Annual Report 2020

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2020 87 The United Laboratories International Holdings Limited Annual Report 2020 7. OTHER GAINS AND LOSSES/OTHER EXPENSES 2020 2019 RMB’000 RMB’000 (a) Other gains and losses, net Net loss on derivative financial instruments (Note) 3,137 1,640 Reversal of write-down of deposits for property, plant and equipment (1,389) (7,237) Net (gain) loss on disposal of property, plant and equipment (43,535) 14,411 Net foreign exchange loss (gain) 27,184 (7,079) Net gain on lease modification (13) – Others (1) 38 (14,617) 1,773 (b) Other expenses Research and development expenditures 339,567 367,968 Temporary production suspension costs – 6,478 Tax penalty 800 4,312 Land penalty 5,767 – Others 7,048 8,071 353,182 386,829 Note: During the years ended 31 December 2020 and 2019, the Group had entered into several foreign currency forward contracts with banks and financial institutions to reduce its exposure to foreign currency risks. These derivatives were not accounted for under hedge accounting. There was one (2019: nil) outstanding derivative financial instrument held by the Group at 31 December 2020.