European Metals Holdings Limited Annual Governance Statement

RNS Number : 2152G

European Metals Holdings Limited

30 September 2024

 

For immediate release

 

30 September 2024

 

European Metals Holdings Limited

ANNUAL GOVERNANCE STATEMENT

European Metals Holdings Limited (ASX & AIM: EMH, OTCQX: EMHXY and EMHLF) ("European Metals" or the "Company") announces the Company's Corporate Governance Statement.

The Corporate Governance Statement has been released on the Australian Stock Exchange ("ASX") as required under the listing rules of the ASX.

For further information please contact:

 

European Metals Holdings Limited Keith Coughlan, Executive Chairman   Kiran Morzaria, Non-Executive Director   Henko Vos, Company Secretary	Tel: [phone] Email: [e-mail]   Tel: [phone]   Tel: [phone] Email: [e-mail]
Zeus Capital Limited (Nomad & Broker) James Joyce / Darshan Patel / Isaac Hooper (Corporate Finance) Harry Ansell (Broking)	Tel: [phone]
BlytheRay (Financial PR) Tim Blythe Megan Ray   Chapter 1 Advisors (Financial PR - Aus) David Tasker	Tel: [phone]         Tel: [phone]

 

ASX CORPORATE GOVERNANCE STATEMENT

 

This Corporate Governance summary discloses the extent to which the Company followed the recommendations set by the ASX Corporate Governance Council in its publication 'Corporate Governance Principles and Recommendations (4^th Edition)' (Recommendations) during the year ended 30 June 2024.  The Recommendations are not mandatory; however, the Recommendations that will not be followed have been identified and reasons have been provided for not following them.

 

The Company's Corporate Governance Plan and Policies has been posted on the Company's website at https://www.europeanmet.com/corporate-governance/.  

 

