Blaze Limited

Corporate Governance

The Board of Directors of Blaze International Limited is responsible for the corporate governance of the Group. The Board guides and monitors the business and affairs of Blaze International Limited on behalf of the shareholders by whom they are elected and to whom they are accountable

In accordance with the Australian Securities Exchange (“ASX”) Corporate Governance Council’s (“CGC”) “Principles of Good Corporate Governance and Best Practice Recommendations” the Corporate Governance Statement must contain certain specific information and must disclose the extent to which the Company has followed the guidelines during the period. Where a recommendation has not been followed, that fact must be disclosed together with the reasons for the departure

Blaze International Limited’s corporate governance practices were in place throughout the financial year ended 30 June 2009 and were compliant, unless otherwise stated, with the Corporate Governance Council’s principles and recommendations, which are noted below. Due to the relatively small size of the Blaze Group and its activities, the size of the Board has been restricted to four directors during the year. Consequently the Board as a whole is involved in matters where larger Boards would ordinarily operate through sub-committees. For these reasons too, some of the best practices recommended by CGC are not cost effective for adoption in a small company environment.

To illustrate where the Company has addressed each of the Council’s recommendations, the following table cross-references each recommendation with sections of this report. The table does not provide the full text of each recommendation but rather the topic covered.

Recommendation	Section
Principle 1: Lay solid foundations for Management and Oversight
Recommendation 1.1 Functions of the Board and Senior Executives	2.1
Recommendation 1.2 Performance Evaluation of Senior Executives	1.3, 1.5
Recommendation 1.3 Reporting on Principle 1	2.1, 1.5
Principle 2: Structure the Board to Add Value
Recommendation 2.1 Independent Directors	1.6
Recommendation 2.2 Independent Chair	1.1, 1.7
Recommendation 2.3 Role of the Chair and CEO	1.6
Recommendation 2.4 Establishment of Nomination Committee	1.4
Recommendation 2.5 Performance Evaluation Processes	1.5
Recommendation 2.6 Reporting on Principle 2	1.7, 1.8, 1.9
Principle 3: Promote Ethical and Responsible Decision Making
Recommendation 3.1 Directors’ and Senior Executives’ Code of Conduct	1.2, 3.1
Recommendation 3.2 Company Security Trading Policy	4.1
Recommendation 3.3 Reporting on Principle 3	1.2, 3.1, 4.1
Principle 4: Safeguard Integrity in Financial Reporting
Recommendation 4.1 Establishment of Audit Committee	5.1
Recommendation 4.2 Structure of Audit Committee	5.1
Recommendation 4.3 Audit Committee Charter	5.2
Recommendation 4.4 Reporting on Principle 4	5.1
Principle 5: Make Timely and Balanced Disclosure
Recommendation 5.1 Policy for Compliance with Continuous Disclosure	6.1
Recommendation 5.2 Reporting on Principle 5	6.1
Principle 6: Respect the Rights of Shareholders
Recommendation 6.1 Communications Strategy	6.2
Recommendation 6.2 Reporting on Principle 6	6.3
Principle 7: Recognise and Manage Risk
Recommendation 7.1 Policies on Risk Oversight and Management of Material Business Risks	8.1
Recommendation 7.2 Attestations by CEO and CFO	8.2
Recommendation 7.3 Risk Management and Internal Control	8.3
Recommendation 7.4 Reporting on Principle 7	8.3
Principle 8: Renumerate Fairly and Responsibly
Recommendation 8.1 Establishment of Remuneration Committee	7.2
Recommendation 8.2 Executive and Non-Executive Director Remuneration	7.3
Recommendation 8.3 Reporting on Principle 8	7.1, 7.2, 7.3

1 Structure and Composition of the Board

1.1 The composition of the Board is determined in accordance with the following principles and guidelines:

· The Board shall comprise at least 3 directors, increasing where additional expertise is considered desirable in certain areas.

· The Board should comprise a majority of independent non-executive directors.

· The Chairperson should be a non-executive director.

· Directors should bring characteristics, which allow a mix of qualifications, skills and experience both nationally and internationally.

