763. Justification of distribution by reference to relevant accounts

(1) Whether a distribution may be made by a company without contravening this Part is determined by reference to the following items as stated in the relevant accounts—
(a) profits, losses, assets and liabilities,
(b) provisions of any kind,
(c) share capital and reserves (including undistributable reserves).
(2) The relevant accounts are the company's last annual accounts, except that—
(a) where the distribution would be found to contravene this Part by reference to the company's last annual accounts, it may be justified by reference to interim accounts, and
(b) where the distribution is proposed to be declared during the company's first accounting reference period, or before any accounts have been circulated in respect of that period, it may be justified by reference to initial accounts.
(3) The requirements of—
section 764 (as regards the company's last annual accounts),
section 765 (as regards interim accounts), and
section 766 (as regards initial accounts),
must be complied with, as and where applicable.
(4) If any applicable requirement of those sections is not complied with, the accounts may not be relied on for the purposes of this Part and the distribution is accordingly treated as contravening this Part.