Lok Sabha Question No. 3683 (UNSTARRED), answered on 2026-03-16
Subject: Corporate Transparency and Parliamentary Oversight
Ministry: CORPORATE AFFAIRS
Asked by: Dr. Prabha Mallikarjun

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3683 ANSWERED ON MONDAY, 16 TH  MARCH 2026 PHALGUNA 25, 1947 (SAKA)

## CORPORATE TRANSPARENCY AND PARLIAMENTARY OVERSIGHT

## QUESTION

3683. DR. PRABHA MALLIKARJUN:

WILL  THE  MINISTER  OF  CORPORATE  AFFAIRS  BE  PLEASED  TO STATE:

- (a)  whether  the  Government  is  regularly  informed  of  systemic compliance  failures  and  enforcement  outcomes,  if  so,  the  details thereof;
- (b)  whether  annual  reports  include  measurable  governance  and investor protection indicators, if so, the details thereof;
- (c)  whether regulatory impact assessments are conducted before major rule changes, if so, the details thereof;
- (d)  whether stakeholder consultations are institutionalized, if so, the details thereof; and
- (e)  whether  enhanced  parliamentary  oversight  is  proposed  to strengthen corporate accountability and if so, the details thereof?

## ANSWER

MINISTER  OF  STATE  IN  THE  MINISTRY  OF  CORPORATE  AFFAIRS; MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

(SHRI HARSH MALHOTRA)

- (a) The  enforcement  action  taken  by  the  Ministry  comprises  of inquiry, inspection and investigations ordered under sections 206(4), 206(5), 210 & 212, respectively of the Companies Act, 2013 to identify non-compliance  of  various  provisions  of  the  Companies  Act,  2013 such as, violation of disclosure norms, related party transactions,

misuse of funds, audit failures etc. On the basis of reports of the Registrars  of  Companies,  Regional  Director(s)  and  Serious  Fraud Investigation  Office,  the  Ministry  issues  instructions  for  taking necessary  penal  action. The  findings  of  the  Inquiry/  Inspection/ Investigation reports are also shared with enforcement agencies like Enforcement Directorate (ED), Income Tax (IT) Department, and GST Authorities as the case may be, to enable further course of action against  such  companies  and  individuals  associated  with  such companies. Details of the enforcement actions and outcomes for the last three years are at Annexure 'A'.

- (b) Annual  Reports  of  the  companies  have  been  mandated  to contain  several  quantitative  and  qualitative  indicators  that  enable investors,  regulators,  and  other  stakeholders  to  take  informed decisions. The important indicators which are mandated to be part of annual reports is provided under section 134 of the Companies Act, 2013  and  Rules  made  thereunder.  Summary  of  the  important indicators are at Annexure 'B'.
- (c) & (d) As  per  the  'Policy  for  Pre-Legislative  consultation  and comprehensive review of existing Rules and Regulations' issued by the  Ministry,  the  draft  principal  rule  or  any  draft  amendment (including any Form annexed to the Rules) may be prepared along with  an  explanatory  note  which  may  be  placed  on  the  Ministry's website for at least 30 days. Rules of emergent nature or where in public interest it is expedient that they may be issued earlier, may not be placed for stakeholders' consultations or may be placed for comments  for  a  shorter  period.  Consultation  with  specific  Body/ Institute/ Agency can also be made.  The Policy also covers manner of public consultation for circulars, if the concerned Division of the Ministry considers it useful.

The  Policy  also  states  that  where  there  is  a  specific  statutory provision for consultation, it shall be followed.   Further, the Policy also provides that sufficient period may be given to the stakeholders to comply with the new set of rules and that the date of enforcement of  rules  should  ordinarily  be  30  days  after  the  date  of  notification unless  a  different  date  is  considered  necessary  for  any  matter  of urgency or public interest.

The suggestions received during such consultations are examined. During  this  exercise,  assessment  of  the  impact  of  the  proposed amendments in Rules is also conducted.

