94
HG METAL MANUFACTURING LIMITED
ANNUAL REPORT 2014
NOTES TO THE
FINANCIAL STATEMENTS
for the financial year ended 31 December 2014
17.
INVENTORIES
Group
Company
2014
2013
2014
2013
$’000
$’000
$’000
$’000
Trading inventories (at cost or net
realisable value)
26,343
90,760
25,645
79,015
Finished goods (at cost)
–
99
–
–
Work-in-progress (at cost)
263
275
–
–
Raw materials (at cost or net
realisable value)
1,452
5,571
–
–
28,058
96,705
25,645
79,015
Group
2014
2013
$’000
$’000
Inventories recognised as expense in cost of sales (Note 7)
165,048
241,710
Write-down of inventories to net realisable value recognised
in other operating expenses
9,783
39
Write off of inventories
638
–
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.