Principles and Recommendations		Comply	Explanation
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.		Yes	The Company has adopted a Board Charter. The Board Charter sets out the specific responsibilities of the Board, requirements as to the Board's composition, the roles and responsibilities of the Chairman and Company Secretary, the establishment, operation and management of Board Committees, directors' access to Company records and information, details of the Board's relationship with management, details of the Board's performance review, and details of the Board's disclosure policy. A copy of the Company's Board Charter 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.		Yes	(a)   The Company has detailed guidelines for the appointment and selection of the Board. The Company's Corporate Governance Plan and Policies 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.		Yes	The Company's Corporate Governance Plan and Policies 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.		Yes	The Company Secretary is appointed and removed by, and is accountable directly to, the Board. The Company Secretary has access to all Board members and the main functions of the role are to assist in advising the Board on governance matters and monitoring compliance with board and committee procedures. The role of the Company Secretary is summarised in the Company's Board Charter and are reflective of the Recommendations.
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.		Partial	The Company has adopted a Diversity Policy in the Corporate Governance Plan and Policies which is available on the company website. The Company's Diversity Policy does not include measurable objectives as the Board believes that the Company will not be able to successfully meet these given the current size and stage of development of the Company.  If the Company's activities increase in size, nature and scope in the future, then appropriate measurable objectives will be set and put into place. Notwithstanding the above, 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 shareholder value and which reflects the values, principles and spirit of the Company's Diversity Policy. At 30 June 2024 the Company had the following ratio of employees: Male Female Employees 100% 0% Board 80% 20% Senior Executive 100% 0% Group 86% 14% A senior executive is defined by the Company as a member of the senior management team as distinct from the Board, being those who have the opportunity to materially influence the integrity, strategy and operation of the Company and its financial performance. The Company is not a "relevant employer" under the Workplace Gender Equality Act 2012.
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.		Yes	The Nomination Committee is responsible for evaluating the performance of the Board and individual Directors on an annual basis in accordance with its Charter. It may do so with the aid of an independent advisor. The Performance Evaluation Policy can be found in the Company's Corporate Governance Plan. The Board periodically discussed the performance and composition of the Board during the reporting period, considering issues or concerns as they arose.  This ongoing process has remained in-house and informal through the year. A performance review of the Board, Directors and Committees was undertaken during the reporting period via a roundtable discussion. No material weaknesses were identified, and no governance changes were deemed necessary.
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.		Yes	(a)   The Remuneration Committee is responsible for evaluating the performance of senior executives. (b)   The Company's Corporate Governance Plan and Policies requires the Remuneration Committee to conduct annual performance of the senior executives. Performance Evaluation Policy requires the Company to disclose whether or not performance evaluations were conducted during the relevant reporting period. The Committee periodically met with senior executives to discuss any issues or concerns as they arose. This ongoing process has remained in-house and informal through the year. A performance review of was undertaken during the reporting period via a roundtable discussion. No material weaknesses were identified, and no governance changes were deemed necessary.
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.		Partial	(a)   The Company has a Nomination Committee comprising all members of the Board with Kiran Morzaria being Chairman of the Committee. Ambassador Bloomfield and Merrill Gray are considered to be independent. The role and responsibilities of the Nomination Committee is outlined in the Nomination Committee Charter of the Corporate Governance Plan and Policies available online on the Company's website. The Company's objective is to have an appropriate mix of expertise and experience on the Board, and where appropriate its committees, so that the Board can effectively discharge its corporate governance and oversight responsibilities The Committee met once during the year and on all occasions were attended by all members.
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.		Yes	Board Skills Matrix Number of directors that meet the skill as at 30 June 2024 and the date of this statement Executive and Non-Executive experience 5 Industry experience and knowledge 5 Leadership 5 Corporate governance and Risk Management 5 Strategic thinking 5 Desired behavioural competencies 5 Geographic experience 5 Capital Markets experience 5 Subject matter expertise - accounting 3 - capital management 5 - corporate financing 4 - industry taxation 0 - risk management 5 - legal 1 - IT expertise 0 - HR expertise and/or experience in workplace health and safety 5 - marketing 5 - environment and sustainability 5 - community relations 5 External firms are employed to support and maintain taxation, legal, and 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.		Yes	(a)   The Company has accepted the definition of "independence" in the Recommendations in making the assessments of independence. Ambassador Bloomfield and Merrill Gray 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 be 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. Each director's independence status is regularly assessed against Box 2.3. (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.
Recommendation 2.4 A majority of the board of a listed entity should be independent directors.		No	The Company did not have a majority of independent directors during the year.  At this time, only Ambassador Bloomfield and Merrill Gray are considered to be independent. Whilst this is not in accordance with the Recommendation, the Board considers that its current composition is the most appropriate blend of skills and expertise relevant to the Company's business, size and operations.  The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made.
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.		No	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 serves as the Executive Chairman of the Board, a role deemed beneficial by the Board due to the Company's current stage of development. As the Company grows in size and complexity, the Board will contemplate the appointment of an independent chair.
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.		Yes	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.		Yes	The Company has formulated Core Values that are included in the Board Charter outlined in the Corporate Governance Plan and Policies 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.		Yes	(a)   The Corporate Code of Conduct applies to the Company's directors, senior executives and employees and is outlined in the Corporate Governance Plan and Policies which is on the Company's website. (b)   The Code of Conduct states that any material breaches are to be reported to the Board. No breaches of the code were reported during the year under review.
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.		Yes	The Company has a Whistleblower Policy in the Corporate Governance Plan and Policies which is on the Company's website. The policy outlines the Company's commitment to encourage the reporting of any instances of suspected unethical, illegal, fraudulent, or undesirable conduct involving The Company and provides protections and measures so that those persons who make a report may do so confidentially and without fear of intimidation or reprisal. The Company confirms that any material incidents under this Policy will be notified to the Board or a committee of the Board.
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.		Yes	The Company has an Anti-Bribery and Anti-Corruption Policy in the Corporate Governance Plan and Policies which is on the Company's website. The policy sets out the conduct expected by the Company to minimise the risk of bribery or corruption occurring in connection with its operations and activities, as well as providing guidance on how to deal with instances of bribery or corruption.
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.		Partial	(a)   The Company has an Audit and Risk Committee comprising of three members being Ambassador Bloomfield (Chairman), Kiran Morzaria and Merrill Gray. Ambassador Bloomfield and Merrill Gray are considered to be independent, and Ambassador Bloomfield is not the chair of the Board. The Audit and Risk Committee Charter is outlined in the Corporate Governance Plan and Policies available on the Company's website. Details regarding the directors' qualifications and experience are contained in the Director's Report of the Annual Report, with the Committee deemed to be structured so that it has the relevant accounting and financial expertise required to discharge its responsibilities.   The Committee met twice during the year and on all occasions were attended by all members.
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.		Yes	In respect of each statutory financial reporting period, the Board was provided with a declaration in accordance with S295A of the Corporations Act which is consistent with Recommendation 4.2.  The Company complied with this recommendation.
