Shareholders of Vedanta on Tuesday approved a resolution for shifting money from its general reserves to the balance sheet.

In a regulatory filing, the Anil Agarwal-led firm said the resolution received the approval of more than 99.96 per cent of the votes polled.

The approval ratio from the company stood at 100 per cent, while it was 99.98 per cent and 98.34 per cent in the case of public institutions and public non-institutions, respectively.

Vedanta Ltd had proposed to move Rs 12,587 crore out of its general reserves to retained earnings, which is likely to be used for payment of dividends.

Earlier companies had to transfer a certain portion of their profits to general reserves before the declaration of dividends.

However, the Companies Act of 2013, did away with this insistence.

The company had justified the move by saying that the mandatory requirement to transfer funds from the profits or retained earnings of a company to its general reserves and the creation of general reserves in accordance with the erstwhile provisions of the Companies Act, 1956 was also done away with.

It added that presently, there is no provision under the Companies Act that enables or restricts the transfer of funds lying in the general reserves of a firm to its retained earnings.

According to Vedanta, in the absence of any specific provisions or guidance under the Act, in the past, the various high courts and the National Company Law Tribunal have permitted companies to undertake such a transfer through a scheme of arrangement.

The company said over the years, it has built up significant reserves through the transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956, and erstwhile rules notified under the Companies (Transfer of Profits to Reserves) Rules, 1975.

However, steady growth in sales volume and balanced capital expenditure for continuing operations have helped the company achieve a strong track record of generating cash flows.

It said that with healthy business practices in place, this growth trajectory will continue and the business operations will keep generating incremental cash flow over the coming years.

Shares of Vedanta on Wednesday ended at Rs 287.50 on the BSE.