Companies Act 2014 section 1083

Relevant financial statements in the case of distribution by PLC

Section 1083 sets out the financial statement requirements that a public limited company (PLC) must satisfy before making a distribution, ensuring compliance with both the general distribution rules and the additional net asset restrictions specific to PLCs.

• The rules on relevant financial statements (section 121) apply to PLCs not only for the general profits-available-for-distribution test (section 117) but also for the stricter PLC net asset test (section 1082), and a distribution that fails to meet these financial statement requirements is automatically treated as a breach of section 1082.
• Where a PLC relies on interim financial statements for a proposed distribution, those statements must be properly prepared (subject only to immaterial departures), and a copy must be filed with the Registrar, together with a certified translation if the statements are not in English or Irish.
• Where a PLC relies on initial financial statements (typically prepared during or before the end of its first financial year), the same proper-preparation and filing requirements apply, and in addition the PLC's statutory auditors must report on whether the statements have been properly prepared; if the audit report is qualified, the auditors must state whether the qualification is material to the question of whether the distribution would breach section 117 or section 1082.
• The definition of "properly prepared" in section 121 extends to these interim and initial financial statements, with the usual statutory requirements for annual financial statements (sections 290, 291 or 292 and, where applicable, Schedule 3 or 3A) being read with whatever modifications are necessary to reflect that the statements do not cover a full financial year.

---