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Corporate Governance

The following outlines the principal Corporate Governance procedures of Satchmo Holdings Limited in fulfilling its obligations and responsibilities to its various stake holders. The Board has established a Corporate Governance structure that incorporates comprehensive systems of control as the basis for the proper administration of Corporate Governance.

ROLES OF THE BOARD AND MANAGEMENT:

The Board clearly establishes relationship between the Board and the Management and describes their function and responsibilities.

The Board is accountable to shareholders for the activities and performance of the Company and has overall responsibility for the Company’s development of business and its corporate governance.

However, the Board does not itself manage the business and affairs of the Company.

Responsibility for management of the Company’s business and affairs, within the scope of the framework established by the Board is delegated to the Managing Director / Executive Director / Chief Operating Officer who are accountable to the Board.

RESPONSIBILITIES OF THE BOARD:

The Board is responsible for setting the strategic direction of the Company, establishing goals for Management and Monitoring the achievement of those goals.

The Key responsibilities of the Board include

  1. Ensuring the Company is properly managed.
  2. Appointment and review of performance of any Executive Staff.
  3. Developing with the Management and approving strategy.
  4. Planning, Program for major capital expenditure.
  5. Arranging for effective budgeting, financial supervision and monitoring of financial performance against the strategic plan and budgets.
  6. Ensuring that appropriate audit arrangements are in place.
  7. Ensuring that effective and appropriate reporting system are in place will, in particular assure the Board that proper financial, operational, compliance and risk management controls function adequately.
  8. Lastly, reporting to shareholders.

BOARD STRUCTURE:

Composition of the Board shall be determined in accordance with the following principals and guidelines:

  1. The Board shall comprise of at least 3 Directors, increasing where additional expertise is considered desirable under certain areas.
  2. The Board should not comprise a majority of Executive Directors.
  3. The Directors should bring characteristics, which allow a mix of qualifications, skills, and experience – both national and international.
  4. The composition of the Board is reviewed on an ongoing basis to ensure that the Board has a proper balance of experience and expertise.

MEETINGS OF THE BOARD:

The Board meets at least 4 times a year to consider the businesses of Satchmo Holdings Limited, financial performance and other Operational issues.

RETIREMENT AND RE-ELECTION:

Out of the total strength of the Board, two-thirds of the Directors, other than the Executive / Managing Director are liable to retire by rotation.

At every Annual General Meeting of the Company, one-third of such Non-Executive Directors for the time being as are liable to retire by rotation. If the number of retiring Director is not three or a multiple of three, the number nearest to one-third shall retire from office.

A retiring Director shall be eligible for re-election.

BOARD COMMITTEES:

The Board (where appropriate) may establish a number of committees to assist in carrying out its responsibilities in an effective and efficient manner.

The Board Committees assist the Board in discharge of its responsibilities and are governed by their respective charters, as approved by the Board.

REMUNERATION COMMITTEE:

The remuneration committee reviews and makes recommendations on remuneration policies for the Company including, in particular, the Managing Director, Executive Director and Senior Management.

It makes recommendation to the Board on the performance of the Senior Management.

AUDIT AND COMPLIANCE COMMITTEE:

The Board has an Audit and Compliance Committee.The committee monitors internal control policies and procedures designed to safeguard Company assets and to maintain the integrity of financial reporting, consistent with SEBI requirements.

The role of the Committee is to provide a direct link between the Board and External auditors.

The committee also gives the Board of Directors additional assurance regarding the quality and reliability of financial information prepared for use by the Board in determining polices or inclusion in financial statements.

The responsibilities of the Audit and Compliance Committee includes:

  1. Oversight of the reliability and integrity of the Company’s accounting policies and financial reporting.
  2. Advising the Board on financial reporting and business risks.
  3. Monitoring compliance with regulatory requirements.
  4. Improving quality of the accounting function.
  5. Liaising with external auditors and ensuring that annual audit and half yearly reviews are conducted in an effective manner.
  6. Reviewing performance of external auditor
  7. Reviewing performance of internal auditor

FINANCIAL INTEGRITY:

There are adequate checks and controls in the Company’s system, both internal verification/ audit and external checks by Statutory auditors.

