Basis of preparation The abridgedfinancial statements have been prepared on the historical cost basis, asmodified by the revaluation of certain financial assets and liabilities andinvestment properties measured at fair value through profit or loss. Theabridged financial statements are prepared in sterling, which is the functionalcurrency of the entity. Judgements and key sources of estimation uncertainty Thepreparation of the financial statements requires management to make judgements,estimates and assumptions that affect the amounts reported. These estimates andjudgements are continually reviewed and are based on experience and otherfactors, including expectations of future events that are believed to bereasonable under the circumstances. Income tax The taxation expense representshe aggregate amount of current and deferred tax recognised in the reportingperiod. Tax is recognised in profit or loss, except to the extent that itrelates to items recognised in other comprehensive income or directly in equity.In this case, tax is recognised in other comprehensive income or directly inequity, respectively. Current tax is recognised on taxable profit for thecurrent and past periods. Current tax is measured at the amounts of tax expectedto pay or recover using the tax rates and laws that have been enacted orsubstantively enacted at the reporting date. Deferred tax is recognised inrespect of all timing differences at the reporting date. Unrelieved tax lossesand other deferred tax assets are recognised to the extent that it is probablethat they will be recovered against the reversal of deferred tax liabilities orother future taxable profits. Deferred tax is measured using the tax rates andlaws that have been enacted or substantively enacted by the reporting date thatare expected to apply to the reversal of the timing difference. Impairment offixed assets A review for indicators of impairment is carried out at eachreporting date, with the recoverable amount being estimated where suchindicators exist. Where the carrying value exceeds the recoverable amount, theasset is impaired accordingly. Prior impairments are also reviewed for possiblereversal at each reporting date. For the purposes of impairment testing, when itis not possible to estimate the recoverable amount of an individual asset, anestimate is made of the recoverable amount of the cash-generating unit to whichthe asset belongs. The cash-generating unit is the smallest identifiable groupof assets that includes the asset and generates cash inflows that largelyindependent of the cash inflows from other assets or groups of assets. Forimpairment testing of goodwill, the goodwill acquired in a business combinationis, from the acquisition date, allocated to each of the cash-generating unitsthat are expected to benefit from the synergies of the combination, irrespectiveof whether other assets or liabilities of the company are assigned to thoseunits. Finance leases and hire purchase contracts Assets held under financeleases and hire purchase contracts are recognised in the abridged statement offinancial position as assets and liabilities at the lower of the fair value ofthe assets and the present value of the minimum lease payments, which isdetermined at the inception of the lease term. Any initial direct costs of thelease are added to the amount recognised as an asset. Lease payments areapportioned between the finance charges and reduction of the outstanding leaseliability using the effective interest method. Finance charges are allocated toeach period so as to produce a constant rate of interest on the remainingbalance of the liability. Financial instruments Financial liabilities and equityinstruments are classified according to the substance of the contractualarrangements entered into. An equity instrument is any contract that evidences aresidual interest in the assets of the entity after deducting all of itsfinancial liabilities. Where the contractual obligations of financialinstruments (including share capital) are equivalent to a similar debtinstrument, those financial instruments are classed as financial liabilities.Financial liabilities are presented as such in the balance sheet. Finance costsand gains or losses relating to financial liabilities are included in the profitand loss account. Finance costs are calculated so as to produce a constant rateof return on the outstanding liability. Where the contractual terms of sharecapital do not have any terms meeting the definition of a financial liabilitythen this is classed as an equity instrument. Dividends and distributionsrelating to equity instruments are debited direct to equity. Definedcontribution plans Contributions to defined contribution plans are recognised asan expense in the period in which the related service is provided. Prepaidcontributions are recognised as an asset to the extent that the prepayment willlead to a reduction in future payments or a cash refund. When contributions arenot expected to be settled wholly within 12 months of the end of the reportingdate in which the employees render the related service, the liability ismeasured on a discounted present value basis. The unwinding of the discount isrecognised as a finance cost in profit or loss in the period in which itarises.