HARDWOOD SALES HOLDING LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
Company Registration No. 09177666 (England and Wales)
HARDWOOD SALES HOLDING LIMITED
COMPANY INFORMATION
Directors
Mr M A Collins
Mr J McCoy
Company number
09177666
Registered office
Huyton Business Park
Ellis Ashton Street, Off Wilson Road
Huyton
Liverpool
L36 6BN
Auditor
DSG Audit
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
HARDWOOD SALES HOLDING LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group statement of comprehensive income
8
Group balance sheet
9
Company balance sheet
10
Group statement of changes in equity
11
Company statement of changes in equity
12
Group statement of cash flows
13
Notes to the financial statements
14 - 30
HARDWOOD SALES HOLDING LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 1 -

The directors present the strategic report for the year ended 31 December 2025.

Principal activities

The principal activity of the company is that of the holding company of Hardwood Sales Limited and of the group was that of a timber merchant.

Review of the business

The results for the year and the financial position at the end were considered satisfactory by the directors. The results for the group show a pre-tax profit of £857,259 (202 4: £510,310) for the year and turnover of £21,209,475 (202 4: £19,648,591). The group has net assets of £7,634,840 (202 4: £6,871,601).

The group has performed in line with expectations in an uncertain economic environment.

Principal risks and uncertainties

We have set out below a number of risk factors that we believe could cause our actual future results to differ materially from expected results. However, other factors could adversely affect the results so the factors set out below should not be considered to be a complete set of all potential risks and uncertainties.

Business conditions and the general economy

The profitability of the group could be adversely affected by a worsening of general economic conditions in the United Kingdom. Whilst a short term worsening in the economic conditions in the United Kingdom should not significantly adversely impact profitability, a sustained downturn over a number of years would be likely to lead to reduced profit in this area.

Credit risk

Credit risk is a constant risk and all new customers are reviewed and their financial position assessed before acceptance. The debt from existing customers is monitored on a regular basis to reduce the cash flow risk.

Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which must fulfil credit rating criteria approved by the Board.

Liquidity risk

The group manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the group has sufficient liquid resources to meet the operating needs of the business.

Interest rate risk

The company is exposed to fair value interest rate risk on its fixed rate borrowings and cash flow interest rate risk on floating rate deposits, bank overdrafts and loans.

The current circumstances provide different challenges, but the directors feel that the group is in a strong position to cope with these challenges.

Development and performance

The group remains in a strong position, having broadened its customer base during recent years, and developed reliable lines of supply.

HARDWOOD SALES HOLDING LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 2 -
Key performance indicators

Measure 202 5 202 4

Turnover £21.2 m £19.6 m

Gross profit £6.1 m £5.2 m

Operating profit £0.9 m £0.6 m

Cash at bank £0.5m £0.5m

The group has focussed on maintaining margins during this uncertain time, fulfilling its expectations and will continue to focus on this area in the forthcoming year.

On behalf of the board

Mr M A Collins
Director
6 August 2026
HARDWOOD SALES HOLDING LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2025.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr M A Collins
Mr J McCoy
Future developments

The group will continue to seek new opportunities, and expand business, but also to maintain margins.

Auditor

The auditor, DSG, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Strategic report

The c group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. The group has done so in respect of its principal activities and financial instruments.

On behalf of the board
Mr M A Collins
Director
6 August 2026
HARDWOOD SALES HOLDING LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 4 -

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

United Kingdom company law requires the directors to prepare financial statements for each financial year. Under that law, the directors have elected to prepare the group and parent company 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 group and parent company, and of the profit or loss of the group for that period.

In preparing these financial statements, the directors are required to:

- select suitable accounting policies and then apply them consistently;

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

- state whether applicable U nited K ingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and parent company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and parent 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 group and parent company, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

HARDWOOD SALES HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HARDWOOD SALES HOLDING LIMITED
- 5 -
Opinion

We have audited the financial statements of Hardwood Sales Holding Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

- give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2025 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent 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 group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

- T he information given in the strategic report and the directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- The strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

HARDWOOD SALES HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARDWOOD SALES HOLDING LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport.

