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REGISTERED NUMBER: 13794223 (England and Wales)















Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30 June 2023

for

Harlow Timber Group Limited

Harlow Timber Group Limited (Registered number: 13794223)






Contents of the Consolidated Financial Statements
for the Year Ended 30 June 2023




Page

Company Information 1

Group Strategic Report 2

Report of the Directors 9

Report of the Independent Auditors 11

Consolidated Income Statement 15

Consolidated Other Comprehensive Income 16

Consolidated Balance Sheet 17

Company Balance Sheet 18

Consolidated Statement of Changes in Equity 19

Company Statement of Changes in Equity 20

Consolidated Cash Flow Statement 21

Notes to the Consolidated Cash Flow Statement 22

Notes to the Consolidated Financial Statements 23


Harlow Timber Group Limited

Company Information
for the Year Ended 30 June 2023







DIRECTORS: N M Sabey
A R Atlee
DJ Stockill
T J Darby
M S Hemsley
P V J Harlow
J R Harlow



REGISTERED OFFICE: c/o Harlow Bros. Limited
Hathern Road
Long Whatton
Loughborough
Leicestershire
LE12 5DE



REGISTERED NUMBER: 13794223 (England and Wales)



SENIOR STATUTORY AUDITOR: Christopher David Hutton FCCA



AUDITORS: Charnwood Accountants & Business Advisors LLP
Statutory Auditor
The Point
Granite Way
Mountsorrel
Loughborough
Leicestershire
LE12 7TZ

Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

The directors present their strategic report of the company and the group for the year ended 30 June 2023.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year end.

Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

Principal activities and business model
The company's principal activity is that of a holding company. The Group operates in the timber industry. The principal activities of the Group for the year under review are that of a timber distributor and manufacturer of trusses and flooring along with the retailing of related building materials.

The core business activities are undertaken through the network of branches primarily located across the Midlands region. We pride ourselves on our ethos for providing excellent customer service through our network of branches and businesses, our knowledgeable staff and our wide ranging and competitively priced products.

The Group purchases its timber products from a variety of sustainable sources primarily throughout Europe. The majority of trade is derived from the building sector and merchants, however we also look to service the local builders working on smaller developments right down to customers undertaking repair projects. We look to add value to the timber we buy in addition to offering all our customers quality products at competitive pricing. We achieve this added value by treating and machining timber prior to resale to customer specifications before we distribute out through our reliable distribution service.

Two of the subsidiaries within the Group, Harlow Timber Systems Ltd and Harlow Timber Systems (Eastern) Ltd, manufacture and sell roof trusses and Engineered Timber products into the new house build market and trade with customers ranging from national house builders to more local property developers.

Results and performance
We are pleased to report a good year of trading results for the Group, as set out on pages 17 to 43. Although each subsidiary company reported a decrease in turnover except HTSE, due to timber costs falling to more sustainable levels, the Group showed resilience on the back of last years Covid influenced results.

Group turnover for the consolidated period of 1st July 2022 to 30th June 2023 was £95,872,685.The largest contributor to this is the main trading company Harlow Bros Limited which accounts for more than half of Group turnover through its network of 8 trading branches which predominantly services the building sector and local businesses.

The operating profit results showed a second years positive contribution from Harlow Timber Systems (Eastern) Ltd. The focus on scaling up production of the roof truss and Engineered timber divisions with the ongoing support of other Group businesses and personnel, alongside strong local management has been successful.

The house building sector showed continued strength in this trading year, although political and economic factors suggest this will definitely impact the forthcoming year. Our customers traded well but are clearly cautious for the future. We therefore expect tougher trading conditions after the year end.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

REVIEW OF BUSINESS CONTINUED
The results reflect the Group's strong underlying trading activities, despite operating in a very competitive marketplace, and dramatic timber cost fluctuations. We strive to improve the efficiency and focus of our operations. The Group companies have made a considerable effort to control costs in recent years, and strong overhead control at both head office and subsidiary level continues to be a key focus of management. We have continued to invest in all areas of the business, such as the vehicle fleet, and improving the customer experience to ensure that we remain competitive whilst offering quality products and customer service. Further investment is planned for the business across the Group which the board is confident will enable it to continue to grow and further strengthen its position for the future

Stock values held dropped across the Group significantly in part due to global cost decreases and focussed management. We continue to work with our supply chain to source the most competitively priced products without compromising on quality. To ensure we supply traceable and sustainable quality products we assess all suppliers continually.
Trade debtors have continued to show good debtor days figures in line with our targets, which due to the processes and credit control team in place, means we are reporting another low bad debt charge for the year again as a percentage of turnover.

All trading entities, including the divisions within these, have targets and goals set over the short and medium term to ensure that they monitor opportunities for growth and to mitigate threats throughout the year, whilst reviewing their working practices to continually improve service levels to our customers. We will continue to invest in our branch premises and staff to enable us to expand and enhance our product offering across the full range of our products.

Staff numbers have fallen slightly this year in line with market demands. Details of the number of employees and related costs can be found in Note 4 to the financial statements.

Overall we are again pleased with the current years trading results, and we are able to report a growth in the value of shareholders' funds of the company for the year whilst maintaining a strong balance sheet which enables us to implement our growth and investments plans for the future. We expect more steady, regular growth for the foreseeable future, given the impact of interest rates, political cost increases and market reaction.

Pension scheme

The Group participates in a defined benefit pension scheme. As of 30 June 2023 there was a surplus for the scheme of £604,000, however, this is not recognised in the accounts due to an asset ceiling on the schemes assets. In note 23 to the accounts we have outlined the impact on the financial statements in more detail based on the actuarial report, from which the directors review the risks in the pension scheme, which is principally under performance of equity investments, and the potential impact on the Group. The calculation of the pension deficit or surplus remains sensitive to changes in the underlying assumptions as reported by the actuaries in their report to us. Given recent changes in the market we will be assessing a change in the administration and funding of this scheme.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

PRINCIPAL RISKS AND UNCERTAINTIES
The process of risk management is applied through a combination of policies, procedures and internal controls. All policies are subject to Board approval and ongoing review by management. Compliance with regulation, legal and ethical standards is a high priority for the Group to ensure they are compliant and able to continue trading successfully.
The finance team is responsible for ensuring that effective internal controls exist to manage the financial risks and that these controls operate effectively for the benefit of the business.

We the directors endeavour to identify the risks that the Group faces on a day to day basis. This is to ensure we have the financial strength and operational capacity to support the growth of the business. The current risk factors below are those that are considered by the board to be material to the Group. However, we also recognise that we operate in a fast paced commercial environment which is constantly evolving, where new risks may appear or immaterial risks may become more important, and the directors will develop appropriate strategies as these risks appear.

Competitive market pressure is an ongoing risk for the Group. To mitigate this risk the company strives to understand its customers' requirements, markets and competitors, to ensure we continue to provide quality products and seek expansion by organic growth. Given the potential economic volatility seen in our core business markets, we are continuously monitoring trends and looking for ways in which to be more efficient and improve our working capital requirements. The production of regular financial information helps the board to identify and assess current trends.

Parts of our business, such as timber raw material purchasing, are affected by fluctuations in price and availability, although we have robust purchasing policies and practices in place that seek to mitigate such risks. We secure material from our long standing supply partners which ensures we can meet production requirements. We are not reliant on any one particular supplier or source allowing us to respond proactively to any sudden changes in market conditions.

