Annual Report 2021

China Merchants China Direct Investments Limited Annual Report 2021 116 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2021 5. FINANCIAL INSTRUMENTS (CONTINUED) Fair value measurement of financial instruments (continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued) Reconciliation of Level 3 fair value measurements of financial assets: (continued) Of the total gains for the year included in profit or loss, loss of US$1,998,519 (2020: gain of US$75,272,243) relates to financial assets at FVTPL categorised in Level 3 held at year end. Fair value gains or losses on financial assets at FVTPL are included in “Net gain on financial assets at fair value through profit or loss”. Transfers between levels of the fair value measurement hierarchy are recognised as of the date of the event or change in circumstances that caused the transfer. In 2021, the listed shares of Cambricon Technologies Corporation Limited (“ Cambricon ”) held by the Group, which were classified as financial assets at FVTPL and subject to a lock-up period, were transferred from Level 3 to Level 1 during the year since the lock-up period expired on 19 July 2021. In 2020, part of listed shares of Oriental Pearl Media Co., Ltd. (“ Oriental Pearl ”) held by the Group, which were classified as financial assets at FVTPL and subject to trading moratorium before, became freely tradable and thus were transferred from Level 3 to Level 1 in 2020. In 2020, the investment deposits related to Anhui iFlyHealth Co., Ltd. (“ iFlyHealth ”, formerly Anhui iFlytek Healthcare Information Technology Co., Ltd.) and China UnionPay Co., Ltd. (“ China UnionPay ”), which were classified as investment deposits at FVTPL for the year ended 31 December 2019, were transferred from investment deposits to unlisted equities since the transfers of legal title of shareholding were duly completed during 2020. The valuation technique for the fair value of iFlyHealth and China UnionPay had changed due to the lack of recent transaction price of the financial assets for reference. The fair value of these investments was determined based on significant unobservable inputs and involved significant judgment made by the management. Thus, the instruments were transferred from Level 2 to Level 3 category in 2020.