Code of Business Conduct for Directors, Officers and Employees

The Board of Directors (“Board”) of Carmanah Technologies Corporation (“Carmanah” or the “Company”) has adopted the following Code of Business Conduct (the “Code”) for all directors, officers and employees of the Company. All subsidiaries of the Company are included in the scope of the Code.

The purpose of this Code is to promote:

  • The highest ethical standards in all facets of the Company’s business
  • Ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
  • Full, fair, accurate, timely, and understandable disclosure in the reports that Carmanah is required to file with such securities exchange or quotation system or regulatory agency as may from time to time apply to the Company and in other public communications made by Carmanah;
  • Compliance with all applicable laws, rules and regulations.

While there cannot be a specific rule for every situation that is encountered, Carmanah has adopted this Code to provide certain principles for the business conduct of the Company’s Board members, officers and employees and expects all to be familiar with and observe the Company’s other policies and procedures and adhere to high ethical standards in all their business dealings.

All Board members, officers and employees must confirm in writing that they have read the Code conduct prior to joining the Company. A violation of the law, employment agreement or this Code is a serious matter that will result in appropriate disciplinary action, including termination of employment.  In addition, violation of domestic or foreign laws, rules and regulations may subject you, as well as the Company, to civil and/or criminal penalties.

The provisions of this Code may be amended or waived only by the Company’s Board, and will be disclosed to shareholders as required by law or regulation.

If there are any doubts about the application or interpretation of the Code, discuss the matter with the Chairman of the Board, and /or the Chief Executive Officer ("CEO") and/or the Chief Financial Officer (“CFO”), as applicable.  In applying the Code, the CEO will report to Carmanah’ s Board.

1. Criteria for Ethical Decision Making

Each director, officer and employee of the Company is expected to adhere to and advocate high standards of honest and ethical conduct (“Ethical Business Practices”) as outlined in this Code. Before embarking on any course of action a Company director, officer or employee, must ask themselves these questions:

  • Is there any reason to believe the life, health or safety of anyone, including people who use the Company’s products, or the environment is endangered by the action?
  • Is there any reason to believe it is not legal?
  • Does it feel fair and honest?
  • Does it compromise trust in your responsibilities or the integrity of the Company?
  • Can it be justified it to the public?

Questions or concerns about this Code or regarding past, present or anticipated conduct should be discussed promptly with the Chairman of the Board and/or the CEO and /or the CFO.

2. Fair Dealings

The Company makes every effort to deal fairly and honestly with its collaborators, suppliers, competitors, other employees and others it has contact with..  The Company should not take unfair advantage of anyone through manipulation, concealment, misappropriation or abuse of confidential information, falsification, and misrepresentation of material facts or any other unfair practice.

All contracts, agreements and other documents must correctly set forth the terms of the underlying business arrangement and any such documents must be reviewed and approved through established Company policy and procedures.

3. Corporate Opportunities and Duty of Loyalty

Each director, officer or employee of the Company has a duty of loyalty to the Carmanah, which includes a duty to advance the Company’s legitimate interests. No one may use their position or the Company’s name, property, information or good will for personal gain or for the gain of others. As well, no one must take advantage of a personal opportunity that is discovered through the use of corporate property, information or their position with the Company.

4. Conflicts of Interest

A conflict of interest arises when our private interests interfere, or appear to interfere, in any way, with the interest of the Company, or impair, or could be perceived to impair our business judgment. We should identify and avoid any situation of actual or apparent conflict of interest.

Some conflicts are clear-cut; others are less obvious. For that reason, we must fully disclose to the CEO and/or the CFO all circumstances that could be construed or perceived as a conflict of interest. As appropriate, the CEO will advise the Board of such conflicts of interest. Full disclosure allows the Company to resolve unclear situations and create an opportunity to avoid or ethically handle conflicts of interest before any difficulty can arise. If a conflict of interest cannot be avoided in a reasonable fashion then appropriate procedures must be put in place to minimize the involvement of any conflicted individuals in the relationship or interaction, giving rise to the conflict. Failure to make required disclosures or resolve conflicts of interest satisfactorily can result in discipline up to and including termination of employment, and liability to account to the Company for any profits.

