PROJECT REPORT ON

WHISTLE BLOWER POLICY-

STATUTORY PROVISIONS AND

GODREJ

Contents
INTRODUCTION......................................................................................................................2
LEGAL REGIME:.....................................................................................................................4
A. FOR COMPANIES:..................................................................................................................4
B. PUBLIC SERVANTS...............................................................................................................6
WHISTLE BLOWER POLICY OF GODREJ AS PER ANNUAL REPORT:.......................................6

1
 WHISTLE BLOWER POLICY OF GODREJ INDUSTRIES LIMITED:........................................7
Scope of the policy:.......................................................................................................................7
Guiding Principle of the Policy:....................................................................................................8
About anonymous disclosures:......................................................................................................8
Protection to Whistle Blowers:......................................................................................................8
Accountability of Whistle Blowers:...............................................................................................9
REFERENCES:........................................................................................................................10

INTRODUCTION

 The term “whistle-blowing” originates from the practice of British policemen who blew their
whistles whenever they observed commission of a crime. Whistle blowing means calling the
attention of the top management to some wrongdoing occurring within an organization. A
whistle blower may be an employee, former employee or member of an organisation, a
government agency, who has willingness to take corrective action on the misconduct. 1
A whistle-blower is considered as any individual who makes a ‘disclosure’. The intent has

1
https://taxguru.in/company-law/whistleblowing-vigil-mechanism-companies-act-2013.html

2
always been to give the terms ‘whistle-blower’ and ‘disclosure’ the widest possible
amplitude.2

One of the first modern definitions of Whistle-Blowing was given by US Consumer activists
Ralp Nader in 1971 who described it as “An act of a man or a woman who, believing that the
public interest over-rides the interest of the organization he serves, blows the whistle that the
organization is involved in corrupt, illegal, fraudulent and harmful activity.

There are total eight type of whistle blowers, but the important ones are the:3

Internal:

A Whistle Blower may be within the organization who discloses any illegal, immoral or
illegitimate practices to the employer. He/she may be;

 Employee
 Superior officer or
 Any designated officer
 External:
 A whistle Blower may be outside the organization who discloses any illegal, immoral or
illegitimate practices to the company. He/she may be;

 Lawyers
 Media
 Law enforcement
 Watchdog agencies
Most whistle blowers are Internal Whistle Blowers who report misconduct on a fellow
employee or superior within the company. External Whistle Blowers report misconduct to
outside persons or entities. While whistle blowing involves the revelation of misconduct or
illegality occurring in an organization. This necessarily involves disclosing the secret
information beyond the bounds intended by those trying to keep it secret, and often this
involves publication and disclosure to the general public.4

2
https://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-single-view/
article/whistleblowing-in-india-are-we-there-yet.html?
no_cache=1&cHash=b5747c0cd8db654635cb5ee27689acaa#:~:text=There%20is%20no%20specific%20law,to
%20private%20employers%20in%20India.&text=The%20purpose%20of%20any%20whistleblower,subsequent
%20victimization%2C%20discrimination%20or%20disadvantage.
3
Ibid
4
https://www.icsi.edu/media/webmodules/45th_nc/WhistleBlowing_BalancingonaTightRope.pdf

3
 LEGAL REGIME:

A. FOR COMPANIES:

 Section 177(9) and (10) of the Companies Act, 2013 provides that all the
public listed companies have to mandatorily establish a vigilant mechanism
for employees and senior executives to report genuine concerns. Further it has
been made mandatory to establish a whistle-blower policy with clear and
adequate safeguards against the victimisation of whistle blower and make
provisions for the direct access to the chairperson of the Audit Committee.
Such details of establishment of such a mechanism shall be disclosed by the
company on its website.
 It is mandatory for:5
 All the listed companies,

 Companies which accept deposits from the public,

 Companies which have borrowed money from Banks and PFI in excess

of Rs.50 crores under section 177(9) read with Companies (Meetings
of Board and its Powers) Rules, 2014.

 The Companies and (Meetings of Board and its Powers) Rules, 2014 further
provides that in case of repeated frivolous complaints being filed by a director
or an employee, the audit committee or the director nominated to play the role
of audit committee may take suitable action against the director or the
employee including reprimand.6

 The SEBI (LODR) Requirements, 2015 also contain requirements for

establishing a Vigil Mechanism termed ‘Whistle Blower Policy’.
 Regulation 4(2)(d)(iv) of SEBI (LODR), 2015 provides for the listed
entities to devise an effective Whistle blower mechanism viz. Whistle
Blower Policy enabling stakeholders, including individual employees

5
Vigil Mechanism/Whistle Blowing Policy under Companies Act available at http://kritiadvisory.com/vigil-
mechanism-whistle-blower-policy-under-company-act-2013/

6
Supra Note 1

4
 and their representative bodies, to freely communicate their concerns
about illegal or unethical practices.

