The Stakeholders Relationship Committee (SRC) is a board committee that deals with the grievances of shareholders and other stakeholders. Section 178(5) of the Companies Act, 2013 governs the SRC.
The applicability
The SRC is mandatory for:
- Listed companies
- Companies with more than 1,000 shareholders, debenture holders, deposit holders or other security holders
The composition
The SRC must have at least three directors, with at least one independent director. The chairperson must be a non-executive director. The committee must meet at least once a year.
The role
The SRC:
- Considers and resolves the grievances of shareholders and other stakeholders
- Monitors the redressal of grievances
- Reviews the measures taken for the effective redressal of grievances
- Reports to the board on the grievances and their resolution
The practical points
The company should constitute the SRC with the required composition. The committee should meet at least once a year. The company should maintain a register of grievances and their resolution. The company should disclose the SRC's composition and role in the board's report.
Call to Action: We advise companies on SRC constitution, grievance redressal and Section 178(5) compliance. For an SRC review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.