This guidance note sets out the Company's policy on the sale and purchase of securities in Alumina Limited by its directors and employees.
Directors and employees are encouraged to be long-term holders of the Company's shares. However, it is important that care is taken in the timing of any acquisition or sale of such shares.
The purpose of this note is to assist directors and employees to avoid conduct known as 'insider trading'. In some respects, the Company's policy extends beyond the strict requirements of the Corporations Act.
This note provides a basic explanation of what constitutes insider trading and the Company's policy to prevent it, including:
In broad terms, a person will be guilty of insider trading if:
Information is generally available where the information is:
Insider trading is a criminal offence.
The criminal penalties for a breach of the insider trading prohibition include:
In addition, the insider trader, and any other persons involved in the contravention, may also be liable to compensate third parties for any resulting loss.
To illustrate the prohibition described above, the following are possible examples of price sensitive information which, if made available to the market, may be likely to affect materially the price of the Company's securities:
A person does not need to be a director or employee of the Company to be guilty of insider trading in relation to securities in the Company. The prohibition extends to dealings by directors and employees through nominees, agents or other associates, such as family members, family trusts and family companies.
It does not matter how or where the person obtains the information - it does not have to be obtained from the Company to constitute inside information.
The prohibition does not apply to subscriptions for shares by employees made under an employee share scheme. However, the prohibition will apply to the disposal of shares acquired under such a scheme. It could also apply to the exercise of employee options.
Directors and employees of the Company must not buy or sell securities in the Company when they are in possession of price sensitive information which is not generally available to the market.
Strictly speaking, there is no particular time during which it is safe to deal in the Company's securities. The sole test is whether, at the particular time, a director or employee is in possession of price sensitive information which is not generally available in the market.
As a matter of practice, however, the following periods are the most appropriate times for directors and employees to deal in securities in the Company:
Even at these times, it is important to be aware that there may be occasions when it is not proper for directors or employees to deal in the Company's securities because of their knowledge of impending or actual developments which are not known in the market place. There are, of course, times when a company is considering a major event (such as those referred to in paragraph 2.C above) and will not advise the market of this until the occurrence of the event is more certain.
Directors and employees must not trade in any of the Company's securities during a "close" period. A "close" period is the period from the end of the financial year or half financial year to the time of release of the annual or half year results.
It is also contrary to Company policy for directors and employees to be engaged in short-term trading of the Company's securities (ie buy and sell within a 12 month period).
Directors and employees are prohibited from:
Any director or employee wishing to buy or sell the Company's shares or exercise options over the Company's shares must advise the Chairman (in the case of directors) or the Managing Director (in the case of an employee) of their intention to do so before buying or selling the shares or exercising options. The Chairman shall advise the Managing Director if he is wishing to buy or sell the Company's shares or exercise options over the Company's shares. If the Chairman is unable to be advised by directors, the Managing Director shall be advised. In the case of employees, if the Managing Director is unable to be advised, the Company Secretary shall be advised. This notification obligation operates at all times (even during the periods specified in paragraph 3.B above).
Directors and employees must not buy or sell the Company's securities or exercise options until approval has been given by the Chairman or Managing Director (as the case may be). Clearance must not be given to trade in the Company's shares or other securities during:
This procedure should prevent potential embarrassment and adverse publicity concerning trading the Company's shares when, for example, there may be important corporate information (whether or not material in a legal context) not publicly released, or when projected financial results may deviate from market expectation.
The Corporations Act obliges a director to notify the ASX within 14 days after any dealing in the Company's shares (either personally or through a third party) which results in a change in the relevant interests of the director in the Company's shares.
In addition, under the ASX Listing Rules the Company is required to notify the ASX of such dealings within 5 business days of such dealings taking place. Directors have agreed with the Company to provide notice of such dealings to the Company as soon as possible after such dealings to enable the Company to comply with its obligations under the Listing Rules. A notice given by the Company to the ASX under the ASX Listing Rules satisfies the director's obligations to notify the ASX under the Corporations Act.
Any director requiring assistance in this regard should contact the Company Secretary.