Harlow Bros Holdings Ltd - Limited company accounts 18.2

REGISTERED NUMBER: 07582674 (England and Wales)

Group Strategic Report, Report of the Directors and

Consolidated Financial Statements for the Year Ended 30 June 2019

for

Harlow Bros Holdings Ltd

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

9

Report of the Independent Auditors

11

Consolidated Income Statement

14

Consolidated Other Comprehensive Income

16

Consolidated Balance Sheet

17

Company Balance Sheet

18

Consolidated Statement of Changes in Equity

19

Company Statement of Changes in Equity

20

Notes to the Consolidated Financial Statements

21

DIRECTORS:

J R Harlow

P V J Harlow

R V D Harlow

D Poli

SECRETARY:

D Poli

REGISTERED OFFICE:

c/o Harlow Bros Limited

Hathern Road

Long Whatton

Loughborough

Leicestershire

LE12 5DE

REGISTERED NUMBER:

07582674 (England and Wales)

SENIOR STATUTORY AUDITOR:

Mr Christopher David Hutton FCCA

AUDITORS:

Charnwood Accountants & Business Advisors LLP

Statutory Auditor

The Point

Granite Way

Mountsorrel

Loughborough

Leicestershire

LE12 7TZ

The directors present their strategic report of the company and the group for the year ended 30 June 2019.

REVIEW OF BUSINESS

We aim to present a balanced and comprehensive review of the development and performance of our business during the

year and its position at the year end.

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

uncertainties we face.

Principal activities and business model

The company's principal activity is that of a holding company. The Group operates in the timber industry. The principal

activities of the Group for the year under review are that of a timber distributor and manufacturer of trusses and flooring

along with the retailing of building materials.

The core business activities are undertaken through the network of branches primarily located across the Midlands region.

The business is family run and we pride ourselves on our ethos for providing excellent customer service through our network

of branches and businesses, our knowledgeable staff and our wide ranging and competitively priced products.

Harlow Bros and a fellow subsidiary purchase their timber products from a variety of sustainable sources primarily

throughout Europe. The majority of trade is derived from the building sector and merchants, however we also look to service

the local builders working on smaller developments right down to customers undertaking repair projects. We look to add

value to the timber we buy in addition to offering all our customers quality products at competitive pricing. We achieve this

added value by treating and machining timber prior to resale to customer specifications before we distribute out through our

reliable distribution service.

The remaining two businesses within the Group are Harlow Timber Systems Ltd and Harlow Timber Systems (Eastern) Ltd.

Both of these companies manufacture and sell roof trusses and Engineered Timber into the new house build market and trade

with customers ranging from national house builders to more local property developers.

Results and performance

We are pleased to report a successful year of trading results for the Group, as set out on pages 14 to 49, which show an

increase in turnover as the Group continues to see a general improvement in trade. The core business continued to grow in

line with our plans, with the overall Group turnover up 13.4% to £78.3m (2018: £69.1m). The largest contributor to this is

the main trading company Harlow Bros which accounts for approx. 54% of Group turnover through its network of 8 trading

branches which predominantly services the building sector and local businesses.

In spite of operating in a continually competitive market, we are pleased to report a positive growth of 2.2% compared to the

prior year.

The directors are continually looking to source the best available product at the most competitive prices by utilising their

industry expertise and buying power of the Group. This growth in turnover has come from strengthening the customer base

as well as timber price inflation which was at its strongest earlier in the trading year. The turnover increase has resulted in an

increase in operating profit to £4.7m (2018: £2.2m).

The operating profit results have been impacted by the performance of the building materials division at Harlow Timber

Systems (Eastern) Ltd in the year which has seen the company report an increased operating loss of £0.9m. As a continued

result in poor performance of the division the board undertook the decision in June 2019 to close down this line of the

business as part of its strategic review of the company's operations. The focus was turned to scaling up production of the roof

trusses and Engineered timber divisions with the ongoing support of other Group businesses and personnel to meet growing

demand. Within the financial statements, the impact of the discontinued operations has been reported. We are hopeful that

the shift in the focus of operations will begin to show positive results by July 2020; however, as with any exercise like this

there is a time lag until results are realised within the year end financials.

REVIEW OF BUSINESS CONTINUED

The house building sector is continuing to show some resilience in the wake of Brexit despite the continued uncertainty as to

the future trading impacts and the wider economy. Our customers appear to be trading well and remain positive for the

immediate future with a strong order book and results; we therefore hope to continue to perform strongly after the year end.

The directors are optimistic that the Group's core businesses activities will continue to show improvements in line with our

overall growth strategy plans.

The results reflect the Group's strong underlying trading activities, despite operating in a very competitive marketplace. We

strive to improve the efficiency and focus of our operations. The Group companies have made a considerable effort to

control costs in recent years, and strong overhead control at both head office and subsidiary level continues to be a key focus

of management. With the builders merchant division of HTSE having a more difficult year resulting in a loss, the other group

companies have continued to report growth due to the strategies put in place by management and the controls inherent within

the key areas across the business to help deliver this. We have continued to invest in all areas of the business, such as the

vehicle fleet, and improving the customer experience to ensure that we remain competitive whilst offering quality products

and customer service. Further investment is planned for the business across the Group which the board is confident will

enable it to continue to grow and further strengthen its position for the future.

Stock levels held across the Group have increased slightly in volume but have remained stable in comparison by value to

prior year. We continue to work with our supply chain to source the most competitively priced products without

compromising on quality. Trade debtors have continued to show good debtor days figures in line with our targets, which due

to the processes and credit control team in place, means we are reporting another low bad debt charge for the year again as a

percentage of turnover.

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.

All trading entities, including the divisions within these, have targets and goals set over the short and medium term to ensure

that they monitor opportunities for growth and to mitigate threats throughout the year, whilst reviewing their working

practices to continually improve service levels to our customers. We will continue to invest in our branch premises and staff

to enable us to expand and enhance our product offering across the full range of our products.

Staff numbers, and in particular, our operational staff have increased this year. The directors recognise the value of their

staff, many of whom are long serving. We are always looking to continually improve their knowledge by identifying and

delivering against their training needs. This includes investment in trainees and apprentices, which are important to ensure

that we have new talent coming through the business, and continued investment in internal systems to manage the growing

workforce needs.

Overall we are satisfied with the current years trading results and we are also pleased to report a growth in the value of

shareholders' funds of the company for the year whilst maintaining a strong balance sheet which enables us to implement our

growth and investments plans for the future. We are confident that this will continue steadily for the foreseeable future, as we

continually aim to develop and grow the business further across our core trading areas.

Pension scheme

The Group participates in a defined benefit pension scheme. As of 30 June 2019 the net surplus of the scheme was £3,240

compared to a deficit of £193,590 last year. Discount rates represented by yields on corporate bonds was at 2.3% for the

year along with decreases in inflation and pensionable pay. The decrease in liabilities that this produces has also been

supported by the increased investment asset performance in the scheme asset portfolio. In note 26 to the accounts we have

outlined the impact on the financial statements in more detail based on the actuarial report. The Group had agreed a deficit

recovery plan with the trustees with the aim to eliminate the deficit at the time by additional contributions commencing from

April 2016. The company regularly assesses the risks in the pension and the potential impact on the Group. The scheme

ceased to future accruals on the 31st March 2019. Furthermore, the Group is in the process of closing down the defined

benefit scheme with the scheme administrator and actuary and they are currently obtaining final valuations on all scheme

assets to be able to reach agreement with the scheme members for their transfer values. The calculation of the pension deficit

or surplus remains very sensitive to changes in the underlying assumptions.

PRINCIPAL RISKS AND UNCERTAINTIES

The process of risk management is applied through a combination of policies, procedures and internal controls. All policies

are subject to Board approval and ongoing review by management. Compliance with regulation, legal and ethical standards

is a high priority for the Group to ensure they are compliant and able to continue trading successfully.

The finance team is responsible for ensuring that effective internal controls exist to manage the financial risks and that these

controls operate effectively for the benefit of the business.