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

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

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

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

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

Responsibilities of directors

As explained more fully in the directors' r esponsibilities s tatement, 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 is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 an auditor's report 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.

Capabilitiy of the audit in detecting irregularities, including fraud

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

The following laws and regulations were identified as being of significance to the entity:

- Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, Company Law, Tax and Pensions legislation, and distributable profits legislation.

- Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include environmental regulations, health and safety legislation, trades description act and employment legislation.

Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: inquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; reviewing post year end payments for evidence of claims pay outs and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.

HARDWOOD SALES HOLDING LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HARDWOOD SALES HOLDING LIMITED
- 7 -

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the parent 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 parent company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Jean Ellis BA FCA CTA (Senior Statutory Auditor)
For and on behalf of DSG Audit, Statutory Auditor
Chartered Accountants
Castle Chambers
43 Castle Street
Liverpool
L2 9TL
6 August 2026
HARDWOOD SALES HOLDING LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
- 8 -
2025
2024
Notes
£
£
Turnover
3
21,209,475
19,648,591
Cost of sales
(15,125,995)
(14,451,574)
Gross profit
6,083,480
5,197,017
Administrative expenses
(5,172,544)
(4,594,401)
Other operating income
29,838
12,847
Operating profit
4
940,774
615,463
Interest receivable and similar income
8
3,375
2,460
Interest payable and similar expenses
9
(86,890)
(107,613)
Profit before taxation
857,259
510,310
Tax on profit
10
(94,020)
(189,491)
Profit for the financial year
763,239
320,819
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.

The notes on pages 14 to 30 form part of these financial statements.

HARDWOOD SALES HOLDING LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2025
31 December 2025
- 9 -
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
5,643,159
5,826,932
5,643,159
5,826,932
Current assets
Stocks
15
2,590,420
2,510,721
Debtors
16
4,623,246
4,407,200
Cash at bank and in hand
530,517
479,830
7,744,183
7,397,751
Creditors: amounts falling due within one year
17
(3,636,197)
(3,815,339)
Net current assets
4,107,986
3,582,412
Total assets less current liabilities
9,751,145
9,409,344
Creditors: amounts falling due after more than one year
18
(497,461)
(952,981)
Provisions for liabilities
Provisions
21
994,564
794,564
Deferred tax liability
25
624,280
790,198
(1,618,844)
(1,584,762)
Net assets
7,634,840
6,871,601
Capital and reserves
Called up share capital
24
200
200
Revaluation reserve
1,803,849
1,803,849
Capital redemption reserve
100
100
Profit and loss reserves
5,830,691
5,067,452
Total equity
7,634,840
6,871,601

These financial statements have been prepared in accordance with the provisions relating to medium-sized groups.

The financial statements were approved by the board of directors and authorised for issue on 6 August 2026 and are signed on its behalf by:
06 August 2026
Mr M A Collins
Director
Company registration number 09177666 (England and Wales)
HARDWOOD SALES HOLDING LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2025
31 December 2025
- 10 -
2025
2024
Notes
£
£
£
£
Fixed assets
Investment property
12
7,000,000
4,779,404
Investments
13
300
300
7,000,300
4,779,704
Current assets
Debtors
16
312,523
360,368
Cash at bank and in hand
25,620
96,673
338,143
457,041
Creditors: amounts falling due within one year
17
(1,190,580)
(1,554,093)
Net current liabilities
(852,437)
(1,097,052)
Total assets less current liabilities
6,147,863
3,682,652
Creditors: amounts falling due after more than one year
18
(115,025)
(476,458)
Provisions for liabilities
Deferred tax liability
25
917,170
538,340
(917,170)
(538,340)
Net assets
5,115,668
2,667,854
Capital and reserves
Called up share capital
24
200
200
Capital redemption reserve
100
100
Profit and loss reserves
5,115,368
2,667,554
Total equity
5,115,668
2,667,854

As permitted by section 408 of the Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £2,447,814 (2024 - £356,492 profit).

