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CORPORATE GOVERNANCE STATEMENT

This statement was last updated on 26 September 2018

Introduction:

The Board of Directors of the Company recognises the importance of sound corporate governance and applies The Quoted Companies Alliance Corporate Governance Code (2018) (the ‘QCA Code’), which they believe is the most appropriate recognised governance code for a company with shares admitted to trading on the AIM market of the London Stock Exchange. It is believed that the QCA Code provides the Company with the framework to help ensure that a strong level of governance is maintained, enabling the Company to embed the governance culture that exists within the organisation as part of building a successful and sustainable business for all its stakeholders.

The QCA Code has ten principles of corporate governance that the Company has committed to apply within the foundations of the business. These principles are:

  1. Establish a strategy and business model which promote long-term value for shareholders;
  2. Seek to understand and meet shareholder needs and expectations;
  3. Take into account wider stakeholder and social responsibilities and their implications for long tern success;
  4. Embed effective risk management, considering both opportunities and threats, throughout the organisation;
  5. Maintain the board as a well-functioning balanced team led by the Chair;
  6. Ensure that between them the directors have the necessary up to date experience, skills and capabilities;
  7. Evaluate board performance based on clear and relevant objectives, seeking continuous improvement;
  8. Promote a corporate culture that is based on ethical values and behaviours;
  9. Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board; and
  10. Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

Chairman’s Corporate Governance Statement:

As Chairman of the Company I have a keen interest in ensuring that an effective and focused Board leads the business and builds upon its successes to date. Strong corporate governance helps underpin the foundations of a solid and successful business. The Board is committed to ensuring good corporate governance, from executive level and throughout the operations of the business. Following the revisions to the AIM Rules for Companies in March 2018, wherebyl AIM companies are required to comply with a recognised corporate governance code, the decision has been made by the Board that it will adopt the QCA Code. The Directors believe that the QCA Code is the most appropriate recognised governance code for the Company.

As Chairman it is my duty to ensure that good standards of governance are delivered and fed down throughout the organisation. The Board, as a whole, looks to instil a culture across the Company, delivering strong values and behaviours. The Board and executive team have worked tirelessly to bring the business to the place it currently stands, but it will face challenges over the next year due to the regulatory changes which we have announced. Throughout this period the importance of good governance and working for the benefit of all stakeholders has been at the forefront of the Board and executive management. As the Company moves forward I, as Chairman, will work with the Board to build upon the existing values that are in place and ensure that good corporate governance continues to be present within the organisation and delivered throughout the business, ensuring that we grow with foundations of integrity and strong principles for the benefit of all stakeholders.

The corporate governance arrangements that the Board has adopted are intended to ensure that the Company delivers medium and long-term value to its shareholders. The Board maintains dialogue with its investors, providing them with such information on the Company’s progress as is permitted by the AIM rules, MAR and the requirements of the relevant legislation.

The Board currently consists of three Independent Non-Executive Directors and three Executive Directors.  Whilst the Board recognises that an Executive Chairman is not considered best practice, the Board believes that this arrangement suits the Company at the current time and that the Chairman is integral to the ongoing development of the business.

Zhou Wenjie

Chairman

Website disclosures:

The QCA Code requires us to apply the ten principles and publish certain disclosures in our annual report and also on our website. Our website disclosures are as follows:

Principle Two - Seek to understand and meet shareholder needs and expectations.

Disclosure: explain the ways in which the Company seeks to engage with shareholders.

The Company’s Annual Report and Notice of Annual General Meetings (AGM) are sent to all shareholders and can be downloaded from our website. Copies of these documents for the last five years, and the Interim Report and other investor presentations are also available on the Company’s website.

Shareholders are kept up to date via regulatory news flow (“RNS”) on matters of a material substance and regulatory nature.

Our AGM is an annual opportunity for shareholders to meet with the Chairman and other members of the Board, including the Chief Financial Officer (CFO). The meeting is open to all shareholders, giving them the option to ask questions and raise issues during the formal business or more informally following the meeting.

At the AGM, separate resolutions are proposed on each substantial issue. For each proposed resolution, proxy forms are issued which provide voting shareholders with an opportunity to vote in advance of the AGM if they are unable to vote in person. Our registrars, Neville Registrars , count the proxy votes which are properly recorded and the results of the AGM are announced through an RNS.

