Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 142 The United Laboratories International Holdings Limited Annual Report 2019 41. FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) Credit risk and impairment assessment (Continued) Other than concentration of credit risk on liquid funds which are deposited with several banks with high credit ratings, the Group does not have any other significant concentration of credit risk. Trade receivables consist of a large number of customers. To manage the risk arising from other receivables and other pledged deposits, the Group only transacts with reputable parties that have no default history and have a strong capacity to meet its contractual cash flow obligations in the near term. The credit risk on other pledged deposits are limited because the counterparties are financial institutions with high external credit ratings of grade A or above. The management has concluded that the expected credit losses for other pledged deposits are not significant. In addition, the management assessed the expected credit losses of other receivables, including consideration receivables, based on historical default loss and forward looking information. The gross carrying amounts of other receivables that are assessed individually and based on provision matrix are RMB773,693,000 and RMB50,179,000 as at 31 December 2019 respectively (2018: nil and RMB59,201,000). During the year ended 31 December 2019, an impairment loss of RMB13,383,000 and RMB3,034,000 has been recognised (2018: nil and RMB6,411,000) in connection with other receivables that are assessed individually and collectively, respectively. Of the total impairment loss, RMB13,383,000 (2018: nil) was recognised in respect of the gross consideration receivables of RMB773,693,000 (2018: nil).