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HKUST 2012-13 Annual Report
81
OVERVIEW
Year 2012/13 started a new chapter in Hong Kong tertiary
education with the launch of four-year undergraduate
programs. The University’s operating income and
expenditure grew along with the roughly one-third
increase in the undergraduate student population.
Coupled with donations and matching grants of $543
million mainly solicited under the 6th Matching Grant
Scheme (MGS) ($28 million for 2011/12), and an increase of
investment returns to $318 million ($19 million for 2011/12)
mainly attributable to a fair value gain of the investment
portfolio managed by fund managers, a surplus of $878
million was recorded for the year (deficit of $101 million for
2011/12).
CONSOLIDATED INCOME AND EXPENDITURE
Consolidated income for the year rose to $4,191 million
($2,916 million for 2011/12) primarily due to the higher
UGC Block Grant for operation of the additional year for the
four-year undergraduate program, additional donations
and matching grants under the 6th MGS and favorable
investment return.
Consolidated expenditure for the year increased to $3,316
million ($3,020 million for 2011/12) as a result of the
general pay adjustment on salaries in line with that for the
civil service, and additional staffing and other resources to
cope with the new four-year undergraduate programs.
SEGMENT RESULTS
University Grants Committee (“UGC”) Block Grant-
funded Activities
While extra preparation costs for the four-year
undergraduate programs were incurred resulting in a
deficit of $153 million for 2011/12, additional recurrent
Block Grant was received from UGC starting 2012/13;
together with the favorable investment return for the year,
a surplus of $148 million has been retained and transferred
to the General and Development Reserve.
Self-Financing Continuing Professional Education
Programs (“CPEP”), Research and Other Activities
Self-financing CPEP activities continued to contribute a
steady surplus to the University. Together with the higher
investment returns, the overall surplus of these operating
segments amounted to $134 million ($99 million for
2011/12).
APPENDIX IV: FINANCE
Donations and Related Activities
As a result of the 6th Government MGS and the favorable
investment returns in 2012/13, this segment saw a surplus
of $596 million (deficit of $47 million for 2011/12). This
illustrated how segment results fluctuate depending on
whether a MGS is in operation or not. Had the operating
results of the donation activities segment been removed
from the other segments, the variance in the consolidated
operating result would be reduced to $336 million (surplus
of $282 million for 2012/13 vs deficit of $54 million for
2011/12) instead of $979 million (surplus of $878 million for
2012/13 vs deficit of $101 million for 2011/12).
CAPITAL EXPENDITURE
Construction projects completed during the year, including
the Lee Shau Kee Business Building, Institute for Advanced
Study Academic Building and the new hostel with 700
student places, have provided the necessary space and
facilities for the expanded operation under the four-year
undergraduate programs. Other in-progress construction
projects include additional teaching, research and student
hostel facilities and an off-campus joint student hostel in
Tseung Kwan O.
As at 30 June 2013, the total commitments for the
approved construction projects and other capital items
amounted to $1,548 million; of which, $979 million will be
supported by approved but yet to be received UGC grants,
$27 million by pledged donations and the rest by the
University’s reserves and deferred income on hand.
OUTLOOK
The University managed the roll-out of the double cohort
successfully in 2012/13. The University continues to
prudently manage its financial affairs to support its recurrent
and strategic needs under the four-year undergraduate
system from 2013/14 and beyond.