TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
93
NOTES TO THE FINANCIAL STATEMENTS
14. Inventories
Group
2014
2013
RM’000
RM’000
Raw materials
28,297
34,584
Unassembled vehicle packs
885,484 1,002,916
Work-in-progress
7,398
37,195
Manufactured inventories and trading inventories
3,846
12,682
Used vehicles
43,026
23,985
New vehicles
412,843
487,877
Spare parts and others
132,747
126,448
1,513,641 1,725,687
Recognised in profit or loss:
Inventories recognised as cost of sales
3,492,566 3,603,654
Write-down to net realisable value
12,580
176
Reversal of write-down
(184)
(62)
The write-down and reversal are included in cost of sales.
15. Derivative financial assets
Nominal
value
Assets Liabilities
Nominal
value
Assets Liabilities
2014
2014
2014
2013
2013
2013
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Group
Derivatives held for
trading at fair value
through profit or
loss - forward
exchange contracts
-
-
-
3,341
36
-
Forward foreign exchange contracts are entered into with locally incorporated licensed banks to hedge certain portion
of the Group’s purchases from exchange rate movements. As the exchange rates are predetermined under such
contracts, in the event of exchange rate movement, exposure to opportunity gain/(loss) is expected. Apart from a small
fee payable to the banks there are no cash requirements for the forward contracts.
It is the Group policy not to enter into hedging contracts, which in the aggregate relate to volumes that exceed its
expected commercial requirements for imports.