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 6 August 2026 and are signed on its behalf by:
06 August 2026
Mr M A Collins
Director
Company registration number 09177666 (England and Wales)
HARDWOOD SALES HOLDING LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
- 11 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2024
206
1,803,849
94
4,919,110
6,723,259
Year ended 31 December 2024:
Profit and total comprehensive income
-
-
-
320,819
320,819
Own shares acquired
-
-
-
(172,477)
(172,477)
Redemption of shares
24
(6)
-
6
-
-
0
Balance at 31 December 2024
200
1,803,849
100
5,067,452
6,871,601
Year ended 31 December 2025:
Profit and total comprehensive income
-
-
-
763,239
763,239
Balance at 31 December 2025
200
1,803,849
100
5,830,691
7,634,840
HARDWOOD SALES HOLDING LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
- 12 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2024
206
94
2,483,539
2,483,839
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
-
356,492
356,492
Own shares acquired
-
-
(172,477)
(172,477)
Redemption of shares
24
(6)
6
-
-
0
Balance at 31 December 2024
200
100
2,667,554
2,667,854
Year ended 31 December 2025:
Profit and total comprehensive income
-
-
2,447,814
2,447,814
Balance at 31 December 2025
200
100
5,115,368
5,115,668
HARDWOOD SALES HOLDING LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
- 13 -
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
1,409,895
1,217,640
Interest paid
(86,890)
(107,613)
Income taxes paid
(207,237)
(181,726)
Net cash inflow from operating activities
1,115,768
928,301
Investing activities
Purchase of tangible fixed assets
(403,451)
(293,790)
Proceeds from disposal of tangible fixed assets
27,143
-
Interest received
3,375
2,460
Net cash used in investing activities
(372,933)
(291,330)
Financing activities
Purchase of own shares
-
0
(172,477)
Repayment of bank loans
(522,561)
(349,750)
Payment of finance leases obligations
(169,587)
(274,076)
Net cash used in financing activities
(692,148)
(796,303)
Net increase/(decrease) in cash and cash equivalents
50,687
(159,332)
Cash and cash equivalents at beginning of year
479,830
639,162
Cash and cash equivalents at end of year
530,517
479,830
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
- 14 -
1
Accounting policies
Company information

Hardwood Sales Holding Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Huyton Business Park, Ellis Ashton Street, Off Wilson Road, Huyton, Liverpool, L36 6BN.

The group consists of Hardwood Sales Holding Limited and all of its subsidiaries.

The principal activities of the group and company are disclosed in the strategic report.

1.1
Basis of preparation

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include investment properties at fair value. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

- Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

- Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

1.2
Business combinations

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

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

1.3
Basis of consolidation

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 15 -
1.4
Going concern

The directors have considered the impact of potential operational and financial challenges posed by the current economic situation, including but not restricted to, an assessment of the robustness of their supply chain and broader logistics arrangements. The directors have concluded that any operational and financial pressures caused directly by the current economic situation are unlikely to have a material impact on the group.

The directors have prepared forecasts and budgets which indicate that the group will continue to generate cash over the period considered by them w hich is at least twelve months from the date of approval of these financial statements, in their assessment of the appropriateness of adopting the going concern basis in preparation of these financial statements. The group has a strong asset base and cash reserves available.

Based on the above, the directors consider it appropriate to prepare these financial statements on a going concern basis.

1.5
Revenue

Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

1.6
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Freehold land and buildings
2% straight line
Plant and equipment
33% straight line
Fixtures and fittings
33% straight line
Motor vehicles
25% reducing balance

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.7
Fixed asset investments

Equity in vest ments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 16 -
1.8
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.11
Financial instruments

The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 17 -
Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest m ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 18 -
1.12
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.13
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Provisions

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

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i s measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.15
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.16
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 19 -
1.17
Leases
As lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease d asset are consumed.

1.18
Government grants

Government grants are recognised at the fair value of the asset receive d or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

1.19

New or Revised Standards

Amendments to FRS 102 issued in September 2024 will apply to the company for accounting periods commencing on or after 1 January 2026. These amendments include significant changes to lease accounting and revenue recognition, together with additional disclosure requirements. The directors are currently assessing the impact of these amendments on the company’s future financial statements.

