Calvalley Petroleum Inc. (“Calvalley” or the “Corporation”) Whistle Blowing Policy
General
CSA Multilateral Instrument 52-110, the applicable rules of the Alberta Securities Commission, and the listing standards of the Toronto Stock Exchange require the Audit Committee of Calvalley to establish formal procedures for: (a) the receipt, retention, and treatment of complaints received by the Corporation and its subsidiaries regarding accounting, internal accounting controls, or auditing matters; (b) the confidential, anonymous submission by consultants or employees of the Corporation and its subsidiaries, of concerns regarding questionable accounting or auditing matters; and (c) violations of the Corporation’s Code of Business Conduct and Ethics (the “Code”).
The Corporation is committed to achieving compliance with all applicable securities laws and regulations, accounting standards, accounting controls and audit practices. Accordingly, pursuant to section 2.3(7) of Multilateral Instrument 52-110, the Corporation's whistle blowing policy (the “Policy”) establishes a framework for the confidential, anonymous submission by consultants or employees of the Corporation of complaints or concerns regarding financial statement disclosures, accounting, internal accounting controls or auditing matters.
Additionally, the Corporation’s Code requires directors, officers and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. As employees and representatives of the Corporation, honesty and integrity must be practiced in the fulfillment of responsibilities and all applicable laws and regulations must be complied with. The Policy provides an opportunity, by way of confidential submission, for all employees and consultants to report violations or suspected violations of the Code.
No director, officer, consultant or employee who in good faith reports a violation of the Code or submits a complaint or a concern regarding financial statement disclosures, accounting, internal accounting controls or auditing matters shall suffer harassment, retaliation or adverse employment consequences. An employee or consultant who retaliates against someone who has reported a violation, complaint or concern in good faith is subject to discipline up to and including termination of employment. This Policy is intended to encourage and enable employees, consultants and others to raise serious concerns within the Corporation rather than seeking resolution outside the Corporation.
The Corporation shall direct its subsidiaries to adopt the Policy in order to ensure all matters raised in respect of the above issues are dealt with in a uniform manner.
Reporting Violations
Financial and Accounting Matters
Each officer, director, consultant and employee of the Corporation should promptly advise the Audit Committee of any issues or concerns raised by third parties that such officer, director, consultant or employee becomes aware of regarding financial statement disclosures, accounting, internal accounting controls or auditing matters, such as issues and concerns appearing in Internet blogs or voiced by participants in Internet chat rooms.
Further, if an employee or consultant believes that they have witnessed operating, accounting or auditing practices that the employee or consultant feel are inappropriate or wrong and which are material, the employee or consultant should report their concerns in sufficient detail to enable the recipient of the complaint to investigate. When reporting such concerns the employee or consultant may identify themselves or, if preferable, report anonymously.
For greater certainty, the above relates to concerns or complaints relating to any financial statement disclosures, accounting, internal accounting controls or auditing matters including, without limitation, the following:
- Fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of the Corporation;
- Fraud or deliberate error in the recording and maintaining of financial records of the Corporation;
- Deficiencies in or non-compliance with the Corporation’s internal accounting controls;
- Misrepresentation or false statement to or by an officer or accountant regarding a matter contained in the financial records, financial reports or audit reports of the Corporation; or
- Deviation from full and fair reporting of the Corporation’s financial condition.
The Audit Committee may enlist consultants or employees of the Corporation and/or outside legal, accounting or other advisors, as appropriate, to conduct the investigation of a submission regarding financial statement disclosures, accounting, internal accounting controls, or auditing matters. In conducting an investigation, the Audit Committee will use reasonable efforts to protect the confidentiality or anonymity of the consultant or employee who made the applicable submission, to the extent the identity of such consultant or employee is known to the Audit Committee, if that is the desire of the particular employee or consultant.