Other than the general uncertainty that surrounds the decision to leave the European Union, Brexit has not yet had a significant impact on the business or operations so far. The Group's relationship with its supply partners in Europe is of great importance to us and we have the flexibility to procure timber from a wide range of reliable supply sources to help mitigate changes in market conditions.

The Group purchases goods from international markets and is therefore exposed to foreign currency movements on such purchases. The Group manages this risk by purchasing and retaining cash funds in these currencies.

We have continuously worked to build a robust and flexible business by attracting and retaining the right quality staff to help us achieve this. By doing so we have a good financial position to deal with any situations which have arisen during the year and which we expect to face in the future.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The activities of the Group expose it to a number of financial risks during the normal course of the Group's business. The Group aims to limit undue exposure to business and financial risks and ensure sufficient working capital exists to fund operations, take opportunities to make additional investments and to mitigate any potential negative effects on the Group's assets and profitability. The directors consider such risks and uncertainties to the business at this point in time are:

Currency risk
As the Group trades in the UK, but purchases from various overseas markets, margins can fluctuate in line with changes in currency spot rates against the value of sterling for our purchases. This is mitigated in part by the Group holding foreign currency accounts from which such transactions will flow through.

Customer mix
There is a risk that the Group becomes too dependent on a particular customer and product range and efforts are made to ensure that our exposure in this respect is minimised by continually striving to expand the range of products and services on offer to enhance the customer experience and build relationships with key customers.

Credit risk
Is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

The objective of the Group in managing its credit risk to ensure that this risk is managed in line with the Group's risk appetite. There is a risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Group policies are aimed at minimising such losses and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of the Group's debtors are shown in the notes to the financial statements.

Pension funding risk
The Group operates a defined benefit plan, although this was ceased to future accruals on 31st March 2019, as noted in the notes to the financial statements. The funding of the pension liabilities at the year end was 37% equities and 63% other assets. The Group is subject to funding risks, which could derive from poorly managed performance of the equity investments. Such risks could lead to increased contributions due from the Group to the pension scheme.

The Group is required by law to maintain a minimum funding level in relation to its obligations to provide pensions to members of the pension scheme. This level of funding is dependent on a series of external factors, such as investment performance, life expectancy and gilt yields. Significant changes in these areas and actuarial assumptions underlying the calculation of plan liabilities for these could materially impact the Group's trading results and can also have a significant effect on the funding levels.This risk is mitigated by the fact that the scheme has been closed to new entrants for many years. The board regularly reviews the investment strategy and performance of the pension scheme investments to ensure that plan assets are performing and growing in line with the plan requirements to cover expected liabilities.

Competitor risk
The Group operates in a highly competitive market balancing both customer requirements and market pressures. The directors review and monitor these factors to ensure the Group's competitiveness is upheld to enable the Group to maintain its long-term relationships with key customers and reputation for quality. We aim to improve, strengthen and maintain the brand to ensure we maintain the right levels of investment and innovation in our customer offerings.

Liquidity risk and going concern.
Liquidity and cash flow risks are the risks that the group cannot meet its obligations associated with financial liabilities as they fall due.The Group is exposed to liquidity risk as sufficient funds are required to support trading and financing activities. The Group regularly monitors its liquidity position to ensure that sufficient funds are available to meet both current and future requirements.

The Group's cash position removes some elements of the financial risks any business faces. With the above business risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen future events outside of our control.

Health and Safety
We are conscious of our corporate responsibilities to all our stakeholders and to society as a whole. Health and safety, environmental matters, staff training and equal opportunities are key areas relevant to the Group's business activities.

We are keen to remain proactive in assessing and minimising the risks in all areas of the business and educating the workforce to provide as safe a working environment as possible for our staff.

We employ a full-time Health and Safety Officer who reports to the board regularly on working practices and improvements that can be made to increase safety for the staff. Employees are encouraged to take personal responsibility for making sure their actions and behaviour maintain safety for all staff members during the working day.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

SECTION 172(1) STATEMENT
All directors act in accordance with their duties, in good faith, to promote the success of the company as a whole, having regard to the effect of decisions on the group and other stakeholders, in particular taking into consideration:

- the likely consequences of any decision long term,
- the interests of the company's employees,
- the need to foster the company's business relationships with suppliers, customers and others,
- the impact of the company's operations on the community and the environment,
- the desirability of the company maintaining a reputation for high standards of business conduct, and
- the need to act fairly between members of the company.

The board of directors have considered the company's vision, purpose and values along with its strategic priorities implemented by the decision making processes in place when taking into account the views and interests of stakeholders. When considering the range of interests involved in arriving at the outcomes of decisions the directors acknowledge that such decisions may involve balancing different perspectives and as such it is not always possible to deliver everyone's desired outcome. The board is aware that the success of the group's businesses is dependent on the support of all of our stakeholders, by building good positive relationships and working together towards shared goals, and long-term success.

ENGAGEMENT WITH EMPLOYEES
Details of the number of employees and related costs can be found in Note 4 to the financial statements.

The company became an Employee Owned business in March 2022, with the previous shareholders selling 90% of their shares to Harlow Timber Group Employee Ownership Trust.

The trust exists solely for the benefit of employees of the Group. We have made an encouraging start to working towards an employee ownership ethos, but recognise this will continue to evolve over time.
This is the first full year of employee ownership and all Group employees have already benefited from a second tax free payment based on the strong result.

The Group's ability to achieve its commercial objectives and to serve the needs of its customers in a profitable and friendly manner depends on the contribution of its employees. Employees are encouraged to develop their contribution to the business whatever department in the business they work in.

The launch of the Companies Values, Vision and Mission has detailed a clear goal for the business and is helping to shape the targets of each department. Having a set of defined values gives our employees an overview of what our priorities are and how they can contribute to their business. These have been incorporated into probation and performance reviews to enable employees to consider how they can impact the culture of Harlow's.

Harlow's is working hard to improve our employee benefit offering, this in time will improve employee engagement, our ability to recruit and retain employees. Over the past year we have implemented a new length of service scheme which has seen over 200 employees across the group receive recognition for their service with Harlow's. We have also introduced a new Employee Assistance Programme which gives employees access to a range of services including counselling, mental health support and guidance on health and wellbeing. Alongside this we have introduced a benefits platform that gives our employees to a range of discounts with high street and online retailers.

Harlow's has an ongoing commitment to developing our employees as well as bringing new people into the industry. It is our policy to train and develop employees to ensure that they are best equipped to undertake their daily tasks for which they are employed, and to provide the opportunity for career development without discrimination. Training and development is provided and is available to all levels and categories of staff. Over the past year we have rolled out our e-learning platform across the group. Allowing access to over 100 courses relating to health and safety, sales skills, personal wellbeing and management techniques. These are used alongside in person training courses and apprenticeships to develop the skills of all employees. This year Harlow's has signed a pledge with the Builders Merchant Federation to have 5% of employees on an apprenticeship. We constantly encourage development of current and new employees regardless of their ability, age, department, or seniority.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

ENGAGEMENT WITH SUPPLIERS, CUSTOMERS AND OTHERS
Suppliers
Through our Group procurement department, we have regular communications and strong relationships with our suppliers, whilst striving to achieve a balance between them and the needs of our customers. We recognise the importance of discussions on material availability, prices and quality, as well as more general supply and demand trends. We continue to develop our range of certified Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) products. To ensure we supply traceable and sustainable quality products we assess all suppliers continually. Being a member of the NMBS buying group further strengthens our supplier relationships in many product ranges.

