Elmore : Response to ASX Aware Query

For personal use only

29 July 2022

Raj Logarajah

Adviser, Listing Compliance

ASX Limited

Level 40, Central Park

152-158 St George's terrace Perth WA 6000

By email:[e-mail]

CLEANSING NOTICE - AWARE QUERY

In reference to your letter dated 21 July 2022, Elmore Limited ("Elmore")("ASX:ELE") provides the following information in relation to the Announcement dated 18 July 2022 as requested.

1. Does ELE consider the information disclosed in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; or
3. Avior Facility,

or any part thereof, to be information that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of ELE? If the answer to this question is "no", please advise the basis for that view. Please address the information disclosed in relation to items 1.1 to 1.3 separately.

ELE considers that the information contained in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; and
3. Avior Facility,

to be information that investors would reasonably require for the purpose of making an informed assessment of the assets and liabilities, financial position and performance, profits and losses and prospects of ELE.

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2. When did ELE first become aware of the information disclosed in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; or
3. Avior Facility,

or any part thereof? In answering this question, please specify the date and time when ELE first became aware of information in relation to items 2.1 to 2.3 or any part thereof, including when discussions/negotiations in relation to items 2.1 to 2.3 commenced. Please address the information disclosed in relation to items 2.1 to 2.3 separately.

Negotiations for the Peko Agreement commenced on 14 June 2022. Due diligence on the transaction continued through June and July, with the terms being negotiated and changing throughout that time. Through these negotiations, the Vendor first floated the idea of Vendor financing the transaction to speed it up around 29 June 2022. Again the terms of these continued to be negotiated while the agreements where being drawn up in July. The history of the Vendor has been that they attempt to change agreements at the last minute. The Share Purchase Agreement was agreed to and executed on Friday 15th July 2022 at 15:40pm (AEST).

The extension to the Avior agreement was negotiated at the end of June, with the first tranche of funds being received on Friday 24th June 2022. The extension of the Avior agreement became necessary when it became clear that the joint venture partner (the Vendor) would be unable to fund their share of the project, and ELE would require short term funding while finalising the Peko and Vendor Finance Agreements and to cover the shortfall from the partners non-payment.

The Announcement was prepared over the weekend.

3. If ELE first became aware of the information disclosed in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; or
3. Avior Facility,

or any part thereof, before lodging the Appendix 3B and Cleansing Notice on the Platform, did ELE make any announcement prior to lodging the Appendix 3B and

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Cleansing Notice on the Platform which disclosed the information in relation to items

3.1 to 3.3? If so, please provide details. If not, please explain:

As the Peko and Vendor Finance Agreement had been signed one hour prior to the lodgement of the Appendix 3B and the Cleansing Notice, the Company was aware of that information at that time.

Likewise the Company had received the extension of the Avior Facility, and so was aware of the information.

It did not lodge any information in relation to the Peko, Vendor Finance, or Avior Facility before lodging the Appendix 3B and Cleansing Notice.

1. why the information in relation to items 3.1 to 3.3 was not released to the market at an earlier time, commenting specifically on when you believe ELE was obliged to release the information in relation to items 3.1 to 3.3 under Listing Rules 3.1; and
2. what steps the Entity took to ensure that the information in relation to items 3.1 to 3.3 was released promptly and without delay.

The information contained in items 3.1 and 3.2 could not be released to the market at an earlier time. The information contained in items 3.1 and 3.2 had only been executed one hour before the release of the Appendix 3B and Cleansing Notice, and so an announcement that would adequately explain the 3.1 and 3.2 items had not been prepared at that time. The vendor was overseas at the time of executing the Agreements, and so it was expected that the final terms would be agreed to, and the agreements executed over the weekend. It was discovered that a Deed of Priority and Subordination would be necessary due to the extension of the Avior Facility, and so it was expected that this would take some time to resolve with the Vendor and Avior. This was not the case (it was agreed to allow this by both the Vendor and Avior, and made a condition subsequent) and the fact that the Agreements were executed on Friday afternoon was unexpected.

The Company prepared an announcement that would adequately explain the agreements as soon as possible after execution, being the weekend, and released the announcement prior to the commencement of trade on the Monday morning.

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It was decided that the extension of the Avior Agreement would be disclosed to the market with the agreed upon terms of the Peko and Vendor Finance Agreements. This was due to the fact that the Company believed that it would be misleading to announce the extension of the Avior Agreement without announcing the Peko and Vendor Financing Agreement. The Avior Agreement was only necessary due to the fact that the joint venture partner (the Vendor) was unable to fund their share of the project. To release this earlier would have compromised negotiations with the Vendor.

The Company prepared the Announcement over the weekend of 18th and 19th July for release prior to the open of the market on 20th July 2022.

4. If ELE first became aware of the information disclosed in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; and
3. Avior Facility,

or any part thereof, before lodging the Appendix 3B and Cleansing Notice on the Platform, please explain why the information in relation to items 4.1 to 4.3 was excluded from the Cleansing Notice.

The Cleansing Notice was lodged as a matter of course, with the Company simply following usual procedure. The execution of the Agreements was unexpected, so the Cleansing Notice had been prepared without consideration of the Agreements. A relationship between the very recently executed Agreements and the Cleansing Notice at the time of lodging the Cleansing Notice was not realised. The Company did not draw a relationship between the two.

The Cleansing Notice was lodged after the market closed on 17th July 2022. The Company believed that the Announcement containing information in relation to items

1. to 4.3 would be released prior to the market opening on 20th July 2022.

5. If ELE first became aware of the information disclosed in the Announcement in relation to the:

1. Peko Agreement;
2. Vendor Finance Agreement; and
3. Avior Facility,

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or any part thereof, before lodging the Appendix 3B and Cleansing Notice on the Platform, did ELE rely on the provisions of Listing Rule 3.1A not to release the information in relation to items 5.1 to 5.3 before ELE lodged the Announcement on the Platform?

The Company is not relying upon Listing 3.1A not to release the information in relation to items 5.1 to 5.2 before ELE lodged the Announcement on the Platform.

1. Please confirm that ELE complying with the Listing Rules and, in particular, Listing Rule 3.1. ELE is complying with the Listing Rules and in particular Listing Rule 3.1.
2. Please confirm that ELE's responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy or otherwise by its board or an officer of ELE with delegated authority from the board to respond to ASX on disclosure matters.
   ELE's responses to the questions above have been authorised and approved in accordance with its published continuous disclosure policy.

Yours faithfully,

Sean Henbury

Company Secretary