 The Securities Exchange Board of India (SEBI) has mandated that every listed
company should have a whistle-blower policy and make employees aware of
such policy to enable employees to report instances of leak of unpublished
price sensitive information.7
 With effect from December 2019, the SEBI has also introduced a reward
mechanism for incentivizing ‘Informants’ to report violation of insider trading
laws to SEBI. 8
 Recently, the Companies (Auditor’s Report) Order, 2020 was issued (CARO
2020) by the Ministry of Corporate Affairs, in line with its objective of
strengthening the corporate governance framework under the Companies Act,
2013. The Order applies to every company, including a foreign company as
defined in the Companies Act, 2013. CARO 2020 necessitates enhanced due
diligence and disclosures on the part of auditors of eligible companies and has
been designed to bring in greater transparency in the financial state of affairs
of such companies. The revisions have also put greater onus on companies to
share information with the auditors, especially on whistle-blower complaints
received during the course of the year, for the consideration of the auditor,
who usually then seeks to know the manner in which the company has dealt
with such complaints, including nature of complaint and quantum involved.

B. PUBLIC SERVANTS
India has enacted the Whistle Blowers Protection Act, 2014 which is applicable only to
public servants.

WHISTLE BLOWER POLICY OF GODREJ AS PER ANNUAL REPORT:

By pursuing the Annual Report, 2020 of the Godrej Industries, it is clearly evident that the
company does have a clear-cut Whistle Blowers Policy in place which is in compliance

7  
Regulation 9A (6), Securities and Exchange Board of India (Prohibition Of Insider Trading) Regulations, 2015
8
https://www.deccanherald.com/business/business-news/sebi-comes-out-with-mechanism-to-reward-
whistleblowers-788514.html

5
 with the law i.e., as per Section 177(9) and (10) of the Companies Act,2013. The major
highlights of the Annual report were:
 The Company has a Whistle Blower Policy wherein the employees are free to
report violations of laws, rules, regulations or unethical conduct to the
‘Whistle Blowing Officer’ of the Company.
 No personnel / employee of the Company has been denied access to the Audit
Committee of the Company.
 The confidentiality of the reported violations, if any, is maintained and the
employees reporting violations are not subjected to any discriminatory
practice. Vigil Mechanism / Whistle Blower Policy is posted on the website of
your Company.
 The purpose of the Whistle-blower Policy is to allow employees to raise
concerns about unacceptable, improper or unethical practices being followed
in the organization, without necessarily informing their supervisors.
 A Whistleblowing Officer has been designated for the purpose of receiving
and recording any complaints under this policy. Therefore, the company has a
proper systematic arrangement which enables an employee to file a complaint
and by appointing a Whistle-Blowing officer, the employee would know that
how he has to approach with the reporting of the misconduct.
 75 stakeholder complaints were received in the past Financial Year and all
such complaints were satisfactorily resolved by the management.
 One of the terms of reference of the Audit Committee is:
To review the functioning of the whistle blower mechanism, which is in
compliance to the SEBI (LODR) Requirements, 2015.

WHISTLE BLOWER POLICY OF GODREJ INDUSTRIES LIMITED:9

Godrej has a whistle blower policy since October 25, 2011 which has been updated
regularly to ensure that it is in compliance with the law. The Latest is Version 1.4,
which was updated in May 2020 for including reporting of UPSI (Unpublished price
sensitive information) by employees, as per Regulation 9A (6) of Securities and

9
https://www.godrejindustries.com/public/uploads/policies_and_codes/
WhistleBlowerPolicy_V5_02042021.pdf

6
 Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations,
2018.
Scope of the policy:10
Various stakeholders of the Company are eligible to make Protected Disclosures
under the Policy. These stakeholders may fall into any of the following broad
categories:
• Employees of the Company • Employees of other agencies deployed for the
Company’s activities, whether working from any of the Company’s offices or any
other location • Contractors, vendors, suppliers or agencies (or any of their
employees) providing any material or service to the Company • Customers of the
Company • Any other person having an association with the Company.
A person belonging to any of the above-mentioned categories can avail of the
channel provided by this Policy for raising an issue covered under this Policy.
The Policy covers malpractices and events which have taken place/ suspected to take
place involving: 1. Abuse of authority 2. Breach of contract 3. Negligence causing
substantial and specific danger to public health and safety 4. Manipulation of
company data/records 5. Financial irregularities, including fraud or suspected fraud or
Deficiencies in Internal Control and check or deliberate error in preparations of
Financial Statements or Misrepresentation of financial reports 6. Any unlawful act
whether Criminal/ Civil 7. Pilferage of confidential/propriety information8. Deliberate
violation of law/regulation 9. Wastage / misappropriation of company funds/assets
10.Bribery or corruption 11.Sexual Harassment

