POLICY ON RELATED PARTY TRANSACTIONS

GAMMON INDIA LIMITED [CIN:L74999MH1922PLC000997] Regd. Office: Gammon House, Veer Savarkar Marg, Prabhadevi, Mumbai, 400 025 Website: www.gammonindia.com Tel: +91 22 61153000 Fax: +91 22 24300529 POLICY ON RELATED PARTY TRANSACTIONS 1. PREAMBLE : The Companies Act, 2013 (the Act ) read with the Companies (Meetings of Board and its Powers) Rules, 2014 (the Rules ) introduced specific provisions on related party transactions. The Act defines the term related party and related party transaction. The Act and the Rules have also provided for a two tier approval process based on the financial limits of each of the related party transactions. With a view to align provisions of the Listing Agreement with the revised provisions of the Act, the Securities and Exchange Board of India (SEBI) revised Clause 49 of the Listing Agreement. Pursuant to the revised Clause 49 VII C of the Listing Agreement, all listed companies are required to formulate a policy on materiality of related party transactions and also a policy on dealing with related party transactions. Gammon India Limited is a flagship of the Gammon Group comprising of several subsidiaries listed as well as unlisted. The objective of the Related Party Policy is to ensure that transactions between Gammon India Limited and its subsidiaries, associates, joint ventures and all related parties are approved and transacted in accordance and in compliance with the relevant provisions of the Companies Act, 2013 and the provisions of the Listing Agreement. With a view to ensuring good Corporate Governance practices as well as ensuring that all related party transactions are in the interests of the Company and its stakeholders, the Board of Directors on the recommendation of the Audit Committee has adopted this Related Party Policy. 2. DEFINITIONS : (c) Act shall mean the Companies Act 2013 and the rules framed thereunder, including any modifications, amendments, clarifications, circulars or re-enactment thereof. Arm s length basis means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest. Associate Company shall have the same meaning as defined in Section 2(6) of the Companies Act, 2013 and shall mean any Company n which the Company has significant influence, but which is not a Subsidiary Company of the Company having such influence and includes a joint venture Company. Explanation For the purposes of this clause, significant influence means Control of at least twenty per cent of total share capital, or of business decisions under an agreement. (d) (e) Audit Committee or Committee means the Audit Committee of the Board of Directors of the Company. Board means the Board of Directors of Gammon India Limited. Page 1 of 5

(f) Key Managerial Personnel means: (i) Chief Executive Officer or the Managing Director or the Manager; (ii) Company Secretary, (iii) Whole-time Director; (iv) Chief Financial Officer; and (v) such other officer as may be prescribed by the Companies Act, 2013 or the rules made thereunder. (g) (h) Material related party transaction means a transaction with a related party if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual consolidated turnover of the company as per the last audited financial statements of the Company. Ordinary Course of Business means the usual transactions, customs and practices undertaken/adopted by the Company to conduct its business operations and activities and includes all such activities which the company can undertake as per its Memorandum & Articles of Association. (i) Related Party shall shave the same meaning as defined in Section 2(76) of the Companies Act, 2013, Clause 49 of the Listing Agreement and shall mean (i) (ii) (iii) (iv) (v) (vi) (vii) a director or his relative; a key managerial personnel or his relative; a firm, in which a director, manager or his relative is a partner; a private company in which a director or manager is a member or director; a public company in which a director or manager is a director or holds along with his relatives, more than two per cent. of its paid-up share capital; any body corporate whose Board of Directors, managing director or manager is accustomed to act in accordance with the advice, directions or instructions of a director or manager; any person on whose advice, directions or instructions a director or manager is accustomed to act: (viii) a holding, subsidiary or an associate company of such company or a subsidiary of a holding company to which it is also a subsidiary; (j) Related Party Transaction shall mean transactions as given under clause to (g) of Section 188 of the Act and as defined in clause 49 (VII) of the listing agreement. These include sale, purchase, leasing or supply of goods or property, availing / rendering of any services, appointment of agents for any of the above and underwriting of securities or transfer of any obligations. "Explanation: A "transaction" with a related party shall be construed to include single transaction or a group of transactions in a contract." Page 2 of 5

