Corporate Governance

For Additional Information Contact:
sales@esica.com
North America: 1-800-799-6324
International: (250) 655-3211

The TSX Venture Exchange (the "Exchange") requires each Tier 1 listed company to disclose in its approach to corporate governance with reference to the Toronto Stock Exchange ("TSX") guidelines for effective corporate governance. The following is provided in compliance with the requirements of the Exchange.

The Company's Board of Directors (the "Board") is engaged in an ongoing review of the Company's corporate governance practices. The Board considers good corporate governance to be central to the effective and efficient operation of the Company. While the TSX guidelines are not requirements, but rather recommendations, the intention of the Board is to refine the Company's practices in order to substantially align them with the TSX and other applicable corporate governance guidelines. The Board believes that a flexible approach to corporate governance practices is important in order to allow the Company to adopt a governance framework best suited for the Company. The Board believes that in the case of some of the TSX guidelines, alternative approaches may be preferable given the Company's particular circumstances.

The following table sets out the fourteen corporate governance guidelines from the TSX Company Manual, together with comments reflecting the position of the Company with respect to each guideline.

TSX Governance Guidelines	Comments
1. Board should explicitly assume responsibility for stewardship of the Company, and specifically for:	The Board is responsible for formulating and implementing corporate policies and generally oversees the business affairs of the Company. The Board meets at least six times during the year to review ongoing business of the Company. The Board also meets when matters arise that require consideration prior to the next regularly scheduled meeting.
(a) adoption of a strategic planning process	Each year, the Board considers the strategic direction of the Company, including corporate goals and objectives and the allocation of capital and other resources.
(b) identification of principal risks, and implementing risk management systems	The Board considers principal risks and risk management systems on an ongoing basis.
(c) succession planning and monitoring of senior management	The Board monitors senior management through regular contact with executive directors and other members of the management team. Succession planning issues are addressed as they arise.
(d) communications policy	The Board reviews and approves the contents of the Company's principal disclosure documents, including the Annual Report, MD&A and Information Circular. Shareholder communications are currently administered by the Chief Executive Officer who is also a member of the Board.
(e) integrity of internal controls and management information systems	Management is responsible for implementing internal controls and management information systems, the integrity of which is monitored by the Audit Committee. The unrelated directors that sit on the Audit Committee meet with the Company's external auditors on an annual basis to provide input with respect to the Company's internal controls.
2. Majority of directors should be "unrelated" (independent of management and free from conflicting interests)	The Board is comprised of five members, four of whom are unrelated directors.
3. Disclosure as to whether each director is related, and how that conclusion was reached	The Chief Executive Officer is a related director due to his position as President and Chief Executive Officer, of the Company. The remaining directors of the Company are considered to be unrelated directors as they are independent of management of the Company and are not subject to influence by any particular shareholder of the Company.
4. Appoint a committee responsible for appointment/assessment of directors	The Company has a compensation committee comprised of two unrelated members.
5. Implement a process for assessing the effectiveness of the Board, its committees and individual directors	The effectiveness of the Board, committees of the Board and individual directors is assessed by the Board, under the direction of the Chairman, as applicable.
6. Provide orientation and education programs for new directors	The Chairman and senior management provide orientation and education for new Board members through interviews, orientation meetings and tours of the Company's manufacturing facility.
7. Examine the size of Board, with a view to improving effectiveness	While the effectiveness of the Board is assessed by the Board, under the direction of the Chairman, at present it is intended that the size of the Board will remain relatively small in order to maintain its efficiency and effectiveness.
8. Review compensation of directors in light of risks and responsibilities	The Compensation Committee is responsible for reviewing the compensation of directors in light of risks and responsibilities.
9. Committees should generally be composed of non-management directors, a majority of whom should be unrelated	The Audit Committee complies with this requirement.
10. The Board should assume responsibility for or appoint a committee responsible for the Company's approach to corporate governance issues	The Board is responsible for the Company's approach to corporate governance issues. The Board draws upon the expertise of the Company's external auditors and corporate legal counsel with respect to corporate governance matters.
11. Develop position descriptions for the Board and the Chief Executive Officer	The Board has the general responsibility to supervise the management of the affairs and business the Company. The responsibility of the Chief Executive Officer of the Company is to implement the corporate policies and objectives of the Company as determined by the Board.
12. Board should approve Chief Executive Officer's corporate objectives	The performance of the Chief Executive Officer of the Company is reviewed by the Board annually.
13. Establish structures and procedures to enable the Board to function independently of management	As the Company grows and develops, the Board will continue to work towards establishing structures and procedures to enable the Board to function more independently of management.
14. Establish an audit committee with a specifically defined set of roles and responsibilities	The Audit Committee has a specific function which includes reviewing and making recommendations to the Board with respect to the annual and interim financial statements of the Company. The Audit Committee meets with the auditors of the Company to facilitate the execution of their audit mandate.
15. All members should be non-management directors	All of members of the Audit Committee other than the CEO are non-management, unrelated directors.
16. Implement a system to enable individual directors to engage outside advisers, at the Company's expense	Individual directors may engage outside advisors at the Company's expense with the authorization of the Chairman of the Company.

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