Kleos Space S A : Corporate Governance Statement

Corporate Governance Statement

The Board of Directors of Kleos Space S.A. (KSS or the Company) is responsible for the corporate governance of the Company and its subsidiaries (Group). The Board guides and monitors the business and affairs of KSS on behalf of security holders by whom they are elected and to whom they are accountable. The Directors and Management of the Company are committed to conducting the business of the Group in an ethical manner and in accordance with high standards of corporate governance. The Company has adopted and substantially complies with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) (Recommendations) to the extent appropriate to the size, life cycle stage and nature of the Group's operations.

Kleos is domiciled in Luxembourg and is registered as a public limited liability company in Luxembourg. The Company is registered in Australia as a foreign company under the Corporations Act 2001 (Cth.) and commenced trading on ASX in August 2018. The main constituent document of the Company is its articles of association, while the corporate governance policies and procedures described below are those that have been in place since the Company's listing on ASX, as amended and re-issued to effect necessary changes and improvements.

The Company's Corporate Governance Statement (Statement) is set out in the table below and reflects the Company's compliance with the Recommendations, with references to each individual recommendation. In this Statement, all references to security holders are references to both shareholders and holders of CHESS depositary interests over the shares of the Company and references to the Company's website are to kleos.space/investors (Website).

This Statement was approved by the Company's Board of Directors on 30 April 2022 and is current as at that date. Where relevant and unless stated otherwise, all the governance practices have been in place and implemented for the full financial year.

PRINCIPLE 1 - LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

Corporate Governance Council Recommendation	Compliance	Disclosure
1.1	A listed entity should disclose: (a) the respective roles and responsibilities of its board and management; and (b) those matters expressly reserved to the board and those delegated to management.	Complies	The respective roles and responsibilities of the Board and management are defined under the Board Charter, a copy of which is available on the Website. There is a clear delineation between the Board's responsibility for the Company's strategy and oversight of activities, and the powers delegated to management.
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.	Complies	The process for selection, appointment, and re-appointment of directors is detailed in the Remuneration and Nomination Committee Charter, a copy of which is available on the Website. The charter requires that: a. appropriate checks be undertaken before a candidate is appointed or put forward to shareholders for election as a director; and b. shareholders be provided with all material information in the Remuneration and Nomination's Committee's possession relevant to a decision on whether to elect or re-elect a director of the Company, including a statement of whether the Board supports the candidate's election or re-election.
1.3	A listed entity should have a written agreement with each director and senior executive setting out the terms of their appointment.	Complies	The Company requires each director and senior executive to execute a written agreement setting out the terms of their appointment or employment.
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.	Complies	The Board Charter provides that the company secretary is directly accountable to the Board through the Chair, and outlines the details of the role. A copy of the charter is available on the Website.
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	Complies in part	The Company has adopted a Diversity Policy, a copy of which is available on the Website. The Diversity Policy requires the Board to establish measurable objectives to assist the Company to achieve gender diversity and to assess the Company's progress in achieving these objectives.
composition of its board, senior executives and workforce generally; and (c) disclose in relation to each reporting period 1. the measurable objectives for that period to achieve gender diversity 2. the entity's progress towards achieving those objectives; and 3. either: A.the respective proportions of men and women on the board, in senior executive positions and across the whole workforce (including how the entity has defined "senior executive" for these purposes); or B.if the entity is a "relevant employer" under the Workplace Gender Equality Act, the entity's most recent "Gender Equality Indicators", as defined in and published under that Act.	The Company has set a target to increase female representation within its workforce by 10% and to appoint a female director, within three years. The Company is also committed to recruiting employees from a diverse pool of qualified candidates and to supporting education and training to support the recruitment of a diverse group of candidates into STEM disciplines. The Board aims to appoint a "diversity champion" to ensure that initiatives are implemented to promote and support the Company's commitment to diversity and inclusiveness in the workforce. The Company is currently recruiting for new directors and improving the gender balance on the Board is a key driver in this process. The percentage of female representation across the Company's workforce is currently as follows: Female directors: 0% Female employees in leadership roles: 11.1% Female employees in the overall workforce: 13.8%.
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.	Complies	The Board Charter requires that the Board annually prepare and review a self-evaluation of its performance against the charter. No Performance Evaluation was completed during the reporting period, as the Board is currently reviewing its structure and recruited a new director in the latter part of the reporting period, with further recruitment ongoing. The Board considers it practical to conduct a performance evaluation once the board composition has been settled.
1.7	A listed entity should: (a) have and disclose a process for periodically 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.	Complies	The charter of the Remuneration and Nomination Committee provides for the review of the performance of the executives. The Board has undertaken an evaluation of the performance of the senior executives in the reporting period.

PRINCIPLE 2 - STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE

2.1	The board of a listed entity should: (a) have a nomination committee which: 1. has at least three members, a majority of whom are independent directors; and 2. is chaired by an independent director, and disclose: 3. the charter of the committee, 4. the members of the committee; and 5. as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings: or (b) if it does not have a 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	Complies	The Board has established a Remuneration and Nomination Committee (RNC) to oversee the selection and appointment practices of the Company. The RNC is governed by a Remuneration and Nomination Committee Charter, which is available on the Website. The RNC is currently constituted of three members: • David Christie (Chair); • Peter Round; and • Padraig McCarthy (who replaced Andrew Bowyer on the RNC in November 2021). David Christie and Padraig McCarthy are independent non-executive directors. The composition of the committee is reflective of the broader constitution of the Board and will evolve as the Board recruit additional members. Nonetheless, the Board is satisfied that the current composition of the RNC is appropriate in the Company's circumstances and allows for the committee to meet its obligations under its charter. The RNC met twice during the reporting period and all members at the time attended each meeting.
to discharge its duties responsibilities effectively. and
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.	Complies	The Board aims to ensure that it, at all times, is composed of members with an appropriate mix of skills, experience, expertise and diversity relevant to the Company's business and which enables it to carry out its duties under the Board Charter. A review of the Company's Skills Matrix was completed during the reporting period. The Board considers that it has the necessary capacity to identify the skills missing and required to complement the Board composition. The current Board is made up of members with a broad range of skills, expertise and experience and from a diverse range of backgrounds, which the members of the Board believe is appropriate to ensure that it can carry out its obligations in accordance with its charter and the requirements of good governance.
2.3	A listed entity should disclose: (a) the names of the directors considered by the board to be independent directors; (b) if a director has an interest, position, association or relationship of the type described in Box 2.3 but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, or relationship in question and an explanation of why the board is of that opinion; and (c) the length of service of each director.	Complies	The Company assesses the independence of its directors against the requirements for independence set out in the Recommendations. Director independence is initially assessed upon each director's appointment and reviewed each year, or as required when a new personal interest or conflict of interest is disclosed. Directors are required to disclose all actual or potential conflicts of interest on an ongoing basis. The Board of Directors as at 31 December 2021 and at the date of this Statement comprises: • Mr Peter Round (Chair since 5 April 2018); • Mr Andrew Bowyer (Executive Director since 6 June 2017); • Mr David Christie (Non-executive Director since 26 March 2018); and • Mr Padraig McCarthy (Non-executive Director since 3 November 2021).