(e)  The  Ministry  administers  the  provisions  of  the  Companies  Act, 2013  relating  to  various  aspects  of  corporate  functioning  and accountability. Notifications  in  respect  of  the  Rules,  including amendments thereto, are laid before both Houses of Parliament as per Section 469(4) of the Companies Act, 2013. This section provides that every rule made under the Act, shall be laid, as soon as may be after  it  is  made,  before  each  House  of  Parliament,  while  it  is  in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry  of  the  session  immediately  following  the  session  or  the successive  sessions  aforesaid,  both  Houses  agree  in  making  any modification in the rule or regulation or both Houses agree that the rule  or  regulation  should  not  be  made,  the  rule  or  regulation  shall thereafter have effect only in such modified form or be of no effect, as  the  case  may  be;  so,  however,  that  any  such  modification  or annulment  shall  be  without  prejudice  to  the  validity  of  anything previously done under that rule or regulation. In addition to the above, the Hon'ble Standing Committee on Finance and  Hon'ble  Parliamentary  Standing  Committee  on  Subordinate Legislation  also  exercise  oversight  over  the  administration  of  the Companies  Act,  2013  and  Rules  made  thereunder.  The  above Committees review the implementation of the Companies Act, 2013 on  various  subjects/  topics  viz.,  Corporate  Governance,  Corporate Social Responsibility, Ease of Doing Business, Investor Education and Protection  Fund,  Capital  Market  aspects,  etc.  and  gives  their observations  &  recommendations.  The  Ministry  submits  Action Taken  Reports  on the above. In view of the above  existing parliamentary  oversight  mechanism,  no  such  proposal  is  under consideration.

*****

## In reply to part (a) of Unstarred Lok Sabha Q. No. 3683

| Particulars                                                             |   2022-23 |   2023-24 |   2024-25 |
|-------------------------------------------------------------------------|-----------|-----------|-----------|
| Number of inquiries ordered                                             |       123 |       240 |       343 |
| Number of inspections ordered                                           |       186 |       166 |        93 |
| Number of investigations ordered                                        |       124 |        58 |        47 |
| Number of companies penalised under the in-house adjudication mechanism |       901 |       980 |      1066 |

*****

Annexure 'A'

## In reply to part (b) of Unstarred Lok Sabha Q. No. 3683

- (i) Section  134  of  the  Companies  Act,  2013,  governs  the approval, signing, and disclosure requirements for a company's financial statements and Board's Report. It requires the Board to approve financial statements-including consolidated financial  statements-before  signing  by  authorized  directors and submission to auditors. The Companies Board Report shall include the following : -
- i. the web address, if any, where annual return referred to in sub-section (3) of section 92 has been placed;
- ii.
- iii.
- number of meetings of the Board;
- Directors' Responsibility Statement;
- iv. details  in  respect  of  frauds  reported  by  auditors  under sub-section (12) of section 143 other than those which are reportable to the Central Government;
- v. a statement on declaration given by independent directors under sub-section (6) of section 149;
- vi. in  case  of  a company covered  under  sub-section  (1)  of section 178, company's policy on directors' appointment and remuneration including criteria for determining qualifications,  positive  attributes,  independence  of  a director and other matters provided under sub-section (3) of section 178;
- vii. explanations or comments by the Board on every qualification, reservation or adverse remark or disclaimer made  by  the  auditor  in  his  report  and  by  the company secretary in practice in his secretarial audit report;
- viii. particulars  of  loans,  guarantees  or  investments  under section 186;
- ix. particulars  of  contracts  or  arrangements  with related parties referred  to  in sub-section  (1)  of  section  188  in the prescribed form;
- x. the amount, if any, which it recommends should be paid by way of dividend;
- xi. material changes and commitments, if any, affecting the financial  position  of the  company  which  have  occurred between the end of the financial year of the company to which the financial statements relate and the date of the report;
- xii. the conservation of energy, technology absorption, foreign exchange earnings and outgo, in such manner as may be prescribed;
- xiii. a statement indicating development and implementation of  a  risk  management  policy  for  the  company  including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company;
- xiv. the details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year;
- xv. in case of  a listed  company and every other public company having  such paid-up  share  capital as  may  be prescribed, a statement indicating the manner in which annual  evaluation  of  the  performance  of  the  Board,  its Committees and of individual directors has been made;

*****