The Board is keen to ensure that the voting decisions of shareholders are reviewed and monitored and that approvals sought at the Company’s AGM are as much as possible within the recommended guidelines of the QCA Code.

The Chairman and CFO, where appropriate, respond to shareholder queries directly (whilst remaining cognisant of the Market Abuse Regulations’ restrictions on inside information and within the requirements of the AIM Rules for Companies).

Shareholders with queries should email zibaometals1234@gmail.com.

Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long term success

Disclosure: Explain how the business model identifies the key resources and relationships on which the business relies. Explain how the Company obtains feedback from stakeholders.

Our business model and strategy is clear and is set out in our Annual Report, which is available on our website. The model is to identify, develop and maintain reliable and quality recycle metal suppliers overseas and PRC and to identify, develop and maintain customers in PRC.

We value the feedback we receive from our stakeholders and we take every opportunity to ensure that where possible the wishes of stakeholders are considered. The executive team is a small and dedicated team who work hard to ensure that values of the Company are an integral part of the business. The Board works closely with the management team with clear and open communication both within and outside of the Board room. The Company has an open-door policy from the executive team down where employees’ opinions and suggestions are valued and listened to.

Principle Six: Ensure that between them the directors have the necessary up to date experience, skills and capabilities

The Board comprises of the Chairman, three non-executive directors and two executive directors, (see www.zibaometals.com). The Board has significant industry, financial, public markets and governance experience, possessing the necessary mix of experience, skills, personal qualities and capabilities to deliver the strategy of the Company for the benefit of the shareholders over the medium to long-term.

Please refer to www.zibaometals.com for background of Directors.

Whilst the Board recognises that an Executive Chairman is not considered best practice, the Board believes that this arrangement suits the Company at the current time and that the Chairman is integral to the ongoing development of the business.

The Board is kept abreast of developments of governance, legal and accounting changes and AIM regulations. The Company’s lawyers provide updates on governance issues to the Board, the Company’s NOMAD provides annual Board AIM Rules refresher training as well as the initial training as part of a new Director’s onboarding.

All Directors have access to the Company’s NOMAD, company secretary, lawyers and auditors as and when required and are able to obtain advice from other external bodies when necessary.

The Company is mindful of the issue of gender balance, although Board appointments are made with the primary aim of ensuring that the candidate offers the required skills, knowledge and experience.

Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement

Disclosure: A description of the Board performance evaluation process.

The Directors consider seriously the effectiveness of the Board, Committees and individual performance.

The Board meets formally two times a year with ad hoc Board meetings as the business demands. There is a strong flow of communication between the Directors. The Agenda is set with the consultation of CFO and Chairman, with consideration being given to both standing Agenda items and the strategic and operational needs of the business. Papers are circulated well in advance of the meetings, giving Directors ample time to review the documentation and enabling an effective meeting.  Resulting actions are tracked for appropriate delivery and follow up.

The current non-executive Directors were appointed in 2014. The composition of the Board continues to be monitored and the balance of executive and non-executive directors.

On-going review of the functioning of the Board and ensuring that the highest level of governance is maintained whilst being mindful of the size and stage of development of the Company. Whilst the Board has not undertaken any formal training this is something that will be considered as the business grows and the Board establishes further.

The Directors have a wide knowledge of the business and requirements of directors’ fiduciary duties. The Directors have access to the Company’s NOMAD, lawyers and auditors as and when required. They are also able, at the Company’s expense, to obtain advice from external bodies if required.  The Board as a whole is mindful of the need for considering succession planning.

Principle Eight: Promote a corporate culture that is based on ethical values and behaviours

Disclosure: how the Board ensures that the Company has the means to determine ethical values and behaviours

The Directors are committed to ethical values and behaviours across the Board and the Company as a whole. The Directors are mindful of the industry that the business operates in and takes all issues of ethical behaviours seriously. These behaviours are instilled throughout the organisation. The importance of delivering success in a safe environment is not undermined.

