30 Gulf Hotels Group issued its financial results for calendar 2019 on 19 February 2020 before the impact of COVID-19 became apparent in the Kingdom of Bahrain. It operates several distinct businesses in Bahrain, Dubai, Sri Lanka and Zanzibar. Each region was subjected to many different circumstances during calendar 2019 yet the Board considered the results to be the best possible in challenging conditions. Indeed, the auditors, KPMG, found no reason to qualify the financial statements as presented by the Board. Little did they know what was to come. Extracts from the income statements of Gulf Hotels Group 2015 2016 2017 2018 2019 30 Gross operating revenue 32,370,415 36,376,953 37,261,496 35,111,278 38,569,810 Operating costs 19.275,130 22.560,099 23.905,875 20,063,366 21,379,281 Gross operating profit 13,095,285 13,816,854 13,355,621 15,047,912 17,190,529 Depreciation 3,054,959 3,919,721 4,624,272 6,749,047 7,597,267 General and administration 1.771,279 2.723,889 2,075,549 6.888.775 6,514,998 expenses Total expenses 4,826,238 6,643,610 6,699,821 13,637,822 14,112,265 Net operating profit 8,269,047 7,173,244 6,655,800 1.410,090 3,078,264 Investment income 928,042 2,833,795 4,380,215 5,511,425 2,871,866 Abnormal gains 6,125,681 Profit for the year 9,197,089 16,132,720 11,036,015 6,921,515 5,950,130 Showing all the workings you use to arrive at your final result, you are required to: 1. Use the data provided above, to estimate the relevant proportion of GHG's total costs that are fixed and that are variable (10 marks) 2. Considering the hospitality industry is only expected to operate at 10% of capacity at best during the period March to June 2020, that is four months, and that tourism will decline by between 20% and 30% for 2020 overall, prepare a forecast income statement for GHG for calendar 2020 (25 marks) Page 2 of 3 3. Prepare a management report of approximately 500 words, discussing the anticipated financial performance of GHG during 2020. (10 marks) For a group submission all members of the group will receive the same mark unless they indicate that the work was not performed equally by all members. In addition, for each student, up to 5 marks will be available for the quality of your individual reflection form