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158Notes to the Financial Statements for the Financial year ended 31st March, 2011e) InventoriesInventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of inventoriescomprises all cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is theprice at which the inventories can be realized in the normal course of business after allowing for the costs of realization.f) Plant and equipment(i) MeasurementPlant and equipment are initially recognized at cost and subsequently carried at cost less accumulated depreciation and accumulatedimpairment losses.Components of costsThe cost of an item of plant and equipment initially recognized includes its purchase price and any cost that is directly attributable to bringingthe asset to the location and condition necessary for it to be capable of operating in the manner intended by management.(ii)DepreciationDepreciation on plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimateduseful lives as follows:Computers 25%Furniture and fittings 20%Office equipment 25%Motor vehicle 20%The residual values, estimated useful lives and depreciation method of plant and equipment are reviewed, and adjusted as appropriate, at theend of each reporting period. The effects of any revision are recognized in the statement of comprehensive income when the changes arise.(iii) Subsequent expenditureSubsequent expenditure relating to plant and equipment that has already been recognized is added to the carrying amount of the asset onlywhen it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measuredreliably. All other repair and maintenance expenses are recognized in the statement of comprehensive income when incurred.(iv) DisposalOn disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognized inthe statement of comprehensive income. Any revaluation reserves relating to the asset are transferred to retained profits directly.g) Impairment of non-financial assetsPlant and equipmentPlant and equipment are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determinedon an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is thecase, the recoverable amount is determined for the cash generating unit (“CGU”) to which the asset belongs.If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reducedto its recoverable amount.The difference between the carrying amount and recoverable amount is recognized as an impairment loss in the statement of comprehensiveincome, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease. An impairmentloss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the lastimpairment loss was recognized.The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount thatwould have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognized for the asset in prior years.A reversal of impairment loss for an asset is recognized in the statement of comprehensive income, unless the asset is carried at revalued amount,in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset waspreviously recognized as an expense in the statement of comprehensive income, a reversal of that impairment is also credited to the statement ofcomprehensive income.