EQ RESOURCES LIMITED — Governance Information 2020

Oct 25, 2020

ABN: 77 115 009 106 (ASX: SEI)

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26 October 2020

Company Announcements Office ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000

Appendix 4G and 2020 Corporate Governance Statement

In accordance with Listing Rules 4.7.3 and 4.7.4, Speciality Metals International Limited attaches a copy of its 2020 Corporate Governance Statement and Appendix 4G for release to the market.

Release of market announcement authorised by: Further Enquiries: Suzanne Irwin Peter Taylor Company Secretary Investor Relations Speciality Metals International Limited 0412 036 231 peter@nwrcommuniciations.com.au

About the Company

Speciality Metals International Limited is an ASX-listed company transforming its world-class tungsten assets at Mt Carbine in North Queensland; leveraging advanced technology, historical stockpiles and unexploited resource with the aim of being the pre-eminent tungsten producer in Australia. The Company also holds gold exploration licences in New South Wales. The Company aims to create shareholder value through the exploration and development of its current portfolio whilst continuing to evaluate corporate and exploration opportunities within the new economy and critical minerals sector.

REGISTERED OFFICE: Office 06-110, Level 6 25 King Street, Bowen Hills Queensland 4006 PRINCIPAL PLACE OF BUSINESS: 6888 Mulligan Highway, Mt Carbine Qld 4871 POSTAL ADDRESS: PO Box 1496, Mareeba Qld 4880

T: (07) 4094 3072 F: (07) 4094 3036 W: specialitymetalsintl.com.au

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SPECIALITY METALS INTERNATIONAL LIMITED ABN 77 115 009 106 (COMPANY)

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CORPORATE GOVERNANCE STATEMENT - FOR THE FINANCIAL YEAR ENDING 30 JUNE 2020

This Corporate Governance Statement is current as at 23 September 2020 and has been approved by the Board of the Company on that date.

This Corporate Governance Statement discloses the extent to which the Company has, during the financial year ending 30 June 2020 (“ reporting period ”) , followed the recommendations set by the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations (3[rd] Edition) ( Recommendations ). The Recommendations are not mandatory, however the Recommendations that have not been followed for any part of the reporting period have been identified and reasons provided for not following them along with what (if any) alternative governance practices were adopted in lieu of the recommendation during that period.

The Company has adopted a Corporate Governance Plan which provides the written terms of reference for the Company’s corporate governance duties. The Company’s Corporate Governance Plan is available on the Company’s website at http://www.specialitymetalsintl.com.au.

RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1 A listed entity should have and disclose a charter which sets out the respective roles and responsibilities of the Board, the Chair and management, and includes a description of those matters expressly reserved to the Board and those delegated to management.	YES	The Company has adopted a Board Charter that sets out the specific roles and responsibilities of the Board, the Chair and management and includes a description of those matters expressly reserved to the Board and those delegated to management. The Board Charter sets out the specific responsibilities of the Board, requirements as to the Board’s composition, the roles and responsibilities of the Chairman and Company Secretary, the establishment, operation and management of Board Committees, Directors’ access to Company records and information, details of the Board’s relationship with management, details of the Board’s performance review and details of the Board’s disclosure policy. A copy of the Company’s Board Charter, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Recommendation 1.2 A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a Director; and (b) provide security holders with all material information relevant to a decision on whether or not to elect or re-elect a Director.	YES	(a) The Company has guidelines for the appointment and selection of the Board in its Corporate Governance Plan. The Company’s Remuneration & Nomination Committee Charter (in the Company’s Corporate Governance Plan) requires the Remuneration & Nomination Committee to ensure appropriate checks (including checks in respect of character, experience, education, criminal record and bankruptcy history, as appropriate) are undertaken before appointing a person, or putting forward to security holders a candidate for election, as a Director. (b) Under the Remuneration & Nomination Committee Charter, all material information relevant to a decision on whether or not to elect or re-elect a Director must be provided to security holders in the Notice of Meeting containing the resolution to elect or re-elect a Director.
Recommendation 1.3 A listed entity should have a written agreement with each Director and senior executive setting out the terms of their appointment.	YES	The Company’s Remuneration & Nomination Committee Charter requires the Remuneration & Nomination Committee to ensure that each Director and senior executive is a party to a written agreement with the Company which sets out the terms of that Director’s or senior executive’s appointment. The Company has had written agreements with each of its Directors and senior executives for the past financial year.
Recommendation 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.	YES	The Board Charter outlines the roles, responsibility and accountability of the Company Secretary. In accordance with this, the Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board.

