Arrangement of provisions
768. Realised losses and profits and revaluation of fixed assets(1) The following provisions have effect for the purposes of this Part.(2) Realised losses include provisions of any kind (except revaluation provisions).(3) A "revaluation provision" means a provision in respect of a diminution in value of a fixed asset appearing on a revaluation of all the fixed assets of the company, or of all of its fixed assets other than goodwill.(4) For the purpose of subsections (2) and (3) any consideration by the directors of the value at a particular time of a fixed asset is treated as a revaluation provided—(a) the directors are satisfied that the aggregate value at that time of the fixed assets of the company that have not actually been revalued is not less than the aggregate amount at which they are then stated in the company's accounts, and(b) it is stated in a note to the accounts—(i) that the directors have considered the value of some or all of the fixed assets of the company without actually revaluing them,(ii) that they are satisfied that the aggregate value of those assets at the time of their consideration was not less than the aggregate amount at which they were then stated in the company's accounts, and(iii) that accordingly, by virtue of this subsection, amounts are stated in the accounts on the basis that a revaluation of fixed assets of the company is treated as having taken place at that time.(5) Where—(a) on the revaluation of a fixed asset, an unrealised profit is shown to have been made, and(b) on or after the revaluation, a sum is written off or retained for depreciation of that asset over a period,an amount equal to the amount by which that sum exceeds the sum which would have been so written off or retained for the depreciation of that asset over that period, if that profit had not been made, is treated as a realised profit made over that period.
769. Determination of profit or loss in respect of asset where records incomplete
In determining for the purposes of this Part whether a company has made a profit or loss in respect of an asset where—(a) there is no record of the original cost of the asset, or(b) a record cannot be obtained without unreasonable expense or delay,
its cost is taken to be the value ascribed to it in the earliest available record of its value made on or after its acquisition by the company.
770. Treatment of development costs(1) Where development costs are shown or included as an asset in a company's accounts, any amount shown or included in respect of those costs is treated for the purposes of section 761 (distributions to be made only out of profits available for the purpose) as a realised loss.
This is subject to the following exceptions.(2) Subsection (1) does not apply to any part of that amount representing an unrealised profit made on revaluation of those costs.(3) Subsection (1) does not apply if—(a) there are special circumstances in the company's case justifying the directors in deciding that the amount there mentioned is not to be treated as required by subsection (1),(b) it is stated in any note to the accounts, that the amount is not to be so treated, and(c) the note explains the circumstances relied upon to justify the decision of the directors to that effect.
771. Distributions in kind: determination of amount(1) This section applies for determining the amount of a distribution consisting of or including, or treated as arising in consequence of, the sale, transfer or other disposition by a company of a non-cash asset where—(a) at the time of the distribution the company has profits available for distribution, and(b) if the amount of the distribution were to be determined in accordance with this section, the company could make the distribution without contravening this Part.(2) The amount of the distribution (or the relevant part of it) is taken to be—(a) in a case where the amount or value of the consideration for the disposition is not less than the book value of the asset, zero,(b) in any other case, the amount by which the book value of the asset exceeds the amount or value of any consideration for the disposition.(3) For the purposes of subsection (1)(a) the company's profits available for distribution are treated as increased by the amount (if any) by which the amount or value of any consideration for the disposition exceeds the book value of the asset.(4) In this section "book value", in relation to an asset, means—(a) the amount at which the asset is stated in the relevant accounts, or(b) where the asset is not stated in those accounts at any amount, zero.(5) The provisions of Chapter 2 (justification of distribution by reference to accounts) have effect subject to this section.
772. Distributions in kind: treatment of unrealised profits(1) This section applies where—(a) a company makes a distribution consisting of or including, or treated as arising in consequence of, the sale, transfer or other disposition by the company of a non-cash asset, and(b) any part of the amount at which that asset is stated in the relevant accounts represents an unrealised profit.(2) That profit is treated as a realised profit for the purpose of determining the lawfulness of the distribution in accordance with this Part (whether before or after the distribution takes place).
773. Consequences of unlawful distribution(1) This section applies where a distribution, or part of one, made by a company to one of its members is made in contravention of this Part.(2) If at the time of the distribution the member knows or has reasonable grounds for believing that it is so made, he is liable—(a) to repay it (or that part of it, as the case may be) to the company, or(b) in the case of a distribution made otherwise than in cash, to pay the company a sum equal to the value of the distribution (or part) at that time.(3) This is without prejudice to any obligation imposed apart from this section on a member of a company to repay a distribution unlawfully made to him.
774. Restriction on application of unrealised profits
A company must not apply an unrealised profit in paying up debentures or any amounts unpaid on its issued shares.
775. Application of rules of law restricting distributions(1) Except as provided in this section, the provisions of this Part are without prejudice to any law or regulation applicable in the Abu Dhabi Global Market restricting the sums out of which, or the cases in which, a distribution may be made.(2) For the purposes of any law or regulation applicable in the Abu Dhabi Global Market requiring distributions to be paid out of profits or restricting the return of capital to members—(a) section 771 (distributions in kind: determination of amount) applies to determine the amount of any distribution or return of capital consisting of or including, or treated as arising in consequence of the sale, transfer or other disposition by a company of a non-cash asset, and(b) section 772 (distributions in kind: treatment of unrealised profits) applies as it applies for the purposes of this Part.(3) In this section references to distributions are to amounts regarded as distributions for the purposes of any law or regulation applicable in the Abu Dhabi Global Market as is referred to in subsection (1).
776. Saving for other restrictions on distributions
The provisions of this Part are without prejudice to any law or regulation applicable in the Abu Dhabi Global Market, or any provision of a company's articles, restricting the sums out of which, or the cases in which, a distribution may be made.
777. Minor definitions(1) The following provisions apply for the purposes of this Part.(2) References to profit or losses of any description—(a) are to profits or losses of that description made at any time, and(b) except where the context otherwise requires, are to profits or losses of a revenue or capital character.(3) "Capitalisation", in relation to a company's profits, means any of the following operations (whenever carried out)—(a) applying the profits in wholly or partly paying up shares in the company to be allotted to members of the company as fully or partly paid bonus shares, or(b) transferring the profits to capital redemption reserve.(4) References to "realised profits" and "realised losses", in relation to a company's accounts, are to such profits or losses of the company as fall to be treated as realised in accordance with principles generally accepted at the time when the accounts are prepared, with respect to the determination for accounting purposes of realised profits or losses.(5) Subsection (4) is without prejudice to any specific provision for the treatment of profits or losses of any description as realised.(6) "Fixed assets" means assets of a company which are intended for use on a continuing basis in the company's activities.