Dynasty Resources : Corporate Governance Statement 2016

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE STATEMENT - 2016

This statement reports on the main corporate governance practices of Dynasty Resources Limited (Company) as at 30 September 2016. References in this statement to "reporting period" are to the financial year ended 30 June 2016.

THE COMPANY'S APPROACH TO CORPORATE GOVERNANCE

The Board are committed to maintaining high standards of ethical behaviour and having an effective system of corporate governance, which is commensurate with the size of the Company and the nature of its business operations and activities.

The ASX Corporate Governance Council's 'Corporate Governance Principles and Recommendations' (Principles) provide a framework for good corporate governance. Commensurate with the spirit of the Principles, the Company has sought to apply the recommendations to the extent the Board considered their implementation was practical and likely to genuine improve the Company's internal processes and accountability to external stakeholders. The directors of the Company recognise the need for high standards of corporate governance. This Statement explains how the Company addresses the ASX Corporate Governance Council's 'Corporate Governance Principles and Recommendations - 3rd Edition' (referred to as either ASX Principles or Recommendations).

Where the Company's compliance with the Principles and Recommendations is reflected in a separate document or policy, a reference to the location of that document or policy is included in this statement.

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT RECOMMENDATION 1.1 - RECOMMENDATION FOLLOWED

A listed entity should disclose:

1. the respective roles and responsibilities of its board and management; and

2. those matters expressly reserved to the board and those delegated to management.

The Company's Board Charter sets out (amongst other things): (a) the roles and responsibilities of the Board and of management; (b) the matters expressly reserved to the Board; and (c) the matters delegated to management.

A copy of the Board Charter can be viewed on the Company's website, or via this link: Board Charter

The Audit & Risk Committee has also been referred responsibilities by the Board as set out in the Committee's Charter. The Charter for the Committee can be viewed on the Company's website, or via this link: Audit and Risk Committee Charter

Other Delegations

The Board has appointed the following parties to provide technical and consulting services to the Company:

• Terra Search provide geological consulting services pursuant to a services agreement that outlines the role and responsibilities of Terra Search in relation to the provision of a comprehensive range of exploration and technical functions on behalf of the Company;

• Hetherington is engaged to provide exploration tenure management services across all tenements held by the Company;

• H & G Wilkinson is engaged to provide accounting and administration services in accordance with a services agreement. The services agreement outlines the role and responsibilities of H & G Wilkinson in relation to a comprehensive range of financial functions on behalf of the Company

  RECOMMENDATION 1.2 - RECOMMENDATION FOLLOWED

  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.

Prior to the appointment of a person, or putting forward to security holders a candidate for election, as a director, the Company will undertake checks which it believes are appropriate to verify a director's character, experience, education, criminal record and bankruptcy history including for new directors:

• background and reference checking;

• requesting information in relation to the person's current and previous positions, directorships, bankruptcy history and any potential conflicts of interests.

  The Company ensures that all material information in its possession relevant to a shareholder's decision whether to elect or re- elect a director, including the information referred to in Recommendation 1.2, is provided to shareholders in the Company's Notice of Annual General Meeting.

  RECOMMENDATION 1.3 - RECOMMENDATION FOLLOWED

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

  Each director and senior executive of the Company has an agreement in writing with the Company which sets out the key terms and conditions of their appointment including their duties, rights and responsibilities and (to the extent applicable) the matters referred to in the commentary to Recommendation 1.3.

  RECOMMENDATION 1.4 - RECOMMENDATION FOLLOWED

  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 is accountable to the Board through the Chairman on all matters to do with the proper functioning of the Board. The Company Secretary is responsible for:

• advising the Board on corporate governance matters;

• managing the company secretarial function;

• attending all Board and Board committee meetings; and

• taking minutes and communicating with the ASX.

  A copy of the Board Charter can be viewed on the Company's website, or via this link: Board Charter

  RECOMMENDATION 1.5 - RECOMMENDATION NOT FOLLOWED

  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; and

• disclose as 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

2. 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 adopted a Diversity Policy. Taking into consideration the scale of the Company's operations, the size of the Board, and that the Company does not have any employees, the Board has not established measureable objectives relating to diversity.

