Rules 4.7.3 and 4.10.3

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

Name of entity

Quantum Graphite Limited

ABN/ARBN 41 008 101 979	Financial year ended:
41 008 101 979	2020

Our corporate governance statement[1] for the period above can be found at:[2] qgraphite.com

These pages of our ☐ annual report: This URL on our ☒ quantumgraphite.com website:

The Corporate Governance Statement is accurate and up to date as at 14 October and has been approved by the board.

The annexure includes a key to where our corporate governance disclosures can be located.[3]

Date: 14 October 2020

Name of authorised officer Sal Catalano authorising lodgement:

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1 “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.

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 Listing Rule 4.10.3.

Under Listing Rule 4.7.3, an entity must also lodge with ASX a completed Appendix 4G at the same time as it lodges its annual report with ASX. The Appendix 4G serves a dual purpose. It acts as a key designed to assist readers to locate the governance disclosures made by a listed entity under Listing Rule 4.10.3 and under the ASX Corporate Governance Council’s recommendations. It also acts as a verification tool for listed entities to confirm that they have met the disclosure requirements of Listing Rule 4.10.3.

The Appendix 4G is not a substitute for, and is not to be confused with, the entity's corporate governance statement. They serve different purposes and an entity must produce each of them separately.

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

3 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.

See notes 4 and 5 below for further instructions on how to complete this form.

ASX Listing Rules Appendix 4G (current at 17/7/2020)

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Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

ANNEXURE – KEY TO CORPORATE GOVERNANCE DISCLOSURES

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4 Tick the box in this column only if you have followed the relevant recommendation in full for the whole of the period above. Where the recommendation has a disclosure obligation attached, you must insert the location where that disclosure has been made, where indicated by the line with “ insert location ” underneath. If the disclosure in question has been made in your corporate governance statement, you need only insert “our corporate governance statement”. If the disclosure has been made in your annual report, you should insert the page number(s) of your annual report (eg “pages 10-12 of our annual report”). If the disclosure has been made on your website, you should insert the URL of the web page where the disclosure has been made or can be accessed (eg “www.entityname.com.au/corporate governance/charters/”).

5 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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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5
1.5 A listed entity should: (a) have and disclose a diversity policy; (b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period: (1) the measurable objectives set for that period to achieve gender diversity; (2) the entity’s progress towards achieving those objectives; and (3) either: (A) the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or (B) 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. If the entity was in the S&P / ASX 300 Index at the commencement of the reporting period, the measurable objective for achieving gender diversity in the composition of its board should be to have not less than 30% of its directors of each gender within a specified period. `☐` and we have disclosed a copy of our diversity policy at: …………………………………………………………………………….. [insert location] and we have disclosed the information referred to in paragraph (c) at: …………………………………………………………………………….. [insert location] and if we were included in the S&P / ASX 300 Index at the commencement of the reporting period our measurable objective for achieving gender diversity in the composition of its board of not less than 30% of its directors of each gender within a specified period. `☒` set out in our Corporate Governance StatementOR `☐` we are an externally managed entity and this recommendation is therefore not applicable
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 for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.	`☐` and we have disclosed the evaluation process referred to in paragraph (a) at: …………………………………………………………………………….. [insert location] and whether a performance evaluation was undertaken for the reporting period in accordance with that process at: …………………………………………………………………………….. [insert location]	`☒` set out in our Corporate Governance StatementOR `☐` we are an externally managed entity and this recommendation is therefore not applicable

