Lionhub : Corporate Governance Statement

LionHub Group Limited

ABN 29 119 999 441

www.lionhub.com.au

CORPORATE GOVERNANCE STATEMENT

With reference to the ASX Corporate Governance Councils "Corporate Governance Principles and

Recommendations" - 3rd Edition

This Corporate Governance Statement is current as of 23 April 2019 has been approved by the Board of Directors.

Principle 1:

Lay solid foundations for management and oversight

Establish and disclose the respective roles and responsibilities of the board and management andhow their performance is monitored and evaluated

1.1The Company should disclose

(a)the respective roles and responsibilities of the board and management; and

(b)those matters expressly reserved to the board and those delegated to management

The Company's Board Charter discloses the specific responsibilities, roles and segregation of functions between the board and those delegated to manager.

A copy of the Company's Board Charter is available on the Company's webpage: http://www.lionhub.com.au/irm/content/corporate-governance.aspx?RID=327

1.2The Company should

(a)undertake appropriate checks before appointing a person, or putting forward to shareholders a candidate for election as a director; and

(b)provide shareholders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director

The Board, through the Remuneration and Nomination Committee, oversees the appointment, selection and induction process for directors. When a vacancy exists or there is need for particular skills, the Board determines the selection criteria based on the skills deemed necessary.

The Remuneration and Nomination Committee identifies potential candidates who are assessed against background, experience, professional skills, personal qualities and their availability to commit themselves to the Board's activities and those of the Company. The Board undertakes checks as to the candidate's character, experience and education and may if it considers it appropriate undertake further checks as to criminal record and bankruptcy history.

Directors appointed by the Board must stand for election at the next general meeting of shareholders.

When directors are due for election or re-election, the Company discloses biographical details, including relevant qualifications and experience in the Notice of Meeting in order for shareholders to make an informed decision regarding that particular director.

The Board will not endorse the reappointment of a director who is not satisfactorily performing the role.

1.3The Company should have a written agreement with each director and senior executive setting out the terms of their appointment.

New directors, who are appointed to the Board, will be provided with a personal letter of appointment which includes the obligations and responsibilities of being a director of the Company, their remuneration details, confidentiality and disclosure obligations, share trading policy guidelines, indemnity and insurance arrangements.

New directors are also advised that they can gain access to copies of Company and Board policies, the Constitution and access to prior Board minutes and papers.

Contracts of employment are entered into with all senior executives.

1.4The Company Secretary should be accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The Company Secretary is accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

The Company's Board Charter provides the details of the role of the Company Secretary.

Each Director of the Company is able to communicate directly with the Company Secretary and vice versa.

1.5The Company should:

(a)Have a diversity policy which includes requirements for the board or a relevant committee of the board to set measurable objectives for achieving gender diversity and to assess annually both the objectives and the Company's progress in achieving them;

(b)Disclose that policy or a summary of it; and

(c)Disclose as at the end of each reporting period the measurable objectives for achieving gender diversity set by the board or a relevant committee of the board in accordance with the Company's diversity policy and its progress towards achieving them, and either

•The respective proportions of men and women on the board, in senior executive positions and across the whole organization; or

•The most recent "Gender Equity Indicators" as defined in the Workplace Gender Equality Act

The Company has established a Diversity policy which provides a framework for new and existing diversity related initiatives and polices to be implemented and maintained. The Policy is available on the Company's webpage.

The measurable objectives that the Company has developed for achieving gender diversity are:

•At least one woman must be included in any pool of candidates for a position as a non- executive director, if available and appropriate; and

•Ensure that in the interview process for each executive and management position there is at least one female on the interview panel if possible.

The Board of Directors is currently comprised of 2 men and 2 women. In addition, the consolidated group employs a total of 7 people of which 5 are women inclusive of 1 woman who is a senior executive.

1.6The Company should

(a)Have and disclose a process for periodically evaluating the performance of the board, its committees and individual directors; and

(b)Disclose in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period in accordance with that process

The Company's Corporate Governance Policies include a Performance Evaluation Process Policy which discloses the annual process for evaluating performance of the Board. The Policy is available on the Company's webpage.

Due to the size of the Company and the nature of its operations a formal performance evaluation of the Board did not take place during the 2018 year.

1.7The Company should

(a)Have and disclose a process for periodically evaluating the performance of its senior executives; and

(b)Disclose, in relation to each reporting period, whether a performance evaluation was undertaken in the reporting period on accordance with that process

The Company's Corporate Governance Policies includes a Performance Evaluation Process Policy which discloses the annual process for evaluating performance. The Chief Executive Officer resigned in 13 March 2019. It is anticipated that a new Chief Executive Officer will be appointed in due course. The Chief Executive Officer will be expected to review, monitor and evaluate the performance of senior executives in conjunction with the Remuneration and Nomination Committee.