Guiding Principle of the Policy:

To ensure that this Policy is adhered to, and to assure that the concern will be acted
upon seriously, the Company will:
1. Ensure that the Whistle blower and/or the person processing the Protected
Disclosure is not victimized for doing so
2. Treat victimization as a serious matter, including initiating disciplinary action on
person/(s) indulging in victimization
3. Ensure complete confidentiality
10
https://whistleblower.godrej.com/WhistleBlowerWeb/assets/pdf/Whistleblower.pdf

7
4. Not attempt to conceal evidence of the Protected Disclosure
5. Take disciplinary action, if any one destroys or conceals evidence of the Protected
Disclosure made/to be made
6. Provide an opportunity of being heard to the persons involved especially to the
subject

About anonymous disclosures:

Whistle blowers are encouraged to put their names to their disclosures. However,
individuals may raise concerns anonymously. As compared to concerns raised where
whistle blowers have chosen to identify themselves, the Company will decide to take
up an anonymously expressed concern based on the following factors:
• The seriousness of the issue raised;
• The credibility of the concern; and
• The likelihood of confirming the allegation from attributable sources. Whistle
blowers are, therefore, strongly encouraged to share their identity when making the
disclosure.

Protection to Whistle Blowers:

 If one raises a concern under this Policy, he/she will not be at risk of suffering
any form of reprisal or retaliation like losing her/ his job or suffer loss in any
other manner as a result of reporting under this Policy.

 The protection is available provided that:

o The Whistle blower has chosen to identify themselves

o The communication/ disclosure is made in good faith

o The Whistle blower reasonably believes that information, and any

allegations contained in it, are substantially true; and

o The Whistle blower is not acting for personal gain. Anyone who
abuses the procedure will be subject to disciplinary action, as will
anyone who victimizes a colleague by raising a concern through this
procedure.

8
  The Company will not tolerate the harassment or victimization of anyone
raising a genuine concern. As a matter of general deterrence, the Company
shall publicly inform employees of the penalty imposed and disciplinary
action taken against any person for misconduct arising from retaliation.

 The identity of the whistle-blower has to be kept confidential.

Accountability of Whistle Blowers:

 Bringing to early attention of the Company any improper practice they
become aware of. Although they are not required to provide proof, they must
have sufficient cause for concern

 Avoiding anonymity when raising a concern.

 Following the procedures prescribed in this policy for making a Disclosure.

 Co-operating with investigating authorities, maintaining full confidentiality.

 Employees are expected to avoid invoking their rights under this Policy to
settle personal scores or to give vent to their malicious intentions.

 Immunity to whistle-blowers does not extend to immunity for involvement in

the matters that are the subject of the allegations and investigation.

 In exceptional cases, where the whistle blower is not satisfied with the
outcome of the investigation carried out by the Whistle Officer or the
Committee, he/she can make a direct appeal to the CMD of the Company.

REFERENCES:

1. The Companies Act, 2013

2. Avtaar Singh, Business Law, EBC Publishing Pvt Ltd., 11th ed, 2018
3. https://taxguru.in/company-law/whistleblowing-vigil-mechanism-companies-
act-2013.html

9
4. https://www.nishithdesai.com/information/research-and-articles/nda-hotline/
nda-hotline-single-view/article/whistleblowing-in-india-are-we-there-
yet.html?
no_cache=1&cHash=b5747c0cd8db654635cb5ee27689acaa#:~:text=There
%20is%20no%20specific%20law,to%20private%20employers%20in
%20India.&text=The%20purpose%20of%20any
%20whistleblower,subsequent%20victimization%2C%20discrimination%20or
%20disadvantage
5. https://www.icsi.edu/media/webmodules/45th_nc/
WhistleBlowing_BalancingonaTightRope.pdf
6. Vigil Mechanism/Whistle Blowing Policy under Companies Act available at
http://kritiadvisory.com/vigil-mechanism-whistle-blower-policy-under-
company-act-2013/
7. https://www.godrejindustries.com/public/uploads/policies_and_codes/
WhistleBlowerPolicy_V5_02042021.pdf
8. https://www.deccanherald.com/business/business-news/sebi-comes-out-with-
mechanism-to-reward-whistleblowers-788514.html
9. https://whistleblower.godrej.com/WhistleBlowerWeb/assets/pdf/
Whistleblower.pdf

10