Leading the way

CanElson is a leading provider of oilfield services

Policy:

This policy, approved by the Audit Committee, is intended to allow easy access for employees and related parties to the Audit Committee. This policy addresses the commitment of the Company and the Board of Directors to integrity and ethical behaviour by helping to foster and maintain an environment where employees and other individuals can act appropriately, without fear of retaliation. Employees are strongly urged to discuss with supervisors, managers or other appropriate personnel, when in doubt, the best course of action in a particular situation.

Purpose:

The purpose of this policy is to encourage all employees, external third parties and the general public to disclose any wrongdoing or apparent wrongdoing regarding adverse employment action (as defined below), accounting, internal accounting controls or auditing matters that may affect the Company, the Company’s customers, shareholders, employees, investors, or the public in general. This policy also outlines the procedures for filing a complaint, how a complaint is investigated and the criteria used to evaluate a complaint.

Definitions:

For purposes of this policy:

(1) Good Faith. Good faith is evident when the complaint is made without malice or consideration of personal benefit and the individual(s) has a reasonable basis to believe that the complaint is true; provided, however, a complaint does not have to be proven to be true to be made in good faith. Good faith is lacking when the disclosure is known to be malicious or false.

(2) Wrongdoing. Examples of wrongdoing include, but are not limited to, financial fraud and accounting fraud, knowing violation of laws and regulations regarding accounting, internal accounting controls or auditing matters.

(3) Adverse Employment Action. Examples of adverse employment action include, but are not limited to, demotion, suspension, termination, transfer to a lesser position, denial of promotions, denial of benefits, threats, harassment or denial of compensation as a result of an employee’s report of wrongdoing, or any manner of discrimination against an employee in the terms and conditions of employment because of any lawful act done by an employee pursuant to this policy.

Procedures:

A. General Guidance

This policy presumes that individuals will act in good faith and will not make false accusations when reporting wrongdoing. An individual who knowingly or recklessly makes statements or disclosures that are not in good faith may be subject to discipline, which may include termination in the case of an employee.

B. Commitment of Audit Committee with Respect to Specified Complaints

• Under securities laws and regulations, the Audit Committee will receive, retain, investigate and act on complaints and concerns of individuals regarding adverse employment action, questionable accounting practices, breaches in internal accounting controls and other accounting, financial reporting or auditing matters.
• At the discretion of the Audit Committee, responsibilities of the Audit Committee created by these procedures may be delegated to any member of the Audit Committee or to a subcommittee of the Audit Committee.

C. Procedures for Receiving an Allegation of Wrongdoing

1. Any allegation of wrongdoing that is made directly to management, whether openly, confidentially or anonymously, will be promptly reported to the Chair of the Audit Committee.

2. Each allegation forwarded to the Chair of the Audit Committee, by management and each allegation that is made direct to the Audit Committee, whether openly, confidentially or anonymously, will be reviewed by the Audit Committee, who may, at their discretion, consult with any member of management or employee whom they believe would have appropriate expertise or information to assist the Audit Committee. The Audit Committee will determine whether the Audit Committee or management should investigate the allegation, taking into account the considerations set forth in Section D below.


D. Considerations Regarding the Decision to Investigate

In determining whether management or the Audit Committee should investigate an allegation of wrongdoing, the Audit Committee will consider, among other factors that are appropriate under the circumstances, the following:


E. Protection of Whistleblowers & Other Individuals

The identity of any employees or outside individuals who make complaints pursuant to this policy will not be revealed to persons in any department, division or work location. The Company will make good faith efforts to protect the confidentiality of individuals making complaints: provided, however, the Company or its employees and agents will be permitted to reveal the individual’s identity and confidential information to the extent necessary to permit an effective investigation, or as required by law. The Company will not tolerate any effort by any other employee or employee group, to ascertain the identity of any person who makes a good faith allegation anonymously.

Consistent with the policies of the Company, the Audit Committee will not retaliate, and will not tolerate any retaliation by management or any other employee or employee group, directly or indirectly, against anyone who, in good faith, makes an allegation of wrongdoing or provides assistance to the Audit Committee, management or any other person or group, including any governmental, regulatory or law enforcement body, investigating such an allegation.

F. Procedures for Making Complaints

In addition to any other avenue available to an employee (such as a supervisor), the Company has engaged WhistleBlower Security to receive from any employee or other individual, confidentially or anonymously, any report or allegation of wrongdoing. Individuals who become aware of any wrongdoing or suspected wrongdoing are encouraged to make a report as soon as possible. Concerns should be submitted with as much detail as possible in order for the claim to be evaluated accurately. Acts of alleged wrongdoing may be disclosed as follows:

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