2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
2
Judgements and key sources of estimation uncertainty
(Continued)
- 20 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Estimating value in use

Where an indication of impairment exists, the directors will carry out an impairment review to determine the recoverable amount, being the higher of fair value less cost to sell and value in use. The value in use calculation requires the directors to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.

Recoverability of receivables

The group establishes a provision for receivables that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the ageing of the receivables, past experience of recoverability and the credit profile of individual or groups of customers.

Determining and reassessing residual values and useful economic lives of tangible assets

The group depreciates tangible assets over their estimated useful lives. In determining appropriate useful lives of assets, the directors have considered historic performance as well as future expectations for factors such as expected usage of the asset, physical wear and tear, technical and commercial obsolescence and legal limitations of the usage of the asset, such as lease terms. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes.

Judgement is applied to determine the residual values for tangible assets. When determining the residual values, the directors have assessed the amount that the group would currently obtain for the disposal of the asset, if it were already of the condition expected at the end of its useful economic life. At each reporting date, the directors have also assessed whether there have been any indicators, such as a change in how the asset is used, significant unexpected wear and tear and changes in market prices, which suggest previous estimates may differ from current expectations. Where this is the case, the residual value and/or useful life is amended and accounted for on a prospective basis.

3
Turnover and other revenue

An analysis of the group's turnover is as follows:

2025
2024
£
£
Turnover analysed by class of business
Sale of goods
21,209,475
19,648,591
2025
2024
£
£
Turnover analysed by geographical market
Sales - UK
20,757,681
18,908,553
Sales - Non EEC
451,794
740,038
21,209,475
19,648,591
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
3
Turnover and other revenue
(Continued)
- 21 -
2025
2024
£
£
Other revenue
Interest income
3,375
2,460
Grants released
2,872
2,872
4
Operating profit
2025
2024
£
£
Operating profit for the year is stated after charging/(crediting):
Government grants
(2,872)
(2,872)
Depreciation of tangible fixed assets
562,787
513,062
Profit on disposal of tangible fixed assets
(2,706)
-
Operating lease charges
87,488
274,897
5
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
3,955
3,570
Audit of the financial statements of the company's subsidiaries
18,585
17,700
22,540
21,270
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the year was:

Group
Company
2025
2024
2025
2024
Number
Number
Number
Number
Staff
54
47
0
0
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
6
Employees
(Continued)
- 22 -

Their aggregate remuneration comprised:

Group
Company
2025
2024
2025
2024
£
£
£
£
Wages and salaries
1,753,673
1,680,127
-
0
-
0
Social security costs
200,962
178,024
-
-
Pension costs
283,663
263,985
-
0
-
0
2,238,298
2,122,136
-
0
-
0
7
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
89,200
130,800
Company pension contributions to defined contribution schemes
137,000
120,000
226,200
250,800
8
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
27
1,788
Other interest income
3,348
672
Total income
3,375
2,460
9
Interest payable and similar expenses
2025
2024
£
£
Interest on bank overdrafts and loans
26,855
58,789
Interest on finance leases and hire purchase contracts
43,884
41,809
Other interest
16,151
7,015
Total finance costs
86,890
107,613
10
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
285,369
227,994
Adjustments in respect of prior periods
(25,431)
(26,178)
Total current tax
259,938
201,816
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
10
Taxation
2025
2024
£
£
(Continued)
- 23 -
Deferred tax
Origination and reversal of timing differences
(165,918)
(20,542)
Other adjustments
-
0
8,217
Total deferred tax
(165,918)
(12,325)
Total tax charge
94,020
189,491

