Anti Corruption Compliance Policy
INTRODUCTION
IARC is committed to conducting all aspects of its business in keeping with the highest legal and ethical standards and expects all employees and other persons acting on its behalf to uphold this commitment. In accordance with this commitment, IARC has adopted this Anti-Corruption Compliance Policy (the “Policy”), which is applicable to all individuals working at all levels including directors, officers, employees (whether permanent, fixed term or temporary), consultants, contractors and sub-contractors, trainees, interns, agents, representatives, and other associated persons and any other persons acting on behalf of IARC (collectively “IARC Personnel”).
IARC is governed by the Foreign Exchange Management Act, 1999, Prevention of Money Laundering Act, 2002, Black Money Act, 2005, U.S. Foreign Corrupt Practices Act and the UK Bribery Act 2010 due to its institutional ownership and investors. IARC shall comply with all of the above-mentioned acts.
In brief, IARC follows a zero-tolerance approach to bribery and corruption and will not tolerate bribery, kickbacks, or corruption of any kind, directly or through third parties, whether or not explicitly prohibited by this Policy or by law. This Policy constitutes a minimum standard. It must be complied with in any country in which our Company does business even when the Policy is stricter than the anti-bribery laws that are applicable in such countries, including both applicable local laws and anti-bribery laws with extra-territorial application. However, when applicable anti-bribery laws are stricter than this Policy, such laws must be complied with.
IARC Personnel are not permitted to give or offer anything of value (including gifts, hospitality, or entertainment) to anyone for the purpose of improperly obtaining or retaining a business advantage. Similarly, IARC Personnel may not solicit or accept such improper payments.
This Policy and the internal controls herein have been designed to prevent bribery from occurring, avoid the appearance of wrongdoing and enable IARC to respond promptly and effectively to any inquiries about its conduct. IARC employees who violate this Policy may be subject to disciplinary action, up to and including termination. The pages that follow provide a general guide to anti-corruption compliance but do not address every potential scenario that may implicate issues bearing on compliance with this Policy. Therefore, any IARC Personnel who have any questions concerning the requirements of this Policy should consult with the President of the respective function. This policy shall be effective immediately upon approval by the Board and will supersede and replace the existing policy.
DEFINITIONS
2.1. Compliance Officer
IARC shall, from time to time, designate an employee of sufficient seniority, competence, and independence as the compliance officer to ensure compliance with the provisions of this Policy (“Compliance Officer”) and the same shall be notified to the IARC Personnel. Currently, Mrs. Naina Hemant Kurane, Company Secretary, has been designated as the Compliance Officer. All guidance in relation to this Policy shall be directed to the Compliance Officer. All reports, complaints, doubts, or concerns in relation to this Policy or any other compliance policies shall be raised by the IARC Personnel to the Compliance Officer, or otherwise as stated in this Policy.
The Functional heads will certify compliances relating to the Anti-Corruption matters and Policy at quarterly intervals.
All queries, concerns or complaints received by any other employee of the Company should be directed to the Compliance Officer. Any action required to be undertaken under this Policy shall be taken by the Compliance Officer in accordance with the procedures laid down under the Policy. For the purposes of this Policy, the Compliance Officer shall have a functional reporting to Mr. Darayus P. Bajan, Chief Operating Officer. All cases of breach of this Policy (irrespective of the amount or seniority of the IARC Personnel) shall be informed to the Compliance Officer who in turn forward the same to the Investigation Committee, in accordance with investigation procedures laid down in following sections.
2.2. Bribery
Bribery includes the offer, promise, giving, demand, or acceptance of an undue advantage as an inducement or reward for an action which is improper, illegal, unethical, or a breach of trust. Bribes often involve payments (or promises of payments) but may also include anything of value – for example, providing lavish/inappropriate gifts, hospitality, and entertainment, inside information, sexual or other favors; offering employment to a relative; underwriting travel expenses; abuse of function; or other favors. Bribery includes advantages provided directly, as well as indirectly through an intermediary. This Policy prohibits IARC Personnel from giving bribes not only to any public/government official but also to any private individual.
2.3. Corruption
Corruption includes wrongdoing on the part of an authority, or those in power, through means that are illegitimate, immoral, or incompatible with ethical standards. In other words, corruption is the misuse of public office or power for private gain, or misuse of private power in relation to business outside the realm of government. Bribery and corruption are used synonymously for the purpose of this Policy.
