QUANTUM GRAPHITE LIMITED - Governance Information 2018

Rules 4.7.3 and 4.10.3[1]

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:

Quantum Graphite Limited ABN / ARBN: Financial year ended: ABN 41 008 101 979 30 June 2017

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.quantumgraphite.com/investors

The Corporate Governance Statement is accurate and up to date as at [insert effective date of statement] and has been approved by the board.

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

Date: 29 June 2018 Name of Director or Secretary authorising Sal Catalano lodgement:

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

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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 We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
1.5 A listed entity should: … the fact that we have a diversity policy that complies with ☒ an explanation why that is so in our Corporate Governance
(a) have a diversity policy which includes requirements for the paragraph (a): Statement
board or a relevant committee of the board to set ☐ in our Corporate Governance Statement OR
measurable objectives for achieving gender diversity and to
assess annually both the objectives and the entity’s progress ☐ at [ insert location ]
in achieving them;
… and a copy of our diversity policy or a summary of it:
(b) disclose that policy or a summary of it; and
☐ at [ insert location ]
(c) disclose as at the end of each reporting period the
measurable objectives for achieving gender diversity set by … and the measurable objectives for achieving gender diversity set by
the board or a relevant committee of the board in accordance the board or a relevant committee of the board in accordance with our
with the entity’s diversity policy and its progress towards diversity policy and our progress towards achieving them:
achieving them and either: ☐ in our Corporate Governance Statement OR
(1) the respective proportions of men and women on the
☐ at [ insert location ]
board, in senior executive positions and across the
whole organisation (including how the entity has defined … and the information referred to in paragraphs (c)(1) or (2):
“senior executive” for these purposes); or
☐ in our Corporate Governance Statement OR
(2) if the entity is a “relevant employer” under the Workplace
Gender Equality Act, the entity’s most recent “Gender ☐ at [ insert location ]
Equality Indicators”, as defined in and published under
that Act.
1.6 A listed entity should: … the evaluation process referred to in paragraph (a): ☒ an explanation why that is so in our Corporate Governance
(a) have and disclose a process for periodically evaluating the ☐ in our Corporate Governance Statement OR Statement
performance of the board, its committees and individual
directors; and ☐ at [ insert location ]
(b) disclose, in relation to each reporting period, whether a … and the information referred to in paragraph (b):
performance evaluation was undertaken in the reporting
☐ in our Corporate Governance Statement OR
period in accordance with that process.
☐ at [ insert location ]
1.7 A listed entity should: … the evaluation process referred to in paragraph (a): ☒ an explanation why that is so in our Corporate Governance
(a) have and disclose a process for periodically evaluating the ☐ in our Corporate Governance Statement OR Statement
performance of its senior executives; and
☐ at [ insert location ]
(b) disclose, in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting … and the information referred to in paragraph (b):
period in accordance with that process.
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … 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: [If the entity complies with paragraph (a):] ☐ an explanation why that is so in our Corporate Governance
(a) have a nomination committee which: … the fact that we have a nomination committee that complies with Statement OR
(1) has at least three members, a majority of whom are paragraphs (1) and (2): ☐ we are an externally managed entity and this recommendation
independent directors; and ☐ in our Corporate Governance Statement OR is therefore not applicable
(2) is chaired by an independent director,
☐ at [ insert location ]
and disclose:
… and a copy of the charter of the committee:
(3) the charter of the committee;
(4) the members of the committee; and ☐ at [ insert location ]
(5) as at the end of each reporting period, the number of … and the information referred to in paragraphs (4) and (5):
times the committee met throughout the period and ☐ in our Corporate Governance Statement OR
the individual attendances of the members at those
meetings; or ☐ at [ insert location ]
(b) if it does not have a nomination committee, disclose that [If the entity complies with paragraph (b):]
fact and the processes it employs to address board
… the fact that we do not have a nomination committee and the
succession issues and to ensure that the board has the
processes we employ to address board succession issues and to
appropriate balance of skills, knowledge, experience,
ensure that the board has the appropriate balance of skills,
independence and diversity to enable it to discharge its
knowledge, experience, independence and diversity to enable it to
duties and responsibilities effectively.
discharge its duties and responsibilities effectively:
☒ in our Corporate Governance Statement
2.2 A listed entity should have and disclose a board skills matrix … our board skills matrix: ☐ an explanation why that is so in our Corporate Governance
setting out the mix of skills and diversity that the board currently ☒ in our Corporate Governance Statement OR
has or is looking to achieve in its membership.
☐ we are an externally managed entity and this recommendation
is therefore not applicable
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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
2.3 A listed entity should disclose: … the names of the directors considered by the board to be ☒ an explanation why that is so in our Corporate Governance
(a) the names of the directors considered by the board to be independent directors: Statement
independent directors; ☐ in our Corporate Governance Statement OR
(b) if a director has an interest, position, association or
☐ at [ insert location ]
relationship of the type described in Box 2.3 but the board
is of the opinion that it does not compromise the … and, where applicable, the information referred to in paragraph (b):
