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REGISTERED NUMBER: 00907445 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 30 June 2025

for

Harlow Bros. Limited

Harlow Bros. Limited (Registered number: 00907445)

Contents of the Financial Statements

for the Year Ended 30 June 2025

Page |

Company Information | 1 |

Strategic Report | 2 |

Report of the Directors | 10 |

Report of the Independent Auditors | 12 |

Income Statement | 16 |

Other Comprehensive Income | 17 |

Balance Sheet | 18 |

Statement of Changes in Equity | 19 |

Notes to the Financial Statements | 20 |

Harlow Bros. Limited

Company Information

for the Year Ended 30 June 2025

| DIRECTORS: | J R Harlow

| J Sharkey

| N Sabey

| M S Hemsley

| A K Harvey

| REGISTERED OFFICE: | Hathern Road

| Long Whatton

| Loughborough

| Leicestershire

| LE12 5DE

| REGISTERED NUMBER: | 00907445 (England and Wales)

| SENIOR STATUTORY AUDITOR: | Anna Brocklehurst

| AUDITORS: | Charnwood Accountants & Business Advisors LLP

| Statutory Auditor

| The Point

| Granite Way

| Mountsorrel

| Loughborough

| Leicestershire

| LE12 7TZ

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

The directors present their strategic report for the year ended 30 June 2025.

REVIEW OF THE 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 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 network of branches located across the Midlands region.

We pride ourselves on having an ethos of excellent customer service throughout this network to enable enhancement of our customers experience in doing business with us, through having knowledgeable staff and offering a wide product range at competitive prices.

Results and performance

We are realistic about this year's trading results for the company, as set out on pages 16 to 36, given the politically influenced market contractions.

Our customers remained cautious during this year, but the immediate future remains less certain given political mindset and economic conditions; continued high Living wage increases, the national insurance rise, sticky interest rates and nervousness around the delayed November budget being the main factors.

The forthcoming year will be challenging with inflation heavily influenced by labour market cost pressure resulting in tighter margins. We remain cautious in relation to how these elements will influence our markets.

The result achieved reflects the company's broad base underlying trading activities whilst we strive to improve the efficiency and focus of our operations. Strong overhead control at branch level remains a key focus of management.

Changes to H&S regulations have impacted all areas of the timber industry generating high one-off costs with no commercial advantage. However, investment in a brand new site in Nottingham, replacing the original, established location has proven commercially timely. This alongside ongoing reviews of all areas within the business, including the vehicle fleet and computer infrastructure support our aim towards improving the customer experience to ensure that we remain competitive whilst offering quality products and customer service.

Stock values increased compared to last year. We continue to work with our supply chain to source the most competitively priced products without compromising on quality with a strong emphasis on Group buying knowledge. 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.

The gross margin fell slightly compared to last year due to cost fluctuations in the timber market and government driven labour cost increases. Timber prices and supply remained stable throughout this financial year. The directors are aware of the implications of this to the market and are continually looking to source the best available product at the most competitive prices.

All trading branches 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. They review 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.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

REVIEW OF BUSINESS CONTINUED

Details of the number of employees and related costs can be found in Note 4 to the financial statements. Staff numbers have risen slightly this year and we recognise that our staff are a major asset for the company. We are always looking to continually improve the knowledge of all our staff through training and personal development.

This years results include significant accruals in relation to the following one off transactions:

Forecast ongoing high fees to a 3rd party relating to the transfer of the HBL Defined Benefit Scheme to Just in 2026.

Potential costs relating to leaving an unreliable supplier of computer infrastructure.

The current years trading results were as anticipated given all these factors, that said all dividend payments made relate to payments towards the loan created as part of becoming Employee Owned. Whilst accepting these transactions will have an impact to certain balance sheet headings, strong trading in previous years has enabled the potential for a reduced payback period whilst still continuing to invest in infrastructure, employees and future capital investment.

Pension scheme

During this financial period, the company began the exercise of transferring the scheme over to a new preferred provider - Just. Although this has proven a costly exercise, the long term benefits for the employees and the company were identified, along with the ambition that this transfer will be completed by the end of 2026.

PRINCIPLE 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.

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.