Customers
We value our customers and recognise that they are the base for the success of our business, building relationships and understanding customer needs is important, in order to continue to provide a quality product and service. Dedicated sales teams are organised so that they focus on specific customers groups ranging from retail, local trades people, regional companies to national companies. ISO management systems and promotion of sustainable forest management practices are maintained to ensure that we meet customer expectations, we continually seek to improve service levels to our customers.

Community and Environment
The Group complies with environmental regulations and the board supports initiatives that reduce adverse impact on local communities and the environment, including investment in energy saving solutions.

The directors recognise that the Group has a responsibility to the environment, customers, suppliers and staff to operate its commercial activities using well-managed forests and to reduce any negative environmental or social impact of its trading as far as is reasonably practical for the Group.

We therefore make it a priority to ensure our timber is legally harvested and comes from well managed forests. The Group recognises that the independent certification of forests and of the supply chain is the best means of providing assurances of this. Where possible we purchase material certified by the Programme for the Endorsement of Forest Certification schemes (PEFC) or the Forest Stewardship Council (FSC).
The Group has third party audits of their chain of custody for timber supplied as certified by PEFC, FSC and other schemes. This is to ensure that claims made about certification can be proven and our certifications for these can be located on our website, www.harlowbros.co.uk, for customers and other stakeholders to view.

As part of our commitment to environmental awareness and best practice the entities in the Group hold an ISO14001 certificate and operates within this environmental management scheme framework in a compliant manner.

Shareholders
The Harlow family previously owned 100% of the company shares. On 31 March 2022 an Employee Ownership Trust was created which purchased 90% of these shares. Harlow Timber Group Trustees Limited was created in order to be trustee of this trust acting in the best interest of the employees. This was the first full year of trading under this structure.

FINANCIAL INSTRUMENTS
A summary of the Group financial instruments and related disclosures affecting the financial statements are set out in the notes to the accounts. The financial risk management objectives and policies of the entity and its exposure to related risks are covered above.


Harlow Timber Group Limited (Registered number: 13794223)

Group Strategic Report
for the Year Ended 30 June 2023

KEY PERFORMANCE INDICATORS
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the Group, these being turnover, gross margin, operating profit and earnings before interest tax depreciation and amortisation (EBITDA). The Group also closely monitors other internal KPI's for example, given this is the first year of consolidation in the group, comparable data is not available;

- Vehicle statistics on usage & efficiency
- Individual employee performance in line with our HR objectives
- The reason and level of sales credits raised
- Daily sales performance and margin threshold reviews

We continually aim to develop and grow our business in order to increase our market share, whilst striving to maintain the gross margin on our products. As the prime measure of our economic output, revenue growth is key to measuring shareholder return and the success of our expansion strategies. Turnover for the year across the group increased, this in part due to significant rises in timber costs. We remain focused on offering the best possible products and service to our customer base.

Gross margin provides an indication of the quality of turnover growth and is also a measure of value added by the Group, reflecting the quality of the goods and services offered.

Overall, the Group's EBITDA for the period is £8.9m, with operating profit of £7.5m. Profit after taxation is £6.4m with the minority interest factored in the amount retained by the Group to be added to retained earnings is £5.7m.

FUTURE DEVELOPMENTS
The Group moved to Employee Ownership under the new group holding title of Harlow Timber Group Limited on 31 March 2022. Harlow Timber Group Trustees Limited was duly formed and a representative board, elected alongside the creation of employee committees. We made an encouraging start to working towards an employee ownership ethos but recognise this will continue to evolve over time. This will involve senior management helping employees at all levels to understand the many implications of this structure and how they can directly influence the success of the business through their own day to day activities and responsibilities.

The directors anticipate the business environment will become increasingly challenging, starting in Q2 and into 2024, but believe that the company is in a good financial position to meet these challenges. However, there are a number of economic, political and international factors influencing trading conditions within our markets and this will need careful management until a more stable trading environment is achieved.

We are mindful of the historical impact of the new house build market expanding and contracting rapidly in demand, therefore we continue to diversify our offering and customer base so as to mitigate reliance on such key sectors should any dips in the market arise. In summary, despite the uncertainty surrounding this sector alongside any late Brexit influence and the economy in general, we anticipate delivering a reasonable set of results in the upcoming year, based on pre-Pandemic levels.

In 2022 the Harlow Timber Group was created as part of the transition to an Employee Owned business.This will allow the business to continue and develop along the same traditional principles that the family have established. Perhaps most importantly of all it ensures that the future of the business remains independent, resilient, and sustainably financed.

ON BEHALF OF THE BOARD:





N M Sabey - Director


19 February 2024

Harlow Timber Group Limited (Registered number: 13794223)

Report of the Directors
for the Year Ended 30 June 2023

The directors present their report with the financial statements of the company and the group for the year ended 30 June 2023.

DIVIDENDS
No dividends will be distributed for the year ended 30 June 2023.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 July 2022 to the date of this report.

N M Sabey
A R Atlee
DJ Stockill
T J Darby
M S Hemsley
P V J Harlow
J R Harlow

STREAMLINED ENERGY AND CARBON REPORTING
Methodology
We have identified the need to take a structured approach to monitoring and measuring our energy consumption. We aim to use this information to help drive greater efficiencies and reduce our energy consumption. We have used the UK Government Environmental reporting guidelines using the methodology from GHG Reporting Protocol. We have applied the 2021 UK Govt Conversion factors for our calculations, Gross Values.

Energy Consumption and GHG Emissions
2023 2022 2021
Annual Energy Consumption 5,689,491 6,065,284 6,288,430 KWH

Scope 1
Total emissions though combustion of Gas 22.35 19.5 15.02 tCO2e
Total emissions though combustion of fuel for transport 887.44 1024.24 1,174.75 tCO2e
Total emissions though combustion of fuel for heating 64.11 77.19 55.13 tCO2e
Scope 2
Total emissions from purchased electricity 244.82 245 221.32 tCO2e
Scope 3
Consumption of fuel in employee-owned vehicles 87.61 93.3 88.59 tCO2e

Total emissions for scope 1, 2 and 3 1,306,33 1,459.23 1,554.80 tCO2e

Intensity ratio 1 tCo2e per employee 4.283 4.816 5.417
Intensity ratio 2 tCO2e per M3 Timber sold 0.018 0.018 0.016

Energy Efficiency actions
The company is aware of its responsibilities to ensure the efficient use of energy. Through its commitments to ISO 14001 it has declared objectives which seek to drive continuous improvement.

Intensity Ratio 1 has again decreased this year. Sales values fell as timber costs dropped from the highs experienced in prior financial years and, timber volume outputs decrease by a small percentage in the year.

Installation of solar panels are nearly complete at our HTS Bardon site commenced at the end of this financial year. Long established solar panel installations on several of our larger sites will undergo refurbishment to modernise the inventors or improve efficiency.

The company continues to reduce its fleet carbon footprint through our vehicle replacement programme which has seen 40% of our cars replaced with full EV and 4 % replaced with hybrid cars, this is an uplift of 19% over the past 12 months. We have also replaced 4 of our commercial vehicles with Euro 6 Vehicles and seen a 12% reduction across the commercial fleet in mileage and emissions. Our forklift electric fleet now stands at 22 platforms with 9080 hours of use for the past 12 months, this equates to a reduction of 48487kg CO2 for our mechanical handling equipment.


