Amendment status not verified — confirm the current text below against the official source.
Ins. by Act I01 of 1956, Sec. 27 (w.e.f. 1st April, 1957). DEFINITIONS XVII. For the purposes of this Schedule- (1) “Capital base” means the sum of- 1[(a) the original cost of fixed assets available for use and necessary for the purpose of the undertaking subject to the provisions of para. XII in respect of service- lines, and the excess amount referred to in the proviso to sub-paragraph (2) of para. VII in respect of any fixed asset which has ceased to be available for use;] (b) The cost of intangible assets 2[including expenses on account of new capital issue]; (c) The original cost of works in progress: 3[(d) The amount of investments compulsorily made under para. IV of this Schedule together with the amount of such investments made after the commencement of this Act from contributions towards depreciation as in the opinion of the Authority could not be utilised for the purpose of the business of electricity supply of the undertaking:] (e) An amount on account of working capital equal to the sum of- (i) One-twelfth of the sum of the book cost of stores, materials and supplies including fuel on hand at the end of each month of the year of account; (ii) (ii) One-twelfth of the sum of 4[cash and bank balances (whether credit or debit) and call and short-term deposits at the end of each month of the year of account, not exceeding in the aggregate an amount equal to one-quarter of the expenditure under sub-para. (2) (b) of this paragraph excluding 5[sub- clauses (i), (iv) (iv-a), (iv-b) and (x)];less- (i) The amount written off or set aside on account of depreciation of fixed assets and amounts written off in respect of intangible assets in the books of the undertaking before or after the commencement of this Act; 6[***] (ii) The amount of any loans advanced by the Board 7 [***]; 8[(ii-a) The amount of any loans borrowed from organisations or Institutions approved by the State Government: (ii-b) The amount of any debentures issued by the licensee:] 9[10(iii) The amounts deposited in cash with the licensee by consumers by way of security; I (iv) The amount standing to the credit of the Tariffs and Dividends Control Reserve 8[at the beginning of the year of account]; 11[(v) The amount standing to the credit of the Development Reserve at the close of the year of account;] (vi) The amount carried forward 8[at the beginning of the year of account] in the accounts of the licensee for distribution to the consumers under para.II.] (2) “Clear profit” means -The difference between the amount of income and the sum of expenditure plus specific appropriations, made up in each case as follows: - (a) Income derived from- (i) Gross receipts from sale of energy, less discounts applicable thereby; (ii) Rental of meters and other apparatus hired to consumers; (iii) Sale and repair of lamps and apparatus: (iv) Rents, less outgoings not otherwise provided for; (v) Transfer fees: (vi) Investments fixed and call deposits and bank balances; (vii) Other general receipts accountable in the assessment of Indian Income-Tax and arising from and ancillary or incidental to the business of Electricity supply, - (b) 12[Expenditure properly incurred on]- (i) Generation and purchase of energy: (ii) Distribution and sale of energy; (iii) Rents, rates and taxes, other than all taxes on income and profits; (iv) Interest on loans advanced by the Board 13[***]; 14[(iv-a) Interest on loans borrowed from organisations or institutions approved by the State Government; (iv-b) Interest on debentures issued by the licensee; (v) Interest on security deposits; (vi) Legal charges; (vii) Bad debts; (viii) Auditor’s fees; (ix) Management including managing agent's remuneration as provided for in para. XIII; (x) Depreciation, computed as 15[hereinbefore] set out; (xi) Other expenses 16[(excluding interest on debentures and loans)], admissible under the law for the time being in force in the assessment of Indian Income-tax and arising from and ancillary or incidental to the business of electricity supply; 17[(xii) Contributions to provident fund, staff pension and gratuity computed under any law for the time being in force or any such scheme as is approved by the State Government; (xii-a) Expenses on apprentice and other training schemes;] 18[(xiii) Bonus paid to the employees of the undertaking- (a) Where any dispute regarding such bonus has been referred to any Tribunal or other authority under any law for the time being in force relating to industrial or labour disputes, in accordance with the decision of such Tribunal or authority; (b) In any other case, with the approval of the State Government;] (c) Special appropriations sufficient to cover- (i) Previous losses (that is to say excess of expenditure over income) which have arisen from the business of electricity supply to the extent in any year 19[permitted by the State Government]; (ii) All taxes on income and profits; (iii) Instalments