Page 137 - HRC_Annual_Report_2023

Financial Reports &
Governance HENGYUAN REFINING COMPANY BERHAD l ANNUAL REPORT 2023 135
Other Information

NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023

16 INVENTORIES
2023 2022
RM’000 RM’000
Crude oil 688,602 705,634

Petroleum products 773,757 871,343
Inventories written down (105,226) (124,924)
668,531 746,419

Materials 36,183 51,941
Provision for obsolete inventories (1,955) (2,126)

34,228 49,815
1,391,361 1,501,868

Included within crude oil and petroleum products is stock in transit as at 31 December 2023 of RM33,012,000 (2022: nil).
Inventories as at the reporting date are pledged in favour of a vendor to secure credit lines for crude oil and product purchases.

17 TRADE RECEIVABLES

2023 2022
RM’000 RM’000
Trade receivables 765,499 719,416
Less: Impairment loss allowance (169) -

765,330 719,416

The credit terms range between 15 to 30 days (2022: 15 to 30 days).
(i) Transferred receivables
The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement. Under this
arrangement, the Company has the right to transfer the relevant receivables to the financial institutions in exchange for
cash upon submission of such request to the financial institutions when there is a need. Trade receivables are derecognised
when the trade receivables are transferred to the financial institution through the factoring arrangement. In the event of
default by the trade receivables, the financial institution has no recourse to the Company. The Company considers that
the held to collect business model remains appropriate for these receivables and hence continues to measure them at
amortised cost.