The Company’s employment agreement generally prohibits an employee’s employment or engagement in any capacity in any other business without the prior permission of the Company. This provision broadly addresses potential conflicts of interest. Specific examples include, but are not limited to:

  • Acting as an employee, director or officer of or a consultant to, a competitor or potential competitor of the Company, regardless of the nature of the employment or consulting relationship;
  • Holding a substantial interest in a business which is a customer, competitor or supplier of the Company or which otherwise does business with the Company;   
  • The purchase of merchandise or services for the Company from, or placement of other business with, a company directly or beneficially owned or controlled by an employee, director or officer of the Company, his or her spouse, relative, in-law or co-habitant;
  • Serving as proprietor, general partner, officer or director of any business (except charitable organizations or family businesses that in no way compete with the Company or do business with the Company) without first obtaining the written consent of the Company (non-employee directors of Company are excluded from this prohibition).

5. Accepting or Giving Gifts

Each director, officer or employee of Carmanah must avoid activities or relationships that appear to or conflict with the Company’s interests or adversely affect the Company’s reputation. The types of activities and relationships to avoid include, but are not limited to:

  • Accepting or soliciting a gift, favor, or service that is intended to, or might appear to, influence the employee’s decision-making or professional conduct.
  • Giving or offering to give any gift, gratuity, favor, entertainment, reward, “bribe” or “kickback” or any other thing of value that might influence or appear to influence the judgment or conduct of the recipient in the performance of his or her job. This includes transactions with government personnel, customers and suppliers.

Each director, officer or employee of Carmanah must never use their position to obtain personal gain nor become obligated to persons with whom Carmanah does business. They must not accept, directly or indirectly, gifts of value, including payments, services, fees, special privileges, pleasure trips, accommodations and loans from any person, organization, or group doing business or seeking to do business with Carmanah, except gifts of nominal value, without obtaining the prior approval of the CEO. If there is any doubt regarding the acceptance, or provision, of a gift or benefit, it should be discussed with the CEO.  As appropriate, the CEO will advise the Board of such matters.

6. Fraud, Theft or Dishonesty

Carmanah will not condone or tolerate acts of fraud, theft, dishonesty, embezzlement, misappropriation or falsification in connection with the performance of each director’s, officer’s or employee’s duties for the Company.  These actions have a direct impact on the Company’s profitability.  The CEO will advise the Board of all such matters. Company reports suspicion of fraud or theft to the applicable law enforcement agency.

7. Compliance with Laws, Regulations and Rules

Each director, officer or employee of Carmanah will obey and comply with all applicable federal, provincial, state and local laws, regulations and ordinances of the countries in which the Company operates, including but not limited to:

  • Health and safety laws including the workplace;
  • Human rights laws including harassment and job discrimination;
  • Employment laws including  payment of minimum wage, overtime requirements, child labor and general working conditions;
  • Immigration related laws concerning the hiring of legally documented workers
  • Laws concerning racketeering and corrupt practices
  • Laws concerning the proper maintenance of books, records and internal controls
  • Laws prohibiting illegal payments, gifts, bribes or kickbacks to governmental officials, political parties or others
  • Privacy laws
  • Environmental laws
  • Laws prohibiting misappropriation, unauthorized use, reproduction or distribution of any third party’s trade secrets, copyrighted information or confidential proprietary information
  • Antitrust and other laws prohibiting unfair competition or restraint of trade
  • Any other applicable law or regulation

Carmanah will not commit or condone unethical or illegal acts nor instruct another employee, consultant, contractor, supplier or representative of the Company to do so.

This Code does not enumerate all laws, rules and regulations applicable to the Company or its business.  You should consult with the Chairman of the Board and /or the CEO and / or the CFO if you have questions on specific laws, rules and regulations that you think may be applicable to your work or responsibilities. As appropriate, the CEO will also advise the Board.

8. Insider Information and Tipping

In order to assist compliance with laws against insider trading, the Company has adopted an Insider Trading Policy, which is available on the Company’s website at www.carmanah.com.

The Insider Trading Policy extends to all insiders (“Insiders”) which includes all employees, management, officers and the Board of the Company and all of its subsidiaries as well third parties having a special relationship with the Company, as applicable. The definition of “special relationship” is very broad and is intended to capture parties that, amongst others, have a material connection with the Company, either through share ownership (any person or company that owns or controls, directly or indirectly, more than 10% of the voting rights of the outstanding voting securities the Company) or a business relationship.

