The Board has the responsibility of ensuring the Company is properly managed so as to protect and enhance Shareholders' interests in a manner that is consistent with the Company's responsibility to meet its obligations to all parties with which it interacts. To this end, the Board has adopted what it believes to be appropriate corporate governance policies and practices having regard to its size and nature of activities.

The main corporate governance principles are summarised below:

Lay solid foundations for management and oversight

The Board of Directors of MMC Contrarian Limited ("MMC") is responsible for the Group's corporate governance.

The Board guides and monitors the business and affairs of the Group on behalf of shareholders, by whom they are elected and to whom they are accountable.   In practice this is achieved through formal delegation to the Managing Director for day to day management of the Group and to its three Board Committees- Audit, Risk and Compliance Committee, Nomination and Remuneration Committee and Investment Committee- for detailed consideration of matters and making recommendations.

The Board responsibilities are outlined in the Board Charter.  Broadly, the primary functions of the Board include:

• determining strategic objectives and approving the annual operating plans, financial targets and capital expenditure plans;

• overseeing the Group, including its controls and accountability systems;

• monitoring systems of risk management, internal controls, legal compliance and codes of conduct within the Group;

• ensuring that the Group has implemented adequate systems of internal control and risk management policies and procedures;

• reviewing the effectiveness, composition and charter of the Board Committees;

• approving all changes to the corporate structure, including tax and financial, which are of strategic importance to the Group;

• approval of the half yearly and annual financial reports;

• declaring the interim and final dividends;

• reviewing the investment performance;

• approving all transactions relating to major business and company acquisitions, mergers and divestments;

• ensuring effective external disclosure policies so that the market is fully informed on all matters that may influence the share price; and

• approving the appointment of the Managing Director and Senior Executives.

The Board is committed to the highest standards of ethical behavior and corporate governance.

Structure the Board to add value

To ensure the Board is well equipped to discharge its responsibilities, it has established guidelines for the nomination and selection of Directors and for the operation of the Board.

The Board is comprised of five directors as follows:

• 2 Independent Directors - Mr Kellerman and Mr Wade are considered independent directors, as defined by the ASX Corporate Governance Council (CGC);
• 1 Executive Director- Mr Hutchison is the Managing Director; and
• 2 Non Executive Directors - Mr Jefferies and Mr Eisen are not considered independent as they are associated with a substantial shareholder in the Company. 

Mr Kellerman is the Chairman and the roles of Chair and Managing Director are not exercised by the same individual.

On appointment, new directors receive a Letter of Appointment which sets out their remuneration and disclosure obligations. The Company also enters into a Deed of Indemnity with each director and the Company Secretary at the time of appointment.

•    reviewing the composition of the Board and making recommendations to the Board;
•    evaluating the performance of the Board;
•    assessing the necessary and desirable competencies of Board members;
•    reviewing Board succession plans; and
•    reviewing the remuneration framework for directors and executives and making recommendations to the Board.

The Committee has the authority to at any time conduct or direct any investigation it considers necessary to fulfill its responsibilities. 

The Board does not have a majority of independent Directors.  The Board has considered its composition and believes that the participation of two independent Directors is appropriate for the Group.  The Board meets at least 6 times a year.

Companies should actively promote ethical and responsible decision making

MMC has established a Code of Conduct. MMC believes that its directors and employees should conduct themselves in an ethical manner at all times. Ethical conduct relates to standards of behaviour characterised not only by complying with the law but also by acting honestly and fairly.  Employees and Directors are encouraged to make the Company aware of any unlawful or unethical behaviour.

All MMC directors and employees are expected to comply with the Code of Conduct. MMC directors and employees must positively promote the policy by personal example, by giving clear and unambiguous guidance and assistance on its operation, and by ensuring that it is communicated and understood by all.

The MMC Employee Trading Policy has been established to govern the trading in shares and securities by its Directors, senior executives and employees.  This policy is designed to raise awareness and minimise any potential for breach of the prohibitions on insider trading, either in substance or appearance. All Directors, officers and employees are required to conduct their personal investment activity in a manner that is lawful and avoids conflicts of interest between the individual’s personal interests and those of the Group and its clients.

