CO129-573-14 Kowloon-Canton railway- provision of a renewals fund 7-6-1938 - 11-10-1938 — Page 4

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2. The present method of fronding for renewals of rolling stock by HIL, Roy & Colony is as follows:

Rery sets aside as a

purely paper

credit the % shown in para 2

against the reserve

debită

thus made again

drot

haper entry only the cost of replacements

Colony takes net neverve of Ray, before

revenue

antiral

deliting depreciation, & fays for replacement's out of a special expenditure subhead of Rary Vole.

revenue

Ray accumulated (defunt & 31. 12. 36

$7,930,870

20

W

that it cannot be said that

Colony holds any free hary funds; the as int

on

this deficit, Pery sets up

the balance of the

is not charged paper credit for interest on

a

defreciation reserve

ale against the paper

delit for interest on

special entendition.

3.

Goo

be

کا

now proposes to back the paper Reserve by a fund of liquid essets, & b increase the fund ba total adequate If the expired life fall the wasting words.

This is a most forudent step.

4.

The provision for

showed cours

renewals in addition to

rolling stock, all hildings, track, bridges

& auch Grant sabit krie, darunt

culverts, plant & machinery

The

anoint the

allowed to the estimated cost of replacement

ocke

asset divided by

its estimated working

life (assuming a flatrate basis is adopted, to

لعبرية

that interest is not credited to the pend). The