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2025
2024
£
£
Profit before taxation
857,259
510,310
Expected tax charge based on the standard rate of corporation tax in the UK of 25% (2024: 25%)
214,315
127,578
Effects of:
Expenses that are not deductible in determining taxable profit
25,771
27,748
Adjustments in respect of prior years
(25,431)
(26,178)
Permanent capital allowances in excess of depreciation
(120,635)
60,343
Taxation charge in the financial statements
94,020
189,491
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 24 -
11
Tangible fixed assets
Group
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost or valuation
At 1 January 2025
4,779,404
2,318,398
217,305
510,320
7,825,427
Additions
43,131
301,448
9,052
49,820
403,451
Disposals
-
0
(19,000)
-
0
(44,685)
(63,685)
At 31 December 2025
4,822,535
2,600,846
226,357
515,455
8,165,193
Depreciation and impairment
At 1 January 2025
190,458
1,530,943
159,157
117,937
1,998,495
Depreciation charged in the year
96,451
332,700
31,766
101,870
562,787
Eliminated in respect of disposals
-
0
(19,000)
-
0
(20,248)
(39,248)
At 31 December 2025
286,909
1,844,643
190,923
199,559
2,522,034
Carrying amount
At 31 December 2025
4,535,626
756,203
35,434
315,896
5,643,159
At 31 December 2024
4,588,946
787,455
58,148
392,383
5,826,932
The company had no tangible fixed assets at 31 December 2025 or 31 December 2024.

Included within tangible fixed assets are assets held under finance leases or hire purchase contracts, as follows:

Group
Company
2025
2024
2025
2024
£
£
£
£
Plant and equipment
181,994
227,493
-
0
-
0
Motor vehicles
66,674
88,899
-
0
-
0
248,668
316,392
-
-

Land and buildings with a carrying amount of £4,535,626 were revalued at December 2022 by Lambeth Smith Hampton, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The directors have reviewed this value at 31 December 202 5 and confirm that there has been no material movement in the value.

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
11
Tangible fixed assets
(Continued)
- 25 -
2025
2024
£
£
Group
Cost
2,813,016
2,769,885
Accumulated depreciation
(577,929)
(521,669)
Carrying value
2,235,087
2,248,216
12
Investment property
Group
Company
2025
2025
£
£
Fair value
At 1 January 2025
-
4,779,404
Additions through external acquisition
-
43,131
Net gains or losses through fair value adjustments
-
2,177,465
At 31 December 2025
-
7,000,000

Investment property comprises the property at Ellis Ashton Street, Liverpool. The fair value of the investment property has been arrived at on the basis of a valuation carried out at December 2025 by LM6 Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.

For the Group financial statements the premises have been accounted for as tangible fixed assets, as the premises are used by the Group in the production and supply of goods and for administrative purposes.

13
Fixed asset investments
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Investments in subsidiaries
14
-
0
-
0
300
300
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2025 and 31 December 2025
300
Carrying amount
At 31 December 2025
300
At 31 December 2024
300
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 26 -
14
Subsidiaries

Details of the company's subsidiaries at 31 December 2025 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Hardwood Sales Limited
Huyton Business Park Ellis Ashton Street, Off Wilson Road, Huyton, Merseyside, United Kingdom, L36 6
Ordinary
100.00
15
Stocks
Group
Company
2025
2024
2025
2024
£
£
£
£
Finished goods and goods for resale
2,590,420
2,510,721
-
0
-
0
16
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Trade debtors
4,441,043
3,774,713
-
0
-
0
Other debtors
47,060
472,310
312,523
360,368
Prepayments and accrued income
135,143
160,177
-
0
-
0
4,623,246
4,407,200
312,523
360,368

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

17
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans
19
-
0
164,000
-
0
164,000
Obligations under finance leases
20
172,830
248,330
-
0
-
0
Trade creditors
1,966,456
1,928,151
17,112
55,544
Amounts owed to group undertakings
-
0
-
0
1,123,922
1,264,280
Corporation tax payable
285,343
232,642
45,546
21,385
Other taxation and social security
575,524
440,651
-
0
-
0
Other creditors
207,481
137,712
-
0
24,723
Accruals and deferred income
428,563
663,853
4,000
24,161
3,636,197
3,815,339
1,190,580
1,554,093

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

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 27 -
18
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans
19
-
0
358,561
-
0
358,561
Obligations under finance leases
20
382,436
476,523
-
0
-
0
Government grants
22
115,025
117,897
115,025
117,897
497,461
952,981
115,025
476,458
19
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank loans
-
0
522,561
-
0
522,561
Payable within one year
-
0
164,000
-
0
164,000
Payable after one year
-
0
358,561
-
0
358,561

The bank loan is secured by way of a fixed and floating charge on the land and buildings of the company. The interest on this bank loan is charged 2.19% per annum over Base Rate. The loan was repaid in full in the year to 31 December 2025.

