NOTES TO THE CONSOLIDATED FINANCIAL  STATEMENTS  (RMB AND US$ AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)  The Group factored a portion of the trade receivables during the years ended December 31, 2012 and 2013.  Factoring is done with reputable bank in China. As of December 31, 2013, Rmb 500.0 million (2012: Rmb Nil)  was included in the “interest-bearing loans and borrowings” representing the Group’s obligation to the banks  for trade receivables factored with recourse. 15.  Other financial liabilities (cont’d) Factoring arrangement (b)  Interest-bearing loans and borrowings (cont’d) 16.  Deferred grants 17. Inventories China Yuchai International Limited | Annual Report 2013 96 Inventories recognized as an expense in “Cost of sales” are Rmb 10,975,089, Rmb 9,477,769 and Rmb 11,283,308  (US$1,843,648) for the years ended December 31, 2011, 2012 and 2013 respectively. Government grants have been received for the purchase of certain items of property, plant and equipment. 31.12.2012 31.12.2013 31.12.2013 Rmb’000 Rmb’000 US$’000 At January 1 333,291 353,394 57,743 Received during the year 68,637 43,694 7,139 Released to consolidated statement of profit or loss (28,534) (50,978) (8,329) Reduced due to disposal of a subsidiary (20,000) —  —  At December 31 353,394 346,110 56,553 Current (Note 26) 27,332 35,145 5,743 Non-current 326,062 310,965 50,810 353,394 346,110 56,553 Inventories are comprised of: 31.12.2012 31.12.2013 31.12.2013 Rmb’000 Rmb’000 US$’000 Raw materials 1,152,624 1,259,175 205,744 Work in progress 18,907 2,666 436 Finished goods 839,224 1,072,211 175,195 Total inventories at the lower of cost and net realizable value 2,010,755 2,334,052 381,375