All Directors, senior executives and employees are prohibited from trading in securities at any time if they are in possession of non-public price sensitive information regarding the Group and its securities or any other listed company and its securities which are included on an excluded list.  Directors, senior executives and employees may only trade in Group securities if all of the following requirements are met:

(a)   The black out period does not apply;

(b)   They are not in possession of price sensitive information;

(c)   They have followed the notice procedure set out in the policy; and

(d)   The relevant approving officer has given consent to trade.

There may be 2 types of black out periods imposed, either 6 weeks before the release of the half year and full year results announcement to the ASX or a Board-imposed black out period.

All directors, senior executives and employees must give written notification, in accordance with the table set out below

      Chairman > MD & CFO/Company Secretary

      MD > Chairman

      All other Directors > MD & CFO/Company Secretary

      All other Employees > MD & CFO/Company Secretary

Safeguard integrity in financial reporting

It is the Board’s ultimate responsibility to ensure that effective internal controls exist within the Group. To assist the Board in this regard it has established an Audit, Risk and Compliance Committee. The Committee consists of the following non-executive Directors:

P Wade (Chairman)

R Kellerman

M Jefferies

The Chairman of this Committee is an independent Director and the Committee has a majority of independent Directors. The Chairman of this Committee is not Chair of the Board.  Committee meetings are held at least three times a year in accordance with the Board Charter. Details regarding the experience and tenure of the members are included in the Board and Executive Bios section.

The functions of the Committee include:

• considering the half yearly and annual financial reports before they are approved by the Board;

• ensuring the effectiveness of management information systems and systems of internal control;

• reviewing the appointment of the external auditors, the terms of their engagement, the scope and quality of the audit and the auditor’s independence;

• establishing and maintaining the framework of internal control; and

• ensuring compliance with statutory, Australian Stock Exchange and other reporting requirements.

The Audit, Risk and Compliance Committee generally invites the Company Secretary and the external auditors to attend Committee meetings.

The external auditors can meet privately with the Committee. The partner managing the audit was appointed in 2009 and will be rotated after a maximum of five years. It is the policy of the external auditors to provide an annual declaration of their independence to the Committee.

Make timely and balanced disclosures

MMC is committed to providing timely and relevant information about its business operations to all shareholders and potential investors to enable them to make informed decisions about their investments.

MMC strives to ensure that all disclosures are;

• made in a timely manner;
• are factual;
• do not omit material information; and
• are expressed in a clear and objective manner to allow an investor to assess the impact of the information when making investment decisions.

Respect the rights of shareholders

The Board aims to ensure that shareholders, on whose behalf they act, are informed of all information necessary to assess the performance of the Group. Information is communicated to the shareholders through:

• compliance with Australian Stock Exchange reporting and disclosure requirements;
• the Company’s website, on which all important Stock Exchange announcements are posted;
• the annual and interim reports; and
• the Annual General Meeting and any other meetings called to obtain approval for Board action as appropriate.

The Company Secretary is responsible for lodging communications with the Australian Stock Exchange.

MMC encourages all shareholders to attend, participate and vote at its Annual General Meeting (AGM). The Notice of AGM is accompanied by explanatory notes on the items of business to assist shareholders to understand the business that will be considered at the meeting.  

The Board also requests that the Company’s external auditor attends the meeting and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Remunerate fairly and responsibly

The Company has established a Nomination and Remuneration Committee. As at the date of this report the Committee consisted of the following Directors:

R Kellerman (Chairman)

P Wade

A Eisen

It is the Board's policy to determine the terms and conditions relating to the appointment and retirement of Non-Executive Directors on a case by case basis and in conformity with the requirements of the Listing Rules and the Corporations Act.

The maximum total remuneration of the Directors of the Company has been set at $450,000. The remuneration for Directors will be reviewed by the Board on a periodic basis as the Company develops its business.

Directors' Access to Independent Professional Advice

It is the Board's policy that any Committees established by the Board should:

• be entitled to obtain independent professional or other advice at the cost of the Company, unless the Board determines otherwise.
• be entitled to obtain such resources and information from the Company including direct access to employees of and advisers to the Company as they might require.
• operate in accordance with terms of reference established by the Board.