Violations of the Code
The Code addresses the issue of raising concerns relating to violations of the Code and suggests that employees share their questions, concerns, suggestions or complaints with someone who can address them properly. In most cases, an employee’s supervisor is in the best position to address an area of concern. However, if the employee or consultant is not comfortable speaking with their supervisor or are not satisfied with their supervisor’s response, the employee or consultant is encouraged to speak with anyone in management whom they are comfortable in approaching. In the event the employee or consultant is not satisfied or is uncomfortable approaching their supervisor or a member of the management group, individuals should report their concerns to the Chair of the Audit Committee pursuant to the Policy procedures as outlined below.
Procedures
Any consultant or employee of the Corporation may submit any concerns regarding financial statement disclosures, accounting, internal accounting controls, auditing matters or Code violations or suspected violations. All such concerns should be described in writing and forwarded in a sealed envelope to the Corporate Secretary or directly to the Chair of the Audit Committee. Any such envelopes received by the Corporate Secretary that are directed to the Audit Committee will be forwarded promptly (and unopened) to the Chair of the Audit Committee. An envelope containing a consultant’s or employee's submission should be labeled: "To be opened by the Audit Committee only" or should bear a similar legend indicating that the envelope contains a submission made pursuant to this Policy. The respective mailing addresses of the Chair of the Audit Committee and the Corporate Secretary are as follows:
Gary Robertson Chair, Audit Committee Calvalley Petroleum Inc. 40 Girouard Avenue Dorval, QUebec H9S 3P9
Tom Valentine Corporate Secretary Calvalley Petroleum Inc. 3700 Canterra Tower 400 Third Ave SW Calgary, Alberta T2P 4H2
Additionally, the Corporation’s website provides an employee or consultant with the opportunity of submitting their complaint directly and anonymously to the Chair of the Audit Committee. The website provides a box wherein the employee or consultant may describe the particular concern being raised and once the message is sent it is automatically directed to the email address of the Chair of the Audit Committee.
If a consultant or employee wishes to discuss his/her submission with the Audit Committee, the consultant or employee should request a meeting (in person or by phone or some other method of communication) with a representative of the Audit Committee in his/her submission and include a telephone number or e-mail address at which he/she can be contacted. The Audit Committee has the authority to determine, in its discretion, whether such a meeting would be appropriate and the Audit Committee may determine not to meet with a consultant or employee, notwithstanding that a request for a meeting has been made, as aforesaid.
Investigation
Following the receipt of any submission of the nature contemplated by this Policy, the Audit Committee will investigate the matter (or cause the same to be investigated) and, if the Audit Committee considers corrective and/or disciplinary action to be appropriate, it will take such corrective and/or disciplinary action as may be within its authority, or make recommendations to the senior officers or the Board of Directors of the Corporation (as applicable), where the implementation of corrective and/or disciplinary action considered appropriate by the Audit Committee is not within the scope of the authority of the Audit Committee. In order to be acted upon, each such submission of a consultant or employee must include sufficient information for the Audit Committee to investigate the matter and determine whether the submission is valid and is made in good faith. If, on preliminary examination, the submission is judged to be without substance or merit, or not made in good faith, the submission may be dismissed. However, prior to such dismissal, the Chair of the Audit Committee shall be required to meet with the complainant, either by teleconference or in person, in respect of such submission in order to determine whether the dismissal of the submission is warranted.
If the identity of the consultant or employee making the submission, or assisting in investigation of the submission, is known by any other person within the Corporation, the Audit Committee will monitor any disciplinary action against the consultant or employee to determine whether such disciplinary action is the result of or related to the making of a submission by the consultant or employee of the nature contemplated by this Policy or the related investigation.
Acting in Good Faith
The Corporation and its officers, consultants, employees and agents will not discharge, demote, suspend, threaten, harass or in any manner discriminate against any consultant or employee in the terms and conditions of his or her employment based upon lawful actions of such consultant or employee in relation to a good faith submission of the nature contemplated by this Policy or the investigation of issues or concerns regarding the Corporation's accounting and auditing matters.
The Audit Committee will retain as a part of its records any such complaints or concerns for a period of at least 7 years.