how much should be spent or allowed is the deciding factor—are
(1) repairs and renewals of premises and plant,
(2) depreciation of freehold and leasehold premises, licensed property and plant, and
(3) bad debts, doubtful debts and depreciation of investments.
These come to a total of £242,640.
It is in exercising their judgment on the reservation and allocation of this sum, which is enough in this case to pay nearly 12 per cent. on the company's ordinary capital, that the directors have to perform what is perhaps their most responsible duty. In their decision about it, and in parallel decisions which have to be made by all Boards of companies engaged in production, transport and commerce and in nearly all forms of finance, prudent Boards set aside sums that err on the side of over provision for depreciation of property and investments and for doubtful debts, and on the side of excessive lavishness in repairs and renewals so that the property may be always rather more than up to date.
Thereby they act in the best interests of the
