The 2025 Companies (Accounts) Amendment: A New Era of Transparency in Gender-Sensitive Corporate Reporting

Introduction

On 30 May 2025 the Ministry of Corporate Affairs (MCA) notified the Companies (Accounts) Second Amendment Rules, 2025, which amend the Companies (Accounts) Rules, 2014 and introduce materially expanded non-financial disclosures in the Board’s Report and related electronic filings. Most notable among these changes are a new, more granular disclosure obligation relating to compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (the “POSH Act”) and a separate, express statement of compliance with the Maternity Benefit Act, 1961. The amendments come into force from 14 July 2025 and are accompanied by a requirement to file extracts of the Board’s Report and Auditor’s Report in specified e-forms, signalling the regulator’s intent to make these welfare and gender-sensitivity metrics machine-readable and publicly accessible.

This blog analyses what the amendments require, why the MCA has chosen this route of regulatory intervention, and how companies, boards and in-house counsel should respond. The analysis proceeds in four parts: (1) a plain-language unpacking of the new disclosure obligations; (2) the statutory and jurisprudential context that makes these disclosures significant; (3) practical and governance implications for corporates and auditors; and (4) enforcement, litigation risk and recommended steps for compliance. Throughout, the focus is on legal clarity and operational practicability so that the end reader—whether a compliance officer, company secretary, HR head or corporate lawyer—has a ready roadmap for implementation.

What the amendments require: content and mechanics

The Amendment Rules introduce specific, standardised fields that companies must include in the Extract of the Board’s Report and in the e-forms that accompany financial statement filings. For sexual harassment reporting, companies are now required to disclose quantitative data such as the number of complaints received during the year, the number disposed of, and the number of cases pending beyond a prescribed time period. The rules also require confirmation that the employer has a functioning Internal Committee (IC) or local complaints mechanism as mandated by the POSH Act and the POSH Rules. In parallel, a new clause requires a formal statement in the Board’s Report affirming that the company has complied with the provisions of the Maternity Benefit Act, 1961—including, as the government guidance suggests, entitlements such as maternity leave and, where applicable, creche facilities and related obligations. The MCA has also layered in procedural change by requiring separate electronic filing of extracts of the Board’s Report and auditor’s reports to facilitate regulator-level review and data analytics.

Two points of mechanics are important. First, the amendments are not limited to listed entities: while some of the reporting thresholds are aimed principally at listed companies and public companies above certain paid-up capital thresholds, the new e-form regime and the expectation of public disclosure have wider application and will quickly become the market norm. Second, by converting discrete welfare compliance items into structured e-fields, the MCA has made these matters auditable in a way that plain narrative Board Report paragraphs were not—placing a higher evidentiary burden on companies to be able to demonstrate the figures and the statements they put on record

The legal and policy rationale: continuity with law and jurisprudence

To understand why these disclosures matter, one must place them in the continuum that runs from the Supreme Court’s landmark decision in Vishaka v. State of Rajasthan (1997) through the POSH Act (2013) to the present regulatory move. The Vishaka judgment established that sexual harassment at the workplace violates fundamental rights and mandated preventive and remedial mechanisms, including time-bound complaint procedures and third-party representation on internal grievance bodies. The POSH Act subsequently codified those principles and placed responsibility on employers to maintain a safe working environment, constitute Internal Committees, and ensure accessible remedies. The MCA’s disclosure mandate is therefore not an isolated administrative whim: it builds on a legal architecture that treats workplace safety and gender equality as core compliance metrics, and elevates transparency as an enforcement and social-accountability tool.

From a policy perspective the move is intelligible on several grounds. Public disclosure changes incentives. Where companies must report, and that reporting is searchable and comparable, boards face reputational and investor scrutiny that complements labour enforcement. The MCA’s choice to require both quantitative POSH data and an explicit maternity-compliance confirmation addresses two related governance failures: under-reporting of sexual harassment (driven by stigma and fear) and a casual approach to statutory maternity entitlements that can translate to discrimination in hiring and retention. By making these items part of the Board’s Report (a statutory document approved by the board and signed off by directors), the regulator aligns corporate fiduciary accountability with social-welfare law. Commentary published by leading law firms notes this alignment and interprets the Rules as an effort to mainstream gender-sensitive metrics into corporate disclosure frameworks.

