12 September, 2018
The Ministry of Corporate Affairs has recently notified the Companies (Accounts) Amendment Rules, 2018 (‘Amendment Rules’).
These Amendment Rules specify that the directors are now required to include a statement in the Board report specifying that the company has complied with the provisions relating to the constitution of Internal Committee (‘IC’) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”).
It is relevant to note that the POSH Act casts an obligation on the employer to make prescribed disclosures in the annual report of the company.
It is the directors who have to ultimately discharge the duties of an employer and make prescribed disclosures as per the POSH Act, in the director’s report prepared under the Companies Act, 2013.
This new requirement under the Amendment Rules reiterates the employer’s obligation to constitute an IC in terms of the POSH Act.
While failure to constitute an IC is a serious contravention punishable under POSH Act, a failure to make appropriate disclosures in the director’s report would be also become punishable under the Companies Act, 2013.
For further information, please contact:
Vineet Aneja, Partner, Clasis Law
vineet.aneja@clasislaw.com
