as per fig. 1 parallel to the water.
To get my capping rails fitting well I have, believe it or not, always made them up out of 120 gram card, cut into the relative width strips for the top, and thin strips of about 1.5 mill width which go onto the inside and outside of the bulwark tops level with the edge to about a depth of1.5 mm. this then gives a good flat surface for the top capping rail to glue onto.
I use cyano for the first layer only to glue to the grp and then aliphatic waterproof glue to build up the layers of card. The card stretches once glue is applied and goes round the curve of the boat,both bow and stern a lot easier than timber or ply.
It can then be coated with sanding sealer and after a few coats can even be sanded lightly or rubbed with wire wool prior to painting to get a smooth base for painting.
have always had good results using this method.
Honestly it works.neil.