Introduction
On 30 May 2025, the Ministry of Corporate Affairs, Government of India, introduced the Companies (Accounts) Second Amendment Rules, 2025 (Amendment) (to access the amendment click here) amending the Companies (Accounts) Rules, 2014 (Accounts Rules). The Amendment inter alia provides for certain additional details that should be included in the Board Report by companies.
The Amendment has come into effect on 14 July 2025 and shall apply to Board Reports of companies that are finalized on or after this date.
In this update, we have provided an overview of the key changes introduced by the Amendment.
Key Changes introduced by Amendment
The Accounts Rules previously mandated companies to include in their Board Reports, a statement confirming compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (PoSH Act). The Amendment now requires the companies to additionally mention the following details in relation to the PoSH Act in the Board Report:
(a) number of complaints of sexual harassment received in the year;
(b) number of complaints disposed- off during the year; and
(c) the number of cases pending for more than 90 days (corresponding to the maximum timeline prescribed under the PoSH Act for completing an inquiry for a sexual harassment complaint).
Notably, the Amendment now also mandates companies to include a specific statement in their Board Report regarding compliance with the provisions of the Maternity Benefit Act, 1961.
Reporting Requirements under the Companies Act, 2013
A key point to consider is that failure to comply with the enhanced reporting requirements in the Board's Report may attract penalties under Section 134 of the Companies Act, 2013. In such cases, the company may be liable to a fine of ₹3,00,000, while the officer in default may face a penalty of ₹50,000.
Conclusion
The recent Amendment mandating disclosures related to sexual harassment is a welcome and progressive step. It aligns with the requirements of the PoSH Act, which already requires companies to include such disclosures in their Annual Report submitted to the District Officer.
Significantly, the Amendment promotes greater transparency by mandating public disclosure of information that was previously confined to internal reporting, particularly in the case of unlisted companies. This shift ensures that such details are now open to public scrutiny, fostering greater accountability and public scrutiny across the corporate landscape.
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