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.		Yes	The Company is committed to providing clear, concise and factual disclosure of material information to all investors in its corporate reports. The Company has adopted a process for the preparation, verification and approval of corporate reports to confirm the accuracy of those reports.  Information published in the Company's periodic cashflow reports, Half Year reports and others are prepared by the Company's external accountants.  Where information is not subject to an audit, it is verified by Senior Management and approved by the Board prior to release to the market. (This remains the case also for externally audited information). All announcements indicate the relevant approver of releases.
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.	Yes	The Board Charter provides details of the Company's disclosure policy. In addition, Continuous Disclosure Policy of the Corporate Governance Plan and Policies outlines 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 and Policies 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.	Yes	The Board is involved in the review and authorisation of material Company announcements and therefore has visibility of the nature, quality and frequency of information being disclosed to the market.
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.	Yes	Materials used in external investor or analyst presentations which are substantive in nature and which have not previously been disclosed will be released to the ASX prior to their use.
Principle 6: Respect the rights of security holders
Recommendation 6.1 A listed entity should provide information about itself and its governance to investors via its website.	Yes	The Company's website, www.europeanmet.com, provides information about the Company, its projects, its Board and management and corporate governance documents.
Recommendation 6.2 A listed entity should have an investor relations program that facilitates effective two-way communication with investors.	Yes	The Company has a Shareholder Communications Policy in the Corporate Governance Plan and Policies which is publicly available on the Company's website, including the effective use of electronic communications.
Recommendation 6.3 A listed entity should disclose how it facilitates and encourages participation at meetings of security holders.	Yes	The Company has a Shareholder Communications Policy in the Corporate Governance Plan and Policies which is publicly available 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.	Yes	The Board ensures that all substantive resolutions at a meeting of security holders are decided by 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.	Yes	The Company provides shareholder materials directly to shareholders through electronic means.  A shareholder may request a hard copy to be posted to them. The Company's share registry is maintained electronically by Computershare. Their contact details are disclosed in the Corporate Directory of the Annual Report.
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.	Partial	The Company has an Audit and Risk Committee comprising of three members being Ambassador Bloomfield (Chairman), Kiran Morzaria and Merrill Gray. Ambassador Bloomfield and Merrill Gray are considered to be independent, and Ambassador Bloomfield is not the chair of the Board. The Audit and Risk Committee Charter is outlined in the Corporate Governance Plan and Policies available on the Company's website. Details regarding the directors' qualifications and experience are contained in the Director's Report of the Annual Report, with the Committee deemed to be structured so that it has the relevant accounting and financial expertise required to discharge its responsibilities. The Committee met twice during the year and on all occasions were attended by all members.
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.	Yes	(a)     The Company has a Risk Management Policy in the Corporate Governance Plan and Policies outlining 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. (b)     The Board regularly reviews the Company's risk profile at its Board meetings and a 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.	Yes	(a)   The Company does not have an internal audit function.   (b)   The Audit and Risk Committee Charter in the Company's Corporate Governance Plan and Policy delegates the responsibility for undertaking and assessing risk management and internal control effectiveness to the Audit and Risk Committee.   The Board recognises that no cost-effective internal control system will preclude all errors and irregularities. The Company's risk management and internal control system is based upon written procedures, policies and guidelines, an organisational structure that provides an appropriate division of responsibility, and the selection and training of qualified service providers and personnel.   The Company's policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed effectively, and efficiently managed and monitored to enable achievement of the Company's business objectives. A number of the Company's activities are also undertaken by external consultants, given the Company's size and level of current activities, coupled with the cost benefit this currently provides the Company.
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.	Yes	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). The Company has assessed its exposure to economic risks as high on the basis that it has no material income and is reliant on the potential exploration success and project development progress including but not limited mine and infrastructure design and development, processing flowsheet development and permitting across all aspects of the project to raise capital to fund exploration, further project development and project delivery as well as corporate operating costs. This risk is managed by regularly reviewing future cashflow requirements to ensure that fundraising is performed in a timely manner and that the Company remains in a position to pay its debts as and when they fall due. The Company has no material exposure to environmental or sustainability risks. The Company's corporate ethics includes a strong focus on environmental responsibility. This approach is integral to ensuring the long-term sustainability of the Company's mineral processing, mining and exploration operations. An Environment, Social and Governance (ESG) Policy has been established to ensure that its field operations comply with permits and licenses, and have minimal impact on the surrounding environments and communities. A copy of this policy is available on the Company's website A copy of the Company's policies on risk oversight and management of material business risks is publicly available under the heading Risk Management Policy. Review of the Company's risk management framework is conducted at least annually, and during the reporting period the Company has no material exposure to environmental or sustainability risks.
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.	Partial	(a)   The Company's Remuneration Committee comprises two members being Kiran Morzaria (Chairman) and Ambassador Bloomfield.  Ambassador Bloomfield is considered to be an independent director. The role and responsibilities of the Remuneration Committee is outlined in the Remuneration Committee Charter of the Corporate Governance Plan and Policies available on the Company's website. The qualifications, experience, and attendance of the members of the Remuneration Committee are detailed in the Remuneration Report which forms part of the Directors' Report in the Company's Annual Report. The Company does not meet the recommendation of the Remuneration Committee having a majority of independent directors. Whilst this is not in accordance with the Recommendation, the Board considers that its current composition is the most appropriate blend of skills and expertise relevant to the Company's business, size and operations. The Board is aware of the importance of independent judgement and considers independence, amongst other things, when new appointments to the Board are made. The full Board approves all management remuneration including the allocation of options (if any) and involves itself in the nomination, selection and retirement of Directors. No Director may be involved in setting their own remuneration or terms and conditions and in such a case, relevant Directors are required to be absent from the full Board discussion. The Board seeks to ensure that collectively its membership represents an appropriate balance between Directors with experience and knowledge of the Company and Directors with an external or fresh perspective. The Board reviews the range of expertise of its members on a regular basis and seeks to ensure that it has operational and technical expertise relevant to the operation of the Company. Directors are re-elected, nominated and appointed to the Board in accordance with the Board's policy on these matters set out in the Remuneration Committee Charter, the Company's Constitution and ASX Listing Rules. The Committee met once during the year which was attended by all members. The Company's remuneration philosophy, objectives and arrangements are detailed in the Remuneration Report which forms part of the Directors' Report in the Company's 2024 Annual Report (lodged separately with the ASX). The Remuneration Committee Charter is publicly available on the Company's website.
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.	Yes	Details of the Company's policies and practices regarding the remuneration of non-executive directors, executive directors and other senior executives is set out in the Remuneration Report as disclosed in the Company's Directors' Report as part of the Company's 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.	Yes	(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 and Policies 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	The Company's directors are all fluent in English.
Recommendation 9.2 A listed entity established outside Australia should ensure that meetings of security holders are held at a reasonable place and time.	N/A	The Company is registered in Australia.
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.	N/A	The Company is registered in Australia.

