Annual Report 2021

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2021 82 The United Laboratories International Holdings Limited Annual Report 2021 4. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY (Continued) Key sources of estimation uncertainty (Continued) Estimated write-down of inventories to net realisable value The Group writes down inventories based on assessments of the net realisable value of existing inventories. Write-down to inventories is made where events or changes in circumstances indicate that the net realisable value of certain items are lower than the costs of those items. The identification of obsolete inventories requires the use of estimation of the net realisable value of items of inventory and estimates on the conditions and usefulness of items of inventories. Where the expectation on the net realisable value is lower than the cost for certain items, a write-down may be required. During the year ended 31 December 2021, write-down of inventories of RMB2,003,000 (2020: RMB5,263,000) has been recognised. The carrying amount of inventories is disclosed in Note 22. 5. REVENUE AND SEGMENT INFORMATION The Group is currently organised into three revenue streams, including Intermediate products, Bulk medicine and Finished products. Specifically, the Group’s reportable segments under HKFRS 8 are as follows: 1) Bulk Medicine – mainly represent sales of amoxicillin products 2) Intermediate products – mainly represent sales of 6-APA products and penicillin G potassium products 3) Finished products – mainly represent sales of insulin series products, antibiotics products, nervous system drugs and ophthalmic products