Summary of Significant Accounting Policies

Associated companies are those in which the Group has a long-term substantial equity interest and in whose commercial and financial policy decisions the Group actively participates. The Group’s share of profits less losses of associated companies, as shown in their audited accounts for the year ended 31 December (except for certain associated companies), is included in the Group’s results.

The results of certain associated companies which do not prepare audited accounts at 31 December are based on their latest audited accounts and unaudited management accounts for the ensuing months up to 31 December.

Investments in associated companies are stated in the Company’s and Group’s accounts at the attributable share of their combined net asset value as shown in their accounts. Any revaluation surplus or deficit arising each year is taken direct to capital reserves. Revaluation deficits are taken to the profit and loss account in the absence of or to the extent that they exceed any surpluses held in reserves relating to previous revaluations.

e.   Other Investments

Investments held on a long-term basis are stated at average cost. Provision is made for any diminution in value which is considered to be permanent.

f.   Fixed Assets

Fixed assets are stated at cost except for those which have been revalued. Surpluses arising on revaluation are credited direct to capital reserves. Revaluation deficits are taken to the profit and loss account in the absence of or to the extent that they exceed any surpluses held in reserves relating to previous revaluations.

The carrying amounts in respect of both revalued assets and those measured at cost are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable amounts. If carrying values exceed the recoverable amounts, the assets are written down accordingly.

All fixed assets, except for freehold and long leasehold (i.e. with unexpired tenures of over 20 years) land, are depreciated evenly over their expected useful lives and residual values have also been taken into account where appropriate. The estimated useful lives of the Group’s fixed assets have been taken as follows:

Buildings		30 to 50 years
Short leasehold land and buildings		Over period of lease (ranging from 2 to 20 years)
Machinery and equipment		3 to 7 years
Motor vehicles		4 to 5 years

Profits or losses on disposal of all fixed assets are included in the profit and loss account. Any surpluses held in capital reserves in respect of previous revaluations of fixed assets disposed of during the year are regarded as having become realised and are transferred to the revenue reserves.