As regulatory scrutiny sharpens in 2025, companies must remain alert to changes that impact their reporting and procedural obligations. Two important developments, the amendment to the Companies (Accounts) Rules, 2014, and a new circular issued by NSDL underscore the growing focus on transparency, workplace compliance, and corporate governance.
- New Board Report Disclosures under the Companies Act, 2013
In a significant move towards enhancing workplace transparency and employee welfare, the Ministry of Corporate Affairs has amended the Companies (Accounts) Rules, 2014. This amendment introduces additional disclosure requirements in the Board’s Report, on compliance with two legislations:
- The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“Posh Act”); and
- The Maternity Benefit Act, 1961 (“Maternity Benefit Act”).
Enhanced Disclosure under POSH Act
Until now, companies having 10 (ten) or more workers were required to only confirm in the Board’s Report that they had complied with the requirement to constitute an Internal Complaints Committee (ICC) under the Posh Act. However, following the amendment, companies must now go a step further by providing specific data including:
- number of complaints of sexual harassment received in the year;
- number of complaints disposed off during the year; and
- number of cases pending for more than 90 (ninety) days.
New Disclosure Requirement: Compliance with Maternity Benefit Act
The amendment introduces a new requirement for companies to include a specific statement in the Board’s Report confirming compliance with the provisions of the Maternity Benefit Act.
Key Compliances Under the Maternity Benefit Act
To ensure compliance, companies wherein 10 or more persons are employed must take note of the following key obligations under the Maternity Benefit Act:
- Provide up to 26 (twenty six) weeks of paid maternity leave to women employees, or 12 (twelve) weeks if the employee has two or more children.
- Grant 12 (twelve) weeks of leave to commissioning mothers and women who legally adopts a child below the age of 3 (three) months starting from the date the child is handed over.
- Allow women returning to work post-delivery 2 (two) nursing breaks per day, in addition to regular rest intervals, until the child reaches the age of 15 (fifteen) months.
- Establishments with 50 (fifty) or more employees must provide a creche facility within a prescribed distance, either separately or along with common facilities and allow 4 (four) visits a day to the creche, which may include the interval for rest.
- The employer shall prepare and maintain registers, records and muster-rolls as required by the Maternity Benefit Act.
Penalty for Non-Compliance:
The Companies Act, 2013
False disclosures in the Board Report may attract a fine up to INR 50,00,000 (Indian Rupees Fifty Lakhs) and/or imprisonment up to 10 (ten) years.
Posh Act
If an employer fails to constitute an Internal Complaints Committee or violates provisions of the Posh Act, they may be fined up to INR 50,000 (Indian Rupees Fifty Thousand). On repeated offence, the penalty may be doubled, and the employer may also face cancellation or non-renewal of business licences or registrations by the appropriate authority.
Maternity Benefit Act
Failure to comply with the provisions of the Maternity Benefit Act, including non-payment of benefits or wrongful dismissal, can result in imprisonment of up to 1 (one) year and a fine of up to INR 5,000 (Indian Rupees Five Thousand).
- NSDL Circular Mandates Issuer Consent for Private Company Share Transfers
In a significant regulatory development, the National Securities Depository Limited has issued Circular No. NSDL/POLICY/2025/0071 dated June 03, 2025, (“NSDL Circular”) mandating stricter compliance requirements for off-market transfers of shares in private limited companies. This move aims to enhance the integrity of such transactions and prevent unauthorised or disputed transfers.
Key Highlights of the NSDL Circular
Effective immediately, Depository Participants are required to process off-market instructions for share transfers in private limited companies only after obtaining a consent/ confirmation letter from the demat account holder(s) issued by the respective private limited company as per the format annexed in the NSDL Circular.
This confirmation serves as an additional safeguard beyond the standard delivery instruction slip, ensuring that the issuer company is aware of and approves the transfer.
What prompted the new requirement
Private limited companies often impose restrictions on the transfer of shares under their Articles of Association or shareholders’ agreements. Until now, such internal restrictions were difficult to monitor in dematerialised (demat) share transfers. The absence of issuer confirmation often led to disputes, unauthorised transfers, and legal complications.
Regulatory Significance
The NSDL Circular marks a crucial shift towards more transparent and controlled off-market transactions involving private limited companies. While it introduces an additional step in the transfer process, it ultimately strengthens corporate governance, protects shareholder interests and is a timely reminder that in private share transfers, transparency and documented consent are no longer optional, they are essential.
For more information about the aforesaid developments you may write to us at: solutions@bridgeheadlaw.com.
Karan Narvekar | Partner
Missba Zariwala | Associate
Views expressed are personal to the authors and do not constitute as legal advice.