Parts of our business, such as timber raw material purchasing, are affected by fluctuations in price and supply of key materials, although purchasing policies and practices in place seek to mitigate, where practicable, such risks. We secure material from our long standing supply partners which ensures we can meet our production requirements.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED

Other than the general uncertainty that surrounds the decision to leave the European Union, Brexit has not had a significant impact on the business or operations so far. 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. The company 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 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. This is mitigated in part by the company holding foreign currency accounts from which such transactions will flow through.

Customer mix

There is a risk that the company becomes too dependent on a particular customer and product range. 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.

Pension funding risk

The company 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 % equities and % other assets. The company 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 company to the pension scheme.

The company 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 company'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

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

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.

We now factor in repayments to the Harlow family for the Employee Ownership loan and this does mean tight control on our cash position remains key to maintain our historically strong bank balance.

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.

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.

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.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

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 Trustees Limited. This is the third year of employee ownership.

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.

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 introduction of the Company's Vision, Mission and Values has established a clear strategic direction for the organisation, guiding departmental objectives accordingly. Clearly defined values provide employees with an understanding of organisational priorities and demonstrate how their contributions advance business goals. These values are now integrated into both probationary and performance review processes, encouraging all staff to reflect on how they can positively influence Harlow's culture.

In 2024, the Values in Practice award scheme was launched to formally recognise individuals who exemplify the company's core values and to motivate broader participation. Additionally, the long-standing length of service programme honoured 63 employees this year, acknowledging their dedication to the business, their teams, and the larger Harlow Group.

Recognising the critical importance of mental health both globally and within our sector, the company has intensified its support initiatives by expanding access to counselling, offering services with mental health professionals, and streamlining GP consultations. Numerous mental health awareness sessions have also been organised for designated champions, equipping them with resources to guide colleagues toward appropriate support.

Harlows is committed to fostering effective employee development and attracting new talent to the industry. Our training policy ensures all team members receive the support necessary to perform their roles effectively and pursue career advancement without discrimination. Through our pledge with the Builders Merchant Federation, we maintain a target of having at least 5% of employees enrolled in apprenticeship programmes at any time. The annual apprentice graduation ceremony continues to celebrate those who complete their courses alongside peers and senior leaders. Furthermore, as part of ongoing investment in employee ownership, a bespoke Management Development Programme has been introduced, with 11 managers participating in workshops in the first group and 12 in the second group, designed to enhance leadership capabilities and adapt to evolving management challenges. We remain steadfast in our commitment to supporting the growth and progression of all employees, regardless of role, experience, or background.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

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 company 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 company has a responsibility to the environment, customers, suppliers and staff to operate its commercial activities using products from 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) or the Forest Stewardship Council (FSC).

The company has third party audits of their chain of custody for timber supplied as certified by PEFC, FSC. This is to ensure that claims made about certification can be proven. 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 company holds 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 maintain this shareholding on behalf of the employees. This was the third full year of trading under this structure.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

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 for example;

- Vehicle statistics on usage & efficiency

- Individual employee performance in line with our HR objectives

- The reason and level of sales credit notes raised

- Daily sales performance and margin threshold reviews

We strive to continually aim to develop, enhance and grow our scalable business model in order to increase our market share, whilst ensuring we maintain our gross margin performance. The key prime measure of our economic output is revenue growth and is vital to measure shareholder return and the success of our expansion strategies. Turnover for the year across the group decreased, as expected as timber costs returned to more realistic levels. We remain focused on offering the best possible range of products and service to our customers.

Gross margin provides an indication of the quality of turnover growth and is also a measure of value added by the company, reflecting the quality of the goods and services offered. The gross margin for the year has increased due to good stock management and considered improved Group buying practices.

Overall, the company's EBITDA fell to £1.4m (2024: £1.9m), with operating profit reported at £0.25m (2024: £1.3m. Profit after taxation is £0.5m (2024: £1.3m) with the defined benefit pension adjustment as shown in note 19 giving total comprehensive income of £0.5m for the year.During the year the company incurred exceptional one off costs of £341k in relation to the closure of the defined benefit pension scheme.

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.

Harlow Bros. Limited (Registered number: 00907445)

Strategic Report

for the Year Ended 30 June 2025

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, responsibilities and discretionary effort.

Communication through Training, utilising the council channels and continuous review of the most effective options to achieve this aim will continue. Perhaps most importantly of all, the focus is to remain independent, resilient, and sustainably financed for the benefit of all employees.

The directors predicted the business environment to become increasingly challenging, influenced by the ongoing, regular above inflation Living wages increases compounded by the National insurance impact. There are also a number of economic, political and international factors influencing trading conditions within our markets and all these additional costs need careful management until a more stable and positive trading environment returns.

