Introduction to the Amendment

On May 30, 2025, the Ministry of Corporate Affairs (MCA) notified a significant reform in corporate reporting standards through the Companies (Accounts) Second Amendment Rules, 2025. This amendment, which comes into effect on July 14, 2025, modifies key disclosure and filing requirements under the Companies Act, 2013. The primary objective is to promote greater transparency and accountability among companies while strengthening the framework for gender-sensitive compliance. A particularly notable development within the amendment is the inclusion of mandatory disclosures related to sexual harassment cases and maternity benefit compliance in the Board’s Report, a move that has deep implications for gender equality and corporate ethics.

The Legal Framework Being Amended

The amendment updates the Companies (Accounts) Rules, 2014, which were originally introduced to streamline the financial and corporate reporting obligations of companies under the Companies Act, 2013. These rules govern how financial statements are prepared, presented, and filed, including the structure and contents of the Board’s Report. The new 2025 amendment modifies specific provisions under Rules 5, 8, and 12 of the original frameworks, and introduces fresh requirements in the annexure of prescribed e-Forms. The shift is not merely procedural but also ideological, signalling the MCA’s intent to link financial disclosure with social responsibility and workplace culture, especially regarding women’s safety and welfare.

Key Changes Related to POSH and Maternity Compliance

A major highlight of the amendment is the enhancement of the Board’s Report with new social compliance disclosures. Companies are now legally required to disclose comprehensive information about the sexual harassment complaints filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). This includes three specific data points: the number of complaints received during the financial year, the number of complaints resolved or disposed of, and the number of cases that remained pending for more than ninety days. This marks a major shift in corporate reporting, bringing what was often treated as internal HR information into the public domain of statutory disclosure.

Equally important is the new requirement to affirm compliance with the Maternity Benefit Act, 1961. Companies must now include a formal statement in the Board’s Report confirming that they have adhered to the provisions of this law, which mandates paid maternity leave and other benefits to female employees. This clause embeds women’s reproductive rights and workplace equity into financial reporting, raising the compliance bar for companies in both the private and public sectors.

Changes to Filing Process and New E-Forms Introduced

In addition to these content-related amendments, the 2025 rules also introduce substantial changes in the manner in which companies submit their annual filings. The amendment marks a transition toward a fully digital compliance environment by introducing e-Forms to replace existing paper-based forms. These include the new e-Form AOC-1 and e-Form AOC-2, as well as mandatory filings for Extract of Board Report, Extract of Auditor’s Report (Standalone), and Extract of Auditor’s Report (Consolidated).

Companies are now required to file these extracts separately in a structured, machine-readable format alongside their primary financial statements. This procedural change will enable regulatory bodies like the Registrar of Companies to more efficiently process and analyze corporate disclosures, including sensitive data related to workplace harassment and employee benefits. It is a pivotal step toward data-driven regulation and real-time monitoring of corporate ethics and governance.

Compliance Requirements and Actionables for Companies

These amendments impose new obligations on all companies to reassess their internal compliance, documentation, and reporting frameworks. First and foremost, companies must ensure that they have a functional and accessible POSH committee as per the 2013 Act, and that this committee maintains accurate and timely records of all complaints received and actions taken. Legal and HR departments must coordinate closely to ensure this data is captured in a format suitable for disclosure in the Board’s Report.

Similarly, for maternity compliance, companies need to verify that they are providing all statutory entitlements such as paid leave, nursing breaks, and protection against dismissal during maternity periods. The statement of compliance must be based on verifiable internal policies and procedures, supported by documented practices. Further, company secretarial teams will need to incorporate these disclosures into the revised e-Forms and ensure that the filing deadlines and technical specifications are meticulously adhered to.

Moreover, management and governance teams should familiarize themselves with Sections 448 and 449 of the Companies Act, which deal with penalties for false statements and evidence. As these disclosures become part of the statutory filing, any inaccuracies can result in civil and criminal liability for the company and its officers.

Why This Amendment Matters for Gender Equality

This amendment is a landmark step in embedding gender equality within corporate law. The requirement to disclose details of sexual harassment complaints is not merely a compliance issue but a measure that can catalyze cultural change within organizations. By bringing these numbers into the public record, the amendment pressures companies to create a safer, more responsive environment for women. It encourages proactive handling of harassment cases and deters concealment or underreporting, which has been a long-standing issue.

Additionally, the statement on maternity benefit compliance reinforces the importance of work-life balance and institutional support for women during one of the most vulnerable phases of their lives. It ensures that maternity leave is treated not as a discretionary policy but as a legal and ethical mandate that companies must uphold. Taken together, these provisions elevate the discourse around gender in the workplace from informal HR policies to legally mandated governance practices.

From a broader societal perspective, these requirements can foster greater trust in companies, particularly from women employees and job seekers. They also contribute to building corporate India’s global reputation as a workplace that values diversity, safety, and inclusion. In a world where ESG (Environmental, Social, and Governance) factors increasingly influence investor decisions, these measures can serve as strong indicators of a company’s social responsibility and ethical culture.

Conclusion

The Companies (Accounts) Second Amendment Rules, 2025 are a timely and transformative update to India’s corporate law framework. By mandating detailed disclosures on sexual harassment complaints and maternity benefits, the amendment addresses two of the most critical issues impacting gender equality in the workplace. The shift toward electronic, structured reporting also marks a move to more efficient and transparent regulatory oversight. Companies must treat these changes not as a compliance burden but as an opportunity to reaffirm their commitment to ethical governance and employee well-being.

A copy of the official amendment is attached at the end of this summary for reference.

Credits: Adv. Deeksha Rai