75
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
for the financial year ended 31 December 2014
3.
SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES (CONT’D)
Key sources of estimation uncertainty (cont’d)
(b)
Inventories and related allowance (cont’d)
During the year, the Group changed its business strategy from a general stockist carrying
a wide range of steel products to a steel solution provider focusing on meeting customers’
steel requirements. Consequently, the Group wrote down inventories by $9,783,000 arising
from the business rationalisation exercise, attempt to convert slow moving inventories to cash
and mitigate the impact of the decline in steel prices.
The carrying amount of inventories for the Group at the balance sheet date is disclosed in
Note 17 to the financial statements.
4.
REVENUE
Revenue of the Group and of the Company represents the invoiced value of goods sold less goods
returned and discounts allowed, net of goods and services tax. Revenue of the Group is in respect
of external transactions only.
Group
2014
2013
$’000
$’000
Sale of goods
159,657
242,093
Provision of services
28,193
23,953
187,850
266,046
