ELEMENTOS LIMITED — Governance Information 2009

Dec 21, 2009

Elementos Limited (ELT)

ASX Guidelines on Corporate Governance

As required by ASX under the ASX conditions of quotation, Elementos Limited advises as follows with respect to its compliance with the best practice recommendations set by the ASX Corporate Governance Council.

ASX Corporate Governance

To further enhance ASX listed entities’ disclosure of corporate governance issues, the ASX Corporate Governance Council ( CGC ) was established on 1 August 2002. The CGC was established for the purpose of creating an agreed set of corporate governance standards of best practice for Australian listed entities.

The CGC has released its Corporate Governance Principles and Recommendations ( ASX Guidelines ) which will apply to the Company’s financial statements upon listing on ASX. The ASX Guidelines articulate eight core principles that CGC believes underlie good corporate governance. The ASX Guidelines provide that a listed entity’s Annual Report is required to disclose its main corporate governance practices and also the extent to which the entity complies with the ASX Guidelines and where it does not, to explain why.

The Company has adopted a Corporate Governance Charter dated 6 November 2009 in order to implement and maintain a culture of good corporate governance both internally and in its external dealings. In adopting the Corporate Governance Charter, the Board has considered the ASX Guidelines.

The information below sets out where the Company has departed from the ASX Guidelines and reasons for such departure. Where the Company’s corporate governance practices depart from the ASX Guidelines, the Company intends to work towards compliance, but does not currently consider that the relevant practices are appropriate for the Company, given its size and the scale of its operations.

The Board is of the view that except as set out below, the Company complies with the ASX Guidelines.

ASX Guideline	Summary of Elementos’ position
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.2 –Companies should disclosethe process for evaluatingthe performance of seniorexecutives	The Board has not established a separate NominationsCommittee. As a result, the full Board is responsible for theproper oversight of the Board, the Directors and seniormanagement. The Board considers that, given its size, noefficiencies or other benefits would be obtained by establishing adiscrete Nominations Committee at this time.The Board has established a Remuneration Committee and hasadopted a Remuneration Committee Charter. The RemunerationCommittee is charged with making recommendations regardingall aspects of executive and non-executive director andmanagement remuneration packages. The Committee comprisesindependent, non-executive Directors, Tony McLennan and NeilStuart.

		ASX Guideline	ASX Guideline		Summar of Element	Summar of Element	os’ osition	os’ osition
					y		p
		Principle Two – Structur		e Board to Add Value
		Recommendation 2.4 – The
		Board should establish a			justif the formation of a searate Nominations Committee The
Nominations Committeey p .Full Board currently performs the functions of a NominationsCommittee and where necessary, will seek the advice of externaladvisors in relation to this function. When the Company reachesa size and scale justifying it, the Board will establish aNominations Committee to assist the Board in relation to theappointment of Directors and senior management. The Board hasadopted a Nominations Committee Charter and has alsoestablished a Remuneration Committee.Principle 4 – Safeguard Integrity in Financial ReportingRecommendations 4.1 – 4.4the Board should establishan Audit CommitteeThe Board’s view is that the Company is not presently of a sizeand its operations are not of a sufficient scale to justify theformation of a discrete Audit Committee. The full Board currentlyperforms the functions of an Audit Committee, including liaisingwith the Company’s external auditors. When the Companyreaches a size and scale justifying it, the Board will establish anAudit Committee to assist the Board in continuing to guaranteethe integrity of the Company’s financial reporting. The Board hasadopted and Audit an Risk Management Committee Charter.		Nominations Committee			y p .Full Board currently performs the functions of a NominationsCommittee and where necessary, will seek the advice of externaladvisors in relation to this function. When the Company reachesa size and scale justifying it, the Board will establish aNominations Committee to assist the Board in relation to theappointment of Directors and senior management. The Board hasadopted a Nominations Committee Charter and has alsoestablished a Remuneration Committee.
					ommee an weredi in ltin t t		ecessary, w see e avchi fntin Whn th Cm
					avsors reao oa size and scale justifyi		s uco. e e ong it the Board will establish
					Nominations Committe		,e to assist the Board in relatio
					appointment of Directo		rs and senior management.
					adopted a Nominations		Committee Charter and has
					established a Remuner		ation Committee.
		Piil 4 Sfd		i i Fiil Ri
		rncpe – aeguar		ntegrty n nanca eportn			g
		Recommendations 4.1 –		4.4	The Board’s view is tha		t the Company is not present
		the Board should establishan Audit Committee
					reaches a si	ze and scale justifying it the Board will
					Audit Comm	ittee to assist the B		,oard in continuing to
					the integrityadopted and	of the Company’s fiAudit an Risk Mana		nancial reporting. Tgement Committee