Corporate Governance Practices and Conduct

Functions of the Board

Board functions - General

The m2m Board retains responsibility for the following items

-  setting and monitoring of objectives, goals and strategic direction for management with a view to maximizing shareholder wealth
-  accepting an annual budget and the monitoring of financial performance
-  ensuring adequate internal controls exist and are appropriately monitored for compliance
-  ensuring significant business risks are identified and appropriately managed
-  approving acquisitions
-  ensuring compliance with statutory requirements
-  selecting and appointing new Directors
-  maintaining the highest business standards and ethical behavior.

Board functions – Nominations

In this area the Chairman of the Board of Directors and the CEO periodically review the performance of Board members and legislative requirements to ensure that the Board continues to have the mix of skills and experience commensurate for the conduct and growth of the Company’s activities at this stage of its corporate development.
In so assuming these responsibilities, the procedures applied by the Board for appointing a director include the selection of a panel of nominees with the skills and experience identified as being required to complement the existing skills and experiences of the existing Board. The Board will also draw upon advices from external consultants and internal industry experiences.

The terms and conditions of the appointment are communicated to the nominees and include the level of remuneration.

The Constitution and the Corporations Act 2001 provide for the events whereby a director may be removed from the Board and shareholders have the power to nominate, appoint or remove directors.
In addition, the Constitution of the Company, the Corporations Act 2001 and the ASX Listing Rules provide for the regular retirement by rotation of directors which ensures that directors must seek re-election by shareholders at least once every three years. Given these regulatory requirements, Directors are not appointed for a specific term and their continuity of service will be determined by shareholders.

Board functions – Remuneration

Subject to the provisions of the Company’s Constitution, the functions that would normally be delegated to a Remuneration Committee are deliberated within the Board of Directors meetings. Accordingly, the Remuneration Committee is not functioning outside of the Board of Directors meetings.

Usually a Remuneration Committee is responsible for making recommendations to the Board on remuneration policies and packages applicable to the Board members and senior executives of the Company. The broad remuneration policy is to ensure the remuneration package properly reflects the person's duties and responsibilities; and that remuneration is competitive in attracting, retaining and motivating people of the highest quality on an international basis. Board delegation of functions to management

With the resignation of Michael So in January 2009 the Company has one executive director and the Chief Executive Officer to whom the Board of Directors has delegated authority within the following areas
-  monitoring performance of the business and its constituent units and managers
-  ensuring that the business processes in relation to risk management and assurance are met
-  implementing Board approved capital expenditures, investments and acquisitions.

To assist in carrying out their responsibilities as directors, after prior consultation with the Chairman of the Board of Directors, directors are able to obtain independent professional advice at the expense of the Company. Such advices as received are available to all directors for their consideration.

The Company’s Constitution does not require a shareholding qualification for directors.

Code of Conduct

The Board of m2m is committed to the terms of the following Code of Conduct. It communicates this to management and requires our staff to adhere to its core values, together with a number of other key attributes that have been identified as being imperative to the success of m2m.

Employees must comply with all laws and regulations. This includes understanding the laws and regulations relevant to their work and complying with the legal requirements of the jurisdiction in which they operate.

Employees should not engage in activities or hold or trade assets that involve, or could appear to involve, a conflict between their personal interests and the interests of the Company.


Management is responsible to the Board, through the CEO, for the group's performance under this Code.

Under the CEO, senior management has operational responsibility for ensuring compliance with the terms of the Code. The Code of Conduct aims to promote ethical and responsible decision making. The Code of Conduct requires all employees to exhibit honesty, loyalty, integrity, professionalism and trust in their dealings, both internally and externally. m2m aims for good corporate governance and specifically requires employees to:

  - avoid situations which may give rise to a conflict of interest
  - avoid situations where they may profit from their position with the Company and gain any benefit which completes with m2m's business
  - comply with all law and regulations and Company policies and procedures
  - not undertake activities inconsistent with their employment with m2m
  - properly use m2m's assets for legitimate business purposes
  - maintain privacy and confidentiality in both m2m's business and the information of this supplies, customers and shareholders.

The Company supports the appointment of Directors who bring a wide range of business and professional skills add experience details of which are recorded in the Directors' Report accompanying this Corporate

Each Director is required to disclose any interest which might create a potential conflict of interest with their duties, as a Director of m2m, or which would affect their independence.

In order for directors to bring independent judgment to bear in decision making, Directors have the right to obtain independent professional advice, if necessary, at the Company's expense.

The Board has resolved that the Code of Conduct extends to guide compliance with legal and other obligations with respect to stakeholders.

Policy in regard to trading in securities

The current Company policy in relation to trading in the Company's securities by directors, officers and employees is:

1.0      "That subject to:

  *  insider trading laws;
  *  continuous disclosure laws; and
  *  Listing Rule requirements

in Australia and any other jurisdictions in which m2m's securities (including options, if any) may be listed from time to time, the Directors are permitted to deal in securities in which they have a relevant interest without restriction for any period other those commencing at the end of each of the half or full financial years and ending with the release of half or full yearly results.

2.0      That Directors are required to wait at least 2 business days after the relevant release of these or any other announcement of the Company so that the market has had time to absorb the information.