We the directors endeavour to identify the risks that the Group faces on a day to day basis. This is to ensure we have the

financial strength and operational capacity to support the growth of the business. The current risk factors below are those

that are considered by the board to be material to the Group. However, we also recognise that we operate in a fast paced

commercial environment which is constantly evolving, where new risks may appear or immaterial risks may become more

important, and the directors will develop appropriate strategies as these risks appear.

Competitive market pressure is an ongoing risk for the Group. To mitigate this risk the company strives to understand its

customers' requirements, markets and competitors, to ensure we continue to provide quality products and seek expansion by

organic growth. Given the potential economic volatility seen in our core business markets, we are continuously monitoring

trends and looking for ways in which to be more efficient and improve our working capital requirements. The production of

regular financial information helps the board to identify and assess current trends.

Parts of our business, such as timber raw material purchasing, are affected by fluctuations in price and availability, although

we have robust purchasing policies and practices in place that seek to mitigate such risks. We secure material from our long

standing supply partners which ensures we can meet production requirements. We are not reliant on any one particular

supplier or source allowing us to respond proactively to any sudden changes in market conditions.

Other than the general uncertainty that surrounds the decision to leave the European Union, Brexit has not yet had a

significant impact on the business or operations so far. The Group's relationship with its supply partners in Europe is of great

importance to us and we have the flexibility to procure timber from a wide range of reliable supply sources to help mitigate

changes in market conditions.

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

purchases. The Group manages this risk by purchasing and retaining cash funds in these currencies.

We have continuously worked to build a robust and flexible business by attracting and retaining the right quality staff to help

us achieve this. By doing so we have a good financial position to deal with any situations which have arisen during the year

and which we expect to face in the future.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The activities of the Group expose it to a number of financial risks during the normal course of the Group's business. The

Group aims to limit undue exposure to business and financial risks and ensure sufficient working capital exists to fund

operations, take opportunities to make additional investments and to mitigate any potential negative effects on the Group's

assets and profitability.

The Group monitors and manages the financial risks through regular review of the risks and consultations with investment

managers to ensure risk is being managed within the Group's appetite.

The directors do not consider the financial instruments to be material for the assessment of the assets, liabilities, financial

position and profit or loss of the Group to warrant an in depth analysis for each risk but they do consider it to be worthwhile

commenting on such risks to provide a better understanding of those affecting the Group as shown below.

Investments are professionally valued each quarter and these valuations have been utilised in the year for when the

investments were realised into cash upon sale.

The directors consider such risks and uncertainties to the business at this point in time are:

Currency risk

As the Group trades in the UK, but purchases from various overseas markets, margins can fluctuate in line with changes in

currency spot rates against the value of sterling for our purchases. This is mitigated in part by the Group holding foreign

currency accounts from which such transactions will flow through.

Customer mix

There is a risk that the Group becomes too dependent on a particular customer and product range and efforts are made to

ensure that our exposure in this respect is minimised by continually striving to expand the range of products and services on

offer to enhance the customer experience and build relationships with key customers.

Credit risk

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

The objective of the Group in managing its credit risk to ensure that this risk is managed in line with the Group's risk

appetite. There is a risk that one party to a financial instrument will cause a financial loss for the other party by failing to

discharge an obligation. The Group policies are aimed at minimising such losses, and require that deferred terms are only

granted to customers who demonstrate an appropriate payment history and satisfy credit worthiness procedures. Details of

the Group's debtors are shown in the notes to the financial statements.

Pension funding risk

The Group operates a defined benefit plan, although this was ceased to future accruals on 31st March 2019, as noted in the

notes to the financial statements. The funding of the pension liabilities at the year end was 88% equities and 12% other

assets. The Group is subject to funding risks, which could derive from poorly managed performance of the equity

investments. Such risks could lead to increased contributions due from the Group to the pension scheme.

The Group is required by law to maintain a minimum funding level in relation to its obligations to provide pensions to

members of the pension scheme. This level of funding is dependent on a series of external factors, such as investment

performance, life expectancy and gilt yields. Significant changes in these areas and actuarial assumptions underlying the

calculation of plan liabilities for these could materially impact the Group's trading results and can also have a significant

effect on the funding levels.

This risk is mitigated by the fact that the scheme has been closed to new entrants for many years. The board regularly

reviews the investment strategy and performance of the pension scheme investments to ensure that plan assets are performing

and growing in line with the plan requirements to cover expected liabilities.

Competitor risk

The Group operates in a highly competitive market balancing both customer requirements and market pressures. The

directors review and monitor these factors to ensure the Group's competitiveness is upheld to enable the Group to maintain

its long term relationships with key customers and reputation for quality. We aim to improve, strengthen and maintain the

brand to ensure we maintain the right levels of investment and innovation in our customer offerings.

Liquidity risk and going concern

Liquidity and cash flow risks are the risks that the group cannot meet its obligations associated with financial liabilities as

they fall due.

The Group is exposed to liquidity risk as sufficient funds are required to support trading and financing activities. The Group

regularly monitors its liquidity position to ensure that sufficient funds are available to meet both current and future

requirements.

The Group's cash position removes some elements of the financial risks any business faces. With the above business risks

and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to

unforeseen future events outside of our control.

Health and Safety

We are conscious of our corporate responsibilities to all our stakeholders and to society as a whole. Health and safety,

environmental matters, staff training and equal opportunities are key areas relevant to the Group's business activities.

We are keen to remain proactive in assessing and minimising the risks in all areas of the business and educating the

workforce to provide as safe a working environment as possible for our staff.

We employ a full-time Health and Safety Officer who reports to the board regularly on working practices and improvements

that can be made to increase safety for the staff. Employees are encouraged to take personal responsibility for making sure

their actions and behaviour maintain safety for all staff members during the working day.

Environmental

The directors recognise that the Group has a responsibility to the environment, customers, suppliers and staff to operate its

commercial activities using well-managed forests and to reduce any negative environmental or social impact of its trading as

far as is reasonably practical for the Group.

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

recognises that the independent certification of forests and of the supply chain is the best means of providing assurances of

this. Where possible we purchase material certified by the Programme for the Endorsement of Forest Certification schemes

(PEFC) or the Forest Stewardship Council (FSC).

The Group has third party audits of their chain of custody for timber supplied as certified by PEFC, FSC and other schemes.

This is to ensure that claims made about certification can be proven and our certifications for these can be located on our

website 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.

KEY PERFORMANCE INDICATORS

We consider that our key financial performance indicators are those that communicate the financial performance and

strength of the Group, these being turnover, gross margin, operating profit and earnings before interest tax depreciation and

amortisation (EBITDA). The Group also closely monitors other internal KPI's for example;

- Vehicle statistics on usage & efficiency

- Individual employee performance in line with our HR objectives

- The reason and level of sales credits raised

- Daily sales performance and margin threshold reviews

We continually aim to develop and grow our business in order to increase our market share, whilst striving to maintain the

gross margin on our products. As the prime measure of our economic output, revenue growth is key to measuring

shareholder return and the success of our expansion strategies. Turnover for the year increased approximately 13% as a

result of our focus on offering the best possible products and service to our customer base in spite of increased competition

in all marketplaces.

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

reflecting the quality of the goods and services offered. The gross margin for the year has increased due to the fall in direct

purchase costs. This have begun to rise steadily into the new year but we have minimised as much as possible by our early

identification of this trend & continued efficiency drive on stockholding and purchasing policies.

Overall, the Group's EBITDA has improved to £6m (2018: £3,9m), with operating profit increasing to £4.9m (2018: £2.2m),

which this trend follows through to profit before tax increasing to £4.7m (2018: £2.2m). Profit after taxation is £4.0m (2018:

£1.7m) with the defined benefit pension adjustment as shown in note 26 giving a total of £4.1m retained by the Group to be

added to retained earnings. Our strategy to recover and improve the financial performance of the business going forward has

been commented on above in the review of business.

FINANCIAL INSTRUMENTS

A summary of the group financial instruments and related disclosures affecting the financial statements are set out in the

notes to the accounts. The financial risk management objectives and policies of the entity and its exposure to related risks are

covered above.

