Notes to the company financial statements
Year ended 31 July 2009

14. Contingent liabilities

Provision is made for the Directors’ best estimate of known legal claims and legal actions in progress. The Company takes legal advice as to the likelihood of success of claims and actions and no provision is made where the Directors consider, based on that advice, that the action is unlikely to succeed or a sufficiently reliable estimate of the potential obligation cannot be made.

At 31 July 2009, the Company has a quantifiable contingent liability for value added tax of certain subsidiary undertakings of £11 million (2008: £16 million) which arose in the ordinary course of business and has not been provided in these accounts since no actual liability is expected to arise.

In addition, the Company has given its principal UK bank authority to transfer at any time any sum outstanding to its credit against or towards satisfaction of the liability to the bank of certain subsidiary undertakings.

The Company has given indemnities and warranties to the purchasers of businesses from the Company and certain Group companies in respect of which no material liabilities are expected to arise.