Issues of bribery and corruption are taken seriously, The Company has a zero-tolerance approach to bribery and corruption and has an anti-bribery and corruption policy in place to protect the Company, its employees and those third parties to which the business engages with. The policy is provided to staff upon joining the business and training is provided to ensure that all employees within the business are aware of the importance of preventing bribery and corruption. There are strong financial controls across the business to ensure on going monitoring and early detection. See further disclosure on p14 of the 2018 Annual Report & Accounts.

A whistleblowing policy is in place, which enables staff to raise any concerns in confidence. Alan Ong has assumed the role of whistleblowing officer.

Principle Nine – Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Disclosure: Roles and responsibilities of the Chair, CEO and other directors with commitments. Describe the roles of the Committees

The Board retains ultimate accountability for good governance and is responsible for monitoring the activities of the executive team. No one individual director has unfettered powers of decision.

The Chairman has the responsibility for ensuring that the Board discharges its responsibilities and is also responsible for facilitating full and constructive contributions from each member of the Board in determination of the Group’s strategy and overall commercial objectives. The Chairman engages with shareholders and other stakeholder groups to ensure a strong relationship between them and the Company.

The Audit Committee meets at least twice a year. The Committee assists with the Board’s oversight of the integrity of the financial reporting and the independence and performance of the Company’s Auditor.

The Remuneration Committee meets once a year to consider all material elements of remuneration, including the executive director’s remuneration and performance.

All Board Committees report back to the Board following a Committee meeting.

The Board retains full and effective control over the Company and holds regular meetings at which financial, operational and other reports are considered and where appropriate voted upon. The Board is responsible for the Group’s strategy and key financial and compliance issues.

There are certain matters that are reserved for the Board, they include:

· approval of the Group’s strategic aims and objectives;

· approval of the Group’s annual operating and capital expenditure budgets and any material changes to them;

· Review of Group performance and ensuring that any necessary corrective action is taken;

· Extension on the Group’s activities into new business or geographical areas;

· Any decision to cease to operate all or any part of the Group’s business;

· Major changes to the Group’s corporate structure and management and control structure;

· Any changes to the Company’s listing;

· Changes to governance and key business policies;

· Ensuring maintenance of a sound system of internal control and risk management;

· Approval of half yearly and annual report and accounts and preliminary announcements of final year results;

· Reviewing material contracts and contracts not in the ordinary course of business.

As the Company grows, the Directors will ensure that the governance framework remains in place to support the development of the business.

Principle Ten - Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

Disclosure: Outcomes of votes cast by shareholders to be disclosed in a clear and transparent manner. If a significant number of votes were cast against a resolution put to a general meeting (20%) explain the reasons behind the votes cast.

If a significant proportion of votes was ever cast against a resolution, the Company would, on a timely basis, provide an explanation of what actions it intends to take to understand the reasons behind that vote result, and, where appropriate, any different action it has taken, or will take, as a result of the vote.

Annual Report disclosures:

The table below provides details of our annual report disclosures as required under the QCA Code

QCA Code

Principle

Required disclosure

Reference

1

Explain the company’s business model and strategy, including key challenges in their execution (and how those will be addressed).

2018 Annual Report: principally pp 3, 4, 7

4

Describe how the board has embedded effective risk management in order to execute and deliver strategy. This should include a description of what the board does to identify, assess and manage risk and how it gets assurance that the risk management and related control systems in place are effective.

2018 Annual Report: p7

5

Identify those directors who are considered to be independent; where there are grounds to question the independence of a director, through length of service or otherwise, this must be explained.

Chin Phang Kwok

Peter George Greenhalgh

Ajay Kumar Rajpal

Describe the time commitment required from directors (including non-executive directors as well as part-time executive directors).

The executive Directors are expected to devote substantially the whole of their time to their duties with the Company.  The non-executives have a lesser time commitment. It is anticipated that each of the non-executives will about 12 days a year.

Include the number of meetings of the board (and any committees) during the year, together with the attendance record of each director.

2018 Annual Report: pp11 and 13

6

Identify each director.

2018 Annual Report: pp 5-6

Describe the relevant experience, skills and personal qualities and capabilities that each director brings to the board (a simple list of current and past roles is insufficient); the statement should demonstrate how the board as a whole contains (or will contain) the necessary mix of experience, skills, personal qualities (including gender balance) and capabilities to deliver the strategy of the company for the benefit of the shareholders over the medium to long-term.

