Corporate Communications and Disclosure Policy | Carmanah Technologies Corporation

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Corporate Communications & Disclosure Policy

Purpose

The Corporate Communications and Disclosure Policy (the "Policy") of Carmanah Technologies Corporation ("Carmanah" or the "Company") describes the Company’s policies regarding the public disclosure of "Material Information".

Material Information

"Material Information" is a material fact or a material change. Canadian securities legislation uses a market impact test in defining "material fact" and "material change". For the purposes of this Policy:

a material fact is defined as a fact that significantly affects or would reasonably be expected to have a significant effect on the market or value of Carmanah’s publicly traded securities; and
a material change is a change in the business, operations or capital of Carmanah that would reasonably be expected to have a significant effect on the market price or value of Carmanah’s publicly traded securities.

Information about Carmanah is not likely to be material, however, if the public dissemination of that information would not have a significant impact on the price or value of Carmanah 's publicly traded securities.

Unless there is reason to believe otherwise, directors, officers and employees of Carmanah should assume that information regarding the following topics is "Material Information":

Financial results or projections;
Sales figures or projections;
Earnings figures or projections;
Significant merger, acquisition, take-over bid, joint venture or change in assets;
Borrowing or lending of a significant amount of funds or any significant mortgaging or encumbering of Carmanah's assets;
Significant change in capital investment plans or corporate objectives;
Change in control of Carmanah;
Significant development regarding a customer or a supplier (e.g., winning or losing a big contract);
Change in senior management on at the Board of Directors (the "Board");
Change in auditor or notification by the auditor that Carmanah may no longer rely on an auditor's audit report;
Significant lawsuit against Carmanah;
Events regarding Carmanah 's securities (e.g., decision by Carmanah to buy back its own securities, default on a security, call of securities for redemption, stock split, dividend decision, change in the terms of a security, public or private sale of additional securities).

In determining whether certain information is material, a number of factors should be taken into account, including:

the nature of the information;
the volatility of Carmanah’s securities; and
the prevailing market conditions.

Directors, officers and employees should not rely on their own individual judgment as to whether particular information is material. Whether particular information is material is a question of judgment. If a director, officer or employee of Carmanah needs to know whether particular information would be considered Material Information, a member of the Corporate Communications and Disclosure Group should be consulted.

Corporate Communications and Disclosure Group

The Corporate Communications and Disclosure Group (the "Disclosure Group") is responsible for overseeing Carmanah 's disclosure practices and procedures. All disclosure of Material Information must be reviewed and approved by the Chief Executive or Chief Financial Officer and at least one other member of the Disclosure Group. The members of the Disclosure Group are:

Chief Executive Officer;
Chief Financial Officer;
Director, Investor Relations; and
General Counsel.

The responsibilities of the Disclosure Group are to:

promote awareness of this Policy within Carmanah;
oversee, review and update this Policy, as required, to ensure continuing compliance with changing legal and regulatory compliance;
review and authorize disclosure (whether electronic, written or oral) of Material Information in advance of its public release;
meet or communicate with other members of the Group as required in order to meet the objectives of this Policy; and
report to the Board quarterly and as otherwise deemed necessary.

The Disclosure Group will make decisions on the disclosure of Material Information pursuant to legal and regulatory requirements, and will advise the Audit Committee of the Board with respect to disclosure issues relating to financial information that is within the mandate of the Audit Committee. If the Disclosure Group determines than any Material Information should remain confidential, the Disclosure Group will determine how the confidentiality of that Material Information will be maintained.

Carmanah business units must keep the Disclosure Group fully apprised of all potential material Carmanah developments by contacting the Director, Investor Relations or the Chief Financial Officer who will make a preliminary assessment of whether the development is material. These Disclosure Group members will involve other group members as required to permit the group to evaluate and determine the materiality of those developments and the appropriateness, timing and strategy surrounding any public release of information relating to those developments.

Application of Policy

This Policy applies to Carmanah and its subsidiaries, and to all directors, officers and employees ("employees") of Carmanah and any other individuals authorized to speak on Carmanah's behalf.