3.0      That the Directors resolve that the Company shall adopt provisions set out above as an internal compliance code to provide guidance to its officers and employees with regards to dealing in m2m securities and that each manager shall be responsible for managing compliance by his staff and contractors with this policy.

Pursuant to the ASX listing Rule 3.19B each director has agreed that if there is a change in their direct or indirect share holding they are required to notify the Company Secretary so that the appropriate disclosures can be made to the ASX.

Continuous Disclosure Statement

m2m's Continuous Disclosure Statement is designed to promote transparency and investor confidence and to ensure that all interested parties have an equal opportunity to obtain information which is issued by m2m. m2m is committed to complying with the continuous disclosure obligations contained in the Listing Rules of the Australian Stock Exchange (ASX) and under the Corporations Act, and ensuring that all shareholders and the market have an equal opportunity to obtain and review full and timely information about m2m's securities.

The ASX defines continuous disclosure in its Listing Rules as "the timely advising of information to keep the market informed of events and developments as they occur". A reasonable person is taken to expect information to have a material effect on the price of value of securities if it would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, buy or sell the securities.

The Executive Chair controls all m2m's communications with assistance from the Company Secretary in carrying out his responsibilities. The Executive Chair is the only officer allowed to authorize the release of material information to the market. The Company Secretary is responsible for administering this policy and is responsible for dealing with the ASX in relation to all Listing Rule issues. The procedures which have been developed to comply with these rules include immediate reporting of any matter which could potentially have a material effect, via established reporting lines to the Executive Chair and/or the Company Secretary.

Disclosure of such price-sensitive information to the ASX must not be delayed and is disclosed, in the first instance, to the Australian Stock Exchange and disclosures to the market will then be placed on m2m's website, www.m2mcorp.com.au. Material information must not be selectively disclosed (i.e. to analysts, the media or shareholders) prior to being announced to the ASX, and all media releases must be referred to the Executive Chair for approval prior to any release.

The Company Secretary is the Company's Disclosing Officer responsible for all communications with the ASX.

The procedures that exist and which are practiced ensure that all matters which may affect the price of securities are monitored by the board and at each board meeting the board confirms whether or not there are any further matters to be disclosed. All communications are reviewed by all of the directors to ensure that they are factually correct and complete.

Should matters arise between scheduled Board of Directors meetings the Executive Chair and CEO will consider them, prepare recommendations and then circulate such recommendations to all directors for review and resolution. Should the matter(s) require disclosure then an announcement while be made via the Disclosing Officer.

Shareholders' Communications Statement

m2m's communication strategy is to promote effective communication with shareholders.

m2m is committed to:

    -   ensuring that shareholders and the financial markets are provided with full and timely information about m2m's activities in a balanced and understandable way
    -   complying with continuous disclosure obligations contained in the applicable Australian Stock Exchange (ASX) Listing Rules and the Corporations Act in Australia
    -   communicating effectively with its shareholders and making it easier for shareholders to communicate with m2m.

The Company relies principally upon the Annual Report and the disclosures to the ASX to provide information to shareholders and investors together with the postings to the Company's website. Where there are specific matters to be drawn to shareholders attention and or approval the Company communicates directly with shareholders.

The Company's Annual Report is available to all members either directly through a hard copy of the Report or an electronic copy available on the Company's website. A copy of the full annual report is available free of charge, upon request, from the Company. The Board ensures that the annual report includes relevant information about the operation of the Company during the year, changes in the state of affairs of the Company and details of future developments, in addition to the other disclosures required by the Corporations Act 2001. The full Annual Report is available on the Company's website;

The half-year report contains summarized financial information and a review of the operations of the Company during the period. The half-year financial report is prepared in accordance with the requirements of Accounting Standards and the Corporations Act 2001, and is lodged with the Australian Securities and Investments Commission via the Australian Stock Exchange. In addition, the Report is 'posted' to the Company's website.

The Board encourages full participation of shareholders at all shareholder Meetings to ensure a high level of accountability and identification with the Company's strategy and goals. Important issues are presented to the shareholders as single resolutions.

Risk Management Statement

The responsibility of overseeing risk falls within the responsibilities of the Board. The Company has commenced the process of identifying key business risks within the Company.

The Company continuously undertakes a risk assessment of the Company's operations, procedures and processes. The risk assessment is aimed at identifying the following:

    -  a culture of risk control and the minimization of risk through the Company, which is being done through natural or instinctive process by employees of the Company
    -  a culture of risk control that can easily identify risks as they arise and amend practices
    -  the installation of processes and procedures in all areas of the business that are designed to minimize an event or incident that could have a financial or other effect on the business and ties day to day management
    -  adoption of these practices and procedures to minimize many of the standard commercial risks (i.e. taking out the appropriate insurance policies, or ensuring compliance reporting is up to date).

The Board recognizes that in order to identify and manage business risk the Company needs to:

    -  maintain a visible set of cohesive procedures for recognition, reporting and managing corporate risk so that staff activities are focused and less reliant on verbal reporting
    -  clearly delineate authorities and responsibilities of staff
    -  provide customers with the confidence that m2m is focused on their needs and requirements and ensuring those needs are met
    -  facilitate continual improvement at all levels of the organization through preventive action and reviews
    -  ensure that the needs of society have been addressed.