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2019 (1) TMI 869 - Tri - Companies LawApproval of the scheme of arrangement - Held that:- The arrangement is only for transfer of money from general reserve to the credit of profit and loss account. Since the amount is accumulated in the general reserve over the years, it is thought fit to transfer this amount to the profit and loss account by means of an arrangement after re-classification and amount lying debit side in the profit and loss account will be written off. Now, the transfer of certain amount to the general reserve whenever dividend is declared is not made compulsory under the provisions of the Companies Act, 2013. It is only optional. The transfer of funds from general reserve to the profit and loss account can be by way of arrangement between the company and its members. The arrangement is a broad term and the proposed transfer is well within four corners of arrangement. So the same can be approved. The petitioner-company filed a memo dated November 14, 2018 along with no objection issued by the BSE and NSE. However, as per letter issued by the BSE, the petitioner-company after approval by the Tribunal has to comply with the directions issued by the BSE in the letter dated August 1, 2016. In the light of my above discussions, the arrangement can be approved subject to compliance with directions issued by the BSE in the letter dated August 1, 2016. Further the scheme is not opposed to public policy and no objection received from shareholders or creditors. Therefore, the scheme of arrangement can be approved.
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