Harlow Timber Group Limited (Registered number: 13794223)

Report of the Directors
for the Year Ended 30 June 2023

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;
- state whether applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements;
- 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, Charnwood Accountants & Business Advisors LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





N M Sabey - Director


19 February 2024

Report of the Independent Auditors to the Members of
Harlow Timber Group Limited

Opinion
We have audited the financial statements of Harlow Timber Group Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 June 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, 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 30 June 2023 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.

Report of the Independent Auditors to the Members of
Harlow Timber Group Limited


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 ten, 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.

Report of the Independent Auditors to the Members of
Harlow Timber Group Limited


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. Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain
sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the
determination of material amounts and disclosures in the Financial Statements, to perform audit procedures to help
identify instances of non-compliance with other laws and regulations that may have a material effect on the Financial
Statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the
Financial Statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs(UK).The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. As such material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment and or collusion.

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

We obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the Company operate in and how the Company are complying with the legal and regulatory frameworks. Focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act, pension legislation and UK tax legislation;

We inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

We discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the Financial Statements may be susceptible to fraud, having obtained an understanding of the effectiveness of the control environment.

The engagement partner assessed that the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations.

We assessed the susceptibility of the company's financial statements to material misstatement, including how fraud might occur, by evaluating management's incentives and opportunities for manipulation of the financial statements. This included the evaluation of the risk of management override of controls. In assessing the potential risks of material misstatement, we obtained an understanding of the company's operations, including the nature of its income and expenditure together with its objectives and strategies to understand the classes of transactions, account balances, expected financial statement disclosures and business risks that may result in risks of material misstatement. Also on the company's control environment, including the policies and procedures implemented by the company to ensure compliance with the requirements of the financial reporting framework.

Our audit procedures involved:

The evaluation of the design effectiveness of controls that the company has in place to prevent and detect fraud;


Report of the Independent Auditors to the Members of
Harlow Timber Group Limited

To undertake journal entry testing, with a focus on higher risk journal, such as, posted by senior management, journals with unusual attributes, journals without any descriptions, journals posted by staff not in the approved list of journals posting and closing journals posted during the preparation of the financial statements, which are material and not reoccurring or common postings which fall outside of the auditor's expectations. Together with assessing whether the judgments made in making accounting estimates are indicative of a potential bias.

In response to the risk of irregularities and non-compliance with laws and regulations our procedures included, but
which were not limited to;

Enquiring of management as to actual and potential litigation and claims against the company;
Completing a review of relevant legal and professional costs within the accounting records for any evidence of
previously un-detected or un-reported instances of non-compliance.

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.




Christopher David Hutton FCCA (Senior Statutory Auditor)
for and on behalf of Charnwood Accountants & Business Advisors LLP
Statutory Auditor
The Point
Granite Way
Mountsorrel
Loughborough
Leicestershire
LE12 7TZ

19 February 2024

Harlow Timber Group Limited (Registered number: 13794223)

Consolidated Income Statement
for the Year Ended 30 June 2023

Year Ended Period
30.6.23 10.12.21 to 30.6.22
Notes £    £    £    £   

TURNOVER 3 95,872,685 27,709,478

Cost of sales 74,914,191 21,944,074
GROSS PROFIT 20,958,494 5,765,404

Administrative expenses 13,628,722 3,239,042
7,329,772 2,526,362

Other operating income 153,338 22,994
OPERATING PROFIT 5 7,483,110 2,549,356

Interest receivable and similar income 395,885 23,495
Other finance income 23 14,000 1,000
409,885 24,495
7,892,995 2,573,851

Interest payable and similar expenses 7 10,266 12
PROFIT BEFORE TAXATION 7,882,729 2,573,839

Tax on profit 8 1,436,481 543,187
PROFIT FOR THE FINANCIAL YEAR 6,446,248 2,030,652
Profit attributable to:
Owners of the parent 5,608,501 1,499,328
Non-controlling interests 837,747 531,324
6,446,248 2,030,652

Harlow Timber Group Limited (Registered number: 13794223)

Consolidated Other Comprehensive Income
for the Year Ended 30 June 2023

Period
10.12.21
Year Ended to
30.6.23 30.6.22
Notes £    £   

PROFIT FOR THE YEAR 6,446,248 2,030,652


OTHER COMPREHENSIVE INCOME
Net actuarial gain / (loss) (475,000 ) 237,570
Equity settled share options 240,932 -
Income tax relating to components of other
comprehensive income

71,000

(52,570

)
OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

(163,068

)

185,000
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

6,283,180

2,215,652

Total comprehensive income attributable to:
Owners of the parent 6,283,180 2,215,652

Harlow Timber Group Limited (Registered number: 13794223)

Consolidated Balance Sheet
30 June 2023

30.6.23 30.6.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 11 - -
Tangible assets 12 4,595,490 4,228,029
Investments 13 - -
4,595,490 4,228,029

CURRENT ASSETS
Stocks 14 12,522,775 17,939,815
Debtors 15 15,731,752 16,628,269
Cash at bank and in hand 16,451,914 10,386,156
44,706,441 44,954,240
CREDITORS
Amounts falling due within one year 16 13,843,948 17,398,640
NET CURRENT ASSETS 30,862,493 27,555,600
TOTAL ASSETS LESS CURRENT
LIABILITIES

35,457,983

31,783,629

CREDITORS
Amounts falling due after more than one
year

17

(181,980

)

-

PROVISIONS FOR LIABILITIES 20 (363,592 ) (276,651 )

PENSION ASSET 24 - 355,000
NET ASSETS 34,912,411 31,861,978

CAPITAL AND RESERVES
Called up share capital 21 31,211,539 31,211,539
Share option reserve 22 240,932 -
Retained earnings 22 3,459,940 650,439
SHAREHOLDERS' FUNDS 34,912,411 31,861,978

The financial statements were approved by the Board of Directors and authorised for issue on 19 February 2024 and were signed on its behalf by:




N M Sabey - Director



M S Hemsley - Director


Harlow Timber Group Limited (Registered number: 13794223)

Company Balance Sheet
30 June 2023

30.6.23 30.6.22
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 11 - -
Tangible assets 12 - -
Investments 13 31,452,468 31,211,536
31,452,468 31,211,536

CURRENT ASSETS
Debtors 15 632,674 416,757
Cash at bank 67,190 -
699,864 416,757
CREDITORS
Amounts falling due within one year 16 325,047 406,754
NET CURRENT ASSETS 374,817 10,003
TOTAL ASSETS LESS CURRENT
LIABILITIES

31,827,285

31,221,539

CREDITORS
Amounts falling due after more than one
year

17

65,000

-
NET ASSETS 31,762,285 31,221,539

CAPITAL AND RESERVES
Called up share capital 21 31,211,539 31,211,539
Share option reserve 22 240,932 -
Retained earnings 22 309,814 10,000
SHAREHOLDERS' FUNDS 31,762,285 31,221,539

Company's profit for the financial year 2,694,814 8,895,172

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 19 February 2024 and were signed on its behalf by:





M S Hemsley - Director


Harlow Timber Group Limited (Registered number: 13794223)

Consolidated Statement of Changes in Equity
for the Year Ended 30 June 2023

Called up Share
share Retained option Total
capital earnings reserve equity
£    £    £    £   

Changes in equity
Issue of share capital 31,211,539 - - 31,211,539
Total comprehensive income - 650,439 - 650,439
Balance at 30 June 2022 31,211,539 650,439 - 31,861,978

