57 56 HKUST Annual Report 2020-2021 APPENDICES HKUST Accounting Advisory Board Members (in Alphabetical order) Chairman Ms. Ivy CHEUNG Partner, Head of Audit, KPMG China Members Mr. Dickman CHIU Group Financial Controller, 100x Group Ms. Cindy CHOW Executive Director, Alibaba Entrepreneurs Fund Ms. Karen HO Former Chief Financial Officer, WeLab Holdings Ms. Jane HUI Partner, Tax Services, Ernst & Young Mr. Horace LEE Director, Wharf Real Estate Investment Company Limited Mr. Roy LEUNG Partner, KPMG China Mr. Andrew LEUNG Chief Financial Officer, Hang Seng Bank Limited Mr. Eugene LIU Managing Partner, RSM Hong Kong Ms. Gloria LUK Partner, Advisory, Deloitte China Mr. Hong NG Advisor, BDO Ms. Cindy NGAN Partner, PwC Hong Kong Mr. Gary WONG Partner, Assurance, Ernst & Young Mr. Fergus WONG Director, National Tax Policy, PwC Hong Kong Mr. Thomas WONG Founding Partner, CW CPA Ms. Shirley WOO Partner, Audit & Assurance, Deloitte China School of Humanities and Social Science Advisory Committee Prof. Timothy BROOK Republic of China Chair, The University of British Columbia Prof. Helen SIU Honorary Professor, Hong Kong Institute for the Humanities and Social Sciences, The University of Hong Kong Professor of Anthropology, Yale University Prof. ZHOU Xueguang Kwoh Ting Li Professor in Economic Development, Professor of Sociology Senior Fellow, Freeman Spogli Institute for International Studies, Stanford University APPENDIX III SENIOR MANAGEMENT & FACULTY APPOINTMENTS & PROFESSOR EMERITUS Senior Management Appointments Prof. CHAN Che-Ting Associate Vice-President for Research and Development Mr. Ernest CHAN Associate Vice-President (Planning & Coordination) Prof. Anirban MUKHOPADHYAY Associate Provost (Teaching & Learning) Senior Faculty Appointments Prof. HONG Jiewen Head of the Department of Marketing Prof. HUNG Mingyi Head of the Department of Accounting Prof. Alexis LAU Kai-Hon Head of the Division of Environment & Sustainability Mr. Donald LOW How-Tian Director of HKUST Institute for Emerging Market Studies Prof. Emily NASON Mung-Lam Director of Undergraduate Recruitment & Admissions Professor Charles NG, Dean of HKUST Fok Ying Tung Graduate School Professor QU Huamin Director of the Interdisciplinary Programs Office Prof. XIE Ting Head of the Division of Life Science Prof. YE Wenjing Director of Advanced Engineering Materials Facility Professor Emeritus The following faculty members were granted the title of Professor Emeritus upon their retirement or departure from the University service: Prof. CHAN Chun-Man Department of Civil and Environmental Engineering Prof. Roger CHENG Shu-Kwan Department of Electronic and Computer Engineering Prof. Ravindra GOONETILLEKE Division of Integrative Systems & Design and Department of Industrial Engineering & Decision Analytics Prof. HU Inchi Department of Information Systems, Business Statistics & Operations Management Prof. WEN Weijia Department of Physics Prof. WONG Man-Yu Department of Mathematics Prof. Michael WONG Kwok-Yee Department of Physics Associate Professor Emeritus The following faculty member was awarded the title of Associate Professor Emeritus upon his retirement from the University service: Dr. WONG Wan-Keung Division of Life Science APPENDIX IV FINANCE Overview The financial year 2020/21 recorded a surplus of $2,003 million ($1,410 million in 2019/20). The higher surplus for 2020/21 was mainly attributable to an extraordinarily favourable investment return due to high market valuations, stimulated by the persistent quantitative easing in response to the COVID-19 pandemic. The surplus was partly offset by lower donation and lower matching grant income following the completion of the Eighth Matching Grant Scheme. The University has committed to prioritising investments aligned with environment, social and corporate governance (ESG) values without compromising on return or diversification. About 50% of the University’s investment managers are signatories to the United Nations’ Principles for Responsible Investment and have integrated ESG into their investment strategies. Consolidated Income and Expenditure Consolidated income increased by $566 million to $6,955 million in 2020/21 ($6,389 million in 2019/20), contributed primarily by a growth in net investment income of $1,725 million, against a reduction in donation and matching grant income of $1,202 million and a reduction in tuition fee income of $183 million compared to the previous year. Consolidated expenditure decreased modestly by $23 million to $4,959 million ($4,982 million in 2019/20), which was mainly attributable to lower salary costs and other operating expenses of $55 million, as partly offset by an increase in depreciation charge of $32 million. Due to the outbreak of COVID-19, many of the