A (2) 7- bonds for a new issue of conversion bonds at 4%. The great majority of the bondholders elected for conversion and the position shortly after the end of the year (23rd January 1934) was:
Converted Redeemed Unaccounted for Total $4,838,000 41,000 48,000 $4,927,00044. Thus only $41,000 had up to this date been required to meet the redemption. No recourse was necessary to the Sinking Fund and actual redemptions were met from the Deposit Fund referred to in paragraph 62 and enclosures of the Annual Report for 1930.
45. There is still remaining in this Deposit Account at 31st December 1933, a balance of $46,154.03 which together with certain rents accruing will more than cover any future redemptions. No information is at present available of any decision having been reached with regard to the ultimate disposal of the Sinking Fund (Vide Section 10 (5) of the Ordinance).
SHING MUN VALLEY WATER SCHEME.
46. The accounting for this work is carried on under the Imprest System. After a preliminary imprest of $10,000 the amount was in March 1933 fixed at $50,000 from which sum the bulk of the local payments are made.
47. A certain amount of difficulty was experienced at first in bringing the accounting into line with the Government system but a form of accounts was drawn up by this department towards the end of the year and, with the concurrence of the Treasurer, adopted by the Resident Engineer and appears to be working smoothly.
48. Similarly, after a not too satisfactory start, the store accounting has been placed on a sound footing. An intensive audit survey of stores was carried out in December 1933 and various discrepancies adjusted.
KOWLOON-CANTON RAILWAY.
49. A copy of the Annual Report of the Manager of the Railway is forwarded (Enclosure N.) and full comparisons of the revenue and expenditure with the Estimates and with the revenue and expenditure of previous years are contained therein.