(k) Policy means this Related Party Transaction Policy of the Company. 3. MATERIALITY THRESHOLDS : As per the Listing Agreement: A Related Party Transaction shall be considered Material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year exceeds 10% of the Annual Consolidated Turnover of the Company as per the last audited Financial Statements of the Company. Under the Act: Nature of transaction Limits for the time being in force [as per Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014]. Sale, purchases or supply of any goods or materials. 10% of Turnover or Rs. 100 crores, whichever is lower. Selling or otherwise disposing of, or buying property of any kind. Leasing of property of any kind. Availing or rendering of any services, directly or through appointment of agent. Related Party's appointment to any office or place of profit in the company, its subsidiary company or associate company Remuneration for underwriting the subscription of any securities or derivatives thereof, of the company 10% of Net Worth or Rs. 100 crores, whichever is lower. 10% of Net Worth or 10% of Turnover or Rs. 100 crores, whichever is lower. 10% of Turnover or Rs. 50 crores, whichever is lower. Where monthly remuneration exceeds Rs. 250,000/- amount exceeding 1% of Net Worth of the Company 4. PROCEDURE FOR APPROVAL OF RELATED PARTY TRANSACTIONS : 4.1 Audit Committee: Effective from 1 st October, 2014 all Related Party Transactions should be referred to the Audit Committee, irrespective of its materiality. The Audit Committee shall also approve any subsequent modification of Related Party Transactions. The onus of referring the Related Party Transactions to the Audit Committee for its approval shall be on the Key managerial Person, Finance & Accounts (F&A) department of the Company as well as on the respective F&A departments of the Company s subsidiaries and associates. Page 3 of 5

4.2 The Audit Committee shall be provided with complete details of the contracts/transaction proposed including but not limited to the names of the parties, the period of the contract, the value of the contract. 4.3 The Audit Committee will take into consideration the following criteria while according approval to Related Party Transaction: Nature of relationship with related party; Nature, material terms, monetary values and particulars of the contract or arrangement; Method and manner of determining the pricing and other commercial terms; Whether the transaction is at arm s length; and Any other information relevant or important for the Audit Committee / Board to take a decision on the proposed transaction. 4.4 The Company can also obtain an omnibus approval from the Audit Committee which may be granted by the committee subject to following conditions: (c) (d) (e) (f) The Audit Committee shall lay down the criteria for granting the omnibus approval in line with this Policy and such approval shall be applicable in respect of transactions which are repetitive in nature. The Audit Committee shall satisfy itself the need for such omnibus approval and that such approval is in the interest of the Company; Such omnibus approval shall specify (i) the name/s of the related party, nature of the transaction, period of transaction, maximum amount of transaction that can be entered into, (ii) the indicative base price / (iii) such other conditions as the Audit Committee may deem fit; Provided that where the need for Related Party Transactions cannot be foreseen and aforesaid details are not available, Audit Committee may grant omnibus approval for such transactions subject to their value not exceeding Rs.1 crore per transaction. The Audit Committee shall review, at least on a quarterly basis, the details of the Related Party. Such omnibus approvals shall be valid for a period not exceeding one year and shall require fresh approvals after the expiry of one year. 4.5 Board of Directors Approval: All related party transactions which are not in the ordinary course of business and not at arms length will after recommendation of the Audit committee be reviewed and approved by the Board. Page 4 of 5

4.6 Shareholders Approval: All transactions with Related parties exceeding the materiality threshold limits as specified in clause 3 above shall be placed before the shareholders for their approval. For this purpose, all entities falling under the definition of related parties shall abstain from voting irrespective of whether the entity is a party to the particular transaction or not. 4.7 The Company is engaged in various sectors such as engineering and construction, power transmission, realty etc. and has global presence in Europe and Africa. The Company is required to incorporate subsidiaries, either as regulatory requirement or for venturing into new sectors. The contracts/arrangements entered into or to be entered into with such subsidiaries/joint ventures though being related party transactions, would be in the ordinary course of business. 5. VIOLATION OF THE POLICY : In case the Company becomes aware of a Related Party Transaction that has not been approved under this Policy prior to its consummation, the same shall be dealt with by the Audit Committee / Board in the following manner: 5.1 The Audit Committee will consider all the relevant facts and circumstances regarding such Related Party Transaction, reason for failure to obtain requisite approvals and decide whether the same should be ratified within 3 months of the date of the contract or arrangement or revised or terminated. While deciding continuance of such Related Party Transaction, the Audit Committee or the Board shall consider whether ratification/revision/termination of such Related Party Transaction would be beneficial or detrimental to the Company. The Company shall also have the option to take such action as may be deemed appropriate. In case, such contract or arrangement is not so ratified, such contract or arrangement shall be voidable at the option of the Board. 5.2 It shall be open to the Company to proceed against a Director or any other employee who had entered into such a contract or arrangement in contravention of the provisions of this Policy for recovery of any loss sustained by it as a result of such contract or arrangement. 5.3 Where the Audit Committee or Board, as the case may be, determines not to ratify a Related Party Transaction that has been commenced without approval, it may direct such additional actions including, but not limited to, immediate cancellation of such transaction or recovery action against a Director or KMP who had entered in to such contract or arrangement in contravention of the provisions of the Act or Clause 49. 5.4 If such contract or arrangement is with a related party with reference to any Director, or is authorised by any other Director, the Directors concerned shall indemnify the Company against any loss incurred by it. 6. CHANGES TO THE POLICY : Any changes in the policy on account of regulatory requirements will be reviewed and approved by the Audit Committee and the Board. The Audit Committee / Board will give suitable directions / guidelines to implement the same. ******************** Page 5 of 5