Instructions for handling inside information at Orkla
(updated as of  January 2009)
1 Background and purpose
Orkla’s statutory duties to ensure the proper handling of information are as follows:
- Orkla must have procedures for the secure handling of inside information.
- A list must be kept of persons who are given access to inside information and the list must be continuously updated.
- Persons who are given access to inside information shall be made aware of the duties and responsibilities that this entails, as well as the criminal liability involved.
- Orkla must be able to provide documentary evidence to the Financial Supervisory Authority of Norway that persons who are given access to inside information are aware of their duties.
The purpose of these instructions is to fulfil the above-mentioned duties, and to increase individuals’ awareness of the responsibility entailed by the possession of inside information and the consequences of misusing such information.
Furthermore, special procedures have been introduced for information which is particularly sensitive and important for Orkla, and which may become inside information (see point 6.)
Proper handling of information is required as regards Orkla as the issuer of both listed shares and other financial instruments such as listed bonds.
2 Applicability, responsiblility, etc.
These instructions apply to all employees and elected officers (Board members, Corporate Assembly members, elected auditor) of Orkla ASA and the company’s subsidiaries, and to joint ventures in which Orkla is managing partner.
The persons in charge of Orkla’s business areas shall ensure that employees and elected officers of Orkla’s subsidiaries receive necessary information about and training in use of these instructions. Responsibility at Orkla ASA lies with the heads of the various departments. The Legal Affairs Department at Orkla, in cooperation with the individual department heads, shall assist in providing practical training.
3 Definition of inside information
“Inside information” means any information of a precise nature relating to financial instruments, the issuer thereof or other circumstances which has not been made public or is not commonly known in the market, and which is likely to have a noticeable effect on the price of those financial instruments (including listed shares or bonds).
Inside information may, for instance, be knowledge of a forthcoming acquisition offer, financial results*, own transaction decisions, contract negotiations, investment decisions and decisions made by public authorities or information regarding framework conditions to which the issuer is subject. The information need not be complete to be regarded as inside information, but must be distinguished from rumours, assumptions and speculations. As a rule, such information will be relevant in relation to all forms of financial instruments related to Orkla. However, there may also be cases in which information is regarded as inside information solely in relation to the Orkla share (and related financial instruments such as options, etc.) and not in relation to listed bonds, and vice versa. This must be specially assessed in each individual case.
Information becomes inside information at the time a reasonable investor would be likely to make use of the information as part of the basis for his/her investment decision. For example, information may become inside information at the latest when, in a negotiation process, it is considered likely that a contract will be concluded. Each situation must be assessed individually. If the circumstances in question are changing, the situation must be assessed on an ongoing basis.
Each employee or elected officer has a duty to continuously assess whether information which he or she receives or gains access to by virtue of his or her position or office at Orkla may be considered to be, or is likely to become, inside information. Any person who gains knowledge of such information shall immediately notify the President and CEO or the SVP Legal Affairs. If the employee or elected officer is in doubt, he or she shall regardless immediately contact Orkla’s Legal Affairs Department.
4 Delayed public disclosure of inside information
The basic rule is that Orkla’s Investor Relations Department shall immediately publicly disclose inside information regarding Orkla-related financial instruments on Oslo Børs.
In some cases, public disclosure may be delayed so as not to prejudice Orkla’s interests, such as the possibility of carrying out a project. The decision as to whether the conditions for delayed public disclosure are satisfied shall be made by the SVP Legal Affairs in the Legal Affairs Department. The Investor Relations Department shall then immediately notify the stock exchange confidentially of the matter, the reason for the delay and the fact that Orkla has begun to keep a list of persons with access to the inside information. Such notification shall be given to the company’s contact person at the stock exchange or to the person on duty in the Market Surveillance Department (where shares are concerned) and/or the Fixed Income Department (where bonds are concerned).
5 Insider lists
As soon as a decision has been made to delay public disclosure, Orkla’s Legal Affairs Department shall maintain an insider list of every person who has access to inside information.
The person responsible for maintaining the list shall ensure that the persons on the list are aware of the duties and responsibilities that this entails, and the criminal liability that attaches to misuse or unwarranted use of such information. When a person receives inside information for the first time, the list maintainer shall obtain a declaration from him or her to the effect that the recipient is aware of the duties and responsibilities that receipt of such information entails. See the Acknowledgement of Access to Inside Information.
In connection with the assignment of tasks, Orkla may require that external service providers keep a list of persons with access to inside information. The external service provider must confirm this in writing by signing an Acknowledgement of Access to Inside Information and Responsibility for Maintaining Insider Lists (Appendix 2). Orkla is responsible for ensuring that external service providers maintain lists in accordance with current rules. The appropriateness of delegating responsibility for maintaining the list must therefore be assessed in each individual case, and shall always be approved by the SVP Legal Affairs.
The person responsible for maintaining the list shall ensure that the list is deposited for proper safekeeping after the last time it is updated. The duty to retain the list applies for five years from the date it was last updated. The Legal Affairs Department at Orkla shall make sure that a proper system is established and maintained for the centralised safekeeping of insider lists and acknowledgements of receipt of inside information.
Further details of listing procedures may be found in the document entitled Insider List (Appendix 3).
6 Project list
A list shall be maintained for each project which is of such a scope or of such a nature that it involves information which is particularly sensitive and important for Orkla, and which may subsequently become inside information. The purpose of the project list is to raise awareness of the duty of confidentiality, and facilitate compliance with statutory listing requirements.
The project list shall be maintained from the date the project is started, even if there is reason to assume that there will be no inside information until later. If an insider list is subsequently established for the project, the project list shall no longer be maintained.
