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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Stakeholders Rights

Rohan, an accounts executive at Sundaram Polymers Ltd (listed), reports suspected inflation of invoices by the finance head, who is a senior manager. Rohan fears the finance head will retaliate and wishes to approach someone directly. Which feature of the vigil mechanism applies?

The vigil mechanism must provide direct access to the Audit Committee chairperson in appropriate or exceptional cases. Since the complaint concerns a senior manager and Rohan fears retaliation, he can use this route rather than going through management.

  1. AIt must give direct access to the chairperson of the Audit Committee in appropriate or exceptional casesCorrect
  2. BIt must give direct access to the statutory auditor in every case
  3. CIt must route all complaints through the Stakeholders Relationship Committee chairperson
  4. DIt must require complaints to be first approved by the managing director

Explanation

Section 177(10) requires the vigil mechanism to make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Routing through the managing director or the Stakeholders Relationship Committee is not what the section provides.

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