2013 — Page 16

Hong Kong Ferry (Holdings) Company Limited Annual Report 2013

Management Discussion and Analysis

The following comments should be read in conjunction with the Audited Consolidated Accounts of the Company and the related notes to the accounts.

REVIEW OF RESULTS

The Group's turnover for the year amounted to approximately HK$440 million, representing a decrease of 29% when compared to the previous year. This was mainly attributed to the decrease in the sales of residential units of Shining Heights.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

As of 31 December 2013, shareholders' fund of the Group showed a slight increase of around 1% as compared to the previous year and amounted to approximately HK$5,187 - million. The increase was mainly due to net effect of the profit realised from the sale of residential units of Shining. Heights and The Spectacle, the gains on revaluation of the Group's investment properties, gains on the disposal of securities investment and the payment of dividends.

There was no change as to the capital structure of the Group during the year. Funding for the Group's activities during the year under review was mainly generated from the sale of residential units of Shining Heights and Green Code.

During the year, there was no material acquisition and disposal of subsidiary and associate. A net repayment of approximately HK$5.2 million was received from an associate which provided mortgage loans to buyers of residential units of Metro Harbour View.

Current assets of the Group were recorded at approximately HK$6,610 million as compared to the current liabilities of approximately HK$3,198 million as of 31 December 2013. Current ratio of the Group had been decreased to 2.1, mainly attributed to the increase in trade and other payables.

GEARING RATIO AND FINANCIAL

MANAGEMENT

As there was no borrowing as at 31 December 2013, no

gearing ratio, which is calculated on the basis of bank borrowing as a ratio of the Group's shareholders' fund, was shown. Assets of the Group had not been charged to any third parties in the year under review.

The Group's financing and treasury activities were managed centrally at the corporate level. Financing facilities extended to the Group were denominated in Hong Kong dollar. Certain deposits are denominated in Renminbi, and the incidental foreign exchange exposures are kept under periodic review. The management will consider appropriate hedging measures, if necessary.

EMPLOYEES

As at 31 December 2013, the number of employees of the Group stood at about 300 (2012: 310). The remuneration packages to employees were commensurable to the market trend and levels of pay in similar industries. A discretionary year-end bonus was paid to employees based on individual performance. Other benefits to employees included medical insurance, retirement scheme, training programmes and educational subsidies. Total employees' costs for the year amounted to approximately HK$86 million, which was commensurate with that recorded in the previous year.