Mr. Gerry Greally:

Regarding the report, Grant Thornton from the outset sought to put together a scheme which would be fair and reasonable to the farmers concerned and the taxpayers. I must make that point to begin with. In undertaking that process, Grant Thornton did, of course, look at how best to compensate for a business that is being closed. Methodologies used in this regard in other countries were examined. In the general perspective of accounting, certain conventions and methodologies are used when trying to value a business. Grant Thornton considered two methods of doing that and then combined them in the end. The first was valuing the assets and devising the net book value of those assets. The second approach then was a consideration of the profitability of the businesses concerned over time. The thinking was that combining those two methods of assessing value in a formula would best produce a market value for these companies.

The Deputy's questions concern the formula in the context of a five-year or ten-year cycle of assessment. The five-year cycle in this regard encompasses a retrospective examination of five years and a projection of five years into the future. In calculating the profitability figure, therefore, the accountants suggested taking an average by going back five years and then going forward another five years to give these companies a multiple of that profitability average for the future. The rationale behind using a period of five years to measure backwards and forwards was that these are multiples and values that are used in company evaluations and for companies of this type. It would be very unusual to go back ten years to calculate a retrospective average of profitability and then to go forward another ten years with that outcome. The logic here is that going back five years is considered as being enough to show the historical profitability of a company and, equally, projecting forward for five years should also be adequate. Going forward those five years takes into account the consideration that people seeking to put a value on these companies will estimate that it will take that long to make their money back. These sorts of multiples and values, therefore, were put together in that context by Grant Thornton and it was conscious of the type and size of the businesses being examined.

The farmers have only recently come to us regarding a ten-year cycle and given us some data for those years. In effect, we have struggled to get any data from them. We first gave them notice that we required these data back in November 2020. We have repeatedly sought these data since then. The farmers provided some data to us, but it was not adequate. They put together some trend lines for us for the ten-year cycle they are talking about now, but that information came in their last communication to us just a little over a week ago. We have not had a chance to examine that information in any detail yet, but we will do so. My main point, therefore, is that Grant Thornton put together the formulas in the absence of specific data on these farms. Granted, information was available from statutory accounts which could be used and, in many ways, it is possible to put together a model for compensation based on such accounts, but we also needed the detailed information that we received only recently. However, we certainly can look at using a period of ten years rather than five years.

Would the Deputy like me to deal with the other questions concerning asbestos, etc.?