Companies (Accounts) Rules Amended to Mandate Disclosure of Compliance With Sexual Harassment Act in Annual Reports Of Pvt Firm Directors [Read Notification]

Acting on a request by the Ministry of Women and Child Welfare to mandate the disclosure regarding the implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act in the Directors’ Report of every company, the Ministry for Corporate Affairs has amended its rules.

Vide its notification dated 31.07.2018, the Ministry of Corporate Affairs has amended the Companies (Accounts) Rules, 2014, issued under Section-134 of the Companies Act, by inserting clause(X) as follows:

A statement that the Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Minister of Women and Child Welfare Maneka Sanjay Gandhi said, “This is a major step towards making the workplace safe for the women in the private sector.” She also stated that she would request SEBI to suitably incorporate this disclosure in the Corporate Governance reports of the listed companies. This will cast higher responsibility on the directors of these companies for the implementation of the Act.

It may be noted that Section-134 of the Companies Act, 2013 provides the disclosure framework which the directors of every company are required to comply with in annual reports. This Section also includes the penal provisions for non-disclosure. The inclusion of the compliance under the Sexual Harassment of Women at Workplace Act in the non-financial disclosures will ensure that the issue gets into the focus in the board of directors of the companies.

The Ministry of Women and Child Development has been making efforts to mainstream the implementation of the Sexual Harassment of Women at Workplace Act, 2013. Detailed rules under the Act were issued. It was ensured that all the ministries/ departments under the Central government as well as the organizations working directly under them constitute the Internal Complaints Committee as mandated under the Act. A number of instructions have been issued by the DoPT on the request of the Ministry to provide immediate relief to the women working in central government against sexual harassment at workplace. The Ministry has also listed a number of entities that can provide training to any organization on effective implementation of the provisions of the Act. The Ministry has provided a facility to all working women to file complaints under this Act directly with the Ministry through the SHE-Box.