On 1 January 2015, Star Ltd acquired 75% of the ordinary shares of Shine Ltd in Hong Kong to form Star-Shine Group (SSG). At that date the balance on the retained earnings of Shine Ltd was Hong Kong Dollars (HK$) 1,700,000. The non-controlling interest in Shine was measured as the proportionate share of the net assets of the subsidiary. No shares have been issued by Shine since acquisition. The summarised income statements and balance sheets of Star Ltd and Shine Ltd as at 31 December 2019 were as follows: Income Statement for the year ended 31 December 2019     Star Shine       GB£ HK$   Sales   37,422,000 9,504,000   Opening inventories   4,158,000 1,259,280   Purchases   20,790,000 5,346,000   Closing inventories   1,485,000 1,021,680   Cost of sales   23,463,000 5,583,600             Gross profit   13,959,000 3,920,400             Depreciation   2,376,000 712,800   Other expenses   629,640 237,600   Interest paid   415,800 118,800   Total expenses   3,421,440 1,069,200             Profit before tax   10,537,560 2,851,200   Taxation   2,673,000 712,800   Profit after tax   7,864,560 2,138,400         Balance Sheet as on 31 December 2019     Star Shine     GB£ HK$ Non-current assets   8,316,000 5,464,800 Investment in Shine Ltd   267300             - Current assets:       Inventories   1,485,000 1,021,680 Trade receivables   3,593,700 1,306,800 Shine Ltd   85,950 - Cash   653,400 47,520 Total current assets   5,818,050 2,376,000 Total Assets   14,401,350 7,840,800 Current liabilities:       Trade payables   3,564,000 1,069,200 Star Ltd     880,988 Taxation   1,188,000 831,600 Total current liabilities   4,752,000 2,781,788 Debentures   2,970,000 950,400 Total assets less liabilities   6,679,350 4,108,612         Capital and reserves       Share capital   2,922,300 359,750 Retained earnings   3,757,050 3,748,862     6,679,350 4,108,612 The following further information is available:   An amount of HK$ 200,000 was written off goodwill as an impairment charge in the current year and HK$ 140,000 in the previous year.   On 23 March 2019, Star Ltd sold goods £2,250,000 to Shine Ltd, making a profit of 20% on cost. At the year end, one third of these raw materials were still in the inventory of Shine Ltd, and the inter-company transactions have not been eliminated from the financial statements. The goods were recorded by Shine at the exchange rate ruling on 23 March 2019.   Exchange rates were as follows: At 1 January 2015                                                               GB£ 1= HK$ 15.52 Average for the year ending 31 December 2019           GB£ 1= HK$ 10.05 At 31 December 2018/ 1 January 2019                           GB£ 1= HK$   9.92 At 31 December 2019                                                         GB£ 1= HK$ 10.25   Required:   If the functional currency of Shine Ltd is HK$, which translation method is applicable to translate Shine’s financial statements to GB£ and why