MINDAX LIMITED — Governance Information 2010

Dec 19, 2010

Mindax Limited

ABN: 28 106 866 442

==> picture [98 x 44] intentionally omitted <==

==> picture [98 x 45] intentionally omitted <==

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

Policy

About this document

Contents

Audience ............................................................................................................................................................... 2
Objectives ............................................................................................................................................................. 2
Scope ...................................................................................................................................................................... 2
Related documentation .................................................................................................................................. 2
Review ..................................................................................................................................................................... 2
1. Policy Statement .................................................................................................................................... 3
2. Core concepts ........................................................................................................................................ 4
3. Prohibited Activities ............................................................................................................................. 5
4. Dealing and Trading in Company Securities & Other Financial Products ...................... 6
5. Short Term Trading ................................................................................................................................. 6
6. Trading Bans/Closed Periods ................................................................................................................. 6
7. What are the consequences of a breach of this policy? ..................................................... 6
8. If in doubt! ............................................................................................................................................... 7

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 2

About this document

Audience

This policy applies to executive and non-executive company officers and staff members of Mindax Limited (ASX:MDX) ('MDX') and each of its incorporated subsidiaries (collectively the 'Group').

Objectives

The purpose of this policy is to ensure that:

• (a) The Group's executive and non-executive company officers and members of staff, have a good understanding of their obligations in relation to dealing in MDX securities, misuse of price sensitive information and insider trading pursuant to Australian law in order to ensure they avoid such conduct;

(b) The Group is protected against damage to its business reputation; and

• (c) MDX and its Australian subsidiaries meet their obligations under the Corporations Act 2001 (Cth) (the 'Act').

Scope

This document outlines the policy that is approved by the Board of Directors.

Related documentation

• Mindax Corporate Code of Conduct.

Next Review

• MDX will monitor and review this policy at least annually to assess its effectiveness and compliance with the law at the time.

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 3

1. Policy Statement

• 1.1. In accordance with the requirements of its Code of Conduct, Mindax Limited shall take all reasonable steps to promote:

• (a) Directors, staff and other company officers to align their personal interests with the success of the Group; and

• (b) Compliance with both the letter and spirit of the laws and regulations that prohibit insider trading.

• 1.2. The Act prohibits a company officer (including a director) or staff member of a company from making improper use of:

• (a) His or her position with the company; or

• (b) Information acquired by virtue of that position,

• (c) to gain (directly or indirectly) an advantage for any person to cause detriment to the company.

• 1.3. The Act also prohibits a person from trading in securities of a company at a time when that person possesses certain information that is not generally available and would be likely to materially affect the market price of the securities.

• 1.4. Directors, staff and other company officers are encouraged to be long-term investors in MDX. However, in light of the prohibitions contained in the law and the need to maintain and protect confidentiality of information relating to the Group:

• (a) Group directors, staff and other company officers:

  • (i) must not, at any time, directly or indirectly, buy or sell MDX securities, or deal in any other related financial products of the Group when in possession of unpublished information that is price sensitive and which could materially affect the price or value of the relevant security,

  • (ii) must not communicate, disclose, use or misuse price sensitive information obtained in the course of his or her position with the Group.

• (b) No Group director, staff member or other company officer may disclose any information or opinion to any third party that as a result of that disclosure, the third party could:

  • (i) execute a transaction of a security or related financial product; or

  • (ii) advise or procure another person to execute such a transaction.

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 4

2. Core concepts

Who is an Insider & what is Insider Trading?

2.1. In general terms insider trading occurs when:

• (a) a person (the ’insider’) possesses information which is not generally available to the market and, if it were generally available to the market it would likely materially affect the price or value of the company's securities (i.e. information that is price sensitive); and

(b) the insider:

Subscribes for, buys, or sells (or enters into an agreement to subscribe for, buy, or sell) securities in the company;

• (ii) Procures someone else to subscribe for, buy, or sell (or enters into an agreement to subscribe for, buy, or sell) securities in the company; or

• (iii) 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 subscribe for, buy, or sell the securities or procure someone else to subscribe for, buy, or sell the securities in the company

  • Includes the exercise of options over unissued shares, and conversion of other convertible securities

• 2.2. Insider trading is a criminal offence. It may also result in civil liability.

• 2.3. A person does not need to be a director, staff member or company officer of a company to be guilty of insider trading. The prohibition extends to dealings by directors, staff members and other company officers through nominees, agents or other associates, such as family members, family trusts and family companies.

What is Information?

• 2.4. Information means any fact, matter or circumstance and includes:-

• (a) Matters of supposition (eg, rumours) and other matters that are sufficiently definite to warrant being made known to the public; and

• (b) Matters relating to the intentions, or likely intentions of a person.

