Finance (No. 2) Act 1997 (c. 58)

SCHEDULES

SCHEDULE 1 U.K. Quantification of a privatisation windfall

Value of a disposal in profit-making terms U.K.

2 (1) Subject to paragraph 4 below, the value in profit-making terms of the disposal made on the occasion of a company’s flotation is the amount produced by multiplying the average annual profit for the company’s initial period by the applicable price-to-earnings ratio. U.K.

(2) For the purposes of this paragraph the average annual profit for a company’s initial period is the amount produced by the following formula—

Where—

A is the average annual profit for the company’s initial period;

P is the amount, ascertained in accordance with paragraph 5 below, of the total profits for the company’s initial period; and

D is the number of days in the company’s initial period.

(3) For the purposes of this paragraph the applicable price-to-earnings ratio is 9.