Debtors Short term debtors are measured at the transaction price, less any impairment losses for bad and doubtful debts. Loans and other financial assets are initially recognised at the transaction price including any transaction costs and subsequently measured at the amortised cost determined using the effective interest method, less any impairment losses or bad and doubtful debts. Creditors Short term creditors are measured at the transaction price. Loans and other financial liabilities are initially recognised at the transaction price net of any transaction costs and subsequently measured at amortised cost determined using the effective interest method. Taxation A current liability is recognised for the tax payable on the taxable profit of the current and past periods. A current tax asset is recognised in respect of a tax loss that can be carried back to recover tax paid in a previous period. Deferred tax is recognised in respect of all timing differences between the recognition of income and expenses in the financial statements and their inclusion in tax assessments. Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or subsequently enacted by the reporting date and that are expected to apply to the reversal of timing differences, except for revalued land and investment property where the tax rate that applies to the sale of the asset is used. Current and deferred tax assets and liabilities are not discounted. Research and development Expenditure on research and development is written off in the year in which it is incurred. Pensions Contributions to defined contribution plans pension scheme are expensed in the period to which they relate. Provisions Provisions are recognised when there is an obligation at the reporting date as a result of a past event. It is probable that economic benefit will be transferred to settle the obligation and the amount of the obligation can be estimated reliably. Leased assets A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases. The rights of use and obligations under finance leases are initially recognised as assets and liabilities at amounts equal to the fair value of the leased assets or, if lower, the present value of the minimum lease payments. Minimum lease payments are apportioned between the finance charge and the reduction in the outstanding liability using the effective interest rate method. The finance charge is allocated to each period during the lease so as to produce a constant periodic rate of interest on the remaining balance of the liability. If there is no reasonable certainty that ownership will be obtained at the end of the lease term, the asset is depreciated over the lower of the lease term and its useful life. Operating lease payments are recognised as an expense on a straight-line basis over the lease term. Patents and trademarks The patent applications and renewal costs are written off to the profit and loss account in the year in which they are incurred. Foreign currency translation Transactions in foreign currencies are initially recognised at the rate of exchange ruling at the date of the transaction. At the end of each reporting period foreign currency monetary items are translated at the closing rate of exchange. Non-monetary items that are measured at historical cost are translated at the rate ruling at the date of the transaction. All differences are charged to profit or loss.