Renaissance Capital Growth & Income Fund III, Inc.

 

Whistleblower Policy

 

The Audit Committee (the “Committee”) of the Board of Directors of Renaissance Capital Growth & Income Fund III, Inc., a Texas corporation (together with its subsidiaries, the “Company”), adopts this Whistleblower Policy (this “Policy”) on December 31, 2007.

 

I.     PURPOSE

 

This Policy establishes procedures for the receipt, review and retention of complaints relating to the Company’s accounting, internal accounting controls and auditing matters.  The Company is committed to complying with all applicable accounting standards, accounting controls and audit practices.  While the Company does not encourage frivolous complaints, the Company does expect its officers, employees and agents to report any irregularities and other suspected wrongdoing regarding questionable accounting or auditing matters.  It is the Company’s policy that its employees may submit complaints of such information on a confidential and anonymous basis without fear of dismissal or retaliation of any kind.  This Policy applies only to reports concerning Accounting Violations (as defined in Part III below).

 

The Committee is responsible for overseeing the receipt, investigation, resolution and retention of all complaints submitted pursuant to this Policy.

 

This Policy was adopted in order to:

 

          1.       cause violations to be disclosed before they can disrupt the business or operations of the Company, or lead to serious loss;

          2.      promote a climate of accountability and full disclosure with respect to the Company’s accounting, internal accounting controls, and auditing matters; and

          3.      ensure that no individual feels at a disadvantage for raising legitimate concerns.

 

This Policy provides a means whereby individuals can safely raise, at a high level, serious concerns and disclose information that an individual believes in good faith relates to Accounting Violations.

 

II.    REPORTING PERSONS PROTECTED

 

This Policy and the related procedures offer protection from retaliation against officers, employees and agents who make any complaint with respect to perceived Accounting Violations (referred to herein as a “Reporting Person”), provided the complaint is made in good faith. “Good faith” means that the Reporting Person has a reasonably held belief that the complaint made is true and has not been made either for personal gain or for any ulterior motive.

 

The Company will not discharge, demote, suspend, threaten, harass or in any manner discriminate or otherwise retaliate against any Reporting Person in the terms or conditions of his or her employment with the Company based upon such Reporting Person’s submitting in good faith any complaint regarding an Accounting Violation.  Any acts of retaliation against a Reporting Person will be treated by the Company as a serious violation of Company policy and could result in dismissal.

 

III.   SCOPE OF COMPLAINTS

 

Employees and officers (“Inside Reporting Persons”) as well as non-employees such as agents, consultants and investors (“Outside Reporting Persons”) are encouraged to report irregularities and other suspected wrongdoings regarding accounting, internal accounting controls or auditing matters, including, without limitation, the following (collectively referred to as “Accounting Violations”):

 

          1.       fraud or deliberate error in the preparation, evaluation, review or audit of any financial statement of the Company;

          2.      fraud or deliberate error in the recording and maintenance of financial records of the Company;

          3.      deficiencies in or noncompliance with the Company’s internal accounting controls;

          4.      misrepresentation or false statement to or by a senior officer or accountant of the Company regarding any matters contained in the financial records or any financial or audit reports of the Company; or

          5.      deviation from full and fair reporting of the Company’s financial condition.

 

IV. CONFIDENTIALITY OF COMPLAINT

 

The Committee will keep the identity of any Inside Reporting Person confidential and privileged under all circumstances to the fullest extent allowed by law, unless the Inside Reporting Person has authorized the Company to disclose his or her identity.

 

The Committee will exercise reasonable care to keep the identity of any Outside Reporting Person confidential until a formal investigation is launched.  Thereafter, the identity of the Outside Reporting Person may be kept confidential, unless confidentiality is incompatible with a fair investigation, there is an overriding reason for identifying or otherwise disclosing the identity of such person, or disclosure is required by law, such as where a governmental entity initiates an investigation of allegations contained in the complaint.  Furthermore, the identity of an Outside Reporting Person may be disclosed if it is reasonably determined that a complaint was made maliciously or recklessly.

