SOLUTION GROUP BERHAD AND ITS SUBSIDIARIES (“Solution Group” or “SOLUTN”)

 

CORPORATE DISCLOSURE & INVESTOR RELATIONS POLICY

 

 

1.0 The purpose of the Corporate Disclosure and Investor Relations Policy

 

Solutions Group Berhad (the “Company” or “SEHB”) is an investment holding company, which is listed on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”) since 2005. 

 

The Solution Group is involved in four (4) core business segments, namely:-

 

  1. Engineering Equipment; Design and develop equipment and software for engineering education, research and technical and vocational training (“TVET”) in chemical, mechanical, electrical, civil and control engineering under SOLTEQ brand;
  2. Industrial Automation; Provision of industrial automation solutions, currently specializes in water works such as remote monitoring system for dams, tidal control system for irrigation and automation system for flood mitigation under SOLWEB brand; and
  3. Industrial Lubricants; Production and distribution of industrial lubricants under SOLMAX and OEM brand; and
  4. Biotechnology; Provision of industrial biotechnology solutions such as design and development of equipment and processes for the manufacturing of products used in the biotechnology and pharmaceutical industries under BIOFORS brand;

 

 

The Company is committed to providing equal access to material information about the Company that is accurate, clear, timely and complete, in order to keep the shareholders, stakeholders and the investing public informed, in accordance with the corporate disclosure requirements set out in the ACE Market Listing Requirements (“Listing Requirements”). In order to ensure that these requirements are fulfilled and to endeavour to comply with the best practices and recommendations in the Corporate Disclosure Guide, the Company has adopted this Corporate Disclosure and Investor Relations Policy (the “CDIR Policy”). No Solution Group’s employee is permitted to disclose, comment on, or repeat to any person or entity external to Solution Group any information that is not generally available in the financial markets.

 

1.1 Objectives of the CDIR Policy

 

Objectives of the CDIR Policy are:

 

  1. To provide guidance to management and employees on the Company’s disclosure, requirements and practices;
  2. To provide guidance in disseminating corporate information to, and in dealing with, investors, analysts, media and the investing public;
  3. To ensure compliance with legal and regulatory requirements on disclosure of material information; and
  4. To promote and maintain market integrity and investor confidence.

 

 

2. Internal Structure and System for Corporate Disclosure

 

2.1 Responsible entity

 

The Company’s Board of Directors (the “Board”) is ultimately responsible for ensuring SEHB’s disclosure requirements are fulfilled. The Board delegates the implementation of this CDIR Policy to the Corporate Disclosure Committee (the “Committee”).

 

 

2.2 The Committee members

 

The Committee includes the following members: -

 

(i)  Group Managing Director;

(ii) Chief Operating Officer; and

(iii) Finance Manager.

 

The Chief Operating Officer will serve as a primary contact person for the Committee and will engage other committee members as necessary and appropriate to the matter at hand. In his absence, any other member of the Committee can be contacted on the matters referenced in the Corporate Disclosure Standard Operating Procedure (“CDP”).

 

 

2.3 The Committee’s responsibilities

 

The ultimate objective is to provide equal access to material information to all stakeholders concerned. The Committee need to avoid selective disclosure in their dealings with investors and immediate rectification is needed once they are aware of unintentional slip. The Committee shall adopt the strategy as and when required by the Board.

 

The Committee’s responsibilities are: -

 

  1. maintaining awareness and understanding of governing disclosure rules and guidelines,including any new or pending developments;
  2. ascertaining whether corporate developments constitute material information and, if so,ensuring procedures outlined in the CDP are implemented to either ensure full and timelydisclosure or keeping information confidential;
  3. developing and implementing procedures to regularly review, update and correct corporatedisclosure information, including information on SEHB’s website;
  4. bringing this policy and CDP to the attention of the Board, management and staff on a regular basis;
  5. monitoring for compliance with this policy and undertaking reviews of any violations,
  6. including the assessment and implementation of appropriate consequences and remedial actions; and
  7. reviewing this policy and CDP at least annually and updating as necessary and appropriate to ensure compliance with prevailing rules and guidelines.

