TNAG-0635-FCO40-783-Supplies-of-electricity-for-Hong-Kong-1977 — Page 80

.C

Ji

C.

4. 3.

New Capital; Limitation on Proportion of Earnings Paid Out As Dividends

1.

2.

Esso will supply its appropriate share of new capital from abroad, and China Light plans to raise from its own shareholders new capital which will, in turn, be invested in the new Company.

The proportion of earnings which may be paid out as dividends to China Light shareholders and Esso shall be related to the ratio of the Special Investment Reserve (SIR) to the sum of the net fixed assets of China Light and the new Company in accordance with the following schedule:

Year-End Ratio

!

}

Maximum Dividend Payout

Son

SIR/Het Fixed Assets

Of Both Companies

50% or greater

40% but less than 50%

30% but less than 40% *

20% but less than 30% -10% but less than 20%

Less than 10%

Cumulative

In Any Single Year

50%

50% or less

50%

60%

60%

70%.

· 70%

80%

80%

Unrestricted

Unrestricted

Unrestricted

D. Term

1.

These arrangements shall apply for a period of 15 years, to commence as soon as the plan shall have been approved by the Boards of Directors and shareholders of both China Light and Esso as laid down in Appendix V, Article 1, paragraph D.

After the twelfth year, the companies and the Government shall institute discussions with respect to the following matters:

a) whether the restrictions embodied in the provisions.

governing the Special Investment Reserve and the Rate Reduction Reserve shall be continued

b)

or

whether new provisions shall be adopted leading toward the elimination of these reserves

whether the rate of return to shareholders not subject to restrictions approved in this Scheme of Control shall be modified in the light of the running out of the term of the lease of the New Territories and other existing circumstances