A copy of the Diversity Policy is located on the Company's website, or via this link: Diversity Policy

The composition of the board is however reviewed on an annual basis and in the event a vacancy arises, the Board Charter requires that diversity be considered as part of the criteria in assessing candidates. As at the date of this Statement, the Board is composed of three male directors, and a female company secretary. A copy of the Board Charter can be viewed on the Company's website, or via this link: Board Charter

RECOMMENDATION 1.6 - RECOMMENDATION FOLLOWED

A listed entity should:

1. have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

2. disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Board's overall performance evaluation is conducted informally by the Chairman on a periodic basis. Whilst Recommendation 1.6 is not strictly followed, the Directors consider that at the date of this report the evaluation process of company directors is appropriate given the size of the Board. A more formal process of Board assessment will be considered in the future if there is any significant change to the Company's operations.

The informal review undertaken by the Board takes into account various matters including those set out in the Board Charter located on the Company's website, or via this link: Board Charter

The Board undertook this review during the period.

RECOMMENDATION 1.7 - RECOMMENDATION FOLLOWED

A listed entity should:

1. have and disclose a process for periodically evaluating the performance of its senior executives; and

2. disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.

The Company's only executive director is the Managing Director, whose performance is reviewed in accordance with Recommendation 1.6 above. This review was undertaken as part of that Board review during the period.

PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE RECOMMENDATION 2.1 - RECOMMENDATION FOLLOWED

The board of a listed entity should:

1. have a nomination committee which:

2. has at least three members, a majority of whom are independent directors; and

3. is chaired by an independent director, and disclose:

4. the charter of the committee;

5. the members of the committee; and

6. 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

7. 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.

The Company has not formed a separate nomination committee. The Board considers that the Company is not currently of a size, or its affairs of such complexity, or any efficiencies or other benefits would be gained by establishing a separate nomination committee. The Board as a whole considers those matters that would usually be the responsibility of a nomination committee.

The composition of the Board is reviewed annually by the Board to ensure it has an appropriate mix of skills and experience that enables the directors individually, and the Board collectively, to:

8. have a proper understanding of, and competence to deal with, the current and emerging issues of the Company and can effectively review and challenge the performance of those consultants and other advisors engaged to assist the Company in its exploration and other activities; and

9. discharge their legal duties and responsibilities effectively and efficiently.

   RECOMMENDATION 2.2 - RECOMMENDATION FOLLOWED

   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.

   The Board periodically evaluates the mix of skills, experience and diversity at the Board level. The Board believes that a highly credentialed Board, with a diversity of background, skills and perspectives, will be effective in supporting and enabling delivery of good governance for the Company and value for the Company's shareholders. The mix of skills comprised in the current Board, and that the Board would look to maintain, and to build on, includes:

10. mining industry expertise;

11. Asia international business experience and understanding of cultural, political, regulatory, and business requirements

12. ASX governance experience and expertise.

13. Accounting and corporate finance - including capital markets, corporate finance and restructuring

14. Acquisitions / joint ventures - experience in mergers and acquisitions, and joint venture business arrangements..

The Board aspires to have a Board comprised of individuals' diverse experience and expertise and will be mindful of this when making appointments which will also be based on merit.

The Non-Executive Directors possess a range of skills summarised in the below table:

Skills and Experience	Number of Directors
Mining industry	1
Asia international	3
ASX governance	1
Accounting and corporate finance	2
Acquisitions / joint ventures	2

RECOMMENDATION 2.3 - RECOMMENDATION FOLLOWED

A listed entity should disclose:

1. the names of the directors considered by the board to be independent directors;

2. 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

3. the length of service of each director.

As at the date of this Statement the board comprises one independent director (Bin Wang), one non-executive director (Qingzhou Yuan) and one executive director (Lewis Tay, Chairman and Managing Director).

The names of the directors who held office during the year are detailed on pages 10 and 12 of the Company's 2016 Annual Report in the Director's Report, together with details of each director's skills, experience and expertise, appointment date and whether the director is considered to be 'independent'. The Company's 2016 Annual Report is available on the website via this link: 2016 Annual Report

The independence of directors is reviewed annually. Based on the Company's criteria for assessing director independence, independent directors are asked to confirm whether they have any interests or relationships that may impact either on their ability to act in the best interests of the Company or independently of management. The criteria used to assess independence, including guidance for determining materiality, are reviewed annually and are set out in the Board Charter. As at the date of this Statement the Board comprises one independent Directors (Bin Wang), one Non-Executive Director (Qingzhou Yuan) and one Executive Director (Lewis Tay, Chairman and Managing Director). Qingzhou Yuan was appointed to the Board on 23 July 2015, having been nominated by the Company's shareholder Cyberstore Technology Limited.