 

V.    SUBMITTING COMPLAINTS

 

          1.       Inside Reporting Persons should submit complaints concerning Accounting Violations in accordance with the following procedures:

 

                   A.     Complaints must be submitted in writing and mailed in a sealed envelope addressed as follows:    

                                                The Audit Committee Chairman 

                                                Renaissance Capital Income Growth & Income Fund III, Inc.

                                                8080 N. Central, Suite 210

                                                Dallas, Texas  75206

                                                          Confidential - To be Opened Only by the Audit Committee Chairman

 

                             The Committee recommends that Inside Reporting Persons use the sample Complaint Form attached to this Policy when reporting Accounting Violations.

 

                   B..     If they so desire, Inside Reporting Persons may request to discuss their complaint with the Audit Committee Chairman by indicating such desire and including their name and telephone number in the complaint.

 

                   C.     Inside Reporting Persons may report Accounting Violations on an anonymous basis.  The Committee urges any employee that is considering making an anonymous complaint to strongly consider that anonymous complaints are, by their nature, susceptible to abuse, less reliable, and more difficult to resolve. In addition, employees considering making an anonymous complaint should be aware that there are significant rights and protections available to them if they identify themselves when making a complaint, and that these rights and protections may be lost if they make the complaint on an anonymous basis.  Therefore, the Company encourages employees to identify themselves when making reports of Accounting Violations.  In responding to anonymous complaints, the Committee will pay due regard to:

 

                             (i)      the fairness to any individual named in the anonymous complaint;

 

                             (ii)    the seriousness of the issue raised;

 

                             (iii)   the credibility of the information or allegations in the complaint, with allegations that are conclusory or that do not have a specific factual basis being likely to receive less credence; and

 

                             (iv)   the ability to ascertain the validity of the complaint and to appropriately resolve it without the assistance and cooperation of the person making the complaint.

 

          2.      Outside Reporting Persons should submit complaints concerning Accounting Violations in accordance with the following procedures:

 

                   A.     Complaints may be submitted by e-mail to whistlerencap@yahoo.com or by a written letter in a sealed envelope addressed as follows: 

                                                The Audit Committee Chairman 

                                                Renaissance Capital Income Growth & Income Fund III, Inc.

                                                8080 N. Central, Suite 210

                                                Dallas, Texas  75206

                                                          Confidential - To be Opened Only by the Audit Committee Chairman

 

                             The Committee recommends that Outside Reporting Persons use the sample Complaint Form attached to this Policy when reporting Accounting Violations.

 

                   B.      Outside Reporting Persons are required to disclose their identity in any complaints submitted under this Policy. Complaints submitted by non-employees on an anonymous basis may not be reviewed.

 

VI. INVESTIGATION OF COMPLAINTS

 

          A.     Upon receipt of a complaint, the Audit Committee Chairman (or his designated representative) will confirm the complaint pertains to an Accounting Violation.  Investigations will be conducted as quickly as possible, taking into account the nature and complexity of the complaint and the issues raised therein.  Any complaints submitted pursuant to this Policy that do not relate to an Accounting Violation will be returned to the Reporting Person, unless the Reporting Person’s identity is unknown.

 

          B.      The Audit Committee Chairman may enlist employees of the Company and outside legal, accounting and other advisors, as appropriate, to conduct an investigation of a complaint.

 

          C.     The results of each investigation will be reported timely to the Audit Committee, which will then apprise the Chief Executive Officer, and prompt and appropriate remedial action will be taken as warranted in the judgment of the Chief Executive Officer or as otherwise directed by the Audit Committee.  Any actions taken in response to a complaint will be reported to the Reporting Person to the extent allowed by law, unless the complaint was submitted on an anonymous basis.

 

          D.     An Inside Reporting Person who is not satisfied with the outcome of the initial investigation or the remedial action taken with respect thereto, if any, may submit directly to the Audit Committee for its review a written complaint with an  explanation of why the investigation or remedial action was inadequate.  An Inside Reporting Person may submit a revised complaint on an anonymous basis in his or her sole discretion.  The Inside Reporting Person should forward the revised complaint to the attention of the Audit Committee Chairman in the same manner as set out above for the original complaint.

