Atlas Iron : Corporate Governance Statement and Appendix 4G

ATLAS 2016 CORPORATE GOVERNANCE STATEMENT‌ And Appendix 4G

Atlas Iron Limited (Atlas or the Company) is committed to implementing and maintaining the highest

standards of corporate governance.

In determining what those standards should involve, Atlas has considered the 3rd Edition of ASX' Corporate Governance Principles and Recommendations (ASX Guidelines) in light of the reduced size of its board. Atlas advises that its corporate governance policies and practices are, in the most part, consistent with those of the ASX Guidelines.

Atlas reviews all its corporate governance practices and policies in each financial year and compares its current practices and policies against the ASX Guidelines with a view to ensuring its corporate governance practices and policies are up to date and reflect Atlas' current stage of development and future growth.

This 2016 Corporate Governance Statement was approved by the Board on 18 October 2016 and is current as at 18 October 2016. A description of the Group's current corporate governance practices is set out in this Group's Corporate Governance Statement which also can be viewed at www.atlasiron.com.au .

A summary of the ASX Guidelines Recommendations and the extent to which Atlas has followed these during the reporting period is set out below:

ASX Recommendation	Adopted
Principle 1: Lay Solid Foundations for Management and Oversight
A listed entity should disclose: the respective roles and responsibilities of its board and management; and those matters expressly reserved to the board and those delegated to management.	
A listed entity should: Undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and 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.	
1.3. A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	
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.	
A listed entity should: have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the entity's progress in achieving them; disclose that policy or a summary of it; disclose at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the entity's diversity policy and its progress towards achieving them, and either: the respective proportions of men and women on the board, in senior executive positions, and across the whole organisation (including how the entity has defined "senior executive" for these purposes); or 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.	 (see explanation below)
A listed entity should: have and disclose a process for periodically evaluating the performance of	

the board, its committees and individual directors; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	(see explanation below)
A listed entity should: have and disclose a process for periodically evaluating the performance of its senior executives; and disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	 (see explanation below)
Principle 2: Structure the board to add value
The board of a listed entity should: have a nomination committee which: has at least three members, a majority of whom are independent directors; and is chaired by an independent director, the charter of the committee; the members of the committee; and as at the end of each reporting period, the number of times the committee met throughput the period and the individual attendances of the members at those meetings; or if it does not have a nomination committee, disclose the 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. and disclose	× (see explanation below)
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	
A listed entity should disclose: the names of the directors considered by the board to be independent directors; if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and an explanation of why the board is of that opinion; and the length of service of each director.	
2.4. A majority of the board of a listed entity should be independent directors.	×(see explanation below)
2.5. The chair of the board of a listed entity should be an independent director and in particular, should not be the same person as the CEO of the entity.	× (see explanation below)
2.6. A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for director to develop and maintain skills and knowledge needed to perform their role as directors effectively.	
Principle 3: Act ethically and responsibly
A listed entity should: have a code of conduct for its directors, senior executives and employees; and disclose that code or a summary of it.	
Principle 4: Safeguard integrity in corporate reporting
The board of a listed entity should: have an audit committee which: has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and	 (composition for part of the period, see

is chaired by an independent director, who is not the chair of the board, the charter of the committee; the relevant qualifications and experience of the members of the committee; and in relation to each reporting period, the number of times the committee met throughput the period and the individual attendances of the members at those meetings; or and disclose: (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	explanation below)
4.2. The board of a listed entity should, before it approves the entity's financial statements for a financial period, receive from the CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.	
4.3. A listed entity that has an AGM should ensure that its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit.	
Principle 5: Make timely and balanced disclosure
A listed entity should: have a written policy for complying with its continuous disclosure obligation under the Listing Rules; and disclose that policy or a summary of it.	
Principle 6: Respect the rights of security holders
6.1. A listed entity should provide information about itself and its governance to investors via its website.	
6.2. A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	
6.3. A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders.	
6.4. A listed entity should give security holders the option to receive communications from, and send communications to, the entity and its security registry electronically.	
Principle 7: Recognise and manage risk
The board of a listed entity should: have a committee or committees to oversee risk, each of which: it has at least three members, a majority of whom are independent directors; and is chaired by an independent director; and disclose, the charter of the committee; the members of the committee; and as at the end of each reporting period, the number of time the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity's risk management framework.	 (composition for part of the period, see explanation below)
The board or a committee of the board should: review the entity's risk management framework at least annually to satisfy itself that it continues to be sound; and disclose, in relation to each reporting period, whether such a review has	

taken place.
A listed entity should disclose: if it has an internal audit function, how the function is structured and what role it performs; or if it does not have an internal audit function, that fact and the processes it employs for evaluating and continually improving the effectiveness of its risk management and internal control processes.	
7.4. A listed entity should disclose whether it has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.	
Principle 8: Remunerate fairly and responsibly
The board of a listed entity should: have a remuneration committee which: has at least three members, a majority of whom are independent directors; and is chaired by an independent director, and disclose: the charter of the committee; the members of the committee; and as at the end of the reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.	 (composition for part of the period, see explanation below)
8.2. A listed entity should separately disclose its policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives.	
A listed entity which has an equity-based remuneration scheme should: have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and disclose that policy or a summary of it.	

Principle 1: Lay Solid Foundations for Management and Oversight Functions of the Board

The Board is responsible for promoting the success of the Group in a way which ensures that the interests of shareholders and stakeholders are promoted and protected. The conduct of the Board is governed by the Constitution of Atlas, the Corporations Act, the ASX Listing Rules and common law.

The Board's responsibilities are detailed in a formal Board Charter which the Board is responsible for reviewing every financial year. The Board Charter is available on Atlas' website.

The following are regarded as the key responsibilities and functions of the Board:

• Developing, reviewing and monitoring long-term business strategies and providing strategic direction to management;

• Ensuring policies and procedures are in place to safeguard Atlas' assets and business, and to enable Atlas to act ethically and prudently;

• Developing and promoting corporate governance systems which ensure Atlas is properly managed;

• Identifying Atlas' principal risks and ensuring appropriate risk systems are in place and that management is taking appropriate action to mitigate those risks;

• Reviewing and approving Atlas' financial statements;

• Monitoring management's performance and Atlas' financial results on a regular basis

• Appointing, ratifying, appraising and determining the remuneration and benefits of the Managing Director;