Changes in equity
Total comprehensive income - 2,809,501 - 2,809,501
Credit relating to equity
settled share based payments - - 240,932 240,932
Balance at 30 June 2023 31,211,539 3,459,940 240,932 34,912,411

Harlow Timber Group Limited (Registered number: 13794223)

Company Statement of Changes in Equity
for the Year Ended 30 June 2023

Called up Share
share Retained option Total
capital earnings reserve equity
£    £    £    £   

Changes in equity
Issue of share capital 31,211,539 - - 31,211,539
Total comprehensive income - 10,000 - 10,000
Balance at 30 June 2022 31,211,539 10,000 - 31,221,539

Changes in equity
Total comprehensive income - 299,814 - 299,814
Credit relating to equity
settled share based payments - - 240,932 240,932
Balance at 30 June 2023 31,211,539 309,814 240,932 31,762,285

Harlow Timber Group Limited (Registered number: 13794223)

Consolidated Cash Flow Statement
for the Year Ended 30 June 2023

Period
10.12.21
Year Ended to
30.6.23 30.6.22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 11,523,903 20,567,019
Interest paid - (12 )
Interest element of hire purchase payments
paid

(10,266

)

-
Tax paid (1,365,467 ) 55,989
Net cash from operating activities 10,148,170 20,622,996

Cash flows from investing activities
Purchase of tangible fixed assets (1,629,707 ) (1,044,383 )
Sale of tangible fixed assets 226,253 200,541
Interest received 395,885 23,495
Net pension interest income 14,000 -
Net cash from investing activities (993,569 ) (820,347 )

Cash flows from financing activities
New loans in year 183,234 -
LLP share due to minority interests (877,077 ) (531,324 )
Contribution to EOT (2,395,000 ) (8,885,169 )
Net cash from financing activities (3,088,843 ) (9,416,493 )

Increase in cash and cash equivalents 6,065,758 10,386,156
Cash and cash equivalents at beginning of
year

2

10,386,156

-

Cash and cash equivalents at end of year 2 16,451,914 10,386,156

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Cash Flow Statement
for the Year Ended 30 June 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Profit before taxation 7,882,729 2,573,839
Depreciation charges 1,186,220 312,996
Profit on disposal of fixed assets (150,228 ) (39,335 )
Pre acquisition assets and liabilities - 35,517,905
Equity-settled share-based payments 240,932 -
Pensions scheme movement (120,000 ) -
Finance costs 10,266 12
Finance income (409,885 ) (24,495 )
8,640,034 38,340,922
Decrease/(increase) in stocks 5,417,040 (17,939,815 )
Decrease/(increase) in trade and other debtors 956,518 (16,629,149 )
(Decrease)/increase in trade and other creditors (3,489,689 ) 16,795,061
Cash generated from operations 11,523,903 20,567,019

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 30 June 2023
30.6.23 1.7.22
£    £   
Cash and cash equivalents 16,451,914 10,386,156
Period ended 30 June 2022
30.6.22 10.12.21
£    £   
Cash and cash equivalents 10,386,156 -


3. ANALYSIS OF CHANGES IN NET FUNDS

At 1.7.22 Cash flow At 30.6.23
£    £    £   
Net cash
Cash at bank and in hand 10,386,156 6,065,758 16,451,914
10,386,156 6,065,758 16,451,914
Debt
Finance leases - (183,234 ) (183,234 )
- (183,234 ) (183,234 )
Total 10,386,156 5,882,524 16,268,680

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements
for the Year Ended 30 June 2023

1. STATUTORY INFORMATION

Harlow Timber Group Limited 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.

The presentation currency of the financial statements is the Pound Sterling (£).


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 and under the provision of The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. The financial statements have been prepared under the historical cost convention, as modified by the recognition of certain financial assets and liabilities measured at fair value.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group and company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in notes below.

These policies have been consistently applied to all the years presented, unless otherwise stated.

Going concern
Having completed their assessment, the directors have concluded that there are no material uncertainties that cast significant doubt about the ability of the group to continue as a going concern.

The Group meets its day-to-day working capital requirements through its bank facilities. The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facilities.
The group's business activities, together with the factors likely to affect its future development and financial position have been documented in the strategic report. The group currently has sufficient financial resources together with strong relationships spread of a number of customers to enable future growth to continue.

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions
The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

the requirement of paragraph 3.17(d);
the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and
11.48(c);
the requirement of paragraph 33.7.

The parent company is included in the consolidated financial statements, and is considered a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The above exemptions available in respect of certain disclosures for the parent company financial statements have been applied on the basis that they do not need to be included for a second time as they are already disclosed as part of the consolidated financial statements.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Basis of consolidation
The consolidated financial statements include the accounts of the Company and all entities controlled by the Company (itssubsidiaries) (together referred to as "the Group") from the date control commences until the date that control ceases.

The consolidated financial statements incorporate the assets, liabilities and results of the Company and its
subsidiary undertakings controlled by the group up to 30 June each year.

Subsidiary undertakings are fully consolidated from the date on which control is transferred to the Group.
Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The financial statements of all subsidiary undertakings are prepared to the same reporting date as the Company. All subsidiary undertakings have been included in the consolidated financial statements.

The principal subsidiary undertakings of the Company at 30 June each year are detailed in note 12 to the Company balance sheet. Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.

Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated on consolidation.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Significant judgements and estimates
In the application of the group's accounting policies, which are described in the accounting policies below, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The Directors believe that the following judgements are critical due to the degree of estimation required and / or the potential material impact they may have on the Group’s financial position and performance.

Judgements
In preparing these financial statements, the directors have made the following key judgements that have a significant effect on the amounts recognised in the financial statements as described below.

1) Determine whether there are indicators of impairment of the group's tangible assets along with residual values and asset lives. The residual value is the net realisable value of an asset at the end of its useful economic life. The group has made an assessment of the residual values that are appropriate for the business and reviews this assessment annually. Note 11 provides details of the value of fixed assets capitalised.

2) Assessing whether the Group controls Harlows Kidderminster LLP requires judgement. The Group holds
a 50% share as stated in the partnership agreement and controls the operating and financial policies of Harlows Kidderminster LLP. This agreement includes the power to set the annual budget and financial plan, appointing, removing and setting the remuneration of senior staff, and setting operating procedures and responsibilities. The Group considers that these powers demonstrate that the Group controls Harlows Kidderminster LLP.

Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the group. Such changes are reflected in the assumptions when they occur.

a) Establishing useful economic lives for depreciation purposes of property, plant and equipment
Long-lived assets, consisting primarily of property, plant and equipment, comprise a significant portion of the
total assets. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of asset and estimates of residual values. The directors regularly review these asset useful economic lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the tangible fixed asset accounting policy.













Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

b) Providing for bad and doubtful debts
The group makes an estimate of the recoverable value of trade and other debtors. The group uses estimates based on historical experience in determining the level of debts, which the group believes, will not be collected. These estimates include such factors as the current credit rating of the debtor, the ageing profile of debtors and historical experience. Any significant reduction in the level of customers that default on payments or other significant improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the operating results. The level of provision required is reviewed on an on-going basis.

c) Defined benefit pension scheme
The group has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors which are sensitive to the actuarial assumptions included within the report by the actuary, including; life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. The actuary estimates these factors in determining the net pension obligation in the balance sheet as arrived at in their report to management. The assumptions reflect historical experience and current trends. The size of the plan assets is also sensitive to asset return levels and the level of contributions paid by the group. See note 22 for the disclosures relating to the defined benefit pension scheme.

d) Impairment of intangible assets and goodwill
Annually, the Group considers whether intangible assets and/or goodwill are impaired. Where an indication of impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and
also selection of appropriate discount rates in order to calculate the net present value of those cash flows.

e) Establishing useful economic life of intangible assets and goodwill
The Group establishes a reliable estimate of the useful life of goodwill and intangible assets arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, the expected usual life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Turnover
Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and value added taxes

The Group bases its estimate of returns on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a financing transaction, the fair value of the consideration is measured as the present value of all future receipts using the imputed rate of interest.