That said, the directors will continue to innovate and explore any opportunities to make considered investment where efficiencies or improved customer offering and services can be achieved.

Reviews of all current plant and processes will be made to enable any efficiency improvements to be identified and actioned.

ON BEHALF OF THE BOARD:

N Sabey - Director

25 March 2026

Harlow Bros. Limited (Registered number: 00907445)

Report of the Directors

for the Year Ended 30 June 2025

The directors present their report with the financial statements of the company for the year ended 30 June 2025.

DIVIDENDS

The total distribution of dividends for the year ended 30 June 2025 will be £ 2,322,000 .

DIRECTORS

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

J R Harlow

J Sharkey

N Sabey

M S Hemsley

A K Harvey

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;

- | 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 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 Bros. Limited (Registered number: 00907445)

Report of the Directors

for the Year Ended 30 June 2025

AUDITORS

The auditors, Charnwood Accountants & Business Advisors LLP, have expressed their willingness to continue in office as auditors and will be proposed for re-appointment at the forthcoming Annual General Meeting in accordance with Section 485 & 487 of the Companies Act 2006.

ON BEHALF OF THE BOARD:

N Sabey - Director

25 March 2026

Report of the Independent Auditors to the Members of

Harlow Bros. Limited

Opinion

We have audited the financial statements of Harlow Bros. Limited (the 'company') for the year ended 30 June 2025 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 2025 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 Bros. Limited

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 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 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 Bros. 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.

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 Bros. 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

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.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

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.

Anna Brocklehurst (Senior Statutory Auditor)

for and on behalf of Charnwood Accountants & Business Advisors LLP

Statutory Auditor

The Point

Granite Way

Mountsorrel

Loughborough

Leicestershire

LE12 7TZ

25 March 2026

Harlow Bros. Limited (Registered number: 00907445)

Income Statement

for the Year Ended 30 June 2025

| 30.6.25 | 30.6.24 |

| Notes | £ | £ | £ | £ |

TURNOVER | 3 | 46,712,072 |  | 43,861,836 |  |

Cost of sales | 37,663,054 |  | 34,706,034 |  |

GROSS PROFIT | 9,049,018 |  | 9,155,802 |  |

Distribution costs | 1,681,691 |  | 1,785,881 |  |

Administrative expenses | 7,201,869 |  | 6,138,218 |  |

|  |  | 8,883,560 |  |  |  |  | 7,924,099 |  |

165,458 |  | 1,231,703 |  |

Other operating income | 89,219 |  | 75,560 |  |

OPERATING PROFIT | 5 | 254,677 |  | 1,307,263 |  |

Interest receivable and similar income | 466,818 |  | 441,252 |  |

721,495 |  | 1,748,515 |  |

Interest payable and similar expenses | 6 | 1,681 |  | - |  |

PROFIT BEFORE TAXATION | 719,814 |  | 1,748,515 |  |

Tax on profit | 7 | 229,195 |  | 444,015 |  |

PROFIT FOR THE FINANCIAL YEAR | 490,619 |  | 1,304,500 |  |

Harlow Bros. Limited (Registered number: 00907445)

Other Comprehensive Income

for the Year Ended 30 June 2025

| 30.6.25 |  | 30.6.24

| Notes | £ | £ |

PROFIT FOR THE YEAR | 490,619 |  | 1,304,500 |  |

OTHER COMPREHENSIVE INCOME | - |  | - |  |

TOTAL COMPREHENSIVE INCOME FOR THE YEAR | 490,619 |  | 1,304,500 |  |

Harlow Bros. Limited (Registered number: 00907445)

