Annual Report 2019

China Merchants China Direct Investments Limited Annual Report 2019 113 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2019 15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED) Notes: (a) The listed equity securities represent the Group’s interest held in China Merchants Bank Co., Ltd., China Reinsurance (Group) Corporation, Iflytek Co., Ltd. and Oriental Pearl Media Co., Ltd. whose fair values are determined based on the quoted market bid prices available on the relevant exchanges. The listed equity securities within lock-up period represent the Group’s interest held in Oriental Pearl Media Co., Ltd. subject to trading moratorium and whose fair values are determined based on the quoted market bid prices available on the Shanghai Stock Exchange and adjusted for lack of marketability due to their non- circulation. For equity securities listed on the New Third Board, namely Wuhan Rixin Technology Co., Ltd. and Xi’an Jinpower Electrical Co., Ltd., their fair values were arrived at by reference to the basis of valuation carried out by an independent valuer not connected with the Group. Determination of fair value is based on the best information available in the circumstances and includes appropriate risk adjustments for lack of marketability. Factors considered in determining the fair value of these investments include multiples of comparable companies listed on stock exchanges. (b) As at 31 December 2019, fair values of unlisted equities and debt investments amounting to US$63,351,819 (2018: US$94,426,718) were arrived at by reference to their recent transaction prices or discounted cash flows. For other unlisted investments, their fair values were arrived at on the basis of valuations (including net asset value and investment cost) carried out by an independent valuer not connected with the Group. Determination of fair value is based on the best information available in the circumstances and includes appropriate risk adjustments for lack of marketability. Factors considered in determining the fair value of these investments include multiples of comparable companies listed on stock exchanges and/or latest available information about financial performance or financial position of investees. (c) As at 31 December 2019, included in unlisted equities investments amounting to US$7,929,819 (2018: US$6,199,732) were investments in associates. The management considers that they are exempted from applying the equity method and are recognised as financial assets at FVTPL.