Companies Act 2014

F714 [ Schedule 21

Section 1110O

Class tests

Gross Assets Test

1. (1) The gross assets test is calculated by dividing the gross assets the subject of a transaction by the gross assets of the traded PLC entering into the transaction.

(2) The gross assets of the traded PLC means the total non-current assets, plus the total current assets, of the traded PLC.

(3) For

( a ) an acquisition of an interest in an undertaking which will result in consolidation of the gross assets of that undertaking in the financial statements of the traded PLC, or

( b ) a disposal of an interest in an undertaking which will result in the assets of that undertaking no longer being consolidated in the financial statements of the traded PLC,

the gross assets the subject of the transaction means the value of 100% of that undertaking s assets irrespective of what interest is acquired or disposed of.

(4) For an acquisition or disposal of an interest in an undertaking which does not fall within paragraph (3) , the gross assets the subject of the transaction means

( a ) for an acquisition, the consideration together with liabilities assumed, if any, and

( b ) for a disposal, the assets attributed to that interest in the traded PLC s accounts.

(5) If there is an acquisition of assets other than an interest in an undertaking, the assets the subject of the transaction means the consideration or, if greater, the book value of those assets as they will be included in the traded PLC s financial statements.

Profits Test

2. (1) The profits test is calculated by dividing the profits attributable to the assets which are the subject of the transaction by the profits of the traded PLC.

(2) For the purposes of paragraph (1) , profits means

( a ) profits after deducting all charges except taxation, and

( b ) for an acquisition or disposal of an interest in an undertaking referred to in paragraphs 1(3)(a) or (b) , 100% of the profits of the undertaking (irrespective of what interest is acquired or disposed of).

(3) In calculating the profits test, the losses of the traded PLC or target undertaking shall be included.

Consideration Test

3. (1) The consideration test is calculated by taking the consideration for the transaction as a percentage of the aggregate market value of all the ordinary shares (excluding treasury shares) of the traded PLC.

(2) For the purposes of paragraph (1)

( a ) the consideration is the amount paid to the contracting party,

( b ) if all or part of the consideration is in the form of securities to be traded on a market, the consideration attributable to those securities is the aggregate market value of those securities, and

( c ) if deferred consideration is or may be payable or receivable by the traded PLC in the future, the consideration is the maximum total consideration payable or receivable under the agreement.

(3) For the purposes of paragraph (2)(b) the figures used to determine consideration consisting of

( a ) securities of a class already listed, shall be the aggregate market value of all those securities on the last business day before the announcement under section 1110O(1) , and

( b ) a new class of securities for which an application for listing will be made, shall be the expected aggregate market value of all those securities.

(4) For the purposes of paragraph (1) , the figure used to determine aggregate market value is the aggregate market value of all the ordinary shares (excluding treasury shares) of the traded PLC at the close of business on the last business day immediately before the announcement under section 1110O(1) .

Gross Capital Test

4. (1) The gross capital test is calculated by dividing the gross capital of the undertaking being acquired by the gross capital of the traded PLC.

(2) For the purposes of paragraph (1) , the gross capital of the company or business being acquired means the aggregate of

( a ) the consideration (as calculated under the Consideration Test),

( b ) if a company, any of its shares and debt securities which are not being acquired,

( c ) all other liabilities (other than current liabilities) including minority interests and deferred taxation, and

( d ) any excess of current liabilities over current assets.

(3) For the purposes of paragraph (1) the gross capital of the traded PLC means the aggregate of

( a ) the market value of its shares (excluding treasury shares) and the issue amount of the debt security,

( b ) all other liabilities (other than current liabilities) including minority interests and deferred taxation, and

( c ) any excess of current liabilities over current assets.

(4) For the purposes of paragraph (1)

( a ) figures used must be, for shares and debt security aggregated for the purposes of the gross capital percentage ratio, the aggregate market value of all those shares (or if not available before the announcement, their nominal value) and the issue amount of the debt security, and

( b ) for shares and debt security aggregated for the purposes of paragraph (3)(b) above, any treasury shares held by the company are not to be taken into account. ]

Annotations

Amendments:

F714

Inserted (30.03.2020) by European Union (Shareholders’ Rights) Regulations 2020 (S.I. No. 81 of 2020), reg. 8 and sch., in effect as per reg. 1(3).