The Group recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the Group retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when the specific criteria relating to each of the Group’s sales channels have been met, as described below.

Sale of goods
Sales of goods are recognised on sale to the customer, which is considered the point of delivery. Delivery occurs when the goods have been shipped to the location specified by the customer, the risks of obsolescence or loss have been transferred to the customer, the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or the company has objective evidence that all criteria for acceptance have been satisfied.

The Group also sells goods via its websites for delivery to the customer or ‘click and collect’ at its retail shops. Revenue is recognised when the risks and rewards of the stock are passed to the customer. For deliveries to the customer this is the point of acceptance of the goods by the customer and for ‘click and collect’ this is the time of collection. Transactions are settled by credit or payment card.

Partnership profits - company only
Income is recognised when the entitlement to profits have been established and agreed.

Dividend income
Dividend income is recognised when the right to receive payment is established.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life.

Improvements to property-2% on cost, 10% on cost and 20% on cost
Plant and machinery-15% on cost and at varying rates on cost

Fixtures and fittings

-
15% on cost, 10% on cost and at varying rates
on cost
Motor vehicles-25% on cost
Computer equipment-20% on cost

Tangible assets are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use.

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to
complete and sell, and after making due allowance for obsolete and slow moving items.

The cost of stock is calculated on the weighted average cost principle on a first in first out basis and includes expenditure incurred in acquiring stock, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost for raw materials and consumables are at the purchase cost to the company. Cost for Work in progress and finished goods includes all direct expenditure.The cost of work in progress and finished goods includes
production overheads and the attributable proportion of indirect overheads based on the normal level of activity.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price, in the ordinary course of business, less costs to complete and sell. The impairment provision is determined primarily by future demand forecasts. The write down is measured as the difference between the calculated cost of the stock and market based upon assumptions about future demand and charged to the provision for stock, which is a component of cost of sales.

Financial instruments
The group mainly enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable and loans to/from related parties.

Debt instruments, like loans and other accounts receivable and payable, are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of the future payment discounted at a market rate of interest for a similar debt instrument.

Trade and other debtors
Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the debtors are stated at cost less impairment losses for bad and doubtful debts.

A provision for impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of debtors. The amount of the provision is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows, and is recognised in the profit & loss in operating expenses.

Trade and other creditors
Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings or current liabilities when applicable.

In the Cash Flow Statement, cash and cash equivalents are shown separate to bank overdrafts that are repayable on demand and form an integral part of the group's cash management.


Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued
Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, 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
In preparing the financial statements of the company, transactions in currencies other than the functional currency are recognised at the spot rate at the dates of the transactions, or at an average rate where this rate approximates the actual rate at the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange differences are recognised in profit or loss in the period in which they arise or loss.

Hire purchase and leasing commitments
Assets acquired under finance leases are capitalised and the outstanding future lease obligations are shown in creditors. Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Pension costs and other post-retirement benefits
The Group operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the reporting date less the fair value of the plan assets at the reporting date.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating the estimated period of the future payments (‘discount rate’).

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Group’s policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as ‘Remeasurement of net defined benefit liability’.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
(a) the increase in pension benefit liability arising from employee service during the period; and
(b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as ‘Finance expense’.

Defined contribution pension plans
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are shown in other creditors in the balance sheet. The assets of the plan are held separately from the Group in independently administered funds.

Harlow Bros Limited operates a defined contribution pension scheme in respect of the directors. A defined benefit scheme is operated for certain other employees. The funding plan and the contribution are not material in the context of these financial statements. Pension costs are charged to the profit and loss account at the time that the contributions are paid into the scheme.

Harlow Timber Systems Limited and Harlows Kidderminster LLP also make payments to a group personal pension scheme for certain directors and employees. Payments to these schemes are charged to the profit and loss account in the period in which they are made.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

2. ACCOUNTING POLICIES - continued

Provisions for liabilities
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable that the group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance cost in profit or loss in the period it arises.

The group recognises a provision for annual leave accrued by employees as a result of services rendered in the current period, and which employees are entitled to carry forward and use within the next 12 months. The provision is measured at the salary cost payable for the period of absence.

Share-based payments
The group provides share-based payment arrangements to certain employees.

Equity-settled arrangements are measured at fair value (excluding the effect of non– market based vesting conditions) at the date of the grant. The fair value is expensed on a straight-line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.

Equity-settled share-based payment transactions are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions where applicable. Fair value is measured by use of an appropriate pricing model which is considered by management to be the most appropriate method of valuation. The expected life used in the model has been adjusted, based on managements best estimate, for the effects of non-transferability and exercise restrictions. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the income statement.

Company
The company has no employees and thus there is no charge in the income statement for share-based payments. The charge for share-based payments has been recognised as an increase in cost of investment in subsidiaries.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the group.

An analysis of turnover by class of business is given below:

Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Goods for re-sale 58,302,007 18,516,636
Manufacturing 37,570,678 9,192,842
95,872,685 27,709,478

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

3. TURNOVER - continued

Turnover represents the amounts mainly derived from the provision of goods and services which fall within the group’s ordinary activities, stated net of value added tax.

The group's principal activities are as stated in the strategic report and the group operates within the geographical region of the United Kingdom.

4. EMPLOYEES AND DIRECTORS
Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Wages and salaries 16,443,722 4,393,682
Social security costs 1,424,197 322,113
Other pension costs 251,254 96,781
18,119,173 4,812,576

The average number of employees during the year was as follows:
Period
10.12.21
Year Ended to
30.6.23 30.6.22

Directors 13 10
Management and administrative 163 151
Production 395 387
571 548

Company
The company had no employees during the current or prior year.

Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Directors' remuneration 1,056,264 176,445
Directors' long term incentive schemes 137,676 -
Directors' pension contributions to money purchase schemes 59,815 7,540
Compensation to directors for loss of office 8,000 -

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 4 5
Defined benefit schemes 2 2

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

4. EMPLOYEES AND DIRECTORS - continued

Information regarding the highest paid director for the year ended 30 June 2023 is as follows:


Year Ended
30.6.23
£   
Emoluments etc 140,188
Pension contributions to money purchase schemes 5,205

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Hire of plant and machinery 27,076 22,941
Other operating leases 418,934 36,369
Depreciation - owned assets 1,186,221 347,882
Profit on disposal of fixed assets (150,228 ) (39,335 )

6. AUDITORS' REMUNERATION
Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Fees payable to the company's auditors and their associates for the audit of
the company's financial statements

101,634

19,109

7. INTEREST PAYABLE AND SIMILAR EXPENSES
Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Other interest - 12
Hire purchase 10,266 -
10,266 12

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

8. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Current tax:
UK corporation tax 1,278,540 547,590

Deferred tax:
Origination & reversal of
timing differences 86,941 48,167
Deferred tax movement on net
pension liability 71,000 (52,570 )
Total deferred tax 157,941 (4,403 )
Tax on profit 1,436,481 543,187

UK corporation tax has been charged at 20.50 % .