 

                   The Audit Committee will review the Reporting Person's revised complaint, together with documentation of the initial investigation, and determine in its sole discretion if the revised complaint merits further investigation.  The Audit Committee will conduct a subsequent investigation to the extent and in the manner it deems appropriate.  The Audit Committee may enlist employees of the Company and outside legal, accounting and other advisors, as appropriate, to undertake the subsequent investigation.  The Audit Committee or its designated representative will inform the Reporting Person of any remedial action taken in response to a Revised Complaint to the extent allowed by law, unless the company was submitted on an anonymous basis.

 

VII.        RETENTION OF COMPLAINTS

 

The Chief Compliance Officer will maintain all complaints received, tracking their receipt, investigation and resolution.  All complaints and reports will be maintained in accordance with the Company’s confidentiality and document retention policies.

 

VIII.       UNSUBSTANTIATED ALLEGATIONS

 

If a Reporting Person makes a complaint in good faith pursuant to this Policy and any facts alleged therein are not confirmed by a subsequent investigation, no action will be taken against the Reporting Person.  In submitting complaints, Reporting Persons should exercise due care to ensure the accuracy of the information reported.  If, after an investigation, it is determined that a complaint is without substance or was made for malicious or frivolous reasons or otherwise submitted in bad faith, the Reporting Person could be subject to disciplinary action.  Where alleged facts reported pursuant to this Policy are found to be without merit or unsubstantiated:  (1) the conclusions of the investigation will be made known to both the Reporting Person, unless the complaint was submitted on an anonymous basis, and, if appropriate, to the persons against whom any allegation was made in the complaint, and  (2) the allegations will be dismissed.

 

X.    REPORTING AND ANNUAL REVIEW

 

The Chairman of the Audit Committee, will submit periodic reports to the Chief Executive Officer and the Audit Committee of all complaints and any remedial actions taken in connection therewith.  This Policy will be reviewed annually by the Audit Committee, taking into account the effectiveness of this Policy in promoting the reporting of Accounting Violations of the Company, but with a view to minimizing improper complaint submissions and investigations.

 

XI.   WEBSITE PUBLICATION

 

This Policy will be posted on the website of its Investment Adviser, RENN Capital Group, Inc., which is www.rencapital.com.

 

 


Whistleblower’s Complaint Form

 

General Instructions:

 

An employee of the Company who is reporting questionable accounting or auditing matters of the Company may or may not do so on an anonymous basis, at his or her sole discretion.  A non-employee’s complaint might not be reviewed if he or she fails to complete Part I (C)of this complaint form.

 

Please be advised that federal law prohibits the Company, as well as its officers, employees or agents, from discharging, demoting, suspending, threatening, harassing or otherwise discriminating against anyone who in good faith reports illegal activities of the Company.

 

Part I

 

A.     [ ]     I would like to discuss this matter with the Chief Executive Officer.

 

B.      [ ]     I am an employee or officer of the Company and wish to remain anonymous.

 

C.     [ ]     I hereby authorize the disclosure of my identity if the Audit Committee Chairman reasonably believes it is necessary or appropriate.  (see General Instructions above)

 

                    Name: ___________________________________________________________________

                    Address: _________________________________________________________________

                    Telephone Number:  ____________________           E-Mail: ___________________________

 

Part II

 

Summary Description of Alleged Violation:  _______________________________________________

 

Alleged Violation is                 [ ]   Ongoing   [ ]  Completed          [ ]  Unclear whether ongoing or completed

 

Department(s) suspected of alleged violation, if applicable:  ___________________________________

 

Individual(s) suspected of alleged violation, if applicable:  _____________________________________

 

Describe all relevant facts of the alleged violation:  __________________________________________

________________________________________________________________________________

________________________________________________________________________________

 

Describe how you became aware of the alleged violation:  _____________________________________

________________________________________________________________________________

 

Describe any steps taken to address the alleged violation prior to submitting this complaint, if any:  ________________________________________________________________________________

 

Who, if anyone, may be harmed or affected by this violation:  ___________________________________

________________________________________________________________________________


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