IRIS Accounts Production v23.4.0.336 01801353 Board of Directors 1.7.22 30.6.23 30.6.23 the design, manufacture and supply of roof trusses to the building trade. true false true true false false true true false Ordinary 1.00000 iso4217:GBPiso4217:USDiso4217:EURxbrli:sharesxbrli:pureutr:tonnesutr:kWh018013532022-06-30018013532023-06-30018013532022-07-012023-06-30018013532021-06-30018013532021-07-012022-06-30018013532022-06-3001801353ns15:EnglandWales2022-07-012023-06-3001801353ns14:PoundSterling2022-07-012023-06-3001801353ns10:Director12022-07-012023-06-3001801353ns10:Director22022-07-012023-06-3001801353ns10:PrivateLimitedCompanyLtd2022-07-012023-06-3001801353ns10:FRS1022022-07-012023-06-3001801353ns10:Audited2022-07-012023-06-3001801353ns10:LargeMedium-sizedCompaniesRegimeForDirectorsReport2022-07-012023-06-3001801353ns10:LargeMedium-sizedCompaniesRegimeForAccounts2022-07-012023-06-3001801353ns10:FullAccounts2022-07-012023-06-3001801353ns10:OrdinaryShareClass12022-07-012023-06-3001801353ns10:Director32022-07-012023-06-3001801353ns10:Director42022-07-012023-06-3001801353ns10:Director52022-07-012023-06-3001801353ns10:Director62022-07-012023-06-3001801353ns10:Director72022-07-012023-06-3001801353ns10:RegisteredOffice2022-07-012023-06-300180135312022-07-012023-06-300180135312021-07-012022-06-3001801353ns5:CurrentFinancialInstruments2023-06-3001801353ns5:CurrentFinancialInstruments2022-06-3001801353ns5:ShareCapital2023-06-3001801353ns5:ShareCapital2022-06-3001801353ns5:RetainedEarningsAccumulatedLosses2023-06-3001801353ns5:RetainedEarningsAccumulatedLosses2022-06-3001801353ns5:ShareCapital2021-06-3001801353ns5:RetainedEarningsAccumulatedLosses2021-06-3001801353ns5:RetainedEarningsAccumulatedLosses2021-07-012022-06-3001801353ns5:RetainedEarningsAccumulatedLosses2022-07-012023-06-3001801353ns5:OwnedOrFreeholdAssetsns5:LandBuildings2022-07-012023-06-3001801353ns5:PlantMachinery2022-07-012023-06-3001801353ns5:FurnitureFittings2022-07-012023-06-3001801353ns5:MotorVehicles2022-07-012023-06-3001801353ns10:HighestPaidDirector2022-07-012023-06-3001801353ns10:HighestPaidDirector2021-07-012022-06-3001801353ns5:PlantEquipmentOtherAssetsUnderOperatingLeases2022-07-012023-06-3001801353ns5:PlantEquipmentOtherAssetsUnderOperatingLeases2021-07-012022-06-3001801353ns5:OwnedAssets2022-07-012023-06-3001801353ns5:OwnedAssets2021-07-012022-06-3001801353112022-07-012023-06-3001801353112021-07-012022-06-3001801353ns10:OrdinaryShareClass12021-07-012022-06-3001801353ns5:LandBuildings2022-06-3001801353ns5:PlantMachinery2022-06-3001801353ns5:FurnitureFittings2022-06-3001801353ns5:MotorVehicles2022-06-3001801353ns5:LandBuildings2022-07-012023-06-3001801353ns5:LandBuildings2023-06-3001801353ns5:PlantMachinery2023-06-3001801353ns5:FurnitureFittings2023-06-3001801353ns5:MotorVehicles2023-06-3001801353ns5:LandBuildings2022-06-3001801353ns5:PlantMachinery2022-06-3001801353ns5:FurnitureFittings2022-06-3001801353ns5:MotorVehicles2022-06-3001801353ns5:CurrentFinancialInstrumentsns5:WithinOneYear2023-06-3001801353ns5:CurrentFinancialInstrumentsns5:WithinOneYear2022-06-3001801353ns5:CurrentFinancialInstruments2022-07-012023-06-3001801353ns5:WithinOneYear2023-06-3001801353ns5:WithinOneYear2022-06-3001801353ns5:BetweenOneFiveYears2023-06-3001801353ns5:BetweenOneFiveYears2022-06-3001801353ns5:MoreThanFiveYears2023-06-3001801353ns5:MoreThanFiveYears2022-06-3001801353ns5:AllPeriods2023-06-3001801353ns5:AllPeriods2022-06-3001801353ns5:AcceleratedTaxDepreciationDeferredTax2023-06-3001801353ns5:AcceleratedTaxDepreciationDeferredTax2022-06-3001801353ns5:DeferredTaxation2022-06-3001801353ns5:DeferredTaxation2022-07-012023-06-3001801353ns5:DeferredTaxation2023-06-3001801353ns10:OrdinaryShareClass12023-06-30
REGISTERED NUMBER: 01801353 (England and Wales)















Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 June 2023

for

Harlow Timber Systems Ltd

Harlow Timber Systems Ltd (Registered number: 01801353)






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




Page

Company Information 1

Strategic Report 2

Report of the Directors 7

Report of the Independent Auditors 9

Income Statement 13

Other Comprehensive Income 14

Balance Sheet 15

Statement of Changes in Equity 16

Notes to the Financial Statements 17


Harlow Timber Systems Ltd

Company Information
for the Year Ended 30 June 2023







DIRECTORS: DJ Stockill
J R Harlow
G J Jarvis
S Dinsdale
C Bowns
M S Hemsley
N M Sabey



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



REGISTERED NUMBER: 01801353 (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 Systems Ltd (Registered number: 01801353)

Strategic Report
for the Year Ended 30 June 2023

The directors present their strategic report 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.

The company is a wholly-owned subsidiary of Harlow Timber Group Ltd and operates in the timber industry. The principal activities of the company for the year under review are that of a engineered timber distributor and manufacturer. We provide products to a wide range of customers within the construction sector and look to create value at the various stages of the selling process.

The business activities are undertaken through the three manufacturing units located across the Midlands region. We pride ourselves on having a long held ethos for excellent customer service provided through our knowledgeable staff and our ability to offer a wide product range at competitive prices.

Results and performance
We are pleased to report a strong year of trading results for the company, as set out on pages 13 to 29, which show a small fall in turnover compared to the prior year peak which was as a result of the house building sector showing resilience during the pandemic and high timber prices. Our customers traded well during this year and into Q1 but the immediate future is less certain given the recent political and economic conditions; increased interest rates being a major factor.

The results reflect the company's strong underlying trading activities whilst we drive to improve the efficiency and focus of our operations. Strong overhead control continues to be a key focus of management. We have continued to invest in all areas of the business, such as the vehicle fleet, production space and plant & machinery to ensure that we can continue to meet demand whilst offering quality products and customer service.

We continue to meet the criteria to remain certified by Programme for the Endorsement of Forest Certification (PEFC) products. This is to ensure we supply traceable and sustainable quality products in line with EU regulations for which we assess all suppliers continually.

Staff numbers peaked this year in line with increased production to meet the growing demand from customers. We are always looking to continually improve their knowledge and identify their training needs. This includes investment in trainees, which are important to ensure that we have new talent coming through the business, and continued investment in internal systems to manage the growing workforce needs.

Overall we are very pleased again with the current years trading results and we can report a growth in the value of shareholders' funds. The result is a strong balance sheet which enables us to implement our growth and investments plans for the future, whilst maintaining a good level of working capital. We are confident that this will continue steadily for the foreseeable future, as we continually aim to develop and grow the business across our core product areas.


Harlow Timber Systems Ltd (Registered number: 01801353)

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 company 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 company 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 company. 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 company. 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.

Key parts of our business, such as timber raw material purchasing, are affected by fluctuations in price and supply of materials, although purchasing policies and practices are in place seek to mitigate, where practicable, such risks. We procure materials from long standing and reliable supply partners which ensures we can meet production requirements. We benefit from being part of the Harlow group of companies and are able to take advantage of combined strategic purchasing opportunities allowing us to respond proactively to changes in market conditions.

The company'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 company purchases goods from international markets and is therefore exposed to foreign currency movements on such purchases.