FUTURE DEVELOPMENTS

Harlow Bros Holdings aim to maintain the management policies which have resulted in the Group's growth in recent years

but are closely the monitoring performance against the strategic review plans for Harlow Timber Systems (Eastern) Ltd in

the current year and providing additional support and resources if required in order to successfully implement the plans. We

anticipate the business environment will remain competitive across the Group however, we believe that the Group is in a

good financial position to meet these challenges, with new product lines continually being introduced throughout the year

and the continuing review of operating and cost efficiencies.

We are mindful of the impact in the market place regarding the final outcome with Brexit and continue to monitor this

situation as signs show that the new house build market in particular can expand and contract rapidly in demand and so we

continue to diversify our offering and customer base so as to mitigate reliance on such key sectors should any dips in the

market arise. In summary we are confident we can deliver another set of strong financials in the current year in line with our

goals and objectives.

EMPLOYMENT STATEMENT

Details of the number of employees and related costs can be found in Note 5 to the financial statements.

The Group's ability to achieve its commercial objectives and to serve the needs of its customers in a profitable and friendly

manner depends on the contribution of its employees. Employees are encouraged to develop their contribution to the

business whatever department in the business they work in. The Group aims to keep employees up to date with financial and

other information as the directors and management board see fit such as engaging through meetings and newsletters.

The Group's employment policies do not discriminate between employees, or potential employees, on the grounds of age,

gender, disability, sexual orientation, ethnic origin or religious belief. Every effort would be made to ensure that employment

would continue for any employees that become disabled including arranging appropriate training. It is our policy that career

development, training and opportunities for promotion of disabled persons should, as far as possible, be identical with that of

other employees in the business. The criteria used for selection or promotion is the suitability of any applicant for the job.

It is our policy to train and develop employees to ensure that they are best equipped to undertake their daily tasks for which

they are employed, and to provide the opportunity for career development without discrimination. Training and development

is provided and is available to all levels and categories of staff.

ON BEHALF OF THE BOARD:

R V D Harlow - Director

24 March 2020

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

30 June 2019.

DIVIDENDS

The total distribution of dividends for the year ended 30 June 2019 will be £1,417,800.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 July 2018 to the date of this report.

J R Harlow

P V J Harlow

R V D Harlow

D Poli

DISCLOSURE IN THE STRATEGIC REPORT

The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group'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 Group Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have

elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the

financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the

group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required

to:

-	select suitable accounting policies and then apply them consistently;

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

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's

and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the

group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also

responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a

director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware

of that information.

AUDITORS

The auditors, Charnwood Accountants & Business Advisors LLP, 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:

R V D Harlow - Director

24 March 2020

Opinion

We have audited the financial statements of Harlow Bros Holdings Ltd (the 'parent company') and its subsidiaries (the

'group') for the year ended 30 June 2019 which comprise the Consolidated Income Statement, Consolidated Other

Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity 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 group's and of the parent company affairs as at 30 June 2019 and of the group's profit for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial

statements section of our report. We are independent of the group in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our

other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you

where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors

thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly

stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in

the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material

misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material

misstatement of the other information. If, based on the work we have performed, we conclude that there is a material

misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the

course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Directors.

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

in our opinion:

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

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

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

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

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page nine, the directors are responsible for

the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal

control as the directors determine necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability

to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis

of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have

no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable

assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will

always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on

the basis of these financial statements.

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.

Mr Christopher David Hutton FCCA (Senior Statutory Auditor)

for and on behalf of Charnwood Accountants & Business Advisors LLP

Statutory Auditor

The Point

Granite Way

Mountsorrel

Loughborough

Leicestershire

LE12 7TZ

25 March 2020

Harlow Bros Holdings Ltd (Registered number: 07582674)

Consolidated Income Statement

for the Year Ended 30 June 2019

30.6.19

Continuing

Discontinued

Total

Notes

£

TURNOVER

3

72,937,739

5,386,256

78,323,995

Cost of sales

(58,593,474

)

(4,834,740

)

(63,428,214

)

GROSS PROFIT

14,344,265

551,516

14,895,781

Distribution costs

(229,642

)

(67,326

)

(296,968

)

Administrative expenses

(9,204,250

)

(809,614

)

(10,013,864

)

4,910,373

(325,424

)

4,584,949

Other operating income

111,576

-

111,576

Gain/loss on revaluation of assets

276,612

-

276,612

OPERATING PROFIT/(LOSS)

5

5,298,561

(325,424

)

4,973,137

Interest receivable and similar income

21,437

36

21,473

Amounts written off investments

-

Interest payable and similar expenses

7

(4,982

)

-

(4,982

)

Other finance costs

24

(1,000

)

-

(1,000

)

PROFIT/(LOSS) BEFORE TAXATION

5,314,016

(325,388

)

4,988,628

Tax on profit/(loss)

8

(993,549

)

61,824

(931,725

)

PROFIT/(LOSS) FOR THE FINANCIAL
YEAR

4,320,467

(263,564

)

4,056,903

Profit/(loss) attributable to:

Owners of the parent

3,561,437

Non-controlling interests

495,466

4,056,903

Harlow Bros Holdings Ltd (Registered number: 07582674)

Consolidated Income Statement

for the Year Ended 30 June 2019

30.6.18

Continuing

Discontinued

Total

Notes

£

TURNOVER

3

58,715,526

10,369,223

69,084,749

Cost of sales

(48,148,137

)

(9,306,714

)

(57,454,851

)

GROSS PROFIT

10,567,389

1,062,509

11,629,898

Distribution costs

(257,726

)

(52,801

)

(310,527

)

Administrative expenses

(8,381,645

)

(829,811

)

(9,211,456

)

1,928,018

179,897

2,107,915

Other operating income

122,371

-

122,371

OPERATING PROFIT

5

2,050,389

179,897

2,230,286

Interest receivable and similar income

12,254

-

12,254

Amounts written off investments

-

Interest payable and similar expenses

7

(16,770

)

-

(16,770

)

Other finance costs

24

(8,000

)

-

(8,000

)

PROFIT BEFORE TAXATION

2,037,873

179,897

2,217,770

Tax on profit

8

(456,025

)

(34,180

)

(490,205

)

PROFIT FOR THE FINANCIAL YEAR

1,581,848

145,717

1,727,565

Profit attributable to:

Owners of the parent

1,360,004

Non-controlling interests

367,561

1,727,565

PROFIT FOR THE YEAR

4,056,903

1,727,565

OTHER COMPREHENSIVE INCOME

Net actuarial gain / (loss)

53,000

80,000

Revaluation of freehold properties

4,651,663

-

Income tax relating to components of other
comprehensive income

(571,911

)

-

OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

4,132,752

80,000

TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

8,189,655

1,807,565

Total comprehensive income attributable to:

Owners of the parent

8,189,655

1,807,565

FIXED ASSETS

Intangible assets

12

206,283

371,311

Tangible assets

13

24,953,807

20,056,578

Investments

14

-

25,160,090

20,427,889

CURRENT ASSETS

Stocks

15

9,852,776

10,312,749

Debtors

16

13,641,449

13,487,630

Cash at bank and in hand

7,030,187

4,263,744

30,524,412

28,064,123

CREDITORS

Amounts falling due within one year

17

13,612,312

13,117,992

NET CURRENT ASSETS

16,912,100

14,946,131

TOTAL ASSETS LESS CURRENT
LIABILITIES

42,072,190

35,374,020

PROVISIONS FOR LIABILITIES

22

(682,792

)

(64,181

)

PENSION ASSET/(LIABILITY)

26

3,240

(193,590

)

NET ASSETS

41,392,638

35,116,249

CAPITAL AND RESERVES

Called up share capital

23

112,136

Share premium

24

1,792,869

Revaluation reserve

24

4,079,752

-

Capital redemption reserve

24

46,995

Fair value reserve

24

229,588

-

Retained earnings

24

35,131,298

33,164,249

SHAREHOLDERS' FUNDS

41,392,638

35,116,249

The financial statements were approved by the Board of Directors on 24 March 2020 and were signed on its behalf by:

