effectiveness of the operation of that system;

(g)                assessing the effectiveness of senior management's implementation of systems for managing material business risk including the making of additional enquiries and to request assurances regarding the management of material business risk, as appropriate;

(h)                monitoring, reviewing and challenging senior management's performance and implementation of strategy;

(i)                  ensuring appropriate resources are available to senior management;

(j)                 approving and monitoring the progress of major capital expenditure, capital management, and acquisitions and divestitures;

(k)                monitoring the financial performance of the Company;

(l)                  ensuring the integrity of the Company's  financial (with the assistance of the Audit Committee, if applicable) and other reporting through approval and monitoring;

(m)              providing overall corporate governance of the Company, including conducting regular reviews of the balance of responsibilities within the Company to ensure division of functions remain appropriate to the needs of the Company;

(n)                appointing the external auditor (where applicable, based on recommendations of the Audit Committee) and the appointment of a new external auditor when any vacancy arises, provided that any appointment made by the Board must be ratified by shareholders at the next annual general meeting of the Company;

(o)                engaging with the Company’s external auditors and Audit Committee (where there is a separate Audit Committee);

(p)                monitoring compliance with all of the Company's legal obligations, such as those obligations relating to the environment, native title, cultural heritage and occupational health and safety; and

(q)                make regular assessment of whether each non-executive director is independent in accordance with the Company's Policy on Assessing the Independence of Directors. 

The Board may not delegate its overall responsibility for the matters listed above.  However, it may delegate to senior management the responsibility of the day-to-day activities in fulfilling the Board's responsibility provided those matters do not exceed the Materiality Threshold as defined below.

Directors are encouraged to request information from senior executives where they consider such information necessary to make informed decisions.

The Board must convene regular meetings with such frequency as is sufficient to appropriately discharge its responsibilities.  It is usual practice for the Board to meet once a month.

4. Materiality Threshold

The Board has agreed on the following guidelines for assessing the materiality of matters:

Materiality – Quantitative

Balance sheet items

Balance sheet items are material if they have a value of more than 10% of pro-forma net asset.

Profit and loss items

Profit and loss items are material if they will have an impact on the current year operating result of 10% or more.

Materiality – Qualitative

Items are also material if:

(a)        they impact on the reputation of the Company;

(b)        they involve a breach of legislation;

(c)        they are outside the ordinary course of business;

(d)        they could affect the Company’s rights to its assets;

(e)        if accumulated they would trigger the quantitative tests;

(f)         they involve a contingent liability that would have a probable effect of 10% or more on balance sheet or profit and loss items; or

(g)        they will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 10%.

Material Contracts

Contracts will be considered material if:

(a)        they are outside the ordinary course of business;

(b)        they contain exceptionally onerous provisions in the opinion of the Board;

(c)        they impact on income or distribution in excess of the quantitative tests;

(d)        there is a likelihood that either party will default, and the default may trigger any of the quantitative or qualitative tests;

(e)        they are essential to the activities of the Company and cannot be replaced, or cannot be replaced without an increase in cost of such a quantum, triggering any of the quantitative tests;

(f)         they contain or trigger change of control provisions;

(g)        they are between or for the benefit of related parties; or

(h)        they otherwise trigger the quantitative tests.

Any matter which falls within the above guidelines is a matter which triggers the materiality threshold ("Materiality Threshold").

5. Statement of Position or Authority

The division of responsibilities between the Chair, the lead independent director, if any, and the CEO is set out below.

6. Responsibilities of the Chair

The Chair is responsible for leadership of the Board, for the efficient organisation and conduct of the Board's function and for the briefing of all directors in relation to issues arising at Board meetings.  The Chair is also responsible for shareholder communication and arranging Board performance evaluation.  The Chair should facilitate the effective contribution of all directors and promote constructive and respectful relations between directors and between board and senior management.

Any other position which the Chair may hold either inside or outside the Company should not hinder the effective performance of the Chair in carrying out their role as Chair of the Company.

7. Responsibilities of the Lead Independent Director

Where the Chair is not an independent director, a lead independent director will be appointed.  The lead independent director will take over the role of the Chair when the Chair is unable to act in that capacity as a result of their lack of independence.

8. Responsibilities of the CEO

The CEO is responsible for running the affairs of the Company under delegated authority from the Board and to implement the policies and strategy set by the Board.  In carrying out their responsibilities the CEO must report to the Board in a timely manner on those matters included in the Company's risk profile, all relevant operational matters and any other matter that is likely to have to fall within the Materiality Threshold.

