Sections 121, 123, 129, 130, 132 and 134 of Companies Amendment Act 2017
The Companies (Amendment) Act, 2017, enacted as Act 1 of 2018, made important changes to the Companies Act, 2013 concerning annual general meeting reports, declaration of dividend, consolidated financial statements, reopening of accounts, the National Financial Reporting Authority and the Board's report.
What these provisions cover
- Section 121: report on the annual general meeting of a listed public company.
- Section 123: declaration and payment of dividend, including computation of profits and interim dividend.
- Section 129: financial statements and consolidated financial statements.
- Section 130: reopening of books of account and recasting of financial statements by court or Tribunal order.
- Section 132: constitution, powers and framework of the National Financial Reporting Authority (NFRA).
- Section 134: approval and signing of financial statements and contents of the Board's report.
Amendment to Section 121 - Report on Annual General Meeting
Section 121 requires every listed public company to prepare a prescribed report on each annual general meeting and file it with the Registrar. The 2017 amendment removed the former cross-reference tying delayed filing to the time specified under section 403.
Section 31 of the Companies (Amendment) Act, 2017:
In section 121 of the principal Act, (i) in sub-section (2), the words and figures "within the time as specified, under section 403" were omitted; and (ii) in sub-section (3), the words and figures "under section 403 with additional fees" were replaced by the word "therein".
Current position: The consolidated Act continues to require filing of the AGM report within thirty days. The penalty provision in section 121(3) was subsequently substituted by the Companies (Amendment) Act, 2019, so the current consolidated text should be used for penalty exposure.
Amendment to Section 123 - Declaration of Dividend
Section 123 regulates the sources from which dividend may be declared and the conditions governing interim dividend. The 2017 amendment clarified that unrealised or notional gains and specified fair-value changes are excluded while computing profits for dividend purposes.
Section 32 of the Companies (Amendment) Act, 2017:
In section 123(1)(a), "both; or" was replaced by "both:" and a proviso was inserted requiring exclusion, in computing profits, of unrealised gains, notional gains, revaluation of assets and changes in the carrying amount of an asset or liability arising from fair-value measurement.
The reference to amounts "transferred by the company to the reserves" was changed to amounts "transferred by the company to the free reserves".
Sub-section (3) was substituted to permit the Board to declare interim dividend during a financial year or during the period from closure of the financial year until the annual general meeting, from the specified surplus or profits. Where the company has incurred a loss during the current financial year up to the end of the immediately preceding quarter, the rate of interim dividend cannot exceed the average dividend declared during the immediately preceding three financial years.
Amendment to Section 129 - Financial Statements
Section 129 requires financial statements to present a true and fair view and comply with applicable accounting standards. For a company having subsidiaries or associate companies, the 2017 amendment recast the consolidated financial statement requirement.
Section 33 of the Companies (Amendment) Act, 2017:
Section 129(3) was substituted. A company having one or more subsidiaries or associate companies must, in addition to its own financial statements, prepare a consolidated financial statement of the company and all subsidiaries and associate companies in the same form and manner and in accordance with applicable accounting standards, and lay it before the annual general meeting.
The company must also attach a separate prescribed statement containing the salient features of the financial statements of its subsidiaries and associate companies. The Central Government may prescribe the manner of consolidation.
Amendment to Section 130 - Reopening of Accounts
Section 130 permits reopening of books and recasting of financial statements only on an order of a competent court or the Tribunal in the circumstances specified by the Act. The 2017 amendment widened the notice language to include another person concerned and introduced a general eight-financial-year limit.
Section 34 of the Companies (Amendment) Act, 2017:
In the proviso to section 130(1), references to "any other person concerned" were inserted so that such a person is covered by the notice and representation process.
A new section 130(3) provides that no order for reopening shall ordinarily relate to a period earlier than eight financial years immediately preceding the current financial year. If the Central Government has directed preservation of books for a longer period under the proviso to section 128(5), reopening may extend to that longer period.
Amendment to Section 132 - National Financial Reporting Authority
Section 132 establishes the statutory framework for NFRA, which has functions relating to accounting and auditing standards, monitoring and enforcement, audit-quality oversight and related matters.
Section 35 of the Companies (Amendment) Act, 2017:
The amendment reduced the stated minimum penalty in section 132(4)(c)(A)(II) from ten lakh rupees to five lakh rupees, changed the appellate reference in section 132(5) to the Appellate Tribunal in the prescribed manner and on payment of the prescribed fee, and omitted sub-sections (6), (7), (8) and (9).
Current-law note: Section 132 has also been affected by later amendments, including provisions concerning NFRA divisions. Use the current consolidated Act and the applicable NFRA rules for present proceedings.
Amendment to Section 134 - Financial Statement and Board's Report
Section 134 governs Board approval and signing of financial statements, attachment of the auditor's report and the matters required in the Board's report. The 2017 amendment simplified and rationalised several disclosure requirements.
Section 36 of the Companies (Amendment) Act, 2017:
Section 134(1) was substituted to prescribe Board approval and the persons who sign the financial statement, including the consolidated financial statement where applicable, before submission to the auditor.
Section 134(3)(a) was substituted so that the Board's report refers to the web address, if any, where the annual return referred to in section 92(3) has been placed. The wording of clause (p) concerning annual evaluation of the Board, its committees and individual directors was also revised.
Provisos were inserted to avoid repetition where disclosures are already included in the financial statements and to permit specified policies available on the company's website to be dealt with in the Board's report through their salient features, changes and web address.
A new section 134(3A) empowered the Central Government to prescribe an abridged Board's report for a One Person Company or small company.
Effective dates of the 2017 amendments
The Companies (Amendment) Act, 2017 received Presidential assent on 3 January 2018. Different provisions commenced on different notified dates. Among the amendments covered here, section 32 (amending section 123) and sections 34 and 35 (amending sections 130 and 132) were brought into force on 9 February 2018. Section 31 (section 121) came into force on 7 May 2018, and section 36 (section 134) came into force on 31 July 2018. The current consolidated Act records the commencement dates against the relevant amendments.
Updated: 18 September 2026. This page is a general legal-information resource and should be read with the official statutory text and notifications applicable to the facts and date concerned.