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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
CAPITAL AND RESERVES (Continued)
(d) Distributability of reserves
At 31 December 2018, the aggregate amount of reserves available for distribution to equity shareholders of the Company, as calculated under the provisions of Part 6 of the Hong Kong Companies Ordinance, was HK$366,867,000 (2017: HK$461,158,000). After the end of the reporting period the directors proposed a final dividend of HK28 cents (2017: HK28 cents) per ordinary share, amounting to HK$99,757,000 (2017: HK$99,757,000) (note 9). This dividend has not been recognised as a liability at the end of the reporting period.
(e) Capital management
The Group's primary objectives when managing capital are to safeguard the Group's ability to continue as a going concern and ensure that it maintains a healthy capital ratio in order to support its business and provide returns for shareholders.
The Group actively and regularly reviews and manages its capital structure under the policy of prudent financial management. The Group maintains a financially sound capital position and, where appropriate, makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 December 2018 and 2017.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
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FINANCIAL RISK MANAGEMENT AND FAIR VALUES OF FINANCIAL INSTRUMENTS
Exposure to credit, liquidity and currency risks arises in the normal course of the Group's business. The Group is also exposed to equity price risk arising from its equity investments in other entities and movements in its own equity share price.
The Group's exposure to these risks and the financial risk management policies and practices used by the Group to manage these risks are described below.
(a)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligation resulting in a financial loss to the Group.
The Group's credit risk is primarily attributable to bank deposits and trade and other receivables. Management has a credit policy in place and the exposures to these credit risks are monitored on an ongoing basis.
Hong Kong Ferry (Holdings) Company Limited Annual Report 2018
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