Balance Sheet

30 June 2025

| 30.6.25 | 30.6.24 |

| Notes | £ | £ | £ | £ |

FIXED ASSETS

Intangible assets | 10 | - |  | - |  |

Tangible assets | 11 | 3,697,317 |  | 2,474,024 |  |

3,697,317 |  | 2,474,024 |  |

CURRENT ASSETS

Stocks | 12 | 8,884,020 |  | 8,001,149 |  |

Debtors | 13 | 12,214,949 |  | 11,611,680 |  |

Cash at bank | 7,463,229 |  | 9,951,663 |  |

28,562,198 |  | 29,564,492 |  |

CREDITORS

Amounts falling due within one year | 14 | 7,894,064 |  | 6,070,879 |  |

NET CURRENT ASSETS | 20,668,134 |  | 23,493,613 |  |

TOTAL ASSETS LESS CURRENT LIABILITIES | 24,365,451 |  | 25,967,637 |  |

PROVISIONS FOR LIABILITIES | 17 | 523,699 |  | 294,504 |  |

NET ASSETS | 23,841,752 |  | 25,673,133 |  |

CAPITAL AND RESERVES

Called up share capital | 18 | 177,864 |  | 177,864 |  |

Share premium | 19 | 9,649,769 |  | 9,649,769 |  |

Capital redemption reserve | 19 | 46,995 |  | 46,995 |  |

Retained earnings | 19 | 13,967,124 |  | 15,798,505 |  |

SHAREHOLDERS' FUNDS | 23,841,752 |  | 25,673,133 |  |

The financial statements were approved by the Board of Directors and authorised for issue on 25 March 2026 and were signed on its behalf by:

M S Hemsley - Director

Harlow Bros. Limited (Registered number: 00907445)

Statement of Changes in Equity

for the Year Ended 30 June 2025

| Called up |  | Capital |

| share |  | Retained |  | Share |  | redemption |  | Total

| capital |  | earnings |  | premium |  | reserve |  | equity

£ | £ | £ | £ | £ |

Balance at 1 July 2023 | 177,864 |  | 15,566,005 |  | 9,649,769 |  | 46,995 |  | 25,440,633 |  |

Changes in equity

Dividends | - |  | (1,072,000 | ) | - |  | - |  | (1,072,000 | ) |

Total comprehensive income | - |  | 1,304,500 |  | - |  | - |  | 1,304,500 |  |

Balance at 30 June 2024 | 177,864 |  | 15,798,505 |  | 9,649,769 |  | 46,995 |  | 25,673,133 |  |

Changes in equity

Dividends | - |  | (2,322,000 | ) | - |  | - |  | (2,322,000 | ) |

Total comprehensive income | - |  | 490,619 |  | - |  | - |  | 490,619 |  |

Balance at 30 June 2025 | 177,864 |  | 13,967,124 |  | 9,649,769 |  | 46,995 |  | 23,841,752 |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements

for the Year Ended 30 June 2025

1. | STATUTORY INFORMATION

| Harlow Bros. 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 Company Information page.

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

| The nature of the company’s operations and its principal activities are set out in the Strategic Report.

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 the notes 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 Timber Group Limited, includes the company’s cash flows in its consolidated financial statements.

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

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 made 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 tangible fixed asset accounting policy.

| 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.

| c) Defined benefit pension scheme

| The company 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 company. See note 19 for the disclosures relating to the defined benefit pension scheme.

| d) Stock provisioning

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

2. | ACCOUNTING POLICIES - continued

| At each reporting date judgement is used by management to establish the net realisable value of stock. Provisions are established for net realisable value where appropriate and are made are based on facts available at the time. The level of provision required is reviewed on an on-going basis.

| In arriving at an estimate for the net realisable value of stock, judgement is required in assessing their likely

| value on realisation taking into account market and technological changes associated with the demand for the product line.

| Revenue recognition

| 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.

| 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 | - | at varying rates on cost

| Plant, machinery, fixtures and 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 Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

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.

| 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 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.

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

2. | ACCOUNTING POLICIES - continued

| Taxation

| 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

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

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

2. | ACCOUNTING POLICIES - continued

| Pension costs and other post-retirement benefits

| The company 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 company 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 company'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 net calculated gain.

| 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

| 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.

| 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 Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

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 company operates within the geographical region of the United Kingdom.

4. | EMPLOYEES AND DIRECTORS

| 30.6.25 |  | 30.6.24

£ | £ |

| Wages and salaries | 8,361,618 |  | 7,938,002 |  |

| Social security costs | 830,527 |  | 739,381 |  |

| Other pension costs | 105,010 |  | 101,439 |  |

9,297,155 |  | 8,778,822 |  |

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

| 30.6.25 |  | 30.6.24

| Directors | 4 |  | 5 |  |

| Management and administration | 130 |  | 130 |  |

| Production | 169 |  | 167 |  |

303 |  | 302 |  |

| 30.6.25 |  | 30.6.24

£ | £ |

| Directors' remuneration | 383,672 |  | 453,391 |  |

| Directors' pension contributions to money purchase schemes | 30,376 |  | 32,228 |  |