R V D Harlow - Director

FIXED ASSETS

Intangible assets

12

-

Tangible assets

13

19,927,500

14,983,695

Investments

14

12,965,795

32,893,295

27,949,490

CURRENT ASSETS

Debtors

16

5,541,422

4,182,777

Cash at bank

1,514,608

336,910

7,056,030

4,519,687

CREDITORS

Amounts falling due within one year

17

1,485,071

1,029,749

NET CURRENT ASSETS

5,570,959

3,489,938

TOTAL ASSETS LESS CURRENT
LIABILITIES

38,464,254

31,439,428

PROVISIONS FOR LIABILITIES

22

618,935

-

NET ASSETS

37,845,319

31,439,428

CAPITAL AND RESERVES

Called up share capital

23

112,136

Share premium

24

26,491,764

Revaluation reserve

24

4,079,752

-

Fair value reserve

24

229,588

-

Retained earnings

24

6,932,079

4,835,528

SHAREHOLDERS' FUNDS

37,845,319

31,439,428

Company's profit for the financial year

3,743,939

1,495,939

The financial statements were approved by the Board of Directors on 24 March 2020 and were signed on its behalf by:

R V D Harlow - Director

Called up

share

Retained

Share

capital

earnings

premium

£

Balance at 1 July 2017

112,136

32,043,886

1,792,869

Changes in equity

Dividends

-

(319,641

)

-

Total comprehensive income

-

1,440,004

-

Balance at 30 June 2018

112,136

33,164,249

1,792,869

Changes in equity

Dividends

-

(1,417,800

)

-

Total comprehensive income

-

3,384,849

-

Balance at 30 June 2019

112,136

35,131,298

1,792,869

Capital

Fair

Revaluation

redemption

value

Total

reserve

equity

£

Balance at 1 July 2017

-

46,995

-

33,995,886

Changes in equity

Dividends

-

(319,641

)

Total comprehensive income

-

1,440,004

Balance at 30 June 2018

-

46,995

-

35,116,249

Changes in equity

Dividends

-

(1,417,800

)

Total comprehensive income

4,079,752

-

229,588

7,694,189

Balance at 30 June 2019

4,079,752

46,995

229,588

41,392,638

Called up

share

Retained

Share

capital

earnings

premium

£

Balance at 1 July 2017

112,136

3,659,230

26,491,764

Changes in equity

Dividends

-

(319,641

)

-

Total comprehensive income

-

1,495,939

-

Balance at 30 June 2018

112,136

4,835,528

26,491,764

Changes in equity

Dividends

-

(1,417,800

)

-

Total comprehensive income

-

3,514,351

-

Balance at 30 June 2019

112,136

6,932,079

26,491,764

Fair

Revaluation

value

Total

reserve

equity

£

Balance at 1 July 2017

-

30,263,130

Changes in equity

Dividends

-

(319,641

)

Total comprehensive income

-

1,495,939

Balance at 30 June 2018

-

31,439,428

Changes in equity

Dividends

-

(1,417,800

)

Total comprehensive income

4,079,752

229,588

7,823,691

Balance at 30 June 2019

4,079,752

229,588

37,845,319

1.	STATUTORY INFORMATION

Harlow Bros Holdings Ltd is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the General Information page.

Harlow Bros Holdings Ltd (‘the Company’) and its subsidiaries (together ‘the Group’) operate a number of depots

throughout the UK.

These financial statements are presented in pounds sterling, the currency of the primary economic environment in

which theGroup operates.

The nature of the group’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, as modified by the recognition of

certain financial assets and liabilities measured at fair value.

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires

management to exercise its judgement in the process of applying the group and company accounting policies. The

areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant

to the financial statements, are disclosed in notes below.

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

Going concern

Having completed their assessment, the directors have concluded that there are no material uncertainties that cast

significant doubt about the ability of the group to continue as a going concern.

The Group meets its day-to-day working capital requirements through its bank facilities. The Group’s forecasts and

projections, taking account of reasonably possible changes in trading performance, show that the Group should be

able to operate within the level of its current facilities.

The group's business activities, together with the factors likely to affect its future development and financial position

have been documented in the strategic report. The group currently has sufficient financial resources together with

strong relationships spread of a number of customers to enable future growth to continue.

After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to

continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going

concern basis in preparing its financial statements.

Financial Reporting Standard 102 - reduced disclosure exemptions

The group has taken advantage of the following disclosure exemptions in preparing these financial statements, as

permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of Section 3 Financial Statement Presentation paragraph 3.17(d);

•

the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42,
11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

The parent company is included in the consolidated financial statements, and is considered a qualifying entity under

FRS 102 paragraphs 1.8 to 1.12. The above exemptions available in respect of certain disclosures for the parent

company financial statements have been applied on the basis that they do not need to be included for a second time

as they are already disclosed as part of the consolidated financial statements.

Basis of consolidation

The consolidated financial statements include the accounts of the Company and all entities controlled by the

Company (itssubsidiaries) (together referred to as "the Group") from the date control commences until the date that

control ceases.

The consolidated financial statements incorporate the assets, liabilities and results of the Company and its

subsidiary undertakings controlled by the group up to 30 June each year.

Subsidiary undertakings are fully consolidated from the date on which control is transferred to the Group.

Control is achieved where the Company has the power to govern the financial and operating policies of an entity so

as to obtain benefits from its activities.

The financial statements of all subsidiary undertakings are prepared to the same reporting date as the Company. All

subsidiary undertakings have been included in the consolidated financial statements.

The principal subsidiary undertakings of the Company at 30 June each year are detailed in note 14 to the Company

balance sheet. Investments in subsidiaries are accounted for at cost less impairment in the individual financial

statements.

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

eliminated on consolidation.

Significant judgements and estimates

In the application of the group's accounting policies, which are described in the accounting policies below,

management is required to make judgements, estimates and assumptions about the carrying values of assets and

liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on

historical experience and other factors that are considered to be relevant. Actual results may differ from these

estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are

recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the

revision and future periods if the revision affects both current and future periods.

The Directors believe that the following judgements are critical due to the degree of estimation required and / or the

potential material impact they may have on the Group’s financial position and performance.

Judgements

In preparing these financial statements, the directors have made the following key judgements that have a significant

effect on the amounts recognised in the financial statements as described below.

1) Determine whether there are indicators of impairment of the group's tangible assets along with residual values and

asset lives. The residual value is the net realisable value of an asset at the end of its useful economic life. The group

has made an assessment of the residual values that are appropriate for the business and reviews this assessment

annually. Note 13 provides details of the value of fixed assets capitalised.

2) Assessing whether the Group controls Harlows Kidderminster LLP requires judgement. The Group holds

a 50% share as stated in the partnership agreement and controls the operating and financial policies of Harlows

Kidderminster LLP. This agreement includes the power to set the annual budget and financial plan, appointing,

removing and setting the remuneration of senior staff, and setting operating procedures and responsibilities. The

Group considers that these powers demonstrate that the Group controls Harlows Kidderminster LLP.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that

have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the

next financial year, are described below. The group based its assumptions and estimates on parameters available

when the financial statements were prepared. Existing circumstances and assumptions about future developments,

however, may change due to market changes or circumstances arising that are beyond the control of the group. Such

changes are reflected in the assumptions when they occur.

a) Establishing useful economic lives for depreciation purposes of property, plant and equipment

Long-lived assets, consisting primarily of property, plant and equipment, comprise a significant portion of the

total assets. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of

asset and estimates of residual values. The directors regularly review these asset useful economic lives and change

them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and

physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on

depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the tangible

fixed asset accounting policy.

b) Providing for bad and doubtful debts

The group makes an estimate of the recoverable value of trade and other debtors. The group uses estimates based on

historical experience in determining the level of debts, which the group believes, will not be collected. These

estimates include such factors as the current credit rating of the debtor, the ageing profile of debtors and historical

experience. Any significant reduction in the level of customers that default on payments or other significant

improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the

operating results. The level of provision required is reviewed on an on-going basis.