Practical implications: governance, HR and audit readiness

The immediate practical implication is that Boards and the compliance function must treat POSH and maternity compliance as core audit-trail matters. Where once an IC’s register and periodic training records might have sufficed, companies now need robust, month-by-month records that can substantiate the numbers filed. Minutes, intake forms, investigation timelines, disposal records and remedial actions (including disciplinary outcomes and follow-up measures) must be maintained to demonstrate the accuracy of disclosures. Similarly, the maternity compliance statement should be backed by policy documents, payroll and leave records, creche arrangements where claimed, and evidence of communication to employees. Law-firm notes accompanying the MCA notification recommend mapping existing HRMS data to the new e-form fields and instituting cross-functional sign-offs (HR, legal, company secretary and internal audit) before filings.

Auditors and company secretaries occupy a pivotal role. The structured e-forms make the Board’s Report extracts verifiable against books and records, and auditors will be expected to exercise professional scepticism about the veracity of the statements. This has two corollaries. First, boards should not treat the disclosure as a mere formality—an inaccurate statement may invite scrutiny from the Registrar of Companies or give rise to shareholder litigation where the disclosure bears on board supervision of workplace risk. Second, audit committees should require a periodic control-assurance memorandum on POSH and maternity compliance, similar to how tax or environmental compliance is handled today. Several leading firms have advised updating audit programmes and management representation letters to include express confirmations about internal committees, training, complaint timelines and maternity-related benefits.

Operationally, smaller companies and those with dispersed workforces face particular challenges. The POSH Act envisages local committees for establishments with lesser headcount; the MCA’s disclosure format assumes aggregation at the corporate level. Companies must therefore reconcile decentralised complaint mechanisms and ensure consistency in how “disposed” or “pending” are defined across units. For employers using gig workers, contractors or platform workers, the question of statutory coverage and the scope of internal grievance mechanisms will be a live compliance issue that requires careful policy drafting and possibly contractual change.

Enforcement, litigation risk and practical recommendations

The Amendment Rules effectively widen the frontiers of enforcement by converting workplace welfare into a visible corporate disclosure item. Regulators, investors and civil society may use the published data to identify outliers—companies that report few complaints despite large headcounts, or those with recurrent “pending beyond 90 days” cases—and then press for investigations. Directors should therefore appreciate that the Board’s Report is not a safe harbour for glossing over operational failures; rather, it invites scrutiny of board oversight and risk management practices. Precedents under company law and the POSH regime suggest that failure to constitute an IC or wilful suppression of material facts can attract both regulatory sanctions and civil liability. The Supreme Court’s jurisprudence on employer liability for breach of statutory obligations remains a clear backdrop for such scrutiny.

What should companies do, concretely? First, map existing practices against the disclosure fields and close gaps in documentation immediately. Second, adopt a quarterly internal-control certification signed by the head of HR and the company secretary that reconciles the HR case-register to the figures that will be filed. Third, update Board and audit-committee reporting to include a standing agenda item on POSH and maternity compliance: summaries of complaints, investigation timelines and corrective actions should be tabled and minuted. Fourth, review employment contracts and contractor arrangements to ensure that statutory entitlements are clearly allocated and documented, and that mechanisms exist for contractors’ workforces to access redress. Finally, consider proactive stakeholder communication: an explanatory note in the annual report on procedures, confidentiality safeguards and victim support measures will reduce the risk of reputational misinterpretation and demonstrate governance intent. Several practice notes produced soon after the amendments advise these steps as good governance.

Conclusion

The MCA’s 2025 amendment to the Companies (Accounts) Rules marks a deliberate shift: workplace safety and statutory welfare are now measurable corporate disclosures rather than internal HR checkboxes. By mandating standardised reporting on POSH complaints and a formal statement on maternity compliance, the regulator has linked statutory labour protections to board-level accountability and public transparency. For companies this is both a compliance burden and an opportunity—an occasion to modernise record-keeping, strengthen investigative rigour, and demonstrate that gender sensitivity is an integral element of enterprise risk management.

Boards and counsel should treat the new rules as a governance modernisation exercise: document, verify, and disclose with candour. Doing so will reduce legal and reputational exposure and, more importantly, reinforce the statutory protections that the Vishaka jurisprudence and the POSH Act were created to secure. The practical playbook is straightforward—align HR systems to e-form fields, harden internal controls and board reporting, and adopt survivor-centred processes that are durable, transparent and auditable. Those steps will ensure that the new disclosures become instruments of accountability and cultural change, rather than mere items of compliance theatre.