Annual Report 2023

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2023 92 The United Laboratories International Holdings Limited Annual Report 2023 10. CONSIDERATION RECEIVABLES On 7 August 2019, The United Laboratories Limited, a wholly-owned subsidiary of the Company, and 恒大地 產集團成都有限公司 (“Evergrande Chengdu”), an independent third party, entered into an investment and cooperation agreement (the “Agreement”). Pursuant to the terms of the Agreement, the Group disposed its wholly owned subsidiary to Evergrande Chengdu at a consideration of RMB980,000,000 which will be settled in seven installments within 27 months from the date of disposal. Consideration of RMB637,000,000 has been received from Evergrande up till 31 December 2021 and remaining consideration of RMB343,000,000 is still outstanding as at 31 December 2021. The entire balance of RMB343,000,000 was fully impaired by the management of the Group during the year ended 31 December 2021. During the years ended 31 December 2023 and 2022, no repayment has been settled by Evergrande Chengdu. The Group has been exploring and considering the possible action against Evergrande Chengdu to recover the consideration receivables, including application of an action against Evergrande Chengdu in the Guangzhou Intermediate People’s Court (the “Court”) for recovery of the consideration receivables and relevant damages which is still under process by the Court during the years ended 31 December 2023 and 2022. The management of the Group is of the opinion that no reversal of impairment loss in respect of the consideration receivables is recognised during the years ended 31 December 2023 and 2022 as the probability of recovery of the consideration receivables is uncertain, after considering various factors, including but not limited to the recoverable amount of the underlying assets, potential transaction cost of recovering the consideration receivables, the financial position of Evergrande Chengdu as well as the controlling shareholder of Evergrande Chengdu was ordered to be wound up by the High Court announced on 29 January 2024.