Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 136 The United Laboratories International Holdings Limited Annual Report 2023 39. FINANCIAL INSTRUMENTS (Continued) Financial risk management objectives and policies (Continued) Credit risk and impairment assessment (Continued) Notes: (1) For the purposes of internal credit risk management, the Group uses repayment history or other relevant information to assess whether credit risk has increased significantly since initial recognition. At 31 December 2023, the balances of other receivables and refundable deposits are not past due and based on the historical default rates of these balances are considered as low risk. (2) For trade receivables, the Group has applied the simplified approach in HKFRS 9 to measure the loss allowance at lifetime ECL. The Group uses provision matrix to calculate ECL for trade receivables. The provision matrix is based on the Group’s historical default rates taking into consideration forward-looking information that is reasonable and supportable available without undue costs or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered. The following ECL rates are about the exposure to credit risk for trade receivables which are assessed based on provision matrix taking into account the weighted average rate of various categories’ debtors at 31 December 2023 and 2022 within lifetime ECL (not credit-impaired). 2023 2022 Average Gross carrying Allowance Average Gross carrying Allowance loss rate amount amount loss rate amount amount RMB’000 RMB’000 RMB’000 RMB’000 Current (not past due) 0.34% 1,599,211 11,563 0.17% 1,662,589 6,143 1-30 days past due 0.02% 327,335 143 0.02% 198,625 75 31-60 days past due 0.10% 229,856 504 0.19% 136,756 340 61-90 days past due 0.03% 191,076 101 0.02% 65,792 25 More than 90 days past due 0.23% 31,160 148 0.08% 46,989 256 2,378,638 12,459 2,110,751 6,839