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Principles of financial Operations
7. (1) In accordance with section 19(4) of the Act, the Authority shall prescribe the
charges payable in respect of the provision of telecommunications services to
ensure its revenues are sufficient to produce on the fair value of its assets a
reasonable return measured by taking its net operating income as a percentage of
the fair value of its fixed assets in operation plus an appropriate allowance for its
working capital.
(2) For the purposes of this regulation “net operating income” means the
amount of income remaining after subtracting from the total operating revenues all
charges which in accordance with generally acceptable counting principles are
chargeable to revenue accounts, including appropriate provisions for depreciation
of assets, adequate maintenance and taxes, but before deducting interest and other
charges on borrowing or taking into account nonoperating income and expendi
ture.
(3) In determining what constitutes a reasonable return, all pertinent eco
nomic and financial considerations shall be taken into account, which include, but
are not limited to. the need for net operating income in an amount sufficient
(a)
to meet interest payments on loans;
(b)
to provide for repayments to be made each year in respect of
loans incurred by the Authority to the extent to which such
repayments exceed the year’s provision for depreciation charged
to revenue accounts;
(c)
to provide a reasonable proportion of the funds needed for
expanding the Authority’s activities and improving its services;
and
(d)
to provide for reserves for replacement, expansion o other pur
poses to the extent to which the Authority deems it necessary to
establish such reserves.
Financial procedures
8.
(1) Subject to regulation 21(1), the Board shall review and approve
(a)
the annual financial statements, reports of the external auditors