CONFIDENTIAL
G.F. 323
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機密
12.
In order to maintain consistency with the revenue figures,
there is an allowance for an increase in the cost of labour over and
above that of general inflation.
The liability for rates is offset
by extra equity subscriptions from Government until there is positive
net cash flow.
13.
The revenue figures are those on which the January report
was based. Subsequent analyses have confirmed the validity of the
January revenue figures.
14.
(d) Currency
Each set of figures used in the cash flow is defined in a
particular currency, with provision made for possible losses and gains
on conversion into Hong Kong dollars. Rather under 50% of the contract
costs will be payable for offshore goods and services, for which con-
tractors may prefer payment in foreign currencies. Also, export
credit loans will normally be denominated in foreign currencies and
for various reasons other loans in foreign currencies will be drawn
upon.
15.
.:
Acceptance of any liability in foreign currency gives rise
to an exchange risk, the size of which is difficult, if not impossible,
to estimate now for any particular currency over a period of years.
Even so, the foreign exchange risk may be reduced to acceptable
proportions by: (i) spreading the liabilities in several different
currencies, thus reducing the extent of the loss if any particular
ONFIDENTIAL #S