In a significant move towards fostering safer workplaces and enhancing corporate transparency, the Ministry of Corporate Affairs (MCA) has introduced the Companies (Accounts) Second Amendment Rules, 2025 through Notification No. G.S.R. 357(E), dated May 30, 2025.  

Effective from July 14, 2025, this amendment imposes mandatory disclosures concerning the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, popularly known as the “POSH Act”, in annual company reports. 

Key Compliance Requirements 

Under this updated regime, every company is required to furnish the following details in its Board Report as part of its annual disclosure obligations: 

-> Confirmation regarding the constitution of the Internal Complaints Committee (ICC) as per the POSH Act. 

-> Number of sexual harassment complaints received during the year. 

-> Number of complaints disposed of within the year. 

-> Details of pending cases exceeding 90 days. 

These disclosures must be made in compliance with Section 134 of the Companies Act, 2013 read with Rule 8(5)(A) of the Companies (Accounts) Rules, 2014. 

Previously, companies only had to confirm the establishment of the ICC. Now, however, detailed statistics on complaints and their resolution status must be shared, signalling stricter regulatory oversight and greater accountability. 

Consequences of Non-Compliance 

Failure to comply with these enhanced disclosure norms may lead to severe financial penalties under Section 134(8) of the Companies Act, 2013: 

₹3,00,000 penalty on the company. 

₹50,000 penalty on each responsible officer, including directors and key managerial personnel. 

That said, small companies, One Person Companies (OPCs), and startups receive some relief under Section 446B of the Act: 

Maximum penalty for such companies: ₹2,00,000. 

Maximum penalty for officers: ₹1,00,000. 

Final Thoughts 

The MCA’s latest notification is a strong reminder that adherence to the POSH Act is no longer optional, it is a legal obligation. Beyond regulatory compliance, it reflects a company’s commitment to creating a safe, respectful, and inclusive work environment. 

With the July 14, 2025 deadline fast approaching, companies must: 

-> Ensure proper constitution and functioning of their Internal Complaints Committee. 

-> Maintain accurate records of complaints and resolutions. 

-> Update their Board Reports to include the mandated disclosures. 

Prompt action now will help businesses avoid penalties and uphold their ethical and legal duties toward workplace safety.