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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Corporate Governance Council recommendation Where a box below is ticked, [4] we have followed the Where a box below is ticked, we have NOT followed the
recommendation in full for the whole of the period above. We recommendation in full for the whole of the period above. Our
have disclosed this in our Corporate Governance Statement: reasons for not doing so are: [5]
PRINCIPLE 2 - STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE
2.1 The board of a listed entity should: ☐ ☒ set out in our Corporate Governance Statement
(a) have a nomination committee which:
[ If the entity complies with paragraph (a): ]
(1) has at least three members, a majority of whom are
and we have disclosed a copy of the charter of the committee at:
independent directors; and
(2) is chaired by an independent director, …………………………………………………………………………….. [ insert location ]
and disclose:
and the information referred to in paragraphs (4) and (5) at:
(3) the charter of the committee; ……………………………………………………………………………..
(4) the members of the committee; and [ insert location ]
(5) as at the end of each reporting period, the number [ If the entity complies with paragraph (b): ]
of times the committee met throughout the period and we have disclosed the fact that we do not have a nomination
and the individual attendances of the members at
committee and the processes we employ to address board
those meetings; or
succession issues and to ensure that the board has the appropriate
(b) if it does not have a nomination committee, disclose that balance of skills, knowledge, experience, independence and
fact and the processes it employs to address board diversity to enable it to discharge its duties and responsibilities
succession issues and to ensure that the board has the effectively at:
appropriate balance of skills, knowledge, experience, independence and diversity to enable it to discharge its …………………………………………………………………………….. [ insert location ]
duties and responsibilities effectively.
2.2 A listed entity should have and disclose a board skills matrix ☐ ☒ set out in our Corporate Governance Statement
setting out the mix of skills that the board currently has or is
and we have disclosed our board skills matrix at:
looking to achieve in its membership.
……………………………………………………………………………..
[ insert location ]
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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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Corporate Governance Council recommendation Where a box below is ticked, [4] we have followed the Where a box below is ticked, we have NOT followed the
recommendation in full for the whole of the period above. We recommendation in full for the whole of the period above. Our
have disclosed this in our Corporate Governance Statement: reasons for not doing so are: [5]
2.3 A listed entity should disclose: ☐ ☒ set out in our Corporate Governance Statement
(a) the names of the directors considered by the board to be
and we have disclosed the names of the directors considered by the
independent directors;
board to be independent directors at:
(b) relationship of the type described in Box 2.3 but the board if a director has an interest, position, affiliation or …………………………………………………………………………….. [ insert location ]
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,
at:
position or relationship in question and an explanation of
why the board is of that opinion; and ……………………………………………………………………………..
[ insert location ]
(c) the length of service of each director.
and the length of service of each director at:
……………………………………………………………………………..
[ insert location ]
2.4 A majority of the board of a listed entity should be independent ☐ ☒ set out in our Corporate Governance Statement
directors.
2.5 The chair of the board of a listed entity should be an ☐ ☒ set out in our Corporate Governance Statement
independent director and, in particular, should not be the same
person as the CEO of the entity.
2.6 A listed entity should have a program for inducting new ☒ ☐ set out in our Corporate Governance Statement
directors and for periodically reviewing whether there is a need
for existing directors to undertake professional development to
maintain the skills and knowledge needed to perform their role
as directors effectively.
PRINCIPLE 3 – INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY
3.1 A listed entity should articulate and disclose its values. ☐ ☒ set out in our Corporate Governance Statement
and we have disclosed our values at:
……………………………………………………………………………..
[ insert location ]
3.2 A listed entity should: ☐ ☒ set out in our Corporate Governance Statement
(a) have and disclose a code of conduct for its directors, and we have disclosed our code of conduct at:
senior executives and employees; and
(b) ensure that the board or a committee of the board is …………………………………………………………………………….. [ insert location ]
informed of any material breaches of that code.
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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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Corporate Governance Council recommendation Where a box below is ticked, [4] we have followed the Where a box below is ticked, we have NOT followed the
recommendation in full for the whole of the period above. We recommendation in full for the whole of the period above. Our
have disclosed this in our Corporate Governance Statement: reasons for not doing so are: [5]
PRINCIPLE 4 – SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS
4.1 The board of a listed entity should: ☐ ☒ set out in our Corporate Governance Statement
