ACR 2026:The Real Cost Isn’t Compliance, It’s Non-Compliance.

Many companies hear the word “compliance” and immediately focus on the costs involved, often overlooking the fact that these investments act as crucial safeguards against much steeper penalties. 

The reality is that the apparent expense of compliance under the POSH Act, 2013, pales in comparison to the devastating impact of non-compliance. Choosing to treat workplace safety and harassment prevention as mere formalities can leave organizations exposed to substantial fines, loss of license, and irreparable damage to their reputation and employee trust. 

By prioritizing robust compliance measures, companies are not just fulfilling a legal obligation, they are protecting their business from risks that could be far costlier in the long run. Hence, any organization which has 10 or more employees shall take proactive steps to comply with the Prevention of Sexual Harassment (POSH) Act, 2013, including the formation of an Internal Committee, regular training sessions, and submission of the Annual Compliance Report. These measures are not mere box-ticking exercises; rather, they are fundamental to building a workplace where employees feel secure and respected.

Moving forward, it’s important to understand exactly what the Annual Compliance Report entails, why it matters, and how it serves as a tangible reflection of an organization’s commitment to both the law and employee well-being.

Why Shouldn’t It Be Ignored?

Under the Prevention of Sexual Harassment (POSH) Act, 2013, employers who fail to submit the Annual Compliance Report (ACR) face an initial penalty of up to ₹50,000. If the violation continues, this fine can be doubled, and repeated non-compliance may lead to more severe consequences, including the cancellation or non-renewal of business licenses.

Additionally, companies must comply with disclosure requirements outlined in the Companies Act, 2013, and the Companies (Accounts) Rules, 2014. According to Section 134(3)(q) of the Companies Act, every company is required to include in its Board of Directors’ report a statement regarding its policy on the prevention of sexual harassment at the workplace. This includes disclosure of POSH compliance and the submission of the Annual Compliance Report (ACR) to the Registrar of Companies (RoC) annually.

Following amendments effective July 14, 2025, Rule 8 of the Companies (Accounts) Rules, 2014, now mandates that a company’s Board report must contain a detailed statement on compliance with the POSH Act. This includes specific information such as the number of complaints received, resolved, or pending, along with details about the constitution and functioning of the Internal Complaints Committee (ICC).

These regulations underscore the critical importance of timely, accurate, and transparent submission of the ACR to avoid financial penalties, legal repercussions, and reputational damage. Strict compliance with these requirements not only fulfills legal obligations but also reflects a company’s commitment to fostering a safe, respectful, and inclusive workplace environment.

What An ACR Must Include?

An Annual Compliance Report (ACR) under the POSH Act, 2013, must include several critical elements to demonstrate an organization’s adherence to legal requirements and commitment to a safe workplace. Key components are:

1. Complaints Data:
   • Total number of sexual harassment complaints received during the year.
   • Number of complaints resolved or disposed of.
   • Cases pending for more than 90 days.
     
2. Actions Taken:
   • Details of disciplinary measures or corrective actions initiated following complaints.
   • Steps taken to prevent harassment and conduct awareness programs.
     
3. Committee Information:
   • Confirmation that the Internal Complaints Committee (ICC) has been properly constituted and is functioning effectively.
   • Names and details of ICC members.
     
4. Awareness and Training Initiatives:
   • Summary of workshops, training sessions, and awareness drives conducted for employees to foster a harassment-free workplace.
     
5. Legal and Policy Compliance:
   • Declaration that the organization has complied with the provisions of the POSH Act, including the constitution of the ICC and implementation of policies.
   • Statement of adherence to the anti-harassment policy outlined in the Act.
     
6. Supporting Documentation:
   • Minutes of meetings, training records, and anonymous case summaries (if applicable).
   • Quarterly progress reports and attendance records for training programs.
     

Recent Amendments (2025) include

• A detailed disclosure of POSH compliance in the Board’s report as mandated under Rule 8 of the Companies (Accounts) Rules, 2014, effective from July 14, 2025.
  
• The requirement to upload reports on the She-Box portal for centralized tracking and monitoring

Filing a comprehensive and transparent ACR is crucial not only to meet legal mandates but also to demonstrate your organization’s seriousness about creating a safe and inclusive workplace. Neglecting these components can lead to penalties, legal actions, and reputational damage.

Whose Responsibility Is It?

As per the Prevention of Sexual Harassment (POSH) Act, 2013, the employer’s key responsibility regarding the annual report is to ensure that it is duly prepared by the Internal Committee (IC). The IC is tasked with compiling a comprehensive report detailing all complaints received, actions taken, and awareness programs conducted during the year. The employer must then submit this annual report to the designated District Officer or the appropriate State government authority, thereby demonstrating compliance with the POSH Act as outlined in Section 22.

To whom this report is submitted?

Even if your organization hasn’t received any complaints of sexual harassment, filing the annual POSH report is mandatory. Besides reporting complaint numbers—or a nil report—the annual report must include other key details like the number of awareness workshops conducted, ensuring prevention efforts and committee functions are documented.

The report should be submitted to the District Officer in the district where your office is located. Organizations with multiple offices in different districts or states need to file separate reports for each location. In some states, reports may also be required to be filed with the State Women and Child Development department, so checking local guidelines is important.

Filing can be done by hand delivery with an acknowledgment receipt, via registered post with acknowledgment due, or by email where permitted. Always keep proof of submission to demonstrate compliance and avoid penalties.

How Can We Help?

Filing the ACR is a legal compliance that not only helps organizations avoid penalties but also assures employees and stakeholders of a safe and respectful work environment. In addition to submission to the District Officer, companies must also report POSH compliance details in their Board of Directors’ annual report under the Companies Act, 2013.

Ungender specializes in guiding organizations through every step of POSH compliance, including the preparation and filing of the Annual Compliance Report. We offer expert consultancy, training sessions for ICC members, employee sensitization programs, and assistance in drafting policies that embrace a zero-tolerance stance towards workplace harassment. With Ungender’s support, organizations can simplify the POSH reporting process, ensure accurate and timely submissions, and build a healthier workplace culture compliant with legal mandates.

For organizations wanting to strengthen their compliance rigor and foster a safe workplace, Ungender provides tailored solutions and expert guidance to meet and exceed POSH requirements seamlessly.