Using or sharing non-public information for trading purposes or for any other purpose except the conduct of the Company’s business is not permitted.  All non-public information about the Company and its business should be considered confidentail information.  Purchasing or selling securities of the Company with knowledge of material nonpublic information, or informing or “tipping” others of such material nonpublic information that has not been generally disclosed other than in the necessary course of business of the Company is not only unethical but also illegal and could result in crimial prosecution in addition to termination of employment.  

Generally, from time to time the Company implements stock trading blackout periods during which time Insiders are restricted from buying or selling shares. A copy of the Company’s Insider Trading Policy is available on the Company’s website at www.carmanah.com.

9. Accounting and Recordkeeping

Many people associated with the Company participate in the financial control and reporting processes of the Company. Employees with any responsibility for aspects of the Company’s financial activities (including, but not limited to, processing of cash receipts or processing or approval of payments; creation, processing or approval of invoices and credit memos; payroll and benefits decisions; approval of expense reports and any and all other transactions; or the estimation of reserves or other claims or the amount of any accrual or deferral; or the recording of any of the foregoing in the Company’s ledgers) and/or the preparation of the Company’s financial statements or other reports, must ensure their involvement complies with complete and accurate procedures as per established Company practice.

Each director, officer or employee of Carmanah shall not subvert the Company’s established systems of internal management and accounting controls, maintain funds or assets for any illegal or improper purposes or make false or misleading statements in any Company documents, reports or records. No undisclosed or unrecorded accounts may be established using the Company’s funds or other assets. All accounting records and the financial reports produced from those records must be kept and presented in accordance with applicable law, must accurately and fairly reflect in reasonable detail the Company’s assets, liabilities, revenue and expenses, and must be in accordance with generally accepted accounting principles.

Transactions must be supported by accurate and reasonably detailed documentation and recorded in the proper account. Best efforts are to be made to record transactions in the proper accounting time period. To the extent that estimates are necessary, they must be based on our good faith judgment and be supported by appropriate documentation. No payment or the related accounting entry may be approved or made with the intention or understanding that any part of the payment will be used for any purpose other than that described by the document supporting the entry or payment.

If Carmanah receive inquiries from the Company’s independent auditors, they will be responded to promptly, fully and accurately.

10. Use of Company Property

Each director, officer or employee of Carmanah has been entrusted with the care, management and cost-effective use of Carmanah’ s property and they will not make use of Company property for their own personal benefit or for the personal benefit of anyone else.

Each director, officer or employee of Carmanah is accountable for all Company property assigned to them and they must maintain it in good condition at all times and return it promptly when asked to do so.  Any dispositions of Company property should be for the benefit of the Company and not for personal benefit.  Access to Carmanah’s computer systems is restricted to authorized individuals only and passwords are to be kept confidential. Use of Carmanah’ s computer systems is limited to authorized business purposes with the exception of nominal personal use of email and voicemail which does not interfere or conflict with business use.

11. Proprietary and Confidential Information, Intellectual Property and Inventions

The Company has adopted a Corporate Disclosure Policy to facilitate proper disclosure practices.  A copy of the Company’s Corporate Disclosure Policy is available on the Company’s website at www.carmanah.com.

Carmanah wants its employees to be well informed about its business, plans for the future, and the successes and challenges the Company has along the way. In return for this openness, each director, officer and employee is entrusted to maintain the confidentiality of the Company’s proprietary information and those aspects of the business that have not yet shared with shareholders and the general public.

Each director, officer and employee is to take all reasonable measures to protect the confidentiality of non-public information about the Company obtained or created in connection with their activities and to prevent the unauthorized disclosure of such information unless required by applicable law or regulation of legal or regulatory process. They must use proprietary information only for Carmanah’s legitimate business purposes, and not for their personal benefit or the personal benefit of anyone else.

To provide the Company with reasonable protection against disclosure of trade secrets and confidential information, all employees are required to sign an employment agreement and a Proprietary Rights Agreement that includes clauses addressing Confidential Information, Invention Assignment, Prior Invention declaration, Non-Competition and Non-Solicitation of Customers & Employees These clauses state in part that Carmanah retains exclusive ownership of all inventions and discoveries arising out of employment and any information pertaining to the business or research activities of Carmanah.