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• RECOMMENDATIONS (3 P [RD] P EDITION) COMPLY EXPLANATION Recommendation 1.5 (a) The Company has adopted a Diversity Policy which provides a A listed entity should: PARTIALLY framework for the Company to establish and achieve measurable diversity objectives, including in respect of gender diversity.

• (a) have a diversity policy which includes requirements for the The Diversity Policy allows the Board to set measurable gender Board or a relevant committee of the Board to set measurable diversity objectives, if considered appropriate, and to assess annually objectives for achieving gender diversity and to assess annually both the objectives (if any have been set) and the Company’s progress both the objectives and the entity’s progress in achieving them; in achieving them.

• (b) disclose that policy or a summary or it; and

• (c) disclose as at the end of each reporting period:

• (i) the measurable objectives for achieving gender diversity set by the Board in accordance with the entity’s diversity policy and its progress towards achieving them; and

• (ii) either:

  • (A) 0Bthe 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

  • (B) 1Bif the entity is a “relevant employer” under the Workplace Gender Equality Act, the entity’s most recent “Gender Equality Indicators”, as defined in the Workplace Gender Equality Act.

• (b) The Diversity Policy is available, as part of the Corporate Governance Plan, on the Company’s website.

• (c) (i) The Board did not set measurable gender diversity objectives for the past financial year, because:

• the Board did not anticipate there would be a need to appoint any new Directors or senior executives due to limited nature of the Company’s existing and proposed activities and the Board’s view that the existing Directors and senior executives have sufficient skill and experience to carry out the Company’s plans; and

• if it became necessary to appoint any new Directors or senior executives, the Board considered the application of a measurable gender diversity objective requiring a specified proportion of women on the Board and in senior executive roles will, given the small size of the Company and the Board, unduly limit the Company from applying the Diversity Policy as a whole and the Company’s policy of appointing based on skills and merit.

• (ii) The Company did not have any women on the Board or in senior executive positions at the end of the reporting period.

  • 37.5% of employees of the Company and its wholly-owned

  • subsidiaries were women. In the retreatment plant joint venture in which the company has an interest of 50%, 10% of employees were women.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Recommendation 1.6 A listed entity should: (a) 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.	YES	(a) The Company’s Remuneration & Nomination Committee is responsible for evaluating the performance of the Board, its committees and individual Directors on an annual basis. It may do so with the aid of an independent advisor. The process for this is set out in the Company’s Corporate Governance Plan, which is available on the Company’s website. (b) During the Reporting Period, the Company completed formal performance evaluations in respect of the Board and its committees. Performance evaluations for individual Directors for the past financial year were performed on an informal basis.
Recommendation 1.7 A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	YES	(a) The Company’s Remuneration & Nomination is responsible for evaluating the performance of the Company’s senior executives on an annual basis. The Company’s Remuneration & Nomination Committee (or, in its absence, the Board) is responsible for evaluating the remuneration of the Company’s senior executives on an annual basis. A senior executive, for these purposes, means key management personnel (as defined in the Corporations Act) other than a non- executive Director. The applicable processes for these evaluations can be found in the Company’s Corporate Governance Plan, which is available on the Company’s website. (b) During the reporting period, the Company had undertaken an evaluation of the Executive Chairman on an informal basis.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Principle 2: Structure the Board to add value
Recommendation 2.1 The Board of a listed entity should: (a) have a nomination committee which: (i) has at least three members, a majority of whom are independent Directors; and (ii) is chaired by an independent Director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 (b) 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, experience, independence and knowledge of the entity to enable it to discharge its duties and responsibilities effectively.	PARTIALLY	(a) During the Reporting Period, the Company established a Remuneration & Nomination Committee with all three Board members, the majority of whom are not independent, being involved in the Company’s nomination process to the maximum extent permitted under the Corporations Act and ASX Listing Rules with non-executive director Yeo Zhui Pei, who is not independent, nominated to Chair the Committee. (b) A copy of the Company’s Remuneration & Nomination Committee Charter, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website. The Charter requires (where possible) that the Committee shall consist of not less than three members with a majority of members independent non-executive Director, with any director to be appointed as Chair. (c) The qualifications of the directors and number of meetings held and attended by directors is provided in the Company’s annual report.

