| Corporate Governance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The board of directors and management of the Company believe in the importance of, and are committed to, sound corporate governance practices for the effective management of the Company, and for the protection of its stakeholders. Corporate governance is the set of processes, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many stakeholders involved and the goals for which the Company is governed. Management has the responsibility for the day to day management of the business of the Company. The board of directors retains responsibility for significant matters and has ultimate oversight for adoption of the Company's strategic planning process and is kept informed of the Company's operations at board and committee meetings as well as through reports and discussions with management. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Code of Business Conduct and Ethics | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Board of Directors of Golden Alliance Resources Corp. (the "Company") has adopted a Code of Business Conduct and Ethics that outlines the Company's values and its commitment to ethical business practices in every business transaction. This code applies to all directors, officers, and employees of the Company and its subsidiaries and affiliates. Honest and Ethical Conduct The Company expects a high level of personal integrity for each employee, officer and director when interacting with investors, business partners, shareholders, suppliers, consultants and other employees. Conflict of Interest When possible, conflicts of interest between personal and professional relationships should be avoided, however, unavoidable conflict of interest will be handled in accordance with the Company's ethical standards. A director, officer or employee may not represent the Company in any transaction with a person or an entity in which the director, officer or employee has a direct or indirect interest or from which the director, officer or employee may derive personal benefit. Accurate and Timely Disclosure Full, fair, accurate, timely and understandable disclosure in reports or documents submitted to the securities commissions across Canada as well as all public communications. Employees and officers who prepare financial and other reports will exercise diligence in ensuring that there are no false or misleading statements. Compliance with Applicable Governmental Laws, Rules and Regulations The Company is committed to compliance with all laws, rules and regulations, including laws and regulations applicable to the Company's securities, as well as any rules promulgated by any exchange on which the Company's shares are listed. Prompt Internal Reporting of Violations Employees, officers and consultants are responsible for the prompt internal reporting of any violations of the Code to the Company's Compliance Officer. Protection and Proper Use of Company Assets and Opportunities All employees have an obligation to protect the Company's assets and to ensure that all opportunities available to the Company are brought to the attention of the relevant officer or employee. Confidentiality of Company Information It is the Company's policy that business affairs of the Company are confidential and should not be discussed outside the Company except for information that has already been made available to the public. Insider Trading Management, employees, members of the Board of Directors and others who are in a "special relationship" with the Company from time to time become aware of corporate developments or plans which may affect the value of the Company's shares (inside information) before these developments or plans are made public. Company directors, officers and employees are prohibited from using this inside information themselves or to disclosing this inside information to others who may use the information to trade Company stock. Fair Dealing Each employee should endeavour to respect the rights of, and deal fairly with, our shareholders, investors, business partners, suppliers, competitors and employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair business practice. Reporting Unethical and Illegal Conduct/Ethics Questions The Company is committed to taking prompt action against violations of the Code of Business Conduct and Ethics and it is the responsibility of all directors, officers and employees to comply with the Code and to report violations or suspected violations to the Company's Compliance Officer. Employees may also discuss their concerns with their supervisor who will then report suspected violations to the Compliance Officer. The Compliance Officer is the CFO and is appointed by the Board of Directors. He is responsible for investigating and resolving all reported complaints and allegations and shall advise the President and CEO, the Chairman and/or the Audit Committee. The Compliance Officer can be reached via telephone at 1-866-921-6714 or via the internet site located at http://www.whistleblowersecurity.com. Violations and Waivers The Compliance Officer will report suspected fraud or securities law violations for review by the Audit Committee. The Audit Committee will report all violations reviewed by the Committee to the Board of Directors. The Compliance Officer will report regularly to the Board of Directors on the results and resolution of complaints and allegations concerning violations of the Code. No waivers of any provision of this Code of Business Conduct and Ethics may be made except by the Board of Directors. Any waiver or amendment shall be reported as required by law or regulation. Only the Audit Committee may amend this Code of Business Conduct and Ethics. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Corporate Disclosure and Insider Trading Policy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Objective The objective of this Corporate Disclosure and Insider Trading Policy (the "Policy") of GOLDEN ALLIANCE RESOURCES CORP. (the "Company") is to ensure that communications to the investing public about the Company are: (a) timely, factual and accurate; and (b) consistent and broadly disseminated in accordance with all applicable legal and regulatory requirements. Everyone who invests in the Company's securities should have equal access to information that may affect their investment decisions. Insiders of the Company and others who have received or have access to undisclosed Material Information (hereinafter defined) about the Company should not purchase or sell the Company's securities or inform others of the undisclosed Material Information unless it is necessary in the ordinary course of business. This Policy extends to all directors, officers, and employees of the Company, its wholly owned subsidiaries and those authorized to speak on the Company's behalf. It covers: (i) disclosures in documents filed with the securities commissions; (ii) written statements made in annual and quarterly reports, news releases, letters to shareholders; (iii) speeches and presentations by senior management or other persons speaking on behalf of the Company; (iv) information contained on the Company's website and other electronic communications; and (v) to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as press conferences and conference calls. Canadian securities laws prohibit trading in the securities of a company on the basis of "inside" information (information that is material and not available to the public). Anyone violating these laws is subject to personal liability and could face criminal penalties. In light of the severity of possible sanctions both to employees individually and to the Company, the Board of Directors has adopted this Policy. This Policy confirms in writing the Company's existing practices. Its goal is to raise awareness of the Company's approach among the Board of Directors, senior management, employees, and others who may have received or have access to undisclosed Material Information about the Company. Insiders Insiders include: (a) directors or senior officers of the Company; (b) directors or senior officers of a company that is itself an insider; (c) directors or senior officers of a subsidiary of the Company; (d) a person that has direct or indirect beneficial ownership or control or direction over securities of the Company carrying more than 10% of the Company's outstanding voting securities. For the purposes of this Policy "Insider" shall also mean all employees and consultants associated with the Company, and joint venture partners who receive or have access to Material Information and shall include family members. Material Information It is not possible to define all categories of Material Information but there are various categories of information that are particularly sensitive and, as a general rule, should always be considered material. Examples of information or events which may be material to the Company are set out in Appendix A. The Company has established a Disclosure Committee to administer and interpret this Policy. If there is uncertainty regarding the materiality of information, the Disclosure Committee in accordance with applicable rules and regulations will make a determination. Insiders should be aware that both positive and negative information is generally considered to be Material Information if: (i) it would reasonably be expected to have a significant effect on the market price or value of the Company's securities; (ii) there is a reasonable likelihood that it would be considered important to an investor in making a decision regarding the purchase or sale of securities of the Company. The Disclosure Committee will give consideration to the nature of the information itself, the volatility of the Company's securities and prevailing market conditions. In general, if there is any doubt about whether particular information is material, the Committee will err on the side of materiality and release the information publicly. (See section on Public Disclosure for Disclosure Committee policy on withholding release of Material Information.) Restriction on Disclosure of Material Information No Insider shall disclose Material Information regarding the Company to any person or group of persons until it has been generally disseminated to the public in accordance with this Policy. Disclosure in individual or group meetings does not constitute adequate disclosure of information that is considered Material Information. The Disclosure Committee may approve limited exceptions to this prohibition where disclosure is made to the Company's auditors, legal counsel, underwriters or other professional advisors in the necessary course of the Company's business. If it is determined that previously undisclosed Material Information has inadvertently been disclosed, the Company shall immediately disclose the information in a news release in order to achieve broad public dissemination of the information, and Market Regulation Services Inc. will be contacted, to determine if trading should be halted. Public Disclosure The Company shall comply with all applicable laws and regulations regarding the timely disclosure of Material Information and changes. Once a decision is made that information is material, applicable securities laws and stock exchange rules require prompt disclosure, and broad dissemination to the public in a manner that is both accurate and complete. Unfavourable news must be disclosed as promptly and completely as favourable news. The principal method of publicly disclosing Material Information will be by news release, using a news wire service that provides simultaneous distribution to widespread news services, financial media, and relevant stock exchanges and regulatory bodies. The Company will comply with the rules of the TSX-V regarding the timing of release of news releases, and any requirement to obtain pre-clearance of news releases. The Company will file material change reports when required in accordance with applicable securities laws and regulations. In certain circumstances, the Disclosure Committee may determine certain Material Information