1961-1962 — Page 21

61. Government's decision was a serious one for the Authority and since then attention has been concentrated on making the best use of the money available from the revolving fund made up of the $156 million loan and the Authority's accrued nett income.

62. Capital expenditure budgets covering the ensuing five years have been prepared at six monthly intervals. On the basis of such statements the planning and construction of the estates at Kwun Tong (Phase I) and Tsuen Wan (Phases I and II) was authorized. The last budget was drawn up in January, 1962 and from this it is estimated that not more than $13 million of additional building work can be financed without further loans before 1967. Owing to the continual pressure for Crown land for various requirements, the Public Works Department is unable to reserve sites for the Authority until funds are made available for developing them. Under these circumstances it has been impossible to plan with any degree of confidence.

63. To give the Authority a clear picture of its current financial position and to allow it to determine the most beneficial utilization of funds, cash budgets are prepared quarterly, covering the estimated capital and recurrent expenditure over the ensuing six months. Monthly statements of income and expenditure, and half-yearly balance sheets, are also prepared for the Authority.

64. During the period under review, capital expenditure of $37,994,465.16 was incurred, and the sum of $35,294,786.57 was drawn from the Loan Fund. At 31st March, 1962, the Authority's indebtedness to the Government stood at $110,962,943.86, and there was a balance of $45,037,056.14 on the loan of $156 million. Interest paid during the year calculated on the maximum monthly loan balances totalled $4,079,731.63.

65. It is pleasing to record that on the last day of the financial year the Colonial Secretary said at the Budget meeting of Legislative Council that Government proposed to review the limit placed on the revolving loan fund and to make further funds available to the Authority.

ACCOUNTS

66. The Authority's accounts are kept under the general direction of the Accountant General, and are audited annually by the Authority's own auditors, Messrs. Peat, Marwick and Mitchell & Co. This firm also acts as honorary adviser to the Authority. The Balance Sheet of the Authority as at 31st March, 1962 is attached as Appendix III.

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