General Income and Expenditure
General income was HK$1,712 million (HK$1,770 million in 2000/01). The fall in income was partly attributable to the full effect of the 10% point-to-point funding cut and partly to a drop in bank interest income resulting from the downward movement of interest rates. Total income from the University Grants Committee (UGC) was HK$1,406 million (HK$1,430 million in 2000/01). The remainder of general income included HK$306 million from tuition fees, interest and investment income, and other items.

General expenditure was HK$1,695 million (HK$1,763 million in 2000/01). Excluding the one-off lump sum payment of HK$32 million for voluntary redundancies in 2000/01, general expenditure was reduced by HK$36 million this year. The University Council approved a revised benefits package for new recruits effective from 1 September 2001, following similar revisions in the Civil Service. To cope with the severe reduction in Government funding, the University has continued with the freeze on the recruitment of non-teaching staff. It has also discontinued the practice of allowing leave accumulation and requires staff members to clear earned leave in future.

Other Income
The University received a total of HK$280 million in earmarked grants from the UGC (HK$265 million in 2000/01), while a total of HK$93 million (HK$37 million in 2000/01) was received from the UGC in the form of capital grants.

After accounting for investment losses arising from the downturn in financial markets, income from donations and designated funds amounted to HK$89 million (HK$101 million in 2000/01). Other operating income generated from self-financing activities and research contracts amounted to a total of HK$210 million (HK$219 million in 2000/01). Total fund balance of donations, designated funds and other operating funds stood at HK$577 million (HK$532 million in 2000/01).

Reserves
Reserves and provisions stood at HK$777 million (HK$809 million in 2000/01), of which HK$630 million formed the General and Development Reserves.