The following Code of Business Conduct and Ethics was adopted by the Board of Directors of Migao Corporation on May 26, 2010 and amended on June 27, 2014.
This Code of Business Conduct and Ethics (the "Code
") covers a wide range of business practices and procedures. It does not cover every issue that may arise, but sets out basic principles to guide all directors, officers and employees (collectively, "Personnel
") of Migao Corporation ("Migao
") and its subsidiaries and affiliates (collectively, "Migao Entities
" or the "Company
"). All Personnel must conduct themselves accordingly and seek to avoid even the appearance of improper behavior. The Code and specific related policies and guidelines put in place from time to time by Migao Entities shall govern your employment or other relationship with Migao Entities.
If a law conflicts with a policy in this Code, Personnel must comply with the law. If a local custom or policy conflicts with this Code, Personnel must comply with this Code. If you have any questions about these conflicts, you should ask a senior officer of Migao how to handle the situation. Management is responsible for administering the Code. The Chief Financial Officer of Migao is the chief contact person in Canada for questions regarding the Code (phone: 1-604-895-7422) and Mr. Peiwei Ni, Director is the chief contact person in China for questions regarding the Code (phone: 86 137 0101 8116).
Personnel who violate the standards in this Code or related policies and guidelines of the Migao Entities shall be subject to disciplinary action, up to and including termination of their employment or other relationship with Migao Entities. If you are in a situation that you believe may violate or lead to a violation of this Code, follow the guidelines described below under "Compliance Procedures".
All Personnel are to sign the Acknowledgement Form attached to the Code and return it as indicated on the Form within 30 days of receiving a copy of the Code.
For confidential reporting of any financial improprieties, please refer to the Whistleblowing Policy.
THE CODECompliance with Laws, Rules and Regulations
Obeying the law, both in letter and in spirit, is the foundation on which the Migao Entities' ethical standards are built and is critical to our reputation and continued success. All Personnel must respect and obey the laws of the various jurisdictions in which the Migao Entities operate and avoid even the appearance of impropriety. Although not all Personnel are expected to know the details of these laws, it is important to know enough to determine when to seek advice from executive members or other appropriate personnel. The Corporate Secretary of Migao is available to assist Personnel in determining applicable legal requirements and to seek the advice of legal counsel where appropriate.
Conflicts of Interest
A "conflict of interest" exists when a person's private interests interfere in any way with the interests of the Migao Entities. A conflict of interest can arise when Personnel take actions or have interests that may make it difficult for them to perform their work for a Migao Entity objectively and effectively. Conflicts of interest also may arise when Personnel or members of their families receive improper personal benefits as a result of their positions with a Entity.
Conflicts of interest are prohibited as a matter of policy, except as may be approved by the Board of Directors of Migao. Conflicts of interest may not always be clear-cut. If you have a question, you should consult with your supervisor or department head. Any Personnel who become aware of a conflict or potential conflict should bring it to the attention of a supervisor or department head and consult the procedures described below under "Compliance Procedures".
Personnel must maintain the confidentiality of confidential information entrusted to them by any Migao Entity and persons with whom the Migao Entities do business. Confidential information includes all non-public information that might be of use to competitors or harmful to any Migao Entity or the person to whom it relates if disclosed. The obligation to preserve confidential information continues even after Personnel cease to have a relationship with any of the Migao Entities.
Personnel who have access to confidential information are not permitted to use or share that information for the purpose of trading securities of Migao (which for purposes of this Code include securities exchangeable for securities of Migao) or for any other purpose except the conduct of the Migao Entities' business. All Personnel should read and abide by Migao's Insider Trading and Confidential Information Policy.
Personnel are prohibited from taking for themselves personally opportunities that are discovered through the use of the Migao Entities' property, information or positions without the consent of the Board of Directors and from using the Migao Entities' property, information, or position for improper personal gain. No Personnel may compete with any of the Migao Entities directly or indirectly. Personnel owe a duty to each Migao Entity to advance its legitimate interests when the opportunity to do so arises.
