Authority's financial arrangements, especially as it repays to Govern- ment only the interest on capital loans; in other words the approved loans are used as a capital fund and advances called for as required. The Authority can thus meet a certain amount of capital expenditure from its own resources, so keeping its interest charges to a minimum.
34. The new arrangements have proved most beneficial, as well as simpler than the previous system, and already the Administration Loan has been liquidated, and certain advances made to meet the cost of topographical surveys on future schemes have been repaid. At 31st March, 1960, the Authority's indebtedness to Government stood at $56,589,417.02. Interest charges amounting to $1,848,962.93 were paid during the year. The Development Fund loan has been increased this year by a further $47.5 millions, to a total of $139 millions, to finance the Choi Hung Estate scheme, the balance being met by the Authority. A further application, for $17 millions, to finance the Ma Tau Wai Estate scheme, is pending, which, when approved, will bring the total loan up to $156 millions.
35. The policy of the Authority has been directed, in accordance with the provisions of the Housing Ordinance, to securing that in any period of three successive years after 1st April, 1956, its revenue shall be sufficient to meet all its outgoings, other than those chargeable to capital expenditure account, and this aim has so far been achieved.
36. Cash budgets are prepared monthly, covering the estimated capital and recurrent expenditure over the ensuing six months, which gives the Finance Select Committee a clear picture of the current financial position, and allows it to determine the most beneficial utiliza- tion of any surplus funds. Monthly statements of income and expendi- ture, and quarterly balance sheets are also prepared for the Authority's information.
ACCOUNTS
37. The Authority's accounts are kept under the general direction of the Accountant General, and audited by the Authority's own auditors, Messrs. Peat, Marwick, Mitchell & Co. This firm also kindly acts as honorary financial advisers to the Authority. The Balance Sheet of the Authority as at 31st March, 1960, is attached as Appendix V.
RENT AND RATES
38. Rents on all estates are calculated on a similar basis. They are fixed by calculating the direct annual expenditure and charges on each
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