Harlow Timber Systems Ltd (Registered number: 01801353)

Strategic Report
for the Year Ended 30 June 2023

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The activities of the company expose it to a number of financial risks during the normal course of the company's business. The company aims to limit undue exposure to business and financial risks and ensure sufficient working capital exists to fund operations and to mitigate any potential negative effects on the company's assets and profitability. The directors consider such risks and uncertainties to the business at this point in time are:

Currency risk
As the company 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.

Customer mix
There is a risk that the company 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
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. Company 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 company's debtors are shown in the notes to the financial statements.

Competitor risk
The company operates in a highly competitive market balancing both customer requirements and market pressures. The directors review and monitor these factors to ensure the company's competitiveness is upheld to enable the company 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
The company is exposed to liquidity risk as sufficient funds are required to support trading and financing activities. The company regularly monitors its liquidity position to ensure that sufficient funds are available to meet both current and future requirements.

The company'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 company'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.

The handling of timber products, both manually and mechanically, and the stacking and storage of these products at height, can be dangerous activities. We utilise the services provided by the Group 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.

Environmental
The directors recognise that the company 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 company.

We therefore make it a priority to ensure our timber is legally harvested and comes from well managed forests. The company 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).

Harlow Timber Systems Ltd (Registered number: 01801353)

Strategic Report
for the Year Ended 30 June 2023

The company has third party audits of their chain of custody for timber supplied as certified by PEFC 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 for customers and other stakeholders to view.

KEY PERFORMANCE INDICATORS
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company, these being turnover, gross margin, operating profit and earnings before interest tax depreciation and amortisation (EBITDA). The company also closely monitors other internal KPI's.

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 was down by 4% as timber prices started to fall from the high level generated by the Covid 19 environment.

Overall, operating profit is £2,218,958 (2022: £2,251,457) and profit before tax has increased to £2,311,224 (2022: £2,258,725). Profit after taxation is £1,827,001 (2022: £1,842,509). A dividend has been declared, as disclosed in the directors report.

FINANCIAL INSTRUMENTS
A summary of the company 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.

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 have 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 more 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.


Harlow Timber Systems Ltd (Registered number: 01801353)

Strategic Report
for the Year Ended 30 June 2023

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 company'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.

ON BEHALF OF THE BOARD:





N M Sabey - Director


19 February 2024

Harlow Timber Systems Ltd (Registered number: 01801353)

Report of the Directors
for the Year Ended 30 June 2023

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

DIVIDENDS
The total distribution of dividends for the year ended 30 June 2023 will be £ 563,000 .

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

DJ Stockill
J R Harlow
G J Jarvis
S Dinsdale
C Bowns
M S Hemsley
N M Sabey

DISCLOSURE IN THE STRATEGIC REPORT
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial instruments.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company 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 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 company'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 company's auditors are aware of that information.

Harlow Timber Systems Ltd (Registered number: 01801353)

Report of the Directors
for the Year Ended 30 June 2023


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 Systems Ltd

Opinion
We have audited the financial statements of Harlow Timber Systems Ltd (the 'company') for the year ended 30 June 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and 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 company's affairs as at 30 June 2023 and of its 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 company 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 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 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 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 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 Systems Ltd


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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, or returns adequate for our audit have not been received from branches not visited by us; or
- the 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 seven, 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 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 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 Systems Ltd


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

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

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
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.


Report of the Independent Auditors to the Members of
Harlow Timber Systems Ltd

We determined that the principal risk in relation to areas of increased management judgement, which could be impacted by management bias, was through the use of journal entries that increase revenues, profits or the carrying value of property plant and equipment in order to inflate results of the company.
Our audit procedures involved:

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

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 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.

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 Systems Ltd (Registered number: 01801353)

Income Statement
for the Year Ended 30 June 2023

30.6.23 30.6.22
Notes £    £    £    £   

TURNOVER 3 20,857,585 21,728,838

Cost of sales 14,419,668 15,853,103
GROSS PROFIT 6,437,917 5,875,735

Distribution costs 436,955 376,986
Administrative expenses 3,786,307 3,251,292
4,223,262 3,628,278
2,214,655 2,247,457

Other operating income 4,303 4,000
OPERATING PROFIT 5 2,218,958 2,251,457

Interest receivable and similar income 6 92,266 7,268
PROFIT BEFORE TAXATION 2,311,224 2,258,725

Tax on profit 7 484,223 416,216
PROFIT FOR THE FINANCIAL YEAR 1,827,001 1,842,509