may be withheld from the public for legitimate business purposes, (for example if release of the information would prejudice negotiations in a corporate transaction), in which case the information will be kept confidential until the Disclosure Committee determines it is appropriate to publicly disclose that information. (See Material Information section regarding Disclosure Committee consideration on release of information.) If any information relates to a "material change" within the meaning of the applicable securities legislation, the Company will cause a Confidential Material Change Report to be filed with the securities regulators and will review (at least every 10 days) the decision to keep the information confidential. All news releases should be accurate and complete and should contain enough detail to enable the media and investors to understand the substance and importance of the change being disclosed. All news releases from the Company shall be disseminated and pre-approved by the Disclosure Committee, or as it may otherwise designate from time to time. In addition, the Company's corporate news releases and news releases relating to Material Information must be approved by the CEO. News releases regarding the Company's financial statements, MD&A and other material financial information shall be approved by the Audit Committee and/or the Board of Directors, in accordance with the Company's Board practice. Market Rumours It is the Company's general policy not to respond to market rumours or speculation unless required by applicable regulatory authorities. The standard response by the Company's spokesperson to questions concerning rumours shall be "We do not comment on rumours". However, any rumour that has had or is likely to have a substantial effect on the price of the Company's securities will be clarified or confirmed in accordance with securities regulations. Confidentiality of Information Insiders shall not communicate confidential information, unless it is necessary to do so in the ordinary course of business and appropriate arrangements are in place to protect the confidentiality of the information. All Insiders will use reasonable efforts to limit access to such confidential information to only those who need to know and such persons will be advised that the information is to be kept confidential. Anyone outside of the Company who may become privy to confidential information concerning the Company will be told that they must not divulge such information to anyone else, other than in the necessary course of business, and that they must not trade in the Company's securities until the information is publicly disclosed. Such outside parties may be asked to confirm their commitment to non-disclosure in the form of a written confidentiality agreement. In order to prevent the misuse or inadvertent disclosure of Material Information, the following procedures should be observed at all times:
Corporate Website Disclosure of information on the Company's corporate website does not in and of itself constitute adequate public disclosure of such information. Only Material Information that has already been disclosed to the public in accordance with this Policy will be posted on the Company's corporate website. All publicly disclosed Material Information about the Company, and presentations to analysts and conferences, will be made available through the corporate website for a reasonable period of time. All documents filed by the Company on SEDAR will be concurrently posted to the corporate website. The Company's website will be kept up-to-date with the Company's latest disclosures. Discussion Boards and Chat Rooms Insiders are prohibited from participating in discussions of the Company's corporate matters in chat rooms or bulletin boards. Insiders shall immediately report to the Disclosure Committee any discussion pertaining to confidential or previously undisclosed information regarding the Company which they find on the Internet. INSIDER TRADING RESTRICTIONS AND OBLIGATIONS It is illegal for anyone to purchase or sell securities of any public company with knowledge of Material Information affecting that company that has not been publicly disclosed. Except in the necessary course of business, it is also illegal for anyone to inform any other person of confidential Material Information. Insiders and employees with knowledge of confidential or Material Information about the Company or counter-parties in negotiations of potential material transactions, are prohibited from trading securities in the Company or any counter-party company until the information has been fully disclosed and a reasonable period of time has passed for the information to be widely disseminated. No Insider may disclose or "tip" undisclosed Material Information to any other person (including family members), and no Insider may make recommendations or express opinions to any other person on the basis of undisclosed Material Information with regard to trading in securities of the Company. No Insider who receives or has access to the Company's undisclosed Material Information may comment on stock price movement or rumours of other corporate developments that are of possible significance to the investing public unless such person is authorized in writing by the Disclosure Committee. Insiders are personally responsible for filing accurate and timely insider trading reports. There now exists a web-based on-line filing system for insider reports (www.sedi.ca). Failure of an insider to file an insider trading report on a timely basis may result in a fine, imprisonment, or both. Exceptions The prohibition on trading does not apply to the exercise of stock options granted under the stock option plan nor to the exercise of outstanding share purchase warrants, but does apply to the subsequent sale of any securities acquired thereunder. Pre-Clearance of Trades Occasionally, certain individuals may have access to undisclosed Material Information for a limited period of time. During such a period, such persons may be notified in writing or by