## (b) Held-to-maturity investments 

Non-derivative financial assets with fixed or determinable pay- ments and fixed maturity dates that the Group has the positive intent and ability to hold to maturity are classified as held-to- maturity investments. The Group did not have any financial assets classified as held-to-maturity investments at the end of this fiscal year. 

## (c) Loans and receivables 

Non-derivative financial assets with fixed or determinable pay- ments not quoted in an active market are classified as loans and receivables. 

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment loss. Amortisation incurred under the effective interest method is recognised in profit or loss. 

## (d) Available-for-sale financial assets 

Non-derivative financial assets designated as available-for-sale financial assets or not classified as FVTPL, held-to-maturity investments or loans and receivables are classified as available- for-sale financial assets. 

Subsequent to initial recognition, available-for-sale financial assets are measured at fair value, and any gain or loss result- ing from changes in fair value is recognised in other compre- hensive income. Dividends on available-for-sale financial assets are recognised in profit or loss. When available-for-sale finan- cial assets are derecognised or determined to be impaired, the cumulative gain or loss that had been recognised in other comprehensive income is reclassified to profit or loss. 

## (iii) Impairment of financial assets other than FVTPL 

Financial assets, other than those at FVTPL, are assessed for any objective evidence of impairment at the end of each quarter. 

Financial assets are impaired when there is objective evi- dence of impairment as a result of one or more events that occurred after the initial recognition of the financial assets and these events have adversely affected the estimated future cash flows of the financial assets that can be reliably estimated. 

Objective evidence of impairment of financial assets includes: 

· significant financial difficulty of the issuer or obligor; 

· breach of contract, such as a default or delinquency in interest or principal payments; 

· probability that the borrower will enter bankruptcy or other financial reorganisation; or 

· disappearance of an active market for the financial assets. In the case of equity instruments classified as available-for- sale, a significant or prolonged decline in the fair value of the equity instrument below its cost would be considered as objective evidence of impairment. 

The Group assesses the existence of objective evidence of impairment for loans and receivables and held-to-maturity financial assets, individually for separately significant assets or collectively for assets with no individual significance. When there is objective evidence of impairment on those financial assets, the difference between the asset’s carrying amount and the present value of estimated future cash flows dis- counted at the financial asset’s original effective interest rate is recognised in profit or loss as an impairment loss. 

The impairment loss for loans and receivables are recog- nised through the allowance for doubtful accounts, and the carrying amount of a loan and receivable is written off against the allowance account when it is subsequently considered uncollectible. When an event occurring after the impairment was recognised causes the amount of the impairment loss to decrease, a reversal of the impairment loss is recognised in profit or loss. 

When there is objective evidence that an available-for-sale financial asset is impaired, the cumulative loss that had been recognised in other comprehensive income is transferred to profit or loss. Any subsequent recovery in the fair value of impaired equity instruments classified as available-for-sale financial assets is recognised in other comprehensive income. 

## (iv) Derecognition of financial assets 

When the contractual rights with respect to the cash flows from a financial asset expire or the contractual rights to receive the cash flows from a financial asset have been transferred and substantially all the risks and rewards of ownership of the financial asset are transferred, the Group derecognises the financial asset. 

## (v) Non-derivative financial liabilities 

The Group measures non-derivative financial liabilities at amortised cost using the effective interest method after initial recognition. The Group derecognises financial liabilities when obligations are fulfilled or when obligations are discharged, cancelled, or expired. 

## (vi) Derivatives 

The Group is engaged in derivative transactions and mainly uses foreign exchange forward contracts to manage its expo- sure to risks from changes in foreign exchange rates. 

Derivatives are initially recognised at fair value of the date when the derivative contracts are entered into and are subse- quently measured at their fair values at the end of each quarter. 

Hedge accounting is not applied to the above derivative transactions at the end of the fiscal year and changes in the fair value of derivatives are immediately recognised in profit or loss. 

