Compensation payable to a licensee

The compnwiion payable to a licensee, on whom an order has been served und.er sect ion 4 or whose undertaking has been t hken a ver before t he commencemenl' of this Act, shall be determined 6nder any one of the Basis A, B, and C specified below, cas may be chosen under section 8. (1) Basis A--(i) The compensation payable under this basis shall be zn amount equel to twenty times the average net annual prcfit of the undertaking during a period of five consecutive account years immediztetely preceding the vesting date. Explanation.--Bor the purpose of this clause, the net annual profit shall be determined in t he mt,nner bid down in Part A or Part B, as the case may be, of Schedule I. (ii) This basis shall not apply to an undertaking which has not been supplying electricity fc r five consecutive account years imneciiately pr'eceding the vesl ing dg.te. (2) Basis B.-Tile cornpensat ion payable under this basis shall be the aggregal e wlue of all the shares consi itut - ing the share e.plta.1 of the und.erla,king, reckoned as shown below :- (a) In the case of shares issued on or before the 31st March 1946, the value of each shcre sh2.11 be reckoned at its average value as ~rrivcd at from the . quotalions for the.shstres as given in the offlcial list of the Madras Shere Market on the 15th dey of each month and where such market was closed on that day, t hie quotations on the next working dey, during the per icci cf three years commencing on the 1st Apl il 1946 and ending on the 31st March 1949 : Provided th8.t this clause sh?,ll not apply if eny one or -ore of the d.iff'erent cl~.sses of shares constituting the capital of the undertaking were not beingregulcxly quoted in such market during t he pericd of three years aforesaid, or if such quotetions c'xringl he whcle cf anyone cf those thee years were not based on actual transactions in such year. (b) In the case of shares issued on or before the 31st M~.rch 1946, if clause (a) does not apply but there h?.ve been bona fide transfers in each of the ditlerent classes of shares in every one of the three years aforesaid, and such transfers have been duly registered in the appro- priate hooks of the licensee, the value of each share of each suclz cl3.s~ tll:l.ll be 1-cckoned ;,t one-t hircf of the aggreg?!t: of its ,T~rce ktnt~unl p.vil*i:go v;~li.c.s for tlie I hrce yezrs, the avc;r:!ge v;:lri,e PI- eech yc-:.r being determined from the ~ T ~ I ~ S L " . C ~ ! U I I S in ihet yeas-. (c) Whcrc ! lu crnounts c2.Jled fc.1- in respect of any sh::rc ! e Torrcc! to in cIt:~isc (a) OJ- C~BLISC (b) 2re in arrezrs, rhe valtlo i.1' such sh::rt. sh:.li bc taken to be a sum which be:~.rs to it 5 vil.luc cs rcckoncd L! rider ckus-e (0) or cL?usc (b), ;l.s ;tls w.sc 1xw.y bc, 1 h ~ . sc?luc propoifion as the amounk paid up bars it? t hc i'iill :ruouiit pi>,yit.ble in respect of 1 he sh:~rc. (d) In the case of shares issued after the 31st March 1946, the aggregate value shall be taken to be the amount actually paid in respect thereof (including the premium, if any), together with an additional sum by way of solatium, calculated at the rate of two per cent for every completed year preceding the vesting date on the amount so paid which was in existence during the whole of such years as shown in the licensee's books : Provided that no part of such amount shall be entitled to a solatium exceeding ten per cent. Explanation.-This basis shall not apply unless clause (a) or clause (b) is applicable. (3) Basis C.-The compensation payable under this basis shall ba the aggregate value of the amounts specified below :- (i) the book value of all completed works in beneficial use pertaining to the undertaking and handed over to the Government (excluding works paid for by consumers) less depreciation calculated in accordance with Schedule II; (ii) the book value of all works in progress handed- over to the Government, excluding works paid for by consumers or prospective consumers; (iii) the bcok i7a1ue of all stores including spare parts handed over to the Government; (iv) the book value of all furniture, office equipment, tools and other non-depreciable equipment, as on the vesting date and handed over to the Government less depreciation calculated in accordance with Schedule II; (v) the book value of all plant and equipment existing on the vesting date but no longer in use owing to wear and tear or to obsolescence, to the extent such value has not been written off in the books of the licensee less depreciation calculated in accordance with Schedule II; (vi) the book value of all intangible assets, the extent such value has not been written off in the books of the licensee; (vii) the amount due from consumers in respect of every hire-purchase agreement referred to in section 6 (2) (a) (ii) less a sum which bears to the difference between the total amount of the instalments and the original cost of the material or equipment, the same proportion as the amount due bears to the total amount of the instalments; (viii) any amount paid actually by the licensee in respect of every contract referred to in section 6 (2) (a) (iii); (ix) an additional sum by way of solatium- (a) in case the licensee is a person licensed under Part II of the Electricity Act, at the rate of ten per cent on the value referred to in sub-clause (ii), at the rate of five per cent on the value referred to in sub-clause (iii) and at the rate specified in the licence in respect of compulsory purchase, or where no rate is specified in the licence, at fifteen per cent on the values referred to in sub-clauses (i) and (iv) ; (b) in case the licensee is a person who has obtained sanction under section 28 of that Act to engage in the business of supplying electrical energy, at the rate of ten per cent on the values referred to in sub-clauses (i) and (iv) and at the rate of five per cent on the values referred to in sub-clauses (ii) and (iii). Explanation.—(1) For the purposes of Basis C, the book value of any fixed asset means its original costs, and shall comprise- (i) the purchase price paid by the licensee for the asset, including the cost of delivery and all charges properly incurred in erecting and bringing the asset into beneficial use as shown in the books of the undertaking; (ii) interest charges on capital expenditure incurred from borrowed money and shown in the books of the undertaking as properly attributable to the asset up to the date of bringing it into beneficial use, at a rate not exceeding six per cent per annum; (iii) cost of supervision actually incurred, but not exceeding fifteen per cent of the amount referred to in paragraph (i). (2) Where any asset was acquired after the expiry of the period to which the latest annual account relates, or where no annual account has to be rendered under the Electricity Act, the book value of the assets shall be such sum as may be decided upon by mutual agreement between the Government and the licensee. Explanation.—(1) For the purposes of Basis C, the book value of any fixed asset means its original cost, and shall comprise— (i) the purchase price paid by the licensee for the asset, including the cost of delivery and all charges properly incurred in erecting and bringing the asset into beneficial use as shown in the books of the undertaking; (ii) interest charges on capital expenditure incurred from borrowed money and shown in the books of the undertaking as properly attributable to the asset up to the date of bringing it into beneficial use, at a rate not exceeding six per cent per annum; (iii) cost of supervision actually incurred, but not exceeding fifteen per cent of the amount referred to in paragraph (i). (2) Where any asset was acquired after the expiry of the period to which the latest annual account relates, or where no annual account has to be rendered under the Electricity Act, the book value of the assets shall be such sum as may be decided upon by mutual agreement between the Government and the licensee.