electronic media (with acknowledgment of receipt) by the Disclosure Committee that they must obtain preclearance at any time prior to buying or selling securities of the Company. Examples of persons subject to pre-clearance by virtue of their jobs are members of the executive team and their administrative staff, investor relations, finance and business development departments. Trading Blackout Periods Trading blackout periods will apply to all Insiders with access to undisclosed Material Information during those periods that are prescribed from time to time by the Disclosure Committee. The Disclosure Committee will notify Insiders to whom the blackout period applies, in writing or by electronic media (with acknowledgment of receipt, advising as to the commencement and termination of the trading blackout period. During the blackout period, no individuals may purchase or sell securities of the Company. All parties with knowledge of special circumstances will be covered by the blackout and may include external advisors such as legal counsel, investment bankers and counter-parties in negotiations of potential material transactions. Insiders may not commence trading until they have received electronic notification that a blackout has ended. Questions Questions concerning this Policy should be addressed to the Company's Chief Financial Officer. Annual Review This Policy has been approved by the Company's Board of Directors. The Disclosure Committee will review this Policy at least annually and any changes proposed will be subject to the approval of the Board of Directors. Distribution of Policy This Policy will be circulated to all directors, officers and employees upon approval by the Board of Directors and whenever changes are made. New employees, directors and officers will be provided with a copy of this Policy and will be advised of its importance. This Policy will be brought to the attention of all Insiders on an annual basis. Potential Civil, Criminal and Disciplinary Action Each person is individually responsible for complying with the securities laws and this Policy, regardless of whether the Company has prohibited trading by that person or any other Insiders. Assuming the absence of undisclosed Material Information, as a general rule, the safest period for Insider trading is within the first ten trading days following the end of a blackout period. Company Insiders may commence trading after the end of the Blackout Period to begin trading Company securities. An Insider who violates this Policy or Canadian insider trading or tipping laws may face disciplinary action up to and including termination of his or her employment with the Company without notice. The violation of this Policy may also violate certain securities laws. If the Company discovers that an Insider has violated any securities laws, it may refer the matter to the appropriate regulatory authorities, which could lead to penalties, fines or imprisonment. Insiders may also be liable for improper transactions by any person (commonly referred to as a "tippee") to whom they have disclosed previously undisclosed Material Information, or to whom they have made recommendations or expressed opinions on the basis of such Material Informationabout trading securities. APPENDIX A MATERIAL INFORMATION The Disclosure Committee will use the National Policy 51-201, Disclosure Standards, to determine Material Information as defined in the Company's Policy. Examples of Potentially Material Information The following are examples of the types of events or information which may be material. This list is not exhaustive and any questions regarding materiality should be referred to the Company's Disclosure Committee. Changes in Corporate or Capital Structure
Changes in Financial Results
Changes in Business and Operations
Acquisitions and Dispositions
Changes in Credit Arrangements
External Political, Economic and Social Developments Companies are not generally required to interpret the impact of external political, economic and social developments on their affairs. However, if an external development will have or has had a direct effect on the business and affairs of the Company but not on other companies engaged in the same business or industry, the Company will, if practical, explain the particular impact on its business. For example, a change in Argentine government policy that affects most companies in the mining industry does not require an announcement, but if it affects only the Company in a substantial way, the Company should make an announcement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Statement of Corporate Governance Practices | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| In accordance with disclosure requirements, the Board of Directors of Golden Alliance Resources Corp. (the "Company") has adopted the following corporate governance practices: 1. Stewardship of the Company The goal of the Company is to create shareholder value through the development of its properties in South America. The Board of Directors has responsibility for the stewardship of the Company, specifically to oversee the operation of the Company and supervise management. The Board acts in accordance with the British Columbia Business Corporations Act, the Company's Articles of Incorporation and By-laws, the policies of the TSX Venture Exchange, and securities rules in the Province of British Columbia. Every Board director is part of the process of establishing policies for the Company and its subsidiaries. (a) The Strategic Planning Process. The Board participates in strategic planning by considering and, if deemed appropriate, adopting plans proposed and developed by management, with management having the primary responsibility for developing a strategic plan. (b) Principal Risks. The Board considers the risks inherent in the mining industry and receives periodic assessments from management as to these risks and the Company's strategies to manage these risks. (c) Succession Planning. The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management. The training