Employees must become familiar with this Policy. If any employee has questions about how this Policy should be followed in any particular case, they should contact the Chief Financial Officer or, if unavailable, one of the other members of the Disclosure Group.

Consequences of Non-Compliance with Policy

Failure to comply with this Policy may result internal disciplinary action or termination of employment without notice.

Failure to comply with this Policy could also violate legal or regulatory requirements. If this appears to have occurred, Carmanah may refer the matter to the appropriate authorities.

Specific Objectives of the Policy

The objectives of this Policy are to ensure that corporate communications of Material Information about Carmanah, whether positive or negative, are:

full, fair, accurate, timely and understandable;
in compliance with applicable governmental laws, rules and regulations;
broadly disseminated in a non-selective manner in accordance with all applicable legal and regulatory requirements.

The provisions of this Policy relating to public disclosure by Carmanah cover, among other things:

documents filed with securities regulators;
written statements made in Carmanah’s annual and quarterly reports, news releases, letters to shareholders and any other public disclosure documents;
presentations by senior management;
information contained on Carmanah 's website and other electronic communications;
oral statements made in meetings and telephone conversations and other communications with analysts and investors;
interviews with the media, speeches, press conferences and conference calls.

Principles of Public Disclosure of Material Information

All Material Information will be publicly disclosed by Carmanah, except in the limited circumstances permitted by this Policy.

Carmanah will not selectively disclose any Material Information, including any report that operating or earnings results will be materially below or above publicly held expectations, unless the information has been publicly disclosed by news release or other appropriate means.

Confidential Material Information

Material Information is "confidential" if it has not been disseminated in a manner making it available to investors generally. Employees of Carmanah should assume that any Material Information that has not been publicly disclosed pursuant to this Policy, for at least one full day of trading of Carmanah 's securities, is still confidential. Any person who is uncertain as to whether particular information is confidential should contact a member of the Disclosure Group.

Disclosure Principles

Once the Disclosure Group has determined that a development constitutes Material Information, Carmanah will comply with the following principles of disclosure:

Material Information will be publicly disclosed promptly by news release to prevent selective, unauthorized disclosures prior to broad disclosure, except as set out below;
If the Disclosure Group determines that public disclosure of Material Information would be premature (for example, if release of the information would prejudice negotiations in a major corporate transaction), the information will be kept confidential to the extent permitted by law, until the Disclosure Group determines that public disclosure is necessary or appropriate. In those circumstances, the Disclosure Group will cause, if necessary, a confidential material change report to be filed with the applicable securities regulators, and will periodically (at least every 10 days) review its decision to keep the information confidential. During the period before such Material Information is publicly disclosed, market activities in Carmanah’s shares should be monitored;
Disclosure must be complete, without any omissions that might make the rest of the disclosure misleading, and unfavorable Material Information will be disclosed as promptly and completely as favourable Material Information;
Carmanah will not make selective disclosures of Material Information. Previously undisclosed Material Information will not be disclosed to selected individuals (for example, as a result of telephone calls or inquiries from an analyst or a shareholder). If previously undisclosed Material Information is inadvertently disclosed to an analyst or any other person not bound by an express confidentiality obligation follow the procedures set out below under "Inadvertent Disclosure";
Disclosure should be corrected as soon as reasonably practicable if Carmanah subsequently learns that an earlier disclosure by Carmanah contained a material error at the time it was given;
The Director, Investor Relations, or the Manager, Corporate Communications, as determined by them after consultation with each other, will monitor the media following the release of Material Information and, in the event of perceived inaccuracies in reporting, will consult with the Disclosure Group to determine if and what corrective steps will be taken.

