Code of Conduct for Directors and Senior Management
This Code shall be applicable to each member of the Board of Directors of “Deep Commercials Limited (the “Company”), hereinafter referred to as ‘a Director’ as well as employees of the Company, or such members of the ‘Senior Management’ of the Company or such other employee of the Company as may be designated as member of the Senior Management for the purpose of this Code by the Managing Director of the Company from time to time (hereinafter referred to as “Senior Management Executives”).
The Board of Directors of the Company wish to document a Code of Conduct for all Directors as well as Senior Management Executives.
a) To enhance the standards of ethical conduct.
b) To evolve as good corporate citizens by implementing highest degree of transparency, integrity, accountability and corporate social responsibility.
c) To further achieve good corporate governance by complying with all laws, rules and regulations applicable to the Company and fulfilling responsibilities towards stakeholders.
d) To set standards of professional conduct of Independent Directors on the Board of the company for implementing best corporate governance practices.
3. THE CODE
A. Regulatory Compliances
(i) To comply with all applicable laws, rules, regulations and regulatory orders.
(ii) To acquire appropriate up to date knowledge of requirements of compliances under various applicable statues.
B. Honest and Ethical Conduct
To act in utmost good faith and in accordance with highest standards of personal and professional integrity, honesty and ethical conduct in respect of all transactions.
C. Conflict of Interest
(i) To avoid scrupulously conflicts of interest with the Company. A conflict of interest exists where the interest of Director or member of the Senior Management conflicts with those of the Company.
(ii) A conflict situation can arise :
a) When a Director or member of the Senior Management acts in a manner or has interests that may make it difficult to perform his or her work objectively or effectively.
b) The receipt of improper personal benefits by a Director or member of the Senior Management of his or her family as a result of one’s position in the Company.
c) Any outside business activity that detracts the ability of a Director or member of Senior Management, to devote appropriate time and attention to his or her responsibilities with the Company.
d) Any significant ownership interest in consulting or employment relationship with any supplier, customer or competitor of the Company.
e) The receipt of non nominal gifts, excessive entertainment, personal benefits either by himself / herself or his / her family as a result of his/ her position in the Company.
f) Shall make disclosure of all material, financial and commercial transactions that may have a potential conflict with the interest of the Company at large including dealing in company shares and commercial dealings with the bodies in which they have shareholding or interest.
D. Corporate Opportunities
a) Not to exploit for their own personal gain, opportunities that are discovered through the use of the Company’s property (including intellectual property), information or position.
b) Not to divert to his / her own advantage any business opportunity that the Company is pursuing.
c) Not to compete directly with the business of the Company or with any business that the Company is considering.
E. Fair Dealing
To deal fairly with the stakeholders, including the shareholders, creditors, lenders, suppliers, customers, employees, etc. of the Company and shall hold themselves accountable to the appropriate authority/body.
F. Protecting Company’s Confidential Information
a) To maintain the confidentiality of sensitive information of the Company and its business or that of any stakeholder to which the Company has a duty of confidentiality to maintain, except when disclosure is authorized or legally mandated. The confidential information includes all information not in the public domain that might be of use to competitors or harmful to the Company .
b) Not to use confidential information for own advantage or profit even after such person ceases to hold office as Director or serve the organization.
G. Use and Protection of Company’s Assets
a) To protect Company’s assets and properties, including intellectual property and ensure its efficient use.
b) To ensure the use of Company’s property for legitimate business purposes.
c) Shall not illegally withhold any property or documents of the Company and should ensure protection of the same at all times.
H. Disclosure of Interest
To disclose the necessary information to the Company at regular intervals in respect of various declarations under the various acts, rules and regulations, including the Companies Act, 2013, and the details of related parties from time to time.
I. Compliance of “Insider Trading Code”
The Board Members and Senior Management of the Company shall not derive benefit or assist others to derive benefit by giving investment advice from the access to and possession of information about the Company, not in public domain and therefore constituting insider information. The Board Members will comply with the prevention of insider trading guidelines as issued by SEBI.
J. Compliance of Third Party Code of Conduct
We have developed this Guidance to explain how our Code of Conduct and Business Principles specifically relate to those who perform services for and on behalf of our Company (“third parties”).
Our third parties include any individual, corporation, partnership or organisation that is not part of the company, but that will provide a product or service to us or on our behalf. This Guidance does not replace our Code. It provides an overview of its requirements for third parties working with us.
This Guidance applies to every third party working on our behalf. We consider our Code and this Guidance when we select third parties, and we expect our third parties to adhere to the requirements of our Code. If a third party violates our Code, applicable laws or industry codes of conduct, we will review that business relationship and take appropriate action, such as terminating that relationship within our contract rights and applicable law.
Our expectations :-
ACT WITH INTEGRITY:
Third parties working with us must act with integrity. They must not offer, give, request or receive bribes or facilitating payments. Third parties working with us must be free from conflicts of interest that jeopardise the third party’s ability to make decisions/take actions in the best interests of the company. None of their activities should damage the company’s reputation. Third parties working with us must not use material information about the company for financial or other personal benefit before it is made public.