independence of the director, the nature of the interest,
☐ in our Corporate Governance Statement OR
position, association or relationship in question and an
explanation of why the board is of that opinion; and ☐ at [ insert location ]
(c) the length of service of each director.
… and the length of service of each director:
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
2.4 A majority of the board of a listed entity should be independent … the fact that we follow this recommendation: ☒ an explanation why that is so in our Corporate Governance
directors.
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
2.5 The chair of the board of a listed entity should be an independent … the fact that we follow this recommendation: ☒ an explanation why that is so in our Corporate Governance
director and, in particular, should not be the same person as the ☐ in our Corporate Governance Statement OR Statement
CEO of the entity.
☐ at [ insert location ]
2.6 A listed entity should have a program for inducting new directors … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
and provide appropriate professional development opportunities ☒ in our Corporate Governance Statement Statement OR
for directors to develop and maintain the skills and knowledge
needed to perform their role as directors effectively. ☐ we are an externally managed entity and this recommendation
is therefore not applicable
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
3.1 A listed entity should: … our code of conduct or a summary of it: ☒ an explanation why that is so in our Corporate Governance
(a) have a code of conduct for its directors, senior executives ☐ in our Corporate Governance Statement OR Statement
and employees; and
☐ at [ insert location ]
(b) disclose that code or a summary of it.
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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	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	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	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 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. [If the entity complies with paragraph (a):] … the fact that we have an audit committee that complies with paragraphs (1) and (2): `☐`in our Corporate Governance Statement OR `☐`at [insert location] … and a copy of the charter of the committee: `☐`at [insert location] … and the information referred to in paragraphs (4) and (5): `☐`in our Corporate Governance Statement OR `☐`at [insert location] [If the entity complies with paragraph (b):] … the fact that we do not have an audit committee and the processes we employ that independently verify and safeguard the integrity of our corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner: `☐`in our Corporate Governance Statement OR `☐`at [insert location] `☒` an explanation why that is so in our Corporate Governance Statement
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 OR `☐`at [insert location]	`☒` an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
4.3 A listed entity that has an AGM should ensure that its external … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
auditor attends its AGM and is available to answer questions ☒ in our Corporate Governance Statement Statement OR
from security holders relevant to the audit.
☐ we are an externally managed entity that does not hold an
annual general meeting and this recommendation is therefore
not applicable
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1 A listed entity should: … our continuous disclosure compliance policy or a summary of it: ☐ an explanation why that is so in our Corporate Governance
(a) have a written policy for complying with its continuous ☒ in our Corporate Governance Statement Statement
disclosure obligations under the Listing Rules; and
(b) 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 … information about us and our governance on our website: ☐ an explanation why that is so in our Corporate Governance
governance to investors via its website. ☒ http://www.quantumgraphite.com/investors Statement
6.2 A listed entity should design and implement an investor relations … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
program to facilitate effective two-way communication with investors. ☒ in our Corporate Governance Statement Statement
6.3 A listed entity should disclose the policies and processes it has in … our policies and processes for facilitating and encouraging ☐ an explanation why that is so in our Corporate Governance
place to facilitate and encourage participation at meetings of participation at meetings of security holders: Statement OR
security holders.
☒ in our Corporate Governance Statement ☐ we are an externally managed entity that does not hold
periodic meetings of security holders and this recommendation
is therefore not applicable
6.4 A listed entity should give security holders the option to receive … the fact that we follow this recommendation: ☐ an explanation why that is so in our Corporate Governance
communications from, and send communications to, the entity ☒ in our Corporate Governance Statement Statement
and its security registry electronically.
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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	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	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	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. [If the entity complies with paragraph (a):] … the fact that we have a committee or committees to oversee risk that comply with paragraphs (1) and (2): `☐`in our Corporate Governance Statement OR `☐`at [insert location] … and a copy of the charter of the committee: `☐`at [insert location] … and the information referred to in paragraphs (4) and (5): `☐`in our Corporate Governance Statement OR `☐`at [insert location] [If the entity complies with paragraph (b):] … the fact that we do not have a risk committee or committees that satisfy (a) and the processes we employ for overseeing our risk management framework: `☐`in our Corporate Governance Statement OR `☐`at [insert location] `☒` an explanation why that is so in our Corporate Governance Statement
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 OR `☐`at [insert location] … and that such a review has taken place in the reporting period covered by this Appendix 4G: `☐`in our Corporate Governance Statement OR `☐`at [insert location]	`☒` an explanation why that is so in our Corporate Governance Statement