See website disclosure Principle Six

Explain how each director keeps his/her skillset up-to-date.

See website disclosure Principle Six

Where the board or any committee has sought external advice on a significant matter, this must be described and explained.

N/A

Where external advisers to the board or any of its committees have been engaged, explain their role.

N/A

Describe any internal advisory responsibilities, such as the roles performed by the company secretary and the senior independent director, in advising and supporting the board.

The Company Secretary helps keep the Board up to date on areas of new governance and liaises with the NOMAD on areas of AIM requirements. The Company Secretary has frequent communication with the Chairman/CEO and is available to other members of the Board as and when required.

7

Include a high-level explanation of the board performance effectiveness process.

2018 Annual Report: p 12

Where a board performance evaluation has taken place in the year, provide a brief overview of it, how it was conducted and its results and recommendations. Progress against previous recommendations should also be addressed.

N/A

8

Include in the chair’s corporate governance statement how the culture is consistent with the company’s objectives, strategy and business model in the strategic report and with the description of principal risks and uncertainties. The statement should explain what the board does to monitor and promote a healthy corporate culture and how the board assesses the state of the culture at present.

see Website disclosures: Principle Eight above.

10

Describe the work of any board committees undertaken during the year.

2018 Annual Report: pp 13-14

Include an audit committee report (or equivalent report if such committee is not in place).

2018 Annual Report: pp 13-14

Include a remuneration committee report (or equivalent report if such committee is not in place).

2018 Annual Report: pp13-14

If the company has not published one or more of the disclosures set out under Principles 1-9, the omitted disclosures must be identified and the reason for their omission explained.

N/A

The Board is responsible for formulating, reviewing and approving the Company’s strategy, budgets and corporate actions.


Internal Controls

The Board acknowledges its overall responsibility for ensuring that the Company has a system of internal controls in place that is appropriate. However, Shareholders should be mindful that any system can only provide reasonable, not absolute assurance against material misstatement or loss and is designed to manage but not eliminate the risk of failure to achieve business objectives. The key procedures are:

● a corporate governance policy with clearly defined rules relating to the delegation of authority;

● preparation of annual budgets for the business, reviewed by the executive management and subject to Board approval; and

● monthly management accounts and key performance dates which are compared with budget.

At formal meetings, the board receives reports by Chairman or Chief Executive or both on the overall performance over the previous period.  They are supported by the Finance Director on financial detail.  They are followed with reports on other matters, particularly progress with development projects.  Minutes of board Committee meetings held since the previous formal board meeting are received and decisions made by those committees are submitted for ratification where such is needed. It is anticipated that 4 Board meetings will be held every year.

There is a formal schedule of matters reserved for the board.  This includes the setting of high level targets, approval of budgets, strategy, funding, capital expenditure, license agreements and incentive schemes.  Specific authority levels for expenditure are delegated to individual executives or management committees according to a schedule agreed by the board.

Whilst the bulk of the formulation of budgets and strategy is undertaken by executive directors, this is done against a framework set by the whole board, challenged by it in detail and finally approved by it.

Remuneration Committee

The Remuneration Committee consists of Chin Phang Kwok and Ajay Rajpal. Chin Phang Kwok has been appointed chairman. The Remuneration Committee monitors the performance of each of the Company’s executive Directors and senior executives to ensure they are rewarded fairly for their contribution. The recommendations of the Remuneration Committee are presented to a meeting of the full Board. The remuneration and terms and conditions of appointment of the non-executive directors are set by the Board as a whole.

The Audit Committee

The Audit Committee consists of Peter Greenhalgh and Ajay Rajpal. Ajay Rajpal has been appointed chairman. The Audit Committee is responsible for ensuring that the Combined Code is implemented  in respect to matters relating to the Company’s external audit. In addition, the Committee also discusses the scope of the audit before its commencement and it receives reports from the external auditors. The Committee also recommends the appointment of, and will review the fees of, the external auditors. The Audit Committee meets the external auditors and meets internally at least twice per year. It also meets on an ad hoc basis as required.Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.