REGISTERED NUMBER: 00981453 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

BOWMILL ENGINEERING LTD

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Consolidated Statement of Income and Retained Earnings

9

Consolidated Balance Sheet

10

Company Balance Sheet

11

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

Notes to the Consolidated Financial Statements

16

DIRECTORS:

D A Boucher

M Leyshon

M Donnan

SECRETARY:

D A Boucher

REGISTERED OFFICE:

18-30 Morris Road

Nuffield

Poole

Dorset

BH17 0GG

REGISTERED NUMBER:

00981453 (England and Wales)

AUDITORS:

Carter & Coley Limited

Chartered Accountants and Statutory Auditor

3 Durrant Road

Bournemouth

Dorset

BH2 6NE

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

Scarcity of key materials continued to be a theme in 2024, although easing somewhat towards the end of the year. The impact of further input cost increases (energy, materials and labour) was only partly ameliorated by favourable spares pricing mid way through the year. For the engineering business, 2024 represented the final year of multi-year fixed price contracts with three major customers, placing pressure on product margins which will ease considerably when revised pricing takes effect in 2025. The metal treatments business performed extremely well in 2024, being largely responsible for the overall improvement in group operating profits compared to 2023.

Group turnover for the year was £18,524,377 (2023: £15,320,541), an increase of 20.9%. Gross profit was £4,538,648 (2023: £3,932,166), an increase of 15.4%. Profit before tax was £1,032,749 (2023: £647,638), an increase of 59.5%. Profit after tax was £825,592 (2023: £552,438), an increase of 49.4%.

DEVELOPMENT AND PERFORMANCE

The directors anticipate significant growth in the coming year, particularly as major contracts come up for renewal. The company is positioned well to benefit from buoyancy in the aerospace markets it serves.

PRINCIPAL RISKS AND UNCERTAINTIES

The company's and the group's customers predominantly operate within the aerospace industry, in a global market. In addition to the pressures of a competitive market, the group is subject to market forces that are outside its control as it is affected by factors relating to the aerospace industry worldwide. Such factors include changes in government regulations and policies; political changes that could lead to changes in the business environment in which the group operates; economic downturns and public confidence in and attitudes towards flying in the light of issues such as terrorism and global warming.

The group addresses these risks and uncertainties by actively seeking to expand its customer base and platforms for its products. It maintains its existing customer base by continually striving to provide a fully integrated service based on a commitment to quality and on-time delivery. In this way, it aims to minimise the effect of any industry downturn.

ON BEHALF OF THE BOARD:

D A Boucher - Director

17 September 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

PRINCIPAL ACTIVITY

The company's principal activities continued to be those of precision engineering and provision of metal treatment processes to the aerospace industry. Its highly engineered products include landing gear kits and assemblies, hydraulic actuation equipment, and engine and oxygen components. The company's subsidiary, Bowmill Metal Treatments Ltd, specialises in a diverse range of metal treatments including non-destructive testing, anodising, cadmium plating and spray surface treatments.

DIVIDENDS

An interim dividend of £14.43763 per share was paid on 30 September 2024. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2024 will be £ 433,129 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

D A Boucher

M Leyshon

Other changes in directors holding office are as follows:

M Donnan was appointed as a director after 31 December 2024 but prior to the date of this report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Carter & Coley Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D A Boucher - Director

17 September 2025

Opinion

We have audited the financial statements of Bowmill Engineering Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Income and Retained Earnings, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2024 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our audit testing included testing complete populations of certain transactions and balances, and using data auditing techniques.

Our audit procedures comprise investigating a limited number of items for testing, rather than testing complete populations.

We based our audit samples following a comprehensive audit plan after reviewing the accounts and discussing them with the directors. The level of testing will then be based on our observations of controls and responses with the work targeting particular items for testing based on their size or risk characteristics.

Our testing also included reviewing management accounts.

We considered whether there were any matters associated with Health and Safety reports that may impact on the going concern assertion.

We tested compliance with reporting for PAYE, VAT, Corporation tax and its other statutory obligations.