Forward-Looking Information

"Forward-Looking Information" is information about prospective results of operations, financial position or changes in financial position, based on assumptions about future conditions and courses of action. If Carmanah elects to disclose Forwarding-Looking Information in continuous disclosure documents, speeches, conference calls, or otherwise, it will observe the following guidelines:

The Forward-Looking Information, if determined to be material, will be broadly disseminated by news release or other appropriate means, in accordance with this Policy;
The information will be clearly identified as forward-looking;
Carmanah will identify material factors and assumptions used in the preparation of the Forward-Looking Information;
The Forward-Looking Information will be accompanied by a statement that identifies, in specific terms, risks and uncertainties that may cause the actual results to differ materially from those set out in the Forward-Looking Information, including a sensitivity analysis to indicate the extent to which different business conditions from the underlying assumptions may affect the actual outcome;
The Forward-Looking Information will be accompanied by a statement that disclaims any intention or obligation of Carmanah to update or revise the Forward-Looking Information, whether as a result of new information, future events or otherwise. Notwithstanding this disclaimer, should subsequent events prove past statements about current events to be materially off target or to have materially changed, the Disclosure Group will consider whether this constitutes Material Information requiring public disclosure. Even if public disclosure is not required, Carmanah may still choose to issue a news release explaining the reasons for the difference and updating its guidance on the anticipated impact on revenue and earnings (or other key metrics). If Carmanah has issued a forecast or projection in connection with an offering document, Carmanah will update that forecast or projection periodically, as required by National Policy 48;

Managing Expectations

Carmanah will try to ensure, through its regular public dissemination of quantitative and qualitative information that analysts' estimates are in line with Carmanah's expectations. However, Carmanah will not confirm, or attempt to influence, an analyst's opinions or conclusions.

Maintaining Confidentiality

All employees of Carmanah who know Material Information relating to Carmanah that has not been communicated to the public are prohibited from communicating ("tipping") that information internally or externally to anyone else, unless it is necessary in the course of business. Communicating information when it is necessary in the course of business is the communication on a "need-to-know" basis of only that information which is necessary for the person communicating the information or the recipient to be able to perform his or her responsibilities at Carmanah.

Communicating information on a "need-to-know" basis would generally cover communications with:

Vendors, suppliers or strategic partners on issues such as research and development, sales and marketing and supply contracts;
Directors, officers and employees of Carmanah;
Lenders, legal counsel, auditors, financial advisors and underwriters;
Parties to negotiations;
Industry associations;
Government agencies and non-governmental regulators;
Credit rating agencies (provided that the information is disclosed for the purpose of assisting the agency to formulate a credit rating and the credit rating is or will be publicly available).

Communicating Material Information outside of these guidelines to family members, friends or other third parties constitutes "tipping" and can result in serious consequences for Carmanah as well as the persons communicating or receiving the information if the persons receiving the information subsequently trade in securities of Carmanah.

Outside parties privy to undisclosed Material Information relating to Carmanah must be advised that they must not divulge the information to anyone else, except on a need-to-know basis, and that they may not trade in securities of Carmanah until the information is publicly disclosed. An outside party may be required to enter into a written confidentiality agreement. A written confidentiality agreement will not normally be required from an outside party who owes a duty of trust or confidence to Carmanah because of a special relationship with Carmanah (such as a banker or lawyer).

In order to prevent the misuse or inadvertent disclosure of Material Information, the following procedures should be observed at all times:

Documents and files containing confidential information should be kept in a safe place to which access is restricted to individuals on a need-to-know basis;
Code names should be used, where appropriate;
Confidential matters should not be discussed in places where the discussion may be overheard, such as elevators, hallways, restaurants, airplanes or taxis;
Use of wireless telephones or other wireless devices to discuss confidential matters should be avoided, where possible;
Confidential documents should not be read or displayed in public places and should not be discarded where others can retrieve them;
Employees must ensure that they maintain the confidentiality of information in their possession outside of the office as well as inside the office;
Transmission of confidential documents by electronic means, such as by fax or directly from one computer to another, should be made only where it is reasonable to believe that the transmission can be made and received under secure conditions;
Unnecessary copying of confidential documents should be avoided and documents containing Confidential Information should be promptly removed from conference rooms and work areas after meetings have concluded. Extra copies of confidential documents should be shredded or otherwise destroyed;
Access to confidential electronic data should be restricted through the use of passwords.