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

| Money purchase schemes | 6 |  | 6 |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

4. | EMPLOYEES AND DIRECTORS - continued

| Information regarding the highest paid director is as follows:

| 30.6.25 |  | 30.6.24

£ | £ |

| Emoluments etc | 115,200 |  | 115,150 |  |

| Pension contributions to money purchase schemes | 11,500 |  | 10,350 |  |

5. | OPERATING PROFIT

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

| 30.6.25 |  | 30.6.24

£ | £ |

| Hire of plant and machinery | 18,973 |  | 23,763 |  |

| Other operating leases | 120,421 |  | 125,266 |  |

| Depreciation - owned assets | 681,754 |  | 605,886 |  |

| Profit on disposal of fixed assets | (43,170 | ) | (46,590 | ) |

| Auditors' remuneration | 51,701 |  | 61,859 |  |

| Foreign exchange differences | 2,702 |  | - |  |

| 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 PAYABLE AND SIMILAR EXPENSES |

| 30.6.25 |  | 30.6.24

£ | £ |

| Interest on CT | 1,681 |  | - |  |

7. | TAXATION

| Analysis of the tax charge

| The tax charge on the profit for the year was as follows:

| 30.6.25 |  | 30.6.24

£ | £ |

| Current tax:

| UK corporation tax | - |  | 356,928 |  |

| Origination & reversal of

| timing differences | 229,195 |  | 87,087 |  |

| Tax on profit | 229,195 |  | 444,015 |  |

| UK corporation tax has been charged at 25% (2024 - 25%).

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

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:

| 30.6.25 |  | 30.6.24

£ | £ |

| Profit before tax | 719,814 |  | 1,748,515 |  |

| Profit multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 25%) | 179,954 |  | 437,129 |  |

| Effects of:

| Expenses not deductible for tax purposes | 377 |  | 386 |  |

| Capital allowances in excess of depreciation | (210,349 | ) | (80,566 | ) |

| Losses surrendered under group relief | 30,018 |  | - |  |

| Deferred tax movement on fixed assets | 229,195 |  | 87,066 |  |

| Total tax charge | 229,195 |  | 444,015 |  |

| 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

| 30.6.25 |  | 30.6.24

£ | £ |

| Final | 2,322,000 |  | 1,072,000 |  |

| Included in dividends is £1,250,000 as a discretionary payment to the holding company Harlow Timber Group Limited in order to accelerate the debt repayments of the EOT to the former owners.

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

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 2025 is shown below:

|  | 2025 |  |  | 2024 |  |

|  | Number of share options |  | Exercise price |  | Number of share options |  | Exercise price |  |

| Outstanding at beginning of period |  | 1,161,291 |  | £0,155 |  | 1,548,387 |  | £0.155 |  |

| Granted during the period |  | 0 |  | £0 |  | 0 |  | £0 |  |

| Forfeited during the period |  | 0 |  | £0 |  | (387,096 | ) | £0 |  |

| Exercised during the period |  | 0 |  | £0 |  | 0 |  | £0 |  |

| Expired during the period |  | 0 |  | £0 |  | 0 |  | £0 |  |

| Outstanding at the end of the period |  | 1,161,291 |  | £0.155 |  | 1,161,291 |  | £0.155 |  |

| Exercisable at the end of the period |  | 0 |  | £0.155 |  | 0 |  | £0.155 |  |

| The total charge for the year of £Nil (2024: £Nil) was recognised by the company for equity settled share-based payment transactions.

