The company and its subsidiaries are party to cross guarantees securing the overdraft and certain bank loans. At 31st December 2009 the maximum liability that could arise for the company from the cross guarantees amounted to £0.4m (2008: £2.3m). Up to the point when it was refinanced during 2009, the company guaranteed its share of the principal and interest payable under a loan to Primister Limited. The principal guaranteed under this loan was £nil at 31st December 2009 (2008: £2.8m) and the interest payable guaranteed was £nil (2008: £0.3m pa).

Where the company enters into financial guarantee contracts and guarantees the indebtedness of other companies within the group, the company considers these to be insurance arrangements, and accounts for them as such. In this respect, the company treats the guarantee contract as a contingent liability until such time that it becomes probable that the company will be required to make a payment under the guarantee.