and development of personnel is generally left to management. The Board appoints the President, Chief Executive Officer and Chairman, as well as the Audit Committee members and officers each year at its first meeting of Directors immediately following the Annual General Meeting. (d) Communications Policy. The Board assesses from time to time how effectively the Company communicates with shareholders, and has instituted a Corporate Disclosure and Insider Trading Policy. The Company meets or exceeds all requirements to disseminate material information in a timely manner based on the TSX Venture Exchange policies. The Company keeps an electronic database for disseminating information, has provided interested parties with a toll free number, meets with brokers and portfolio managers and attends investment conferences in Canada and the U.S. The Company has a website with detailed information on its properties and corporate structure and offers parties an electronic means of communicating with the Company. (e) Integrity of Internal Control. The Board, through the Audit Committee and in conjunction with its auditors, assesses the adequacy of the Company's internal control systems. This process is undertaken on an annual basis during preparation of the year end financial audit. The Audit Committee also reviews and assesses the financial statements on a quarterly basis. 2. Board Independence The Board is presently set at six directors and presently consists of six directors. David Horton, John Gammon, and Leonard Harris are "outside" and "unrelated" directors. The other directors, Joseph Grosso, Nikolaos Cacos and David Terry, are "inside" and "related" directors, because of Messrs. Grosso's and Terry's management positions, and Messrs. Cacos and Grosso are also directors of a management company with which the Company has a Management Services Agreement (see "Management Agreements"). The entrepreneurial nature of the Company, and the current stage of the Company's development, make it appropriate for the Board to be composed of the present number and composition of directors, and the Board believes that when balanced against the attendant increase in cost to the Company and possible reduction in the efficiency with which decisions are made, it would not be warranted to significantly increase the size of the Board or change the Board's composition at this time. 3. Unrelated Directors Currently, the three unrelated and outside directors are David Horton, John Gammon, and Leonard Harris. Mr. Horton has been a Senior Vice-President for Canaccord Financial Inc. since 1996. Mr. Gammon was Assistant Deputy Minister of the Ontario Ministry of Mines from 1988 until August 2005 when he became President of John Gammon Associates Inc. Mr. Leonard Harris a mining industry consultant, joined the Board in January 2008. Each outside director also sits on the board of several companies. 4. Related Directors Since January 2010, Mr. Grosso has been President and CEO and a director of the Company. He is also President, CEO, and a director of Grosso Group Management Ltd. Mr. Grosso is also a member of the board of several public companies. Nikolaos Cacos has been a director of the Company since incorporation in September 2009. He is also a director of Grosso Group Management Ltd. Mr. Cacos is President of Cacos Consulting Ltd., a private company providing management services to private and public companies since 2001. Mr. Cacos is also a member of the board of several public companies. David Terry became a director of the Company in January 2010. He is also Vice President of Exploration for the Company. Mr. Terry is also a member of the board of several public companies. 5. Directorships
6. Nominating Committee The Board has not constituted a nominating committee to propose new nominees to the Board and for assessing directors' performance because the Company is too small to justify a formal process. However, the Board as a whole from time to time discusses potential candidates for the Board, particularly during the preparation of the Annual General Meeting Information Circular. 7. Assessing the Board's Effectiveness The Board has not constituted a committee to assess the effectiveness of the Board as a whole or the contribution of individual directors; however, the Chairman has responsibility for ensuring the effective operation of the Board. 8. Orientation and Education of Directors The Company does not have a formal process of orientation and education for new members of the Board. The outside Board members currently have considerable experience as members of the boards of other public companies. Senior management provides updated presentations on material changes of the Company's business to all members of the Board. 9. Effective Board Size The Board has considered its size with a view to the impact of size upon its effectiveness and has concluded that the number of directors as presently constituted is appropriate for the Company given the complexity and current stage of development of the Company's business. The Board as presently constituted includes considerable experience in the mining industry as well as financial experience. 10. Compensation of Directors Board members are not presently compensated in their capacity as director, although they are reimbursed for expenses incurred in connection with their service. Directors generally receive a grant of stock options upon their appointment, and throughout their term from time to time, as deemed appropriate. 11. Audit Committee The Audit Committee members are appointed each year after the Annual General Meeting. The Audit Committee meets each quarter to review the interim financials and meets one time, and more if necessary, to review the year end financials. The auditors of the Company report to the Audit Committee. The Audit Committee reviews the Company's annual consolidated financial statements and interim financial statements and makes its recommendation for Board approval. 