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Notes to the Financial Statementfor the financial year ended 31st March, 2009m) Impairment of assets(i) Non-financial assetsThe carrying amounts of the company’s assets are reviewed at each balance sheet date to determine whether there is anyindication of impairment. If any such indication exists, the asset’s recoverable amounts are estimated in order to determine theextent of the impairment loss (if any). An impairment loss is recognised whenever the carrying amount of an asset exceeds itsrecoverable amount. The impairment loss is charged to the income statement unless it reverses a previous revaluation, creditedto equity, in which case it is charged to equity.Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of itsrecoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have beendetermined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognisedimmediately in the income statement, unless the relevant asset is carried at a revalued amount, in which case the reversal of theimpairment loss is treated as a revaluation increase.(ii) Financial assetsThe carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as thedifference between the carrying amount and the present value of estimated future cash flows, discounted at the original effectiveinterest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries ofamounts previously written off are recognised against the same line item in the income statement.The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount ofimpairment loss decreases and the related decrease can be objectively measured.n) Operating leaseLease of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified asoperating leases. Rentals payable under operating leases are charged to income statement on a straight line basis over the term ofthe relevant lease.o) ProvisionsProvisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event and it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimatecan be made of the amount of the obligation.The company recognises the estimated liability for warranty to repair or replace products still under warranty at the balance sheet date.This provision is calculated based on historical experience of the level of repairs and replacements and as a percentage of sales.p) Share capitalShare capital issued by the company are classified as equity and recorded at the proceeds received, net of direct issue costs.q) Employee benefitsDefined contribution planAs required by law, the company makes contributions to the state pension scheme, the Central Provident Fund (CPF). CPF contributionsare recognised as an expense in the income statement in the same period as the employment that gives rise to the contributions.Employee leave entitlementEmployee entitlements to annual leave are recognised when they accrue to employees. An accrual is made of the estimated liabilityfor annual leave as a result of services rendered by employees up to the balance sheet date.3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTSThe presentation of financial statements in conforming with FRS requires the use of certain critical accounting estimates and judgementsin applying the accounting policies. These estimates and judgements are continually evaluated and are based on historical experienceand other factors, including expectations of future events that are believed to be reasonable under the circumstances. Actual resultsmay differ from these estimates. The following are the significant accounting estimates and judgements for preparation of financialstatements:(a) Plant and equipmentManagement determines the estimated useful lives and residual values for the company’s plant and equipment. Management willrevise the depreciation charge where useful lives and residual values are different to previously estimated, or it will write off or writedown technically obsolete or non-strategy assets that have been abandoned or sold.(b) Income taxesThe company has exposure to income taxes in country where it operates. Significant judgement is involved in determining the company’sprovision for income taxes. The company recognises liabilities for expected tax issues based on estimates of whether additional taxeswill be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differenceswill impact the income tax and deferred tax provision in the financial year in which such determination is made. At 31st March, 2009,the carrying amounts of the company’s current income tax payable are disclosed in the balance sheet.