Due to the size of the Company and the nature of its operations and the recent resignation of the Chief Executive Officer a formal performance evaluation of the senior executives did not take place during the 2018 year.

Principle 2:

Structure the board to add value

The board should be of an appropriate size, composition, skills and commitment to enable it todischarge its duties effectively.

2.1The Company should

(a)Have a nomination committee

•With a least three (3) members, a majority of who are independent directors;

•Chaired by an independent director

And discloses:

•The charter of the committee;

•The members of the committee; and

•The number of times the committee met throughout the period and the individual attendance of the members at those meetings

(b)If the Company has no nomination committee, there must be disclosure of 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 independent and diversity to enable it to discharge its duties and responsibilities effectively.

The Company has established and maintained a Remuneration and Nomination Committee.

The Remuneration and Nomination Committee reviews the Board's size and composition, its committees and committee charters and evaluates Board candidates and makes recommendations to the Board on suitable individuals for Board appointment.

This Committee is governed by a formal charter which is disclosed on the Company's website. The charter defines the Committee's function, operation, structure, authority and responsibilities.

Due to the size of the Company and the nature and scale of its operations the current Remuneration and Nomination Committee is comprised of only two Directors being Choon Keng Kho and Kwee Jee Lee. Only Ms Kwee Jee Lee is an independent Director.

Mr CK Kho (who is the Chairman of the Board) is the Chairman of the Remuneration and Nomination Committee.

The Board acknowledges that the Committee does not comply with the structure recommended by the ASX Corporate Governance Council. The Board considers that Mr Kho's knowledge, experience, leadership and skill set remains the most appropriate for the Company at this stage in its development.

2.2The Company should have and disclose a board skills matrix of skills and diversity that the board currently has or is looking to achieve in its membership.

The skills, experience and knowledge of each of the Directors is disclosed in the Company's Annual Report and on the Company's website.

Also refer to the Board Skills Matrix attached as Appendix A.

2.3The Company should disclose:

(a)The names of the directors considered by the board to be independent;

(b)If a director has an interest, position, association or relationship that might cause doubts about the independence of a director but the board is of the opinion that it does not compromise the independence of the director, the nature of the interest, position, association or relationship in question and explanation of why the board is of that opinion; and

(c)The length of service of each director

Of the current Board of four directors two are independent directors.

The two independent directors are Ms Kwee Jee Lee and Mr Kim Huat Koh.

Information relating to the directors is disclosed in the Directors' Report section of the Company's Annual Report and on the Company's website.

2.4 A majority of the board should be independent directors

Following changes to the Board during the course of 2018 and early 2019 the majority of the Board are no longer independent Directors. Due to the relatively recent changes to the Board and the size of the Company and the nature and scale of its operations the Board does not comply with this recommendation at the date of this report. The composition of the Board is to be reviewed during the course of 2019.

2.5The chair of the board should be an independent director and, in particular should not be the same person as the CEO.

The Chairman of the Board, Mr Choon Keng Kho, is not independent however his knowledge, experience, leadership and skill set are considered to be of significant value to direct the Company.

2.6The Company should have a program for inducting new directors and provide appropriate professional development opportunities for directors to develop and maintain the skills and knowledge needed to perform their role as directors effectively.

The Company has a program for inducting new directors which includes apprising them of the Company's policies and procedures and providing them with the opportunity to visit the Company's operations and meet with senior executives.

Due to the size of the Company and the nature and scale of its operations the Company does not have a formal program for providing professional development opportunities for Directors.

Principle 3:

Act ethically and responsibly

The Company should act ethically an responsibly

3.1The Company should:

(a)Have a code of conduct for its directors , senior executives and employees; and

(b)Disclose that code or a summary of it.

The Company has established a Code of Business Conduct and a Directors and Executive Officers' Code of Conduct both of which provide a framework for decisions and actions in relation to ethical conduct in employment.

These codes underpin the Company's commitment to integrity and fair dealing in its business affairs and a duty of care to all Directors, senior executives, employees and 3rd party service providers who are committed to implementing the Code and each individual is accountable for such compliance.

These codes are disclosed on the Company's website.

Principle 4:

Safeguard integrity in corporate reporting

The Company should have formal and rigorous processes that independently verify and safeguardthe integrity of its corporate reporting

4.1The Company should:

(a)Have an audit committee

•With a least three (3) members, all of whom are non-executive directors and the majority of who are independent directors;

•Chaired by an independent director who is not the chair of the board

And discloses:

•The charter of the committee;

•The relevant qualifications and experience of the members of the committee; and

•The number of times the committee met throughout the period and the individual attendance of the members at those meetings

(b)If the Company has no audit committee, there must be disclosure of that fact and the processes it employs to 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.

The Company has an established Audit and Risk Management Committee.

Due to the size of the Company and the nature and scale of its operations the current Audit and Risk Management Committee is comprised of only two Directors, both of whom are independent non-executive directors.