Distributable profits — dividends (s.830)

The board of a private company limited by shares wishes to pay a dividend to its ordinary shareholders. The company's most recent annual accounts show accumulated realised profits of £40,000 and accumulated realised losses of £55,000. The company also holds an asset that has risen in value, giving rise to an unrealised revaluation surplus of £30,000 which has not been realised. The finance director proposes paying a £20,000 dividend, reasoning that the revaluation surplus more than covers it. A director asks whether the dividend may lawfully be paid. Which of the following best states the position?