Page 77 - Urban Renewal Authority 2023-24 Annual Report

(d) Provision for Impairment on Properties and Committed Projects Chairman’s Statement
Based on the accounting policy detailed in Notes 2(h) and 2(n) to the financial statements, provision
for impairment on properties and committed projects of HK$3,089 million was made in 2023/24, Managing Director’s Statement
mainly arose from the declining assessed land value of the committed projects, reflecting the
sustained property market downturn.

(e) Result for the Year
For the year 2023/24, the URA recorded an operating deficit of HK$831 million. After inclusion of the
provision for impairment on properties and committed projects, the net deficit was HK$3,920 million,
compared to the net deficit of HK$3,530 million for 2022/23. The unfavourable performance for
2023/24 mainly attributable to property market downturn, which led to (a) lower upfront payment
from the project tender awarded in the year as mentioned in paragraph (I)(a) above, and (b) Operating Review
substantial provision for impairment made for committed projects.

(II) Financial Position at 31 March 2024

(a) Properties under Development
Properties under development before provision for impairment was HK$28,684 million as at 31 March
2024 (31 March 2023: HK$25,249 million). This sum represented the acquisition and development Corporate Sustainability
costs of 10 projects under various states of implementation, out of which Kowloon City Projects, Kwun
Tong Town Centre Project and Kim Shin Lane/Fuk Wa Street Project accounted for 85 percent of the
total value.

The aforesaid value was off-set against the cumulative provision for impairment totalling HK$6,514
million (31 March 2023: HK$4,053 million), resulting in a net value of HK$22,170 million (31 March
2023: HK$21,196 million). The increase in the net value was mainly due to the costs incurred for
property acquisitions for Kim Shin Lane/Fuk Wa Street Project and the remaining Kowloon City
Projects, after offsetting (i) the removal of the development costs of Project CBS-1:KC tendered out in
2023/24 as mentioned in paragraph I(a) above and (ii) additional provision for impairment on
committed projects made for the year as explained in paragraph (I)(e) above. Management Discussion and Analysis

URA ANNUAL REPORT 2023-24 75 Projects at a Glance
Corporate Governance