All reports to the Board must present a true and fair view of the Company’s financial condition and operational results.

The CEO is also responsible for appointing, where appropriate, removing senior executives, including the chief financial officer and the company secretary, with the approval of the Board. The CEO is responsible for evaluating the performance of senior executives.

9. Responsibilities of Non-Executive and/or Independent Directors

The Board determines whether each of the non-executive directors of the Company is independent on a regular basis in accordance with its Policy on Assessing the Independence of Directors.  The Board recognises the importance of the appropriate balance between independent and non-independent representation on the Board.  In making this determination, the Board takes into account the skills and experience required, in the context of the Company's operations and activities.

The independent directors may meet without other directors present, if appropriate.

The non-executive directors may meet without senior management present at times scheduled from time to time.  Such meetings may be facilitated by the Chair or the lead independent director, as appropriate.

10. Directors and Officers

Individual directors should devote the necessary time to the tasks entrusted to them.  All directors should consider the number and nature of their directorships and calls on their time from other commitments.

Directors and officers of the Company should be aware of their legal obligations, some of which are set out in the Overview of Duties Imposed on Directors of Public Companies.

11. Responsibilities of Senior Management

Senior Management is responsible for supporting the CEO and to assist the CEO implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.

Senior Management is responsible for reporting all matters which fall within the Materiality Threshold at first instance to the CEO or, if the matter concerns the CEO, then directly to the Chair or the lead independent director, as appropriate.

AUDIT COMMITTEE CHARTER

1. Composition of the Audit Committee

The Committee is to include at least two members, both of whom are non- executive directors and with at least one being independent. The Chair of the Committee is to be independent and not the Chair of the Board.

At least one member is to have relevant qualifications and experience.

From time to time, non Committee members may be invited by the Committee to attend meetings of the Committee, if it is considered appropriate.

2. Role of the Audit Committee

The role of the Audit Committee is to:

(a)               monitor and review the integrity of the financial reporting of the Company, reviewing significant financial reporting judgments;

(b)               review the Company’s internal financial control system and, unless expressly addressed by a separate risk committee or by the Board itself, risk management systems;

(c)                monitor, review and oversee the external audit function including matters concerning appointment and remuneration, independence and non-audit services;

(d)               monitor and review compliance with the Company's Code of Conduct; and

(e)               perform such other functions as assigned by law, the Company's Constitution, or the Board.

3. Operations

The Committee meets at least half yearly, with further meetings on an as required basis.

Minutes of all meetings of the Committee are to be kept and the minutes and a report of actions taken or recommended to be given at each subsequent meeting of the full Board. Committee meetings will be governed by the same rules, as set out in the Company's Constitution as they apply to the meetings of the Board.

4. Authority and Resources

The Company is to provide the Committee with sufficient resources to undertake its duties, including provision of educational information on accounting policies and other financial topics relevant to the Company, and such other relevant materials requested by the Committee.

The Committee has rights of access to management and has the authority to seek explanations and additional information from the Company's external auditors, without management present, when required.

The Committee has the power to conduct or authorize investigations into any matters within the Committee's scope of responsibilities. The Committee has the authority, as it deems necessary or appropriate, to retain independent legal, accounting or other advisors.

5. Reporting to the Shareholders

The Committee is to report to the Board half yearly on the following matters:

·                 assessment of whether external reporting is consistent with Committee members' information and knowledge and is adequate for shareholder needs;

·                 assessment of the management processes supporting external reporting;

·                 recommendations for amending the Company's Procedures for the Selection and Appointment of the External Auditor and procedures for the rotation of external audit engagement partners;

·                 recommendations for the appointment or, if necessary, the removal of the external auditor;

·                 assessment of the performance and independence of the external auditors.  Where the external auditor provides non-audit services, the report should state whether the Audit Committee is satisfied that provision of those services has not compromised the auditor's independence; and

·                 the results of the Committee's review of risk management and internal control systems.

The Chair of the Audit Committee, if appointed, is to be present at the annual general meeting to answer questions, through the Chair of the Board.

6. Responsibilities

Annual responsibilities of the Committee are as set out in the Audit Committee Charter – Annual Action Points (attached).

