The Chief Finance Officer has presented to the Board of Directors of a Public University the Annual Financial Report and Statement for approval. As a member of the Board, you have been asked to study the Financial Report and prepare a paper for further discussion at the next Board meeting. The University has a student population of 12,000 with1,900 staff comprising of 1,000 academic staff and 900 Non Academic. In 2018, the University had 1600 staffs. The University has completed the construction of the main campus that will allow an increase of student capacity to 20,000. Question 2 : Your second task is to study Revenue and Expenditure. a) What are the key revenues and the total Revenue for 2019? Based on the revenue, who is the most important client of the university? What must you do to retain this client? b) What is Capital Expenditure? ( in the Government University a Development Fund is set up for this expenditure) What is Operating Expenditure? What was the total expenditure of the University for 2019? What does it mean if Revenue is less than Expenditure? Why had this happened? Comment on how well the Expenditure was managed in 2019. c) What would you consider as Fixed Costs for the University? Hint: consider a situation where the students have to be away from the campus for 1 year. Will the lecture halls be used, if not in use would the airconditions be turned on, and if they are not switched on, will your utilities electric bills be low? d) What would be the Fixed Cost and Variable Cost per Student? Estimate the Cost Per Student Per Year bome by the University. Compare this to the fees paid by the students. How can the Cost per Student per Year be reduced ? Observation, Conclusion and Suggestions for further actions. (50 MARKS] PUBLIC UNIVERSITY OF MALAYSIA BALANCE SHEET as of 31 December 2019 2019 2018 NONCURRENT ASSETS Real Estate, Plants and Equipments Works in Progress 661,344,250 74,201,698 435.092,233 50.642,217 TOTAL NONCURRENT ASSETS 735,545,948 485.734.450 CURRENT ASSETS Student Debtors Other Debtors Deposits and Advance Payments Fixed Deposits Cash on Hand and in Bank 5,606,235 13.558,457 8,675,418 88,501.868 16,622,111 8.570,028 12,048.879 12,834,986 98,321,888 28,081,252 TOTAL CURRENT ASSETS 132,964,089 159.857,033 TOTAL ASSETS 868,510,037 645,591,483 34,442.819 6,401.890 EQUITY Operating Expenditure Fund Trust Fund Development Fund Loan Fund Student Residence Fund Enterprise Fund Endowment Fund Asset Fund Excess Revaluation 41,091,106 13,727.727 (5.478,033) 2,027,591 1,104.279 95,033 283,147 381.147 251,971,732 2,185,427 2,185,427 381.147 Accumulated Deficit of Subsidiary (4.300,942) (3,063,736) TOTAL EQUITY 300,903,561 41.985.026 NONCURRENT LIABILITIES Long Term Borrowings Financial Leases Long Term Employee Benefits Deferred Revenue 40,451 117.353 1,729,614 549,751,315 55.876 117,377 1,809,760 584,138,188 TOTAL NONCURRENT LIABILITIES 551,638,733 586,121,201 CURRENT LIABILITIES Short Term Borrowings 15,448 15,447 Short Term Employee Benefits Creditors Provision for Income Tax 2.030,412 13,921,650 233 2.087,905 15,381,671 233 TOTAL CURRENT LIABILITIES 15,967,743 17,485,256 TOTAL LIABILITIES 567,606,476 603,606.457 TOTAL EQUITY AND LIABILITIES 868,510,037 645,591,483 PUBLIC UNIVERSITY OF MALAYSIA REVENUE AND EXPENDITURE STATEMENT as of 31 December 2019 2019 2018 REVENUE Government Grant Other Grants Student Fees Others 165,931,500 37,292,514 34,958,878 29,000,462 164.676.397 38,934,593 32,281,044 30,002,629 TOTAL REVENUES 267,183,352 265,894,663 EXPENDITURES Emoluments Supply and Services NOTE 31 Other Expenses (incl. Student Activities) Depreciation of Assets, Plants and Equipments Bad Debts Less Revaluation of Assets Employee Benefits 126,842,084 113,421,496 12.117.943 25,142,647 94,504 5.478,033 12.078 118,756,998 104.927,517 17,103,258 22,612,643 97,756 TOTAL EXPENDITURES 283.108,785 263,498,172 INCOME/(LOSS) BEFORE TAX (15,925,433) 1.596,491 TAX 3,261 INCOME/(LOSS) AFTER TAX (15,928,694) 2.396,491 OTHER REVENUE AFTER TAX Item will not be Reclassified as Profit or Loss Net Gains from Revaluation of Real Estate 251,971,732 236,046,038 2,396,491 PUBLIC UNIVERSITY OF MALAYSIA REVENUE AND EXPENDITURE STATEMENT as of 31 December 2019 NOTE 31 2019 2018 SUPPLY AND SERVICES Travel Expenses Goods Transportation Communication and Utilities Rentals Raw Material Supplies, Maintenance and Repair Other Supplies Maintenance and Minor Repair Services Professional Services and Hospitalities 3,556,295 49,290 13.732.198 12.757,084 865,650 9.911.341 14,129,874 58,419,764 3,112.734 21.901 11,963,695 12.999.142 726.424 9,349,484 12,704,272 54,049,865 113,421,496 104,927,517