Vigil Mechanism Policy

Preface

This Policy is mandated under Section 177 of the Companies Act, 2013, and the Rules thereunder, which specify that: (a) every listed company, (b) companies accepting deposits from the public and (c) companies that have borrowed money from banks and public financial institutions exceeding Rupees Fifty Crores, must establish a Whistleblower Policy/Vigil Mechanism to enable directors and employees to report genuine concerns or grievances regarding unethical behavior, actual or suspected fraud or violations of the company's Code of Conduct.

Such a vigil mechanism should provide adequate safeguards to prevent victimization of employeesand directors who utilize the mechanism. It shall also offer direct access to the Chairperson of theAudit Committee or the director nominated to fulfil the role of the Audit Committee, as appropriate, in exceptional cases.

Accordingly, Zerodha Capital Private Limited has established a Vigil Mechanism, as the Company has borrowed funds from banks and public financial institutions exceeding Rs. 50 Crore and has formulated a policy for the same.

Applicability

This policy is applicable to all directors, employees (whether working in Bangalore or any other branchoffices), ex- employees, stakeholders, customers, suppliers, vendors and including agents of Zerodha Capital (herein after referring to as Whistle Blower).

Objectives

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct in its business operations. To maintain these standards, the Company encourages its employees to come forward and express any concerns regarding suspected misconduct, without fear of retaliation or unfair treatment. A Vigil (Whistleblower) Mechanism provides a channel for employees and directors to report their grievances or concerns related to unethical behavior actual or suspected fraud, or violations of company policies, legal or regulatory requirements incorrect or misrepresentation of any financial statements and reports, etc.

This mechanism does not absolve employees of their duty to maintain confidentiality in the course of their work. Additionally, it is not to be used as a means for raising malicious or unfounded allegations against individuals in positions of authority or colleagues in general.

Scope of the Policy

The Policy covers malpractices and events that have occurred or are suspected to have occurred, including but not limited to:

Misuse or abuse of authority
Fraud or suspected fraud
Violation of Company Rules
Manipulation or misappropriation of funds
Breach of the Company’s Code of Conduct
Breach of Business Integrity and Ethics
Breach of the terms and conditions of employment and related rules
Intentional financial irregularities
Violation of any laws, regulations or policies, including but not limited to corruption, bribery,theft, fraud, coercion, and willful omission
Gross wastage or misappropriation of Company funds/assets

This Policy also covers any other matters or activities that may adversely affect the interests of the Company.

Definitions

Audit Committee means the Audit Committee constituted by the Board of Directors of the Company in accordance with Section 177 of the Companies Act, 2013.
Company means Zerodha Capital Private Limited
Employee means every employee of the Company, including the Directors in the employment of the Company.
Investigators mean those persons authorized, appointed, consulted or approached by Nominated Director in connection with conducting investigation into a protected disclosure
Nominated Director The person designated by the Board to oversee the vigil mechanism (in the absence of an Audit Committee) to play the role of Audit Committee.
Protected Disclosure means any communication made in good faith that discloses or demonstrates information that may evidence unethical or Improper Activity.
Subject means a person or group of persons against or in relation to whom a Protected Disclosure is made or evidence gathered during the course of an investigation.
Vigilance and Ethics Officer means an officer appointed to receive protected disclosures from whistle blowers, maintaining records thereof, placing the same before the Board for its disposal and informing the Whistle Blower the result thereof.
Whistle Blower Any Employee or Director who discloses or demonstrates evidence of an unethical activity or any conduct that may constitute breach of the Group’s/Group Company’s Code of Conduct or Group Values. This whistleblower has come to the decision

Eligibility

All Employees of the Company and various stakeholders of the company are eligible to make Protected Disclosures under the Policy in relation to matters concerning the Company.

Role of a Whistle Blower / Complainant

The Whistle Blower’s role is that of reporting party with reliable information. They are not required to act as investigators, nor would they determine the appropriate or remedial action. They should also not act nor participate in any investigation activities unless warranted otherwise. Details of Whistle Blower will not be disclosed and will remain confidential at all times to the extent possible and permitted under law.

Procedure

For the purpose of implementation of the Policy, the Company Secretary shall act as Vigilance and Ethics Officer.
All Protected Disclosures concerning about Misuse or abuse of authority, Fraud or suspected fraud, Violation of Company rules, Manipulation or misappropriation of funds, Breach of the Company’s Code of Conduct, Breach of Business Integrity and Ethics, Breach of the terms and conditions of employment and related rules, Intentional financial irregularities, Violation of any laws, regulations or policies, including but not limited to corruption, bribery, theft, fraud, coercion, and willful omission, Gross wastage or misappropriation of Company funds/assets should be addressed to the Vigilance and Ethics Officer.
The contact details of the Vigilance and Ethics Officer

Address:

In the event of a Protected Disclosure is made against the Vigilance and Ethics Officer, it should be addressed to the Nominated Director.