1.2 The Board has established a framework for the management of the Group including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

The full Board holds regular meetings to discuss operational matters, plus strategy meetings and any extraordinary meetings at such other times as may be necessary to address any specific significant matters that may arise.

To assist the Board carry out its functions, it has developed a Code of Conduct to guide the Directors, the Managing Director and other senior executives in the performance of their roles. The Code of Conduct addresses the maintenance of the confidence in the Company’s integrity, legal obligations and expectations of shareholders, responsibility and accountability of individuals for reporting and investigating reports of unethical behaviour.

1.3 The Board reviews its composition on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. When a vacancy exists, for whatever reason, or where it is considered that the Board would benefit from the services of a new director with particular skills, the Board will select appropriate candidates with relevant qualifications, skills and experience. External advisers may be used to assist in such a process. The Board will then appoint the most suitable candidate who must stand for election at the next general meeting of shareholders.

1.4 The ASX Corporate Governance Council’s “Principles of Good Corporate Governance and Best Practice Recommendations” recommends the appointment of a Nomination Committee for prospective Board appointments. The Board considers that the Company and the Board are currently not of sufficient size to justify the establishment of a Nomination Committee.

The terms and conditions of the appointment and retirement of directors are not formally set out in a letter of appointment. However matters such as remuneration, expectations, terms, the procedures for dealing with conflicts of interest and the availability of independent professional advice are clearly understood by all directors, who are experienced public company directors.

1.5 The Board meets once a year to review its own performance. The non-executive directors are responsible for regularly evaluating the Executive Director. This evaluation is based on specific criteria, including the Company’s business performance, whether long-term strategic objectives are being achieved and the development of management and personnel. The evaluation is taken into account in determining the Executive Director’s remuneration. A performance evaluation for the board, its committees and directors, was in accordance with the process disclosed, took place on 18 June 2009.

1.6 The skills, experience and expertise relevant to the position of director held by each director in office at the date of the annual report is included in the Directors’ Report. Directors of Blaze International Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered judgement.

1.7 The following directors of Blaze International Limited are considered to be independent:

Name	Position
B Roberts	Non-Executive Director – appointed 1 June 2007
C Lee	Non-Executive Director – appointed 19 July 2007

1.8 Each director has the right to seek independent professional advice at the Company’s expense. However, prior approval of the Chair will be required, which will not be unreasonably withheld.

1.9 The term in office of each director in office at the date of this report is as follows:

Name

Term in Office

V Hyde

Since 18 April 2007

B Roberts

Since 1 June 2007

C Lee

Since 19 July 2007

2 Responsibilities of the Board

2.1 The Board is responsible for setting the strategic direction and establishing the policies of the Group as there are no senior executives. It is responsible for overseeing the financial position, and for monitoring the business and affairs on behalf of the shareholders, by whom the Directors are elected and to whom they are accountable. The Board also addresses issues relating to internal controls and approaches to risk management.

3 Ethical standards

3.1 The Board acknowledges the need for continued maintenance of the highest standards of corporate governance practice and ethical conduct by all Directors and employees of the Group. A fundamental theme of the Group’s code of ethics is that all business affairs are conducted legally, ethically and with the strict observance of the highest standards of integrity and propriety. The Directors and management have the responsibility to carry out their functions with a view to maximising financial performance of the Group.

All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Group.

4 Trading in Company securities by directors and employees

4.1 On 18 June 2009 the Board reviewed and re-adopted its Share Trading Policy. The Board periodically reminds Directors, senior executives and employees of the prohibition in the Corporations Act 2001 concerning trading in the Company’s securities when in possession of “inside information”. The Board also periodically reminds Directors of their obligations to notify the Company Secretary of any trade in securities to ensure that ASX Listing Rule requirements are met.

