Director Independence

The board considers three of BSA's directors as independent under the guidelines: Ross Johnston, Michael Givoni and Paul Teisseire.

In assessing the independence of directors, the board follows the ASX guidelines as set out:

An independent director is a non-executive director (ie is not a member of management) and:

1. is not a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company
2. within the last three years has not been employed in an executive capacity by the company or another group member, or been a director after ceasing to hold any such employment
3. within the last three years has not been a principal of a material professional adviser or a material consultant to the company or another group member, or an employee materially associated with the service provided
4. is not a material supplier or customer of the company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer
5. has no material contractual relationship with the company or another group member other than as a director of the company
6. has not served on the board for a period which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the company
7. is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the company.

Mr Cowley is a director and the company secretary of the major substantial shareholder in BSA and is not considered to be independent because of this fact. Messrs Foley and Lowe, being executive directors, are also not considered to be independent.

ASXCGC Recommendation 2.1 states that the majority of directors of the company should be independent. BSA does not comply with that recommendation in that 50% of directors are independent.

The reason for departure from this Recommendation 2.1 is one of practicality. The Board has focussed on the overarching principle of having directors who add value to the business.

Through the Nominations Committee, which has met during the current financial year, directors have considered the balance of skills and experience required of board members for the size and state of development of BSA. The board believes that it has the right numbers and skill sets within its board members for the current size of the company, and is confident that each non-executive director brings independent judgement to bear on board decisions.

During the year, a performance evaluation for the board, its committees and directors was undertaken and was in accordance with the process developed by the board for that purpose.

Where additional skills are considered necessary for specific purposes, access is made to independent professional advice at the expense of the company.