Outside Directorships and Other Outside Activities
Although an employee's activities outside the Company are not necessarily a conflict of interest, a conflict could arise depending upon the employee's position with the Company and the Company's relationship with the other employer or activity. Outside activities may also be a conflict of interest if they cause, or are perceived to cause, an employee to choose between that interest and the interests of the Company.
An employee may not serve as a director, partner, employee of or consultant to, or otherwise work for or receive compensation for personal services from, any affiliate, customer, partner, supplier, distributor, licensee or competitor of the Company or any other business entity that does or seeks to do business with the Company. In certain exceptional circumstances, an executive officer may be permitted to serve as a director of such an entity (but in no circumstances will an employee be permitted to serve as a director of a competitor of the Company). See the section "Waivers of the Code" herein. Serving in such a capacity for a company that is not an affiliate, customer, partner, supplier, distributor, licensee or competitor of the Company may be permitted, but such activities must be approved in advance by the employee's supervisor and Migao's Chief Financial Officer.
Employees are encouraged to serve as a director, trustee or officer of non-profit organizations in their individual capacity and on their own time, but they must obtain prior approval from Migao's Chief Financial Officer to do so as a representative of the Company.
The guidelines in this section are not applicable to directors of any Migao Entity that do not also serve in management positions within the Company.
Protection and Proper Use of Migao Entity Assets
All Personnel should endeavor to protect Migao Entity assets and ensure their efficient use. Theft, carelessness, and waste have a direct impact on the profitability of the Migao Entities. Any suspected incident of fraud or theft should be reported immediately to your superior or department head for investigation.
The obligation of Personnel to protect the assets of the Migao Entities includes the Migao Entities' proprietary information. Proprietary information includes any information that is not known generally to the public or would be helpful to competitors of any of the Migao Entities. Examples of proprietary information include intellectual property (such as trade secrets, patents, trademarks, and copyrights), business, marketing and service plans, designs, databases, salary information and any unpublished financial data and reports. Unauthorized use or distribution of this information would violate Migao Entity policy and could be illegal and result in civil or criminal penalties. The obligation to preserve the confidentiality of proprietary information continues even after Personnel cease to have a relationship with the Migao Entities.
Migao Entity assets may never be used for illegal purposes.
Competition and Fair Dealing
The Migao Entities seek to excel and to outperform any competitors fairly and honestly through superior performance and not through unethical or illegal business practices. Taking proprietary information without the owner's consent, inducing disclosure of that information by past or present employees of other persons or using that information is prohibited. Personnel should respect the rights of, and deal fairly with, the Migao Entities' competitors and persons with whom the Migao Entities have a business relationship. Personnel should not take unfair advantage of anyone through illegal conduct, manipulation, concealment, abuse of proprietary information, misrepresentation of material facts, or any other intentional unfair-dealing practice. Personnel must not act in a manner that may be anti-competitive under anti trust laws. The Corporate Secretary of Migao is available to assist Personnel in determining the application of those laws and to seek the advice of legal counsel where appropriate.
Employees must act in a manner that creates value for the Company's customers and helps to build a relationship based upon trust. The Company and its employees have provided products and services for many years and have built up significant goodwill over that time. This goodwill is one of our most important assets, and Company employees must act to preserve and enhance the Company's reputation.
The Company's suppliers make significant contributions to the Company's success. To create an environment where the Company's suppliers have an incentive to work with the Company, suppliers must be confident that they will be treated lawfully and in an ethical manner. The Company's policy is to purchase supplies based on need, quality, service, price and terms and conditions. The Company's policy is to select significant suppliers or enter into significant supplier agreements though a competitive bid process where possible. In selecting suppliers, the Company does not discriminate on the basis of race, color, religion, sex, national origin, age, sexual preference, marital status, medical condition, veteran status, physical or mental disability, or any other characteristic protected by applicable law. A supplier to the Company is generally free to sell its products or services to any other party, including Company competitors. In some cases where the products or services have been designed, fabricated, or developed to the Company's specifications, the agreement between the parties may contain restrictions on sales.