c) Defined benefit pension scheme

The group has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present

value of the obligation depend on a number of factors which are sensitive to the actuarial assumptions included

within the report by the actuary, including; life expectancy, salary increases, asset valuations and the discount rate on

corporate bonds. The actuary estimates these factors in determining the net pension obligation in the balance sheet as

arrived at in their report to management. The assumptions reflect historical experience and current trends. The size of

the plan assets is also sensitive to asset return levels and the level of contributions paid by the group. See note 25 for

the disclosures relating to the defined benefit pension scheme.

d) Impairment of intangible assets and goodwill

Annually, the Group considers whether intangible assets and/or goodwill are impaired. Where an indication of

impairment is identified the estimation of recoverable value requires estimation of the recoverable value of the cash

generating units (CGUs). This requires estimation of the future cash flows from the CGUs and

also selection of appropriate discount rates in order to calculate the net present value of those cash flows.

e) Establishing useful economic life of intangible assets and goodwill

The Group establishes a reliable estimate of the useful life of goodwill and intangible assets arising on business

combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, the

expected usual life of the cash generating units to which the goodwill is attributed, any legal, regulatory or

contractual provisions that can limit useful life and assumptions that market participants would consider in respect of

similar businesses.

f) Valuation of investment properties

The group carries its investment properties at fair value, with changes in fair value being recognised in the

statement of profit or loss. For investment properties, a valuation methodology based on expected yield rates was

considered for the year. In addition, the group measures land and buildings at revalued amounts with changes in fair

value being recognised in other comprehensive income. Land and buildings were valued by reference to

market-based evidence, using comparable prices adjusted for specific market factors such as nature, location and

condition of the property where the directors consider it applicable.

The key assumptions used to determine the fair value of the properties are provided in the investment property

accounting policy.

Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents the amount

receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the Group and

value added taxes

The Group bases its estimate of returns on historical results, taking into consideration the type of customer, the type

of transaction and the specifics of each arrangement.

Where the consideration receivable in cash or cash equivalents is deferred, and the arrangement constitutes a

financing transaction, the fair value of the consideration is measured as the present value of all future receipts using

the imputed rate of interest.

The Group recognises revenue when (a) the significant risks and rewards of ownership have been transferred to the

buyer; (b) the Group retains no continuing involvement or control over the goods; (c) the amount of revenue can be

measured reliably; (d) it is probable that future economic benefits will flow to the entity and (e) when the specific

criteria relating to each of the Group’s sales channels have been met, as described below.

Sale of goods

Sales of goods are recognised on sale to the customer, which is considered the point of delivery. 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 of returns.

Rental income - company only

Rents receivable on freehold and investment properties, under the terms of operating leases, are included in the profit

and loss account on a receivable basis less related expenses.

Partnership profits - company only

Income is recognised when the entitlement to profits have been established and agreed.

Dividend income

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

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in October 2015, has been

amortised evenly over its estimated useful life of 5 years.

Goodwill recognised represents the excess of the fair value and directly attributable costs of the purchase

consideration over the fair values to the Group’s interest in the identifiable net assets, liabilities and contingent

liabilities acquired.

Positive goodwill acquired on each business combination is capitalised, classified as an asset on the statement of

financial position and amortised on a straight line basis over its useful life.

Goodwill acquired in a business combination is, from the acquisition date, allocated to each cash generating unit that

is expected to benefit from the synergies of the combination.

If a subsidiary, associate or business is subsequently sold or discontinued, any goodwill arising on acquisition that

has not been amortised through the profit and loss account is taken into account in determining the profit or loss on

sale or discontinuance.

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.

Freehold property

-

2% on cost

Improvements to property

-

20% on cost and 10% on cost

Plant and machinery

-

15% on cost and at varying rates on cost

Fixtures and fittings

-

15% on cost, 10% on cost and at varying rates on
cost

Motor vehicles

-

25% on cost

Computer equipment

-

20% on cost

No depreciation is provided on freehold land.

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.

Land and buildings include freehold and leasehold retail outlets and offices. Land and buildings are stated at cost (or

deemed cost for land and buildings held at valuation) less accumulated depreciation and accumulated impairment

losses.

Freehold property is measured at fair value less accumulated depreciation and impairment losses recognised after the

date of revaluation. Valuations are performed with sufficient frequency to ensure that the carrying amount of a

revalued asset does not differ materially from its fair value. A revaluation surplus is recorded in OCI and credited to

the asset revaluation surplus in equity. However, to the extent that it reverses a revaluation deficit of the same asset

previously recognised in profit or loss, the increase is recognised in profit and loss. A revaluation deficit is

recognised in the statement of profit or loss, except to the extent that it offsets an existing surplus on the same asset

recognised in the asset revaluation surplus.

An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between

depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost.

Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of

the asset and the net amount is restated to the revalued amount of the asset. Upon disposal, any revaluation surplus

relating to the particular asset being sold is transferred to retained earnings.

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to

complete and sell, and after making due allowance for obsolete and slow moving items.

The cost of stock is calculated on the weighted average cost principle on a first in first out basis and includes

expenditure incurred in acquiring stock, production or conversion costs, and other costs incurred in bringing them to

their existing location and condition. Stocks are recognised as an expense in the period in which the related revenue

is recognised.

Cost for raw materials and consumables are at the purchase cost to the company. Cost for Work in progress and

finished goods includes all direct expenditure.The cost of work in progress and finished goods includes

production overheads and the attributable proportion of indirect overheads based on the normal level of activity.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its

selling price, in the ordinary course of business, less costs to complete and sell. The impairment provision is

determined primarily by future demand forecasts. The write down is measured as the difference between the

calculated cost of the stock and market based upon assumptions about future demand and charged to the provision

for stock, which is a component of cost of sales.

Financial instruments

The group mainly enters into basic financial instruments transactions that result in the recognition of financial assets

and liabilities like trade and other accounts receivable and payable and loans to/from related parties.

Debt instruments, like loans and other accounts receivable and payable, are initially measured at present value of the

future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are

payable or receivable within one year, typically trade payables or receivables, are measured, initially and

subsequently, at the undiscounted amount of the cash or other consideration, expected to be paid or received.

However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a

trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case

of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and

subsequently, at the present value of the future payment discounted at a market rate of interest for a similar debt

instrument.

Trade and other debtors

Trade and other debtors are initially recognised at the transaction price and thereafter stated at amortised cost using

the effective interest method, less impairment losses for bad and doubtful debts except where the effect of

discounting would be immaterial. In such cases, the debtors are stated at cost less impairment losses for bad and

doubtful debts.

A provision for impairment of trade debtors is established when there is objective evidence that the group will not be

able to collect all amounts due according to the original terms of debtors. The amount of the provision is determined

as the difference between the asset's carrying amount and the present value of estimated future cash flows, and is

recognised in the profit & loss in operating expenses.

Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the

effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits with banks and other short-term

highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet,

bank overdrafts are shown within borrowings or current liabilities when applicable.

In the Cash Flow Statement, cash and cash equivalents are shown separate to bank overdrafts that are repayable on

demand and form an integral part of the group's cash management.

Financial assets and financial liabilities at fair value through profit or loss

Classification

Investments in debt, equity and derivatives held by the group are classified as financial assets or liabilities at fair

value through profit or loss.

Recognition, derecognition and measurement

Regular purchases and sales of financial instruments are recognised on the trade date, being the date on which the

group commits itself to the purchase or sale. Financial instruments at fair value through profit or loss are initially

recognised at fair value, when the group becomes party to the contractual provisions of the instrument, with their

associated transaction costs being charged immediately, when incurred, to profit or loss.

Subsequent to the initial recognition, financial assets and liabilities at fair value through profit and loss are measured

at fair value with the resultant gains and losses being taken to profit or loss.

Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or when the

group has transferred substantially all the risks and rewards of ownership.

