Trading Securities Policy
These guidelines set out the policy on the sale and purchase of securities in NSL Consolidated Limited (Company) by its Directors and employees.
Directors of the Company (Directors) and employees are encouraged to be longterm holders of the Company‟s securities. However, it is important that care is taken in the timing of any purchase or sale of such securities.
The purpose of these guidelines 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.
2. WHAT TYPES OF TRANSACTIONS ARE COVERED BY THIS POLICY?
This policy applies to both the sale and purchase of any securities of the Company and its subsidiaries.
3. WHAT IS INSIDER TRADING?3.1 Prohibition
Insider trading is a criminal offence. It may also result in civil liability. In broad terms, a person will be guilty of insider trading if:
- that person possesses information which is not generally available to the market and, if it were generally available to the market, would be likely to have a material effect on the price or value of the Company‟s securities (ie, information that is "price sensitive");
- and that person:
- buys or sells securities in the Company; or
- procures someone else to buy or sell securities in the Company; or
- passes on that information to a third party where that person knows, or ought reasonably to know, that the third party would be likely to buy or sell the securities or procure someone else to buy or sell the securities of the Company.
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:
- the Company considering a major acquisition or disposal of assets;
- the threat of major litigation against the Company;
- the Company‟s sales and profit results materially exceeding (or falling short of) the market‟s expectations;
- a material change in debt, liquidity or cash flow;
- a significant new development proposal i.e., new product or technology;
- the granting (or loss) or a major contract;
- management or business restructuring proposal; and
- a share issue proposal.
3.3 Dealing through third parties
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 (referred to as “Associates” in these guidelines).
3.4 Information however obtained
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.
3.5 Confidential Information
Employees and directors also have a duty of confidentiality to the Company. A person must not reveal any confidential information concerning the Company, use that information in any way which may cause loss to the Company, or use that information to gain an advantage for themselves or anyone else.
3.6 Employee share schemes
The prohibition does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme. However, the prohibition does apply to the sale of shares acquired under an employee share scheme and also to the sale of shares acquired following the exercise of an option granted under an employee option scheme.
4. GUIDELINES FOR TRADING IN THE COMPANY’S SECURITIES4.1 General rule
Directors and employees are prohibited from trading in the Company‟s securities during the following designated closed periods:
- in the ten days immediately preceding the release of the Company‟s Quarterly Activities Report and Quarterly Cashflow Report to the Australian Securities Exchange (ASX) (Quarterly Reports) in accordance with the ASX Listing Rules (or, if shorter, the period from the end of the quarter to the time of publication); and
- in the two days immediately after the release of the Company‟s Quarterly Reports. The Company may at its discretion vary this rule in relation to a particular period by general announcement to all employees either before or during the period. However, if a Director or employee of the Company is in possession of price sensitive information which is not generally available to the market, then they must not deal in the Company‟s securities at any time.
4.2 No short-term trading in the Company’s securities
Directors and employees should never engage in short-term trading of the Company‟s securities except for the exercise of options where the shares will be sold shortly thereafter.
4.3 Securities in other companies
Buying and selling securities of other companies with which the Company may be dealing is prohibited where an individual possesses information which is not generally available to the market and is „price sensitive‟. For example, where an individual is aware that the Company is about to sign a major agreement with another company, they should not buy securities in either the Company or the other company.
Directors and all employees may at any time:
- acquire ordinary shares in the Company by conversion of securities giving a right of conversion to ordinary shares;
- acquire Company securities under a bonus issue made to all holders of securities of the same class;
- acquire Company securities under a dividend reinvestment, or top-up plan that is available to all holders or securities of the same class;
- acquire, or agree to acquire or exercise options under a Company Share Option Plan;
- withdraw ordinary shares in the Company held on behalf of the employee in an employee share plan where the withdrawal is permitted by the rules of that plan; and
- acquire ordinary shares in the Company as a result of the exercise of options held under an employee option scheme.
- It is noted that the Company does not have in place any active share or option plans. However, it should be noted that should it do so:
- it is not permissible to provide the exercise price of options by selling the shares acquired on the exercise of these options unless the sale of those shares occurs during one of the 4 week periods specified in paragraph 4.1; and
- where the exercise price of options is being provided by a margin loan or other form of lending arrangement then there may be a risk that the employee or Director may need to sell shares to avoid providing additional capital or security to the lender in the event of a decrease in the value of the shares.
Were this to occur at a time when the person possessed inside information then the sale of Company securities would be a breach of insider trading laws, even though the person‟s decision to sell was not influenced by the inside information that the person possessed and the person may not have made a profit on the sale. Where Company securities are provided to a lender as security by way of mortgage or charge a sale that occurs under that mortgage or charge as a consequence of default would not breach insider trading laws.
4.5 Notification of periods when Directors and employees can trade
The Company Secretary‟s Department will endeavour to notify all Directors and employees of the times when they are permitted to buy or sell the Company‟s securities as set out in paragraph 4.1.
5. APPROVAL AND NOTIFICATION REQUIREMENTS5.1 Requirements before trading
- Any Director wishing to buy, sell or exercise rights in relation to the Company‟s securities must obtain the prior approval of the Chairman or the Board before doing so;
- If the Chairman wishes to buy, sell or exercise rights in relation to the Company‟s securities the Chairman must obtain the prior approval of the Board before doing so;
- Any first or second line reports of the Chief Executive Officer wishing to buy, sell or exercise rights in relation to the Company‟s securities must obtain his prior approval before doing so;
- Any Director or employee who (or through his or her Associates) buys, sells, or exercises rights in relation to Company securities must notify the Company Secretary in writing of the details of the transaction within five (5) business days of the transaction occurring. This notification obligation operates at all times but does not apply to acquisitions of shares or options by employees made under employee share or option schemes, nor does it apply to the acquisition of shares as a result of the exercise of options under an employee option scheme.
- Comply with any conditions on trading imposed by the Chairman (including, for example, any time limits applicable to the clearance);
5.2 Notification of trading:
- The applicant must confirm that they do not hold any inside information;
- Directors and employees that have been advised by the Chairman that there is no reason to preclude him from trading in the Company‟s securities as notified;
- In the case of any other Restricted Person, they must notify and obtain clearance from the Company Secretary before trading, or giving instructions for trading.
The form to complete and send to the Company Secretary‟s Department is available on request from the Assistant Company Secretary.
6. ASX AND OTHER SECURITIES EXCHANGES NOTIFICATION FOR DIRECTORS
The ASX Listing Rules require the Company to notify the ASX within 5 business days after any dealing in securities of the Company (either personally or through an Associate) which results in a change in the relevant interests of a Director in the securities of the Company. The Company has made arrangements with each Director to ensure that the Director promptly discloses to the Company Secretary all the information required by the ASX.
7. MARGIN AND SECURITIES LENDING ARRANGEMENTS
Margin and securities lending in relation to securities held by Directors in the Company is discouraged.
If a Director wishes to enter into a margin or securities lending arrangement in relation to securities he or she holds in the Company, approval must first be obtained from the Board.
Disclosure of all margin and securities lending arrangements will be made available to ASX as required by any ASX guidelines or rules.
8. EFFECT OF COMPLIANCE WITH THIS POLICY
Compliance with these Guidelines for trading in the Company‟s securities does not absolve that individual from complying with the law, which must be the overriding consideration when trading in the Company‟s securities.
9. BREACHES OF POLICY
Strict compliance with this policy is a condition of employment.
10. ADDITIONAL INFORMATION
If you have any questions arising from these guidelines, you should contact the Company Secretary or Chief Executive Officer.