10. | INTANGIBLE FIXED ASSETS

| Goodwill

£ |

| COST

| At 1 July 2024

| and 30 June 2025 | 147,555 |  |

| AMORTISATION

| At 1 July 2024

| and 30 June 2025 | 147,555 |  |

| NET BOOK VALUE

| At 30 June 2025 | - |  |

| At 30 June 2024 | - |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

11. | TANGIBLE FIXED ASSETS

| Plant, |

| machinery, |

| Improvements |  | fixtures |

| to |  | and |  | Motor |

| property |  | computers |  | vehicles |  | Totals

£ | £ | £ | £ |

| COST

| At 1 July 2024 | 642,480 |  | 7,202,362 |  | 2,217,771 |  | 10,062,613 |  |

| Additions | 354,992 |  | 1,149,169 |  | 535,687 |  | 2,039,848 |  |

| Disposals | (42,398 | ) | (279,046 | ) | (423,655 | ) | (745,099 | ) |

| At 30 June 2025 | 955,074 |  | 8,072,485 |  | 2,329,803 |  | 11,357,362 |  |

| DEPRECIATION

| At 1 July 2024 | 107,720 |  | 5,680,387 |  | 1,800,482 |  | 7,588,589 |  |

| Charge for year | 33,468 |  | 430,201 |  | 218,085 |  | 681,754 |  |

| Eliminated on disposal | - |  | (254,834 | ) | (355,464 | ) | (610,298 | ) |

| At 30 June 2025 | 141,188 |  | 5,855,754 |  | 1,663,103 |  | 7,660,045 |  |

| NET BOOK VALUE

| At 30 June 2025 | 813,886 |  | 2,216,731 |  | 666,700 |  | 3,697,317 |  |

| At 30 June 2024 | 534,760 |  | 1,521,975 |  | 417,289 |  | 2,474,024 |  |

12. | STOCKS

| 30.6.25 |  | 30.6.24

£ | £ |

| Raw materials | 8,884,020 |  | 7,948,554 |  |

| Work-in-progress | - |  | 52,595 |  |

8,884,020 |  | 8,001,149 |  |

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

13. | DEBTORS

| 30.6.25 |  | 30.6.24

£ | £ |

| Amounts falling due within one year:

| Trade debtors | 6,190,119 |  | 5,856,071 |  |

| Amounts owed by group undertakings | 394,796 |  | 385,120 |  |

| Other debtors | 93,531 |  | 39,221 |  |

| Tax | 3,174 |  | - |  |

| Prepayments and accrued income | 967,209 |  | 765,148 |  |

7,648,829 |  | 7,045,560 |  |

| Amounts falling due after more than one year:

| Loans owed by group undertakings | 4,566,120 |  | 4,566,120 |  |

| Aggregate amounts | 12,214,949 |  | 11,611,680 |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

13. | DEBTORS - continued

| 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 £152,791 (2024: £186,874).

14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |

| 30.6.25 |  | 30.6.24

£ | £ |

| Trade creditors | 5,069,253 |  | 4,212,529 |  |

| Amounts owed to group undertakings | 469,248 |  | 69,698 |  |

| Tax | - |  | 140,028 |  |

| Social security and other taxes | 227,149 |  | 212,680 |  |

| VAT | 879,341 |  | 820,475 |  |

| Other creditors | 262,308 |  | 257,065 |  |

| Accruals and deferred income | 575,165 |  | 358,404 |  |

| Accrued expenses | 411,600 |  | - |  |

7,894,064 |  | 6,070,879 |  |

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

15. | LEASING AGREEMENTS

| Minimum lease payments under non-cancellable operating leases fall due as follows:

| 30.6.25 |  | 30.6.24

£ | £ |

| Within one year | 903,035 |  | 996,017 |  |

| Between one and five years | 3,757,675 |  | 3,664,693 |  |

| In more than five years | 2,228,125 |  | 2,228,125 |  |

6,888,835 |  | 6,888,835 |  |

16. | FINANCIAL INSTRUMENTS

|  | 2025 |  | 2024 |  |

|  | £ |  | £ |  |

| Financial assets measured at amortised cost |  | 21,997,004 |  | 21,870,195 |  |

| Financial liabilities measured at amortised cost |  | 6,453,432 |  | 4,897,696 |  |

| 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.

17. | PROVISIONS FOR LIABILITIES

| 30.6.25 |  | 30.6.24

£ | £ |

| Deferred tax

| Accelerated capital allowances | 523,699 |  | 294,504 |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

17. | PROVISIONS FOR LIABILITIES - continued

| Deferred |

| tax |

£ |

| Balance at 1 July 2024 | 294,504 |  |

| Charge to Income Statement during year | 229,195 |  |

| Balance at 30 June 2025 | 523,699 |  |

| Deferred tax is provided at the future effective tax rate of 25% 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 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 and issued:

