Annual Report 2020

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2020 101 The United Laboratories International Holdings Limited Annual Report 2020 18. RIGHT-OF-USE ASSETS Leasehold Staff Motor Plant and lands Quarter Vehicles machinery Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 At 1 January 2019 228,592 637 2,673 275,701 507,603 Additions 9,056 – – – 9,056 Transfer to property, plant and equipment – – – (209,324) (209,324) Depreciation (6,720) (264) (1,337) (66,377) (74,698) At 31 December 2019 230,928 373 1,336 – 232,637 Additions – – 1,800 – 1,800 Depreciation (6,778) (264) (1,264) – (8,306) Lease modification – – (223) – (223) At 31 December 2020 224,150 109 1,649 – 225,908 Year ended Year ended 31/12/2020 31/12/2019 RMB’000 RMB’000 Total cash outflow for leases 1,721 9,056 For both years, the Group leases staff quarter and vehicles for its operations. Lease contracts are entered into for fixed term of 1 year to 3 years. In addition, the Group owns several industrial buildings where its manufacturing facilities are primarily located and office buildings. The Group is the registered owner of these property interests, including the underlying leasehold lands. Lump sum payments were made upfront to acquire these property interests. The leasehold land components of these owned properties are presented separately only if the payments made can be allocated reliably. Sale and leaseback transactions – seller-lessee To better manage the Group’s capital structure and financing needs, the Group sometimes enters into sale and leaseback arrangements in relation to machinery leases. These legal transfer does not satisfy the requirements of HKFRS 15 to be accounted for as a sale of the machinery. During the year ended 31 December 2020, the Group has not raise any borrowings in respect of such sale and leaseback arrangements while the Group has raised RMB400,000,000 borrowings in respect of such arrangements for the year ended 31 December 2019.