BluGlass : Corporate Governance Statement

BluGlass Limited - Corporate Governance Statement

1. General

The Company's corporate governance framework has been formulated in light of the principles and recommendations released by the Australian Stock Exchange Corporate Governance Council, ("The ASX Recommendations"). The Company's framework largely complies with these recommendations. Consistent with the Company's approach to sound corporate governance, opportunities for improvement are regularly considered.

The Directors are responsible to shareholders for the performance of the Company and their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Company is properly managed.

The main processes that the directors of the Company use in doing so are set out in this statement.

2. Value and Vision Statement

The Company has adopted a Vision and Value Statement to define the type of organisation it aspires to be and what it requires from directors, senior executives and employees to achieve that aspiration:

Vision

Powering a brighter future through lower temperature RPCVD - enabling tomorrow's smarter, cleaner and more efficient photonics.

Value Statement

BluGlass is an Australian semiconductor technology developer commercialising a breakthrough semiconductor technology called RPCVD in the global laser diode, LED and

microLED industries. BluGlass' patented hardware and processes offer semiconductor

nitride manufacturers a cleaner, safer manufacturing process, while also offering more efficient devices at lower cost.

Our team is guided by a set of core values. Our goal is for all our decisions and actions to reflect these principles. We believe that putting our values into practice benefits our shareholders, customers, partners, employees and the communities that we serve.

INNOVATION- Science and innovation is the heart of everything we do at BluGlass - where making the impossible, possible is part of our job description. We strive to help the

world's best photonics leaders drive the technologies and solutions of tomorrow. We have

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earned a reputation for helping our customers and partners solve complex, incumbent problems with our unique nitride technology approach, protected by our growing international patent portfolio.

INTEGRITY- BluGlass strives to act with integrity, transparency, and commitment in all our interactions with our valued shareholders, collaborators, suppliers and customers. With our stringent quality control processes, we aim to be recognised as a trusted industry partner and supplier of products and solutions.

IMPACT- The technologies BluGlass and our customers are pioneering are set to have meaningful impact on the global economy and environment as the world transitions to smarter, cleaner and lighter footprint technologies. BluGlass strives to positively impact through pioneering innovation, global commercialisation and by delivering increasingly energy efficient technologies - reduced carbon emissions. Together this will create significant benefit for our shareholders, our customers, our industry; and the environment we live in.

INCLUSION- The best innovation happens when great and diverse minds work together. BluGlass is a place where everyone, regardless of gender, race, background and sexuality has a seat at the table and where all of our team, regardless of hierarchy, are encouraged and supported to share ideas, solutions and think outside the box. BluGlass is also a

collaborative business, working with the world's best technology leaders and research

institutions as we help drive the technologies of tomorrow.

3. Board Composition

The Company's Constitution requires that the minimum number of Directors is 3.

Membership of the Board currently comprises:

• 3 non executive Directors (including the Chairman), being independent Directors (as to "independence" see section 5 below); and
• 1 Executive Director, being the Executive Chairman in an interim capacity

Directors are subject to retirement by rotation and election by shareholders at a general meeting. No Director may remain on the Board for more than three years without re-election. Where a Director is appointed during the year that Director will hold office until the next Annual General Meeting and then be eligible for re-election.

When considering Board vacancies, Directors take into account the candidate's capacity to enhance the mix of skills and experience of the Board and to contribute to the ongoing development of the Company.

Prior to the appointment of a Director or putting forward to security holders a candidate for election, as a director , the Company undertakes appropriate checks before appointing a person, and provides security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director.

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4. Board's Role and Responsibilities

The Board is committed to maximising performance, generating appropriate levels of shareholder value and financial return.