5 Audit Committee

5.1 The ASX Corporate Governance Council’s “Principles of Good Corporate Governance and Best Practice Recommendations” recommends the appointment of an Audit Committee for focusing the Company on particular issues relevant to verifying and safeguarding the integrity of the Company’s financial reporting. The Board considers that the Company and the Board are currently not of sufficient size to justify the establishment of an Audit Committee and all matters that would be addressed by committees are usually dealt with by the full Board of Directors. In the absence of an audit committee, the Board sets aside time to deal with issues and responsibilities usually delegated to the audit committee to ensure the integrity of the financial statements of the Company and the independence of the external auditor.

5.2 The Board has adopted an Audit Committee Charter which sets out the roles and responsibilities, composition, structure and membership requirements. The Board refers to the Audit Committee Charter to ensure they are meeting all the requirements otherwise delegated to an Audit Committee. A copy of the Audit Committee Charter is available on the Company’s website.

6 Continuous Disclosure and Communication with Shareholders

6.1 The Chair is responsible, in consultation with the Board, for interpreting and monitoring the Company’s compliance with the continuous disclosure requirements of the ASX whilst the Company Secretary is responsible for all communications with ASX. The Board has adopted a continuous disclosure policy to ensure that the Company complies with the disclosure requirements of the ASX Listing Rules, which is available on the Company’s website. All directors and senior employees have a general understanding of the continuous disclosure requirements under the ASX listing rules, particularly as they relate to identification of matters that may have a material effect on the price of the Company’s securities and that would influence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities.

6.2 Communication with shareholders is conducted through the following mechanisms:

Announcements lodged with ASX
Half Yearly and Preliminary Final Reports
Annual Reports
Annual General Meetings

Notices of meeting are specifically designed and distributed on a timely basis to encourage shareholder attendance and participation at general meetings.

6.3 The Company also posts corporate information in the investor section of its Company website at www.blazelimited.com.au and encourages shareholders to visit the website. The Company’s policy for shareholder communications is available on the Company’s website.

7 Remuneration

7.1 The ASX Corporate Governance Council’s “Principles of Good Corporate Governance and Best Practice Recommendations” recommends the appointment of a Remuneration Committee for focusing the Company on appropriate remuneration policies, which are designed to meet the needs of the Company and to enhance corporate and individual performance. The broad remuneration policy is to ensure the remuneration package properly reflects the person’s duties and responsibilities and level of performance and that remuneration is competitive in attracting, retaining and motivating people of the highest quality.

7.2 The Board considers that the Company and the Board are currently not of sufficient size to justify the establishment of a Remuneration Committee and all matters that would be addressed by committees are usually dealt with by the full Board of Directors.

7.3 Details on the amount of remuneration and all monetary and non-monetary components for each of the directors and executives are provided in the Directors’ Report. All Directors are Non-Executive Directors so there is no difference in remuneration structure. In relation to the payments of bonuses, options and other incentive payments, discretion is exercised by the Board, having regard to the overall performance of Blaze International Limited, the performance of the individual during the period and in accordance with thresholds set in plans approved by shareholders. There are no retirement benefits for non-executive directors.

There were no loans made to directors or executives during the period and there are no amounts owing by directors and executives at the year end.

8 Risk Management

8.1 The full Board is responsible for the oversight of risk management and internal control. Due to the current size and operations of the Consolidated Entity, a formal risk management committee is not considered to add any efficiency to the process of assessing and managing material business risk. The Board sets aside time at meetings to discuss any risk management issues and Directors are encouraged to give priority to such issues.

8.2 In developing its risk management policies, the Board has taken into consideration any legal obligations and the reasonable expectations of its stakeholders in relation to risk management. The Chair is accountable to the Board for effective risk management. The Board undertakes to review the management of material business risks at least annually. The objectives of the Company’s risk management strategy are to:

· identify risks to the Company;

· balance risk to reward;

· ensure regulatory compliance is achieved; and

· ensure senior executives, the Board and investors understand the risk profile of the Company.

The Board monitors risk through various arrangements including:

regular Board meetings;
share price monitoring;
market monitoring; and
regular review of financial position and operations.

The Company’s risk management strategy was formally reviewed by the Board on 26 May 2009 and was considered a sound strategy for addressing and managing risk. A copy of the strategy is available on the Company’s website.

8.3 The Board has received assurance from the Chair 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.