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Corporate Governance Council recommendation We have followed the recommendation in full for the whole of the We have NOT followed the recommendation in full for the whole
period above. We have disclosed … of the period above. We have disclosed … [4]
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1 The board of a listed entity should: [If the entity complies with paragraph (a):] ☒ an explanation why that is so in our Corporate Governance
(a) have a remuneration committee which: … the fact that we have a remuneration committee that complies with Statement
(1) has at least three members, a majority of whom are paragraphs (1) and (2):
independent directors; and ☐ in our Corporate Governance Statement OR
(2) is chaired by an independent director,
☐ at [ insert location ]
and disclose:
… and a copy of the charter of the committee:
(3) the charter of the committee;
(4) the members of the committee; and ☐ at [ insert location ]
(5) as at the end of each reporting period, the number of … and the information referred to in paragraphs (4) and (5):
times the committee met throughout the period and ☐ in our Corporate Governance Statement OR
the individual attendances of the members at those
meetings; or ☐ at [ insert location ]
(b) if it does not have a remuneration committee, disclose that [If the entity complies with paragraph (b):]
fact and the processes it employs for setting the level and
… the fact that we do not have a remuneration committee and the
composition of remuneration for directors and senior
processes we employ for setting the level and composition of
executives and ensuring that such remuneration is
remuneration for directors and senior executives and ensuring that
appropriate and not excessive.
such remuneration is appropriate and not excessive:
☐ in our Corporate Governance Statement OR
☐ at [ insert location ]
8.2 A listed entity should separately disclose its policies and … separately our remuneration policies and practices regarding the ☐ an explanation why that is so in our Corporate Governance
practices regarding the remuneration of non-executive directors remuneration of non-executive directors and the remuneration of Statement OR
and the remuneration of executive directors and other senior executive directors and other senior executives:
executives. ☐ we are an externally managed entity and this recommendation
☒ in our Corporate Governance Statement
is therefore not applicable
8.3 A listed entity which has an equity-based remuneration scheme … our policy on this issue or a summary of it: ☐ an explanation why that is so in our Corporate Governance
should:
☒ in our Corporate Governance Statement Statement OR
(a) have a policy on whether participants are permitted to
☐ w e do not have an equity-based remuneration scheme and this
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of recommendation is therefore not applicable OR
participating in the scheme; and ☐ we are an externally managed entity and this recommendation
(b) disclose that policy or a summary of it. is therefore not applicable
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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	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	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	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
ADDITIONAL DISCLOSURES APPLICABLE TO EXTERNALLY MANAGED LISTED ENTITIES
- Alternative to Recommendation 1.1 for externally managed listed entities: The responsible entity of an externally managed listed entity should disclose: (a) the arrangements between the responsible entity and the listed entity for managing the affairs of the listed entity; (b) the role and responsibility of the board of the responsible entity for overseeing those arrangements. … the information referred to in paragraphs (a) and (b): `☐`in our Corporate Governance Statement OR `☐`at [insert location] `☐` an explanation why that is so in our Corporate Governance Statement
-	Alternative to Recommendations 8.1, 8.2 and 8.3 for externally managed listed entities: An externally managed listed entity should clearly disclose the terms governing the remuneration of the manager.	… the terms governing our remuneration as manager of the entity: `☐`in our Corporate Governance Statement OR `☐`at [insert location]	`☐` an explanation why that is so in our Corporate Governance Statement

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CORPORATE GOVERNANCE STATEMENT

This statement reports on the significant corporate governance practices of Quantum Graphite Limited (Company) as at 30 June 2018 and it has been approved by the Board of the Company.

