ESTRELLA RESOURCES LIMITED — Governance Information 2012

May 7, 2012

ACN 151 155 207

ESTRELLA RESOURCES LIMITED

CORPORATE GOVERNANCE STATEMENT

This Corporate Governance Statement sets out the Company’s current compliance with the ASX Corporate Governance Council’s Corporate Governance Principles and Best Practice Recommendations ( Best Practice Recommendations ). The Best Practice Recommendations are not mandatory. However, the Company is required to provide a statement disclosing the extent to which the Company has followed the Recommendations.

BEST PRACTICE RECOMMENDATION	BEST PRACTICE RECOMMENDATION	COMMENT
1	Lay solid foundations for management and oversight
1.1	Companies should establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	The Company’s Corporate Governance Plan includes a Board Charter, which discloses the specific responsibilities and functions of the Board and provides that the Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Managing Director. The Board Charter also specifically outlines the role of the Company’s Directors. Each function and its responsibility are outlined in the Board Charter and this Corporate Governance Statement is available on the Company’s website.
1.2	Companies should disclose the process for evaluating the performance of senior executives.	The Board will monitor the performance of senior management, including measuring actual performance against planned performance. The Board Charter sets out the process to be followed in evaluating the performance of senior executives. Each senior executive is required to participate in a formal review process which assesses individual performance against predetermined objectives.
1.3	Companies should provide the information indicated in the_Guide to_	This Corporate Governance Statement is available on the Company’s website and contains a summaryof the Board

	reporting on Principle 1.	Charter. The Board Charter discloses the specific responsibilities of the Board and provides that the Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Managing Director. The Board Charter also specifically outlines the role of the Company’s Chairman, Individual Directors and Managing Director. No evaluation of senior executives has yet taken place noting that it has been less than one year since incorporation and many senior executives are still in the process of being recruited. However a full evaluation will be carried out in future years.
2	Structure the board to add value
2.1	A majority of the board should be independent directors.	Notwithstanding the fact that Mr Solomon and Mr Kidston each have a non-controlling interest in the Company’s adviser, Helmsec, three of the four members of the current board (Mr Solomon, Mr Kidston and Mr Bavin) are considered to be independent directors and the remaining director, Dr Berton, is not due to his role as Managing Director. A majority of the board is comprised of independent directors (as above) and three of the four members of the current board are non-executive Directors except for the Managing Director, Dr Jason Berton. The Board is of the view that it is currently structured in such a way so as to add value and is appropriate for the complexity of the business at this time. It is intended that, as considered appropriate, further non- executive Director appointments to the Board will be made in the future as required.

2.2	The chair should be an independent director.	The Chairman of the Board is Mr Gavin Solomon who is considered to be an independent non-executive director.
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	The Company does not currently have a Chief Executive Officer however, the Company has a separate Chairman and a Managing Director who is responsible for the day to day operations and administration of the Company.
2.4	The board should establish a nomination committee.	The Board, as a whole, currently serves as the Company’s nomination committee. Terms and conditions of employees are negotiated by the Managing Director for recommendation to the Board. As the Company grows in size it is planned that the Company will implement a separate nomination committee with its own separate nomination committee charter.
2.5	Companies should disclose the process for evaluating the performance of the board, its committees and individual directors.	The performance of the Board and the various Board committees as and when established is to be evaluated by the Chairperson. The performance of each committee is measured against the scope and responsibilities detailed in their respective charters and the process for evaluating the performance of the Board, its committees and individual directors is to be disclosed by the Chairman. An evaluation of the Board of the Board has not yet occurred given the Company is less than one year old. The Board is responsible for the evaluation and review of the performance of the Chairman and the effectiveness and programme of board meetings. The position of Chairman will be reviewed by the Board at the first Board meeting following the Annual General Meeting each year. No evaluation of the Chairman and the effectiveness of board meetings have yet taken place but will be done in future years. The programme of board meetings has been reviewed and modified to ensure timely information is reviewed by the board. The Company’s Corporate Governance Policies set out the