(a) have an audit committee which:
[ If the entity complies with paragraph (a): ]
(1) has at least three members, all of whom are non-
and we have disclosed a copy of the charter of the committee at:
executive directors and a majority of whom are
independent directors; and ……………………………………………………………………………..
[ insert location ]
(2) is chaired by an independent director, who is not
the chair of the board, and the information referred to in paragraphs (4) and (5) at:
and disclose: ……………………………………………………………………………..
[ insert location ]
(3) the charter of the committee;
[ If the entity complies with paragraph (b): ]
(4) the relevant qualifications and experience of the
and we have disclosed the fact that we do not have an audit
members of the committee; and
committee and the processes we employ that independently verify
(5) in relation to each reporting period, the number of
and safeguard the integrity of our corporate reporting, including the
times the committee met throughout the period and
processes for the appointment and removal of the external auditor
the individual attendances of the members at those
and the rotation of the audit engagement partner at:
meetings; or
(b) if it does not have an audit committee, disclose that fact …………………………………………………………………………….. [ insert location ]
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.
4.2 The board of a listed entity should, before it approves the ☒ ☐ set out in our Corporate Governance Statement
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.
4.3 A listed entity should disclose its process to verify the integrity ☒ ☐ set out in our Corporate Governance Statement
of any periodic corporate report it releases to the market that is
not audited or reviewed by an external auditor.
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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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Corporate Governance Council recommendation Where a box below is ticked, [4] we have followed the Where a box below is ticked, we have NOT followed the
recommendation in full for the whole of the period above. We recommendation in full for the whole of the period above. Our
have disclosed this in our Corporate Governance Statement: reasons for not doing so are: [5]
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
5.1 A listed entity should have and disclose a written policy for ☒ ☐ set out in our Corporate Governance Statement
complying with its continuous disclosure obligations under
and we have disclosed our continuous disclosure compliance policy
listing rule 3.1.
at: quantumgraphite/investors
5.2 A listed entity should ensure that its board receives copies of all ☒ ☐ set out in our Corporate Governance Statement
material market announcements promptly after they have been
made.
5.3 A listed entity that gives a new and substantive investor or ☒ ☐ set out in our Corporate Governance Statement
analyst presentation should release a copy of the presentation
materials on the ASX Market Announcements Platform ahead
of the presentation.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
6.1 A listed entity should provide information about itself and its ☒ ☐ set out in our Corporate Governance Statement
governance to investors via its website.
and we have disclosed information about us and our governance on
our website at: quantumgraphite/investors
6.2 A listed entity should have an investor relations program that ☒ ☐ set out in our Corporate Governance Statement
facilitates effective two-way communication with investors.
6.3 A listed entity should disclose how it facilitates and encourages ☒ ☐ set out in our Corporate Governance Statement
participation at meetings of security holders.
and we have disclosed how we facilitate and encourage participation
at meetings of security holders at: quantumgraphite/investors
6.4 A listed entity should ensure that all substantive resolutions at a ☒ ☐ set out in our Corporate Governance Statement
meeting of security holders are decided by a poll rather than by
a show of hands.
6.5 A listed entity should give security holders the option to receive ☒ ☐ set out in our Corporate Governance Statement
communications from, and send communications to, the entity
and its security registry electronically.
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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5	Corporate Governance Council recommendation Where a box below is ticked,4we have followed the recommendation in full for the whole of the period above. We have disclosed this in our Corporate Governance Statement: Where a box below is ticked, we have NOT followed the recommendation in full for the whole of the period above. Our reasons for not doing so are:5
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):] and we have disclosed a copy of the charter of the committee at: …………………………………………………………………………….. [insert location] and the information referred to in paragraphs (4) and (5) at: …………………………………………………………………………….. [insert location] [If the entity complies with paragraph (b):] and we have disclosed 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 at: …………………………………………………………………………….. [insert location] `☒` set out 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 that the entity is operating with due regard to the risk appetite set by the board; and (b) disclose, in relation to each reporting period, whether such a review has taken place.	`☐` and we have disclosed whether a review of the entity’s risk management framework was undertaken during the reporting period at: …………………………………………………………………………….. [insert location]	`☒` set out in our Corporate Governance Statement