ACT FAIRLY :
Conduct their operations in accordance with the principles of fair competition and in conformance with all applicable laws and industry codes. They should not use any unfair advantage over a competitor through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or by any other unfair dealing.
BE TRANSPARENT IN THEIR DEALINGS WITH OTHERS :
Third parties working with us must operate under specific accounting and reporting standards and must maintain accurate accounting records, consistent financial reports and effective internal financial controls.
Third parties working with us must not use any form of forced, compulsory or child labour. They must maintain a work environment in which all feel welcome and free of harassment, discrimination or other improper conduct. They must respect the human rights, dignity and privacy of the individual and the right of employees to freedom of association, freedom of expression and the right to be heard. Third parties working with us must maintain a healthy and safe work environment and develop a proactive, cooperative attitude toward employee health and safety.
RESPECT THE ENVIRONMENT AND THEIR COMMUNITY:
Third parties working with us must strive to make their businesses sustainable.
REPORT ANY CONCERNS:
Third parties working with us must report any breach of our Code, applicable laws and industry codes that they discover, even if they are not directly involved. Third parties should also protect whistleblowers’ confidentiality and prohibit retaliation against workers who make a report in good faith.
K. Contribution in Strategic Planning
a) To have clear understanding of business, its plants, management structure, the capabilities and capacity of the Company.
b) To have proper understanding and competence to deal with the current and emerging issues related to the business of the Company.
c) To exercise independent judgment and if required, oppose, in case the vital interest of the Company is affected.
d) To promote ethical and responsible decision making.
e) To contribute in the most effective manner to achieve the Vision and
Mission of the Company.
a) To endeavor to attend and actively participate in all the meetings of the Board of Directors and its Committees, where he is a member, as well as general meetings of the members of the Company.
b) Not to participate in any meeting, in any discussion or vote on any matter in which he is interested as a Director.
c) To attend such meetings as are required of the person for the benefit, growth and development of the Company.
M. Act as Trustee
a) To exercise his / her powers at all times for the purpose they were conferred, for the benefit and prosperity of the Company.
b) To discharge his fiduciary duty as a Trustee in a fair impartial manner.
N. Policies and Procedures
a) To comply and abide by the policies and rules framed by the Company from time to time.
b) To adhere to the systems and procedures of the Company.
RISK MANAGEMENT POLICY
The Risk Management (RM) encompasses practices relating to identification, assessment, monitoring and mitigation of various risks to our business. Risk Management Policy of our Company seeks to minimize unfavourable impact on our business objectives and develop stakeholder value. Further, our risk management practices seek to sustain and enhance long-term competitive advantage of the Company.
The purpose of this policy is to address unanticipated and unintended losses to the human resources, financial assets and property of the Organisation without unnecessarily limiting the activities that advance the Organisation’s mission and goals. The board is responsible to frame, implement and monitor the Risk
Management Plan of the company.
The effective management of risk is vital to the continued growth and success of the company. For risk management to be effective, all operations must apply the following principles to the context of their particular business and its objectives:
- Risk management must create and protect value.
- Risk management is integrated into organisational processes.
- Explicit risk management helps decision-makers make informed choices.
- Risk management is focused on the sources of uncertainty around the achievement of objectives
- Risk management must be tailored to the context and fit for purpose
- Risk management is dynamic, iterative and responsive to change.
Risk Management Policy Statement
The company recognizes that Risk management is one of the key principles of effective Governance. The Risk management policy is given below:-
-To Continuously thrive for available risks in the Organisation which directly or indirectly effect the functioning of the Organisation.
-To ensure the protection of rights & values of Shareholders by establishing a well organized Risk Management Framework.
-Selecting, maintaining and enhancing the risk management tools used by the Program to provide analyses that inform and support the investment actions of the entire Organisation.
Identification, Measurement and Assessment of Risk
Management’s responsibility, as delegated by the Board, is to operationalize the Risk Management Program and ensure that formal procedures are in place to identify and define risk with input from representatives across the enterprise.
Measurement of risk is completed considering both quantitative and qualitative means using the likelihood and impact criteria as developed by Management and as reviewed by the Board.
The following broad categories of risks have been considered in our risk management framework:
Market Risk : Risks emenating out of the choices we make on markets, resources and delivery model that can potentially impact our long-term competitive advantage. Risks relating to inherent characteristics of our industry including competitive structure, technological landscape, extent of linkage to economic environment and regulatory structure.
Operational Risk : Risks inherent to business operations including those relating to client acquisition, service delivery to clients, business support activities, information security, physical security and business activity disruptions.
Interest Risk : Interest rate risk is the risk where changes in market interest rates might adversely affect an NBFC’s financial condition. The changes in interest rates affect company in some way. The immediate impact of changes in interest rates is on company’s earnings (i.e. reported profits) by changing its Net Interest Income (NII). As such the company is into funding of loans which are always fixed rate loans. The company manages this risk on NII by pricing its loan products at a rate which covers interest rate risk. The risk from the earnings perspective can be measured as changes in the Net Interest Income (NII) or Net Interest Margin (NIM). Once interest rate risk is measured, lending rates are finalized. Given the interest rate fluctuation, the company has adopted a prudent & conservative risk mitigation strategy to minimize interest risk.