Authorized Spokesperson

The following are the "Authorized Spokespersons" who are permitted to communicate on behalf of Carmanah with the investment community, investors, regulators and the media:

the Chief Executive Officer;
the Chief Financial Officer;
any Senior Vice-President of Carmanah;
the Director of Investor Relations;
the Manager, Corporate Communications; and
persons specifically authorized by the Chief Executive Officer.

No other persons are authorized to communicate on behalf of Carmanah, unless specifically authorized in this Policy or by the Chief Executive Officer.

Corporate Disclosure of Material Information

In order to ensure compliance with legal and regulatory requirements, the Disclosure Group and its members have the sole authority in respect of the corporate communication of Material Information that has not been publicly disclosed.

Shareholders, the Investment Community and the Media

Directors, officers or employees who are not authorized spokespersons must not respond to inquiries from the investment community, the media or others, unless specifically asked to do so by an authorized spokesperson. Investment community inquiries must be referred to the Director, Investor Relations. The Director, Investor Relations will co-ordinate all meetings and interviews with and presentations to (including electronic or telephonic ones) security holders, the investment community, and the financial media. The Disclosure Group will approve the messages and materials for these events. If Material Information is to be disclosed, it will be released in accordance with this Policy immediately before the meeting. The Manager, Corporate Communications will co-ordinate media training for officers and senior managers to ensure they are prepared and trained to address the communications needs of external audiences when they are authorized to speak to the media.

Public Disclosure

The principal method of publicly disclosing Material Information by Carmanah will be by news release. No news release disclosing Material Information may be issued by Carmanah unless it has been approved in advance by the Chief Executive Officer or the Chief Financial Officer and at least one other member of the Disclosure Group. Conference calls will be held to report on quarterly earnings and major corporate developments so that the information will be accessible simultaneously to all interested parties, some as participants by telephone and others in a listen-only mode by telephone or by a Web cast over the Internet. Conference calls will be preceded by a news release containing all Material Information.

News Releases

If a stock exchange upon which securities of Carmanah are listed is open for trading at the time of the issuance of a news release announcing Material Information, prior notice of the news release must be provided to the market surveillance department of the stock exchange to enable a trading halt, if deemed necessary by the stock exchange. If a news release announcing Material Information is issued outside of trading hours, the market surveillance department of the stock exchange must be notified before the market reopens. Annual and interim financial results will be publicly disclosed by news release as soon as possible following approval of the financial statements by Carmanah's Board in the case of annual financial results and the Audit Committee of the Board in the case of quarterly financial results.

Material Information will be publicly disclosed immediately by news release through a major news wire service, on Carmanah's website and by mail, fax or e-mail to lists of interested parties which have requested such information. News releases will be transmitted to SEDAR, all stock exchange members on exchanges where Carmanah's securities trade, relevant regulatory bodies, major business wires, national financial media, and the local media in areas where Carmanah has its headquarters and operations. Carmanah’s Corporate Communications Department will manage the distribution of such information. The News Releases section of Carmanah's Web site will include a notice that advises the reader that the information was accurate at the time of posting, but may be superseded by subsequent publicly disclosed information.

Conference Calls

Carmanah will grant public access to conference calls, teleconference calls and simultaneous webcasts it organizes for analysts and security holders. The news release announcing an upcoming conference call will include:

the date and time of the conference call;
a general description of what is to be discussed;
the means of accessing the conference call; and
how long a replay of the conference call will be available on Carmanah's website.

Conference calls will normally be preceded by a meeting of Carmanah’s participants to review responses to anticipated questions and to identify information that may require public disclosure prior to the conference call. At the beginning of the call, a Carmanah spokesperson will provide appropriate cautionary language with respect to any Forward-Looking Information and direct participants to publicly available documents containing the assumptions and sensitivities and a discussion of the risks and uncertainties. A tape recording of the conference call or an archived audio Web cast on the Internet will be made following the call and maintained on the website for a minimum of 30 days, for anyone interested in listening to a replay.