 

 

2.4 Authorized spokesperson

 

Authorized spokespersons for the respective events are as follows: -

 

  1. Press releases, media conferences and investor briefing – Managing Director, or in hisabsence, Finance Manager;
  2. Public announcements to Bursa Securities – Finance Manager with prior approval from Solution Group Managing Director or Chief Operating Officer. The Finance Manager shall give prior notice of all such Bursa Securities announcements to the Independent Directors except for announcements on changes in shareholdings of Directors, major shareholders and/ or personsconnected to them.

 

 

3. Procedures and Practices on Corporate Disclosures

 

3.1 Disclosure of Material Information

 

Information is considered material if it is reasonably expected to have material effect on:

 

  1. the price, value or market activity of the Company’s shares; or
  2. the decision of a shareholder or an investor in determining his choice of action.
  3. Bursa Securities requires immediate disclosure of all material information except as set out in item 3.3 below. Examples of events which may require immediate disclosure are set out in Paragraphs9.04, 9.19 and 9.20 of the Listing Requirements, and also the CDP.

 

 

3.2 Responsibilities and Procedures for Disclosure of Material Information

 

3.2.1                         The Committee shall manage SEHB’s public releases of information, whether material or otherwise. The Committee has the overall responsibility to ensure that the content clearly andeffectively communicates the intended substance and meaning of the information to the public.

3.2.2                         The Finance Department shall ensure the disclosure of financial data are consistent with theprevailing accounting standards and guidelines and shall review and verify the accuracy of allfinancial data if they form part of the release. For announcements regarding the Quarterly FinancialResults and the events listed in Paragraph 9.04 of the Listing Requirements, and the Annual Report, the prior approval of the Board of Directors shall be obtained.

3.2.3                         When a decision has been made by the Board or authorized spokesperson that information ismaterial and be disclosed immediately, except in circumstances where immediate disclosure willprejudice the interests and corporate objectives of the company, the Company Secretary or such otherperson authorized by the Executive Chairman or Managing Director will prepare a draftannouncement, to be reviewed by the Committee for accuracy and compliance with the applicabledisclosure requirements, and then approved by the Executive Chairman, Managing Director or the Executive Director(s) prior to dissemination.

3.2.4                         Once the announcement has been approved, the information will be released to BursaSecurities, and Securities Commission, if necessary. The announcement will be concurrently releasedto the major newspapers and publications, if deemed necessary.

3.2.5                         After public dissemination, the Company’s disclosures will be monitored to ensure accuratemedia reporting and take corrective measures, if necessary.

3.2.6                         The Corporate Affairs Department has to ensure that all announcements made to BursaSecurities are placed on SEHB’s website, as soon as practicable after the same are released on theBursa Securities’ website and compliance with the Paragraph 9.21 of the Listing Requirements.

 

3.3 Withholding Confidential Information

 

3.3.1      SEHB will only withhold information consistent with the circumstances outlined in paragraph9.05 of the Listing Requirements. When confidential material information being withheld involves amaterial change, the Committee shall file a report with Bursa Securities on a confidential basis. If at any time, such confidential material information is inadvertently divulged in a way resulting inselective disclosure to any individual member of the investing public, the Committee shall ensure fulland accurate public disclosure is made.

3.3.2      Persons privy to confidential material information shall not divulge the information to anyoneelse except in the course of the business or their employment. A list of such persons is maintainedand attached herewith (“Privy List”). The Privy List shall be reviewed and updated on quarterly basis.

3.3.3      In such cases, the following precautions will be observed to keep the information completely confidential:

 

  1. Access to the information will be on a need to know basis.
  2. If and when the information is disclosed in the necessary course of business, recipients of suchinformation will be made aware of the need to keep the information confidential inside oroutside the Company. For example – Confidential information should not be discussed whereit might be overheard, such as elevators, hallways, or other public places.
  3. Reasonable care will be taken to ensure appropriate security and protection of the information.
  4. At the discretion of the Executive Chairman, Managing Director or Executive Director(s),
  5. persons receiving confidential information shall sign a confidentiality agreement/“letter”.