Gifts and Entertainment
Business gifts and entertainment are customary courtesies designed to build goodwill and constructive relationship among business partners. These courtesies may include such things as meals and beverages, tickets to sporting or cultural events, discounts not available to the general public, accommodation and other merchandise or services. In some cultures, they play an important role in business relationships. However, a problem may arise when these courtesies compromise, or appear to compromise, a Migao Entity's ability to make fair and objective business decisions or to gain an unfair advantage.
Social amenities customarily associated with legitimate business relationships are permissible. These include the usual forms of entertainment, such as lunches or dinners, as well as occasional gifts of modest value. While it is difficult to define "customary" or "modest" by stating a specific dollar amount, common sense should dictate what would be considered extravagant or excessive. If a disinterested third party would be likely to believe that the gift affected your judgment, then it is too much. All business dealings must be on arm's-length terms and free from any favourable treatment resulting from the personal interests of Personnel.
No gift or entertainment should ever be offered, given, provided, authorized or accepted by any Personnel or their family members unless it is not a cash gift, is consistent with customary business practices, is not excessive in value, cannot be construed as a bribe or payoff, and does not violate any laws. Strict rules apply when a Migao Entity does business with governmental agencies and officials, as discussed in more detail in the next section below. Personnel should discuss with their department head any gifts or proposed gifts about which they have any questions.
Payments to Government Personnel
All Personnel must comply with all laws prohibiting improper payments to domestic and foreign officials. Most countries have laws regarding business gifts that may be accepted by government personnel. The promise, offer or delivery to an official or employee of various governments of a gift, favor or other gratuity in violation of these laws would not only violate the Migao Entities' policies but could also be a criminal offense. Illegal payments should not be made to government officials of any country. The Corporate Secretary of Migao can provide guidance to Personnel in this area.
Any contact with government personnel for the purpose of influencing legislation or rule making, including such activity in connection with marketing or procurement matters, is considered lobbying. You are responsible for knowing and adhering to all relevant lobbying laws and associated gift laws, if applicable and for compliance with all reporting requirements. You must obtain the prior approval of the Corporate Secretary of Migao to lobby or authorize anyone else (for example, a consultant or agent) to lobby on behalf of the Migao Entities, except when lobbying involves only normal marketing activities and not influencing legislation or rule making.
Discrimination and Harassment
The diversity of Personnel is a tremendous asset. The Migao Entities are firmly committed to providing equal opportunity in all aspects of employment and shall not tolerate any illegal discrimination or harassment of any kind. Examples include derogatory comments based on racial or ethnic characteristics and unwelcome sexual advances. Violence and threatening behavior are not permitted. Personnel are encouraged to speak with the Corporate Secretary or the Mr. Peiwei Ni in China when a co-worker's conduct makes them uncomfortable and to report harassment when it occurs.
Health and Safety
The Migao Entities strive to provide all Personnel with a safe and healthy work environment. All Personnel have responsibility for maintaining a safe and healthy workplace by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions to a supervisor or department head. Being under the influence of and the possession of illegal drugs in the workplace shall not be tolerated. Personnel should report to work in condition to perform their duties, free from the influence of illegal drugs or alcohol.
Accuracy of Records and Reporting
The Migao Entities require honest and accurate recording and reporting of information to make responsible business decisions. Each Migao Entity's accounting records are relied upon to produce reports for our management, directors, shareholders, governmental agencies and persons with whom the applicable Migao Entity does business. All of each Migao Entity's financial statements and the books, records and accounts on which they are based must appropriately reflect such Migao Entity's activities and conform to applicable legal and accounting requirements and to the Migao Entity's system of internal controls. Unrecorded or "off the books" funds or assets should not be maintained unless required by applicable law or regulation.
