Annual Report 2022

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2022 98 The United Laboratories International Holdings Limited Annual Report 2022 10. DISPOSAL OF A SUBSIDIARY/CONSIDERATION RECEIVABLES (Continued) During the year ended 31 December 2021, commercial bills receivables of RMB213,905,000 has been received and an impairment loss of approximately RMB5,185,000 has been reversed. As at 31 December 2021, the last three installments of the consideration receivables of RMB343,000,000 is still outstanding. Based on the legal opinion from the PRC lawyer, who is independent and not connected to the Group, the Group can initiate a litigation against Evergrande Chengdu to recover the consideration receivables, after considering various factors, including but not limited to the recoverable amount of the underlying assets, potential transaction cost of recovering the consideration receivables, the financial position and credit risk of Evergrande Chengdu, the management of the group is of the opinion that the last three installments are not probable to recover and, accordingly, has made a full provision for them. During the year ended 31 December 2022, no repayment has been settled by Evergrande Chengdu. The Group has been exploring and considering the possible action against Evergrande Chengdu to recover the consideration receivables. The Group applied for the commencement of an action against Evergrande Chengdu on 7 March 2022 in the Guangzhou Intermediate People’s Court for recovery of the consideration receivables and relevant damages and received a notice of acceptance on 14 March 2022 (the “Action”). Due to the large number of actions against China Evergrande Group commenced in the Guangzhou Intermediate People’s Court, the Action is handled by the Chengdu Intermediate People’s Court. On 23 December 2022, the Chengdu Intermediate People’s Court officially accepted the filing and the pretrial conference was scheduled on 21 February 2023. The court case is still in trial as at the date of issuance of the consolidated financial statements. The management of the Group is of the opinion that no reversal of impairment loss in respect of the consideration receivables is recognised during the year ended 31 December 2022 as the probability of recovery of the consideration receivables is uncertain, after considering various factors, including but not limited to the recoverable amount of the underlying assets, potential transaction cost of recovering the consideration receivables as well as the financial position of Evergrande Chengdu.