It is the responsibility of the Board of Directors of the Company to monitor the business affairs of the Company and to protect the rights and interests of the shareholders. The Board believes that high standards of corporate governance are an essential prerequisite for creating sustainable value for shareholders. This statement sets out the Company’s main corporate governance policies and practices. All these practices, unless otherwise stated, were in place for the entire year financial year. The policies and practices are reported against the 3[rd] Edition of the ASX Corporate Governance Council’s Corporate Governance Principles and 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.

References in this statement to “reporting period” are to the financial year ended 30 June 2017.

PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Recommendation 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.

Recommendation followed . The Company’s Board Charter sets out (amongst other things):

the roles and responsibilities of the Board and of management;
the matters expressly reserved to the Board; and
the matters delegated to management.

A copy of the Board Charter can be viewed at the Company’s website.

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 in its possession relevant to a decision on whether or not to elect or re-elect a director.

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

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

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

Recommendation followed in part . Each director and senior executive of the Company has a responsibility to assist the Deed Administrators implement the relevant Deed of Company Arrangement (Deed) as stipulated under the Deed. Upon the completion of the Deed, the Company intends to enter into agreements in writing with each director and senior executives setting 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

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.

Recommendation followed. The Company Secretary has a direct line of reporting to the Chairman and is responsible for:

advising and supporting the Chairman and the Board and its committees to manage the day to day governance framework of the Company;
assisting with Board effectiveness by monitoring whether applicable Board and committee policies, procedures and charters are followed and coordinating timely completion and despatch of Board agendas and papers; and
assisting with all matters to do with the proper functioning of the Board including advising on governance matters and assisting with induction and professional development of directors.

The responsibilities of the Company Secretary are set out in the Board Charter referenced in this statement.

Recommendation 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:
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.

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Recommendation not followed. The Company seeks to treat everyone with fairness and respect which includes valuing diversity and difference and acting without prejudice. The Company believes that decision-making is enhanced through diversity and supports and encourages diversity at all levels of the organisation in accordance with the Company’s Diversity Policy. A copy of the Diversity Policy is located at the Company’s website.

Given the size of the Company and status of the Company’s operations, the Board believes that it is not appropriate at this stage to set measurable objectives in relation to diversity beyond those included in the Diversity Policy. Notwithstanding this, the Company strives to provide the best possible opportunities for current and prospective employees of all backgrounds in such a manner that best adds to overall shareholders’ value and which reflects the values, principles and spirit of the Diversity Policy. The Board also believes that diversity is a relevant consideration for constitution of an effective Board, as discussed at Recommendation 2.2.

For the reporting year ended 30 June 2017, the Company reports as follows:

Gender diversity report	Total Positions	Held by Women
Board	6	-
Senior executives	1	-
Other employees	-	-
Total organisation	6	-

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.

Recommendation not followed. The Board recognises that as a result of the Company’s size and the scope of its operations, the assessment of the Board’s overall performance and its own succession plan is conducted on an ad hoc 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 and effective. A more formal process of Board assessment will be considered in the future as the Company develops.

The informal review undertaken by the Board takes into account various matters including those set out in the Board Charter included in this statement.

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.

Recommendation not followed. The Managing Director (or Chairman in the absence of a Managing Director) reviews the performance of the senior executives on an ad hoc basis. These evaluations take into account criteria such as the achievement and performance towards the Company’s objectives and (where appropriate) performance benchmarks and the achievement of individual performance objectives.

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However, the Board also recognises the need for flexibility in defining performance objectives which must reflect the Company’s size and the scope of its operations.

During the reporting period, no informal performance evaluations of the senior executives were undertaken by the Company.

PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE

Recommendation 2.1

The board of a listed entity should:

(a) have a nomination committee which:
has at least three members, a majority of whom are independent directors;
is chaired by an independent director, and disclose;
the charter of the committee;
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, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

Recommendation followed. The Board has no formal nomination committee. Acting in its ordinary capacity from time to time as required, the Board carries out the process of determining the need for, screening and appointment of new Directors, including utilising the services of personnel consultants. In view of the Company’s size and available resources, it is considered that a separate nomination committee would not provide any material benefit to the Company or the Board’s decision-making process.