12. Approach to Corporate Governance The Board of Directors has assumed the responsibility for developing the Company's approach to governance issues and responding to governance guidelines. 13. Position Descriptions The Company has not formally developed position descriptions for the Board and the Chief Executive Officer; however, the Board is satisfied that senior management is fully aware of their responsibilities and those matters that are within their mandate. 14. Board Independence The Board has functioned, and is of the view that it can continue to function, independently of management, as required. Although the Board is evenly split between independent and non-independent members, in view of the size of the Company and the nature of its business, it is essential that those having an intimate knowledge of the Company's operations be present during important Board discussions. Notwithstanding the foregoing, if the Board believed it was appropriate and meaningful, it would formalize a process whereby the Board could meet without a management presence at the meeting. 15. Ethical Business Conduct The Board has adopted a Code of Business Conduct and Ethics. A copy of the Code and Policy can be found on the Company website at http://www.goldenalliancecorp.com. The Board appoints a Compliance Officer who is responsible for investigating and resolving all reported complaints and allegations concerning violations of the Code of Business Conduct. The Compliance Officer has direct access to the Audit Committee and the Board and the Compliance Officer is required to report to the Board at least annually on compliance activity. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Whistleblower Policy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOLDEN ALLIANCE RESOURCES CORP. (the "Company") is committed to the highest standards of openness and accountability. We believe that trust and integrity are of vital importance in our business. It is the responsibility of all directors, officers and employees to report violations or suspected violations in accordance with this Whistleblower Policy. This Policy is intended to encourage and enable employees and others to raise serious concerns within the Corporation rather than seeking resolution elsewhere. No director, officer or employee who in good faith reports a violation shall suffer harassment, retaliation or adverse employment consequence. Compliance Officer The Company's Compliance Officer shall be the Chief Financial Officer of the Company and is appointed by the Board of Directors, and is responsible for investigating and resolving all reported complaints and allegations. At his discretion, he shall advise the President, the CEO, the Chairman and/or the Audit Committee of a reported complaint or allegation. The Compliance Officer has direct access to the Audit Committee of the Board of Directors and is required to report to the Committee at least annually on his compliance activity. The Compliance Officer will notify the sender and acknowledge receipt of the reported violation or suspected violation within five business days. All reports will be promptly investigated and appropriate corrective action will be taken if warranted by the investigation. In order to protect anonymity, and to ensure proper record keeping as required by regulation, the Company uses an external reporting agency that is the sole link to the Compliance Officer. Whistleblower Security Inc. is an independent company that serves as an avenue for disclosure of unethical or illegal activities as observed or witnessed by staff. Whistleblower Security Inc. offers 24/7 access to confidential methods of disclosing these activities. Open dialogue within the Company is encouraged, however, if necessary, the alternative confidential procedures are provided by Whistleblower Security. Whistleblower Issues The Whistleblower disclosures include the following issues:
The disclosure can relate to wrongdoings anywhere in the world; it is not restricted to head office. Directors, officers and employees shall promptly bring to the attention of the Compliance Officer any information they may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to the Company and the operation of its business or any violation of the Code of Business Conduct and Ethics. Any information concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect the ability to record, process, summarize and report financial data; or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in our financial reporting, disclosures or internal controls should be reported to the Compliance Officer. Employees are encouraged to promptly bring to the attention of a manager or the Compliance Officer any information concerning any actual or apparent conflicts of interest between personal and professional relationships involving any management or other employees who have a significant role in financial reporting, disclosures or internal controls of the Company. Making a Disclosure In most cases, an employee's supervisor is in the best position to address an area of concern. However, if employees are not comfortable speaking with their supervisor or are not satisfied with the supervisor's response, employees are encouraged to speak with anyone in management with whom they are comfortable or to the Compliance Officer. Supervisors and managers are required to report suspected violations to the Company's Compliance Officer, who has specific and exclusive responsibility to investigate all reported violations. For suspected fraud or securities law violations, individuals contact the Corporation's Compliance Officer directly. The Company aims to ensure that all issues raised under this policy are dealt with speedily and effectively. There are three ways to make a report through the Whistleblower system: by telephone, online and by email. If a disclosure is made, the Complaint handler will fully document the specifics and make the information available to the Compliance Officer. The caller will be given a case number for the report and asked to check back within 72 hours to address these questions. If you raise a concern or report suspected wrongdoing