Applicability
Every listed public company and a company covered under rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014 are required to constitute a Nomination and Remuneration Committee (NRC).

As per Rule 4 the following class or classes of companies shall have at least two directors as independent directors –

(i) the Public Companies having paid up share capital of ten crore rupees or more; or

(ii) the Public Companies having turnover of one hundred crore rupees or more; or

(iii) the Public Companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees:

Provided that in case a company covered under this rule is required to appoint a higher number of independent directors due to composition of its audit committee, such higher number of independent directors shall be applicable to it:

Provided further that any intermittent vacancy of an independent director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later:

Provided also that where a company ceases to fulfil any of three conditions laid down in sub-rule (1) for three consecutive years, it shall not be required to comply with these provisions until such time as it meets any of such conditions;

Provided that a company belonging to any class of companies for which a higher number of independent directors has been specified in the law for the time being in force shall comply with the requirements specified in such law.

Composition:

• Minimum 3 non-executive directors out of which at least one-half of the members must be Independent Directors.
• The Chairperson of the company may be appointed as a member but cannot act as Chairperson of the NRC.

Additional Compliances in case of a listed company as per Regulation 19 and Regulation 62G [HVDLE] of SEBI (LODR) Regulation:

• At least two thirds of the directors shall be independent directors at the time of constitution of NRC
• Chairperson shall be independent director & present at AGM
• Quorum – 2 or 1/3rd of members of committee whichever is more (at least 1 independent director)
• Committee to meet at least once in a financial year
• Provisions of 62G shall not be applicable during the period HVDLE is undergoing corporate insolvency process under Insolvency Code. Roles and responsibilities of committee shall be fulfilled by IRP/RP

Functions of the Nomination and Remuneration Committee

The NRC is responsible for:

a.Identification and Selection

• • Identifying individuals qualified to become Directors and those to be appointed to Senior Management positions.
  • Recommending their appointment and removal to the Board.
  • specifying the manner for effective evaluation of performance of Board, its committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance

b.Performance Evaluation

• • formulating the criteria for determining qualifications, positive attributes and independence of a director
  • Recommending to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees.

c.Remuneration Policy

• • Formulating criteria for:
    • Determining qualifications,
    • Assessing positive attributes, and
    • Establishing independence of a Director.
  • Recommending a Remuneration Policy for:
    • Directors,
    • Key Managerial Personnel (KMP),
    • Other employees.

Functions of NRC shall be same as above in case of a listed company and HVDLE, which is given under Schedule II of SEBI (LODR) Regulations, 2015.