  • The periodic (quarterly) review by Audit Committee on the financials and accounting policy observance etc.
  • Certification by the Managing Director and Chief Finance Officer to the effect that they have reviewed the Cash flow Statement and that the Statements do not contain any materially untrue statement or omit any material fact or contain statement that might be misleading.
  • The responsibility for establishing and maintaining internal controls for financial reporting and evaluating the effectiveness of internal control system of the Company pertaining to financial reporting is with the Managing Director and CFO.

AUDIT PROCESS:

  • As a part of the Company’s commitment to safeguarding integrity in financial reporting, Satchmo Holdings Limited Accounts are subject to annual audit by an independent, professional auditor, who also reviews the quarterly accounts.
  • Complying with Listing regulations under Cl 41 the financial results are prepared and submitted quarterly to Stock Exchanges, which are also subjected to a Limited Review by the Statutory Auditors.
  • The Auditor attends and is available to answer questions for the Company’s Annual General Meetings.

AUDITOR INDEPENDENCE:

  • The Company has implemented procedures and policies to monitor the independence and competence of the Company’s external auditors.
  • Details of the amount paid for both audit work and non-audit services are set out in the Company’s annual report.
  • The Board requires that adequate hand over occurs 6 months prior to rotation of an audit partner to ensure an efficient audit under the new partner.

BUSINESS RISKS:

The Company has laid down procedures to inform Board members about the risk assessment and minimization procedures. These procedures shall be periodically reviewed to ensure that executive management controls risk through means of a properly defined framework

BUSINESS CONDUCT AND ETHICS

  • The Board of Directors have laid down a Code for Business Conduct and Ethics for all its members and Senior management of the Company.
  • All the Board members and Senior management personnel shall affirm compliance with the code on an annual basis. The Annual Report of the Company shall contain a declaration to this effect signed by the CEO / Managing Director
  • The Codes and Disclosure norms adopted by the Board are:
  1. Business Conduct and Ethics
  2. Code for Prevention of Insider Trading
  3. Whistle Blower Policy

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CODE OF BUSINESS CONDUCT AND ETHICS

INTRODUCTION

This Code of Business Conduct and Ethics is intended to help and ensure compliance with legal requirements and our own standards of business conduct and ethics. All Company directors, executives and employees are expected to read and understand this Code of Business Conduct and Ethics, uphold these standards in day-to-day activities, comply with all applicable policies and procedures, and ensure that all business associates, agents and contractors are aware of, understand and adhere to these standards.

1.COMPLIANCE WITH LAWS, RULES AND REGULATION

Directors, executives, and employees of the Company are required to conduct their business affairs in conformity and compatibility with applicable laws, rules, and regulations both in letter and spirit, in all the territories in which he/she operates. They shall also encourage and promote such behaviour for themselves, colleagues, and employees across the Company.

Directors, executives, and employees must acquire appropriate knowledge of the legal requirements related to their duties and sufficient to enable them to recognize potential dangers and to know when to seek advice from the relevant department. Violation of applicable government laws, rules and regulations may subject Directors, executives and employees to individual criminal or civil liability as well as to disciplinary action by the Company.

2.PROTECTING THE COMPANY’S ASSETS

  1. Assets of the Company should not be misused but employed for the purpose of conducting the business and optimizing output for which they are duly authorized. These include tangible assets such as equipment and machinery, systems, facilities, materials, resources as well as intangible assets such as proprietary information, draw equity and relationships withcustomers and suppliers, etc.
  2. IT assets like desktop computers, laptops and other IT assets given to the employees is exclusively for work purposes and that any information stored in the IT assets is subject to scrutiny. Incidental use of the IT assets like checking personal mails etc is allowed so long it does not disturb/ hamper employee’s professional deliverables.

3.INTELLECTUAL PROPERTY RIGHTS

Intellectual Property Rights is an important area for the success of the Company. All employees should ensure that intellectual property rights of the Company viz. trademarks, trade name, copyrights, etc. are duly protected through registration of the same with concerned statutory authorities to prevent any misuse of the same by others.