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

Period
10.12.21
Year Ended to
30.6.23 30.6.22
£    £   
Profit before tax 7,882,729 2,573,839
Profit multiplied by the standard rate of corporation tax in the UK of
20.495 % (2022 - 19 %)

1,615,565

489,029

Effects of:
Expenses not deductible for tax purposes 51,303 800
Capital allowances in excess of depreciation (204,115 ) (43,410 )
Other timing differences 126 79,251
Deferred tax movement 157,941 17,517
Tax attributable to minority interes (184,339 ) -
Total tax charge 1,436,481 543,187

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

8. TAXATION - continued

Tax effects relating to effects of other comprehensive income

30.6.23
Gross Tax Net
£    £    £   
Net actuarial gain / (loss) (475,000 ) 71,000 (404,000 )
Equity settled share options 240,932 - 240,932
(234,068 ) 71,000 (163,068 )

10.12.21 to 30.6.22
Gross Tax Net
£    £    £   
Net actuarial gain / (loss) 237,570 (52,570 ) 185,000

In the Spring Budget 2021 the UK government announced on 3 March 2021 that they will be increasing the
corporation tax rate from 19% to 25% from 1 April 2023. This rate change was substantively enacted on 24th
May 2021and therefore deferred taxes are recognised at this rate at the balance sheet date. The hybrid rate charged in the year to 30th June 2023 is 20.5%.

The effective tax rate differs from the UK corporation tax rate principally due to the deductibility of allowances on capital expenditure and other permanent differences arising in the period as detailed in the tax charge reconciliation.

9. INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent company is not presented as part of these financial statements.


10. SHARE-BASED PAYMENTS

Certain employees of the group have been granted options over the shares in Harlow Timber Group Limited. The options are granted with a fixed exercise price, are exercisable ten years after the date of grant and are forfeited if an employee leaves employment with the employing company. Employees are required to remain in employment with the group during the vesting period. On exercise of the options by the employees, the group issues the number of agreed ordinary shares in the parent company with a subsequent reduction in the share option reserve within equity.

A reconciliation of share option movements over the year to 30 June 2023 is shown below:

2023 2022

Number of
share options

Exercise price
Number of share
options
Exercise
price
Outstanding at beginning of period 0 £0 0 £0
Granted during the period 2,516,129 £0.155 0 £0
Forfeited during the period 0 £0 0 £0
Exercised during the period 0 £0 0 £0
Expired during the period 0 £0 0 £0
Outstanding at the end of the period 2,516,129 £0.155 0 £0
Exercisable at the end of the period 0 £0.155 0 £0

The total charge for the year of £240,932 (2022: £0) was recognised by the group for equity settled share-based payment transactions.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

11. INTANGIBLE FIXED ASSETS

Group
Goodwill
£   
COST
At 1 July 2022
and 30 June 2023 147,555
AMORTISATION
At 1 July 2022
and 30 June 2023 147,555
NET BOOK VALUE
At 30 June 2023 -
At 30 June 2022 -

Amortisation of intangible fixed assets is included in administrative expenses when chargeable.

Company
The Company had no intangible assets at the end of the current or previous year to note.

12. TANGIBLE FIXED ASSETS

Group
Plant,
machinery,
Improvements fixtures
to and Motor
property computers vehicles Totals
£    £    £    £   
COST
At 1 July 2022 1,623,202 11,384,884 3,758,885 16,766,971
Additions 34,804 1,196,815 398,088 1,629,707
Disposals - (223,711 ) (556,248 ) (779,959 )
At 30 June 2023 1,658,006 12,357,988 3,600,725 17,616,719
DEPRECIATION
At 1 July 2022 391,817 9,142,634 3,004,491 12,538,942
Charge for year 67,027 708,615 410,579 1,186,221
Eliminated on disposal - (213,328 ) (490,606 ) (703,934 )
At 30 June 2023 458,844 9,637,921 2,924,464 13,021,229
NET BOOK VALUE
At 30 June 2023 1,199,162 2,720,067 676,261 4,595,490
At 30 June 2022 1,231,385 2,242,250 754,394 4,228,029

Company
The company had no tangible fixed assets as at 30th June 2022.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

13. FIXED ASSET INVESTMENTS

Company
Shares in
group
undertakings
£   
COST
At 1 July 2022 31,211,536
Additions 240,932
At 30 June 2023 31,452,468
NET BOOK VALUE
At 30 June 2023 31,452,468
At 30 June 2022 31,211,536



Company

Principal activity

Class of shares held
Ownership
- 2022

Harlow Bros Limited
Manufacture and
supply of timber

Ordinary

100%



Harlow Timber Systems Ltd
Manufacturer and
supply of roof
trusses


Ordinary


100%


Harlow Timber Systems (Eastern)
Ltd
Manufacture and
supply of roof
trusses


Ordinary


100%

Harlows Kidderminster LLP
(registered no: OC330392)

Timber merchants

Capital account holding

>50%

All the above subsidiaries have their registered office as the company head office which is located at Hathern Road, Long Whatton, Loughborough, Leicestershire, England, LE12 5DE.

All subsidiaries listed have been included within the consolidated accounts.

14. STOCKS

Group
30.6.23 30.6.22
£    £   
Raw materials 12,441,851 17,782,632
Work-in-progress 80,924 157,183
12,522,775 17,939,815

Group
There is no material difference between the replacement cost of stocks and the amounts stated above.

Company
The company had no stock as at 30th June 2023.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

15. DEBTORS

Group Company
30.6.23 30.6.22 30.6.23 30.6.22
£    £    £    £   
Amounts falling due within one year:
Trade debtors 13,922,506 14,881,095 - -
Other debtors 44,675 625 - -
Tax 60,000 - 60,000 -
Prepayments and accrued income 1,704,571 1,746,549 - -
15,731,752 16,628,269 60,000 -

Amounts falling due after more than one year:
Amounts owed by group undertakings - - 572,674 416,757

Aggregate amounts 15,731,752 16,628,269 632,674 416,757

Company
Amounts owed by group undertakings are unsecured, have no fixed date of repayment and are repayable on demand.

16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company
30.6.23 30.6.22 30.6.23 30.6.22
£    £    £    £   
Hire purchase contracts (see note 18) 66,254 - - -
Trade creditors 8,317,957 10,104,378 - -
Amounts owed to group undertakings - - 191,794 307,794
Tax 576,652 603,579 133,233 98,940
Social security and other taxes 644,612 450,073 - -
VAT 1,639,461 2,278,193 - -
Other creditors 1,437,187 2,873,684 20 20
Accruals and deferred income 1,161,825 1,088,733 - -
13,843,948 17,398,640 325,047 406,754

Company
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are
repayable on demand.

17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR

Group Company
30.6.23 30.6.22 30.6.23 30.6.22
£    £    £    £   
Hire purchase contracts (see note 18) 116,980 - - -
Other creditors 65,000 - 65,000 -
181,980 - 65,000 -

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Group
Hire purchase contracts
30.6.23 30.6.22
£    £   
Net obligations repayable:
Within one year 66,254 -
Between one and five years 116,980 -
183,234 -

Group
Non-cancellable operating leases
30.6.23 30.6.22
£    £   
Within one year 1,388,848 1,990,289
Between one and five years 4,632,633 7,416,702
In more than five years 3,256,933 7,574,837
9,278,414 16,981,828

19. FINANCIAL INSTRUMENTS

Group 2023
£

Financial assets measured at amortised cost 32,183,671
Financial liabilities measured at amortised cost 13,488,610


Company 2022
£

Financial assets measured at amortised cost 27,014,425
Financial liabilities measured at amortised cost 16,795,061


Financial assets measured at amortised cost comprise cash at bank and in hand, trade debtors and other debtors.

