POSH in the Board’s Report (2026): The ₹3 Lakh Line Most Companies Will Get Wrong This Filing Season

On 30 May 2025 the Ministry of Corporate Affairs rewrote a single clause in the Companies (Accounts) Rules, and most private company directors still have not noticed. Rule 8(5)(x) used to let a board tick a box: "the company has complied with the POSH Act." From the financial year now closing, that box no longer exists. Your Board's Report for FY 2025-26 has to state the actual number of sexual-harassment complaints received, how many were disposed of, and how many are still pending beyond ninety days. Get that POSH Board's Report disclosure wrong, or leave it out, and the defective report attracts a penalty of ₹3,00,000 on the company plus ₹50,000 on every officer in default under Section 134(8). AGMs closed on 30 September. The reports are being signed this fortnight. This is the first full year the new rule bites.

The problem: a compliance line that moved from HR into the Board's Report

For years, sexual-harassment compliance sat with the HR team and rarely reached the board table. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, known as the POSH Act, requires any workplace employing ten or more people to set up an Internal Committee under Section 4. Section 22 then asks the employer to record the number of cases filed and disposed in its own annual report. Companies read that loosely and printed one sentence in the Board's Report.

That gap is now closed. Through the Companies (Accounts) Second Amendment Rules, 2025, notified on 30 May 2025 and effective from 14 July 2025, the MCA substituted Rule 8(5)(x). The clause no longer accepts a bare compliance statement. It asks for data. A board that signs off vague language is signing a Board's Report that does not meet the prescribed content, and an incomplete Board's Report is a defective one for the purposes of Section 134.

The exposure is real because the numbers are large and the officers are named. As with the wider set of Board's Report disclosures under Section 134, Section 134(8) fixes a penalty of ₹3,00,000 on the company and ₹50,000 on every officer in default when the Board's Report does not comply with Section 134. Directors who sign the report are officers in default. There is no daily-running element here, but the amounts are fixed and the adjudicating officer has little discretion once the omission is on record. For a company that also never constituted an Internal Committee, Section 26 of the POSH Act adds a fine of up to ₹50,000, which doubles on a second offence and can lead to cancellation of the business licence or registration.

What changed in Rule 8(5)(x)

The old text and the new text look similar at a glance, so it is worth setting them side by side. Before the amendment, Rule 8(5)(x) required the Board's Report to carry a statement that the company had complied with the provisions relating to the constitution of the Internal Committee under the POSH Act. After the amendment, the same clause requires a statement that the company has constituted an Internal Committee, followed by three figures for the financial year.

The clause reaches every company other than a One Person Company and a Small Company. The Small Company threshold matters for company secretaries advising private clients. A company is Small only if its paid-up capital is up to ₹4 crore and its turnover is up to ₹40 crore. A private limited with revenue of ₹5 crore or more has crossed that line and cannot rely on the exemption. Founder-run companies that assume the rule is "for big listed firms" are reading it backwards.

The filing-season clock for FY 2025-26

The disclosure is not a standalone form. It travels inside the Board's Report, which is approved by the board, attached to the financial statements, and then filed with the Registrar in Form AOC-4 under Section 137. Missing the content in the report means the AOC-4 you upload carries a defective document. Here is where the dates fall for a company with a 31 March year-end that held its AGM on the last permitted day.

Is your Internal Committee even valid?

Before you write a single number, check that the committee producing those numbers is lawfully composed. A disclosure that states an Internal Committee exists, when the committee is short a member or has no external member, is worse than silence, because it puts a false statement into a public filing. Section 4 sets a specific composition.

Workplaces with fewer than ten workers, and complaints made against the employer, go to the Local Committee constituted by the District Officer rather than an Internal Committee. A start-up that has just crossed ten employees during FY 2025-26 has to constitute its Internal Committee from the month it crossed the threshold, not from the next April.

What you must do now

Treat this as a short pre-signing checklist for the board meeting that approves the accounts.

1. Confirm the committee. Verify the Internal Committee has a Presiding Officer, two employee members, and one external member, with at least half women. Fix any vacancy before the board signs, and keep the nomination letters on file.
2. Pull the FY 2025-26 numbers. Ask the Internal Committee for complaints received, complaints disposed of, and complaints pending beyond ninety days for the financial year. A nil year is stated as three zeros, not skipped.
3. Draft the four-part statement. A clean version reads: "The Company has constituted an Internal Committee under the POSH Act, 2013. During the financial year, [X] complaints were received, [Y] were disposed of, and [Z] were pending for more than ninety days."
4. Reconcile the two reports. The figures in the Board's Report should match the Internal Committee's annual report to the District Officer under Section 21. A mismatch between a Registrar filing and a District Officer filing is easy for a survey to catch.
5. Check the Small Company status honestly. Run paid-up capital and turnover against the ₹4 crore and ₹40 crore limits for the year. If either is breached, the exemption is gone and the disclosure is mandatory.
6. Register on SHe-Box. Following the Supreme Court's orders, District Officers are surveying whether Internal Committees exist and asking for details on the SHe-Box portal run by the Ministry of Women and Child Development. Registration is the paper trail that backs the board's statement.
7. Adopt, sign, attach. Approve the Board's Report in the board meeting, have the chairperson or two directors sign, and attach it to the financial statements before the AOC-4 upload.