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Recommendation 2.2

A listed entity should have and disclose a Board skill matrix setting out the mix of skills and diversity that the Board currently has or is looking to achieve in its membership.

	YES	The Board regularly 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 perspective will be effective in	The Board regularly 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 perspective will be effective in	The Board regularly 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 perspective will be effective in
		supporting and enabling delivery of good governance for the Company and value for the Company’s shareholders. As at 30 June 2020, the Board was
		comprised of three directors from diverse backgrounds	with a range of
		business experience, skills and attributes. The following demonstrates
		the skills and experience of the directors across several	dimensions that
		are relevant to the Company:
				# of directors
		Managing and leadership
		• Senior management positions held outside the		3
		Company (past and present)
		Resource Industry Experience
		• Management/board representation on other resource		3
		entities (past and present)
		• Experience in resource-based transactions, joint		3
		ventures, acquisitions and/or disposals
		• Management of resource production activities (past		1
		and present)
		• Commodity value chain expertise (market analysis,		1
		commercial trading arrangements)
		Governance or regulatory
		• Experience in governance of listed organisations		3
		• Board membership of other listed entities (past or		1
		present)
		Strategy
		• Experience in growing the business, assessing value-		3
		based opportunities, thinking strategically in order to
		review and challenge management, make informed
		decisions and assess performance against strategy
		Financial acumen
		• Financial literacy		3
		• Execution or involvement in equity and debt funding		1
		strategies, capital and debt raising
		In addition, the Board Charter requires the disclosure	of each Board
		member’s qualifications and expertise. Full details as to each Director and
		senior executive’s relevant skills and experience are available in the
		Company’s Annual Report.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Recommendation 2.3 A listed entity should disclose: (a) the names of the Directors considered by the Board to be independent Directors; (b) if a Director has an interest, position, association or relationship of the type described in Box 2.3 of the ASX Corporate Governance Principles and Recommendation (3rd Edition), 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 (c) the length of service of each Director	YES	(a) The Board Charter requires the disclosure of the names of Directors considered by the Board to be independent. The Board considers Mr Stephen Layton to be independent. (b) There are no independent Directors who fall into this category. (c) The Company’s Annual Report discloses the length of service of each Director.
Recommendation 2.4 A majority of the Board of a listed entity should be independent Directors.	NO	The Company’s Board Charter requires that, where practical, the majority of the Board should be independent. In August 2019, there was a significant change in the membership of the Board, such that there was not an independent majority of the Board. The Company considers the appointment of Mr Oliver Kleinhempel and Mr Yeo Zhui Pei, who are not independent, are of great benefit in developing the Company’s tungsten and minerals portfolio, given their wealth of technical and management experience in the minerals and processing business. It is noted the composition of the Board will be reassessed in future in line with changes in the Company's operations and level of activity and will be adjusted as deemed appropriate. The Board will consider the ASX Recommendations in assessing any future changes in Board composition.

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RECOMMENDATIONS (3 P [RD] P EDITION) COMPLY Recommendation 2.5 The Chair of the Board of a listed entity should be an independent NO Director and, in particular, should not be the same person as the CEO of the entity.

EXPLANATION

The Board Charter provides that, where practical, the Chair of the Board should be an independent Director and should not be the CEO/Managing Director.

For the Reporting Period, up to 24 April 2020, the Chair of the Company was Mr Russell Krause, who was not an independent Director. Mr Krause was also Executive Chairman of the Company. As such, the role of the Managing Director and Chairman was the same person.

The Board did not previously consider that separating the roles of the Managing Director and Chairman was appropriate for the past financial year given:

• the Board believes the current membership reflects an appropriate mix of experience and ability to represent all shareholders at present;

• the Company considered it necessary, given its speculative and small-scale activities, to attract and retain suitable Directors by offering Directors an interest in the Company; and

• the Company considered it appropriate to provide remuneration to its Directors in the form of securities in order to conserve its limited cash reserves.

On 13 May 2020, Mr Oliver Kleinhempel, who is not independent, assumed the role of Non-Executive Chairman for a transitional period, with Mr Kevin MacNeill appointed as Interim-CEO, providing a separation of these roles.

It is noted the composition of the Board will be reassessed in future in line with changes in the Company's operations and level of activity and will be adjusted as deemed appropriate. The Board will consider the ASX Recommendations in assessing any future changes in Board composition.

