POLICY GOVERNING TRANSACTIONS WITH RELATED PARTIES OF NRC LIMITED

  1. Introduction

The Board of Directors of the Company has adopted the following Policy and procedure with regard to Related Party Transactions. This policy envisages the procedure governing Related Party Transactions keeping in mind the potential or actual conflicts of interest that may arise consequent upon the transaction entered into by the Company and the whether the said transactions are consistent with the Company’s and its shareholder’s interest.

Accordingly, pursuant to the Section 188 of the Companies Act, 2013 and Regulations 16(c) and 23 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), this policy has been adopted by the Company's Board of Directors vide its resolution dated 20th February, 2015 and amended vide its resolution dated 11th February, 2016 in order to set forth the procedures under which certain transactions must be reviewed and approved or ratified, as permitted. The Audit Committee shall review significant related party transactions, submitted to it by Management, approve and / or recommend for Board and / or shareholders’ approval thereon.

2Definitions:

(a)Audit Committee (Committee) shall mean a committee of the Board of Directors of the Company constituted under the provisions of the Listing Agreement and the Companies Act, 2013.

(b)“Arm’s length transaction” means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest.

(c)Board means Board of Directors of NRC Limited.

(d)NRC shall mean NRC Limited wherever it is referred to in the policy.

(e)Control shall for the same mean as defined in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

(f)Director shall mean the Directors of NRC.

(g)Key Managerial Personnel shall mean key managerial personnel in relation to NRC as defined in the Companies Act, 2013.

(h)Related Party Transaction shall mean RPT as defined in SEBI (LODR) Regulations, 2015, namely, – “ a transfer of resources, services or obligations between a listed entity and a related party, regardless of whether a price is charged and a "transaction" with a related party shall be construed to include a single transaction or a group of transactions in a contract”.

(i) Policy shall mean the policy on Related Party Transactions (RPT) of NRC.

(j)Related Entities and Relatives:

An entity shall be considered as related to NRC, if –

  1. such entity is a related party under section 2(76) of the Companies Act, 2013 ;
  2. Such entity is a related party under the applicable Accounting Standards.

Relative means relative as defined in the Companies Act, 2013, namely, anyone who is related to another, if –

  1. they are members of a Hindu Undivided Family;
  2. they are husband and wife; or
  3. father (including step father);
  4. mother (including step mother);
  5. son (including step son);
  6. son’s wife;
  7. daughter;
  8. daughter’s husband;
  9. brother (including step brother);
  10. sister (including step sister).

(k)Shareholders shall mean shareholders of NRC.

(l)Special Resolution shall mean a resolution in which vote cast in favour of the resolution on show of hands or electronically or on poll, as the case may be, by members who being entitled so to do, vote in person or by proxy or by postal ballot are required to be not less than three times the number of votes, if any, cast against the resolution by members so entitled in voting.

3Procedure for approving Related Party Transactions

  1. Disclosure by Directors:

Every Director shall at the beginning of the financial year provide information by way of written notice to the Company regarding his concern or interest in the entity with specific concern to parties which may be considered as related party with respect to the Company and shall also provide the list of relatives which are regarded as related party as per this policy. Directors are also required to provide the information regarding their engagement with other entity during the financial year which may be regarded as related party according to this policy.

  1. Identification of Transactions with Related Parties:

Each Director and Key Managerial Personnel is responsible for providing notice to the Company of any potential Related Party Transaction where he may be considered interested. Audit Committee will determine whether a transaction does, in fact, constitute a Related Party Transaction requiring compliance with this policy. The Directors and Key Managerial Personnel will ensure that their notice of any potential Related Party Transaction is delivered well in advance so that the Audit Committee has adequate time to obtain and review information about the proposed transaction.

  1. Review and approval of Related Party Transaction:

1)Audit Committee:

All Related Party Transactions shall require prior approval of the Audit Committee. Pursuant to the Listing Regulations, as amended from time to time, a transaction with a related party shall be considered material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten per cent of the annual turnover of the Company as per the last audited financial statements of the Company

However, the Audit Committee may grant omnibus approval for Related Party Transactions proposed to be entered into by the company subject to the following conditions:

a)Audit Committee shall lay down the criteria for granting omnibus approval in line with the policy and such approval shall be applicable in respect of transactions which are repetitive in nature;

b)Audit Committee shall satisfy itself the need for such omnibus approval and that such approval is in the best interest of the company ;

c)Such omnibus approval shall specify -

i)Name of the related party, nature of transaction, period of transaction, maximum amount of transaction that may be entered into;

ii)an indicative base price/contracted current price and the formula for variation in the price, if any ;

iii)Such other condition as the Audit Committee may deem fit.

Provided that where the need for RPT cannot be foreseen and the aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions, subject to their value not exceeding Rupees One Crore per transaction.

d)Audit Committee shall review at least on a quarterly basis details of RPT entered into by the company, pursuant to each of the omnibus approval ;

e)Such omnibus approval shall be valid for a period not exceeding one year and shall require fresh approval after the expiry of one year.

2)Board of Directors:

Where approval of Board of Directors is required for any related party transaction or if the Board in any case elects to review any such matter or it is mandatory under any law for Board to approve the Related Party Transaction, then the considerations set forth above shall apply to the Board’s review 9 and approval of the matter, with such modification as may be necessary or appropriate under the circumstances. Any member of the Board who has any interest in any Related Party Transaction will recuse himself and abstain from discussion and voting on the approval of Related Party Transaction.

3Approval of the Shareholders:

In case, the Board refers a related party transaction for seeking approval of the shareholders as per the provisions of Companies Act, 2013 or otherwise, if any member of Company is a related party as per this policy, such member of the Company shall not vote on resolution passed for approving such related party transaction.

4Review of RPT:

Related Party Transactions not approved under this Policy: If a Related Party Transaction is entered into by the Company without being approved under this Policy, the same shall be reviewed by the Committee. The Committee shall evaluate the transaction and may decide such action as it may consider appropriate including ratification, revision or termination of such related party transaction. In connection with any review of a related party transaction, the Committee has authority to modify or waive any procedural requirements of this policy.

All RPT shall be reviewed on a periodical basis by the Audit Committee and the Company shall provide details of all such transactions to the Committee at its meeting at least once in every quarter, if necessary.

5Omission on prior approval of the Committee :

In a case where RPT have been entered into without prior approval of the Committee, it shall be the prerogative of the Committee to:

i)call for all the details relevant to the transactions ;

ii)consider and examine all the facts and circumstances with respect to the case ; and

iii)try and establish the reasons for omission.

Once the Committee is satisfied with the facts produced before it, it shall then consider ratification or termination of the transactions and shall take further action as it may deem appropriate.

6Authority to amend the policy:

Audit Committee shall have the right to make recommendations to the Board with regard to any amendment in the policy and the Board shall have the power to make any amendment to the policy as it deems fit from time to time, provided that the policy continues to be in line with the requirements of applicable SEBI Regulations and all other applicable laws for the time being in force.

7Disclosure:

Details of all material transactions with related parties shall be disclosed quarterly along with the compliance report on corporate governance.

The Company shall disclose the policy on dealing with Related Party Transactions on its website and a web link thereto shall be provided in the Annual Report. Furthermore, all the related party transactions shall be disclosed in the Annual Report of the Company.