TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 110

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payments on account and interest on long term borrowed capital

during construction) less depreciation as specified in paragraph 6

of Appendix I, and of the year end closing balance, similarly cal-

culated, as shown by the records of the Companies:

From such Permitted Return there shall be deducted the charge

referred to in paragraph B.3 below and interest, other than interest

agreed to be capitalized, payable on long term borrowed capital, if

any.

The Companies will agree on a basis for-the division between them-

of the remaining funds which shall represent the net return to

shareholders.

2. 1) If the gross tariff revenues of China Light in any year shall exceed

the total for the Companies of:

:

a) operating costs including depreciation as specified in

paragraph 6 of Appendix I;

b)

amounts derived from tariffs corresponding to the

Development Fund additions referred to in paragraph C.2

below;

c) taxes, including profits tax and tax equalization

reserves, and

d) the maximum Permitted Return specified in paragraph B.1

above,

such excess shall be added to a Balancing Fund in China Light's books,

as referred to in Section E.