Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 105 The United Laboratories International Holdings Limited Annual Report 2023 20. INTANGIBLE ASSETS (Continued) Notes: At 31 December 2023 and 2022, cost of intangible assets comprise of: i. An amount of RMB20,237,000 (2022: RMB20,237,000), representing development cost incurred in obtaining licenses for manufacturing finished products granted by the relevant PRC authorities. The licenses granted allow the Group to apply for the relevant technical know-how to manufacture finished products for five years from the date of granting relevant licenses. The costs of these intangible assets are therefore amortised over the useful lives of five years and were fully amortised in prior years. A total amount of RMB216,812,000 (2022: RMB165,744,000), representing the capitalised development costs incurred in obtaining licenses for manufacturing finished products: (a) During the year ended 31 December 2023, the development cost of Semaglutide of RMB48,538,000 (2022: nil) and insulin degludec and liraglutide injection of RMB2,530,000 (2022: nil) has been capitalised as the management of the Group consider the recognition criteria of internally generated intangible asset has been satisfied as all regulatory approvals before production have been obtained. There has been no amortisation for the development cost as the related products have not been put into production. In accordance with HKAS 36, the Group performed its annual impairment test for intangible asset not yet available to use by comparing its carrying amount with its recoverable amount. The calculation applied discounted cash flow methodology, of which the cash flow projections are based on financial budget endorsed by management. The management of the Group determined no impairment loss is required. (b) During the year ended 31 December 2021, the capitalised development cost of insulin aspart (the “Insulin Aspart”) of RMB77,129,000 and amoxicillin and clavulanate potassium granules (the “Amoxicillin and Clavulanate”) of RMB7,590,000 has started to amortise from the date when it was put into production process. (c) During the year ended 31 December 2019, the development cost of 6-Aminopenicillanic Acid (the “6-Aminopenicillanic Acid”) of RMB2,417,000 has started to amortise from the date when it was put into production process. (d) The development cost of Clavulanate Potassium (the “Clavulanate Potassium”) of RMB9,200,000 has started to amortise from the date when it was put into production process since the year ended 31 December 2018. (e) The capitalised development cost of insulin glargine (the “Insulin Glargine”) of RMB69,408,000 has started to amortise from the date when it was put into production process since the year ended 31 December 2017. The capitalised development cost of Insulin Aspart, 6-Aminopenicillanic Acid and Insulin Glargine and Amoxicillin and Clavulanate is amortised over 10 years and the capitalised development cost of Clavulanate Potassium is amortised over 5 years which are the expected period for which they will bring future economic benefits to the Group.