Financial assets and financial liabilities arising from derivatives are classified as either financial assets at FVTPL or financial liabilities at FVTPL. 

## (15) Cash and cash equivalents 

Cash and cash equivalents comprise cash on hand, demand deposits, and highly liquid short-term investments with maturi- ties of three months or less from the date of acquisition which are subject to an insignificant risk of changes in value. 

## (16) Inventories 

Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes costs of purchase, costs of conversion and all other costs incurred in bringing the inven- tories to their present location and condition. Net realisable value is calculated as the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to sell. Cost of inventories is calculated mainly using the first-in, first-out (FIFO) method. 

## (17) Assets held for sale 

Non-current assets or disposal groups are classified as “Assets held for sale” if their carrying amounts will be recovered principally through a sale transaction rather than through con- tinuing use. To be classified as assets held for sale, the asset must be available for immediate sale in its present condition, and the sale must be highly probable. Specifically, manage- ment of the Group must have a firm commitment to execute the plan to sell the asset and the sale is expected to be com- pleted within one year from the date of classification, as a general rule. Assets held for sale are measured at the lower of their carrying amounts and fair values less costs to sell, and they are not depreciated or amortised while they are classified as held for sale. 

## (18) Equity 

## (i) Ordinary shares 

Proceeds from the issuance of ordinary shares by the Company are included in share capital and capital surplus. Transaction costs of issuing ordinary shares (net of tax) are deducted from capital surplus. 

## (ii) Treasury shares 

When the Company reacquires its own ordinary shares, the amount of the consideration paid including transaction costs is deducted from equity. When the Company sells treasury shares, the difference between the carrying amount and the consideration received from the sale is recognised in equity. 

## (19) Share-based payment 

The Group has a share option plan as an equity-settled share- based payment for directors and corporate officers. Share options are measured at the grant date fair value, and the fair value of share options is calculated using the binomial model. 

The fair value of share options determined at the grant date is expensed over the vesting period with a corresponding increase in equity by taking into account the number of share options that will eventually vest. 

## (20) Employee benefits 

## (i) Retirement benefits 

The Group operates defined benefit and defined contribution retirement plans for its employees. 

## (a) Defined benefit plans 

Net defined benefit assets or liabilities are calculated as the present value of the defined benefit obligation less the fair value of plan assets and they are recognised in the consoli- dated statements of financial position as assets or liabilities. The defined benefit obligation is calculated by using the pro- jected unit credit method. The present value of the defined benefit obligation is calculated by the expected future pay- ments using discount rate. The discount rate is determined by reference to market yield on high-quality corporate bonds having maturity terms consistent with the estimated term of the related pension obligations. 

Service cost and net interest expense (income) on the net defined benefit liabilities (assets) are recognised in profit or loss. 

Actuarial gains and losses, the return on plan assets, excluding amounts included in net interest, and any change in the effect of the asset ceiling are recognised immediately in other comprehensive income under “Remeasurements of defined benefit plans”, and transferred from other components of equity to retained earnings immediately. 

## (b) Defined contribution plans 

Contributions paid for defined contribution plans are expensed in the period in which the employees provide the related service. 

## (ii) Short-term employee benefits 

Short-term employee benefits are expensed when the related service is provided. Bonus accrual is recognised as a liability when the Group has present legal or constructive obligations resulting from past service rendered by the employees and reliable estimates of the obligations can be made. 

