European Metals Holdings Regulatory News (EMH)

European Metals Holdings Limited

Keith Coughlan, Executive Chairman

Kiran Morzaria, Non-Executive Director

Dennis Wilkins, Company Secretary

Tel: +61 (0) 419 996 333

Email: keith@europeanmet.com

Tel: +44 (0) 20 7440 0647

Tel: +61 (0) 417 945 049

Email: dennis@europeanmet.com

WH Ireland Ltd (Nomad & Joint Broker)

James Joyce//Darshan Patel

(Corporate Finance)

Harry Ansell/Jasper Berry (Broking)

Tel: +44 (0) 20 7220 1666

Shard Capital (Joint Broker)

Damon Heath

Erik Woolgar

Tel: +44 (0) 20 7186 9950

Blytheweigh (Financial PR)

Tim Blythe

Megan Ray

Chapter 1 Advisors (Financial PR - Aus)

David Tasker

Tel: +44 (0) 20 7138 3222

Tel: +61 (0) 433 112 936

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1

A listed entity should have and disclose a board charter setting out:

(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.

Complying

The Company has adopted a Board Charter.

The Board Charter sets out the specific responsibilities of the Board, requirements as to the Boards composition, the roles and responsibilities of the Chairman and Company Secretary, the establishment, operation and management of Board Committees, Directors access to company records and information, details of the Board's relationship with management, details of the Board's performance review and details of the Board's disclosure policy.

A copy of the Company's Board Charter is stated in the Corporate Governance Plan which is available on 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.

Complying

(a) The Company has detailed guidelines for the appointment and selection of the Board. The Company's Corporate Governance Plan requires the Board to undertake appropriate checks before appointing a person, or putting forward to security holders a candidate for election, as a director.

(b) Material information relevant to any decision on whether or not to elect or re-elect a Director will be provided to security holders in the notice of meeting holding the resolution to elect or re-elect the Director.

Recommendation 1.3

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

Complying

The Company's Corporate Governance Plan requires the Board to ensure that each Director and senior executive is a party to a written agreement with the Company which sets out the terms of that Director's or senior executive's appointment.

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.

Complying

The Board Charter outlines the roles, responsibility and accountability of the Company Secretary. The Company Secretary is accountable directly to the Board, through the chair, on all matters to do with the proper functioning of the Board.

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.

Not Complying

(a) The Company has adopted a Diversity Policy in Schedule 13 of the Corporate Governance Plan which is available on the company website.

(b) The Diversity Policy states that the Board is responsible for setting measurable objectives for achieving gender diversity.

(c) The Company currently has no employees and utilizes external consultants and contractors as and when required.

There are currently no women in senior executive positions or on the Board.

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.

Complying

(a) The Nomination Committee is responsible for evaluating the performance of the Board and individual directors on an annual basis. It may do so with the aid of an independent advisor. The Performance Evaluation Policy can be found in Schedule 7 of the Company's Corporate Governance Plan.

(b) The Company's Corporate Governance Plan requires the Company to disclosure whether or not performance evaluations were conducted during the relevant reporting period.

Due to the size of the Board and the nature of the business, it has not been deemed necessary to institute a formal documented performance review program of individuals. However, the Chairman intends to conduct formal reviews each financial year whereby the performance of the Board as a whole and the individual contributions of each director are disclosed. The Board considers that at this stage of the Company's development an informal process is appropriate.

The review will assist to indicate if the Board's performance is appropriate and efficient with respect to the Board Charter.

The Board regularly reviews its skill base and whether it remains appropriate for the Company's operational, legal and financial requirements. New Directors are obliged to participate in the Company's induction process, which provides a comprehensive understanding of the Company, its objectives and the market in which the Company operates.

Directors are encouraged to avail themselves of resources required to fulfil the performance of their duties.

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 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.

Complying

(a) The Remuneration Committee is responsible for evaluating the performance of senior executives. The Remuneration Committee is to arrange an annual performance evaluation of the senior executives.

(b) The Company's Corporate Governance Plan requires the Remuneration Committee to conduct annual performance of the senior executives. Schedule 7 'Performance Evaluation Policy' requires the Company to disclose whether or not performance evaluations were conducted during the relevant reporting period.

During the financial year an evaluation of performance of the individuals was not formally carried out as the Company has no employees. However, a general review of the individuals occurs on an on-going basis to ensure that structures suitable to the Company's status as a listed entity are in place.

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.

Part complying

(a) The Company has a Nomination Committee comprising all members of the Board with Mr Morzaria being Chairman of the Committee. Only Mr Morzaria and Ambassador Bloomfield are considered to be independent.

The role and responsibilities of the Nomination Committee and Charter is outlined in Schedule 4 of the Corporate Governance Plan and Policies available online on the Company's website.

The Board devotes time at board meetings to discuss board succession issues. All members of the Board are involved in the Company's nomination process, to the maximum extent permitted under the Corporations Act and ASX Listing Rules.

The Board regularly updates the Company's board skills matrix (in accordance with recommendation 2.2) to assess the appropriate balance of skills, experience, independence and knowledge of the entity.

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.

