Procedure for Constitution of Stakeholder’s Relationship Committee

Aakanksha Singhal

Aakanksha Singhal

Published on: Sep 21, 2021

Khushboo Sharma

Updated on: Nov 26, 2024

★★★★★(15 Rating)

19059

Introduction

Stakeholder’s Relationship Committee is one of the important committees within the organization responsible for-

• looking after the interest of shareholders, debenture holders & other security holders; and
• resolving the grievances of such security holders

Applicable Provisions:

1. Section 173, 178 of Companies Act, 2013
2. Regulation 20 and 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
3. Clauses of Secretarial Standard on Board Meeting (SS-1)

Mandatory Requirements

1. Companies comprising of more than 1000 shareholders, debenture-holders, deposit-holders and any other security holders at any time during a financial year shall constitute Stakeholders Relationship Committee.
2. Chairperson of such Committee shall be a non-executive director and be present at the AGM to answer the queries of security holder’s [as per the provisions of Companies Act, 2013].
3. Minimum 3 directors with at least 01 independent director (in case of a listed entity having outstanding SR equity shares, minimum 2/3rd of the Stakeholders Relationship Committee shall comprise of independent directors) [as per the provisions of SEBI (LODR) Regulations, 2015].
4. The Stakeholders Relationship Committee shall meet at least once in a year.

Following Procedure is to be Followed

1. Convene a Meeting of Board of Directors [As per section 173 & SS-1]
   • Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
   • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
   • Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolution
     • Approve the constitution of Stakeholder’s Relationship Committee
     • To authorize the Director or Company Secretary to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
   • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
2. Constitution of Stakeholder’s Relationship Committee
   Pursuant to the approval of Board of Directors, Stakeholder’s Relationship Committee shall be constituted
3. Dissemination of Stakeholder’s Relationship Committee policy details on Website
   • Listed entity shall disseminate all the information in accordance with Regulation 46 (2) (a) to (z) on its functional website and update any change in the content of its website within 02 working days from the date of such change in content.
4. Role of Stakeholder’s Relationship Committee
   The role of the Stakeholders Relationship Committee shall include-
   • resolving grievances of the security holders [of listed entity] including complaints related to transfer/transmission of shares, non-receipt of annual report, non-receipt of declared dividends, issue of new/duplicate certificates, general meetings etc.
   • Reviewing the measures taken for effective exercise of voting rights by shareholders;
   • Reviewing the compliance of the service standards adopted by the listed entity for various services being rendered by the Registrar & Share Transfer Agent
   • Review of the various measures and initiatives taken by the listed entity for reducing the quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual reports/statutory notices by the shareholders of the company.