URA

MANAGEMENT DISCUSSION AND ANALYSIS 57 (d) Write back of provision for impairment on properties and committed projects Based on the accounting policy detailed in Notes 2(g) and 2(m) to the financial statements, write back of provision for impairment on properties and committed projects of $526 million was made in 2017/18. It is primarily due to rising property prices during the year. (e) Surplus for the year For the year 2017/18, the URA recorded a net surplus of $12,038 million, reflecting an increase of $8,896 million as compared to the $3,142 million net surplus for the year 2016/17. Before the write back of provision for impairment on properties and committed projects of $526 million, the surplus in 2017/18 was $11,512 million in comparison with $2,312 million reported in 2016/17. Major contributions to the 2017/18 net surplus were (a) the surplus from tendered projects; (b) the share of surplus sales proceeds from various joint development projects; and (c) the write back of provision for impairment on properties and committed projects on various projects previously made as a result of the rising property prices during the year. (II) Financial Position at 31 March 2018 (a) Properties under development Properties under development as at 31 March 2018 was $25,769 million (31 March 2017: $19,087 million), representing the acquisition and development costs for projects. This sum comprised of fourteen projects under various states of implementation. The aforesaid value was off-set against the cumulative provision for impairment totalling $1,980 million (31 March 2017: $3,305 million), resulting in a net value of $23,789 million (31 March 2017: $15,782 million). The increase in the net value was mainly due to accelerated acquisition of Kowloon City projects during the year and the write back of provision for impairment. It was off-set by certain projects being tendered during the year. (b) Cash and bank balances As at 31 March 2018, the URA’s cash and bank balances and securities holdings totaled $21,221 million (31 March 2017: $19,741 million). The URA placed the surplus cash on short- term deposits with a number of financial institutions. The URA also invested in fixed income products of the required credit rating in accordance with the investment guidelines as approved by the Financial Secretary with capital conservation as the priority.