of written-down amounts in respect of intangible assets and new capital issue expenses to the extent in any year actually appropriated for the purpose in the books of the undertaking: provided that the amounts so appropriated shall not exceed the amount found by dividing the written- down cost of such assets by the number of complete years remaining before the next option of purchase under the licence arises; (iv) Contributions to the Contingency Reserve, computed as 15[herein before] set out; (v) Contributions towards arrears of depreciation; 19[(v-a) Contributions to the Development Reserve referred to in para. V-A;] 20(v-b) Debt redemption obligation of the private licensees which may be done on a year to year basis, taking into account the requirements of debt redemption and resource generation through depreciation, retained surplus;]: (vi) Other special appropriations permitted by the State Government. (3) “Debenture capital” means-Capital raised against debentures or other instruments creating a charge or lien on the assets of the undertaking. (4) “Intangible assets” means- Underwriter’s commission and such preliminary and promotional expenditure shown as a debit in the capital account of the undertaking, as has fairly arisen in promoting the business of electricity supply excluding any amount paid on account of goodwill. (5) “Ordinary capital” means- In the case of a company, the amount of ordinary capital paid up and attributable to the undertaking of the licensee; In other cases the net amount standing to the credit of the proprietor or proprietors' account or accounts whether in capital personal or any other account howsoever called and properly attributable to the business of electricity supply. (6) “Original cost” means in respect of any asset the sum of-- (a) The cost of the asset to the licensee, including the cost of delivery and all charges properly incurred in erecting and bringing the asset into beneficial use; 21[(b) Interest charges on capital expenditure incurred, during the period between the date of the grant of the licence and the date when the undertaking commences supply, from borrowed money and properly attributable to the assets as actually accrued up to the date of such supply as well as interest incurred on outlays for subsequent expansions;] (c) A proper addition on account of supervision not exceeding fifteen per centum of the cost referred to in sub-paragraph (a), so however that the original cost of any asset shall not in any case exceed the original cost attributed thereto in the books of the undertaking. (7) “Preference (capital” means- The amount of paid-up capital attributable to the undertaking of the licensee, issued on such preferred term as are sufficient to qualify it for such description. 22[ * * * * * * ] (9) “Reasonable return” means-- In respect of any year of account, the sum of the following: - (a) The amount found by applying the standard rate to the capital base at the end of that year; 23[(b) The income derived from investments other than those included in the capital base under provisions of Cl. (d) of sub-paragraph (1);] (c) And amount equal to one-half of one per centum on any loans advanced by the Board 24[* * *); 25[(C-1) An amount equal to one-half of one per centum on the amounts borrowed from organisations or institutions approved by the State Government; (C-2) An amount equal to one-half of one per centum on the amounts realised by the issue of debentures;] 26[(d) An amount equal to one-half of one per centum on the accumulations in the Development Reserve created under para. V-A of this Schedule; I 27[(e) Such other amount as may be allowed by the Central Government, having regard to the prevailing tax structure in the country.] 28[(10) “Standard rate” in respect of any year of account means- (a) In relation to that part of the capital base for that year of account which is equivalent to the capital base as on the 31st day of March, 1955, seven per centum per annum; (b) In relation to the remaining 29[capital base for that year, the Reserve Bank rate ruling at the beginning of that year plus- (i) Two per centum for investments made up to the date of the commencement of The Electricity Laws (Amendment) Act, 1991; and (ii) Five per centum for investments made thereafter: Provided that the Central Government may, by notification in the Official Gazette, and with effect from such date as may be specified therein, increase or decrease the standard rate specified in Cl. (b), if, after consultation with the Authority, that Government considers it necessary so to do to ensure that any rise or fall in the Reserve Bank rate does not affect the reasonable return in any subsequent year of account in relation to that part of the capital base which is equivalent to the capital base as computed on the last date of the previous year of account;] (11) “Written-down cost” means- Original cost less the amounts set aside or written-off on account of original in the books of the undertaking.