Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 124 The United Laboratories International Holdings Limited Annual Report 2023 34. GOVERNMENT GRANTS Government grants comprise: (i) Incentive subsidies of RMB68,232,000 (2022: RMB57,131,000) have been received in the current year to encourage the operations of certain PRC subsidiaries for the development of environmental friendly manufacturing, pollution prevention, development on export sales and advanced technology. Full amounts are recognised as income in profit or loss as there were no specific conditions attached to the grants and, therefore, the Group recognised the grants to profit or loss upon receipt. The subsidies were granted on a discretionary basis to the Group during the current year. (ii) During the year ended 31 December 2023, the Group had recognised government grants of RMB529,000 (2022: RMB1,288,000) in respect of Covid-19-related subsidies and entire amount relates to Employment Support Scheme provided by the Hong Kong government and recognised RMB1,455,000 (2022: RMB nil) from Hong Kong Productivity Council. (iii) Certain subsidies relate to the development of pharmaceutical products or improvement of production efficiency amounting of RMB41,348,000 (2022: RMB52,446,000) at 31 December 2023 are included as deferred income. The amounts are recognised as income when the Group has fulfilled the relevant conditions attaching to the grants, including but not limited to obtaining the medical licenses of the pharmaceutical products or the starting of commercial sales of the pharmaceutical products. During the current year, the Group has recognised the government grant of approximately RMB11,098,000 (2022: RMB5,541,000) as income in profit or loss. (iv) Government subsidies granted for the acquisition of property, plant and equipment by the Group brought forward from prior year had been treated as deferred income and was transferred to income over the useful lives of the relevant assets. At 31 December 2023, an amount of RMB32,237,000 (2022: RMB43,413,000) were included in non-current liabilities. During the year ended 31 December 2023, RMB11,176,000 (2022: RMB11,906,000) was released to the profit or loss. The aggregate subsidy income recognised to the profit or loss during the year ended 31 December 2023 amounted to RMB92,490,000 (2022: RMB75,866,000) (Note 6).