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G Key to Disclosures Corporate Governance Council Principles and Recommendations

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Corporate Governance Council recommendation Where a box below is ticked, [4] we have followed the Where a box below is ticked, we have NOT followed the
recommendation in full for the whole of the period above. We recommendation in full for the whole of the period above. Our
have disclosed this in our Corporate Governance Statement: reasons for not doing so are: [5]
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBLY
8.1 The board of a listed entity should: ☐ ☒ set out in our Corporate Governance Statement
(a) have a remuneration committee which:
[ If the entity complies with paragraph (a): ]
(1) has at least three members, a majority of whom are
and we have disclosed a copy of the charter of the committee at:
independent directors; and
(2) is chaired by an independent director, …………………………………………………………………………….. [ insert location ]
and disclose:
and the information referred to in paragraphs (4) and (5) at:
(3) the charter of the committee; ……………………………………………………………………………..
(4) the members of the committee; and [ insert location ]
(5) as at the end of each reporting period, the number [ If the entity complies with paragraph (b): ]
of times the committee met throughout the period and we have disclosed the fact that we do not have a remuneration
and the individual attendances of the members at
committee and the processes we employ for setting the level and
those meetings; or
composition of remuneration for directors and senior executives and
(b) if it does not have a remuneration committee, disclose ensuring that such remuneration is appropriate and not excessive:
that fact and the processes it employs for setting the level and composition of remuneration for directors and senior …………………………………………………………………………….. [ insert location ]
executives and ensuring that such remuneration is
appropriate and not excessive.
8.2 A listed entity should separately disclose its policies and ☒ ☐ set out in our Corporate Governance Statement
practices regarding the remuneration of non-executive directors
and the remuneration of executive directors and other senior and we have disclosed separately our remuneration policies and
executives. practices regarding the remuneration of non-executive directors and
the remuneration of executive directors and other senior executives
at: quantumgraphite/investors
8.3 A listed entity which has an equity-based remuneration scheme ☒ ☐ set out in our Corporate Governance Statement OR
should:
and we have disclosed our policy on this issue or a summary of it at: ☐ we do not have an equity-based remuneration scheme and
(a) have a policy on whether participants are permitted to this recommendation is therefore not applicable OR
quantumgraphite/investors
enter into transactions (whether through the use of
☐ we are an externally managed entity and this recommendation
derivatives or otherwise) which limit the economic risk of
is therefore not applicable
participating in the scheme; and
(b) disclose that policy or a summary of it.
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ASX Listing Rules Appendix 4G (current at 17/7/2020)

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

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ASX Listing Rules Appendix 4G (current at 17/7/2020)

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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 2020 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 4[th] Edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (ASX Guidelines).

Where the Company’s compliance with the ASX Guidelines 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 2020.

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.

The Board Charter was reviewed by the Board during the 2020 financial year to ensure it reflects the current obligations of the Board and the requirements of the ASX Guidelines. 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 director or senior executive or putting someone forward 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 probity checks which it believes are appropriate to verify a director’s character, experience, education, criminal record and bankruptcy history including for new directors.

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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 . Directors are not appointed for specific terms and are subject to rotational requirements for re-election. The condition for continued office is effective contribution relevant to the Company’s size and nature of operations and this is regularly reviewed in the evaluation of the Board’s performance. The Company intends to enter into written agreements 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 ASX Guideline 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 and disclose a diversity policy;
(b) through its board or a committee of the board set measurable objectives for achieving gender diversity in the composition of its board, senior executives and workforce generally; and
(c) disclose in relation to each reporting period:
i. the measurable objectives set for that period to achieve gender diversity;
ii. the entity’s progress towards achieving those objectives; and iii. either:
- A. the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined “senior executive” for these purposes); or
- B. 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.

If the entity was in the S&P/ASX 300 Index at the commencement of the reporting period, the

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measurable objective for achieving gender diversity in the composition of its board should be to have not less than30% of its directors of each gender within a specified period.

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 decisionmaking 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. In addition, the Board did not anticipate that there will be a need to appoint any new directors or senior executives due to the limited nature of the Company’s existing activities and the Board’s position that existing directors and senior executives have the skill and expertise to execute the Company’s plans.

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 in ASX Guideline 2.2.

For the reporting year ended 30 June 2020, the Company reports as follows:

Gender diversity report	Total Positions	Held by Women
Board	5	-
Senior executives	1	-
Other employees	-	-
Total organisation	5	-

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 for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

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. The Board considers that a formal process of Board assessment, beyond the existing ad hoc review process, will be implemented once the Company commences production activities.

