Risk Management Policy

The “Corporate Fraud Policy” is required to facilitate the development of controls which will aid in the detection and prevention of fraud against BOI Shareholding Ltd. (“the Company”) Section 134(5) of the companies Act 2013 mentions that Board’s report shall also include a Director’s Responsibility Statement indicating therein that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. It is the intent of the Company to promote consistent organisational behaviour by providing guidelines and assigning responsibility for the development of internal controls and conduct of investigations.

In the light of the foregoing and keeping in view the approach of the Company, it is considered appropriate that a Fraud Policy is documented and implemented.

Scope of policy

This policy applies to any irregularity, or suspected irregularity, involving employees as well as consultants, vendors, contractors outside agencies, and/or other parties with a business/service relationship with the Company.

Authorized Person

The Managing Director of the Company will be the “Authorised Person”, who will co-ordinate with, all the investigations, both internal and external.

Policy

Detection

Management is responsible for detecting defalcation, misappropriation and other irregularities. Each member of the management team should be familiar with the types of improprieties that might occur within his or her area of responsibility and be alert for any indication of irregularity,

Any irregularity detected or suspected must be reported immediately to the Authorised Person.

Prevention

Management is also responsible for prevention of frauds, which would be taken care by:

Identification of areas prone to fraud risk and mitigation of fraud risk.
Plugging the loopholes in the systems, procedure and practices leading to perpetration of frauds noticed during study of frauds.
Educate the staff members by impacting suitably on fraud and its prevention.
Undertake periodical analysis of frauds and report the same to the board.

Policy Objectives

The “Fraud Policy” has been framed to protecting Company’s money and property from any attempt either by members of the public, contractors, sub-contractors, agents, recipients, intermediaries or its own staff, to gain by deceit, financially or through other benefits.

In this regard, Fraud Policy:

Maintains a zero tolerance attitude towards fraud;
Requires that any case of suspected or detected fraud must be reported immediately to the Authorised Person;
Adopts a risk management approach to the prevention detection and investigation of suspected fraudulent activity that is incorporated into its business processes, management practices, internal controls and related activities;
Commits to training staff in ethics, privacy and fraud awareness activities and
Prosecutes or applies other appropriate sanctions against those who have committed fraud.

Definition of fraud

In terms of The Companies Act, 2013:
“Fraud” in relation to affairs of a company or anybody corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss.

“Fraud” is a wilful act intentionally committed by an individual(s) – by deception suppression, cheating or any other fraudulent or any other illegal means, thereby, causing wrongly gain(s) to self or any other individual(s) and wrongful loss to other(s).

Actions constituting fraud

The term “Fraud” shall be meant by any the following defalcation, misappropriation and other fiscal irregularities:

Any dishonest or fraudulent act.
Misappropriation of funds, securities, supplies, or other assets.
Impropriety in the handling or reporting of money or financial transactions.
Profiteering as a result of insider knowledge of Company activities.
Disclosing confidential and proprietary information to outside parties.
Disclosing to other persons securities activities engaged in or contemplated by the Company.
Accepting or seeking anything of material value from contractors, vendors, or persons providing services/materials to the Company, causing irregularities.
Destruction, removal, or inappropriate use of records, furniture, fixtures and equipment and /or,
Any similar or related irregularity.

Investigation responsibilities

The Authorised Person has the primary responsibility for entrusting the investigation of all suspected fraudulent acts as defined in the policy. If the investigation substantiates that fraudulent activities have occurred, the Authorised Person shall report the fraud to the company’s board and take suitable steps for redressal under direction of the Board of Directors of the Company.

Decisions to refer the internal investigation results to the appropriate law enforcement and or regulatory agencies for independent investigation will be made in conjunction with the Board of Directors of the Company. Similarly, the decision to give sanction for prosecution shall be done in consultation with the Board of Directors of the Company.

Reporting

Company will submit a quarterly report to the Subsidiaries and Depository Management Department – Bank of India, before the end of the first month of the subsequent quarter, in addition to quarterly and yearly reporting of fraud to the Audit committee and to the Board.

In case of identification of any fraud, the following reports relating to fraud will be submitted to the Audit Committee and to the Board:

Confidentiality

The Authorised Person treats all information received confidentially. Any employee who suspects dishonest or fraudulent activity will notify the Authorised Person immediately, and should not attempt to personally conduct investigations or interviews/interrogations related to any suspected fraudulent act.

Investigation results will not be disclosed or discussed with anyone other than those who have a legitimate need to know. This is important in order to avoid damaging the reputation of persons suspected but subsequently found innocent of wrongful conduct and to protect the Company from potential civil liability.

Authorization for investigation suspected fraud

Authorised person will have

Free and unrealistic access to all Company records and premises, whether owned or rented; and
The authority to examine, copy, and/or remove all or any portion of the contents of files, desks, cabinets and other storage facilities on the premises without prior knowledge or consent of any individual who might use or have custody of any such items or facilities when it is within the scope of their investigation.

Authorization for investigation suspected fraud

Great care must be taken in the investigation of suspected improprieties or irregularities so as to avoid false accusations or alerting suspected individuals that an investigation is under way.

An employee who discovers or suspects fraudulent activity will contact the Authorised person immediately. The employee or other complainant may remain anonymous. All inquiries concerning the activity under investigation from the suspected individual his or her attorney or representative, or any other inquirer should be directed to the Authorised Person.

Reporting procedures

Termination

If an investigation results in a recommendation to terminate an individual, the recommendation will be reviewed by the Board and, if necessary, by outside counsel, before any such action is taken

Administration

The Managing Director is responsible for the administration, revision, interpretation, and application of this policy. The policy will be reviewed every year.