As per Companies Act,2013 it is mandatory for all the listed companies and Companies which accepts deposits from the public, Companies which have borrowed money from Banks and PFI in excess of Rs.50 crores to establish a Vigil mechanism for directors and employeesto report genuine concerns, as per section 177(9) of the Companies Act, 2013 read with Rule (7) of the Companies (Meetings of Board and its Powers) Rules, 2014. Companies which are required to constitute an audit committee shall operate the vigil mechanism through the audit committee and if any of the members of the committee have a conflict of interest in a given case, they should recuse themselves and the others on the committee would deal with the matter on hand. For other companies, the Board of directors shall nominate a director to play the role of audit committee for the purpose of vigil mechanism to whom other directors and employees may report their concerns.
Vigil Mechanism is intended to provide adequate safeguards against victimization of employees and directors who avail of the Vigil mechanism and also provide for direct access to the chairperson of the Audit committee or the director nominated to play the role of audit committee, as the case may be, in exceptional cases. Once established, the existence of the mechanism may be appropriately communicated within the organization.
In case of repeated frivolous complaints being filed by a director or anemployee, the audit committee or the director nominated to play the role of audit committee may take suitable action against the concerned director or employee including reprimand.
The Company has already adopted a Code of Conduct for Directors and employees, which lays down the principles and standards that should govern the actions of the Directors and the employees. Any actual or potential violation of the Code, whomsoever insignificant or perceived as such, is a matter of serious concern for the Company. This policy formalizes company’s commitment to provide employees, an avenue to raise concerns in circumstances where they believe that anyone in the organization is engaged in inappropriate practices prejudicial to the interests of organization or not in line with the policies/or culture of the organization.