Address:

If a protected disclosure is received by any executive of the Company other than the Vigilance and Ethics Officer, the same should be forwarded to the Vigilance and Ethics Officer for further appropriate action. Care must be taken to ensure the confidentiality of Whistleblower’s identity.
Protected Disclosures should preferably be submitted in writing to ensure clarity regarding the issues raised. The disclosure should either be typed or written in legible handwriting in English, Hindi or the regional language of the Whistleblower’s place of employment.
The Protected Disclosure should be accompanied by a cover letter which shall bear the identity of the Whistle Blower. The Vigilance and Ethics Officer shall detach the covering letter and forward only the Protected Disclosure to the Investigators for investigation.
Protected Disclosures should be based on factual information, not speculation or assumptions and should provide as much specific information as possible to allow a proper assessment of the concern’s nature and extent.
To provide protection to the Whistleblower, their identity should be disclosed in the covering letter accompanying the Protected Disclosure. There is no need to send a copy of the communication to anyone else within the Company.
In exceptional cases where the Whistle Blower is not satisfied with the outcome of the investigation and the decision, they may submit a direct appeal to the Nominated Director.

Investigation

All Protected Disclosures under this Policy shall be recorded and thoroughly investigated within a reasonable timeframe. The Vigilance and Ethics Officer or Nominated Director may conduct the investigation and at their discretion, may involve other officials or agencies.
The decision to conduct an investigation, made by the Vigilance and Ethics Officer or Nominated Director, is not an accusation. It should be treated as a neutral fact-finding process. The outcome of the investigation may not necessarily support the Whistleblower’s conclusion that an improper or unethical act has been committed.
The identity of both the Subject and the Whistleblower will be kept confidential to the extent possible, considering the legitimate needs of law and the investigation.
Subjects will generally be informed of the allegations at the beginning of a formal investigation and will have opportunities to provide their input during the process.
Subjects have the right to consult with individuals of their choice, other than the Investigators, members of the Board or the Whistleblower. They may also engage legal counsel at their own cost to represent them during the investigation. However, if the allegations against the Subject are found to be unfounded, the Company may consider reimbursing the legal costs.
Subjects have a responsibility not to interfere with the investigation. Evidence must not be withheld, destroyed or tampered with and witnesses must not be influenced, coached, threatened or intimidated by the Subjects.
Unless there are compelling reasons not to do so, Subjects will be given the opportunity to respond to significant findings in the investigation report. No allegation of wrongdoing against a Subject shall be considered valid unless supported by credible evidence.
Subjects have the right to be informed of the outcome of the investigation. If the allegations are not substantiated, the Subject should be consulted about whether public disclosure of the investigation results would be in the best interest of both the Subject and the Company.
The disciplinary measures, if applicable, may include the following:

Oral or written censure
Suspension from duty (with pay, reduced pay or without pay)
Restrictions on access
Removal of privileges or benefits
Reassignment
Assignment to a lower position
Reduction in future pay
Ineligibility for promotion for a specified period
Termination of appointment
Legal action

The investigation should generally be completed within 90 days of receiving the Protected Disclosure.

Reporting

A Quarterly Report with number and nature of complaints received under the Policy (if any) and their outcome shall be placed before the Board.

Disqualification

A Whistleblower who knowingly makes false allegations regarding unethical or improper practices or wrongful conduct, against any individual or subject, when reported to the Vigilance and Ethics Officer or the Nominated Director, shall be subject to appropriate disciplinary action, as per the rules, procedures and policies of the Company

Secrecy / Confidentiality

The Whistleblower, Vigilance and Ethics Officer, Nominated Director, the Subject and all individuals involved in the process shall:

Maintain confidentiality of all matters related to this Policy.
Ensure that documents and papers are never left unattended at any time.
Keep electronic communications and files strictly confidential.
Discuss the matters only with those individuals who are required to be involved in the investigation process, as per the guidelines of this Policy.

Protection

No unfair treatment will be imposed on a Whistleblower solely because they have reported a Protected Disclosure under this Policy. The Company firmly condemns any form of discrimination, harassment, victimization or other unfair employment practices directed at Whistleblowers. As such, the Company will provide complete protection to Whistleblowers against any retaliatory actions, including but not limited to threats, intimidation, termination or suspension of services, disciplinary action, transfer, demotion, denial of promotion or any other actions that may hinder the Whistleblower’s ability to perform their duties, including making further Protected Disclosures.

The Company will also take steps to mitigate any difficulties the Whistleblower may face as a result of making the Protected Disclosure. If the Whistleblower is required to provide evidence in criminal or disciplinary proceedings, the Company will ensure they receive appropriate guidance on the procedure and any necessary support.

A Whistleblower may report any violation of the above clause to the Nominated Director, who shall investigate the matter and recommend appropriate action to the management.

The identity of the Whistleblower shall be kept confidential to the extent possible and as permitted by law.

Any employee assisting in the investigation will be provided with the same level of protection as the Whistleblower.

Decision

If an investigation conducted by the Vigilance and Ethics Officer concludes that an improper or unethical act has occurred, the Vigilance and Ethics Officer shall recommend appropriate disciplinary or corrective action to the management of the Company. It is clarified that any disciplinary or corrective action taken against the Subject, as a result of the investigation findings under this Policy, shall be in accordance with the applicable personnel or staff conduct and disciplinary procedure

Retention Of Document

All Protected Disclosures, whether in writing or documented, along with the results of the investigations related to them, shall be retained by the Company for a minimum period of eight (8) years, or for such a longer period as specified by any applicable law, whichever is greater.

A Whistleblower Policy can only be effective if it is properly communicated to employees. A Whistleblower Policy can only be effective if it is properly communicated to employees. The policy should be published on the website of the company and details of establishment of Vigil mechanism shall be disclosed in the Board's Report of the Company.

Administration And Review Of Policy

The Company reserves the right to amend or modify this Policy, in whole or in part, at any time.
The Policy shall be reviewed annually by the Board of Directors of the Company.

Annexure

Template For Reporting Violation