Annual Report 2019

228 Transport International Holdings Limited 2019 Annual Report Notes to the Financial Statements (Expressed in Hong Kong dollars unless otherwise indicated) 31 Financial risk management and fair values of financial instruments (continued) (e) Fuel price risk It is the Group’s policy to closely monitor fuel price movements. Certain subsidiaries of the Group have entered into price cap arrangements to limit the risk exposure in the event that oil prices rise above the cap level during the years ended 31 December 2019 and 2018. The Group had not entered into any fuel oil swap contract during the years ended 31 December 2019 and 2018. (f) Fair values measurement (i) Financial instruments measured at fair value Fair value hierarchy The following table presents the fair value of the Group’s 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 2019 2018 Fair value measurements categorised into Fair value measurements categorised into Fair value Level 1 Level 2 Level 3 Fair value Level 1 Level 2 Level 3 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Recurring fair value measurements Assets: Investments in debt securities – listed 1,449,971 1,449,971 – – 1,428,067 1,428,067 – – Unlisted equity securities 515,926 – – 515,926 512,019 – – 512,019 Derivative financial instruments – other forward foreign exchange contracts – – – – 88 – 88 – Liability: Derivative financial instruments – forward foreign exchange contracts held as cash flow hedge – – – – (1,346) – (1,346) – During the years ended 31 December 2019 and 2018, there were no transfers between instruments in Level 1 and Level 2, or transfers into or out of Level 3. 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.