A 4 person Stakeholders Relationship Committee was formed by Prakash Ltd having 1001 Shareholders Th...........

Companies Act-Phase (I & II) Board-powersandMeetings

A 4 person Stakeholders Relationship Committee was formed by Prakash Ltd having 1001 Shareholders. The 4 members were highly qualified Executive Directors. Amongst them a Director was named Chairman. Is this a validly constituted SRC, if not, why?

Yes, the SRC is validly constituted

No, the SRC is not validly constituted as there is failure to maintain minimum no. of Non-Executive Members on SRC

No, the SRC Chairman is invalid, as the post can be held only by Nonexecutive Director

No, the SRC is invalid as it consists members already serving on BOD.

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Explanation:

Stakeholders Relationship Committee(SRC):

The Board of Directors of a company which consists of more than one thousand shareholders, debenture-holders, deposit-holders and any other security holders at any time during a financial year shall constitute a Stakeholders Relationship Committee consisting of a chairperson who shall be a non-executive director and such other members as may be decided by the Board.

The SRC shall consider and resolve the grievances of security holders of the company.

The chairperson of each of the committees constituted under this section or, in his absence, any other member of the committee authorised by him in this behalf shall attend the general meetings of the company.