Annual Report 2021

CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED 184 Notes to the Consolidated Financial Statements For the year ended 31 December 2021 37. FINANCIAL RISK MANAGEMENT (CONTINUED) 37.3 Fair value estimation (continued) (i) Fair value of financial instruments that are measured at fair value on a recurring basis The following table presents the Group’s financial instruments that are measured at fair value at 31 December 2021 and 2020: Level 1 Level 2 Level 3 Total HK$’million HK$’million HK$’million HK$’million At 31 December 2021 Financial assets Financial assets at FVTPL 2,941 2,891 3 5,835 Equity instruments at FVTOCI — — 32 32 2,941 2,891 35 5,867 At 31 December 2020 Financial assets Financial assets at FVTPL 2,952 — 3 2,955 Equity instruments at FVTOCI — — 31 31 2,952 — 34 2,986 Financial liabilities Financial liabilities at FVTPL — — 3,432 3,432 Set out below is the information about how the fair values of the above financial instruments are determined, including the valuation techniques and inputs used: The fair value of the freely traded listed equity instruments that are accounted for as financial assets at FVTPL is valued based on the quoted prices in active markets for the identical assets directly. The fair value of the structured deposits that are accounted for as financial assets at FVTPL is valued based on the foreign exchange rate and gold price. As at 31 December 2021, if the foreign exchange rate was 5% (31 December 2020: N/A) higher/lower while all the other variables were held constant, the changes in fair value of the structured deposit would be insignificant (31 December 2020: N/A). As at 31 December 2021, if the gold price was 5% (31 December 2020: N/A) higher/lower while all the other variables were held constant, the changes in fair value of the structured deposit would be insignificant (31 December 2020: N/A). The fair value of other unlisted equity instruments that are accounted for as financial assets at FVTPL or equity instruments at FVTOCI is valued based on Guideline Publicly Traded Company method whereas the key inputs to the valuation models include the market multiples, share prices, volatilities and dividend yields of similar companies that are traded in a public market, discount of lack of marketability with reference to the share prices of listed enterprises in similar industries. As at 31 December 2021, if any of the significant unobservable input above was 5% (2020: 5%) higher/lower while all the other variables were held constant, the change in fair value of these unlisted equity instruments would be insignificant (2020: insignificant).