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2016 (11) TMI 1134 - HC - Companies LawReduction of the share premium account - special resolution passed by the requisite majority of its equity shareholders - Held that:- From the facts of the case on record it is quite clear that the adjustment of the consolidated loss of the petitioner company as on 31-3-2015 as against the surplus in its Securities Premium Account also as on 31-3-2015 will not cause any prejudice to any creditor of the company or entail reduction in the value of its shares. The decision to adjust the consolidated loss with surplus/ (deficit) in Securities Premium Account is purely a commercial decision with the approval by the Shareholders with the required majority by way of a special resolution. It is in consonance with the Articles of Association of the petitioner company. There is no outflow of any fund or assets of the petitioner company nor any disability resultantly obtains to the company’s working in its day to day business, or otherwise, from the reduction of the share capital) (securities premium account). The adjustment sought by the petitioner company only facilitates reflecting of the correct financial statement of the affairs of the company to its benefit in the market place. Consequently, we allow this petition and confirm the reduction of the petitioner company’s share capital (Securities Premium Account) against the accumulated losses in the surplus/ (deficit) head of Reserves & Surplus of the petitioner company in terms of the special resolution passed by the requisite majority of the equity shareholders of the petitioner company through postal ballot and e-voting on 16-1-2016. I would also approve the form of Minutes under Section 103(1) of the Act of 1956 as set out in para 20 of the petition which is proposed to file with the ROC (Jaipur). The procedure prescribed in Section 101(2) of the Act of 1956 is dispensed with as also is dispensed with is the formalities of the words "And Reduced" while describing capital structure of petitioner company while confirming the approved reduction of share capital (Securities Premium Account).
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