2.4. Government Officials
In the Indian context, a public official, a government official or a public servant would include (but not be limited to) the following:
a. any person holding a legislative, executive or administrative office of the government (domestic or foreign), or acting in an official capacity for or on behalf of a legislative, executive, or administrative office of the government (domestic or foreign), whether appointed or elected, whether permanent or temporary, whether paid or unpaid, irrespective of that person’s seniority;
b. any person in the service or pay of the government or of a corporation established by or under a central, provincial or state statute, or an authority or a body owned or controlled or aided by the government or a government company or any person who is remunerated by the government by fees or commission for the performance of any public duty;
c. any judge or presiding officer of a court or statutory forum, including any person empowered by law to discharge, whether by himself/herself or as a member of any body of persons, any adjudicatory functions;
d. any person authorized by a court of justice to perform any duty, in connection with the administration of justice, including a liquidator, receiver or commissioner appointed by such court;
e. any person who performs a public duty, including for a public agency or public enterprise, or provides a public service, as defined in the domestic law of the country and as applied in the pertinent area of law; and
f. any other person defined as a “public servant” under the Prevention of Corruption Act, 1988 or the Lokpal and Lokayuktas Act, 2013 or other applicable, domestic law.
“State” means all levels and subdivisions of governments (i.e., local, regional, or national and administrative, legislative, or executive).
Some examples of public officials include employees of a public or private bank, members of parliament and legislative assemblies, employees of RBI, SEBI, customs and excise officials, judges, officials of permitting agencies; candidates for political office; and officials of public international organizations (e.g., the Red Cross). This term also includes government-owned or controlled commercial enterprises such as state-owned or controlled universities, airlines, oil companies, health care facilities, or other vendors.
2.5. Facilitation Payment
“Facilitation Payments” are unofficial payments made to public officials in order to secure or expedite the performance/ non-performance of a routine or necessary action. They are sometimes referred to as 'speed' money or 'grease' payments or ‘good-will money’. The payer of the facilitation payment usually already has a legal or other entitlement to the relevant action. In India, facilitation payments are prohibited and are perceived similar to bribe payments.
2.6. Kickback
A “kickback” is a form of negotiated bribery in which a commission is paid to the individual who is giving, paying, or promising to give or pay a bribe as a Quid Pro Quo for services rendered. The remuneration (money, goods or services handed over) is negotiated ahead of time. The kickback varies from other kinds of bribes in that there is implied collusion between agents of the two parties, rather than one party extorting the bribe from the other. The purpose of kickback is usually to encourage the other party to cooperate in the illegal scheme.
2.7. Third party
The term “third party” includes any individual or organization, who/which comes into contact with the Company or transacts with the Company, and also includes actual and potential clients, intermediaries, vendors, consultants, retainers, agents, advisors, distributors, business associates such as JV and consortium partners, partners (including academic institutions), contractors, suppliers or service providers who work for and on behalf of the Company.
2.8. Improper performance
Breach of an expectation that a person will act in good faith, impartially or in accordance with a position of trust amounts to improper performance. This would also include obtaining, agreeing to receive, accepting, or attempting to obtain an undue advantage for acts to be performed properly.
Our Policy
3.1. IARC Personnel shall not be permitted to pay or receive bribes
IARC Personnel must conduct their activities in full compliance with this Policy and any applicable anti-corruption laws in effect in the jurisdictions where IARC conducts business.
Under this Policy, IARC Personnel are not permitted to give or offer anything of value, directly or indirectly, to any Government Official or any commercial party for the purpose of improperly obtaining or retaining a business advantage. “Anything of value” should be broadly interpreted to include cash, gifts to family members, forgiveness of a debt, loans, personal favours, entertainment, meals and travel, political and charitable contributions, business opportunities and medical care, among other items. Simply put, bribes, kickbacks or similar payments are never permitted, whether made to a Government Official or to customers, investors, clients or other private parties. Similarly, IARC Personnel may not solicit or accept such payments.
If confronted with a request or demand for an improper payment or other violation of this Policy, the request or demand must be immediately rejected and reported to the President of the respective function / Compliance Officer designated above. Similarly, if any employee or agent knows or believes that an improper payment has been, or will be made, the employee or third party must also report such payment to the President of the respective function/ Compliance Officer designated above. IARC’s policy is that no adverse employment action will be taken against any personnel in retaliation for, honestly and in good faith, reporting a violation or suspected violation of anti-corruption laws or this Policy.
