3.

Whistle Blowing Policy

Government of India in the year 2011 has passed the Whistle Blower Protection Act
giving the Whistle Blowing Policy a Statutory Protection. Even Section 177 of
Companies Act provides for creation of a whistle blowing policy for listed companies.
Although, it is prescribed for listed companies, there is no harm in it if it is
implemented in a Pvt Ltd Company.
General guidelines regarding this policy:
1. Company will have to create a Separate email id__________ only for receiving the
emails from whistleblowers.
2. This email id will be accessed only by the Board of Directors of the Company.
3. Many company uses special hot lines for this purpose but it may not be prudent
considering the size of our company and cost attached to it.
4. All departmental heads are required to notify & communicate the existence and
contents of this policy to the employees of their department.
5. Every departmental head shall submit an undertaking duly signed by him to the
Board of Directors that this policy was notified to each employees of his
department.
6. The new employees shall be informed about the policy by the HR department.
7. The Board of Directors is entitled to amend, suspend this policy at any time.
Eligibility
All Employees and directors of the Company are eligible to make Protected
Disclosures under the Policy. The Protected Disclosures may be in relation to matters
concerning the Company or any other group Company.
Purpose of this Policy
Any employee of the company who has knowledge about any of the
violation/contravention/illegal/or any other wrong thing going in the company, he
should be able to freely report this to the concerned authorities. The employee will
be completely protected from any kind of intimation or threats from the aggrieved
party.

What kind of Violations/wrong actions should be reported?

Cash Related
Theft of cash
Stealing from petty cash.
Taking money from the Safe.
Skimming of cash before recording revenues or receivables (understating sales or
receivables).
Stealing incoming cash or cheques through an account set up to look like a bona
fide payee account.
False payment requests
Employee creating false payment instruction with forged signatures and
submitting it for processing.
False email payment request together with hard copy printout with forged
approval signature.
Taking advantage of the lack of time which typically occurs during book closing to
get false invoices approved and paid.
Cheque fraud
Theft of company cheques.
Duplicating or counterfeiting of company cheques.
Tampering with company cheques (payee/amount).
Depositing a cheque into a third party account without authority.
Cheque kiting (a fraud scheme using two deposit accounts to withdraw money
illegally from the bank).
Paying a cheque to the company knowing that insufficient funds are in the
account to cover it.
Billing Schemes
Over-billing customers.
Recording of false credits, rebates or refunds to customers.

 Pay and return schemes (where an employee creates an overpayment to a

supplier and pockets the subsequent refund).
Using fictitious suppliers or shell companies for false billing.

Misuse of accounts
Wire transfer fraud (fraudulent transfers into bank accounts).
Unrecorded sales or receivables.
Employee account fraud (where an employee is also a customer and the
employee makes unauthorized adjustments to their accounts).
Writing false credit note to customers with details of an employees personal bank
account or of an account of a company controlled by the employee.
Stealing passwords to payment systems and inputting series of payments to own
account.
Non Cash
Inventory and fixed assets
Theft of inventory.
False write offs and other debits to inventory.
False sales of inventory.
Theft of fixed assets, including computers and other IT related assets.
Theft or abuse of proprietary or confidential information (customer information,
intellectual property, pricing schedules, business plans, etc).
Receiving free or below market value goods and services from suppliers.
Unauthorized private use of company property.
Procurement
Altering legitimate purchase orders.
Falsifying documents to obtain authorization for payment.
Forging signatures on payment authorizations.
Submitting for payment false invoices from fictitious or actual suppliers.

 Improper changes to supplier payment terms or other supplier details.

Intercepting payments to suppliers.
Sending fictitious or duplicate invoices to suppliers.
Improper use of company credit cards.
Marked up invoices from contracts awarded to supplier associated with an
employee.
Payroll
Fictitious (or ghost) employees on the payroll.
Falsifying work hours to achieve fraudulent overtime payments.
Abuse of commission schemes.
Improper changes in salary levels.
Abuse of holiday leave or time off entitlements.
Submitting inflated or false expense claims.
Adding private expenses to legitimate expense claims.
Applying for multiple reimbursements of the same expenses.
False workers compensation claims.
Bribery and extortion
Bribery
Payment of agency/facilitation fees (or bribes) in order to secure a contract.
Authorizing orders to a particular supplier in return for bribes.
Giving and accepting payments to favour or not favour other commercial
transactions or relationships.
Payments to government officials to obtain a benefit t (e.g. customs officials, tax
inspectors).
Anti-trust activities such as price fixing or bid rigging.
Illegal political contributions.
Extortion

 Extortion (offering to keep someone from harm in exchange for money or other
consideration).
Blackmail (offering to keep information confidential in return for money or other
consideration)

Or any other kind of violation/wrong thing which an employee feels is

wrong & it should get reported.

How to report
Step 1:
If an employee has a concern about malpractice, he or she should consider raising it
initially with their line manager. This may be done orally or in writing.
An employee should specify from the outset if they wish the matter to be treated in
confidence (i.e. his identity is not be revealed) so that appropriate arrangements
can be made.
If an employee feels that they are unable to raise a particular matter with their line
manager, for whatever reason, they should raise the matter with their head of
department or any other person as the board may decide.
Step 2:
If these channels have been followed and the employee still has concerns or he/she
does not want to raise these issues with them, then he should directly send an
email @ (_______________________) to report the matter with his full identity including
the concerned department where he is working. Further, all precautions will be
taken to keep his identity discreet/secret.
Protecting the employee
Company will not tolerate harassment or victimization of anyone raising a genuine
concern under the whistle blowing policy. If an employee requests that their identity
be protected, all possible steps will be taken to prevent the employees identity
becoming known. If the situation arises where it is not possible to resolve the
concern without revealing the employees identity (e.g. if the employees evidence
is needed in court), the best way to proceed with the matter will be discussed with
the employee.
Disqualifications

a. While it will be ensured that genuine Whistleblowers are accorded complete

protection from any kind of unfair treatment as herein set out, any abuse of this
protection will warrant disciplinary action.
b. Protection under this Policy would not mean protection from disciplinary
action arising out of false or bogus allegations made by a Whistleblower
knowing it to be false or bogus or with a mala fide intention.
c. Whistleblowers, who make three or more Protected Disclosures, which
have been subsequently found to be mala fide, frivolous, baseless,
malicious, or reported otherwise than in good faith, will be disqualified
from reporting further Protected Disclosures under this Policy. In respect
of such Whistleblowers, the Company would reserve its right to
take/recommend appropriate disciplinary action.