The scope of reviews undertaken by the Board take 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 evaluating the performance of its senior executives at least once every

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reporting period; and

(b) disclose for each reporting period whether a performance evaluation has been undertaken in accordance with that process during or in respect of that period.

Recommendation followed in part. The Managing Director (or where relevant the Chairman) reviews the performance of the senior executives under an informal process carried out throughout the financial year. Subject to the evaluation of performance under this process, the relevant performance evaluation may be referred to the Board for discussion and the opportunity to raise any matter in connection with the evaluation process. Performance evaluations take into account criteria such as the achievement and performance of the Company’s objectives and (where appropriate) performance benchmarks and the achievement of individual objectives. 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. Due to the limited nature of the scope of operations, no evaluations of the senior executives were undertaken.

During the financial year, no informal performance evaluations of the senior executives were undertaken by the Company.

PRINCIPLE 2 – STRUCTURE THE BOARD TO BE EFFECTIVE AND 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, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.

Recommendation followed in part. The Board has no formal nomination committee. In view of the Company’s size and scope of operations, it is considered that a separate nomination committee would not provide any material benefit to the Company or the Board’s decision-making process.

The Board carries out the duties and functions ordinarily carried out by a nomination committee including the processes to address succession, ensure the Board has the appropriate balance of expertise, experience, independence and knowledge of the Company to enable it to discharge its duties and responsibilities effectively.

Recommendation 2.2

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

Recommendation in part. The Board regularly evaluates the mix of skills, expertise and experience at 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 five Directors from diverse backgrounds with a

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range of business experience, skills and attributes. The Board has not established a formal skills matrix; however, the skills of each director and the collective skills of the Board are regularly reviewed by the Board. Further, the Board requires that disclosure of each Board member’s qualification, expertise and experience, a summary of which is available in the Company’s financial report.

In connection with the Board’s review of skills, the Board evaluates skills and experience in the context of seven key factors;

management and leadership
governance, regulatory and compliance
financial performance and risk
capital raising and capital management
strategy
industry experience
stakeholder management

The directors’ objective is 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, affiliation 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 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 followed in part. 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.

The Company’s financial report discloses the length of service of each director and identifies whether the director is an independent director, an executive or non-executive director.

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

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. The level of materiality threshold is considered by the Board from time to time.

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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 for periodically reviewing whether there is a need for existing directors to undertake professional development to 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 articulate and disclose its values.

Recommendation followed in part. The Company expects all personnel to treat each other with respect and fulfil their duties honestly, fairly and in compliance with all applicable laws. 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.

Recommendation 3.2

A listed entity should:

(a) have and disclose a code of conduct for its directors, senior executives and employees; and
(b) ensure that the board or a committee of the board is informed of any material breaches of that Code.

Recommendation followed in part. To establish practices the Board supports the need for all personnel to observe the highest standards of behaviour in the course of the fulfilment of their duties. Any material transgressions of these standards are addressed directly by the Board or the Audit and Risk Committee.

Recommendation 3.3

A listed entity should:

(a) have and disclose a whistle-blower policy; and
(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.

Recommendation not followed. The Company considers that due to its size and scope of operations the

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objectives sought to be achieved by Recommendation 3.3 is properly covered by the Board’s Policy and Procedures it has adopted in connection with ASX Guidelines 3.1 and 3.2.

Recommendation 3.4

A listed entity should:

(a) have and disclose an anti-bribery and corruption policy; and
(b) ensure that the board or committee of the board is informed of any material breaches of that policy.

Recommendation followed in part. The Company does not have a formal Anti-Bribery and Anti-Corruption Policy however, in connection with the Company’s Audit and Risk Committee Charter, the Committee members of the Audit and Risk Committee are directly responsible for the establishment of a appropriate risk management policy framework which includes communicating the Company’s risk management philosophy, policies and processes to all employees and ensuring that a risk aware culture is communicated to all personnel. The Board is informed of any breaches or general non-compliance with this framework.

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
(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 on the Company’s website.

In view of the size and scope of the Company’s operation, the Committee members are not independent directors and include the Chairman and Chief Executive Officer. The Board considers that the experience and expertise of Committee members properly addresses the roles and responsibilities of an Audit and Risk Committee.