All Personnel have a responsibility, within the scope of their positions, to ensure that each Migao Entity's accounting records do not contain any false or intentionally misleading entries. The Migao Entities do not permit intentional misclassification of transaction as to accounts, departments or accounting records. All transactions must be supported by accurate documentation in reasonable detail and recorded in the proper accounts and in the proper accounting period. Personnel should read Migao's Whistleblowing Policy with respect to the confidential reporting of concerns regarding accounting, internal controls and auditing matters.
Many Personnel use business expense accounts, which must be documented and recorded accurately. If Personnel are not sure whether a certain expense is legitimate, a supervisor or department head can provide advice. General rules and guidelines are available from the Chief Financial Officer of Migao.
Business records and communications often become public through legal or regulatory proceedings or the media. Personnel should avoid exaggeration, derogatory remarks, guesswork or inappropriate characterizations that can be misunderstood. This requirement applies equally to communications of all kinds, including e mail, informal notes, internal memos, and formal reports.
Use of E-mail and Internet Services
E-mail and internet services are provided to assist Personnel in carrying out their work. Incidental and occasional personal use is permitted, but never for personal gain or any improper purpose. Personnel may not access, send or download any information that could be insulting or offensive to another person, such as sexually explicit messages, cartoons, jokes, unwelcome propositions, derogatory comments based on racial or ethnic characteristics, or any other message that could reasonably be viewed as harassment. Flooding the Migao Entities' system with junk mail and trivia hampers the ability of the system to handle legitimate business and is prohibited.
Messages (including voice-mail) and computer information sent, received or created by Personnel are considered property of the Migao Entities and Personnel should recognize that these messages and information are not "private". Unless prohibited by law, the Migao Entities reserve the right to access and disclose those messages and information as necessary for business purposes. Personnel should use good judgment and not access, send messages or store any information that they would not want to be seen or heard by others.
Use of Software
All software used by employees to conduct Company business must be appropriately licensed. Employees should never make or use illegal or unauthorized copies of any software, whether in the office, at home, or on the road, since doing so may constitute copyright infringement and may expose the employee and the Company to potential civil and criminal liability. Any non licensed/supported software will be removed.
Records on Legal Hold
A legal hold suspends all document destruction procedures in order to preserve appropriate records under special circumstances, such as litigation or government investigations. Migao's Chief Financial Officer determines and identifies what types of Company records or documents are required to be placed under a legal hold and will notify employees if a legal hold is placed on records for which they are responsible. Employees must not destroy, alter or modify records or supporting documents that have been placed under a legal hold under any circumstances. A legal hold remains effective until it is officially released in writing by the Chief Financial Officer. If an employee is unsure whether a document has been placed under a legal hold, such employee should preserve and protect that document while the Chief Financial Officer is contacted.
The information in the Company's public communications must be full, fair, accurate, timely and understandable. All employees and directors are responsible for acting in furtherance of this obligation and complying with the Company's Disclosure Policy to that end. Each employee and director is responsible for complying with the Company's disclosure controls and procedures and internal controls for financial reporting. Any questions concerning the Company's disclosure controls and procedures and internal controls for financial reporting should be directed to Migao's Chief Financial Officer.
The Company has established specific policies regarding who may communicate information to the public, the press and the financial analyst communities as set out in the Disclosure Policy:
- Migao's Chief Executive Officer, Chief Financial Officer and its external investor relations consultant (collectively, the "Spokesmen") are the sole official spokespeople for all communication with the media, investors and analysts.
- Pursuant to the Disclosure Policy, all public disclosure through press releases of material information will be determined by the Management Disclosure Committee and the Board of Directors of Migao.