The deeper implication

According to CS Sapna Malpani, the amendment quietly turned a human-resources formality into a director-level statement of fact, and that is the part clients underestimate. A signed Board's Report is a representation by the board. When the board declares a number of complaints, it is warranting that the Internal Committee functioned, that records exist, and that nothing was buried. During due diligence for a funding round or an acquisition, that single paragraph is now a document an investor's counsel will test against the Internal Committee minutes and the District Officer filing.

The forward view is that enforcement will come through cross-checking rather than fresh inspections. The Supreme Court's follow-up orders in Aureliano Fernandes have set District Officers to survey Internal Committees and upload the results on SHe-Box. Once that database matures, a Registrar reviewing a Board's Report that claims an Internal Committee exists can be matched against a SHe-Box record that shows none. Companies that treat the disclosure as boilerplate are the ones a data match will surface first.

How this compares with the disclosures companies confuse it with

Two other Board's Report items get mixed up with POSH. The first is the CSR disclosure, which lives in its own report and Form CSR-2 and is driven by spend rather than headcount. The second is the risk-management and internal-control commentary under Section 134(3), which is narrative. The POSH line is different from both because it is a hard count tied to a separate statute with its own penalty. A company can be fully compliant on CSR and internal financial controls and still hand the Registrar a defective Board's Report by omitting three POSH figures. Keep the POSH statement as a distinct, numbered item so a reviewer can find it at a glance.

Key takeaways

Sources and references

• Ministry of Corporate Affairs, Companies (Accounts) Second Amendment Rules, 2025 (notification dated 30 May 2025)
• India Code, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
• India Code, Companies Act, 2013, Section 134
• AZB & Partners, Mandatory Disclosure of POSH Compliance in the Board Report
• Supreme Court of India, Aureliano Fernandes v State of Goa (directions on IC constitution and monitoring)
• Ministry of Women and Child Development, SHe-Box portal

Frequently asked questions

What is the POSH Board's Report disclosure under Rule 8(5)(x)?

It is the statement a company must include in its Board's Report confirming that an Internal Committee has been constituted under the POSH Act, 2013, together with three figures for the financial year: the number of sexual-harassment complaints received, the number disposed of, and the number pending beyond ninety days. This replaced the earlier one-line compliance statement after the Companies (Accounts) Second Amendment Rules, 2025 took effect on 14 July 2025, so FY 2025-26 is the first full year every reporting company must give the detailed figures.

Which companies are exempt from the POSH Board's Report disclosure?

Only One Person Companies and Small Companies are outside the requirement. A Small Company is one with paid-up share capital up to ₹4 crore and turnover up to ₹40 crore. If a private company crosses either limit during the year, it stops being a Small Company and the POSH disclosure becomes mandatory. Most funded start-ups and mid-market private limited companies are therefore covered, even though they often assume the rule is only for large or listed firms.

What is the penalty for missing the POSH disclosure in the Board's Report?

An incomplete Board's Report is a defective one under Section 134, and Section 134(8) fixes a penalty of ₹3,00,000 on the company and ₹50,000 on every officer in default. Directors who sign the report are officers in default. If the company also failed to constitute an Internal Committee, Section 26 of the POSH Act adds a fine of up to ₹50,000, which doubles on a second offence and can lead to cancellation of the business licence or registration.

Do we still need to file the POSH annual report with the District Officer?

Yes. The Board's Report disclosure under the Companies Act does not replace the Internal Committee's annual report under Section 21 of the POSH Act, which goes to the employer and the District Officer, usually by 31 January for the preceding calendar year. The two filings should carry the same numbers. A company that reports one figure to the Registrar and a different figure to the District Officer creates an inconsistency that a compliance survey can flag.

How many complaints do we report if we had none this year?

A nil year is reported as zero for each of the three items: nil received, nil disposed, and nil pending beyond ninety days. Leaving the line out because there were no complaints is one of the most common errors, and it makes the Board's Report defective in exactly the same way as omitting a real number. State the constitution of the Internal Committee and the three zeros.

When is the disclosure due for FY 2025-26?

The disclosure is part of the Board's Report, which is approved with the accounts and filed with the Registrar as an attachment to Form AOC-4 within thirty days of the AGM. For a company that held its AGM on 30 September 2026, that places the AOC-4 filing around 29 October 2026, so the POSH figures need to be finalised with the Internal Committee before the board signs the report in September or October.