3.2. Gifts, Meals, Entertainment and Employment
This Policy sets forth various rules relating to gifts, entertainment, travel, meals, lodging and employment. All such expenditures must be recorded accurately in the books and records of IARC, in accordance with Section 5 below.
3.2.1. Gifts
As a general matter, IARC prohibits the provision of gifts. However, the polite and customary conduct of business may require that IARC Personnel give modest gifts to counterparts as a token or courtesy (e.g., sweets during Diwali or Eid). This Policy recommends that all IARC Personnel assess the intention behind any gift, given or received. Gifts, with the intention of improperly influencing one’s decision-making ability or making the recipient feel unduly obligated in any way, shall never be offered, or received. The Company prohibits the offer or receipt of gifts or hospitality that are not reasonable and not bona fide.
A gift is anything of value and would encompass any gratuitous monetary or non-monetary benefit. It includes tangible items such as cash, precious metals, stones, jewellery, art, and any of their equivalents, but also intangible items such as discounts, services, loans, favours, special privileges, advantages, benefits, and rights that are not available to the general public. A “gift” also includes meals, entertainment, hospitality, vacations, trips, use of vacation homes, tickets to sporting or music events, outings, vendor familiarization trips, and use of recreational facilities only if done outside a business context such as meetings, normal courtesy to visitors, events, conferences and other bona fide business reasons such as festive time distribution up to the certain limits
Offering gifts in order to win or keep business is unethical and, in many cases, illegal and may take the form of an illicit payment or a conflict of interest or a bribe. For example, providing lavish gifts to a customer with the intention to influence his patronage, is not just a gift but has taken the form of a bribe. If any IARC Personnel finds it difficult to provide a comfortable answer to questions on appropriateness of a gift, or if is unsure whether they should accept something of value, then they must ask President of the respective function/ the Compliance Officer designated above for clarification.
All gifts received should be promptly reported to the President of the respective function/ the Compliance Officer designated above if they are not in the ordinary course of business, in compliance with all the policies issued by the Company and as per applicable law. Gifts of cash or cash equivalents (such as bullion, jewelry, cash cards etc.) must never be accepted.
As a general guide, IARC Personnel may provide token gifts valued at less than Rs. 5000, and the giving or receiving of gifts or hospitality may be acceptable, if it meets all the following requirements:
i) the gift does not involve cash or cash equivalent gifts (e.g., gift cards, store cards or gambling chips);
ii) the gift is permitted under both local law and customs (including cultural and religious festivals) and the guidelines of the recipient’s employer;
iii) the gift is presented openly with complete transparency;
iv) It is given in the name of the Company and not in the name of the individual employee providing the gift;
v) Would not influence, or appear to influence, or cause a conflict of interest for the gift giver or receiver;
vi) the gift is properly recorded in IARC’s books and records and is fully documented and supported by original receipts;
vii) the gift is provided as a token of esteem or courtesy.
Any gift that does not satisfy all of the above criteria, and any gift to a Government Official, is prohibited unless it is pre-approved in writing by the Compliance Officer.
3.2.2. Entertainment and Hospitality
Entertainment and hospitality involving government officials and customers may be appropriate in certain circumstances. IARC permits entertainment if the applicable expenses (1) are related to the normal course of IARC’s operations; (2) are permitted under local law; (3) are customary under local business practices; (4) are reasonable under the circumstances and not lavish or extravagant; and (5) avoid the appearance of impropriety.
When possible, business entertainment payments should be made directly by IARC to the provider of the service and should not be paid directly to a Government Official or other party as a reimbursement.
All business entertainment expenses, regardless of amount or attendees, should be properly documented in an expense report. Such expense report shall enumerate the attendees, including the name of each attendee and his or her title and place of employment, and provide a detailed business purpose for the entertainment.
In addition to traditional gifts, both hospitality and entertainment that are provided to business relationships where IARC professionals are not in attendance, and instances where IARC pays for travel related expenses for a Government Official, shall be considered gifts, and subject to the rules and requirements for gifts specified in this Policy.