Credit Risk : Ownership structure could have a key influence on an NBFC’s credit profile in that a strong promoter and strategic fit with the promoter can benefit an NBFC’s earning, liquidity and capitalisation, and hence its credit profile. In assessing an NBFC’s ownership structure, the parameters examined include, among others: the credit profile of the promoter, shareholding pattern of the NBFC, operational synergies of the NBFC with its promoter, level of involvement of promoter in the NBFC and level of commitment, and track record of the promoter in providing fund support.
Liquidty Risk : Measuring and managing liquidity needs are vital for effective operation of company.
The importance of liquidity transcend individual institutions, as liquidity shortfall in one institution can have repercussions on the entire system. Board should measure not only the liquidity positions of company on an ongoing basis but also examine how liquidity requirements are likely to evolve under different assumptions. Experience shows that assets commonly considered as liquid, like Government securities and other money market instruments, could also become illiquid when the market and players are unidirectional. Therefore, liquidity has to be tracked through maturity or cash flow mismatches. For measuring and managing net funding requirements, the use of a maturity ladder and calculation of cumulative surplus or deficit of funds at selected maturity dates is adopted as a standard tool.
Human Resource Risk : ACCL Human Resource adds value to the entire company by ensuring that the right person is assigned to the right job and that they grow and contribute towards organizational excellence. Our growth has been driven by our ability to attract top quality talent and effectively engage them in right jobs. Risk in matters of human resources are sought to be minimised and contained by following a policy of providing equal opportunity to every employee, inculcate in them a sense of belonging and commitment and also effectively train them in spheres other than their own specialisation. Employees are encouraged to make suggestions on innovations, cost saving procedures, free exchange of other positive ideas etc. It is believed that a satisfied and committed employee will give of his best and create an atmosphere that cannot be conducive to risk exposure. Employee-compensation is always subjected to fair appraisal systems with the participation of the employee and is consistent with job content, peer comparison and individual performance.
Regulations and compliance : The company is exposed to risk attached to various statutes and regulations. The company is mitigating these risk through regular review of legal compliances carried out through internal as well as external compliance audit.
Responsibility for risk management is shared across the organisation. Key responsibilities include:
Controlling the risks through a formal program is necessary for the well-being of the organization and everyone in it. The jobs and services the organization provides the safety of the workplace and other benefits all depend to an extent on our ability to control risks.
The Board is responsible for satisfying itself annually, or more frequently as required, that management has developed and implemented an effective risk management framework. Detailed work on this task is delegated to the Audit Committee, who also plays the role of Risk Management Committee and reviewed by the full Board.
The Audit Committee assists the Board in overseeing the group’s risk profile and is responsible for
Overseeing management’s actions in the identification, management and reporting of material business risks.
All Directors and Senior Management Executives shall:
a) Take every reasonable step to ensure adherence to the laws of the land.
b) In their decisions respect the necessity of protecting the environment around it, of the country, and the global environment as whole and shall promote the same values.
c) Practice a Code of giving highest respect for humans and human values and must promote the same.
d) Exercise their responsibilities with utmost consciousness within the organization and shall promote the same.
e) Conduct themselves in the private and personal life in the manner and that shall not demean the image and damage the interest of the Company.
f) Not give any statement to the press or any other form of media without due authorization from the appropriate authority / body.
g) Neither directly or indirectly gives any official favours for personal purposes nor spends any money of the Company for personal purposes.
h) Not knowingly suppress a material fact, which can be detrimental to the interest of the Company, from the appropriate authority / body.
i) Not make any statement, verify any return or form, containing any particulars knowing them to be false.
j) Not fail to invite the attention of the appropriate authority / body in respect of matters affecting the Company or arising out of professions, any material departure from the generally accepted principles of propriety.
k) Co-operate in any enquiries and/or investigations.
l) Practice a conduct that promotes the equality of gender, class and caste and shall promote the same values and also exercise their duties in a manner that encourages healthy personal and career growth of the employees of the Company.
m) Exercise their responsibilities with utmost cost consciousness within the organization and shall promote the same.
n) Not conduct themselves in such manner as would be construed to be an incident of sexual harassment at the workplace.
o) Not engage in misinformation, disinformation or personal vilification or victimization of any employee or stakeholder.
p) Not use abusive or offensive language at the workplace or any such location connected to official business.
q) Not show disrespect to their senior officers or to the authority of the Board.
r) At all times make every reasonable effort to lead by example.
Each of the Directors on the Board of the company and Senior Management Personnel shall file the Company Secretary of the Company, a declarations to compliance with the provisions of this code by the 30th April every year, starting from 2015.
From time to time Board may amend or waive certain provisions depending on legal or other requirements or for a bona fide purpose.