Harlow Timber Systems Ltd (Registered number: 01801353)

Other Comprehensive Income
for the Year Ended 30 June 2023

30.6.23 30.6.22
Notes £    £   

PROFIT FOR THE YEAR 1,827,001 1,842,509


OTHER COMPREHENSIVE INCOME
Equity settled share options 68,838 -
Income tax relating to other comprehensive
income

-

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

68,838

-
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

1,895,839

1,842,509

Harlow Timber Systems Ltd (Registered number: 01801353)

Balance Sheet
30 June 2023

30.6.23 30.6.22
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 10 794,927 760,828

CURRENT ASSETS
Stocks 11 1,168,320 1,711,807
Debtors 12 3,685,187 4,214,511
Cash at bank and in hand 3,940,736 2,286,351
8,794,243 8,212,669
CREDITORS
Amounts falling due within one year 13 2,750,887 3,501,434
NET CURRENT ASSETS 6,043,356 4,711,235
TOTAL ASSETS LESS CURRENT
LIABILITIES

6,838,283

5,472,063

PROVISIONS FOR LIABILITIES 17 55,725 22,344
NET ASSETS 6,782,558 5,449,719

CAPITAL AND RESERVES
Called up share capital 18 100 100
Retained earnings 6,782,458 5,449,619
SHAREHOLDERS' FUNDS 6,782,558 5,449,719

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 Systems Ltd (Registered number: 01801353)

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

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 July 2021 100 4,801,110 4,801,210

Changes in equity
Dividends - (1,194,000 ) (1,194,000 )
Total comprehensive income - 1,842,509 1,842,509
Balance at 30 June 2022 100 5,449,619 5,449,719

Changes in equity
Dividends - (563,000 ) (563,000 )
Total comprehensive income - 1,895,839 1,895,839
Balance at 30 June 2023 100 6,782,458 6,782,558

Harlow Timber Systems Ltd (Registered number: 01801353)

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

1. STATUTORY INFORMATION

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

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


The principal place of business is Walker Rd, Forest Business Park, Bardon Hill, Coalville, Leicestershire, LE67 1TU.

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.

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 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 note 2 below.

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

Financial Reporting Standard 102 - reduced disclosure exemptions
The company 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 requirements of Section 7 Statement of Cash Flows;
the requirement of paragraph 33.7.

The company is a wholly owned subsidiary of Harlow Timber Group Limited, and subsequently a qualifying entity under FRS102 and has such applied the qualifying exemptions given above under FRS102 in respect of those disclosures.

The company has taken advantage of the exemption, under paragraph 1.12(b) of FRS 102, from preparing a statement of cash flows, on the basis that it is a qualifying entity and its ultimate parent company, Harlow Bros Holdings Limited, includes the company’s cash flows in its consolidated financial statements.

The consolidated financial statements of Harlow Timber Group Limited, within which the company is included, can be obtained from the Companies House.

Harlow Timber Systems Ltd (Registered number: 01801353)

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

2. ACCOUNTING POLICIES - continued

Significant judgements and estimates
In the application of the company'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.

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.

- Determine whether there are indicators of impairment of the company's tangible and intangible 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 company has taken an assessment of the residual values that are appropriate for the business and reviews this assessment annually. Note 10 provides details of the value of fixed assets capitalised.

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 Company 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 Company. 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 accounting policies.

b) Providing for bad and doubtful debts
The company makes an estimate of the recoverable value of trade and other debtors. The company uses estimates based on historical experience in determining the level of debts, which the company 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.

Harlow Timber Systems Ltd (Registered number: 01801353)

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

2. ACCOUNTING POLICIES - continued

Turnover
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to customers during the year.

Revenue is recognised when the significant risks and rewards of the goods or services provided have transferred to the buyer, the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the company.

Revenue is measured at the fair value of the consideration receivable from the sale of goods and services to third parties after deducting discounts and other promotional activities. Revenue may include duties which the company pays as principal, but excludes amounts collected on behalf of other parties, such as value added tax or other sales taxes.

Revenue of the company comprises the following key streams:

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.

Retail sales are usually by cash, credit or payment card. Provision is made for credit notes based on the expected level of returns which is based on the historical experience taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.

