Third Schedule The interest formula

Clauses 1, 10 and 35

1. In this schedule, unless the contrary intention appears—

“associated company” means Consolidated Zinc, Commonwealth Aluminium Corporation Pty. Limited and any other company or enterprise that the Minister, after consultation with the Company, from time to time declares to be an associated company by reason of its direct or indirect association with the Company arising from their respective share holdings;

“base figure” means, in respect of a financial year, the amount ascertained by dividing by one minus the rate of tax an amount equal to 6  per centum of the average over the financial year of the issued share capital of the Company at the end of each month of the financial year;

“commercial prices” means the respective prices at which, in the circumstances of the particular contract, the products could reasonably be expected to be purchased or the supplies could reasonably be expected to be sold by an independent purchaser or seller, as the case may be, willing to do business on a commercial basis;

“gross operating surplus” means, in respect of a financial year, the amount remaining after deducting from income that would constitute assessable income of the Company in respect of the Company’s undertaking for the financial year under the Act all amounts that would properly be allowable as deductions therefrom for the purposes of ascertaining the taxable income of the Company in respect of the Company’s undertaking for the financial year under the Act, but with the following qualifications—

(a) interest payable by the Company under this agreement will not be deducted;

(b) interest payable on money borrowed by the Company for the conduct of the Company’s undertaking will not be deducted;

(c) if any of the products of the Company’s undertaking are sold by the Company below commercial prices, the receipts will be calculated as if the products had been sold at commercial prices;

(d) if supplies of bauxite or alumina obtained for use in the Company’s undertaking have been purchased at other than commercial prices the deduction therefor will be on the basis of commercial prices; and

(e) deductions for depreciation will be calculated on a straight line basis; provided that, if in any financial year after the Company has undertaken works to expand the smelting capacity of the Company’s undertaking beyond a designed smelting capacity of 28,000 long tons of aluminium per annum the production of the Company’s undertaking in the financial year exceeds 28,000 long tons of aluminium, the gross operating surplus means the amount that bears to the amount remaining as aforesaid the same proportion as 28,000 long tons bears to the installed designed smelting capacity of the Company’s undertaking at the commencement of the financial year;