 

 

QCA CORPORATE GOVERNANCE REPORT

 

The following sets out the Company's Corporate Governance Report in accordance with the AIM Rules for Companies, a copy of which is also available from the Company's website at:

https://www.europeanmet.com/aim-rule-26/

 

INTRODUCTION

 

In April 2018, the Quoted Companies Alliance (QCA) published an updated version of its Code which provides UK small and mid-sized companies such as European Metals Limited with a corporate governance framework that is appropriate for a Company of our size and nature. The Board considers the principles and recommendations contained in the QCA Code are appropriate and have therefore chosen to apply the QCA Code.

 

The updated 2018 QCA Code has 10 principles that should be applied.  Each principle is listed below together with an explanation of how the Company applies or otherwise departs from each of the principles.

 

PRINCIPLE ONE

Business Model and Strategy

 

Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium Project. Geomet s.r.o. is owned 49% by European Metals and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 360.2Mt at 0.44% Li₂O and 0.05% Sn and an Inferred Mineral Resource of 294.7Mt at 0.39% Li₂O and 0.05% Sn containing a combined 7.39 million tonnes Lithium Carbonate Equivalent and 335.1kt of tin reported 13 October 2021. An initial Probable Ore Reserve of 34.5Mt at 0.65% Li₂O and 0.09% Sn reported 4 July 2017 has been declared to cover the first 20 years mining at an output of 22,500tpa of lithium carbonate reported 11 July 2018.

 

On 19 January 2022, EMH provided an update to the 2019 PFS Update, conducted by specialist independent consultants, which indicates a post-tax NPV of USD1.938B and a post-tax IRR of 36.3% and confirmed that the Cinovec Project is a potential low operating cost producer of battery-grade lithium hydroxide or battery grade lithium carbonate as markets demand. It confirmed the deposit is amenable to bulk underground mining. Metallurgical test-work has produced both battery grade lithium hydroxide and battery grade lithium carbonate in addition to high-grade tin concentrate at excellent recoveries. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.