4.CONFLICTS OF INTEREST

Each of us has a responsibility towards the Company, our stockholders and each other. Although this duty does not prevent us from engaging in personal transactions and investments, it does demand that we avoid situations where a conflict of interest might occur or appear to occur. The Company is subject to scrutiny from many different individuals, organizations and even society.
We should always strive to avoid even the appearance of impropriety.
An employee involved in any of the types of relationships or situations described in this policy should immediately and fully disclose the relevant circumstances to his or her immediate supervisor, or any other appropriate supervisor, for a determination about whether a potential or actual conflict exists. Failure to disclose facts shall constitute grounds for disciplinary action.

5.INSIDER TRADING

Director, executives and employees and his immediate family shall not derive any benefits or assist others to derive any benefits from access to and possession of information about the Company or the group, which is not in the public domain and thus constitutes insider information.

Employees of the Company shall not use or proliferate information which is not available to the investing public and which therefore constitutes insider information for making or giving advice on investment decisions on the securities of the group Company on which insider information has been obtained.

Such insider information might inter-alia includes the following:

  1. Acquisition and divestiture of businesses or business units,
  2. Financial information such as profits, earnings, and dividends,
  3. Announcement of new product introductions or developments,
  4. Assets revaluations, investment decisions / plans, restructuring plans,
  5. Major supply and delivery agreements, raising finances.

6.CORPORATE OPPORTUNITIES

Director, executives and employees may not exploit for their own personal gain opportunities that are unfold or discovered through the use of Company’s property, information or position unless such opportunity is disclosed to the Board of Directors / Committee of Directors in writing and the Board / Committee of Directors declines to pursue such opportunity.

7.COMPETITION AND EVEN-HANDEDNESS

Director, executives, and employees should not take unfair advantage of anyone through manipulation, concealment, and /or misrepresentation of material facts or any other unfair trade practices.

The Company shall be enabled to fully strive for the establishment and support of a competitive open market economy in India and abroad and shall cooperate in the efforts to promote the progressive and judicious liberation of trade and investment by a country.

8.CONDUCT RELATING TO CUSTOMERS, EMPLOYEES AND STAKEHOLDERS AND OTHERS

Customers

Our products and services shall be competitive and whilst fulfilling the needs of our customers, shall offer the best possible value to our customers such that the Company becomes the customer’s first choice for quality and service. No false or misleading claims shall be made whilst marketing our products or services. Our service standards shall be of the highest possible order.

Employees

The Company wants to attract, develop, and motivate the best people. We will create a work environment that is open, honest, and unprejudiced and which encourages people to achieve their full potential. We will value people’s individual and team contributions and offer opportunities to share in the Company’s commercial success.

Partners

The Company will cultivate a global network of collaborative and mutually beneficial alliances. The Company will respect partner’s customs and traditions and be honest and ethical in our dealings.

We as a team will work with partners in creation of successful ventures, which have high standards of integrity and business practice. We will use our values and principles in dialogue with other organizations and in considering new and existing relationships.

Vendors

The Company will value its vendors. We will work with them in innovative ways that create added value for our customers and trading partners. The Company will have a fair procurement process, administering tendering and contracting procedures in good faith.

Community

The Company will contribute to the well being of the societies in which it operates through its business activities and the skills of its people. The Company will maintain the highest level of integrity while respecting local laws, customs and traditions. We will work with community and other organizations to support non-profit making activities that benefit wider society.

9.SEXUAL HARASSMENT

The Company is committed to providing a work environment free of harassment. Company policy prohibits harassment based on caste, religious creed, physical or mental disability, medical condition, age, sexual orientation, and/or any other basis protected by law or ordinance or regulation. All such harassment is unlawful. The Company’s anti-harassment policy applies to all persons involved in the operation of the Company and prohibits unlawfulharassment by any employee of the Company.

10.HEALTH, SAFETY AND ENVIRONMENT

The business of the Company shall be carried on in a congenial environment whereby adequate health and safety measures are taken in the workplace of the employees. Directors and executives shall ensure that due compliance of all laws and regulations pertaining to health and safety measures are ensured on a continuous basis.

