Annual Report 2020

169 Notes to the Financial Statements Miramar Hotel and Investment Company, Limited Annual Report 2020 23 Financial risk management and fair values (Continued) (d) Foreign currency risk The Group owns assets and conducts its business primarily in Hong Kong and the PRC with its cash flows substantially denominated in Hong Kong dollars and Renminbi. The Group has no significant exposure to foreign currency risk as substantially all the transactions are either denominated in the functional currency of the entity or in United States dollars, where Hong Kong dollars is pegged to United States dollars, the resulting currency risk is considered insignificant. (e) Fair value measurement (i) Financial assets measured at fair value The following table presents the fair value of financial instruments measured at the end of the reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined in HKFRS 13, Fair value measurement . The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows: – Level 1 valuations: Fair value measured using only Level 1 inputs, i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. – Level 2 valuations: Fair value measured using Level 2 inputs, i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available. – Level 3 valuations: Fair value measured using significant unobservable inputs. Fair value at 31 December Fair value measurements at 31 December 2020 2020 Level 1 Level 2 Level 3 HK$’000 HK$’000 HK$’000 HK$’000 Recurring fair value measurements Assets: Equity securities designated at FVOCI: – Listed equity securities in Hong Kong 70,064 70,064 – – – Listed equity securities outside Hong Kong 8,897 8,897 – – Financial assets measured at FVPL: – Unlisted investment fund 55,429 – 55,429 – – Listed equity securities in Hong Kong 6,104 6,104 – – – Listed securities outside Hong Kong 1,406 1,406 – –