36. During 1958, however, the general financial arrangements of the Authority were discussed with Government, and as a result it was agreed that all outstanding loans should be consolidated into one block loan of $91,500,000, interest on the first $45,000,000 of which would be at 31% per annum, and on any funds over that amount at 5% per annum. This gives a much greater degree of flexibility to the Authority's financial arrangements, as it will repay to Government only the interest on capital loans, the capital being retained as permanent assets for use in future schemes.
37. These new financial arrangements have already proved most beneficial, in that they have enabled the Administration loan, amount- ing to $296,818.77 as at 31st December, 1958, to be liquidated, together with the advances to meet expenses incurred with the topographical surveys of the Clearwater Bay Road and Ma Tau Chung schemes, amounting (with interest) to $13,916.69 and $5,336.08 respectively. In addition interest on the North Point loan, amounting to $572,107.30 has been repaid, and $500,000 (which had been on fixed deposit) repaid to Government from surplus funds in order to reduce interest charges on the So Uk loan. At 31st March, 1959, the Authority's indebtedness to the Government stood at $47,375,000.00.
38. Cash budgets are prepared monthly, covering the ensuing six months, to give the Finance Select Committee a clear picture of estimated capital and recurrent expenditure, and so let it determine how best to use surplus, funds. Monthly statements of income and expenditure and quarterly balance sheets are also prepared for the Authority's information.
ACCOUNTS
39. The Authority's accounts are kept under the general direction of the Accountant General, and audited annually by the Authority's own auditors, Messrs. Peat, Marwick, Mitchell & Co. This firm also kindly acts as honorary financial advisers to the Authority. Copies of the accounts for the year ended 31st March, 1959, are attached as Appendix IV.
RATES
40. The rateable value of the Authority's property is assessed in the ordinary way by the Commissioner for Rating and Valuation on the basis of the economic value of the premises, and not of rent actually
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