Audit Committee Charter – Annual Action Points

Financial Reporting and Internal Controls

o     Review half-year, annual  and, if applicable, quarterly financial statements

o     Assess management's selection of accounting policies and principles

o     Consider the external audit of the financial statements and the external auditor's report thereon including an assessment of whether external reporting is consistent with Committee members' information and knowledge

o     Consider internal controls including the Company's policies and procedures to assess, monitor and manage financial risks (and other business risks if authorised)

o     Assess if the external auditors report is adequate for shareholder needs

Annual meeting with External Auditor

o     Discuss the Company's choice of accounting policies and methods, and any recommended changes

o     Discuss the adequacy and effectiveness of the Company's internal controls

o     Discuss any significant findings and recommendations of the external auditor and management's response thereto

o     Discuss any difficulties or disputes with management encountered during the course of the audit including any restrictions or access to required information

External Auditor

o    Review the Company's Procedure  for the Selection, Appointment and Rotation of External Auditor

o    Recommend to the Board to appoint and, if necessary, remove the external auditor and approve the terms on which the external auditor is engaged

o    Establish/review permissible services that the external auditor may perform for the Company and pre-approve all audit/non-audit services

o    Confirm the independence of the external auditor, including reviewing the external auditor's non-audit services and related fees

o    Assess the overall performance of the external auditor

o    Ensure that the external auditor is requested to attend the annual general meeting  of the Company and is available to answer questions from shareholders

Internal Communications and Reporting

o    Provide the report described in clause 5 of this Audit Committee Charter

o    Regularly update the Board about Committee activities and make appropriate recommendations

o    Ensure the Board is fully aware of matters which may significantly impact the financial conditions or affairs of the business

Other

o    Verify the membership of the Committee is in accordance with the Audit Committee Charter

o    Review the independence of each Committee member based on the Company's Policy on Assessing the Independence of Directors

o    Review and update the Audit Committee Charter and Action Points

o     Develop and oversee procedures for treating complaints or employee concerns received by the Company regarding accounting, internal accounting controls, auditing matters and breaches of the Company's Code of Conduct

NOMINATION COMMITTEE CHARTER

1. Composition

The Nomination Committee shall comprise the full Board.

From time to time, non Committee members may be invited by the Committee to attend meetings of the Committee, if it is considered appropriate.

2. Role

The role of the Nomination Committee is to effectively examine the selection and appointment practices of the Company, although the Board retains ultimate responsibility for these practices.

3. Operations

The full Board shall meet as the Committee at least once a year and otherwise as required. Minutes of all meetings of the Committee are to be kept.  Committee meetings will be governed by the same rules as set out in the Company’s Constitution, as they apply to meetings of the Board.

4. Responsibilities

(a)               Size and Composition of the Board

To ensure that the Board has the appropriate blend of directors with the necessary expertise and relevant industry experience, the Committee shall:

(i)                  regularly review the size and composition of the Board, and make recommendations to the Board on any appropriate changes;

(ii)                identify and assess necessary and desirable director competences and provide advice on the competency levels of directors with a view to enhancing the Board;

(iii)               make recommendations on the appointment and removal of directors;

(iv)              make recommendations on whether any directors whose term of office is due to expire should be nominated for re-election;

(v)                regularly review the time required from non-executive directors and whether non-executive directors are meeting that requirement.

(b)               Selection Process of new Directors

The Committee shall review the Company's Policy and Procedure for Selection and (Re)Appointment of Directors.  Such procedure should be transparent to promote investor understanding and confidence in the process.

The Committee is empowered to engage external consultants in its search for a new director.

The initial appointment of a new Director is made by the Board.  The new Director will be required to stand for election at the Company's next general meeting.

(c)                Performance Appraisal Competency

The Committee shall:

(i)                  develop a process for evaluation of the performance of the Board, Board committees (if any); and when deemed appropriate by the Chair, individual Board members in accordance with the Company's Process for Performance Evaluation;

(ii)                implement ways of enhancing the competency levels of directors;

(iii)               consider and articulate the time required by Board members in discharging their duties efficiently;

(iv)              undertake continual assessment of directors as to whether they have devoted sufficient time in fulfilling their duties as directors;

(v)                develop a process for and carry out an evaluation of the performance of the CEO in accordance with the Company's Process for Performance Evaluation;

(vi)              review and implement the Company's Induction Program;

(vii)             ensure new directors participate in the Induction Program; and

(viii)           provide all directors with access to ongoing education relevant to their position in the Company.

