Orion Equities : 2016 Corporate Governance Statement and Appendix 4G

In general, the Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. The Board is also responsible for the overall corporate governance of the Company, and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole.

The Board also ensures that the Company complies with all of its contractual, statutory and any other legal and regulatory obligations. The Board has the final responsibility for the successful operations of the Company. Where the Board considers that particular expertise or information is required, which is not available from within its members, appropriate external advice may be taken and reviewed prior to a final decision being made.

Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the matters set out below, subject to delegation to Senior Management as specified elsewhere in this Statement or as otherwise appropriate:

formulation and approval of the strategic direction, objectives and goals of the Company;

the prudential control of the Company's finances and operations and monitoring the financial performance of the Company;

the resourcing, review and monitoring of Senior Management and the Investment Committee;

ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained;

the identification of significant business risks and ensuring that such risks are adequately managed;

the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market;

the establishment and maintenance of appropriate ethical standards;

responsibilities typically assumed by a nomination committee, including (refer also Section 2.2):

devising criteria for Board membership, regularly reviewing the need for various skills and experience on the Board and identifying specific individuals for nomination as Directors; and

oversight of Board and Company Executive succession plans;

responsibilities typically assumed by an audit committee, including (refer also Section 4.1):

reviewing and approving the audited annual and reviewed half-yearly financial reports; and

reviewing the appointment of the external auditor, their independence, the audit fee and any questions of resignation or dismissal;

responsibilities typically assumed by a risk committee, including (refer also Section 7.1):

) ensuring that an appropriate risk management framework is in place and is operating properly; and

reviewing and monitoring legal and policy compliance systems and issues; and

responsibilities typically assumed by a remuneration committee, including (refer also Section 8.1):

reviewing the remuneration and performance of Directors;

setting policies for Senior Executive remuneration, setting the terms and conditions of employment for Senior Executives, undertaking reviews of Senior Executive performance, including setting goals and reviewing progress in achieving those goals; and

reviewing the Company's Senior Executive and employee incentive schemes (where applicable) and making recommendations on any proposed changes.

In view of the current composition of the Board (which comprises an Executive Chairman, an Executive Director and a Non-Executive Director) and the nature and scale of the Company's activities, the Board has considered that establishing formally-constituted committees for audit, risk, board nominations and remuneration would not add value for shareholders, and is therefore not required.

Accordingly audit matters, risk matters, the nomination of new Directors and the setting, or review, of remuneration levels of Directors and Executives are considered by the Board as a whole and approved by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest). That is, matters typically dealt with by audit, risk, nominations and remuneration committees are dealt with by the full Board.

The role of Senior Management is to deliver the strategic direction and goals determined by the Board.

The Board has delegated to the Executive Chairman, and through the Executive Chairman to other Senior Executives, responsibility for the day-to-day management of the Group, which includes:

management of the Group's operations and finances;

reporting to the Board on matters including the Group's operations and financial performance;

recommending Group strategy, budgets, plans, policies and risk management systems to the Board; and

determining Group policies, other than those reserved for the Board.

Senior Management may also be delegated responsibility for other matters under policies adopted by the Board.

The Company's Senior Management Team comprises the Executive Chairman (Mr Farooq Khan, appointed on 23 October 2006; previously Executive Chairman of the Company between 4 October 1999 and 1 July 2003) and the Executive Director/Company Secretary (Mr Victor Ho, appointed Executive Director on 4 July 2003 and Company Secretary on 2 August 2000).

The Board will consider nominations for appointment or election of Directors that may arise from time to time, having regard to the skills and experience required by the Company (as detailed in the Board Skills Matrix referred to in Section 2.1 below) and procedures outlined in the Company's Constitution and the Corporations Act 2001 (Cth).

The Company undertakes appropriate checks before appointing a person, or putting forward to shareholders a candidate for election, as a Director. Candidates are assessed through interviews, meetings and background and reference checks (which may be conducted both by external consultants and by Directors) as appropriate.

The Company gives shareholders all material information in its possession relevant to the decision on whether or not to elect (or re-elect) a Director, either in the notice of the meeting at which the election of the Director is to be held, or by including in the notice a clear reference to the location on the Company's website, Annual Report or other document lodged with ASX where the information can be found.