Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 130 The United Laboratories International Holdings Limited Annual Report 2019 32. CONVERTIBLE BONDS (Continued) The fair value of the Convertible Bonds with embedded derivatives were determined by the directors with reference to a valuation report carried out by an independent valuer. The movement of the Convertible Bonds for the year ended 31 December 2019 and 2018 are set out as below: Debt Derivative Total component components amount RMB’000 RMB’000 RMB’000 At 1 January 2018 597,504 440,719 1,038,223 Interest charged 88,648 – 88,648 Interest paid (35,121) – (35,121) Conversion into ordinary shares (37,526) (43,651) (81,177) Exchange loss 32,135 14,600 46,735 Gain arising on changes of fair value – (226,414) (226,414) At 31 December 2018 645,640 185,254 830,894 Interest charged 97,356 – 97,356 Interest paid (37,924) – (37,924) Conversion into ordinary shares (5,878) (2,459) (8,337) Exchange loss 11,768 4,559 16,327 Loss arising on changes of fair value – 110,117 110,117 At 31 December 2019 710,962 297,471 1,008,433 Binomial model is used for valuation of the derivative components of the Convertible Bonds. Details of the inputs and assumptions of the model are as follows: 31 December 2019 31 December 2018 Share price of the Company HK$5.68 HK$4.16 Exercise price HK$4.72 HK$4.86 Remaining life 1.93 years 2.93 years Risk-free rate 1.737% 1.758% Expected volatility 40.811% 42.416% Expected dividend yield 1.202% 1.474%