Further details of procedures for maintaining a project list may be found in the document entitled Project List (Appendix 4).
7 The duties and responsibilities of each person in connection with receipt of inside information
Each employee and elected officer who receives inside information regarding Orkla-related financial instruments shall act in accordance with the prohibitions and duties that are described in further detail below: Prohibition of misuse of inside information (point 7.1), Duty of confidentiality (point 7.2), Duty to provide information regarding the communication of inside information (point 7.3), Duty of proper handling, etc. (point 7.4).
7.1 Prohibition of misuse of inside information
No person must subscribe for, purchase, sell or exchange financial instruments issued by Orkla ASA if he or she has inside information regarding Orkla-related financial instruments. This prohibition applies to every natural and legal person, indirect and direct trading, and trading both for own account and for ä third party’s account, irrespective of form of settlement. The prohibition also applies to incitement to trade, i.e. persons who have inside information regarding Orkla-related financial instruments are not permitted to give other persons advice or in any way influence other persons to carry out, or refrain from carrying out, such transactions.
This applies correspondingly to the entry into, purchase, sale or exchange of options or forward/futures contracts or similar rights (including financial derivatives) related to such financial instruments or to incitement to carry out such transactions.
The prohibition applies only to trades that can be characterised as misuse of inside information. Whether or not the trade constitutes misuse must be assessed in each individual case. Under the Securities Trading Act, the prohibition does not prevent the normal exercise of an option or forward/futures contract upon expiry of the contract.
7.2 Duty of confidentiality
Inside information is confidential information, and shall not be given to or in other ways made available to an unauthorised person.
The information may only be communicated or made available to another person if the recipient has an relevant, well-founded need for the information, assessed on the basis of Orkla’s interests. A strict “need to know” principle applies, i.e. as few people as possible shall have access to the information, as late as is practically possible.
Any person who communicates inside information or makes such information available to another person has an independent responsibility for ensuring that the person who is given access to the information is simultaneously made aware of the duties and responsibilities entailed by the receipt of such information, including the duty of confidentiality, the duty of proper handling of the information, the duty not to misuse it, and the criminal liability that attaches to the misuse or unwarranted distribution of such information. The above applies regardless of whether the recipient is an Orkla employee/elected officer or an external advisor or a business connection.
7.3 Duty of information in connection with the communication of inside information
If inside information is communicated or made available to another person under point 7.2 above, the person responsible for maintaining the insider list and/or the SVP Legal Affairs shall be notified immediately, and if possible, before the information is communicated.
Compliance with this duty of information is essential if Orkla is to be able to fulfil its statutory duty to maintain an insider list, and to ensure that the persons who are given access to inside information are aware of the responsibility that this entails.
The person responsible for maintaining the insider list shall immediately put the person in question on the list of persons who have access to inside information. The insider list maintainer shall at the latest at the same time make sure that the recipient has been made aware of the duties and responsibilities that such access entails, and the criminal liability that attaches to misuse or unlawful use of such information. (See point 5 above.)
7.4 Duty to ensure proper handling of inside information and to secure information
Any person who has inside information has a duty, in handling such information, to exercise due care in order to ensure that inside information does not come into the possession of unauthorised persons or is misused. According to Orkla’s Information Security Instructions, inside information is classified as confidential information.
For further rules regarding proper safekeeping, securing of electronic information, distribution, etc. see Orkla’s Information Security Instructions regarding confidential information.
7.5 Criminal liability, etc.
Misuse of inside information and contraventions of rules regarding confidentiality and proper handling of information are criminal acts. Contraventions are punishable by fines or imprisonment. Both wilful and negligent contraventions are punishable, as are aiding and abetting and attempted contraventions. Furthermore, offenders risk incurring personal liability for damages to Orkla and other parties, as well as dismissal with or without notice from their positions.
8 Special comments on financial reporting at Orkla Group level
With regard to non-consolidated financial results at business area level, an assessment must be made of whether the results can be regarded as inside information in each individual case, in the same way as for other sensitive information under point 3 above.
With regard to consolidated financial results in connection with quarterly financial reporting for the Orkla Group, this shall always be treated as if it were inside information. The information shall be handled in accordance with the duties laid down in these instructions, but with the adjustments and clarifications that follow from 8.1 – 8.3 below.
8.1 Delayed public disclosure
The main rule is that where consolidated financial results prepared in connection with quarterly reporting for the Orkla Group are concerned, the conditions for delayed public disclosure are satisfied.
8.2 Profit warning
The Financial Planning and Analysis Department (FPA) must continuously assess whether the financial results for the period reveal substantial variances (significantly worse or better) from expectations created by the company, i.e. expectations that can be traced back to information provided by Orkla itself. This assessment must be carried out in consultation with the SVP Legal Affairs and the Legal Affairs Department and the Investor Relations Department. If appropriate, Orkla’s CFO must then decide whether to publish a profit warning.
The FPA shall maintain an insider list for financial reporting as soon as the quarterly financial statements have been prepared in such a way as to provide a clear picture of the Group’s financial situation and/or consolidated quarterly information is available in Hyperion (Orkla’s consolidation system).
A list of persons who have access to financial reporting information shall be kept in the same way as the insider list, cf. point 5 above, regardless of whether the financial results at that point in time are defined as inside information or not.
9 Special comments on primary insiders – trading in financial instruments, duty of investigation, duty of obtaining clearance, duty of notification, etc.
In addition to the Instructions for Handling Inside Information, primary insiders are subject to the Rules for Primary Insiders at Orkla (Appendix 5). Further details of procedures for trading in financial instruments and the investigation, clearance and notification duties of primary insiders are set out in these rules.