Adcock Ingram Integrated Report 2018

Notes to the Group annual financial statements continued 89 ADCOCK INGRAM  Integrated Report 2018 15 INVENTORIES 2018 2017 R‘000 R‘000 Raw materials 422 294 316 194 Work-in-progress 31 556 22 891 Finished goods 1 112 099 817 864 Inventory value, net of provisions 1 565 949 1 156 949 Inventories written down and recognised as an expense in profit or loss: Cost of sales 94 854 66 215 Inventories are written off if aged, damaged, stolen or the likelihood of being sold is remote. Inventories are written down to the lower of cost and net realisable value. 16 TRADE AND OTHER RECEIVABLES Trade receivables 1 552 765 1 495 169 Less: Provision for credit notes (38 316) (40 047) Provision for impairment (40 143) (28 370) 1 474 306 1 426 752 Derivative asset at fair value (1) 21 838 8 957 Other receivables 61 970 59 280 Bank interest receivable 907 – Sundry receivables 61 063 59 280 The maximum exposure to credit risk in relation to trade and other receivables 1 558 114 1 494 989 Pre-payments 75 405 55 292 VAT recoverable (2) 7 776 17 521 1 641 295 1 567 802 (1) It is expected that the derivative asset will be realised within the next 90 days. (2) VAT recoverable will be received within one month. 62% (2017: 59%) of pre-payments will be recycled to other assets in the statement of financial position and the balance to profit or loss over the next 12 months.