| Number: | Class: | Nominal | 30.6.25 |  | 30.6.24

| value: | £ | £ |

| 177,864 | Ordinary | £1 | 177,864 |  | 177,864 |  |

| 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. | RESERVES

| Capital |

| Retained |  | Share |  | redemption |

| earnings |  | premium |  | reserve |  | Totals

£ | £ | £ | £ |

| At 1 July 2024 | 15,798,505 |  | 9,649,769 |  | 46,995 |  | 25,495,269 |  |

| Profit for the year | 490,619 |  | 490,619 |  |

| Dividends | (2,322,000 | ) | (2,322,000 | ) |

| At 30 June 2025 | 13,967,124 |  | 9,649,769 |  | 46,995 |  | 23,663,888 |  |

| Retained earnings - includes all current and prior retained period profits and losses of the company net of any dividends paid to shareholders. Included in dividends is £1,250,000 as a discretionary payment to the holding company Harlow Timber Group Limited in order to accelerate the debt repayments of the EOT to the former owners.

| Capital redemption reserve - arises from the purchase of own share capital in prior years and will only be realised when the related assets are disposed of by the company.

| Share premium - this represents the excess of proceeds over the nominal value of new shares issued.

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

20. | EMPLOYEE BENEFIT OBLIGATIONS

| The company 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 credit method can be expected to increase over time, as the average age of the membership increases. A full actuarial valuation was carried out at 30th June 2025 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 £479,000. 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 2025 imply the following life expectancies :

| Male retiring at age 65 in 2025 21.7 years

| Female retiring at age 65 in 2024 23.6 years

| Male retiring at age 65 in 2045 22.9 years

| Female retiring at age 65 in 2045 25.1 years

| The amounts recognised in the balance sheet are as follows:

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Present value of funded obligations | (1,034,000 | ) | (1,125,000 | ) |

| Fair value of plan assets | 1,034,000 |  | 1,125,000 |  |

- |  | - |  |

| Present value of unfunded obligations | - |  | - |  |

| Deficit | - |  | - |  |

| Net liability | - |  | - |  |

| The amounts recognised in profit or loss are as follows:

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Current service cost | - |  | - |  |

| Net interest from net defined benefit asset/liability | 209,000 |  | 57,000 |  |

| Past service cost | - |  | - |  |

209,000 |  | 57,000 |  |

| Actual return on plan assets | (152,000 | ) | - |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

20. | EMPLOYEE BENEFIT OBLIGATIONS - continued

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

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Opening defined benefit obligation | 1,125,000 |  | 1,104,000 |  |

| Interest cost | 57,000 |  | 57,000 |  |

| Actuarial losses/(gains) | (107,000 | ) | - |  |

| Benefits paid | (41,000 | ) | (28,000 | ) |

| Other remeasurements | - |  | (8,000 | ) |

1,034,000 |  | 1,125,000 |  |

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

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Opening fair value of scheme assets | 1,125,000 |  | 1,104,000 |  |

| Interest income | - |  | 88,000 |  |

| Expected return | (152,000 | ) | - |  |

| Benefits paid | (41,000 | ) | (28,000 | ) |

| Assets subject to ceiling | 102,000 |  | 23,000 |  |

| Administrative expenses paid | - |  | (1,000 | ) |

| Return on plan assets (excluding interest income) | - |  | (61,000 | ) |

1,034,000 |  | 1,125,000 |  |

| The amounts recognised in other comprehensive income are as follows:

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Other remeasurements | - |  | 8,000 |  |

| Return on plan assets (excluding interest income) | - |  | (61,000 | ) |

| Changes in asset ceiling | - |  | 54,000 |  |

- |  | 1,000 |  |

Harlow Bros. Limited (Registered number: 00907445)

Notes to the Financial Statements - continued

for the Year Ended 30 June 2025

20. | EMPLOYEE BENEFIT OBLIGATIONS - continued

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

| Defined benefit |

| pension plans |

| 30.6.25 |  | 30.6.24 |

£ | £ |

| Cash | 88,000 |  | 1,072,000 |  |

| Other assets | 1,425,000 |  | 634,000 |  |

| Asset ceiling | (479,000 | ) | (581,000 | ) |

1,034,000 |  | 1,125,000 |  |

| 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):

| 30.6.25 |  | 30.6.24

| Discount rate | 5.70% | 5.20% |

| Future pension increases | 3.30% | 3.10% |

| Inflation | 3.10% | 3.30% |

| Defined contribution scheme

| 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 £26,183 were due to the fund. These are included in other creditors. The pension charge represents contributions due from the company totalling £273,236 which are charged to the profit & loss account in the period that they arise.

21. | 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.

22. | 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. There is no identifiable controlling party.