Financial liabilities measured at amortised cost comprise trade creditors, other creditors and accruals.

20. PROVISIONS FOR LIABILITIES

Group
30.6.23 30.6.22
£    £   
Deferred tax
Accelerated capital allowances 333,303 279,762
Other timing differences 30,289 (3,111 )
363,592 276,651

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

20. PROVISIONS FOR LIABILITIES - continued

Group
Deferred
tax
£   
Balance at 1 July 2022 276,651
Provided during year 86,941
Pre acquisition balance
Balance at 30 June 2023 363,592

Deferred tax is provided mainly at the future effective tax rate of 25% (2021 - 19%) based on the rates
substantively enacted at the balance sheet date, the expected timing of the reversals and the expected profitability of the company.

This relates to the reversal of timing differences on acquired tangible assets and capital allowances
through depreciation and amortisation.

21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 30.6.23 30.6.22
value: £    £   
28,289,003 Ordinary £1 28,289,003 28,289,003
3 Preference £1 3 3
2,922,533 JRH Family Ordinary £1 2,922,533 2,922,533
31,211,539 31,211,539

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. All ordinary shares rank equally with regard to the company's residual assets.

The holders of the preference shares have no voting nor dividend rights. On a return, liquidation or capital reduction or otherwise assets less liabilities are to be applied to the preference shareholders second after first paying the employee ownership trust its entitlement. All preference shares are redeemable at par in accordance with the articles of the company under the share purchase agreement.

22. RESERVES

Group
Share
Retained option
earnings reserve Totals
£    £    £   

At 1 July 2022 650,439 - 650,439
Profit for the year 5,608,501 5,608,501
Contribution to EOT (2,395,000 ) - (2,395,000 )
Pensions actuarial gain/(loss) (404,000 ) - (404,000 )
Credit relating to equity
settled share based payments - 240,932 240,932
At 30 June 2023 3,459,940 240,932 3,700,872

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

22. RESERVES - continued

Company
Share
Retained option
earnings reserve Totals
£    £    £   

At 1 July 2022 10,000 - 10,000
Profit for the year 2,694,814 2,694,814
Contribution to EOT (2,395,000 ) - (2,395,000 )
Credit relating to equity
settled share based payments - 240,932 240,932
At 30 June 2023 309,814 240,932 550,746

The share option reserve represents the charge to profit or loss for services received by the Group in relation to equity settled share based payments not yet settled.

23. NON-CONTROLLING INTERESTS

Minority interests are attributable to non group members of Harlows Kidderminster LLP.

24. EMPLOYEE BENEFIT OBLIGATIONS

The Group sponsors The Harlow Bros Ltd Retirement Benefits Scheme which is a defined benefit scheme in the UK. The scheme is closed to new entrants. As a consequence the current service cost calculated under the projected unit method can be expected to increase over time, as the average age of the membership increases. A full actuarial valuation was carried out at 5th April 2018 and updated to 30th June 2022 by a qualified actuary, independent of the scheme's sponsoring employer. The major assumptions used by the actuary are shown below.

The most recent actuarial valuation showed a surplus of £604,000, however this is reduced by an asset ceiling of £0 so this is not recognised in the accounts. The employer will meet all levies to the Pension Protection Fund, insurance premiums for death in service benefits and management and administration expenses as and when they are due. The scheme ceased to future accruals on the 31st March 2019.

The assets of the scheme have been valued using a discounted cash-flow approach using the same assumptions as are used to value the liabilities. This is the same approach as adopted in previous years. The liabilities of the scheme have been calculated using the following principal actuarial assumptions.

The mortality assumptions adopted at 30th June 2022 imply the following life expectancies :

Male retiring at age 65 in 2023 21.7 years
Female retiring at age 65 in 2023 23.6 years
Male retiring at age 65 in 2043 22.9 years
Female retiring at age 65 in 2043 25.0 years

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

24. EMPLOYEE BENEFIT OBLIGATIONS - continued

The amounts recognised in profit or loss are as follows:

Defined benefit
pension plans
30.6.23 30.6.22
£    £   
Current service cost - 1,000
Net interest from net defined benefit
asset/liability

(14,000

)

(1,000

)
Past service cost - -
(14,000 ) -

Actual return on plan assets 62,000 (87,000 )

Changes in the present value of the defined benefit obligation are as follows:

Defined benefit
pension plans
30.6.23 30.6.22
£    £   
Opening defined benefit obligation 1,283,000 1,664,000
Current service cost - 1,000
Interest cost 48,000 31,000
Actuarial losses/(gains) (200,000 ) (306,000 )
Benefits paid (27,000 ) (107,000 )
1,104,000 1,283,000

Changes in the fair value of scheme assets are as follows:

Defined benefit
pension plans
30.6.23 30.6.22
£    £   
Opening fair value of scheme assets 1,567,000 1,761,000
Contributions by employer 106,000 -
Expected return 62,000 32,000
Actuarial gains/(losses) - (119,000 )
Benefits paid (27,000 ) (107,000 )
Assets subject to ceiling (604,000 ) -
1,104,000 1,567,000

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

24. EMPLOYEE BENEFIT OBLIGATIONS - continued

The amounts recognised in other comprehensive income are as follows:

Defined benefit
pension plans
30.6.23 30.6.22
£    £   
Actual return less expected return on pension
assets

(1,000

)

(119,000

)
Experience gains and losses arising on the
scheme liabilities

64,000

(146,000

)
63,000 (265,000 )

The major categories of scheme assets as amounts of total scheme assets are as follows:

Defined benefit
pension plans
30.6.23 30.6.22
£    £   
Cash 1,068,000 989,000
Other assets 640,000 -
Asset ceiling (604,000 ) -
Alternatives - 578,000
1,104,000 1,567,000

None of the fair values of the assets shown above include any direct investments in the company’s own financial instruments or any property occupied by, or other assets used by, the company.

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

30.6.23 30.6.22
Discount rate 5.20% 3.80%
Future pension increases 3.10% 2.40%
Inflation 3.40% -

Defined contribution scheme

The Group operates defined contribution pension schemes for the directors and employees. The Group makes contributions to its pension scheme for employees, including directors when required. The assets of the scheme are held separately from those of the Group in an independently administered fund. At the balance sheet date, unpaid contributions of £63,126 were due to the fund. These are included in other creditors. The pension charge represents contributions due from the Group totalling £67,872 are charged to the profit & loss account in the period that they arise.

25. RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements.

Harlow Timber Group Limited (Registered number: 13794223)

Notes to the Consolidated Financial Statements - continued
for the Year Ended 30 June 2023

25. RELATED PARTY DISCLOSURES - continued

Other related parties
30.6.23 30.6.22
£    £   
Amount due to related party - 5,000

26. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is Harlow Timber Group Employee Ownership Trust which holds 90% of the
ordinary shares in Harlow Timber Group Limited in trust for the benefit of the employees. The trustee of the trust is Harlow Timber Group Trustees Limited. A company incorporated in England and Wales limited by Guarantee. There is no identifiable controlling party.