PEFC UKANNUAL REPORT

CONTENTS01 CHAIRMANS REPORT

Chairman Hugh Miller reflects on PEFCs progress over the past year

02 MARKET OUTREACHSnapshot of PEFC UKs market outreach activities to promote awareness of and drive demand for certified products

04 ENGAGING CONSUMERS ON FOREST ISSUES

A report from PEFCs 2014 Stakeholder Dialogue

05 GROWING DEMAND FOR CERTIFIED PRODUCTS

The key messages from PEFCs first global consumer survey

06 PEFC INTERNATIONALS ACTIVITIES

An overview of PEFC International activities in 2014

07 DEMAND FOR CERTIFICATIONKey forest and Chain of Custody certification facts and figures

08 BOARD OF DIRECTORSPEFC UK Board of Directors - providing industry expertise from a broad range of sectors

10 ACCOUNTSPEFC UK financial information for 2013-14

13 CERTIFICATION FOR SMALL WOODLAND OWNERS

A cost effective solution to enable small woodland owners to participate in certification

PEFC UK LIMITEDProgramme for the Endorsement of Forest Certification

Sheffield Technology ParksCooper BuildingsArundel StreetSheffield S1 2NS

t +44 (0) 114 307 2334e info@pefc.co.ukw www.pefc.co.ukRegistered in Scotland Company Number 209443

BOARD OF DIRECTORSHugh Miller (Chairman)Ross BradshawPat BurkeSteve CookJulia Griffin David LeslieJohn SandersonRob ShawMark WeatherbedSee page 8 for details

01HUGH MILLER OBE, CHAIRMAN, PEFC UK

Today, two thirds of all certified forests globally are certified to

PEFC. More than half of the entire worlds traded sustainable

forest products are sourced from forests certified to PEFCs

exacting standards. This makes PEFC the worlds leading forest

certification system and the largest source of certified forest

products.

PEFC UK recognises the vital role that both consumers and

the companies that supply them play in driving demand for

certified forest products and so market outreach continues to

be central to PEFC UKs activities. We are therefore greatly

encouraged that PEFC brand recognition continues to grow

with more and more companies across the UK using the PEFC

logo on product to provide their customers with assurances of

responsible sourcing.

November saw the UK team head across the Channel to

participate in PEFCs second forest certification week in Paris.

In his keynote conference speech, PEFC Chairman Bill Street

noted that in less than two decades, PEFC has gone from an 11

strong organisation to one that now has national members from

38 countries. Moreover, PEFC is making encouraging progress

in the areas where forest certification has been slow to take

root. In the past two years, PEFC has welcomed Japan into

membership and has endorsed national certification systems in

China and Indonesia.

One of the highlights of 2014 was the Food from the Forest

event that PEFC co-hosted with AB Packaging Group to mark

our first appearance at the Packaging Innovations event. The

evening sought to highlight the diverse range of goods and

services that forests provide us with and the importance of

preserving them for future generations.

As ever thanks are due to the many individuals and

organisations that enable PEFC to achieve as much as it does

in the UK. I would like to thank the Finnish Forest Foundation

for their continuing financial support to our marketing and

communications programme. Thanks are also due to Heritage

Envelopes for helping PEFC keep its stationery bill in check

and to AB Packaging Group for sponsoring the Food from the

Forest event.

Sadly, this is my final report as I will be retiring from the PEFC

UK Board at this years Annual General Meeting. I would like

to record my appreciation to my fellow Board members for

the time they have generously devoted to our affairs over the

past three years of my tenure as Chairman. I would also like to

thank the PEFC UK team of Alun Watkins, Tracey Reeve and

Hilary Khawam who continue to work so diligently to take the

organisation forward. I know that between them, the Board and

Secretariat will do their utmost to ensure that the organisation

goes from strength to strength in the future.

CHAIRMANS REPORT

Welcome to PEFC UKs 2015 Annual

Report. Over the past year, the PEFC

team has continued to work diligently to

raise the organisations profile and grow market demand for certified products to ensure that we continue to add value,

both to PEFC-certified products and the companies that trade in them.

Some of the many products across the UK using the PEFC logo

02MARKET OUTREACHIn order to increase recognition of the PEFC brand and provide added value to more than 1,000 UK companies who have invested in PEFC Chain of Custody, market outreach remains the PEFC teams top priority. This year has been a busy one for the PEFC team and the following provides a snapshot of our marketing and communications activities over the past twelve months.