 

The quantity of these resources directly attributable to the Company is equivalent to the 49% shareholding the Company has in Geomet s.r.o.

 

This makes Cinovec the largest hard rock lithium deposit in Europe, the fifth largest non-brine deposit in the world and a globally significant tin resource.

 

Parts of the ore body near surface have been mined for tin from the 14th Century to the 20th Century and the lithium-bearing orebody below surface previously had over 400,000 tonnes of ore mined as a trial sub-level open stope mining operation for tin mineralisation in the 1980's.

 

PRINCIPLE TWO

Understanding Shareholder Needs and Expectations

 

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders.  The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company's Annual General Meeting. Investors also have access to current information on the Company though its website, www.europeanmet.com, and via Keith Coughlan, Executive Chairman, who is available to answer investor relations enquiries.

 

The Company has adopted a Shareholder Communications Policy 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 Corporate Governance Plan and Policies, which is available on the Company website, www.europeanmet.com/corporate-governance.

 

PRINCIPLE THREE

Considering wider stakeholder and social responsibilities

 

The Board recognises that the long-term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators, and other stakeholders.

 

The Company is working to be a socially responsible, premier lithium product producer that can positively impact stakeholders, communities and the host nation. This drives the Company's strategic decision-making and is reflected across our Environmental, Social, Governance (ESG) profile. As we progress the Cinovec project, these ESG principles will continue to guide us to ensure we are enabling Europe's sustainable future.

 

The Company has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity to raise issues and provide feedback to the Company.

 

PRINCIPLE FOUR

Risk Management

 

The Board has established an Audit and Risk Committee which, at 30 June 2024, was comprised of directors Ambassador Lincoln Bloomfield (Chairman of Audit and Risk Committee), Kiran Morzaria and Merrill Gray. The role and responsibilities of the Audit and Risk Committee are outlined in the Audit and Risk Committee Charter of the Company's Corporate Governance Plan and Policies available online on the Company's website, www.europeanmet.com/corporate-governance.

 

The Board devotes time at board meetings 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.

 

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.  Risk Management Policy included the Corporate Governance Plan and Policies details the Company's disclosure requirements with respect to the risk management review procedure and internal compliance and controls.

 

The Board Charter requires the Board to disclose the number of times the Board met throughout the relevant reporting period, and the individual attendances of the members at those meetings. Details of the meetings will be provided in the Company's Annual Report. 

 

PRINCIPLE FIVE

A Well-Functioning Board of Directors

 

The Board currently comprises of 5 members: 2 Executive members (the Executive Chairman, Keith Coughlan and Executive Director, Richard Pavlik) and 3 Non-Executive members (Kiran Morzaria, Ambassador Lincoln Bloomfield and Merrill Gray). Biographical details of the current directors are set out within Principle Six below.  Pursuant to Section 10.7 of the Company's Constitution, a retiring director shall be eligible for re-election.  All the executive directors are full time, and the non-executive directors are considered to be part time but are expected to provide as much time to the Company as is required.

 

All letters of appointment of directors are available for inspection at the Company's registered office during normal business hours.  The Board elects a Chairman to chair every meeting.

 

The Board holds formal meetings periodically as issues arise and require more details. The directors are in contact and discuss all necessary issues on a regular basis and to ensure that the non-executive directors, while not involved in the day to day running of the Company, are still kept up to date on a regular basis. 

 

The Company has established an Audit and Risk Committee, a Remuneration Committee, a Nomination Committee, and an Environment, Social and Governance Committee, particulars of which are set out in Principle Nine below.

 

The QCA recommends a balance between executive and non-executive directors and recommends that there be two independent non-executives.  Kiran Morzaria, Ambassador Lincoln Bloomfield and Merrill Gray are considered by the Board to be independent.

 

Following the appointment of Merrill Gray on 18 April 2024, the Board is comprised of 2 Executive members and 3 Non-Executive members.

 

The details of the directors are disclosed in the Annual Report and Company website, www.europeanmet.com/directors-and-senior-management.

 

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 director's interests, positions, associations and relationships are provided in the Annual Reports and Company website, www.europeanmet.com/directors-and-senior-management.

