Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 129 The United Laboratories International Holdings Limited Annual Report 2019 32. CONVERTIBLE BONDS (Continued) The Company may at any time after 5 December 2019 and prior to 5 December 2021, the date of maturity, redeem the Convertible Bonds in whole, but not in part, at their principal amount, together with interest accrued but unpaid up to the day before the date fixed for redemption, provided that the closing price of the shares of the Company, translated into US dollars at the prevailing rate applicable to the relevant trading day, for 30 consecutive trading days prior to the date upon which notice of such redemption is published is at least 130% of the conversion price then in effect, translated into US dollars at the fixed exchange rate of HK$7.7563 to USD1.00. The Company may at any time redeem the outstanding Convertible Bonds in whole, but not in part, at their principal amount together with interest accrued but unpaid up to the day before the date fixed for redemption if, immediately prior to the date of notice, at least 90% of principal amount of the bonds originally issued has already been converted, redeemed or purchased and cancelled. As at 31 December 2019, the Company has not redeemed the outstanding Convertible Bonds. The Convertible Bonds contain liability component, conversion option and early redemption option derivatives. The Company’s and the holder’s early redemption option derivatives are not closely related to the host liability component as the early redemption amount is not closed to the amortised cost of the liability on each exercise date. The conversion option and the Company’s and the bond holder’s early redemption option derivatives are measured at fair value with changes in fair value recognised in profit or loss. At the date of issue, the debt component was recognised at fair value, calculated based on the present value of the redemption amount at maturity. In subsequent periods, the debt component is carried at amortised cost using the effective interest method. The effective interest rate of the debt component is 14.6% (2018: 14.6%). The derivatives components of the Convertible Bonds are measured at fair values at the date of issue and in subsequent periods with changes in fair value recognised in profit or loss. In June 2018, the Convertible Bonds with fixed principal amount of USD8,049,000 (equivalent to approximately RMB51,111,000) were converted into total 12,845,770 ordinary shares of HK$0.01 each at a conversion price of HK$4.86 per conversion share (Note 34). In December 2019, the Convertible Bonds with fixed principal amount of USD1,000,000 (equivalent to approximately RMB7,756,000) were converted into total 1,643,283 ordinary shares of HK$0.01 each at a conversion price of HK$4.72 per conversion share (Note 34). As at 31 December 2019, the Convertible Bonds in an aggregate principal amount of USD120,951,000 (equivalent to approximately RMB846,580,000) remained outstanding with a maturity date of 5 December 2021, and is classified as a non-current liability.