Complying

(1) Skill gap noticed however an external taxation firm is employed to maintain taxation requirements.

(2) Skill gap noticed however a legal firm is employed on an adhoc basis to maintain IT requirements.

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.

 Complying

(a) The Board Charter provides for the disclosure of the names of Directors considered by the Board to be independent. Only Mr Morzaria and Ambassador Bloomfield are considered to be independent. The details of the directors are disclosed in the Annual Report and Company website.

(b) The Board Charter requires Directors to disclose their interest, positions, associations and relationships and requires that the independence of Directors is regularly assessed by the Board in light of the interests disclosed by Directors. Details of the Directors interests, positions associations and relationships are provided in the Annual Reports and Company website.

(c) The Board Charter provides for the determination of the Directors' terms and requires the length of service of each Director to be disclosed. The length of service of each Director is provided in the Annual Reports and Company website.

Recommendation 2.4

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

Not complying

Given the Company's present size and scope it is currently not Company policy to have a majority of Independent Directors.

At this time Mr Morzaria and Ambassador Bloomfield are considered to be independent.

Details of each Director's independence are provided in the Annual Reports and Company website.

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.

Not complying

The Board Charter provides that where possible, the Chairman of the Board should be an independent director and not be the same person as the MD of the Company.

Mr Keith Coughlan is the Executive Chairman of the Board and is not an independent director.

If the Chairman resigns the Board will consider appointing a lead independent Director.

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.

Complying

The Board Charter states that a specific responsibility of the Board is to procure appropriate professional development opportunities for Directors. The Board is responsible for the approval and review of induction and continuing professional development programs and procedures for Directors to ensure that they can effectively discharge their responsibilities.

Principle 3: Instil a culture of acting lawfully, ethically and responsibly

Recommendation 3.1

A listed entity should articulate and disclose its values.

Complying

The Company has formulated Core Values that are included in the Board Charter outlined in the Corporate Governance Plan available on the Company's website.

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.

Complying

(a) The Corporate Code of Conduct applies to the Company's directors, senior executives and employees and is in Schedule 2 of the Corporate Governance Plan which is on the Company's website.

(b) The Code of Conduct states that any material breaches are to be reported to the Board.

Recommendation 3.3

A listed entity should:

(a) have and disclose a whistleblower policy; and

(b) ensure that the board or a committee of the board is informed of any material incidents reported under that policy.

Part Complying

(a) The Company has a Whistleblower Policy available on the corporate governance page of its website.

(b) The Company's Whistleblower Policy does not explicitly state that the Board or a committee is to be informed of any material incidents. It is intended that the Company Secretary or other eligible recipient would inform the Board of any material incidents.

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.

Part Complying

(a) The Company has an Anti-Bribery and Anti-Corruption Policy in Schedule 15 of the Corporate Governance Plan which is on the Company's website.

(b) The Policy does not explicitly state that the Board or a committee is to be informed of any material breaches. It is intended that the Company Secretary or Chairman would inform the Board of any material breaches.

Principle 4: Safeguard the integrity of corporate reports

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.

Part Complying

(a) The Company has a combined Audit and Risk Committee comprising of two members being Ambassador Bloomfield (Chairman) and Mr Morzaria. Ambassador Bloomfield is considered to be independent and is not chair of the Board.

The Audit and Risk Committee Charter is outlined in Schedule 3 of the Corporate Governance Plan available on the Company's website. The qualifications, experience and attendance of the members of the Audit and Risk Committee are disclosed in the Company's Directors' Report (contained in the 2021 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.

Complying

The Company's Audit and Risk Committee Charter states that a duty and responsibility of the Committee is to ensure that before the Board approves the entity's financial statements for a financial period, the CEO and CFO have declared 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 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.

Complying

The Company provides interim (currently quarterly) updates of the Company's progress across all areas of the business, including select financial information. The Executive Chairman is responsible for all such updates, which are reviewed by the Board. Individual components are also reviewed by senior management with responsibility for the specific component subject matter. The financial information is compiled by the Chief Financial Officer in accordance with generally accepted accounting practices.

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.

Complying

The Board Charter provides details of the Company's disclosure policy. In addition, Schedule 6 of the Corporate Governance Plan is entitled 'Continuous Disclosure Policy' and details the Company's disclosure requirements as required by the ASX Listing Rules and other relevant legislation.

The Board Charter and Continuous Disclosure Policy are in the Corporate Governance Plan available on the Company website.

Recommendation 5.2

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

Complying

The Company has established a Continuous Disclosure Policy which is included in the Corporate Governance Plan on the Company's website. This policy states that all material market announcements are promptly provided to directors.

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.

Complying

The Company has established a Continuous Disclosure Policy which is included in the Corporate Governance Plan on the Company's website. This policy requires new investor presentations to be released to the market ahead of the presentation.

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.

Complying

The Company's website, www.europeanmet.com, provides information about the Company, its projects, its Board and management and governance.

Recommendation 6.2

A listed entity should have an investor relations program that facilitates effective two-way communication with investors.

Complying

The Company has adopted a Shareholder Communications Strategy which aims to promote and facilitate effective two-way communication with investors. The Shareholder Communications Strategy outlines a range of ways in which information is communicated to shareholders.