In other cases, we used audit sampling to enable us to draw a conclusion about the population from which the sample is selected.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Clark BSc FCA (Senior Statutory Auditor)

for and on behalf of Carter & Coley Limited

Chartered Accountants and Statutory Auditor

3 Durrant Road

Bournemouth

Dorset

BH2 6NE

17 September 2025

TURNOVER

3

18,524,377

15,320,541

Cost of sales

13,985,729

11,388,375

GROSS PROFIT

4,538,648

3,932,166

Administrative expenses

3,078,405

2,892,858

1,460,243

1,039,308

Other operating income

13,665

13,594

OPERATING PROFIT

5

1,473,908

1,052,902

Interest payable and similar expenses

6

441,159

405,264

PROFIT BEFORE TAXATION

1,032,749

647,638

Tax on profit

7

207,157

95,200

PROFIT FOR THE FINANCIAL YEAR

825,592

552,438

Retained earnings at beginning of year

4,774,855

4,592,917

Dividends

9

(433,129

)

(370,500

)

RETAINED EARNINGS FOR THE GROUP AT END OF YEAR

5,167,318

4,774,855

Profit attributable to:

Owners of the parent

825,592

552,438

FIXED ASSETS

Tangible assets

10

4,608,868

4,640,142

Investments

11

3,000

3,000

4,611,868

4,643,142

CURRENT ASSETS

Stocks

12

5,775,954

6,118,795

Debtors

13

3,789,478

2,888,753

Cash at bank and in hand

65,029

431,994

9,630,461

9,439,542

CREDITORS

Amounts falling due within one year

14

6,942,879

6,894,544

NET CURRENT ASSETS

2,687,582

2,544,998

TOTAL ASSETS LESS CURRENT LIABILITIES

7,299,450

7,188,140

CREDITORS

Amounts falling due after more than one year

15

(1,246,482

)

(1,581,285

)

PROVISIONS FOR LIABILITIES

19

(855,650

)

(802,000

)

NET ASSETS

5,197,318

4,804,855

CAPITAL AND RESERVES

Called up share capital

20

30,000

30,000

Retained earnings

21

5,167,318

4,774,855

SHAREHOLDERS' FUNDS

5,197,318

4,804,855

The financial statements were approved by the Board of Directors and authorised for issue on 17 September 2025 and were signed on its behalf by:

D A Boucher - Director

FIXED ASSETS

Tangible assets

10

4,069,171

4,075,532

Investments

11

3,004

3,004

4,072,175

4,078,536

CURRENT ASSETS

Stocks

12

5,670,165

6,043,047

Debtors

13

2,847,627

2,314,289

Cash at bank and in hand

61,456

87,527

8,579,248

8,444,863

CREDITORS

Amounts falling due within one year

14

7,328,126

7,020,667

NET CURRENT ASSETS

1,251,122

1,424,196

TOTAL ASSETS LESS CURRENT LIABILITIES

5,323,297

5,502,732

CREDITORS

Amounts falling due after more than one year

15

(1,200,118

)

(1,542,736

)

PROVISIONS FOR LIABILITIES

19

(744,469

)

(689,200

)

NET ASSETS

3,378,710

3,270,796

CAPITAL AND RESERVES

Called up share capital

20

30,000

30,000

Retained earnings

21

3,348,710

3,240,796

SHAREHOLDERS' FUNDS

3,378,710

3,270,796

Company's profit for the financial year

541,043

265,721

The financial statements were approved by the Board of Directors and authorised for issue on 17 September 2025 and were signed on its behalf by:

D A Boucher - Director

Cash flows from operating activities

Cash generated from operations

1

1,698,387

882,910

Interest paid

(360,139

)

(330,354

)

Interest element of hire purchase payments paid

(81,020

)

(73,957

)

Net cash from operating activities

1,257,228

478,599

Cash flows from investing activities

Purchase of tangible fixed assets

(649,370

)

(633,619

)

Sale of tangible fixed assets

8,190

856

Net cash from investing activities

(641,180

)

(632,763

)

Cash flows from financing activities

Bank loan advances

-

550,000

Bank loan repayments

(290,020

)

(226,207

)

Advances re trade payables

46,271

327,009

Advances re debt financing

1,023,120

224,685

Amount introduced by directors

433,129

370,256

Amount withdrawn by directors

(515,843

)

