s 712 Determination of available profits
(1) The available profits of the company are determined as follows. (2) First, determine the profits of the company by reference to the following items as stated in the relevant accounts— (a) profits, losses, assets and liabilities, (b) provisions of the following kinds— (i) where the relevant accounts are Companies Act accounts, provisions of a kind specified for the purposes of this subsection by regulations under section 396; (ii) where the relevant accounts are IAS accounts, provisions of any kind; (c) share capital and reserves (including undistributable reserves). (3) Second, reduce the amount so determined by the amount of— (a) any distribution lawfully made by the company, and (b) any other relevant payment lawfully made by the company out of distributable profits, after the date of the relevant accounts and before the end of the relevant period. (4) For this purpose “ other relevant payment lawfully made ” includes— (a) financial assistance lawfully given out of distributable profits in accordance with Chapter 2, (b) payments lawfully made out of distributable profits in respect of the purchase by the company of any shares in the company, and (c) payments of any description specified in section 705 (payments other than purchase price to be made out of distributable profits) lawfully made by the company. (5) The resulting figure is the amount of available profits. (6) For the purposes of this section “the relevant accounts” are any accounts that— (a) are prepared as at a date within the relevant period, and (b) are such as to enable a reasonable judgment to be made as to the amounts of the items mentioned in subsection (2). (7) In this section “ the relevant period ” means the period of three months ending with the date on which the solvency statement is made in accordance with section 720A or the directors' statement is made in accordance with section 714.