 

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, www.europeanmet.com/directors-and-senior-management. The Corporate Code of Conduct, which applies to the Company's directors, senior executives and employees is included in the Corporate Governance Plan and Policies which is on the Company's website, www.europeanmet.com/corporate-governance.

 

PRINCIPLE SIX

Appropriate Skills and Experience of the Directors

 

The Company believes the current balance of skills in the Board as a whole, reflects a very broad range of commercial and professional skills across geographies and industries, and each of the directors has experience in public markets. An assessment of the Board's skills and expertise is also set out in the Corporate Governance Report included in the Company's Annual Report, and which is available on the Company's website, https://www.europeanmet.com/shareholdercentre-reports.

 

The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal.

 

Profiles of the directors are set out below:

 

Mr Keith Coughlan - Executive Chairman

Mr Coughlan has almost 30 years' experience in stockbroking and funds management.  He has been largely involved in the funding and promoting of resource companies listed on ASX, AIM and TSX.  He has advised various companies on the identification and acquisition of resource projects and was previously employed by one of Australia's then largest funds management organisations.  Mr Coughlan is currently Non-executive Director of Codrus Minerals Limited (ASX:CDR).

 

Mr Coughlan is currently a member of the Nomination Committee and the Environment, Social and Governance Committee.

 

Mr Richard Pavlik - Executive Director

Mr Pavlik is the Chief Advisor to the CEO of Geomet s.r.o., and is a highly experienced Czech mining executive. Mr Pavlik holds a Masters Degree in Mining Engineering from the Technical University of Ostrava in Czech Republic. He is the former Chief Project Manager and Advisor to the Chief Executive Officer at OKD. OKD has been a major coal producer in the Czech Republic. He has almost 30 years of relevant industry experience in the Czech Republic. Mr Pavlik also has experience as a Project Analyst at Normandy Capital in Sydney as part of a postgraduate program from Swinburne University. Mr Pavlik has held previous senior positions within OKD and New World Resources as Chief Engineer, and as Head of Surveying and Geology. He has also served as the Head of the Supervisory Board of NWR Karbonia, a Polish subsidiary of New World Resources (UK) Limited. He has an intimate knowledge of mining in the Czech Republic. 

 

Mr Pavlik is currently a member of the Nomination Committee and the Environment, Social and Governance Committee.

 

Mr Kiran Morzaria - Non-executive Director

Mr Morzaria has extensive experience in the mineral resource industry working in both operational and management roles.  He spent the first four years of his career in exploration, mining, and civil engineering before obtaining his MBA.  Mr Morzaria has served as a director of a number of public companies in both an executive and non-executive capacity. 

 

Mr Morzaria is currently a member of the Audit and Risk Committee and the Environment, Social and Governance Committee.

 

Mr Morzaria is currently Chairman of the Remuneration Committee and the Nomination Committee.

 

Ambassador Lincoln Bloomfield - Non-executive Director

Ambassador Bloomfield is based in Washington, DC, and brings governance and regulatory experience, years of international diplomacy and security expertise to the EMH Board, along with a North American presence while his private sector experience is centred on sustainability, resilience, and renewable energy. 

 

Ambassador Bloomfield is currently a member of the Remuneration Committee and the Nomination Committee.

 

Ambassador Bloomfield is currently Chairman of the Audit and Risk Committee and the Environment, Social and Governance Committee.

 

Ms Merrill Gray - Non-executive Director

Ms Gray is a highly experienced executive and non-executive of ASX and private companies. Her appointment brings over 30 years of metallurgical and mining engineering as well as geology experience. This includes across large-scale new technology project development and production management skills. She currently works as a global critical minerals and renewable energy (including hydrogen derivatives) corporate advisor, having previously been MD and CEO of Syngas Ltd (Founder), Hexagon Energy Materials Limited (ASX: HXG) and Co-MD of lithium-ion battery recycling company, Primobius GmbH. She has significant international experience, including within the European Union and specifically with German automotive OEM's. Ms Gray brings experience and networks across the lithium-ion battery supply chain.

 

She holds Bachelor of Engineering and Bachelor of Science degrees, as well as an MBA, and is a fellow of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Engineering.

 

Ms Gray is currently a member of the Nomination Committee, the Audit and Risk Committee and the Environment, Social and Governance Committee.

 

PRINCIPLE SEVEN

Evaluation of Board Performance

 

The Board 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 process for this can be found in Performance Evaluation Policy of the Company's Corporate Governance Plan and Policies which requires the Board to disclose 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 help determine whether 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.