Everybody shall be committed to prevent wasteful use of natural resources and minimize any hazardous impact of the development, production, use and disposal of any of its products and services on the ecological environment.

11. ETHICAL CONDUCT

Directors, executives, and employees of Satchmo Holdings Limited shall deal on behalf of the Company with professionalism, honesty, integrity as well as high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be as such by third parties.

Every employee shall be responsible for the implementation of and compliance with the code in his/her professional environment. Failure to adhere to the code could attract severe consequences including termination of employment.

12. DISCIPLINARY ACTIONS

The matters covered in this Code of Business Conduct and Ethics are of the utmost importance to the Company, its stockholders and its business partners, and are essential to the Company’s ability to conduct its business in accordance with its stated values. We expect of all our employees, business associates, agents, contractors and consultants to adhere to these rules in carrying out their duties for the Company.

The Company will take appropriate action against any employee, business associates, agent, contractor or consultant whose actions are found to violate these policies or any other policies of the Company. Disciplinary actions may include immediate termination of employment or business relationship at the Company’s sole discretion. Where the Company has suffered a loss, it may pursue its remedies against the individuals or entities responsible. Where laws have been violated, the Company will cooperate fully with the appropriate authorities.

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WHISTLE- BLOWING POLICY AND PROCEDURES

INTRODUCTION

Satchmo Holdings Limited is committed to the highest standards of moral and ethical integrity, transparency, and propriety in its work. Towards this end, the Company encourages staff with bonafide concerns over core values, probity and integrity, legal compliance, violation of the Satchmo Holdings Limited Code of Conduct (Code of Conduct) or good Safety Health Environment (SHE) practices to come forward and express their bonafide concerns without fear of victimization, harassment or retribution.

Aim and Scope

This policy aims to -:

  • Provide avenues for staff to raise serious concerns regarding ethical values,probity and integrity, legal compliance, violation of the Code of Conduct or good SHE practices.
  • Redress any harassment or victimization in workplace including sexual harassment.
  • Enable management to be informed at an early stage to take corrective action and avoid any complication at a later date.
  • Develop a culture of openness, accountability, and total integrity.
  • Reassure staff that they would be fully protected from harassment or victimization for whistle blowing in good faith

Safeguards

The Company will ensure the following safeguards to employees making such disclosures provided -:

  • The disclosure is made bonafide and in good faith;
  • The employee reasonably and bonafide believes that the information or allegations he / she discloses is substantially true and;
  • The employee is not acting for any personal gain

Prevention of harassment or victimization

The employee would be protected against actions such as dismissal, demotion, disciplinary action or punishment or any form of harassment or victimization, discrimination, bias, or other unfair employment practices directly or indirectly attributable to whistle-blowing. Any action as aforesaid or threat of any such action would be treated as a serious disciplinary offence and liable to serious disciplinary action.

Sexual harassment
In case of any complain of sexual harassment, an appropriate committee consisting of individuals who have the required independence, objectivity and stature would be constituted by the Managing Director of the Company.

Confidentiality

The Company recognizes that some individuals would wish to raise a concern in confidence. The Company will do its best to protect the identity of any employee who whistle-blows and wishes to remain anonymous as also the confidentiality of the concern raised in confidence.

Reckless / Irresponsible Allegations

Investigations are costly, time-consuming, and potentially damaging events and the Company will not encourage allegations that are reckless, irresponsible, malicious or were made for ulterior purposes.

PROCEDURES FOR RAISING CONCERNS

The Company offers the employee a stepwise approach to get answers to questions about integrity issues and to raise any concerns about what might be a violation:

  1. Locally
  • Consider contacting the line manager
  • Consider contacting another senior manager within Satchmo Holdings Limited
  • Consider contacting the Company Secretary – cs@nelholdings.com
  • Consider contacting the Managing Director at nitesh.shetty@niteshgroup.com
  1. If an adequate response is not received by the employee, or the step above does not deliver a satisfactory outcome:

Contact the Audit Committee Chairman

Mr. Ananthanarayanan S at anarayanan@gmail.com or at +91 99021 68702

PROCEDURE FOR HANDLING WHISTLE BLOWING

  1. Committee

An appropriate committee comprising of the Senior Management Team (SMT) members will be constituted by the Managing Director.