Any non-material supplemental information provided to participants will also be posted to Carmanah's website for others to view. The Disclosure Group will hold a debriefing immediately after the conference call and, if the debriefing uncovers selective disclosure of previously undisclosed Material Information, Carmanah will immediately disclose that Material Information in accordance with this Policy.

Analysts

Carmanah recognizes that meetings with analysts and institutional investors are an important element of Carmanah's investor relations program. Carmanah will meet with analysts and investors on an individual or small group basis, as needed, and will initiate contact with, or respond to, analysts and investors in a timely, consistent and accurate fashion in accordance with this Policy.

Carmanah will provide only factual non-material information at individual and group meetings, in addition to publicly disclosed information, recognizing that an analyst or institutional investor may construct this information into a mosaic that could result in Material Information. Carmanah will not alter the materiality of information by breaking down the information into smaller, non-material components.

Inadvertent Disclosure

If an employee of Carmanah becomes aware that there may have been an inadvertent disclosure of confidential Material Information relating to Carmanah, that person should immediately contact a member of the Disclosure Group. The Disclosure Group shall endeavour to obtain from the recipient(s) of the information an express written or oral agreement to keep this information confidential. Failing this, to the extent requested by the Disclosure Group, the director, officer or employee should assist in the development and implementation of a plan to make prompt public disclosure of the Material Information on a timely basis by news release or other appropriate means. This plan will normally include contacting the relevant stock exchange and requesting that trading be halted pending public disclosure of the Material Information.

Prompt public disclosure means the later of:

24 hours; and
the opening of the next trading day on any stock exchange on which Carmanah's securities are listed, in each case after such person became aware of the inadvertent disclosure.

Rumours

Carmanah will not normally comment, affirmatively or negatively, on rumours. This Policy also applies to rumours on the Internet. Carmanah's spokespersons will respond consistently to rumours, by stating, "It is our Policy not to comment on market rumours or speculation." Should a stock exchange request that Carmanah make a definitive statement in response to a market rumour relating to Carmanah, the Disclosure Group will respond to the stock exchange.

Analyst Research Reports

Carmanah will review research reports by analysts for internal use only and will not normally comment on those reports to any persons outside of Carmanah, except for the purpose of pointing out factual errors based on already publicly disclosed information. Carmanah will not post research reports by analysts on its website. Carmanah will not confirm, or attempt to influence, an analyst's opinions or conclusions and will not express comfort with the analyst’s model or earnings estimates. In order to avoid appearing to endorse an analyst's research report or model, Carmanah will provide its comments orally or will attach a disclaimer to written comments to indicate that the analyst's report or model was reviewed only for factual accuracy based on publicly disclosed information. Carmanah may post on its Web site a complete list, regardless of the recommendation, of all of the investment firms and analysts who are known to Carmanah to provide research coverage on Carmanah.

Disclosure Record

Carmanah will maintain on its website certain public information about Carmanah.

The documents to be maintained in relation to Carmanah will include:

Annual Reports for the preceding five fiscal years;
Annual Information Forms for the preceding five fiscal years;
Management Information Circulars for the preceding five fiscal years;
Management's Discussion & Analysis for the preceding five fiscal years;
Quarterly reports for the current and the immediately preceding fiscal year;
News releases for the current and the immediately preceding fiscal year;
Material change reports for the current and the immediately preceding fiscal year.

Carmanah Website

The Chief Financial Officer is responsible for approving and monitoring all information placed on the Investor Information section of the website to ensure that it is accurate, complete, up-to-date and in compliance with legal and regulatory requirements.

Investor Information material will be contained within a separate section of Carmanah's website and shall include a notice that advises the reader that the information posted was accurate at the time of posting, but may be superceded by subsequent disclosures. All data posted to Carmanah's web site, including text and audiovisual material, will show the date that the material was posted. Disclosure on Carmanah's web site alone does not constitute adequate dissemination of confidential Material Information. Any disclosure of confidential Material Information on Carmanah's web site will be preceded by the issuance of a news release or dissemination by other appropriate means.

Non-Compliance Reporting

Any violation of this Policy should be promptly reported to any member of the Disclosure Group or through the Whistle Blower process described on the Company website.

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