Fair value

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

The fair value of assets and liabilities traded in an active market is based on quoted market prices at the close of

trading on the reporting date. For quoted financial assets the valuation is based on the closing bid price; for quoted

liabilities the closing asking price is applied.

Where financial instruments are not traded in an active market, the fair value is determined using valuation

techniques. The valuation techniques used are dependent on the level of data, the circumstances and the availability

of observable inputs for each such financial instrument but may include comparable recent arm’s length transactions,

discounted cash flow analysis and other models.

Net gain or loss from financial assets and liabilities at fair value through profit or loss

Net gains or losses from financial instruments at fair value through profit or loss includes all realised and unrealised

fair value changes but does not include interest and dividend income.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement,

except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the balance sheet date.

Deferred 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.

Leases

Assets acquired under finance leases are capitalised and the outstanding future lease obligations are shown in

creditors. Operating lease rentals are charged to the profit and loss account on a straight line basis over the period of

the lease.

Pension costs and other post-retirement benefits

The Group operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit

that the employee will receive on retirement, usually dependent upon several factors including age, length of service

and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the balance sheet in respect of the defined benefit plan is the present value of the defined

benefit obligation at the reporting date less the fair value of the plan assets at the reporting date.

The defined benefit obligation is calculated using the projected unit credit method. Annually the Group engages

independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future

payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms

approximating the estimated period of the future payments (‘discount rate’).

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with

the Group’s policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or

credited to other comprehensive income. These amounts together with the return on plan assets, less amounts

included in net interest, are disclosed as ‘Remeasurement of net defined benefit liability’.

The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost

of an asset, comprises:

(a) the increase in pension benefit liability arising from employee service during the period; and

(b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation

and the fair value of plan assets. This cost is recognised in profit or loss as ‘Finance expense’.

Defined contribution pension plans

A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity.

Once the contributions have been paid the Group has no further payment obligations. The contributions are

recognised as an expense when they are due. Amounts not paid are shown in other creditors in the balance sheet. The

assets of the plan are held separately from the Group in independently administered funds.

Harlow Bros Limited operates a defined contribution pension scheme in respect of the directors. A defined benefit

scheme is operated for certain other employees. The funding plan and the contribution are not material in the context

of these financial statements. Pension costs are charged to the profit and loss account at the time that the

contributions are paid into the scheme.

Harlow Timber Systems Limited and Harlows Kidderminster LLP also make payments to a group personal pension

scheme for certain directors and employees. Payments to these schemes are charged to the profit and loss account in

the period in which they are made.

Investment property

Investment property is shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair

value is recognised in profit or loss.

Property is held to earn rental income rather than for the purpose of the group’s principal activities is classified as

Investment property. Such properties are held for their long term investment potential.

Investment properties are accounted for as follows:

Investment properties are measured initially at cost, including transaction costs and any directly attributable

expenditure. Subsequent to initial recognition, investment properties are stated at fair value, where such

properties can be measured reliably and which reflects market conditions at the reporting date. The surplus or deficit

on revaluation is recognised in the profit and loss account accumulated in the profit and loss reserve unless a deficit

below original cost, or its reversal, on an individual investment property is expected to be permanent, in which case

it is recognised in the profit and loss account for the year, including the corresponding tax effect.

Fair values are determined based on an annual evaluation by either the directors or an independent professional third

party valuer where the directors assess there is likely to be a material change in value. No depreciation is provided in

respect of investment properties.

Investment properties are derecognised either when they have been disposed of or when they are permanently

withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net

disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

Income from investment properties is disclosed in ‘Other operating income’ and details are shown in the fixed asset

note to the accounts. The related operating costs are immaterial and are included within administrative

expenses.

Fixed asset investments

The consolidated financial statements incorporate the financial statements of the company and entities controlled by

the group (its subsidiaries). Control is achieved where the group has the power to govern the financial and operating

policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in total comprehensive income from

the effective date of acquisition and up to the effective date of disposal, as appropriate using accounting policies

consistent with those of the parent. All intra-group transactions, balances, income and expenses are eliminated in full

on consolidation.

Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.

Provisions for liabilities

Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it

is probable that the group will be required to settle the obligation, and a reliable estimate can be made of the amount

of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present

obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the

obligation.

Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is

recognised at present value using a pre-tax discount rate. The unwinding of the discount is recognised as a finance

cost in profit or loss in the period it arises.

The group recognises a provision for annual leave accrued by employees as a result of services rendered in the

current period, and which employees are entitled to carry forward and use within the next 12 months. The provision

is measured at the salary cost payable for the period of absence.

3.

TURNOVER

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

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 group's principal activities are as stated in the strategic report and the group operates within the geographical

region of the United Kingdom.

4.	EMPLOYEES AND DIRECTORS

30.6.19

30.6.18

£

Wages and salaries

13,978,633

12,403,128

Social security costs

1,215,890

1,068,226

Other pension costs

413,499

405,260

15,608,022

13,876,614

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

30.6.19

30.6.18

Directors

4

Management and administrative

125

164

Production

405

343

534

511

Company

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

30.6.19

30.6.18

£

Directors' remuneration

125,205

258,165

Directors' pension contributions to money purchase schemes

-

6,295

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

Money purchase schemes

-

1

Defined benefit schemes

4

5.	OPERATING PROFIT

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

30.6.19

30.6.18

£

Hire of plant and machinery

136,970

118,096

Depreciation - owned assets

1,315,044

1,502,142

Profit on disposal of fixed assets

(55,879

)

(24,341

)

Goodwill amortisation

165,028

Changes in fair value investments

-

(1,202

)

Stock recognised as an expense

50,845,245

46,684,547

6.	AUDITORS' REMUNERATION

30.6.19

30.6.18

£

Fees payable to the company's auditors for the audit of the company's
financial statements

13,500

8,000

Fees payable to the company's auditors for other services to the group:

The auditing of accounts of

the Company's subsidiaries

61,200

51,863

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

30.6.19

30.6.18

£

Bank interest

3,994

16,770

Other interest

8

-

Interest payable

980

-

4,982

16,770

8.

TAXATION

Analysis of the tax charge

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

30.6.19

30.6.18

£

Current tax:

UK corporation tax

838,850

444,807

Deferred tax:

Origination and reversal of

timing differences

46,705

33,008

Defered tax DB pension

46,170

12,390

Total deferred tax

92,875

45,398

Tax on profit

931,725

490,205

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained

below:

30.6.19

30.6.18

£

Profit before tax

4,988,628

2,217,770

Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2018 - 19%)

947,839

421,376

Effects of:

Expenses not deductible for tax purposes

(4,023

)

20,529

Capital allowances in excess of depreciation

-

(14,193

)

Depreciation in excess of capital allowances

10,380

-

Non taxable goodwill amortisation

31,355

Other timing differences

(94,145

)

(14,260

)

Unrealised revaluation gains

(52,556

)

-

accounting profit

Deferred tax adjustment

46,705

33,008

Deferred tax charge on net pension asset / liability

46,170

12,390

Total tax charge

931,725

490,205

Tax effects relating to effects of other comprehensive income

30.6.19

Gross

Tax

Net

£

Net actuarial gain / (loss)

53,000

-

53,000

Revaluation of freehold properties

4,651,663

(571,911

)

4,079,752

4,704,663

(571,911

)

4,132,752

30.6.18

Gross

Tax

Net

£

Net actuarial gain / (loss)

80,000

-

80,000

The tax rate for the current year is lower than the prior year, due to changes in the UK corporation tax rate, which

decreased from 20% to 19% from 1 April 2017. Changes to the UK corporation tax rates were substantively enacted

as part of Finance Bill 2016 (on 6 September 2016). These include reductions to the main rate to reduce the rate to

17% from 1 April 2020. Deferred taxes at the balance sheet date have been measured using these enacted tax rates

and reflected in these financial statements.

In November 2019, the Prime Minister announced that he intended to cancel the future reduction in corporation tax

rate from 19% to 17%. This announcement does not constitute substantive enactment and therefore deferred taxes at

the balance sheet date continue to be measured at the enacted tax rate of 17%. However, it is possible that the

corporation tax rate remains at 19% after 1 April 2020.

