FRENCKEN GROUP LIMITED
ANNUAL REPORT 2015
92
NOTES TO FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)
18 INVENTORIES
The Group
2015
$’000
2014
$’000
Raw materials
38,323
35,969
Work-in-progress
24,333
25,318
Finished goods
36,268
34,382
98,924
95,669
The cost of inventories recognised as an expense and included in “cost of sales” amounts to $226,472,000 (2014 :
$251,684,000).
Inventories of $38,572,000 (2014 : $35,599,000) have been pledged as security for certain bank overdrafts of the
Group (Note 26).
19 TRADE RECEIVABLES
The Group
2015
$’000
2014
$’000
Trade receivables
87,838
87,857
Allowance for impairment of doubtful receivables (Note 34(b)(ii)(a))
(427)
(650)
87,411
87,207
Trade receivables of $16,436,000 (2014 : $23,877,000) have been pledged as security for certain banking facilities of
the Group (Note 26).
The carrying values of trade receivables approximated their fair values at balance sheet date as these amounts are
recoverable within the next 12 months.
As at 31 December 2015, approximately 46% (2014 : 43%) of the trade receivables balance of the Group relates
to four major customers that are involved in a different spectrum of industries and possess a variety of end markets
to which they sell. Management has in place specific procedures to ensure that the related credit risks are closely
monitored. Due to these factors, management believes that no additional credit risk beyond the amount of allowance
for impairment made is inherent in the Group’s trade receivables.
The exposure of trade receivables to currency risk and credit risks is disclosed in Notes 34(a) and 34(b) respectively.