3.2.3. Travel and Lodging
Reasonable and bona fide travel expenditures paid on behalf of Government Officials or customers may be permissible in certain circumstances. Permissible payments may cover the costs of travel for an official or customer to visit the offices IARC for discussions in respect of IARC’s operations within the official’s responsibility or travel in connection with a status review. Travel expenses shall not be extravagant or lavish and may include (1) airfare; (2) lodging cost; and (3) ground transportation costs during the trip. Payment of cash per diems, expenses unrelated to legitimate business activities, and expenses that benefit a friend or family member of a Government Official are prohibited.
Direct reimbursements should also be avoided. Rather, reimbursements should be made to the Government Entity or business entity that employs the expense recipient. Payments directly to the expense recipient (of a per diem allowance, expense reimbursement, or for any other purpose) require specific written approval of MD & CEO in all cases.
“Government Entity” means any nation or government or any province, state or any other political subdivision thereof, any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, any court, tribunal or arbitrator and any securities exchange or body or authority regulating such securities exchange.
3.2.4. Employment/Internships
On occasion, Government Officials or IARC’s business partners may request that IARC provide internships or employment to certain individuals. Offering internships or employment to Government Officials or the business partners may be viewed as providing an item of value.
This Policy sets forth guidance for handling such requests from Government Officials or business partners. If a candidate is interviewed for an internship or employment within the ordinary course of filling a position, MD & CEO must be notified of the candidate’s relationship to a Government Official or the business partner. If a candidate related to a Government Official or a business partner is interviewed outside of the ordinary course of filling a position, any internship or employment offer must be pre-approved by MD & CEO.
3.3. Political Contributions and Charitable Donations
IARC shall make charitable donations in fulfilment of its Corporate Social Responsibility (CSR) obligations under applicable laws in accordance with the procedure laid down in this behalf. IARC Personnel may not make political donations on behalf of IARC or its affiliates. No charitable donations are to be made, whether in their own name or in the name of IARC, to obtain or retain business or to gain an improper business advantage. Any charitable contributions by IARC must be permitted under the law, permissible pursuant to the terms of this Policy, made to a bona fide organization, and made with the prior approval of MD & CEO. MD & CEO must be notified if a Government Official solicits a contribution in connection with any government action related to IARC or its affiliates.
RELATIONSHIPS WITH THIRD PARTIES
IARC may be held responsible for bribes paid on its behalf by third parties, with severe and often irreparable consequences, even if the company did not authorise these payments. Under Indian law, the capacity in which the person performs services for or on behalf of IARC shall not matter irrespective of whether such person is an employee, agent, or subsidiary of IARC. Therefore, it is critical that we are careful in the selection of agents and other parties, that is, those people or companies who act on our behalf.
Anti-corruption laws prohibit indirect payments made through a third party, including giving anything of value to a third party while knowing that value will be given to a Government Official for an improper purpose. IARC Personnel should avoid situations involving third parties that might lead to a violation of this Policy.
IARC employees who deal with third parties are responsible for taking reasonable precautions to ensure that the third parties conduct business ethically and comply with this Policy.
To cover the risk, either IARC will conduct training or will request the service provider to conduct the training-
The training shall be fully documented, and the attendance to be recorded.
Only trained employees are deployed on IARC’s account.
Such precautions may include conducting a risk-based due diligence review of a third party, inserting appropriate anti-corruption compliance provisions in the third party’s written contract, requiring the third party to certify that it has not violated and will not violate this Policy and any applicable anti-corruption laws during the course of its business with IARC, and monitoring the reasonableness and legitimacy of the services provided by and the compensation paid to the third party during the engagement. IARC Personnel should pay particular attention and closely monitor high-risk third parties whose engagement may involve interactions with Government Officials, including for purposes of obtaining permits, clearances, authorizations, or similar approvals or review by a governmental authority or agency. Any doubts regarding the scope of appropriate due diligence efforts in this regard should be resolved by contacting President of the respective function / the Compliance Officer designated above.
Below are possible red flags that may arise during the course of business dealings with third parties (the below is not intended to be exhaustive and is for illustrative purposes only):
1. The third party has a history of improper payment practices, such as prior or ongoing formal or informal investigations by law enforcement authorities or prior convictions;
2. The third party has a poor business reputation;
3. Other companies have terminated contracts with the third party for improper conduct;
4. Information provided about the third party or its services of principals is not verifiable by data, only anecdotally;
5. The third-party lacks experience or a “track record” with the product, service, field, or industry;
6. The third party has an unusual or non-existent corporate structure;
7. The third party’s invoice vaguely describes the services provided;
8. The third party offers to submit or submits inflated, inaccurate, or suspicious invoices;
9. The third-party requests that payments be made to two or more accounts;
10. The third-party refuses to agree to comply with the FCPA, UKBA, equivalent applicable anti-corruption legislation, anti-money laundering laws, or other similar laws and regulations; and
11. The third party suggests the hiring of an individual that appears to have connections or is related to a Government Official.