 

3.3.4      If at any one time, confidential material information is inadvertently leaked, lost or cannot be maintained resulting in selective disclosures, the Committee will take action to ensure full and accurate public disclosure is made, i.e. immediately announce the information to Bursa Securities.

 

3.4 Responding to Market Rumours

 

3.4.1      SEHB does not comment, affirmatively and negatively, on rumours or speculations, true or false, when it is apparent that the material information does not originate from SEHB. Authorized spokesperson will evaluate whether or not it is necessary to issue clarifying statements through news agencies and/ or press releases in the event that rumours cause fluctuations in share prices or if the Bursa Securities requests a clarification.

3.4.2      When SEHB is aware that the rumour is about material information that is being withheld from public disclosure under confidentiality privileges, SEHB will consult with Bursa Securities for guidance on the matter.

3.4.3      When it is found to be necessary to issue clarifying statements, the Committee will take steps to ascertain the truthfulness of the report or rumour. Then, the Committee will make a recommendation to the Executive Chairman, the Managing Director or the Executive Director(s) as to the nature, extent and timing of the response, that is, to confirm, clarify or deny the report or rumour.

3.4.4      When it becomes apparent that one of these parties of Directors, Officers, employees and advisors, is the source of a market rumour involving such information, the Committee will review the matter and recommend the next course of action as to appropriate consequences and remedial measures.

 

3.5 Communications with financial analysts, the media and the investing public

 

3.5.1      The Committee will be responsible for preparing the designated spokesperson for briefing sessions with financial analysts, the media and the investing public on information about the Company. The briefing materials shall thereafter be posted on SEHB’s website to provide ordinary investors with full access to the briefing materials.

3.5.2      SEHB will not provide confidential, proprietary or material non-public information during such briefings unless such information has previously been fully disclosed and disseminated to the public. Any information disclosed will be factual and not speculative. SEHB shall not give any forecasts or projection on the performance or share price of the Company.

3.5.3      SEHB does not discriminate among recipients of information. Under no circumstances will SEHB confirm or attempt to influence a financial analyst’s opinions or conclusions. SEHB will provide the same information to both financial analysts and individual investors when requested.

3.5.4      SEHB will not comment on opinions made by analysts except where it is a factual error.

3.5.5      SEHB shall arrange no meetings with the press, media, investors, analysts or other capital market players from the last day of the reporting period until publication of the first three Quarterly reports or 4 weeks prior to the publication of the Year-end report. The exception to this rule is the Annual General Meeting or any public relations event and the respective press conferences, if any, to be held thereafter. During these periods, only questions of a generic nature may be handled.

 

3.6 Forward looking information

 

3.6.1      SEHB will not provide forecasts of future earnings or other financial results.

3.6.2      The Committee shall ensure sufficient forward looking information is provided to the investing public to enable seasoned evaluations of SEHB and its future performance prospects. Generally, such information and guidance will be consistent with and complementary to information that has been otherwise provided via timely disclosure documents such as Annual Reports, Quarterly Announcements etc.

3.6.3      Documents containing forward looking information will be accompanied by a disclaimer cautioning the reader that there are risks and uncertainties that could cause material differences between actual results and forecasts.

3.6.4      When making oral forward looking statements, reasonable care shall be taken to also include appropriate reference to such risks and uncertainties in the discussion.

 

3.7 Crisis procedures

 

In the event of a serious occurrence (crisis) that requires disclosure to the public, only the Chairman, Solution Group Managing Director, Executive Director(s) and/ or the Finance Manager shall handle dissemination of information to the markets.

 

3.8 Restrictions on Insider Trading

 

3.8.1      Section 188 (“S188”) of Capital Markets & Services Act 2007 (“CMSA”) defines “insider” as a person who possesses information that is not generally available which on becoming generally available a reasonable person would expect it to have a material effect on the price or the value of the shares, and knows or ought reasonably to know that the information is not generally available.

3.8.2      S188 of the CMSA prohibits insiders from trading SEHB’s shares when they are in possession of price-sensitive information.