		MacNeill appointed as Interim-CEO, providing a separation of these roles. It is noted the composition of the Board will be reassessed in future in line with changes in the Company's operations and level of activity and will be adjusted as deemed appropriate. The Board will consider the ASX Recommendations in assessing any future changes in Board composition.
Recommendation 2.6		In accordance with the Company’s Board Charter, the Remuneration and
A listed entity should have a program for inducting new Directors and providing appropriate professional development opportunities for continuing Directors to develop and maintain the skills and knowledge needed to perform their role as a Director effectively.	YES	Nomination Committee (or, in its absence, the Board) is responsible for the approval and review of induction and continuing professional development programs and procedures for Directors to ensure that they can effectively discharge their responsibilities. The Company Secretary is responsible for facilitating inductions and professional development.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Principle 3: Act ethically and responsibly
Recommendation 3.1 A listed entity should: (a) have a code of conduct for its Directors, senior executives and employees; and (b) disclose that code or a summary of it.	YES	(a) The Company’s Corporate Code of Conduct applies to the Company’s Directors, senior executives and employees. (b) The Company’s Corporate Code of Conduct (which forms part of the Company’s Corporate Governance Plan) is available on the Company’s website.
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1 The Board of a listed entity should: (a) have an audit committee which: (i) has at least three members, all of whom are non-executive Directors and a majority of whom are independent Directors; and (ii) is chaired by an independent Director, who is not the Chair of the Board, and disclose: (i) the charter of the committee; (ii) the relevant qualifications and experience of the members of the committee; and (iii) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (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 financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.	PARTIALLY	(a) The Company has an Audit and Risk Committee Charter that provides for the creation of an Audit and Risk Committee, with at least three members, all of whom must be independent Directors, and which must be chaired by an independent Director who is not the Chair. The Company has separated the Audit and Risk Committees to facilitate focus on the responsibilities of each. During the Reporting Period, the Audit Committee was chaired by Mr Stephen Layton, who replaced Mr Rolly Nice as Chair of the Committee in August 2019, both of whom were deemed to be independent and neither were Chair of the Board. All directors participated in the Audit Committee, with the majority of directors not independent. The Company’s Audit and Risk Charter is available on the Company’s website. The qualifications of directors and number of meetings held and attended by directors is provided in the Company’s annual report.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Recommendation 4.2 The Board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that 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.	YES	The Company’s Audit Committee Charter requires the CEO and CFO (or, if none, the person(s) fulfilling those functions) to provide a sign off on these terms. The Company has obtained a sign off on these terms for each of its half year and annual financial statements in the past financial year.
Recommendation 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.	YES	The Company’s Corporate Governance Plan provides that the Board must ensure the Company’s external auditor attends its AGM and is available to answer questions from security holders relevant to the audit. The Company’s external auditor attended the Company’s last AGM during the past financial year.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1 A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	YES	(a) The Board Charter provides details of the Company’s disclosure policy. In addition, the Corporate Governance Plan details the Company’s disclosure requirements as required by the ASX Listing Rules and other relevant legislation. (b) The Corporate Governance Plan, which incorporates the Board Charter, is available on the Company website.
Principle 6:Respect the rights of security holders
Recommendation 6.1 A listed entity should provide information about itself and its governance to investors via its website.	YES	Information about the Company and its governance is available in the Corporate Governance Plan which can be found on the Company’s website.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Recommendation 6.2 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	YES	The Company has adopted a Shareholder Communications Strategy which aims to promote and facilitate effective two-way communication with investors. The Strategy outlines a range of ways in which information is communicated to shareholders and is available on the Company’s website as part of the Company’s Corporate Governance Plan.
Recommendation 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.	YES	Shareholders are encouraged to participate at all general meetings and AGMs of the Company. Upon the despatch of any notice of meeting to Shareholders, the Company Secretary shall send out material stating that all Shareholders are encouraged to participate at the meeting.
Recommendation 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.	YES	The Shareholder Communication Strategy provides that security holders can register with the Company to receive email notifications when an announcement is made by the Company to the ASX, including the release of the Annual Report, half yearly reports and quarterly reports. Links are made available to the Company’s website on which all information provided to the ASX is immediately posted. Shareholder queries should be referred to the Company Secretary at first instance.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Principle 7: Recognise and manage risk
Recommendation 7.1 The Board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (i) has at least three members, a majority of whom are independent Directors; and (ii) is chaired by an independent Director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the process it employs for overseeing the entity’s risk management framework.	PARTIALY	(a) The Company’s Corporate Governance Plan contains an Audit and Risk Committee Charter that provides for the creation of an Audit and Risk Committee with at least three members, the majority of whom must be independent Directors, and which must be chaired by an independent Director. The Company has separated the Audit and Risk Committees to facilitate focus on the responsibilities of each. The Company had a Risk Committee for the past financial year on which all directors participated, with Oliver Kleinhempel replacing Russell Krause as Chairman, neither of whom were deemed independent. A copy of the Corporate Governance Plan is available on the Company’s website. The qualifications of directors and number of meetings held and attended by directors is provided in the Company’s annual report.
Recommendation 7.2 The Board or a committee of the Board should: (a) review the entity’s risk management framework with management at least annually to satisfy itself that it continues to be sound; and (b) disclose in relation to each reporting period, whether such a review has taken place.	YES	(a) The Audit and Risk Committee Charter requires that the Audit and Risk Committee (or, in its absence, the Board) should, at least annually, satisfy itself that the Company’s risk management framework continues to be sound. (b) The Company’s Board has completed a review of the Company’s risk management framework in the past financial year.

