39(1)Where a distribution is proposed to be declared during the accounting reference period of a successor company which includes the transfer date or before any accounts are laid or filed in respect of that period, sections 270 to 276 of the [1985 c. 6.] Companies Act 1985 (accounts relevant for determining whether a distribution may be made by a company) shall have effect as if—
(a)references in section 270 to the company’s accounts or to accounts relevant under that section; and
(b)references in section 273 to initial accounts,
included references to such accounts as, on the assumptions stated in sub-paragraph (2) below, would have been prepared under section 227 of that Act in respect of the relevant year.
(2)The said assumptions are—
(a)that the relevant year had been a financial year of the successor company;
(b)that the vesting effected by Part II of this Act had been a vesting of all the property, rights and liabilities (other than excepted rights and liabilities within the meaning of section 66 or 67 of this Act) to which the Board or Council concerned was entitled or subject immediately before the beginning of the relevant year and had been effected immediately after the beginning of that year;
(c)that the value of any asset and the amount of any liabilities of the Board or Council concerned vested in the successor company by virtue of that section had been the value or (as the case may be) the amount assigned to that asset or liability for the purposes of the statement of accounts prepared by that Board or Council in respect of the financial year immediately preceding the relevant year;
(d)that any securities of the successor company issued or allotted before the declaration of the distribution had been issued or allotted before the end of the relevant year; and
(e)such other assumptions (if any) as may appear to the directors of the successor company to be necessary or expedient for the purposes of this paragraph.
(3)For the purposes of the said accounts the amount to be included in respect of any item shall be determined as if anything done by the Board or Council concerned (whether by way of acquiring, revaluing or disposing of any asset or incurring, revaluing or discharging any liability, or by carrying any amount to any provision or reserve, or otherwise) had been done by the successor company.
Accordingly (but without prejudice to the generality of the preceding provision) the amount to be included in any reserves of the successor company as representing its accumulated realised profits shall be determined as if any profits realised and retained by the Board or Council concerned had been realised and retained by the successor company.
(4)The said accounts shall not be regarded as statutory accounts for the purposes of section 76 of this Act.
(5)In this paragraph—
“complete financial year” means a financial year ending with 31st March;
“the relevant year” means the last complete financial year ending before the transfer date.