on-campus activities and recruitments activities were postponed which led to the decrease in operating costs. Segment Results Commentaries on operating segments, analysed by UGC-Funded Activities and non-UGC Funded Activities, are as follows: UGC-Funded Activities UGC-Funded Activities showed a surplus of $876 million for the year ($536 million for 2019/20), which primarily came from the favourable investment return as allocated. The University’s UGC reserves continued to rise, and stood at $4,003 million ($3,127 million in 2019/20). Non-UGC Funded Activities Self-Financing Continuing Professional Education Programs, Research and Other Activities Self-financing CPEP activities contributed a surplus of $196 million ($298 million for 2019/20), against lower student enrolment and lower tuition income. Non-UGC funded research activities contributed a surplus of $33 million ($42 million for 2019/20), mainly arising from completed commercial research projects and government subsidies. Other activities contributed a surplus of $406 million (loss of $53 million for 2019/20) which was mainly due to an increase in allocated net investment income. In aggregate, the overall surplus of these operating segments amounted to $635 million ($287 million for 2019/20). Donations Activities Donations totalling $139 million were recognized as income for 2020/21 ($741 million for 2019/20). Overall the segment showed a surplus of $492 million ($587 million for 2019/20) as contributed by the investment return. The University has successfully secured $420 million new pledges in 2020/21 ($240 million in 2019/20). Non-UGC Reserves Non-UGC reserve balances reached $8,177 million at the end of 2020/21 ($7,022 million for 2019/20). The growth in the reserve balance was mainly contributed by the afore-stated allocated investment returns, donation, selffinancing and other activities. Capital Expenditure Following the planned completion of the Shaw Auditorium scheduled for opening in November 2021, still a number of construction projects are underway to enhance the University’s facilities and infrastructure to cater for accommodation and amenity needs of students as well as for academic and research activities. The largest construction project is the New 1551-bed Student Hostel, which is expected to be completed by 2023. Besides, two research buildings are underway and are targeted to be completed in 2025 and 2026 respectively. Accordingly, as at 30 June 2021, total commitments for approved construction projects and other capital items amounted to $4,678 million; $3,346 million of which will come from existing University’s Funds, $998 million will be funded by deferred income on hand, $227 million from pledged donations and $107 million from approved but yet to be received UGC grants. Outlook The prolonged coronavirus pandemic has presented unprecedented difficulties and challenges to the operations of the University in multiple dimensions. With the dedicated efforts of the management team and responsive Council directions and support, the University has coped well and overcome difficulties one by one. In the coming new semester, the University will continue exercising flexibility in learning and teaching activities, providing quarantine service for affected faculties and students, and administering access control at campus entrances. HKUST(GZ) is progressing well and the first semester in Guangzhou campus is expected to start in September 2022. The Guangzhou campus will be operated under the “Unified HKUST, Complementary Campuses” framework. Under this framework, it is expected that academic breakthroughs will be achieved through the collaboration between the two campuses. To make the University a global leader in sustainability education, the University will pursue the four focus areas, namely, operations, education, community and demonstration as set out in the new “2028 Sustainability Challenge” announced in HKUST’s Strategic Plan 2021-28. The University is ambitious in transforming the campus into a zero-carbon, zero-waste, and net-positive environmental impact living laboratory for learning, experimenting and showcasing new ideas and approaches. The financial position of the University is very healthy with total accumulated funds of over $12 billion at the end of the year. However, given the challenges and uncertainties ahead, not least the expected tapering of the quantitative easing which could materially affect the valuation of the University’s investment portfolio, the University will remain cautious in managing and deploying its resources to support its missions, and to ensure long-term financial sustainability. Patrick K.C. YEUNG Treasurer of the University 19 October 2021
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