TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 114

APPENDIX I.

PROCEDURES FOR TARIFF ADJUSTMENTS

Before the twentieth day of the month following the end of each calendar

quarter, China Light will make a calculation as described below to determine

the change, if any, to be made in its basic tariffs to all classes of consumers.

The calculation will be based on the combined financial and operating results

of the Companies for the twelve-month period ending with the last day of the

calendar quarter in question (such 12-month period being hereinafter called

the "Base Period").

1.

Minimum and Maximum Combined Permitted Return

The dollar amounts of minimum and maximum Permitted Returns shall be

calculated for the Base Period by multiplying the respective percentages

specified in paragraph B.1 of this Scheme by the sum of the "Average

Net Fixed Assets" of the Companies, the results being hereinafter

referred to as "Base Period Minimum Return" and "Base Period Maximum

Return" respectively.

2.

Combined Base Period Profit

In respect of any Base Period, the combined profit of the Companies shall

be calculated by deducting the following from China Light's gross revenue:

a) The combined net operating costs of the Companies, including,

but not limited to, depreciation as specified in paragraph 6

hereof, costs for operating and maintenance labour and materials,

fuel consumed, management and other overhead charges incurred.