The Shareholder Communications Policy can be found in Schedule 10 of the Corporate Governance Plan which is available on the Company website.

Recommendation 6.3

A listed entity should disclose how it facilitates and encourages participation at meetings of security holders.

Complying

The Company has a Shareholder Communications Policy, which is included in the Corporate Governance Plan on the Company's website. The Policy specifically encourages full participation of shareholders at General Meetings to ensure a high level of accountability and identification with the Company's strategy and goals and outlines the various ways in which the Company communicates with shareholders.

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.

Complying

In accordance with ASX guidance, all Listing Rule resolutions and all substantive resolutions are decided by a poll rather than by a show of hands.

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.

Complying

Security holders can register with the Company to receive email notifications when an announcement is made by the Company to the ASX.

Shareholder's queries should be referred to the Company Secretary at first instance.

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.

Part complying

(a) The Company has a combined Audit and Risk Committee comprising of two members being Ambassador Bloomfield (Chairman) and Mr Morzaria. Ambassador Bloomfield is considered to be an independent director.

The Audit and Risk Committee Charter is outlined in Schedule 3 of the Corporate Governance Plan available on the Company's website. The qualifications, experience and attendance of the members of the Audit and Risk Committee are disclosed in the Company's Directors' Report (contained in the 2021 Annual Report).

The Board devote time at annual board meeting to fulfilling the roles and responsibilities associated with overseeing risk and maintaining the entity's risk management framework and associated internal compliance and control procedures.

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.

Complying

(a) The Company process for risk management and internal compliance includes a requirement to identify and measure risk, monitor the environment for emerging factors and trends that affect these risks, formulate risk management strategies and monitor the performance of risk management systems. Schedule 8 of the Corporate Governance Plan is entitled 'Risk Management Policy' and details the Company's disclosure requirements with respect to the risk management review procedure and internal compliance and controls.

(b) The Board has not formally reviewed the Company's risk profile during the 2021 financial year. However, this issue is regularly reviewed at Board meetings and risk management culture is encouraged amongst employees and contractors.

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.

Complying

(a) The Company does not have an internal audit function.

(b) The Audit and Risk Committee Charter, Schedule 3 of the Company's Corporate Governance Plan, delegates the responsibility for undertaking and assessing risk management and internal control effectiveness to the Audit and Risk Committee.

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.

Complying

The Audit and Risk Committee Charter details the Company's risk management systems which assist in identifying and managing potential or apparent environmental and social sustainability risks (if appropriate). Review of the Company's risk management framework is conducted at least annually, and reports are continually created by management on the efficiency and effectiveness of the Company's risk management framework and associated internal compliance and control procedures.

Principle 8: Remunerate fairly and responsibly

Recommendation 8.1

The board of a listed entity should:

(a) have a remuneration committee which:

(i) has at least three members, a majority of whom are independent directors; and

(ii) is chaired by an independent director,

and disclose:

(iii) the charter of the committee;

(iv) the members of the committee; and

(v) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or

(b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

Part Complying

(a) The Company's Remuneration Committee comprises two members being Mr Morzaria (Chairman) and Ambassador Bloomfield, who are both considered to be independent directors.

The role and responsibilities of the Remuneration Committee and Charter is outlined in Schedule 5 of the Corporate Governance Plan available on the Company's website. The qualifications, experience and attendance of the members of the Remuneration Committee are disclosed in the Company's Directors' Report (contained in the 2021 Annual Report).

The Board devote time at annual board meetings to fulfilling the roles and responsibilities associated with setting the level and composition of remuneration for Directors and senior executives and ensuring that such remuneration is appropriate and not excessive.

Recommendation 8.2

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

Complying

Details of the Company's policies and practices regarding the remuneration of Directors and other senior management is set out in the Remuneration Report as disclosed in the Company's Directors' Report (contained in the 2021 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.

Complying

(a) The Company's Remuneration Committee Charter states that the Committee is required to review, manage and disclose the policy (if any) 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. The Board must review and approve any equity-based plans.

(b) A copy of the Company's Corporate Governance Plan which includes the Remuneration Committee Charter is available on the Company's website.

Principle 9: Additional recommendations that apply only in certain cases

Recommendation 9.1

A listed entity with a director who does not speak the language in which board or security holder meetings are held or key corporate documents are written should disclose the processes it has in place to ensure the director understands and can contribute to the discussions at those meetings and understands and can discharge their obligations in relation to those documents.

N/A

N/A

Recommendation 9.2

A listed entity established outside Australia should ensure that meetings of security holders are held at a reasonable place and time.

Complying

The Company is a public company, incorporated in the British Virgin Islands and registered in Australia. Security holder meetings are held in Australia during normal business hours.

Recommendation 9.3

A listed entity established outside Australia, and an externally managed 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.

Complying

The Company is a public company, incorporated in the British Virgin Islands and registered in Australia. The Company takes all reasonable steps to ensure the external auditor is represented at each annual general meeting to answer questions concerning the conduct of the audit, the preparation and content of the auditor's report, accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit