Urban Renewal Authority 2018-19 Annual Report

76 MANAGEMENT DISCUSSION AND ANALYSIS (c) Debt securities issued The URA is rated AA+ by Standard & Poor’s Rating Services. As at 31 March 2019, the outstanding debt securities issued by the URA was $2,793 million under the US$1,000 million Medium Term Note (MTN) Programme. (d) Net asset value The URA’s net asset value as at 31 March 2019 was $46,974 million (31 March 2018: $44,644 million), representing the Government’s capital injection of $10,000 million (31 March 2018: $10,000 million) and an accumulated surplus of $36,974 million (31 March 2018: $34,644 million). The financial highlights of the past ten years are summarised on page 113 of this Annual Report. (III) Capital Injection and Tax Exemption Following approval by the Finance Committee of the Legislative Council on 21 June 2002, the Government injected $10,000 million of equity capital into the URA in five tranches of $2,000 million each over a five- year period from 2002/03 to 2006/07. The Government continues to exempt the URA from taxation. (IV) Waiver of Land Premia by the Government The Government waives the land premia for redevelopment sites granted to the URA. For 2018/19, the land premia waived by the Government on three land grants amounted to $190 million. Since May 2001, a total of 43 land grants have been waived in respect of all the tendered projects with aggregate land premia totalling $19,678 million. Without this waiver, the URA’s net surplus for 2018/19 of $2,330 million for the year would have been lowered by $190 million to $2,140 million; its accumulated surplus as at 31 March 2019 would have been lowered by $19,678 million to $17,296 million; and its net asset value as at 31 March 2019 would have been decreased to $27,296 million. (V) Financial Resources, Liquidity and Commitments As at 31 March 2019, the URA’s net liquidity position totaled $15,314 million. At the same date, the URA’s outstanding commitments to the commenced projects, together with the construction cost on projects based on the valuation carried out by the URA’s in-house professionals, were estimated at $9,134 million. In addition to the US$1,000 million MTN Programme mentioned in paragraph II (c) above, the URA also maintained uncommitted credit facilities with major banks in Hong Kong. The external funding and credit facilities ensured the URA would have sufficient financial resources to carry out its urban renewal programme as planned.