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RECOMMENDATIONS (3 P [RD] P EDITION) COMPLY EXPLANATION Recommendation 7.3 (a) A listed entity should disclose: YES

• (a) The Audit and Risk Committee Charter provides for the Audit and Risk Committee to monitor the need for an internal audit function.

• (b) The Company did not have an internal audit function for the past financial year. The Company employed the following process for evaluating and continually improving the effectiveness of its risk management and internal control processes:

• (a) if it has an internal audit function, how the function is structured and what role it performs; or

• (b) 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.

• (i) the Board monitors the need for an internal audit function having regard to the size, location and complexity of the Company’s operations;

• (ii) the Board periodically undertakes an internal review of financial systems and processes where systems are considered to require improvement these systems are developed; and

• (iii) The Board reviews risk management and internal compliance procedures at each Board meeting and monitors the quality of the accounting function.

		systems and processes where systems are considered to require improvement these systems are developed; and (iii) The Board reviews risk management and internal compliance procedures at each Board meeting and monitors the quality of the accounting function.
Recommendation 7.4		The Audit and Risk Committee Charter requires the Audit and Risk
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.	YES	Committee (or, in its absence, the Board) to assist management determine whether the Company has any material exposure to economic, environmental and social sustainability risks and, if it does, how it manages or intends to manage those risks.
		The Company’s Corporate Governance Plan requires the Company to
		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. The Company discloses this information in its Annual
		Report as part of its continuous disclosure obligations.

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RECOMMENDATIONS (3PRD PEDITION)	COMPLY	EXPLANATION
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1 The Board of a listed entity should: (a) have a remuneration committee which: (i) has at least three members, a majority of whom are independent Directors; and (ii) is chaired by an independent Director, and disclose: (iii) the charter of the committee; (iv) the members of the committee; and (v) 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 (b) 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.	PARTIALLY	(a) During the Reporting Period the company established a Remuneration & Nomination Committee with all Board members being involved, and non-executive director Yeo Zhui Pei, who is not independent, nominated to Chair the Committee. A copy of the Company’s Remuneration & Nomination Committee Charter, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website. The Charter requires (where possible) that the Committee shall consist of not less than three members with a majority of members independent non-executive Director, with any director to be appointed as Chair. The qualifications of directors and number of meetings held and attended by directors is provided in the Company’s annual report.
Recommendation 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 and ensure that the different roles and responsibilities of non-executive Directors compared to executive Directors and other senior executives are reflected in the level and composition of their remuneration.	YES	The Company’s Corporate Governance Plan requires the Board to disclose its policies and practices regarding the remuneration of Directors and senior executives, which is disclosed in its Annual Report.

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RECOMMENDATIONS (3 P [RD] P EDITION) Recommendation 8.3

A listed entity which has an equity-based remuneration scheme should:

• (a) 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

• (b) disclose that policy or a summary of it.

COMPLY

EXPLANATION

(a) The Company had an equity-based remuneration scheme during the past financial year. The Company’s Corporate Governance Plan YES prohibits Key Management Personnel entering into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme. (b) Executives are prohibited from entering into transactions or arrangements which limit the economic risk of participating in equitybased remuneration or in unvested entitlements.

