Annual Report 2022

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2022 149 The United Laboratories International Holdings Limited Annual Report 2022 39. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS (Continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (Continued) Fair value at 31 December Fair value hierarchy Valuation technique(s) and key input(s) Significant unobservable inputs Relationship of unobservable inputs to fair value 2022 2021 RMB’000 RMB’000 Financial assets Financial asset at FVTPL – unquoted equity investment 500 500 Level 3 Method of comparables is used to evaluate the market value of the unquoted equity investments by using price to book ratio of listed entities in similar industries. – discount for lack of marketability of 32% (2021: 32%), determined by reference to recent market research. – A significant increase in the discount for lack of marketability would result in a significant decrease in the fair value. Financial liabilities Cross currency interest rate swap classified as financial instruments accounted for as FVTPL in the consolidated statement of financial position – Liabilities (5,812) Level 2 Discounted cash flow Measured at the present value of future cash flows estimated and discounted based on the applicable yield curves derived from quoted interest rates and foreign exchange rates between US$ and EUR, which is observable at the end of the reporting period. N/A N/A Foreign currency forward contracts classified as financial instruments accounted for as FVTPL in the condensed consolidated statement of financial position Liabilities (10,087) Assets 1,841 – Level 2 Discounted cash flow Future cash flows are estimated based on forward exchange rates (from observable forward exchange rates at the end of the reporting period) and contracted forward rates, discounted at a rate that reflects the credit risk of various counterparties. N/A N/A There is no transfer between the different levels of the fair value hierarchy for both years.