Annual Report 2021

230 Transport International Holdings Limited 2021 Annual Report NOTES TO THE FINANCIAL STATEMENTS (Expressed in Hong Kong dollars unless otherwise indicated) 32 Financial risk management and fair values of financial instruments (continued) (f) Fair values measurement (continued) (i) Financial instruments measured at fair value (continued) Fair value hierarchy (continued) As at 31 December 2020, the fair value of unlisted equity instruments was determined using the market approach of comparable companies adjusted for lack of marketability discount. Except for the abovementioned financial assets, there were no transfers between instruments in Level 1 and Level 2, or transfers into or out of Level 3 during the years ended 31 December 2021 and 2020. The Group’s policy is to recognise transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur. (ii) Valuation techniques and inputs used in Level 2 fair value measurement The fair values of forward foreign exchange contracts as at 31 December 2021 in Level 2 were marked to market using quoted market prices from financial institutions. (iii) Information about Level 3 fair value measurement in 2020 Valuation technique Significant unobservable inputs Percentage Unlisted equity instruments Market comparable companies Discount for lack of marketability 40% The fair value of unlisted equity instruments is determined using the market approach of comparable companies adjusted for lack of marketability discount. The fair value measurement is negatively correlated to the discount for lack of marketability. As at 31 December 2020, it is estimated that with all other variables held constant, a decrease/increase in the discount for lack of marketability by 5 percentage points would have increased/decreased the Group’s other comprehensive income by $43,131,000. The movement during the year in the balance of Level 3 fair value measurement is as follows: 2021 2020 $’000 $’000 Unlisted equity securities: At 1 January 517,575 515,926 Net unrealised gains recognised in other comprehensive income during the year – 1,649 Transferred out (517,575) – At 31 December – 517,575 Any gains or losses arising from the remeasurement of the Group’s unlisted equity securities held for strategic purposes are recognised in the fair value reserve (non-recycling) in other comprehensive income. (iv) Fair values of financial instruments carried at other than fair value All financial instruments carried at cost or amortised cost are carried at amounts not materially different from their fair values as at 31 December 2021 and 2020 except as follows: Amounts due from/to associates and loan to joint venture of the Group are unsecured, interest-free and have no fixed terms of repayment/settlement. Given these terms, it is not meaningful to disclose their fair values.