Annual Report 2022

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2022 131 The United Laboratories International Holdings Limited Annual Report 2022 36. PLEDGE OF OR RESTRICTIONS ON ASSETS Pledge of assets Other than deposits and property, plant and machinery made to financing institutions disclosed in Notes 25 and 29 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: 2022 2021 RMB’000 RMB’000 Property, plant and equipment 416,896 417,602 Right-of-use assets 167,837 173,057 Banker’s acceptance bills receivables 251,378 18,353 Restrictions on assets In addition, lease liabilities of RMB7,640,000 (2021: RMB10,996,000) are recognised with related right-of- use assets of RMB6,570,000 (2021: RMB9,802,000) at 31 December 2022. 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 and other payables are disclosed in Note 24. 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 29) and lease liabilities (Note 28), net of cash and cash equivalents and equity attributable to owners of the Company, comprising issued share capital, retained profits and other reserves. The management of the Group reviews the capital structure on a regular basis. As part of this review, the management considers the cost of capital and the associated risk, and takes appropriate actions to adjust the Group’s capital structure.