The effective tax rate differs from the UK corporation tax rate principally due to the deductibility of allowances on

capital expenditure and other permanent differences arising in the period as detailed in the tax charge reconciliation.

9.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not

presented as part of these financial statements.

10.

DIVIDENDS

30.06.19

30.06.18

£

Total dividends paid

1,417,800

319,641

11.	DISCONTINUED OPERATIONS

In June 2019 the company's management decided to close down its building materials segment which the disclosure

of can be seen on the consolidated income statement pages. Following a strategic review of the company's operations

by the directors it was decided to close this segment of the business to enable greater focus on their more successful

key competencies being the manufacture of the Truss and I-Beam product lines.

12.	INTANGIBLE FIXED ASSETS

Group

Goodwill

£

COST

At 1 July 2018

and 30 June 2019

995,055

AMORTISATION

At 1 July 2018

623,744

Amortisation for year

165,028

At 30 June 2019

788,772

NET BOOK VALUE

At 30 June 2019

206,283

At 30 June 2018

371,311

Amortisation of intangible fixed assets is included in administrative expenses.

Company

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

13.	TANGIBLE FIXED ASSETS

Group

Freehold

Improvements

Freehold

investment

to

Plant and

property

machinery

£

COST OR VALUATION

At 1 July 2018

15,453,299

1,125,987

930,448

9,264,728

Additions

15,530

-

68,628

455,022

Disposals

-

(36,112

)

Revaluations

3,364,184

276,612

-

Reclassification/transfer

210,099

(210,099

)

-

At 30 June 2019

19,043,112

1,192,500

999,076

9,683,638

DEPRECIATION

At 1 July 2018

1,346,306

-

102,775

6,533,778

Charge for year

13,045

-

39,827

680,668

Eliminated on disposal

-

(27,488

)

Revaluation adjustments

(1,287,479

)

-

At 30 June 2019

71,872

-

142,602

7,186,958

NET BOOK VALUE

At 30 June 2019

18,971,240

1,192,500

856,474

2,496,680

At 30 June 2018

14,106,993

1,125,987

827,673

2,730,950

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

COST OR VALUATION

At 1 July 2018

972,487

3,365,619

33,503

31,146,071

Additions

89,475

728,322

4,147

1,361,124

Disposals

(6,146

)

(284,730

)

-

(326,988

)

Revaluations

-

3,640,796

At 30 June 2019

1,055,816

3,809,211

37,650

35,821,003

DEPRECIATION

At 1 July 2018

781,764

2,292,808

32,062

11,089,493

Charge for year

44,908

535,641

955

1,315,044

Eliminated on disposal

(5,645

)

(216,729

)

-

(249,862

)

Revaluation adjustments

-

(1,287,479

)

At 30 June 2019

821,027

2,611,720

33,017

10,867,196

NET BOOK VALUE

At 30 June 2019

234,789

1,197,491

4,633

24,953,807

At 30 June 2018

190,723

1,072,811

1,441

20,056,578

Included in cost or valuation of land and buildings is freehold land of £1,296,025 (2018 - £1,296,025) which is not

depreciated.

Cost or valuation at 30 June 2019 is represented by:

Freehold

Improvements

Freehold

investment

to

Plant and

property

machinery

£

Valuation in 2019

3,364,184

276,612

-

Cost

15,678,928

915,888

999,076

9,683,638

19,043,112

1,192,500

999,076

9,683,638

Fixtures

and

Motor

Computer

fittings

vehicles

equipment

Totals

£

Valuation in 2019

-

3,640,796

Cost

1,055,816

3,809,211

37,650

32,180,207

1,055,816

3,809,211

37,650

35,821,003

If freehold properties had not been revalued they would have been included at the following historical cost:

30.6.19

30.6.18

£

Cost

15,370,816

Value of land in freehold land and buildings

1,296,025

Company

Freehold

investment

property

Totals

£

COST OR VALUATION

At 1 July 2018

15,145,187

1,125,987

16,271,174

Additions

15,530

-

15,530

Revaluations

3,364,184

276,612

3,640,796

Reclassification/transfer

210,099

(210,099

)

-

At 30 June 2019

18,735,000

1,192,500

19,927,500

DEPRECIATION

At 1 July 2018

1,287,479

-

1,287,479

Revaluation adjustments

(1,287,479

)

-

(1,287,479

)

At 30 June 2019

-

NET BOOK VALUE

At 30 June 2019

18,735,000

1,192,500

19,927,500

At 30 June 2018

13,857,708

1,125,987

14,983,695

Included in cost or valuation of land and buildings is freehold land of £ 1,296,025 (2018 - £ 1,296,025 ) which is not

depreciated.

Cost or valuation at 30 June 2019 is represented by:

Freehold

investment

property

Totals

£

Valuation in 2019

3,364,184

276,612

3,640,796

Cost

15,370,816

915,888

16,286,704

18,735,000

1,192,500

19,927,500

If freehold properties had not been revalued they would have been included at the following historical cost:

30.6.19

30.6.18

£

Cost

15,370,816

Value of land in freehold land and buildings

1,296,025

Freehold property and investment properties have been revalued during the year which was carried out in June 2019

by Mather Jamie an independent firm of chartered surveyors. All properties held were subject to revaluation. The

valuations were made on an open market basis by reference to their existing use and in accordance with the

Appraisal and Valuation Standards published by the Royal Institution of Chartered Surveyors.

14.	FIXED ASSET INVESTMENTS

Company

Shares in

group

undertakings

£

COST

At 1 July 2018

and 30 June 2019

28,440,795

PROVISIONS

At 1 July 2018

and 30 June 2019

15,475,000

NET BOOK VALUE

At 30 June 2019

12,965,795

At 30 June 2018

12,965,795

The group or the company's investments at the Balance Sheet date in the share capital of companies include the

following:

Subsidiaries

Company

Principal activity

Class of shares
held

Ownership -
2019

Ownership -
2018

Harlow Bros Limited

Manufacture and
supply of timber

Ordinary

100%

Harlow Timber Systems Ltd

Manufacturer and
supply of roof trusses

Ordinary

100%

Harlow Timber Systems (Eastern) Ltd

Manufacture and
supply of roof trusses

Ordinary

100%

Harlows Kidderminster LLP
(registered no: OC330392)

Timber merchants

Capital account
holding

>50%

All the above subsidiaries have their registered office as the company head office which is located at Hathern Road,

Long Whatton, Loughborough, Leicestershire, England, LE12 5DE.

All subsidiaries listed have been included within the consolidated accounts.

15.

STOCKS

Group

30.6.19

30.6.18

£

Stock

9,766,962

10,175,897

Work-in-progress

85,814

136,852

9,852,776

10,312,749

There is no significant difference between the replacement cost of the inventory and its carrying amount.

16.

DEBTORS

Group

Company

30.6.19

30.6.18

30.6.19

30.6.18

£

Amounts falling due within one year:

Trade debtors

11,187,900

11,702,546

31,206

22,202

Amounts owed by group undertakings

-

1,712,566

328,061

Other debtors

376,327

228,501

211,161

109,447

Tax

95,067

237,472

-

VAT

-

74,526

Prepayments and accrued income

1,992,478

1,319,111

10,323

-

Prepayments

(10,323

)

-

13,641,449

13,487,630

1,965,256

534,236

Amounts falling due after more than one year:

Amounts owed by group undertakings

-

3,576,166

3,648,541

Aggregate amounts

13,641,449

13,487,630

5,541,422

4,182,777

Trade debtors are stated after provisions for impairment of £146,353.

17.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group

Company

30.6.19

30.6.18

30.6.19

30.6.18

£

Bank loans and overdrafts (see note 18)

-

407,531

-

407,531

Trade creditors

7,635,349

8,989,232

8,484

18,173

Amounts owed to group undertakings

-

974

288,408

Tax

417,948

171,726

47,253

171,726

Social security and other taxes

319,877

287,304

-

VAT

1,643,196

1,299,883

58,008

-

Other creditors

2,316,830

936,183

1,225,771

19,007

Directors' current accounts

114,831

Accruals and deferred income

1,164,281

911,302

29,750

10,073

13,612,312

13,117,992

1,485,071

1,029,749

18.