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.
Freehold property - 2% on cost
Plant and machinery - 15% on cost
Fixtures, fittings & computers - at varying rates on cost
Motor vehicles - 25% 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 Systems Ltd (Registered number: 01801353)

Notes to the 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 company only 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 company 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.


Harlow Timber Systems Ltd (Registered number: 01801353)

Notes to the 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 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
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.

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

Pension costs and other post-retirement benefits
The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company 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 company in independently administered funds.

The company also makes 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.

Share-based payment
Where the company participates in a share-based payment arrangement established by a group company, the company takes advantage of the alternative treatment allowed under Section 26 of FRS 102. The company recognises the share-based payment expense based on an allocation of its share of the group’s total expense, calculated in proportion to the number of participating employees. The corresponding credit is recognised in retained earnings as a component of equity.

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 Company'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.

Harlow Timber Systems Ltd (Registered number: 01801353)

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

2. ACCOUNTING POLICIES - continued

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 company to continue as a going concern.

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

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

3. TURNOVER

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

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

The company'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
30.6.23 30.6.22
£    £   
Wages and salaries 4,068,825 3,492,435
Social security costs 387,355 347,919
Other pension costs 70,616 65,736
4,526,796 3,906,090

The average number of employees during the year was as follows:
30.6.23 30.6.22

Directors 4 4
Management/Admin 26 25
Production 115 105
145 134

30.6.23 30.6.22
£    £   
Directors' remuneration 345,407 340,670
Directors' long term incentive schemes 68,838 -
Directors' pension contributions to money purchase schemes 24,210 23,126

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

Money purchase schemes 4 4

Harlow Timber Systems Ltd (Registered number: 01801353)

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

4. EMPLOYEES AND DIRECTORS - continued

Information regarding the highest paid director is as follows:
30.6.23 30.6.22
£    £   
Emoluments etc 129,945 109,351
Pension contributions to money purchase schemes 11,235 10,826

5. OPERATING PROFIT

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

30.6.23 30.6.22
£    £   
Hire of plant and machinery 3,949 10,767
Other operating leases 187,814 50,822
Depreciation - owned assets 314,709 345,862
Profit on disposal of fixed assets (31,438 ) (44,299 )
Auditors' remuneration 15,755 11,115
Stock recognised as an expense 11,326,821 13,038,651

In accordance with SI 2008/489 the company has not disclosed the fees payable to the company’s auditors for ‘Other services’ as this information is included in the consolidated financial statements of Harlow Timber Group Limited.

6. INTEREST RECEIVABLE AND SIMILAR INCOME
30.6.23 30.6.22
£    £   
Deposit account interest 92,266 6,032
Other interest - 1,236
92,266 7,268

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
30.6.23 30.6.22
£    £   
Current tax:
UK corporation tax 450,842 409,615
Prior year adjustment - (14,783 )
Total current tax 450,842 394,832

Deferred tax 33,381 21,384
Tax on profit 484,223 416,216

Harlow Timber Systems Ltd (Registered number: 01801353)

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

7. TAXATION - continued

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

30.6.23 30.6.22
£    £   
Profit before tax 2,311,224 2,258,725
Profit multiplied by the standard rate of corporation tax in the UK of
20.500% (2022 - 19%)

473,801

429,158

Effects of:
Expenses not deductible for tax purposes 7,576 659
Capital allowances in excess of depreciation (30,535 ) (20,202 )
Adjustments to tax charge in respect of previous periods - (14,783 )

Deferred tax movement 33,381 21,384
Total tax charge 484,223 416,216

Tax effects relating to effects of other comprehensive income

30.6.23
Gross Tax Net
£    £    £   
Equity settled share options 68,838 - 68,838

In the Spring Budget 2021 the UK government announced that they will be increasing the corporation tax rate from 19% to 25% from 1 April 2023. This rate change was substantively enacted on 24 May 2021 which is before the balance sheet date and therefore deferred taxes are recognised at this rate at the balance sheet date.

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.

8. DIVIDENDS
30.6.23 30.6.22
£    £   
Interim 563,000 1,194,000

Harlow Timber Systems Ltd (Registered number: 01801353)

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

9. SHARE-BASED PAYMENTS

Certain employees of the company along with other group employees 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 company. Employees are required to remain in employment with the group during the vesting period.

The company recognises an equity-settled share-based payment expense based on a reasonable allocation of the total charge for the group. This allocation is the total charge for the group pro-rated for the number of expected participating employees of the company.