		process to be followed in evaluating the performance of senior executives. Each senior executive is required to participate in a formal review process which assesses individual performance against predetermined objectives.
2.6	Companies should provide the information indicated in the_Guide to_ reporting on Principle 2.	A description of the skills and experience of each of the directors is contained in the Company’s Replacement Prospectus lodged with the ASX on 11 April 2012. Three of the four members of the current board (Mr Solomon, Mr Kidston and Mr Bavin) are considered to be independent directors in accordance with the definition of an independent director as contained in the Company’s Board Charter due to the fact that Mr Solomon and Mr Kidston each only have a non-controlling interest in the Company’s adviser, Helmsec, The Board is of the view that it is currently structured in such a way so as to add value and is appropriate for the complexity of the business at this time. The Board, Board Committees or individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairperson. The Board, as a whole, will serve as the Company’s nomination committee. The Board will determine the procedure for the selection and appointment of new directors and the re-election of incumbents in accordance with the Company’s constitution and having regard to the ability of the individual to contribute to the ongoing effectiveness of the Board, to exercise sound business judgement, to commit the necessary time to fulfil the requirements of the role effectively and to contribute to the development of the strategic direction of the Company. The policy for the appointment of new directors is set out in the Company’s Board Charter, a summary of which is contained within this Corporate Governance Statement. No evaluation of the Board or Committees hasyet takenplace as the Companyis

		less than one year old. Mr Solomon and Mr Kidston were appointed as directors on 27 May, 2011, Dr Berton on 25 October, 2011 and Mr Bavin on 6 March, 2012.
3	Promote ethical and responsible decision-making
3.1	Companies should establish a code of conduct and disclose the code or a summary of the code as to:  the practices necessary to maintain confidence in the company’s integrity  the practices necessary to take into account their legal obligations and the reasonable expectations of their stakeholders  the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.	The Company’s Corporate Governance Plan includes the following policies and charters which provide a framework for decisions and actions in relation to ethical conduct in employment.  Board Charter  Audit & Risk Management Committee Charter  Code of Conduct - Obligations to Stakeholders  Code of Conduct - Directors and Key Officers  Continuous Disclosure  Health, Safety, Environment and Community Committee Charter  Remuneration Committee Charter  Securities Trading  Diversity A summary of the Company’s Corporate Governance Policies are contained within this Corporate Governance Statement which is available on the Company’s website.
3.2	Companies should establish a policy concerning diversity and disclose thepolicyor a summaryof thatpolicy. Thepolicyshould include	The Company has established a Diversity of as part of its Corporate Governance Plan. The Policydetails the Board’s

	requirements for the board to establish measurable objectives for achieving gender diversity and for the board to assess annually both the objectives and progress in achieving them.	commitment to providing an inclusive workplace and recognises the value that a workforce made up of individuals with diverse skills, values, backgrounds and experiences can bring to the Company. The Company has a commitment to gender diversity and female participation is sought in all areas. Decisions relating to promotion, leadership development and flexible work arrangements are all based on merit and reinforce the importance of equality in the workplace. Ongoing monitoring of company policies and culture will be undertaken to make sure they do not hold any group back in their professional development. The Board is responsible for the selection of new board members. In accordance with its Board Charter and the ASX Corporate Governance Principles and Recommendations (including 2010 amendments), the Board must ensure that the selection process is formal and transparent. High quality female candidates should be considered as part of any recruitment process. The Company will establish measurable objectives for achieving gender diversity when it has grown to a point where it is appropriate to do so. The Board will, at least once per year, review the policy to determine its adequacy for current circumstances and make recommendations to the Board for amendment where required.
3.3	Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.	The Company will establish measurable objectives for achieving gender diversity when it has grown to a point where it is appropriate to do so and this will be included in the Annual Report each year.
3.4	Proportion of women employees, senior executive positions and on the	The Company currently only has 2 employees who are both male. The Companydoes not have anywomen on the Board at

	Board	present but this will be reviewed in accordance with the next review of the Board’s skills and requirements in accordance with the Company’s Diversity Policy.
3.5	Companies should provide the information indicated in the Guide to reporting on Principle 3.	This Corporate Governance Statement is available on the Company’s website and contains a summary of the Diversity Policy. The Company’s Annual Report each year will contain an update on the Company’s compliance with the ASX’ recommendations and the Company’s Diversity Policy.
4	Safeguard integrity in financial reporting
4.1	The board should establish an audit committee.	The Company has established an Audit and Risk Management Committee and a copy of the policy titled_“Charter of the Audit_ _and Risk Management Committee”_is summarised in the Company’s Prospectus and like all of the Company’s policies is available from the Company on request.
4.2	The audit committee should be structured so that it:  consists only of non-executive directors  consists of a majority of independent directors  is chaired by an independent chair, who is not chair of the board  has at least three members.	The Audit and Risk Management Committee currently has three members who are all independent non-executive directors. The committee is chaired by Mr Solomon who is also Chair of the Board however, the position of Chair of the Audit and Risk Management Committee will be reviewed in line with the first Board review after the Company’s next Annual General Meeting. Mr Kidston and Mr Bavin are the other members of the Committee and are also considered independent.
4.3	The audit committee should have a formal charter.	The Company’s Corporate Governance Plan includes a formal charter for the Audit and Risk Management Committee.
4.4	Companies should provide the information indicated in the_Guide to_ reporting on Principle 4.	The Committee will meet twice a year and at least once each year with the Company’s Auditors. The Committee has powers under the Company's Audit & Risk Management Charter including unrestricted access to the Company’s internal and external auditors and all Company records for the purposes of carryingout its responsibilities under the Charter. The