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Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:

SPECIALITY METALS INTERNATIONAL LIMITED

ABN / ARBN: 77 115 009 106	Financial year ended:
77 115 009 106	30 JUNE 2020

Our corporate governance statement[2] for the above period above can be found at:[3]

These pages of our annual report:

This URL on our website: http://www.specialitymetalsintl.com.au

The Corporate Governance Statement is accurate and up to date as at 23 September 2020 and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.

Date: 26 October 2020

Name of Secretary authorising lodgement: Suzanne Irwin

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1 Under Listing Rule 4.7.3, an entity must lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX.

Listing Rule 4.10.3 requires an entity that is included in the official list as an ASX Listing to include in its annual report either a corporate governance statement that meets the requirements of that rule or the URL of the page on its website where such a statement is located. The corporate governance statement must disclose the extent to which the entity has followed the recommendations set by the ASX Corporate Governance Council during the reporting period. If the entity has not followed a recommendation for any part of the reporting period, its corporate governance statement must separately identify that recommendation and the period during which it was not followed and state its reasons for not following the recommendation and what (if any) alternative governance practices it adopted in lieu of the recommendation during that period.

Under Listing Rule 4.7.4, if an entity chooses to include its corporate governance statement on its website rather than in its annual report, it must lodge a copy of the corporate governance statement with ASX at the same time as it lodges its annual report with ASX. The corporate governance statement must be current as at the effective date specified in that statement for the purposes of rule 4.10.3.

2 “Corporate governance statement” is defined in Listing Rule 19.12 to mean the statement referred to in Listing Rule 4.10.3 which discloses the extent to which an entity has followed the recommendations set by the ASX Corporate Governance Council during a particular reporting period.

3 Mark whichever option is correct and then complete the page number(s) of the annual report, or the URL of the web page, where the entity’s corporate governance statement can be found. You can, if you wish, delete the option which is not applicable.

Throughout this form, where you are given two or more options to select, you can, if you wish, delete any option which is not applicable and just retain the option that is applicable. If you select an option that includes “OR” at the end of the selection and you delete the other options, you can also, if you wish, delete the “OR” at the end of the selection.

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ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	… the fact that we follow this recommendation: in our Corporate Governance Statement … and information about the respective roles and responsibilities of our board and management (including those matters expressly reserved to the board and those delegated to management): at http://www.specialitymetalsintl.com.au/corpgov as part of the Company’s Corporate Governance Plan,
1.2	A listed entity should: (a) undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director; and (b) 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.	… the fact that we follow this recommendation: in our Corporate Governance Statement
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	… the fact that we follow this recommendation: in our Corporate Governance Statement
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.	… the fact that we follow this recommendation: in our Corporate Governance Statement

4 If you have followed all of the Council’s recommendations in full for the whole of the period above, you can, if you wish, delete this column from the form and re-format it.

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
1.5	A listed entity should: (a) 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; (b) disclose that policy or a summary of it; and (c) 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: (1) 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.		an explanation why that is so in our Corporate Governance Statement A copy of our diversity policy, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website: at http://www.specialitymetalsintl.com.au … and the information referred to in paragraphs (c)(1): in our Corporate Governance Statement
1.6	A listed entity should: (a) 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.	… the evaluation process referred to in paragraph (a): in our Corporate Governance Statement … and the information referred to in paragraph (b): in our Corporate Governance Statement
1.7	A listed entity should: (a) have and disclose a process for periodically evaluating the performance of its senior executives; and (b) disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process.	… the evaluation process referred to in paragraph (a): in our Corporate Governance Statement … and the information referred to in paragraph (b): in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 2 - STRUCTURE THE BOARD TO ADD VALUE
2.1	The board of a listed entity should: (a) have a nomination committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) 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 (b) 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.		an explanation why that is so in our Corporate Governance Statement … a copy of the charter of the committee, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website: at http://www.specialitymetalsintl.com.au/corpgov … and the information referred to in paragraphs (4) and (5): in our 2020 Annual Report
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 in its membership.	… our board skills matrix setting out the mix of skills that the board currently has: in our Corporate Governance Statement
2.3	A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) 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 (c) the length of service of each director.	… the names of the directors considered by the board to be independent directors: in our Corporate Governance Statement … and, where applicable, the information referred to in paragraph (b): in our Corporate Governance Statement … and the length of service of each director: in our 2020 Annual Report at http://www.specialitymetalsintl.com.au
2.4	A majority of the board of a listed entity should be independent directors.		an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
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.		an explanation why that is so in our Corporate Governance Statement
2.6	A listed entity should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.	… the fact that we follow this recommendation: in our Corporate Governance Statement
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1	A listed entity should: (a) have a code of conduct for its directors, senior executives and employees; and (b) disclose that code or a summary of it.	… our code of conduct or a summary of it: at http://www.specialitymetalsintl.com.au/corpgov as part of the Company’s Corporate Governance Plan
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
4.1	The board of a listed entity should: (a) have an audit committee which: (1) has at least three members, all of whom are non-executive directors and a majority of whom are independent directors; and (2) is chaired by an independent director, who is not the chair of the board, and disclose: (3) the charter of the committee; (4) the relevant qualifications and experience of the members of the committee; and (5) in relation to each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (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.		… that does not comply with recommendation 4.1(a)(1) an explanation why that is so in our Corporate Governance Statement … the fact that we have an audit committee that is chaired by an independent director, who is not the chair of the board: in our Corporate Governance Statement … a copy of the charter of the committee, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website: at http://www.specialitymetalsintl.com.au/corpgov … and the information referred to in paragraphs (4) and (5): in our 2020 Annual Report