20
Finance lease obligations
Group
Company
2025
2024
2025
2024
Amounts due:
£
£
£
£
Current liabilities
172,830
248,330
-
0
-
0
Non-current liabilities
382,436
476,523
-
0
-
0
555,266
724,853
-
-
Group
Company
2025
2024
2025
2024
Future minimum lease payments due:
£
£
£
£
Within one year
172,830
248,330
-
0
-
0
In two to five years
382,436
476,523
-
0
-
0
555,266
724,853
-
-
HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
20
Finance lease obligations
(Continued)
- 28 -

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is four years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The finance lease obligations are secured on the assets to which they relate.

21
Provisions for liabilities
Group
Company
2025
2024
2025
2024
£
£
£
£
Dilapidations provision
994,564
794,564
-
-
Movements on provisions:
Dilapidations provision
Group
£
At 1 January 2025
794,564
Additional provisions in the year
200,000
At 31 December 2025
994,564
22
Government grants
Group
Company
2025
2024
2025
2024
£
£
£
£
Arising from government grants
115,025
117,897
115,025
117,897

Government grants relate to funds received in respect of the construction of additional sheds, which has led to the creation of additional jobs

23
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
283,663
263,985

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 29 -
24
Share capital
Group and company
2025
2024
2025
2024
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
170
170
170
170
B Ordinary shares of £1 each
15
15
15
15
C Ordinary shares of £1 each
15
15
15
15
200
200
200
200
25
Deferred taxation

Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
2025
2024
Group
£
£
ACAs
194,910
237,027
Revaluations
429,370
553,171
624,280
790,198
Liabilities
Liabilities
2025
2024
Company
£
£
ACAs
7,840
45,429
Revaluations
909,330
492,911
917,170
538,340
Group
Company
2025
2025
Movements in the year:
£
£
Liability at 1 January 2025
790,198
538,340
(Credit)/charge to profit or loss
(165,918)
378,830
Liability at 31 December 2025
624,280
917,170

The deferred tax liability within the company has arisen following the transfer of the property from the subsidiary company to the holding company, being the accelerated capital allowances on the assets transferred.

HARDWOOD SALES HOLDING LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 30 -
26
Related party transactions

The company has taken advantage of the reduced disclosure exemption available under Financial Reporting Standard 102 relating to the disclosure of related party transactions between wholly owned group companies.

No other transactions with related parties were undertaken such as are required to be disclosed Financial Reporting Standard 102.

27
Controlling party

The directors are of the opinion that there is no one ultimate controlling party.

28
Cash generated from group operations
2025
2024
£
£
Profit after taxation
763,239
320,819
Adjustments for:
Taxation charged
94,020
189,491
Finance costs
86,890
107,613
Investment income
(3,375)
(2,460)
Gain on disposal of tangible fixed assets
(2,706)
-
Depreciation and impairment of tangible fixed assets
562,787
513,062
Increase in provisions
200,000
400,000
Movements in working capital:
(Increase)/decrease in stocks
(79,699)
42,415
Increase in debtors
(216,046)
(724,974)
Increase in creditors
7,657
374,546
Decrease in deferred income
(2,872)
(2,872)
Cash generated from operations
1,409,895
1,217,640
29
Analysis of changes in net debt - group
1 January 2025
Cash flows
31 December 2025
£
£
£
Cash at bank and in hand
479,830
50,687
530,517
Borrowings excluding overdrafts
(522,561)
522,561
-
Payment of finance leases obligations
(724,853)
169,587
(555,266)
(767,584)
742,835
(24,749)
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