		Committee will recommend to the Board procedures for the selection and appointment of external auditors and for the rotation of external auditor partners. The members of the Committee are Mr Solomon, Mr Kidston and Mr Bavin whose experience are all detailed in the Company’s Replacement prospectus lodged with ASIC on 11 April 2012. The Committee has met on one occasion so far.
5	Make timely and balanced disclosure
5.1	Companies should establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies.	The Company has a continuous disclosure program/policy in place designed to ensure compliance with the ASX Listing Rule on continuous disclosure and to ensure accountability at a senior executive level for compliance and factual presentation of the Company’s financial position.
5.2	Companies should provide the information indicated in_Guide to_ Reporting on Principle 5.	The continuous disclosure policy of the Company is summarised in the Company’s Prospectus and like all of the Company’s policies is available from the Company on request.
6	Respect the rights of shareholders
6.1	Companies should design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose their policy or a summary of that policy.	The Company’s Corporate Governance Plan includes a shareholder communications strategy, which aims to ensure that the shareholders are informed of all major developments affecting the Company’s state of affairs. This is contained within the Company’s policies titled_“Code of Conduct – _Obligations to Stakeholders”_and“Corporate Governance_ Policy – Continuous Disclosure”.
6.2	Companies should provide the information indicated in the_Guide to_ reporting on Principle 6.	The shareholder communication policy of the Company is set out in the Company’s policies titled_“Code of Conduct – _Obligations to Stakeholders”_and“Corporate Governance_ _Policy – Continuous Disclosure”_which are summarised in the Company’s Prospectus and like all of the Company’s policies are available from the Company on request.

7	Recognise and manage risk
7.1	Companies should establish policies for the oversight and management of material business risks and disclose a summary of those policies.	The Board in conjunction with the Audit and Risk Management Committee determines the Company’s “risk profile” and is responsible for overseeing and approving risk management strategy and policies, internal compliance and internal control. The Company has established policies for the oversight and management of material business risks. The Audit and Risk Management Charter of the Company is set out in the Company’s Prospectus.
7.2	The board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.	The responsibility for undertaking and assessing risk management and internal control effectiveness is delegated to the Board in conjunction with the Audit and Risk Committee. The Board and Audit and Risk Management Committee are required to assess risk management and associated internal compliance and control procedures and will be responsible for ensuring the process for managing risks is integrated within business planning and management activities. Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee at the first Board meeting subsequent to each Committee meeting.
7.3	The board should disclose whether it has received assurance from the chief executive officer (or equivalent) and the chief financial officer (or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee. The Board will seek the relevant assurance from the management and the executive directors (or their equivalents) at the relevant time.
7.4	Companies should provide the information indicated in_Guide to_ Reporting on Principle 7.	Reports on risk management are to be provided to the Board by the Audit and Risk Management Committee. The Board will ensure that the report under Recommendation

		7.2 is provided at the relevant time. The Board will ensure that the management or the executive director(s) provide the assurance under Recommendation 7.3 at the relevant time.
8	Remunerate fairly and responsibly
8.1	The board should establish a remuneration committee.	The Board has established a separate Remuneration Committee.
8.2	The remuneration committee should be structured so that it: •consists of a majority of independent directors; •is chaired by an independent chair; and •has at least three members.	The members of the remuneration committee are Simon Kidston (Chair), Julian Bavin and Gavin Solomon who are all independent directors. The Committee Chair is separate from the Board Chair.
8.3	Companies should clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and senior executives.	The Committee distinguishes the structure of non-executive directors' remuneration from that of executive directors and senior executives. The Company’s Constitution and the Corporations Act also provides that the remuneration of non- executive Directors will be not be more than the aggregate fixed sum determined by a general meeting. The Board is responsible for determining the remuneration of the executive directors (without the participation of the affected director).
8.4	Companies should provide the information indicated in the_Guide to_ reporting on Principle 8.	The Remuneration Committee will meet twice a year. A copy of the Remuneration Committee Charter is summarised in the Company’s Prospectus. The members of the Remuneration Committee are currently Mr Simon Kidston (Chair), Mr Gavin Solomon and Mr Julian Bavin. A summary of the Company’s policy on prohibiting transactions in associated products which operate to limit the risk of participating in unvested entitlements under any equity based remuneration scheme is contained within the Remuneration Committee Charter.