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 financial 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

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operating effectively.

Recommendation followed. The Board receives a declaration in the form set out in ASX Guideline 4.2 from its CEO or Chief Financial Officer in relation to the financial report and in accordance with the requirements set out in the Company’s Audit and Risk Committee Charter.

Recommendation 4.3

A listed entity should disclose its process to verify the integrity of any periodic corporate report it releases to the market that is not audited or reviewed by an external auditor.

Recommendation followed. To the extent that the Company releases to the market any report that is unaudited or not reviewed by an external auditor, the Company requires that such report be approved directly by the Board or the Audit and Risk Committee to ensure that the content o the report is accurate and consistent with the Company’s audited financial reporting and its technical report issued under the JORC Ore Reserve Committee 2012 Standards.

PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE

Recommendation 5.1

A listed entity should have and disclose a written policy for complying with its continuous disclosure obligations under listing rule 3.1.

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.

The directors are also bound by the Company’s Securities Trading Policy which governs the dealings by directors and senior executives in the Company’s securities.

Recommendation 5.2

A listed entity should ensure that its board receives copies of all material market announcements promptly after they have made.

Recommendation followed. Announcements made on the ASX by the Company are distributed to all directors and accessible on the Company’s website.

Recommendation 5.3

A listed entity that gives a new and substantive investor or analyst presentation should release a copy of the presentation materials on the ASX Market Announcements platform ahead of- the presentation.

Recommendation followed. In accordance with the Company’s Continuous Disclosure and Communications Policy, all material market presentations are released to the market in a prompt manner.

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. 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.

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Recommendation 6.2

A listed entity should have an investor relations program that facilitates 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 how it facilitates and encourages 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 ensure that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands.

Recommendation followed. It has been the Company’s practice for voting on certain resolutions to be conducted by a poll.

Recommendation 6.5

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 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.

Recommendation followed in part. The Company has established an Audit and Risk Committee to oversee risk whether financial, operational or otherwise. The Audit and Risk Committee comprises 3 directors, including the Chair of the Board. The Audit and Risk Committee’s Charter is located at the Company’s website. The Committee’s members and their relevant qualifications and experience, the number of times

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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 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 that the entity is operating with due regard to the risk appetite set by the board; and

(b) disclose, in relation to each reporting period, whether such a review has taken place.

Recommendation followed in part. The Company’s Risk Management Policy sets out the framework for risk management including the review of the framework itself. The Risk Management Policy is located on the Company’s website. See also the Company’s policies in respect of ASX Guideline 7.1.

The Board does not schedule an annual review of the Company’s risk management framework. In light of the size and scope of the Company’s activities, the Board addresses individual risks and reviews risks associated with the Company’s activities as and when required. In the reporting period, the Board did not complete a review of the Company’s risk management framework.

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 governance, risk management and internal control processes.

Recommendation not followed. The Company is committed to management and control of 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 and scope of operations.

The ongoing mitigation and management of key business risks is addressed by the Board. 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 environmental or social 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:

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(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 remuneration is appropriate and not excessive.

Recommendation not followed. Due to the size and scope of operations, the Company does not have a remuneration committee. The Board reviews 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 full details of the Company’s policies and practices regarding the remuneration of non-executive directors and the remuneration of executive directors and other senior executives is set out in the Remuneration Report within the Directors’ Report of the 2020 Annual Financial 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 on the Company’s website.

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AI assistant

QUANTUM GRAPHITE LIMITED — Regulatory Filings 2020

65646_rns_2020-10-14_c262f2d5-756b-4860-bdf1-57b30b12f691.pdf

Appendix 4G

Key to Disclosures Corporate Governance Council Principles and Recommendations

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 BE EFFECTIVE AND ADD VALUE

Recommendation 2.1

Recommendation 2.2

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

Recommendation 3.2

Recommendation 3.3

Recommendation 3.4

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

Recommendation 5.2

Recommendation 5.3

PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS

Recommendation 6.1

Recommendation 6.2

Recommendation 6.3

Recommendation 6.4

Recommendation 6.5

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 Regulatory Filings 2020