Recommendation 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.

Recommendation followed. 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 perspectives, will be effective in supporting and enabling delivery of good governance for the Company and value for the Company’s shareholders. The Board comprises six Directors from diverse backgrounds with a range of business experience, skills and attributes. The following table demonstrates the skills and experience of the Directors across several dimensions that are relevant to Quantum. Biographical information on each director is contained in the Annual Report.

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Composition of skills and experience of the Board (out of 5)

Managing and leadership Senior management positions held outside Quantum (past and present) 5 Fundraising Debt and / or equity raising 5 Industry experience Management / board representation in other resource entities (past and present) 5 Experience in resource-based transactions – mergers, acquisitions, etc 5 Capital projects 5	Governance or regulatory
	Experience in governance of listed organisations 5
	Board membership of other listed entities (past and present) 5
	Strategy
	Experience in corporate transactions – mergers / acquisitions / divestments 5
	Experience in growing the business 5

The Directors aspires to maintain a Board comprised of individuals with the necessary experience and expertise to execute the Company’s business plans.

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 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.

Recommendation not followed. In the opinion of the board, subject to materiality considerations, to qualify as being “independent”, a director must be independent of management and free of any business or other relationship of the type set out in Box 2.3.

Recommendation 2.4

A majority of the board of a listed entity should be independent directors.

Recommendation not followed. Given the current size of the Company’s operations, the risks associated with small industrial mineral projects and the extent of the development required of the Company’s assets, the Board considers that all board members should have a sufficient interest in the Company to provide

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shareholders with the confidence that the interests of board members and their own interests are strongly aligned.

Note, in accordance with the ASX Recommendations, the independence of a director is assessed by determining whether the director is independent of management and free of any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgment. The test of whether a relationship or business is material is based on the nature of the relationship or business and on the circumstances and activities of the director. Materiality thresholds are considered by the Board from time to time.

Recommendation 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.

Recommendation followed in part. The Chairman of the Board is not an independent director and is not the CEO. Given the current size of the Company’s operations, the risks associated with small industrial mineral projects and the extent of the development required of the Company’s assets, the Board considers that all board members should have a sufficient interest in the Company to provide shareholders with the confidence that the interests of board members and their own interests are strongly aligned.

Recommendation 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.

Recommendation followed. All new directors are provided with an induction including meetings with the Managing Director and senior executives / management as appropriate and provision of information on the Company including Company and Board policies and other material documents.

All directors are expected to maintain the skills required to effectively discharge their obligations to the Company. Directors are encouraged to undertake continuing professional education and, if this involves industry seminars and approved education courses, where appropriate, this is paid for by the Company.

PRINCIPLE 3 – A LISTED ENTITY SHOULD 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.

Recommendation not followed. The Company expects all personnel to treat each other with respect.

PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE 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;
(iii) the charter of the committee;
(iv) the relevant qualifications and experience of the members of the committee; and

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(v) 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.

Recommendation followed in part. The Company has established an Audit and Risk Committee which comprises at least 2 directors. The Audit Committee Charter is located at the Company’s website.

The Committee’s members and their relevant qualifications and experience, the number of times the Committee met throughout the reporting period and the attendance of the Committee’s members at those meetings is set out in the Annual Report.

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, 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.

Recommendation followed in part. The Board receives a declaration in the form set out in Recommendation 4.2 from its CEO or Chief Financial Officer in relation to the financial statements.

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.

Recommendation followed. The Company’s external auditor attends each AGM of the Company and is always available to answer questions from security holders relevant to the audit.

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.

Recommendation followed. The Company has a Continuous Disclosure and Communications Policy that outlines the processes followed by the Company to ensure compliance with its continuous disclosure obligations and the corporate governance standards applied by the Company in its communications to the market. The Continuous Disclosure and Communications Policy can be viewed at the Company’s 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. Recommendation followed. Information about the Company and its operations is located at the Company’s website.

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Information about the Company’s corporate governance (including links to the Company’s corporate governance policies and charters) can be accessed from the Investors page.

Recommendation 6.2

A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors.

Recommendation followed. The Company has a Continuous Disclosure and Communications Policy that outlines the processes followed by the Company to ensure communication with shareholders and the investment community is effective, consistent and adheres to the principles of continuous disclosure. The Continuous Disclosure and Communications Policy is located at the Company’s website.

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.