LOANS

An analysis of the maturity of loans is given below:

Group

Company

30.6.19

30.6.18

30.6.19

30.6.18

£

Amounts falling due within one year or on

demand:

Bank loans

-

407,531

-

407,531

19.	LEASING AGREEMENTS

Minimum lease payments fall due as follows:

The Group as lessee.

Future aggregate minimum rental payments under non-cancellable leases are:

Leasehold
property

£

Leases expiring within one year

100,600

Later than one year but not later than five years

402,400

Leases expiring after five years

358,017

861,017

The Group as lessor.

The Group leases out it's investment properties under operating leases.

Future aggregate minimum rentals receivable under non-cancellable leases are:

Leasehold
property

£

Leases expiring within one year

88,419

Later than one year but not later than five years

151,400

Leases expiring after five years

94,300

334,119

20.	SECURED DEBTS

The following secured debts are included within creditors:

Group

Company

30.6.19

30.6.18

30.6.19

30.6.18

£

Bank loans

-

407,531

-

407,531

21.	FINANCIAL INSTRUMENTS

Group

2019

2018

£

Financial assets measured at amortised cost

18,689,481

16,432,263

Financial assets measured at fair value through profit and loss

1,192,500

1,125,987

Financial liabilities measured at amortised cost

13,612,312

11,359,079

Loan commitments measured at cost less impairment

-

407,531

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

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

Financial assets measured at fair value through profit or loss comprise of investment properties.

22.	PROVISIONS FOR LIABILITIES

Group

Company

30.6.19

30.6.18

30.6.19

30.6.18

£

Deferred tax

Accelerated capital allowances

63,857

67,231

-

Other timing differences

618,935

(3,050

)

618,935

-

682,792

64,181

618,935

-

Group

Deferred

tax

£

Balance at 1 July 2018

64,181

Credit to Income Statement during year

(324

)

Revaluation of properties

618,935

Balance at 30 June 2019

682,792

Company

Deferred

tax

£

Revaluation of properties

618,935

Balance at 30 June 2019

618,935

Deferred tax is provided at the future effective tax rate of 17% (2018 - 19%) based on the rates substantively enacted

at the balance sheet date, the expected timing of the reversals and the profitability of the company.

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

through depreciation and amortisation The company also recognises a deferred tax liability of £760 (2018 - £45,410

asset) at the year end in relation to the reversal of timing differences on the defined benefit pension deficit. The debit

to the profit & loss account relating to the movement on this asset was £46,170.

23.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

30.6.19

30.6.18

value:

£

105,005

Ordinary

£1

105,005

7,131

Non-voting

£1

7,131

112,136

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.

24.

RESERVES

Group

Retained

Share

Revaluation

earnings

premium

reserve

£

At 1 July 2018

33,164,249

1,792,869

-

Profit for the year

3,561,437

Dividends

(1,417,800

)

Pension actuarial gain

53,000

-

Revaluation of property

-

4,079,752

Property revaluation transfer

(229,588

)

-

At 30 June 2019

35,131,298

1,792,869

4,079,752

Group

Capital

Fair

redemption

value

reserve

Totals

£

At 1 July 2018

46,995

-

35,004,113

Profit for the year

3,561,437

Dividends

(1,417,800

)

Pension actuarial gain

-

53,000

Revaluation of property

-

4,079,752

Property revaluation transfer

-

229,588

-

At 30 June 2019

46,995

229,588

41,280,502

Company

Fair

Retained

Share

Revaluation

value

earnings

premium

reserve

Totals

£

At 1 July 2018

4,835,528

26,491,764

-

31,327,292

Profit for the year

3,743,939

Dividends

(1,417,800

)

(1,417,800

)

Revaluation of property

-

4,079,752

-

4,079,752

Property revaluation transfer

(229,588

)

-

229,588

-

At 30 June 2019

6,932,079

26,491,764

4,079,752

229,588

37,733,183

Retained earnings - includes all current and prior retained period profits and losses of the company net of any

dividends paid to shareholders.

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

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 group.

Revaluation reserve - as shown in the statement of changes in equity is used to record increases in the value of

property plant and equipment fixed assets and decreases to the extent that such decrease relates to an increase on the

same asset, net of any deferred tax provision.

Fair value reserve - as shown in the statement of changes in equity is used to record increases in the value of

investment property assets and decreases to the extent that such decrease relates to an increase on the same asset, net

of any deferred tax provision.

25.	NON-CONTROLLING INTERESTS

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

26.	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 method can be expected to increase over time, as the average age of the membership increases. A full actuarial

valuation was carried out at 5th April 2018 and updated to 30th June 2019 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 £34,000. 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 2019 imply the following life expectancies :

Male retiring at age 65 in 2019 21.8 years

Female retiring at age 65 in 2019 23.7 years

Male retiring at age 65 in 2039 23.5 years

Female retiring at age 65 in 2039 25.6 years

The amounts recognised in the balance sheet are as follows:

Defined benefit

pension plans

30.6.19

30.6.18

£

Present value of funded obligations

(1,557,000

)

(1,768,000

)

Fair value of plan assets

1,561,000

1,529,000

4,000

(239,000

)

Present value of unfunded obligations

-

Surplus/(Deficit)

4,000

(239,000

)

Deferred tax (liability)/asset

(760

)

45,410

Net asset/(liability)

3,240

(193,590

)

The amounts recognised in profit or loss are as follows:

Defined benefit

pension plans

30.6.19

30.6.18

£

Current service cost

73,000

112,000

Net interest from net defined benefit
asset/liability

1,000

8,000

Past service cost

-

74,000

120,000

Actual return on plan assets

(7,000

)

80,000

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

Defined benefit

pension plans

30.6.19

30.6.18

£

Opening defined benefit obligation

1,768,000

1,794,000

Current service cost

73,000

112,000

Interest cost

43,000

48,000

Actuarial losses/(gains)

(106,000

)

(40,000

)

Benefits paid

(46,000

)

(146,000

)

Curtailments

(175,000

)

-

1,557,000

1,768,000

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

Defined benefit

pension plans

30.6.19

30.6.18

£

Opening fair value of scheme assets

1,529,000

1,505,000

Contributions by scheme participants

85,000

90,000

Expected return

42,000

40,000

Actuarial gains/(losses)

(49,000

)

40,000

Benefits paid

(46,000

)

(146,000

)

1,561,000

1,529,000

The amounts recognised in other comprehensive income are as follows:

Defined benefit

pension plans

30.6.19

30.6.18

£

Actual return less expected return on pension
assets

(49,000

)

40,000

Experience gains and losses arising on the
scheme liabilities

168,000

5,000

119,000

45,000

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

Defined benefit

pension plans

30.6.19

30.6.18

£

Cash

222,000

173,000

Alternatives

1,339,000

1,356,000

1,561,000

1,529,000

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

30.6.19

30.6.18

Discount rate

2.30%

2.80%

Future salary increases

-

4.20%

Future pension increases

2.40%

2.50%

Allow for revalue of deferred

3.10%

2.30%

Inflation

2.10%

3.20%

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 £56,097 were due to the fund. These are included in other creditors. The pension charge represents

contributions due from the company totalling £413,499 are charged to the profit & loss account in the period that

they arise.

27.	RELATED PARTY DISCLOSURES

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial

Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with

wholly owned subsidiaries within the group.

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

financial statements.

Key management personnel of the entity or its parent (in the aggregate)

30.6.19

30.6.18

£

Amount due to related party

114,831

Directors' current accounts included in Creditors above represent monies loaned to the company by the directors'.

These loans are interest free to the company and are repayable in full on demand.

28.	ULTIMATE CONTROLLING PARTY

The company is controlled by the Harlow family, including the directors as stated in the directors' report. No

one individual member of the family has control of the Company.