What is Insider Information?

• 2.5. Insider information means information in relation to which the following paragraphs are satisfied:

• (a) The information is not generally available;

• (b) If the information were generally available, a reasonable person would expect it to have a material effect on the price or value of a financial product.

• 2.6. It does not matter how or where the person obtains the information. It does not have to be obtained from the company to constitute insider information.

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 5

What does "Generally Available" mean in this context?

• 2.7. Information is generally available if

• (a) It consists of a readily observable matter; or

• (b) If both of the following apply:

  • (i) it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in securities of bodies corporate of a kind whose price or value might be affected by the information, and

  • (ii) since it was so made known, a reasonable period for it to be disseminated among such persons has elapsed; or

• (c) It consists of deductions, conclusions or inferences reasonably made or drawn from information referred to above.

When will there be a 'Material Effect'?

• 2.8. Information has a material effect on the price or value of securities and financial products if the information would, or would likely, influence people who commonly acquire or dispose of the particular securities and financial products.

Examples

• 2.9. You may come into possession of insider price sensitive information if you become aware of any of the following when it is NOT generally available and it would likely materially affect the price of a company's securities:-

• (a) Actual profit results;

• (b) Internal forecasts of profit results;

• (c) Changes of strategic business direction;

• (d) Details of a new product(s), service (s) or contact(s);

• (e) the appointment or resignation of a CEO, or Chairman, or director;

• (f) an actual or proposed major acquisition or disposal of assets;

(g) a float or other share issue, capital raising, takeover, merger, purchase, sale or partial sale of business;

• (h) actual or proposed litigation.

3. Prohibited Activities

• 3.1. The following are strictly forbidden: -

• (a) Dealings in MDX securities or other related financial products of the Group outside the guidelines specified in this policy.

• (b) Dealings in MDX securities and any financial products related to the Group when in possession of price-sensitive information about the Group that is not available to the general public.

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 6

• 3.2 No other exceptional circumstances that permit trading during a prohibited period are noted in this policy.

4. Dealing and Trading in Company Securities & Other Financial Products

• 4.1. Mindax Limited shall maintain procedures and processes to enable compliance with and monitoring of the policies set out in this document.

5. Short Term Trading

• 5.1. Group directors, staff and other company officers must not engage in short term trading of MDX securities. For example, buying or selling MDX shares within a short period of time with the view of realising a profit or minimising a loss as opposed to holding the shares as a long term investment.

6. Trading Bans/Closed Periods

• 6.1. Any proposed trading in the company’s securities by directors (other than the Managing Director), staff and other company officers is to be firstly advised to the Managing Director (‘MD’). The MD must firstly advise the Chairman of any trade he/she proposes to make. Once the MD or Chairman (as applicable) has given approval, the relevant trade may be executed. Such policy clearly mitigates the risk of breaching the insider trading provisions and gives the MD control to restrict trading if the MD may be privy to sensitive information before the other company officers and personnel are, or the MD has knowledge that certain sensitive information (eg exploration results) are due for receipt within a short term timeframe.

• 6.2. The Board may also impose trading bans at any time if it considers that as a consequence of any circumstances that have not been disclosed to the market there is a risk that they or the Group's employees or other company officers may trade inappropriately.

• 6.3. Group directors, staff and other company officers are prohibited from trading during the following 'closed periods':

• (a) during the two week period immediately before the release of MDX’s quarterly reports;

• (b) two weeks immediately before the MDX Annual General Meeting when it is customary for the Chairman and MD to provide further information about MDX's current business activities; and

• (c) not until after a reasonable amount of time has passed in respect of a market announcement that released what was price sensitive information, which was not previously available to the market, is released (generally two trading days, unless another period is considered appropriate by the Board).

What are the consequences of a breach of this policy?

• 7.1. A breach of this policy, or failure to comply with the processes and procedures that are in force at any time in connection with this policy, may result in termination of a position with the company.

7.

Dealing in Company Securities, Misuse of Price Sensitive Information & Insider Trading

page 7

7.2. In determining what disciplinary action is to be taken, the Group MD shall, in consultation with the Board, take into account the circumstances surrounding the breach or non compliance and the impact that the breach has, or could potentially have, on the Group and its reputation with the regulators and the market.

8. If in doubt!

• 8.1. The Group will devote appropriate resources to ensure that staff are provided with sufficient support and information to encourage ongoing compliance with this policy.

• 8.2. The Group does not provide legal or financial advice to its staff. However, it will provide confidential access to its legal and compliance advisers for consultation regarding the operation of the policy. If you are in doubt as to whether the insider trading prohibitions may apply to you at any time, please contact the MD or Company Secretary prior to dealing in any MDX securities or related financial products.