 

PRINCIPLE EIGHT

Corporate Culture

 

The Corporate Code of Conduct applies to the Company's directors, senior executives, and employees.

 

The purpose of the Corporate Code of Conduct is to provide a framework for decisions and actions in relation to ethical conduct in employment.  It underpins the Company's commitment to integrity and fair dealing in its business affairs and to a duty of care to all employees, clients, and stakeholders.  The document sets out the principles covering appropriate conduct in a variety of contexts and outlines the minimum standard of behaviour expected from employees.

 

The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback and enabling positive and constructive challenge. The Company has adopted, with effect from the date on which its shares were admitted to AIM, a code for directors' and employees' dealings in securities which is appropriate for a company whose securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into effect in 2016.

 

PRINCIPLE NINE

Maintenance of Governance Structures and Processes

 

The QCA Code recommends that the Company maintain governance structures and processes in line with its culture and appropriate to its size and complexity.

 

Ultimate authority for all aspects of the Company's activities rests with the Board, the respective responsibilities of the Chairman and Chief Executive Officer arising as a consequence of delegation by the Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for the effectiveness of the Board, while management of the Company's business and primary contact with shareholders has been delegated by the Board to the Managing Director.  As the Company does not currently have a Managing Director, Mr Keith Coughlan, in his role as Executive Chairman, is responsible for the management of the Company's business and primary contact with shareholders. 

 

The Board has established the following committees.

 

Audit and Risk Committee

The Board has established an Audit and Risk Committee which, at 30 June 2024, was comprised of directors Ambassador Lincoln Bloomfield (Chairman of Audit and Risk Committee), Mr Kiran Morzaria and Ms Merrill Gray.  The role and responsibilities of the Audit and Risk Committee are outlined in the Audit and Risk Committee Charter of the Company's Corporate Governance Plan and Policies available online on the Company's website, www.europeanmet.com/corporate-governance.

 

This committee has primary responsibility for monitoring the Financial Reporting function and internal controls in order to ensure that the financial performance of the Company is properly measured and reported. The committee receives the financial reports from the executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit and Risk Committee shall meet at least each financial quarter and it has unrestricted access to the Company's auditors.

 

Remuneration Committee

The Board has established a Remuneration Committee which, at 30 June 2024, was comprised of directors Mr Kiran Morzaria (Chairman of Remuneration Committee) and Ambassador Lincoln Bloomfield.  The role and responsibilities of the Remuneration Committee are outlined in the Remuneration Committee Charter of the Company's Corporate Governance Plan and Policies available online on the Company's website, www.europeanmet.com/corporate-governance.

 

The Remuneration Committee reviews the performance of the executive directors and employees and makes recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration Committee also considers and approves the granting of share options pursuant to the share option plan and the award of shares in lieu of bonuses pursuant to the Company's Remuneration Policy.

 

Nomination Committee

The Board has established a Nomination Committee which, at 30 June 2024, was comprised of Mr Kiran Morzaria (Chairman of Nomination Committee), Mr Keith Coughlan, Mr Richard Pavlik, Ambassador Lincoln Bloomfield and Ms Merrill Gray, being all the directors.  The role and responsibilities of the Nomination Committee are outlined in the Nomination Committee Charter of the Company's Corporate Governance Plan and Policies available online on the Company's website, www.europeanmet.com/corporate-governance.

 

Environment, Social and Governance Committee

The Board has established an Environment, Social and Governance Committee which, at 30 June 2024, was comprised of Ambassador Lincoln Bloomfield (Chairman of Environment, Social and Governance Committee), Mr Keith Coughlan, Mr Richard Pavlik, Mr Kiran Morzaria and Ms Merrill Gray, being all the directors.  The role and responsibilities of the Environment, Social and Governance Committee and Charter are set out in the Environment, Social and Governance Committee Charter of the Company's Corporate Governance Plan and Policies available online on the Company's website, www.europeanmet.com/corporate-governance.

 

PRINCIPLE TEN

Shareholder Communication

 

The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company's Annual General Meeting.

 

Investors also have access to current information on the Company through its website, www.europeanmet.com, and via Keith Coughlan, Executive Chairman, who is available to answer investor relations enquiries.

 

The Company shall include, when relevant, in its annual report, any matters of note arising from the audit or remuneration committees.

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