Recommendation followed. The Continuous Disclosure and Communication Policy sets out the policies and processes the Company has in place to facilitate and encourage participation at meetings of security holders. The Company permits shareholders to cast their proxies prior to a General Meeting if they are unable to attend 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.

Recommendation followed. The Company gives security holders the option to receive communications from, and send communications to, the Company and its security registry electronically, as provided for in the Company’s Continuous Disclosure and Communication Policy.

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 risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.

Recommendation followed in part. The Company has established an Audit & Risk Committee to oversee risk whether financial, operational or otherwise. The Audit & Risk Committee comprises at least 2 directors, none of whom is the chair of the Board.

The Audit & Risk Committee’s Charter is located at the Company’s website.

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Recommendation 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.

Recommendation not followed. The Company’s Risk Management Policy sets the framework for risk management and review of the risk management framework. See also Company’s position in respect of recommendation 7.1.

In the reporting period, the Board has not completed a review of the Company’s risk management framework. The Board as a whole addresses individual risks as required. A systematic review of risks associated with the company’s activities will be initiated by the Board as required. The Risk Management Policy is located at the Company’s website.

Recommendation 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.

Recommendation not followed. Quantum is committed to understanding and managing risk and establishing an organisational culture that ensures risk management is included in all activities, decision making and business processes. The company does not have a formal internal audit function due to its size.

The ongoing mitigation and management of key business risks is an item addressed by the Board as a whole. Where appropriate, these risks are managed with the support of relevant external professional advisers.

Recommendation 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.

Recommendation followed. The Company undertakes mineral exploration and production activities and, as such, faces risks inherent to its business, including economic, environmental and social sustainability risks, which may materially impact the Company’s ability to create or preserve value for security holders over the short, medium or long term.

One of the Company’s core values is safety; it prioritises safety and health to people, the environment and community. The Company views sustainable and responsible business practices as an important long-term driver of performance and shareholder value and is committed to transparency, fair dealing, responsible treatment of employees and partners and positive interaction with the community.

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

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(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 remuneration is appropriate and not excessive.

Recommendation not followed. The Company does not have a remuneration committee. Given the current size of the Company, the Board considers that all board members review remuneration levels on a case by case basis, i.e., assessment of individual personnel is considered more appropriate than formal remuneration policies. In doing so, the Board seeks to retain professional services as and when required to assist it in its deliberations.

Recommendation 8.2

A listed entity should separately disclose its policies and practices regarding the remuneration of nonexecutive directors and the remuneration of executive directors and other senior executives.

Recommendation followed. The Company’s policies and practices regarding the remuneration of nonexecutive directors and the remuneration of executive directors and other senior executives is set out in the applicable Remuneration Report contained in the Annual Report.

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.

Recommendation followed. The Company has an equity-based remuneration scheme. The Company’s Securities Trading Policy provides that Directors and senior executives are subject to limitations in respect of trading in financial products issued or created over or in respect of the entity’s securities. The Securities Trading Policy is located at the Company’s website.

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AI assistant

QUANTUM GRAPHITE LIMITED — Governance Information 2018

65646_rns_2018-07-01_42027f43-2b92-4549-b202-44aede0be5d2.pdf

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity:

ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

CORPORATE GOVERNANCE STATEMENT

PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Recommendation 1.1

Recommendation 1.2

Recommendation 1.3

Recommendation 1.4

Recommendation 1.5

Recommendation 1.6

Recommendation 1.7

PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE

Recommendation 2.1

Recommendation 2.2

Composition of skills and experience of the Board (out of 5)

Recommendation 2.3

Recommendation 2.4

Recommendation 2.5

Recommendation 2.6

PRINCIPLE 3 – A LISTED ENTITY SHOULD ACT ETHICALLY AND RESPONSIBLY

Recommendation 3.1

PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING

Recommendation 4.1

Recommendation 4.2

Recommendation 4.3

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1

PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS

Recommendation 6.1

Recommendation 6.2

Recommendation 6.3

Recommendation 6.4

PRINCIPLE 7 – RECOGNISE AND MANAGE RISK

Recommendation 7.1

Recommendation 7.2

Recommendation 7.3

Recommendation 7.4

PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY

Recommendation 8.1

Recommendation 8.2

Recommendation 8.3

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QUANTUM GRAPHITE LIMITED Governance Information 2018