(d)               Succession Plans

The Committee shall review the Board's succession plans.  Succession plans are to assist in maintaining the appropriate balance of skills, experience and expertise on the Board.

5. Authority and Resources

The Company is to provide the Committee with sufficient resources to undertake its duties.  The Committee has the authority, as it deems necessary or appropriate, to access advice from external consultants or specialists.

REMUNERATION COMMITTEE CHARTER

1. Composition

The Remuneration Committee shall comprise the full Board.

From time to time, non Committee members may be invited by the Committee to attend meetings of the Committee, if it is considered appropriate.

2. Role

The function of the Committee is to assist the Board in fulfilling its corporate governance responsibilities with respect to remuneration by reviewing and making appropriate recommendations on:

(a)               remuneration packages of executive directors, non-executive directors and senior executives; and

(b)               employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed.

3. Operations

The full Board shall meet in its capacity as the Committee at least once a year and otherwise as required. Minutes of all meetings of the Committee are to be kept. Committee meetings will be governed by the same rules as set out in the Company’s Constitution, as they apply to meetings of the Board.

4. Responsibilities

The responsibilities of the Committee include a review of:

(a)                the Company's Remuneration Policy and framework ;

(b)                senior executives' remuneration and incentives; and

(c)                superannuation arrangements.

Executive Remuneration

In considering the Company's Remuneration Policy and levels of remuneration for executives, the Committee makes decisions which:

(a)               motivates executive directors and senior executives to pursue long term growth and success of the Company within an appropriate control framework;

(b)               demonstrates a clear correlation between senior executives  performance and remuneration;

(c)                aligns the interests of key leadership with the long-term interests of the Company's shareholder; and

(d)               prohibits executives from entering into transactions or arrangements which limit the economic risk of participating in unvested entitlements.

To the extent that the Company adopts a different remuneration structure for its executive directors, the Committee shall document its reasons for the purpose of disclosure to stakeholders.

Non-Executive Remuneration

In considering the Company's Remuneration Policy and levels of remuneration for non-executive directors, the Committee is to ensure that:

(e)               fees paid to non-executive directors are within the aggregate amount approved by shareholders  and make recommendations to the Board with respect to the need for increases to this aggregate amount at the Company's annual general meeting;

(f)                 non-executive directors are remunerated by way of fees (in the form of cash and superannuation benefits);

(g)               non-executive directors are not provided with retirement benefits other than statutory superannuation entitlements; and

(h)               non-executive directors are not entitled to participate in equity-based remuneration schemes designed for executives without due consideration and appropriate disclosure to the Company's shareholders.

To the extent that the Company adopts a different remuneration structure for its non-executive directors, the Committee shall document its reasons for the purpose of disclosure to stakeholders.

Incentive Plans and Benefits Programs

The Committee is to:

(i)                 review and make recommendations concerning long-term incentive compensation plans, including the use of share options and other equity-based plans.  Except as otherwise delegated by the Board, the Committee will administer equity-based and employee benefit plans, and as such will discharge any responsibilities under those plans, including making and authorising issues of equity, in accordance with the terms of those plans;

(j)                 ensure that incentive plans are designed around appropriate and realistic performance targets that measure relative performance and provide rewards when they are achieved; and

(k)               continually review and if necessary improve any existing benefit programs established for employees.

5. Authority and Resources

The Company is to provide the Committee with sufficient resources to undertake its duties.  The Committee may seek input from individuals on remuneration policies, but no individual should be directly involved in deciding their own remuneration.

The Committee has the authority, as it deems necessary or appropriate, to obtain advice from external consultants or specialists in relation to remuneration related matters.

POLICY AND PROCEDURE FOR SELECTION AND (Re) APPOINTMENT OF DIRECTORS

New Directors

It is the Policy of the Board that in determining candidates for the Board, the following process shall occur.

1.                  The Nomination Committee (or equivalent) evaluates the range of skills, experience and expertise of the existing Board.  In particular, the Nomination Committee (or equivalent) is to identify the particular skills that will best increase the Board's effectiveness. Consideration is also given to the balance of independent directors on the Board.

2.                  A potential candidate is considered with reference to their skills and expertise in relation to other Board members.

3.                  If relevant, the Nomination Committee recommends an approp