Corporate Governance

WHISTLEBLOWER POLICY

Whistleblower - Confidential Hotline:  416-998-9384

Procedures for Receipt, Retention, and Treatment of Complaints about the Corporation's Accounting, Internal Accounting Controls, or Auditing Matters

PURPOSE

It is the Audit Committee's (“Committee”) responsibility to ensure that Clearford Industries Inc. (the “Corporation”) has appropriate procedures for the receipt, retention, and treatment of complaints about the Corporation's accounting, internal accounting controls, or auditing matters. In addition, the Audit Committee must provide for confidential, anonymous submission by the Corporation's employees of concerns about questionable accounting or auditing matters. The procedures outlined below are intended to fulfill these responsibilities and to ensure that any such complaints and concerns are promptly and effectively addressed.

MEANING OF TERMS

“Anonymous” means of unknown authorship, and without designation that might lead to information about the authorship.
 
“Complaint” means any adverse information provided to the Corporation, whether in the form of a concern, a demand for remedial action, or a report of a suspected violation of law or Corporation policy, that relates to the Corporation's accounting, internal accounting controls, or auditing matters.
 
“Confidential” means authorized for access by only those persons who have a need to know. Ordinarily, a need to know arises from an obligation to investigate or to take remedial or disciplinary action.
 
“Confidential Designee” means a person, independent of the financial reporting function, designated by the Audit Committee to assist the Committee to address Complaints in a manner consistent with these Procedures and the role of the Committee. As designated by the Committee, the Confidential Designee shall be the Chairman of the Audit Committee.

PROCEDURES

1. Submission and Receipt of Complaints

1. Employees are free to bring Complaints to the attention of their supervisors, as they would any other workplace concern. The recipients of such Complaints shall forward them promptly to the Confidential Designee, The Chair of the Audit Committee.
2. Furthermore, to ensure that Complaints can be submitted confidentially and anonymously, the Corporation maintains a formal means by which employees may communicate Complaints by voicemail (the “Compliance Hotline”) which is only accessible by the Confidential Designee.  The Compliance Hotline number is 416-998-9384.

2. Retention of Records of Complaints

Records pertaining to a Complaint are the property of the Corporation and shall be retained:

1. in compliance with applicable laws and document retention policies;
2. subject to safeguards that ensure their confidentiality, and, when applicable, the anonymity of the person making the Complaint; and
3.  in such a manner as to maximize their usefulness to the Corporation's overall compliance program.

3.  Treatment of Complaint

1. All Complaints shall be treated as confidential and shall be reviewed by the Confidential Designee, the Audit Committee Chairman, within 48 hours.
2. Although a person making an anonymous Complaint may be advised that maintaining anonymity could hinder an effective investigation, the anonymity of the person making the Complaint shall be maintained until the person indicates that he or she does not wish to remain anonymous. Any system established for exchanging information with a complainant shall be designed to maintain anonymity.
    
3. The Chair of the Audit Committee shall inform the Committee, in summary form or otherwise, of all Complaints received, with an initial assessment as to the appropriate treatment of each Complaint. Assessment, investigation, and evaluation of Complaints shall be conducted by, or at the direction of, the Audit Committee or the Confidential Designee. If the Committee deems it appropriate, the Committee may engage at the Corporation's expense independent advisors, such as outside counsel and accountants unaffiliated with the Corporation's auditor.
    
4. Following investigation and evaluation of a Complaint, the Chair of the Audit Committee shall report to the Committee on recommended disciplinary or remedial action, if any. The action determined by the Committee to be appropriate under the circumstances shall then be brought to the Board or to the appropriate members of Senior Management for authorization or implementation, respectively. If the action taken to resolve a Complaint is deemed by the Audit Committee to be material or otherwise appropriate for inclusion in the minutes of the meetings of the Committee, it shall be so noted in the minutes.
    
5. Any effort to retaliate against any person making a Complaint in good faith is strictly prohibited and shall be reported immediately to the Chair of the Audit Committee.