Proprietary and confidential information is any information about Carmanah that has not been disclosed to the public and includes, without limitation:

  • The Company’s ideas, discoveries, inventions, algorithms, techniques, processes, know how, trade secrets, data, designs, methods, flow charts, drawings, specifications, plans, prototypes, apparatus, devices, manufacturing and production processes
  • Patents portfolio, , regulatory filings  and correspondences
  • Software
  • Any other trade secret or confidential or proprietary information in the possession or control of the Company
  • Customer and supplier lists, relationship with consultants, contracts, business plans and marketing strategies
  • Personnel information

Each director, officer and employee is each responsible to know what is confidential or proprietary and to ensure that they use it only in the performance of their duties with Carmanah. If there is any doubt, the information to be considered confidential until clarification is obtained from the CEO and/or CFO.  

12. Reporting and Whistleblower Protection

Each director, officer and employee has the responsibility to ask questions, seek guidance, report suspected violations and express concerns regarding compliance with this Code, including but not limited to questionable accounting, internal accounting control or auditing matters.  If they know or believe that any other director, officer, employee or representative of the Company has engaged or is engaging in Company-related conduct that violates applicable law or this Code, they are responsible to report such information.

The Chairman of the Board  is  responsible for administering the Company’s Whistleblower Policy for any director, officer and employee, who, in good faith, report complaints or concerns regarding any suspected misconduct, illegal activities or fraud (corporate or regulatory), including questionable accounting, internal accounting controls and auditing matters, or other violations of federal, provincial or state laws or this Code.  A copy of the Company’s Whistleblower Policy is available on the Company’s website at www.carmanah.com .

No adverse action or retribution of any kind will be taken by the Company because a director, officer or employee reports, in good faith, a suspected violation of this Code or other irregularity.

Reports under the Company’s Whistleblower Policy can be made to the Company’s service representative, Whistleblower Security Inc.:

Whistleblower Security Inc.

North America Toll Free: 1.866.921.6714
United Kingdom Toll Free: 800.40.49.825
Email: Carmanah@whistleblowersecurity.com
Website: www.whistleblowersecurity.com

13. Public Company Reporting

As a public company, it is of critical importance that the Company’s filings with such securities exchange or quotation system or regulatory agency as may from time to time apply to the Company and the Canadian provincial or federal securities regulatory authorities be full, fair, accurate and timely. Depending on a director, officer or employees respective position with the Company, they may be called upon to provide information necessary to ensure that the Company’s public disclosure documents meet these requirements. The Company expects each individual to take their responsibility very seriously and to provide prompt and accurate answers to inquiries related to the Company’s public disclosure requirements. The Company has adopted a Corporate Disclosure Policy to assist with disclosure compliance, a copy of which is available on the Company’s website at www.carmanah.com

14. Waivers and Amendments

While some of the principles contained in this Code must be strictly adhered to and no exception can be allowed, in other cases exception may be possible. Any director or officer who seeks a waiver or an exception to any of this Code should contact the Chairman of the Board. Any waiver or amendment of this Code may be made only by the Board and will be disclosed to the Company’s shareholders as required by law or regulation.

Any other employee who believes that an exception to these principles is appropriate in his or her case should first contact his or her immediate supervisor. If the supervisor agrees that an exception is appropriate, the approval of the CEO must be obtained. The CEO shall be responsible for maintaining a complete record of all requests for exceptions to any of these policies and the disposition of such requests. The CEO will advise the Chairman of the Board of such exception.

15. Administration, Compliance and Distribution

Carmanah’s Board has established the standards of business conduct contained in this Code.  This Code shall be distributed to each new director, officer and employee of the Company upon commencement of his or her employment or other relationship with the Company.  A copy of the Company’s Code is available on the it’s website at www.carmanah.com .

Strict adherence to this Code is vital.  Failure to comply with the standards outlined in this Code will result in disciplinary action up to and including termination of employment, in accordance with applicable employment law.  Supervisors are required to report any behavior that may be in breach of this Code and must respond appropriately to any reports which they receive.  Any supervisor who directs or approves or condemns any conduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, will be subject to disciplinary action, up to and including termination of employment.

Certain violations of this Code may require the Company to refer the matter to the appropriate governmental or regulatory authorities for investigation or prosecution.

For clarification or guidance on any point in the Code of Business Conduct, please consult the CEO and / or the CFO.

 

Effective March 2013