POSH Act Board Report Disclosures: New Mandatory Requirements for Companies

The Companies (Accounts) Second Amendment Rules, 2025, effective from July 14, 2025, have introduced detailed mandatory disclosures relating to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) in the Board's Report of every company. The amendment goes beyond the earlier requirement to merely state the number of complaints received and disposed of. Companies must now disclose complaint statistics with greater granularity, including cases pending beyond 90 days, and must report the gender composition of their workforce. Non-compliance with these disclosure requirements attracts financial penalties for both the company and its officers.

What Must Be Disclosed in the Board's Report

Under the amended rules, every company is required to include the following information in its Board's Report: the total number of sexual harassment complaints received during the financial year, the number of complaints that were resolved during the year, the number of cases that remained pending for more than 90 days as at the end of the year, and the gender composition of the workforce, specifically the number of female, male, and transgender employees. This is a significant expansion from the earlier requirement, which only mandated disclosure of the number of complaints filed, disposed of, and pending. The addition of the 90-day pendency metric is particularly noteworthy, as it creates a measurable accountability standard for the Internal Committee's efficiency in handling complaints.

Penalties for Non-Compliance

Failure to include the prescribed POSH Act disclosures in the Board's Report can result in fines ranging from Rs 50,000 to Rs 1,00,000 for the company. Officers in default may face personal penalties. For repeated violations, the consequences can be more severe, including potential non-renewal of business licences under the POSH Act itself. Companies and their officers may face penalties of up to Rs 3,00,000 and Rs 50,000 respectively for failing to meet disclosure obligations. These penalties apply in addition to any penalties that may be attracted under the POSH Act for substantive non-compliance with the Act's requirements, such as failure to constitute an Internal Committee or failure to conduct inquiries within the prescribed timelines.

Recent Judicial Developments on POSH Proceedings

Courts have also provided important procedural clarifications that affect how companies handle POSH complaints. A written complaint is mandatory for the Internal Committee to assume jurisdiction; in the absence of a formal written complaint addressed to the IC, any inquiry conducted by it has no legal basis. This means that companies cannot initiate POSH proceedings based on informal reports or verbal complaints without a written filing by the aggrieved woman. Separately, courts have held that termination or adverse action taken against an employee while a sexual harassment complaint is pending attracts strict judicial scrutiny, particularly where the action appears to be retaliatory. Such adverse action cannot be treated as a routine administrative step and may be set aside if the employer cannot demonstrate that it was unconnected to the complaint.

Practical Takeaways

Company secretaries and compliance officers should immediately update the Board's Report template to include the expanded POSH disclosure requirements. HR teams must maintain accurate records of complaint statistics, resolution timelines, and workforce gender composition throughout the year to enable accurate reporting. The 90-day pendency metric means that Internal Committees should be resourced and trained to resolve complaints within a reasonable timeframe. Companies should review their POSH policies to ensure that the complaint intake process requires a written filing and that the IC's procedures align with current judicial requirements. Legal counsel should advise boards on the reputational and regulatory risks of non-disclosure and ensure that the Board's Report accurately reflects the company's POSH compliance position.