Director’s Responsibility Statement vs Companies Accounts (Amendment) Rules, 2018

Post recommendation from the Ministry of Women and Child Welfare, the Ministry of Corporate Affairs (MCA) has mandated that all Private Companies must disclose in their Board Report, the constitution of the Internal Complaints Committee under the POSH Act, 2013.
The Director’s Responsibility Statement generally confirming that a system of compliance exists would no longer suffice.

Major Step of MCA to ensure safe workplace for Women

This is a major step of the MCA towards ensuring a safe workplace for women.
The Annual Board Report includes the Directors’ Responsibility Statement Section 134 {3}{c}
The Directors’ Responsibility Statement includes an attestation that the Board has ensured that a system of compliance is in place. However, earlier there was no specific clause for POSH compliance.
Post introduction of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Section 22 of the Act mandating that POSH compliance be reported in the Annual Report, some listed companies started including this provision in the Directors’ Responsibility Statement from 2014 onwards. However, the majority of companies continued to ignore this vital POSH compliance.
This mandatory inclusion vide amendment to the Companies Accounts Rules, 2014 has cast absolute responsibility on the Directors to take POSH compliance seriously.

Non-Disclosure shall attract hefty penalties

Companies not disclosing constitution of the ICC in the Board Report would be liable for the following penalties:

    • Penalty upto Rs. 25,00,000/-

    • Imprisonment for 3 years for every officer at default

Format for Directors’ Responsibility Statement (Suggested POSH Portion only)

Mandate as per POSH Act, 2013

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at the Workplace Act 2013.

All employees (Permanent, Contractual, Temporary, Trainees) are covered under this policy.

The following is the summary of sexual harassment complaints received and disposed of during the year 2016-2017:

No. of Complaints received during the year:

No. of Complaints disposed of during the year

Mandate as per amendment to the Companies Accounts Rule, 2014

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.