by your supervisor, another employee, officer, member of the board of directors, and/or the Whistle-Blower hotline, the Company will not take action against you even if, after investigation, there is no finding of wrongdoing, and will not tolerate retaliation or allow you to be victimized as long as (a) your report was made in good faith, (b) you believed it to be substantially true, (c) you were not maliciously making false allegations, and (d) you were not seeking any personal or financial gain. Monitoring the Whistleblower Policy The effectiveness of this Policy will be monitored by the Audit Committee of the Board of Directors. The Compliance Officer determines if a special meeting of the Audit Committee is required and shall provide information about the complaint to all members of the Audit Committee at its next regularly scheduled meeting. The Chairman of the Audit Committee shall advise the Board of Directors in writing of all violations. The Compliance Officer can be reached via telephone at 1-866-921-6714 or via the internet site located at http://www.whistleblowersecurity.com. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Charter of the Audit Committee | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandate The primary function of the Audit Committee ("Committee") is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the following: (a) the financial reports and other financial information provided by the Company to regulatory authorities and shareholders; (b) the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting; and (c) financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels. The Committee's primary duties and responsibilities are to (i) serve as an independent and objective party to monitor the Company's financial reporting and internal control system and review the Company's financial statements; (ii) review and appraise the performance of the Company's external auditors; (iii) provide an open avenue of communication among the Company's auditors, financial and senior management and the board of directors; and (iv) to ensure the highest standards of business conduct and ethics. Composition The Committee shall be comprised of three directors as determined by the board of directors, the majority of whom shall be free from any relationship that, in the opinion of the board of directors, would interfere with the exercise of his or her independent judgment as a member of the Committee. At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Company's Charter, the definition of "financially literate" is the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can presumably be expected to be raised by the Company's financial statements. The members of the Committee shall be elected by the board of directors at its first meeting following the annual shareholders' meeting. Unless a Chair is elected by the full board of directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership. Meetings The Committee shall meet at least four times annually, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Executive Officer and/or the Chief Financial Officer and the external auditors in separate sessions. Responsibilities and Duties To fulfill its responsibilities and duties, the Committee shall: Documents/Reports Review (a) Review and update this Charter annually. (b) Review the Company's financial statements, MD&A, any annual and interim earning statements and press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion or review rendered by the external auditors. External Auditors (a) Review annually the performance of the external auditors who shall be ultimately accountable to the board of directors and the Committee as representatives of the shareholders of the Company. (b) Obtain annually a formal written statement of external auditors setting forth all relationships between the external auditors and the Company. (c) Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors. (d) Take or recommend that the full board of directors take appropriate action to oversee the independence of the external auditors. (e) Recommend to the board of directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval. (f) At each meeting, consult with the external auditors, without the presence of management, about the quality of the Company's accounting principles, internal controls and the completeness and accuracy of the Company's financial statements. (g) Review and approve the Company's hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Company. (h) Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements. (i) Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company's external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if:
Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee. Financial Reporting Processes (a) In consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external. (b) Consider the external auditor's judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting. (c) Consider and approve, if appropriate, changes to the Company's auditing and accounting principles and practices as suggested by the external auditors and management. (d) Review significant judgments made by management in the preparation of the financial statements and the view of the external auditors as to appropriateness of such judgments. (e) Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information. (f) Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements. (g) Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented. (h) Review certification process for certificates required under MI 52-109. (i) Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. Other (a) Review any related party transactions. (b) Review reports from persons regarding any questionable accounting, internal accounting controls or auditing matters ("Concerns") relating to the Company such that:
All of the foregoing in a manner that the individual submitting such Concerns shall have no fear of adverse consequences. (approved by the Board of Directors May 27, 2010) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
