Consolidated Income and Expenditure
Consolidated income for the year was HK$2,775.6 million (HK$2,466.2 million in 2002-03), of which, HK$1,896.8 million or 68.3% was government subventions, HK$431.4 million or 15.5% was tuition and program fees, HK$120.9 million or 4.4% was interest and investment income, HK$149.5 million or 5.4% was donations, HK$133.9 million or 4.8% was auxiliary services income and other income was HK$43.1 million or 1.6%.

The UGC introduced a Matching Grant Scheme in 2003-04. The University successfully raised a total of HK$140 million in donations (including HK$58 million in endowments) under the Scheme, some HK$130 million of which was matched by UGC grants.

Improvement in investment income also contributed to the significant growth in consolidated income (HK$120.9 million in 2003-04 as compared to HK$24.3 million in 2002-03).

Consolidated expenditure for the year was HK$2,345.1 million (HK$2,453 million in 2002-03) with HK$1,743.4 million or 74.3% for Learning and Research activities, HK$123.5 million or 5.3% for Management and general, HK$356 million or 15.2% for Premises and related expenses, and HK$122.2 million or 5.2% for other items.

UGC-funded Activities
UGC grants accounted for HK$1,838.7 million or 97% of government subventions, including recurrent block grant and supplementary grants of HK$1,349.7 million; earmarked grants for housing, research, capital works, and rates and government rent refunds of HK$358.4 million, and matching grant of HK$130.6 million.

The recurrent block grant together with fees and other income totaled HK$1,746 million, and related expenditure amounted to HK$1,603 million. The surplus of HK$143 million was transferred to the General and Development Reserve. As at 30 June 2004, the reserve balance stood at HK$814 million.

Capital Projects
Construction of The Hong Kong Jockey Club Enterprise Center will shortly be underway. The Government agreed to provide HK$105.6 million to meet half of the estimated construction costs, subject to the University being able to find matching funds from private sources. This has proved possible, as a result of a generous donation of HK$100 million from The Hong Kong Jockey Club Charities Trust.

Accounting Practices
Following the joint recommendation of UGC-funded institutions to make the local tertiary institutions' accounting practices accord more closely with international standards and modern accounting requirements, the University has adopted the Hong Kong Generally Accepted Accounting Principles (GAAP) for the preparation of financial statements from 2003-04 onwards. For comparison purposes, the 2002-03 financial statements have been restated, also in compliance with the Hong Kong GAAP.