Devine : 2018 Corporate Governance Statement & Appendix 4G

CORPORATE GOVERNANCE STATEMENT

This Corporate Governance Statement (Statement) indicates Devine Limited's (Devine or Company) conformance with the Australian Securities Exchange (ASX) Corporate Governance Council's Corporate Governance Principles and Recommendations (3rd Edition) (Principles and Recommendations), as required by the ASX Listing Rules. It has been summarised into sections in line with the eight core corporate governance principles as specified by the Principles and Recommendations.

The Statement contains specific information in relation to the governance practices adopted by Devine and in compliance with the "if not, why not" regime, areas of non-compliance are disclosed under the relevant principle and where the Company has not adopted a recommendation, the Statement will explain why.

An assessment of the Company's governance practices against the Principles and Recommendations has been undertaken by the Board and Devine's Management. The Company's governance practices as disclosed in this Statement are expected to achieve good governance outcomes and meet the reasonable expectations of most investors in most situations.

Documents supporting the Company's Corporate Governance framework referenced in this Statement are available in the 'Investor Relations' section on the Company's website at the following link: www.devinegroup.com.au.

This Statement is current as at 29 March 2019, and has been approved by the Board.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Role of the Board and Management

The Board acts on behalf of the Company's shareholders and is accountable to them as its agents. It appoints a management team headed by the Chief Executive Officer (CEO) to help run the day to day affairs of the Company.

There is a clear division of roles and responsibilities between the Board and Management. The Board is responsible for seeking and identifying the expectations of shareholders, as well as other regulatory and ethical expectations and obligations. In addition, it is also responsible for identifying areas of business opportunities and significant business risks and ensuring arrangements are in place to adequately take advantage of the opportunities and manage those risks.

The responsibility for the operation and administration of the consolidated entity is delegated to the CEO and the Executive Management Team. The Board ensures that this team works within authority limits and delegations and are appropriately qualified and experienced to discharge their responsibilities.

The Board's role and responsibilities are set out in the Board Charter along with delegations to senior management and certain Committees. The Board Charter is available at: www.devinegroup.com.au/asx-information/policies-compliance.aspx.

Key accountabilities and matters reserved for the Board include:

•approval and adoption of budgets by management and the monitoring of progress against those budgets. This includes the establishment and monitoring of key performance indicators (both financial and non-financial) for all significant business processes, the establishment of financial delegations by the Board to management and staff and the review and ratification of systems of risk management and internal compliance and control, codes of conduct and legal compliance;

•to select and appoint (and if appropriate, remove from office) the CEO and determine his/her conditions of service; and

•the Company's formal "Performance Management Plan" which assesses the performance of the Executive Management Team and Senior Executives. The performance of the Executive Management Team was reviewed during the 2018 Financial Year.

The Board establishes and disbands committees as required in order to support the Board in carrying out its responsibilities. Director appointments to the Board Committees are by formal resolution of the Board. Attendance at full Board and Board Committee meetings is tabulated in the Directors' report section of the Company's 2018 Annual Report.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT (CONTINUED)

Appointment of Directors and Senior Management

The Board is charged in terms of its charter with:

•reviewing Board composition;

•recommending the appointment or removal of Directors; and

•assisting in identifying, interviewing and recruiting candidates for appointment as Directors.

The Board ensures that appropriate background checks are performed for all new Director and Senior Executive appointments.

The Company has formal appointment letters with each Non-Executive Director and formal employment agreements with the CEO and each Senior Executive, setting out all the relevant terms of employment and appointment. Details of the remuneration of Directors and Key Management Personnel (KMP) are disclosed in the Remuneration report section of the Company's 2018 Annual Report.

The Company provides shareholders with all material information in its possession relevant to deciding whether or not to elect or re-elect a Director, including a statement as to whether the Board supports the election or re-election. The Company also advises shareholders as to whether the candidate is considered to be an independent Director.

New Directors are briefed on the Company's operations and all information relevant to the performance of their role. Directors have access to the Company Secretary and CEO at all times.

Company Secretary

The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do with the proper functioning of the Board, including advising on governance matters, monitoring that Board policies and procedures are followed, coordinating all Board business including meetings, agendas, Board papers and minutes. The Company Secretary is responsible for lodgements with relevant regulators, management of dividend payments and management of the relationship between shareholders and the share registry.

The decision to appoint or remove a Company Secretary is approved by the Board.

Diversity

The Board believes that a diverse and inclusive workforce at all levels of the organisation makes good business sense and the Board is committed to fostering a corporate culture that embraces diversity. Devine values diversity and aims to create a vibrant and inclusive workforce which is reflective of the communities in which it operates. The Company ensures that recruitment and selection practices are appropriately structured so that a diverse range of candidates are considered and there are no biases that might discriminate against candidates.

In building a more diverse and inclusive workforce, it is recognised that this enables a greater diversity of thought, more informed decision making and ultimately better business outcomes.

The Board has adopted a diversity policy which includes requirements for the Board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the Company's progress in achieving them. The Board has reviewed against these measurable objectives, which is referred to in the Diversity Report.

The Company's Diversity Policy and 2018 Diversity Report is available in the 'Investor Relations' section of the Company's website at: www.devinegroup.com.au/asx-information/policies-compliance.aspx.

PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT (CONTINUED)

Board and Committee Performance Evaluation

It is the responsibility of the Board to assess whether or not it continues to operate within established guidelines and with the appropriate skill mix. In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the Chairman reviews the performance of all Directors annually and may ask Directors whose performance is considered unsatisfactory to retire.

The review process includes interviews with Directors and Senior Executives and it may also involve interviews with key stakeholders.

The Board's performance is reviewed annually and a Board performance evaluation was conducted during the 2018 Financial Year. The review indicated that the Board and its Committees are functioning effectively.

Senior Executive Performance Evaluation

The Board is responsible for determining and reviewing the compensation arrangements for KMP and Senior Executives. It is the Company's objective to provide maximum stakeholder benefit from the retention of a high quality executive team by remunerating Senior Executives fairly and appropriately and with reference to relevant employment and market conditions.

The expected outcomes of the remuneration structure are:

•to provide satisfactory returns to shareholders;

•the retention and motivation of Senior Executives;

•to attract quality management to the Company; and

•to provide performance incentives which are aligned with the interests of shareholders.

The Board is also responsible for reviewing the performance of the KMP. The roles and responsibilities of the CEO and KMP are established through key performance objectives. They are assessed against those objectives on an annual basis, or more frequently if that is considered necessary.

Full details of the Company's remuneration philosophy and structure, and payments to Directors and KMP are set out in the Company's Remuneration Report section of the Company's 2018 Annual Report.