The general responsibilities of the Board are:

• Protection and enhancement of shareholder value
• Formulation, review and approval of the objectives and strategic direction of the Company
• Monitoring the financial performance of the Company by reviewing and approving budgets and monitoring results
• Approving all significant business transactions including acquisitions, divestments and capital expenditure
• Ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained
• The identification of significant business risks and ensuring that such risks are adequately managed
• Evaluation of potential business development opportunities
• The review of performance and remuneration of executive directors and staff
• Ensuring there is an effective Corporate Governance structure and practice in place.
• Ensuring the integrity in financial reporting. Please refer to board committees section below.
• Ensuring the Company's Code of Conduct (Annexure 2) and other policies are adhered to, to promote ethical and responsible decision making.
• Ensuring that an appropriate policy is in place regarding trading of the Company's shares by employees of the Company (Annexure 3).
• Ensuring that an appropriate policy is in place regarding the recognition and management of the Risks facing the Company (Annexure 4).
• Ensuring that all aspects of executive and non executive remuneration, including the design and implementation of all incentive option schemes, the assessment, nomination and recruitment of potential board members, recommendations of the appointment and removal of members of the Board, review of board succession plans, and the evaluation of the board's performance. To assist in the performance of this function the Board has adopted a Nomination and Remuneration Charter (Annexure 6) and will use this Charter to guide its role in relation to nomination and remuneration matters.
• Ensuring that appropriate policies and procedures are in place to ensure compliance with applicable laws.

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Annexure 1 outlines the specific roles of the board, the Chairman and the CEO.

5. Board processes

The Board currently schedules a minimum of 6 meetings per year. In addition, the Board meets whenever necessary to deal with specific matters needing attention between the scheduled meetings. Extraordinary meetings take place at such other times as may be necessary to address any specific significant matters that may arise.

The agenda for meetings is prepared by the Company Secretary in conjunction with the Chairperson and Chief Executive Officer, with periodic input from the Board. Board papers are distributed to directors in advance of scheduled meetings.

The company secretary is accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

Board processes and evaluation of performance

The Board currently schedules a minimum of 6 meetings per year. In addition, the Board meets whenever necessary to deal with specific matters needing attention between the scheduled meetings. Extraordinary meetings take place at such other times as may be necessary to address any specific significant matters that may arise.

The agenda for meetings is prepared by the Company Secretary in conjunction with the Chairman, with periodic input from the Board. Board papers are distributed to Directors in advance of scheduled meetings.

Each member of the Board is committed to spending sufficient time to enable them to carry out their duties as a Director.

It is recognised and accepted that Board members may also concurrently serve on other boards, either in an executive or non-executive capacity.

Due to the current size of the Company and its level of activity, the Board is currently responsible for the evaluation of its performance and the performance of individual Directors. This internal review is to be conducted on an annual basis and if deemed necessary this internal review will be facilitated by an independent third party.

The review will include:

1. comparing the performance of the Board with the requirements of its Charter;
2. examination of the Board's interaction with management;
3. the nature of information provided to the Board by management; and
4. management's performance in assisting the Board to meet its objectives.
5. a critical review of the mix of skills, experience and diversity of the Board;
6. consideration of any opportunities for professional development and training which may improve the performance of the Board and its individual members.

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A similar review may be conducted for each Committee by the Board with the aim of assessing the performance of each Committee and identifying areas where improvements can be made.

Executive Team

The Chairman will oversee the evaluation of the remuneration of the Company's senior executives, including the Managing Director. To assist in this process an independent advisor may be used.

Performance Evaluations of senior executives are based on specific pre defined KPI's, including the business performance of the Company and its subsidiaries, whether strategic objectives are being achieved and the development of management and personnel.

Disclosure

The Company must disclose, in relation to each financial year, whether or not the relevant annual performance evaluations of the Board, committees, individual directors and senior management have been conducted in accordance with the above processes.

6. Independence of Board Members

The Board regularly assesses the independence of each of the 4 Directors based on the interests and associations disclosed by them, in line with the ASX best practice guidelines on independence, which are listed below.

Currently the 3 non executive directors are deemed to be independent.

ASX Recommendation 2.4 states that a majority of the Board should be independent directors. In assessing the makeup of the Board, the Company aims for its Directors to be independent in thought and judgement, as well as expecting the Directors to add value to the company. This board structure will be reviewed at the appropriate stages of the Company's development.

Assessing the independence of directors - The ASX guidelines

An independent director is a non-executive director (i.e. 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;

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