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 774,194 £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 774,194 £0.155 0 £0
Exercisable at the end of the period 0 £0.155 0 £0

The total charge for the year of £68,838 (2022: £0) was recognised by the company for equity settled share-based payment transactions.

10. TANGIBLE FIXED ASSETS
Fixtures,
Freehold Plant and fittings Motor
property machinery & computers vehicles Totals
£    £    £    £    £   
COST
At 1 July 2022 - 1,808,847 388,243 887,777 3,084,867
Additions 2,070 253,942 110,296 10,117 376,425
Disposals - (3,300 ) - (153,591 ) (156,891 )
At 30 June 2023 2,070 2,059,489 498,539 744,303 3,304,401
DEPRECIATION
At 1 July 2022 - 1,414,704 244,553 664,782 2,324,039
Charge for year 17 146,179 36,435 132,078 314,709
Eliminated on disposal - (1,170 ) - (128,104 ) (129,274 )
At 30 June 2023 17 1,559,713 280,988 668,756 2,509,474
NET BOOK VALUE
At 30 June 2023 2,053 499,776 217,551 75,547 794,927
At 30 June 2022 - 394,143 143,690 222,995 760,828

Harlow Timber Systems Ltd (Registered number: 01801353)

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

11. STOCKS
30.6.23 30.6.22
£    £   
Raw materials 1,098,376 1,567,924
Work-in-progress 69,944 143,883
1,168,320 1,711,807

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

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
30.6.23 30.6.22
£    £   
Trade debtors 2,842,878 3,568,511
Amounts owed by group entities 279,984 128,387
Other debtors 8,110 -
Prepayments and accrued income 554,215 517,613
3,685,187 4,214,511

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

Trade debtors are stated after provisions for impairment of £54,539.

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
30.6.23 30.6.22
£    £   
Bank loans and overdrafts (see note 14) - 5,652
Trade creditors 1,620,549 2,490,582
Tax 190,457 119,092
Social security and other taxes 110,871 111,962
VAT 368,244 363,612
Other creditors 14,128 13,121
Accruals and deferred income 446,638 397,413
2,750,887 3,501,434

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

14. LOANS

An analysis of the maturity of loans is given below:

30.6.23 30.6.22
£    £   
Amounts falling due within one year or on demand:
Bank overdrafts - 5,652

Harlow Timber Systems Ltd (Registered number: 01801353)

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

15. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
30.6.23 30.6.22
£    £   
Within one year 307,882 278,306
Between one and five years 726,889 738,727
In more than five years 137,558 270,212
1,172,329 1,287,245

16. FINANCIAL INSTRUMENTS

2023 2022
£ £

Financial assets measured at amortised cost 7,071,708 5,983,249

Financial liabilities measured at amortised cost 2,081,315 2,906,768


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.

17. PROVISIONS FOR LIABILITIES
30.6.23 30.6.22
£    £   
Deferred tax
Accelerated capital allowances 22,344 25,455
Other timing differences 33,381 (3,111 )
55,725 22,344

Deferred
tax
£   
Balance at 1 July 2022 22,344
Provided during year 33,381
Balance at 30 June 2023 55,725

Deferred tax is provided 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 profitability of the company.

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

18. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 30.6.23 30.6.22
value: £    £   
100 Ordinary £1 100 100

Harlow Timber Systems Ltd (Registered number: 01801353)

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

18. CALLED UP SHARE CAPITAL - continued

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.

19. PENSION COMMITMENTS

The company operates defined contribution pension schemes for the directors and employees. The company makes contributions to its pension scheme for employees, including directors when required. The assets of the scheme are held separately from those of the company in an independently administered fund. At the balance sheet date, unpaid contributions of £13,424 (2022 - £12,444) were due to the fund. These are included in other creditors. The pension cost charge for the year represents contributions payable by the company to the schemes and amounted to £70,616 (2022- £65,736).

20. 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.

21. ULTIMATE CONTROLLING PARTY

The company is controlled by Harlow Timber Group Limited, which owns all of the issued share capital in the company. No other group statements include the results of the company. The parent undertaking and the smallest and largest group to consolidate these financial statements is Harlow Timber Group Limited. Copies of the consolidated financial statements can be obtained from the the company registered office as shown on the company information page to these financial statements.

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.