18 February 2015
The newly enacted Companies Act, 2013 (Section 177) and Companies (Meetings of Board and its Powers) Rules, 2014 provides for establishment of a vigil mechanism for its directors and employees to report genuine concerns in such manner as may be prescribed in the following class of companies. a. Listed company b. Companies which accept deposit from the public c. Companies which have borrowed money from banks or public financial institutions in excess of Rs.50 crore. The Act also provides that the vigil mechanism shall be disclosed by the Company on its website and in the Board Report. The listing agreement (clause 49) provides for similar provisions.
The Vigil Mechanism intends to cover serious concerns that could have grave impact on the operations and performance of the business of the Company.
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