RECORDKEEPING AND INTERNAL CONTROLS
Accurate and complete record keeping is essential to the successful operation of our Company, as well as to the ability of the company in meeting its legal and regulatory obligations.
This Policy requires that all expenditures made by IARC are accurately reflected in the financial records and that all payments made with IARC funds, or on behalf of IARC, have been properly authorized. IARC Personnel must follow all applicable standards, principles, laws and practices for accounting and financial reporting. IARC Personnel must complete all reports and records required by management. In particular, IARC Personnel should ensure that no part of any payment is to be made for any purpose other than that to be fully and accurately described in IARC’s books and records. IARC Personnel should use best efforts to ensure that all transactions, dispositions, and payments involving IARC funds or assets are properly and accurately recorded in IARC’s financial records. No undisclosed or unrecorded accounts are to be established for any purpose. False or artificial entries are not to be made in IARC’s books and records for any reason. Finally, personal funds must not be used to accomplish what is otherwise prohibited by this Policy.
IARC shall keep a written record of all gifts and hospitality accepted or offered generally with a value of over Rs. 5,000, which shall be subject to review. Further, the company shall ensure all expense claims relating to hospitality, gifts or expenses incurred to third parties are submitted in accordance with this Policy and specifically record the identity of recipients and the reason for the expenditure.
Expenses must never be hidden or purposefully misclassified. Many serious global bribery and corruption scenarios are found to involve inaccurate record-keeping. To prevent this, international anti-corruption laws generally require detailed and accurate accounting records for transactions, including cash and bank accounts.
All business units and entities must maintain an effective system of internal control, monitoring of transactions and internal audit of transactions. The Compliance Officer designated above is primarily responsible for the oversight and enforcement of this Policy. IARC will conduct periodic audits of its books and records to monitor compliance with this Policy.
TRAINING
IARC is committed to ensuring that it has adequate procedures to combat risks of violation of Company policies including this Policy and applicable laws. To meet this objective, regular training will be made available to IARC Personnel. The details of our whistleblowing procedures will be disseminated throughout the company and will be done on a regular basis.
As part of IARC’s ongoing commitment to anti-corruption compliance, all employees must receive and review a copy of this Policy. All employees must certify annually in writing that they (1) have reviewed the Policy; (2) agree to abide by the Policy; and (3) agree to report any potential violations of the Policy.
In addition, IARC will offer regular anti-corruption compliance training programs, at least annually, to educate employees about the requirements and obligations of anti-corruption laws and this Policy. All employees of IARC must participate in such training and the Head of HR must retain attendance records establishing compliance with this requirement.
IARC may also extend training programs to third parties, if it is envisaged that the work profile allocated to them carries a significant risk as per this Policy. Dissemination of this Policy for new joiners shall be carried out at the time of induction by the HR. IARC’s zero-tolerance approach to bribery and corruption should be communicated to all agents, suppliers, contractors and business partners at the commencement of IARC’s business relationship with them. IARC has further disseminated this Policy on its website which may be referred by the users as and when required.
REPORTING REQUIREMENTS AND WHISTLEBLOWER PROTECTION
IARC takes its commitment to anti-corruption compliance very seriously and expects all Company Personnel to share that commitment. IARC, therefore, expects and requires that any IARC Personnel who have knowledge of, or reason to suspect, any violation of this Policy contact respective designated authority under IARC’s Whistle blower Policy immediately. Reports may be made anonymously. If any IARC Personnel fails to report known or suspected violations, then the relevant IARC Personnel may be subject to appropriate disciplinary action.
It is IARC’s policy that, if the report of known or suspected violations is made honestly and in good faith, no adverse employment-related action will be taken in retaliation for reporting a violation or suspected violation of anti-corruption laws or this Policy.
There is a Whistle Blower Policy which forms part of the IARC Employee Handbook.
8. REVIEW
The Anti-Corruption Compliance Policy shall be placed for review by the Board every two years, or as needed.