Annual Report 2021

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2021 91 The United Laboratories International Holdings Limited Annual Report 2021 7. OTHER GAINS AND LOSSES, NET/OTHER EXPENSES 2021 2020 RMB’000 RMB’000 (a) Other gains and losses, net Net (gain) loss on fair value change of derivative financial instruments (Note) (8,120) 3,137 Write-down (reversal of write-down) of deposits for property, plant and equipment 3,165 (1,389) Net loss (gain) on disposal of property, plant and equipment 19,381 (43,535) Net foreign exchange (gain) loss (34,550) 27,184 Net gain on lease modification – (13) Others 868 (1) (19,256) (14,617) (b) Other expenses Research and development expenditures 465,243 339,567 Tax penalty 223 800 Land penalty 1,739 5,767 Others 27,749 7,048 494,954 353,182 Note: During the years ended 31 December 2021 and 2020, 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 (2020: one) outstanding derivative financial instrument held by the Group as at 31 December 2021.