The Spokesmen are the only people who may communicate externally on behalf of the Company. Employees and directors should refer all inquiries or calls from the press, from shareholders or from financial analysts to one of the Spokesmen, who will see that the inquiry is directed to the appropriate authority within the Company.
Employees and directors may not publish or make public statements outside the scope of employment with or service to the Company that might be perceived or construed as attributable to the Company without preapproval from Migao's Chief Executive Officer. Any such statement must include a disclaimer that the publication or statement represents the views of the specific author and not of the Company.
WAIVERS OF THE CODE
Any waiver of this Code for executive officers or directors may be made only by the Directors of Migao (or a committee of the Board of Directors to whom that authority has been delegated) and shall be subject to disclosure as required by law or stock exchange regulation.
REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOR
The Migao Entities have a strong commitment to the conduct of business in a lawful and ethical manner. Personnel are encouraged to talk to executive officers or other appropriate personnel about observed illegal or unethical behavior and when in doubt about the best course of action in a particular situation. It is the policy of the Migao Entities not to allow retaliation for reports of misconduct by others made in good faith. It is, at the same time, unacceptable to file a report knowing that it is false. All Personnel are expected to cooperate in internal investigations of misconduct. See "Confidential Reporting Procedures" below for confidential reporting of Code violations.
All Personnel must work to ensure prompt and consistent action against violations of this Code or related policies and guidelines. However, in some situations it is difficult to know right from wrong. Since we cannot anticipate every situation that shall arise, it is important that the Migao Entities have a way to approach a new question or problem. These are the steps to keep in mind:
- Make sure you have all the facts. In order to reach the right solutions, we must be as fully informed as possible.
- Ask yourself: What specifically am I being asked to do? Does it seem unethical or improper? This shall help you to focus on the specific question you are faced with and the alternatives you have. Use your judgment and common sense - if something seems like it might possibly be unethical or improper, it probably is.
- Clarify your responsibility and role. In most situations, there is shared responsibility. Are your colleagues informed? It may help to get others involved and discuss the problem.
- Discuss the problem with your supervisor. This is the basic guidance for all situations. In many cases, your supervisor shall be more knowledgeable about the question, and shall appreciate being brought into the decision-making process. Remember that it is your supervisor's responsibility to help solve problems.
- Seek help from Migao resources. In the rare case where it may not be appropriate to discuss an issue with your supervisor, or where you do not feel comfortable approaching your supervisor with your question, discuss it locally with your "two-up". If that is not appropriate for any reason, contact, the Corporate Secretary or Mr. Peiwei Ni in China.
- You may report ethical violations in confidence and without fear of retaliation. If your situation requires that your identity be kept secret, your anonymity shall be protected. The Migao Entities do not permit retaliation of any kind against employees for good faith reports of ethical violations.
CONFIDENTIAL REPORTING PROCEDURE
Any employee with a good faith concern about any violation of this Code or related policies and guidelines can report those concerns directly to the Chairman of the Corporate Governance and Compensation Committee of Migao (currently Peiwei Ni) in any of the following ways:
- by email: email@example.com
- by phone: 1-416-606-8883 (Canada) 86 137 0101 8116 (China)
- by mail: 38 Nan Wei Lu, C1-501, Xuanwu District, Beijing, China, 100050
- Confidentiality of reports received by the Chairman shall be maintained to the fullest extent possible, consistent with the need to conduct an appropriate review. When possible, the Chairman shall acknowledge receipt of a report, although it is not the intention to communicate to the person making that report the status of its review or resolution.
The Chairman shall maintain a log of all reports that are received, tracking their receipt, investigation and resolution.
I acknowledge that I have received and read the Code of Business Conduct and Ethics of Migao Corporation and understand my obligations to comply with the principles and policies outlined in the Code and with related policies and guidelines of Migao Entities.
Name (printed): ................................................................................................
This signed and completed form should be returned to the Chief Financial Officer in Canada or Mr. Peiwei Ni in China within 30 days of receiving a copy of the Code.