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
4.2	The board of a listed entity should, before it approves the entity’s financial statements for a financial period, receive from its 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.	… the fact that we follow this recommendation: in our Corporate Governance Statement
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.	… the fact that we follow this recommendation: in our Corporate Governance Statement
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1	A listed entity should: (a) have a written policy for complying with its continuous disclosure obligations under the Listing Rules; and (b) disclose that policy or a summary of it.	… our continuous disclosure compliance policy or a summary of it: at http://www.specialitymetalsintl.com.au/corpgov as part of the Company’s Corporate Governance Plan
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.	… information about us and our governance on our website: at http://www.specialitymetalsintl.com.au
6.2	A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.	… the fact that we follow this recommendation: in our Corporate Governance Statement
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.	… our policies and processes for facilitating and encouraging participation at meetings of security holders: in our Corporate Governance Statement
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.	… the fact that we follow this recommendation: in our Corporate Governance Statement

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
7.1	The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) 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 (b) 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.		… that does not comply with recommendation 4.1(a)(1) or 4.1(a)(2) an explanation why that is so in our Corporate Governance Statement … a copy of the charter of the committee, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website: at http://www.specialitymetalsintl.com.au/corpgov … and the information referred to in paragraphs (4) and (5): in our 2020 Annual Report
7.2	The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	… the fact that board or a committee of the board reviews the entity’s risk management framework at least annually to satisfy itself that it continues to be sound: in our Corporate Governance Statement … and that such a review has taken place in the reporting period covered by this Appendix 4G: in our Corporate Governance Statement
7.3	A listed entity should disclose: (a) if it has an internal audit function, how the function is structured and what role it performs; or (b) 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.	… the fact that we do not have an internal audit function and the processes we employ for evaluating and continually improving the effectiveness of our risk management and internal control processes: in our Corporate Governance Statement
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.	… whether we have any material exposure to economic, environmental and social sustainability risks and, if we do, how we manage or intend to manage those risks: in our 2020 Annual Report

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Corporate Governance Council recommendation	Corporate Governance Council recommendation	We have followed the recommendation in full for the whole of the period above. We have disclosed …	We have NOT followed the recommendation in full for the whole of the period above. We have disclosed …4
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1	The board of a listed entity should: (a) have a remuneration committee which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) 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 (b) 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.		… that does not comply with recommendation 8.1(a)(1) or 8.1(a)(2) an explanation why that is so in our Corporate Governance Statement …. that the Company has a remuneration committee. … a copy of the charter of the committee, which is part of the Company’s Corporate Governance Plan, is available on the Company’s website: at http://www.specialitymetalsintl.com.au/corpgov … and the information referred to in paragraphs (4) and (5): in our 2020 Annual Report
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.	… separately our remuneration policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives: in our 2020 Annual Report
8.3	A listed entity which has an equity-based remuneration scheme should: (a) 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 (b) disclose that policy or a summary of it.	… our policy on this issue or a summary of it: in our Corporate Governance Statement

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