Annual Report 2020

232 Transport International Holdings Limited 2020 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) (d) Currency risk (continued) (ii) Sensitivity analysis The table below indicates the instantaneous change in the Group’s profit after tax (and retained profits) and other components of consolidated equity that would arise if foreign exchange rates to which the Group has significant exposure at the end of the reporting period had changed at that date, assuming all other risk variables remained constant. In this respect, it is assumed that the pegged rate between Hong Kong dollars and United States dollars would be materially unaffected by any changes in movement in value of United States dollars against other currencies. 2020 2019 Increase/ (decrease) in foreign exchange rates (Decrease)/ increase in profit after tax and retained profits Increase/ (decrease) in other components of equity Increase/ (decrease) in foreign exchange rates Increase/ (decrease) in profit after tax and retained profits Increase/ (decrease) in other components of equity $’ 000 $’ 000 $’ 000 $’ 000 British Pounds Sterling 6% (8,076) – 6% 1,497 – (6)% 8,076 – (6)% (1,497) – United States dollars 1% 5,334 11,557 1% 2,050 14,500 (1)% (5,334) (11,557) (1)% (2,050) (14,500) Results of the analysis as presented in the above table represent an aggregation of the instantaneous effects on each of the Group entities’ profit after tax and equity measured in the respective functional currencies, translated into Hong Kong dollars at the exchange rate ruling at the end of the reporting period for presentation purposes. The sensitivity analysis assumes that the change in foreign exchange rates had been applied to re-measure those financial instruments held by the Group which expose the Group to foreign currency risk at the end of the reporting period, including inter-company payables and receivables within the Group which are denominated in a currency other than the functional currencies of the lender or the borrower. The analysis excludes differences that would result from the translation of the financial statements of operations outside Hong Kong into the Group’s presentation currency. The analysis is performed on the same basis for 2019. (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 2020 and 2019. The Group had not entered into any fuel oil swap contract during the years ended 31 December 2020 and 2019.