The step wise approach will be as follows:

  1. Look into the nature of the allegation.
  2. If satisfied, look for sufficient evidence to substantiate the allegation.
  3. If there is enough evidence, proceed with the investigation.
  1. Procedure for Investigation

Committee

  1. To look in detail on the evidence which may include but not limited to documents & papers, written submission(s), emails / SMS etc
  2. To call the relevant employee and record his / her explanation
  3. If satisfied with the explanation, investigation to be closed with reasons being recorded therein.
  4. If not satisfied with the explanation, the committee can (i). make its own report and recommendation on the investigation or (ii). proceed to collect further information / evidence on the matter.
  5. May also co-opt any other employee in the committee for assisting in investigating the allegation
  6. May, with the approval from Managing Director (MD) also request Internal audit to help in investigation
  7. Once satisfied with the information gathered / evidence received for making a report, the committee will prepare its report and also its recommendation.
  8. Will submit its report to the Managing Director (MD). If the findings of the committee relate to any integrity issue and / or requires dismissal of an employee, copies of such report shall also be circulated to Audit Committee of the Company.

If the allegation is against any of the Executive Vice President / Vice President, while the above procedures will be followed, the committee will be constituted as under:

  1. MD
  2. Internal Auditor
  3. An Independent Director
  • Close out procedure

Due action as recommended by the committee would be followed up for implementation and file closed with sign off by MD / Audit Committee.

Procedure if the allegation is not established or where committee has doubts over the allegation

  1. The whistle blower (if known) will be called to substantiate the allegation with proper evidence
  2. If the whistle blower is not known, the file will be closed with proper reasoning recorded and a noting to that effect by HR.
  1. Procedure for handling ‘sexual harassment’ cases

An environment at the workplace for preservation and enforcement of the right to gender equality of the working woman is the Company’s desired objective.

Sexual harassment includes such unwelcome sexually determined behaviour (whether directly or by implication) as:

  1. Physical contact and advances;
  2. A demand or request for sexual favors;
  3. Sexually-coloredremarks;
  4. Showing pornography;
  5. Any other unwelcome physical, verbal or non-verbal conduct of sexual nature;
  6. Harassment or victimization at workplace because subject of sexual harassment does not respond favorably or rebuffs such advances or objects thereto.

Where any of the above acts is committed in circumstances where under the victim of such conduct has a reasonable apprehension that in relation to the victim’s employment or work such conduct can be humiliating and may constitute a health and safety problem. It is discriminatory for instance when the woman has reasonable grounds to believe that her objection would disadvantage her in connection with her employment or work including recruiting or promotion or where it creates a hostile work environment. Adverse consequences might be visited if the victim does not consent to the conduct in question or raises any objection thereto.

  1. Complaint mechanism

Whether or not such conduct constitutes an offence under law or a breach of the service rules, an appropriate committee as detailed below would be set up to redress the complaint made by the victim. Such complaint mechanism should ensure time bound treatment of complaints preferably within one month.

  1. Complaints Committee

A Complaints Committee shall be constituted by the MD and should be headed by a woman and not less than half of its members should be women. Further, to prevent the possibility of any undue pressure or influence from senior levels, such Complaints Committee should involve a totally independent third party. The committee should maintain strict confidentiality and conduct itself with utmost fairness and total impartiality, without fear or favour.

Where a complainant has good reason to object to the inclusion in the Committee of a particular individual, he / she should not be a member. Also, no individual should be appointed to the Committee where there is a conflict of interest, direct or indirect, or a potential conflict of interest.

  1. Procedure for investigation

As enumerated in II above.

During the investigation, the committee shall ensure that victims, and / or witnesses are not victimized or discriminated against while dealing with complaints of sexual harassment.

It is once again emphasized that the committee should maintain strict confidentiality.

  1. Close out procedure

The close out procedure under this will be same as enumerated in III above.

In addition to the above where such conduct amounts to a specific offence under the Indian Penal Code or under any other law, the employer shall initiate appropriate action in accordance with law by making a complaint with the appropriate authority.