3.8.3      However, during closed periods, principal officers and persons in the Privy List who wishes to trade in SEHB’s shares (who are not in possession of price-sensitive information), are required to contact the Corporate Affairs Department first before they trade. Bursa Securities Listing Requirements have defined close periods as:

 

  1. during the period commencing from the time information is obtained, up to a full market day after the announcement to Bursa Securities of a matter that involved price sensitive information in relation to SEHB’s shares; and
  2. during the period commencing from one month prior to that targeted date of the announcement to Bursa Securities of the quarterly results up to one full market day after the announcement of SEHB’s results for the financial quarter.

 

3.8.4      S188 of the CMSA also provides both civil and criminal penalties for contravention of insider trading sections. Directors, Officers and Employees who are not sure whether they could trade in SEHB’s shares may contact the Corporate Affairs Department for advice.

 

3.9 Consequences for Non-compliance to the CDIR Policy

 

An employee of the Solution Group who violates SEHB’s CDIR may face disciplinary action, which may result in the termination of his or her employment. The violation of this CDIR Policy may also violate certain securities laws. If the Company discovers that an employee has violated such securities laws, it may refer the matter to the appropriate regulatory authorities.

 

  1. Unusual Market Activity (“UMA”)

 

4.1 One of the indications of leakage of undisclosed material information is where there is unusual trading activity or price movement in SEHB’s shares. In such instance, Bursa Securities will issue a written UMA query to SEHB.

 

4.2 Upon receiving the UMA query, the Committee shall:

 

(i)                 undertake due inquiry with the relevant persons such as Directors, major shareholders and persons familiar with the affairs of SEHB to determine the cause; and

(ii)                issue a clarifying statement.

 

4.3 The Committee should ensure that the enquiry or information gathering process is carried out efficiently and the announcement is made on an immediate basis.

 

  1. Electronic Communications

 

5.1  SEHB’s IT policy provides rules and guidance for employees on the use of internet. Employees are responsible and accountable for knowing these rules, and for any and all actions they take on the internet.

5.2             The IT Department monitors on employee’s activity on the internet. 

5.3             Violations of the internet policy are considered serious offence and may result in disciplinary actions up to and including dismissal.

5.4             Amongst others, SEHB’s IT policy specifically prohibits using of internet to transmit or exchange confidential or critical company information, except where a secured method is employed. In general, SEHB considers internet communication as an extension of the corporate disclosure record. As such, use of the internet and email is subject to the same disclosure rules, guidelines and procedures.

5.5             SEHB’s website contain an Investor Relation section containing all timely disclosure and material information documents including:

 

  1. Annual Reports;
  2. Quarterly Financial Reports;
  3. Public announcements to the Bursa Securities;
  4. Board Charter, Terms of Reference of Audit and Nomination Committees; and
  5. News releases and press conference presentations.
  6. All timely disclosure and material information will be posted on SEHB’s website as soon as possible after release by the news wire service.

 

It will also consist of supplemental non-material information including:

 

  1. Corporate fact sheets;
  2. Analyst’s briefings and coverage;
  3. Investor relations presentations; or
  4. Other materials that may be distributed at meetings with analysts and/ or investors.
  5. Supplemental, non-material information will be posted on SEHB’s website as soon as practical after it is available.

 

All information published will also be made available in hard copy, upon request.

 

5.6             Given the potential for web-based information being assumed to be real time, live or always up to date, SEHB shall exercise due diligence in maintaining and updating the website on a regular basis.

5.7             All timely disclosure and material information will be dated and retained in the website for a minimum period of two (2) years. Non-material information such as investor presentations are generally materials designed to summarize and supplement public information about SEHB for the benefit of investors. These are generally time sensitive hence will be clearly date stamped and will be maintained on the website until such time as the information becomes outdated or is replaced.

 

  1. Review and revision of this policy

 

This Policy shall be reviewed annually and revised as appropriate to ensure compliance with prevailing rules and guidelines.

 

 

  1. Effective period of this policy

 

This Policy is with effect from 10 October 2017 and shall remain in effect until specifically superseded or revoked by the Company’s Board of Directors.