Annual Report 2021

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2021 130 The United Laboratories International Holdings Limited Annual Report 2021 36. PLEDGE OF OR RESTRICTIONS ON ASSETS Pledge of assets Other than deposits and property, plant and equipment made to financing institutions disclosed in Note 28 of the consolidated financial statements, the Group had also pledged the following assets to banks as securities against banking facilities granted to the Group at the end of the reporting period: 2021 2020 RMB’000 RMB’000 Property, plant and equipment 417,602 446,089 Rights-of-use assets 173,057 178,270 Bills receivables 18,353 26,493 Pledged bank deposits 827,389 440,194 Restrictions on assets In addition, lease liabilities of RMB10,996,000 (2020: RMB1,686,000) are recognised with related right-of- use assets of RMB9,802,000 (2020: RMB1,758,000) at 31 December 2021. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor and the relevant leased assets may not be used as security for borrowing purposes. Furthermore, bills receivables issued by third parties endorsed with recourse for settlement of trade payables, other payables and payables in respect of the acquisition of property, plant and equipment, are disclosed in Notes 23 and 25. 37. CAPITAL RISK MANAGEMENT The Group manages its capital to maintain a balance between continuity of funding of cash flows from operating activities and the flexibility through the use of the finance from banks. The Group also monitors the current and expected liquidity requirements and its compliance with lending covenants regularly to ensure that it maintains sufficient working capital and adequate committed lines of funding to meet its liquidity requirement. The capital structure of the Group consists of net debt, which includes borrowings (Note 28) and lease liabilities (Note 27), net of cash and cash equivalents and equity attributable to owners of the Company, comprising issued share capital, retained profits and other reserves.