Annual Report 2021

CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 172 Notes to the Consolidated Financial Statements For the year ended 31 December 2021 37. FINANCIAL RISK MANAGEMENT (CONTINUED) 37.1 Financial risk factors (continued) (i) Market risk (continued) (a) Foreign exchange risk (continued) At 31 December 2021, if Renminbi had strengthened/weakened against the other currencies by 3% (2020: 3%) with all other variables held constant, profit before taxation would have been approximately HK$101 million lower/higher (2020: HK$91 million lower/higher) mainly as a result of decrease/increase (2020: decrease/increase) in net foreign exchange gains on translation of cash and cash equivalents, debtors, creditors and bank and other borrowings denominated in non-functional currencies of the relevant group companies. At 31 December 2021, if United States dollar had strengthened/weakened against the other currencies by 0.5% (2020: 0.5%) with all other variables held constant, profit before taxation would have been approximately HK$99 million lower/higher (2020: HK$129 million lower/higher) mainly as a result of decrease/increase (2020: decrease/increase) in net foreign exchange gains on translation of cash and cash equivalents, debtors, creditors and bank and other borrowings denominated in non-functional currencies of the relevant group companies. (b) Price risk The Group is exposed to equity securities price risk because of investments held by the Group that are classified on the consolidated statement of financial position as financial assets at FVTPL and equity instruments at FVTOCI. At 31 December 2021, if there had been a 10% (2020: 10%) increase/decrease in the prices of the respective equity instruments with all other variables held constant, (i) profit before taxation would increase/decrease by HK$294 million (2020: HK$296 million) as a result of the changes in fair value of the financial assets at FVTPL and (ii) other comprehensive income for the year ended 31 December 2021 would increase/decrease by HK$3 million (2020: HK$3 million) as a result of the changes in fair value of the equity instruments at FVTOCI. The Group is not exposed to commodity price risks and has not entered into any derivatives to manage exposures of price risk.