(433,129

)

Hire purchase advances

352,529

521,636

Hire purchase repayments

(498,235

)

(485,877

)

Government grants

7,200

7,511

Equity dividends paid

(433,129

)

(370,500

)

Net cash from financing activities

125,022

485,384

Increase in cash and cash equivalents

741,070

331,220

Cash and cash equivalents at beginning of year

2

(845,117

)

(1,176,337

)

Cash and cash equivalents at end of year

2

(104,047

)

(845,117

)

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

Profit before taxation

1,032,749

647,638

Depreciation charges

666,126

617,126

Loss on disposal of fixed assets

6,330

4,745

Government grants

(7,200

)

(7,511

)

Finance costs

441,159

405,264

2,139,164

1,667,262

Decrease/(increase) in stocks

342,841

(1,169,200

)

Increase in trade and other debtors

(818,011

)

(196,781

)

Increase in trade and other creditors

34,393

581,629

Cash generated from operations

1,698,387

882,910

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2024

31/12/24

1/1/24

£

£

Cash and cash equivalents

65,029

431,994

Bank overdrafts

(169,076

)

(1,277,111

)

(104,047

)

(845,117

)

Year ended 31 December 2023

31/12/23

1/1/23

£

£

Cash and cash equivalents

431,994

38,911

Bank overdrafts

(1,277,111

)

(1,215,248

)

(845,117

)

(1,176,337

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/1/24

Cash flow

At 31/12/24

£

£

£

Net cash

Cash at bank and in hand

431,994

(366,965

)

65,029

Bank overdrafts

(1,277,111

)

1,108,035

(169,076

)

(845,117

)

741,070

(104,047

)

Debt

Finance leases

(1,273,962

)

145,704

(1,128,258

)

Debts falling due within 1 year

(291,117

)

(6,405

)

(297,522

)

Debts falling due after 1 year

(738,307

)

296,425

(441,882

)

(2,303,386

)

435,724

(1,867,662

)

Total

(3,148,503

)

1,176,794

(1,971,709

)

1.	STATUTORY INFORMATION

Bowmill Engineering Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Basis of consolidation

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of the business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent considerations after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for the final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at at cost less impairment.

Deferred tax is recognised on differences between the value of the assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

The consolidated financial statements incorporate those of Bowmill Engineering Ltd and all its subsidiaries (ie entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.

All the financial statements are made up to 31 December 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring accounting policies used into line with those used by other members of the group.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. In the group financial statements, joint ventures are accounted for using the equity method.

Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates. In the group financial statements, associates are accounted for using the equity method.

Significant judgements and estimates

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are as follows:-

- Tangible fixed assets are depreciated over their useful lives taking into account residual values where

appropriate. The actual lives of the assets are assessed annually and may vary depending on a number of

factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

- Stocks and work in progress are reviewed annually for impairment. Such reviews require the exercise of

judgement by management and include the identification of slow moving and obsolete stock, an assessment of current orders and market conditions and the review of stock movements since the end of the reporting period.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Freehold property

-

Straight line over 60 years

Short leasehold

-

in accordance with the term of the lease

Plant and machinery

-

20% on reducing balance, 15% on reducing balance and Straight line over 15 years

Fixtures and fittings

-

25% on reducing balance and 15% on reducing balance

Motor vehicles

-

25% on reducing balance

Fixed assets are initially recognised at cost.

Government grants

The group has received government grants in respect of certain additions to plant. These grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the accrual model.

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Financial instruments

The group has chosen to adopt sections 11 and 12 of FRS 102 in respect of financial instruments.

Basic financial assets, including trade and other debtors and cash and bank balances are recognised at

transaction price. At the end of each reporting period financial assets are assessed for objective evidence of

impairment. Any impairment loss is recognised in the profit and loss account.

Basic financial liabilities, including trade and other creditors, bank loans and overdrafts and amounts owed to

other group companies that do not constitute a financing transaction are recognised at transaction price.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due in one year or less. If not, they are presented as non-current liabilities.

Cash and cash equivalents comprise cash at bank and in hand. In the balance sheet, bank overdrafts are shown within current liabilities.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.