PEFC UK Co-sponsors Wood Awards 2014The Wood Awards recognise, encourage and promote outstanding design, craftsmanship and installation using wood throughout the UK and was sponsored for the first time by PEFC UK in partnership with the Malaysian Timber Council.

The Arnold Laver Gold Award was presented to those responsible for the Ditchling Museum of Art and Craft in East Sussex in front of an audience of more than 200 leading industry and architectural figures.

Over 70 of the 2014 entries specified PEFC-certified wood as their choice of material across a diverse and cosmopolitan

range of products and projects, which also saw a marked increase in the use of cross laminated timber (CLT) in the building categories.

Other winners included: The Sam Wanamaker Playhouse at Shakespeares Globe Theatre in London for the Commercial & Public Access Award and the Alfriston School Swimming Pool in Beaconsfield for the Structural Award.

2014 Annual Stakeholder DayThe third annual PEFC UK Stakeholder Day took place in London in July. The event highlighted the progress of certification in Asia and opportunities for the UK market. Over 100 delegates from a cross section of industry sectors heard from speakers which included Professor Lu Wenming, the Deputy Secretary General of the Chinese Forest Certification Council CFCC) and Sheam Satkuru-Granzella who heads up The Malaysian Timber Council in Europe.

TIMBER AND CONSTRUCTION

Lockerbie Field TripLast summer James Jones & Sons Scotlands largest independent sawmiller and Scottish Woodlands the UKs leading independent Forest Management Company came together with PEFC UK to host a field trip to the Scottish borders. The visit aimed to demonstrate sustainable forest management in action to stakeholders from a broad range of sectors including public sector, forestry, timber trading, construction, retail, paper and packaging.

FORESTRY

Alfriston School Swimming Pool Professor Lu Wenming

03

Packaging Innovations 2014In September, PEFC UK exhibited for the first time at Packaging Innovations. Participating in this show was part of a PEFC-wide packaging outreach campaign which aims to promote the assurances that packaging, made from PEFC-certified fibre and carrying the PEFC logo, can provide.

Alun Watkins, who heads up PEFC in the UK, presented at one of the shows Learn Shop seminars. We were so pleased with the reception we received that we have already booked our space for 2015.

Food from the Forest ReceptionLingonberries from Finland, maple syrup from Canada, venison from the Scottish Highlands, Iberico ham from Spain along with forest honey, porcini mushrooms and black truffles from the Umbria region of Italy, were just a few of the delicacies on the menu at a drinks reception, designed to showcase food from the worlds forests. Guest speaker at the event, which was co-hosted by PEFC UK and AB Group Packaging and timed to coincide with the Packaging Innovations Show, was TV chef Valentine Warner. Valentine is a food writer and cook with a passion for nature, the seasons and working outdoors and therefore a keen advocate for forests as a source of food.

The evening sought to highlight the huge variety of goods and services that forests provide, such as fibre for paper and packaging, timber, fuel, employment, leisure opportunities, habitats for animals, insects and birds, food and the importance of preserving them for future generations.

Several new titles have been added to the PEFC library over the past twelve months which are available free of charge.

The first PEFC: Sustainability for Packaging Professionals sets out the market drivers for responsibly-sourced packaging.

The second Flooring and PEFC-Certified Timber sets out the drivers for certified flooring.

PEFC - Promoting Sustainable Construction through Certified Timber was published in November 2014. This four page brochure features case studies of flagship building projects which have used PEFC-certified timber.

Finally, PEFC Chain of Custody Certification: Sourcing Responsibly sets out the business benefits of certification.

These publications can be downloaded from the PEFC UK website.

The new PEFC UK website now has a fresh look and a more user-friendly and contemporary feel. It offers a new and improved search tool for certified companies, an on-line logo generator and accessible social media channels including Twitter, Flickr and YouTube. The improved menu and simple layout are designed to make it easier for users to navigate.

PAPER AND PACKAGING NEW PUBLICATIONS FROM PEFC

NEW LOOK FOR PEFC UK WEBSITE

PEFC/01-00-01

FOR PACKAGING PROFESSIONALS

PEFC: SUSTAINABILITY

AND PEFC-CERTIFIED TIMBER

FLOORING

CERTIFIED TIMBER

PEFC - PROMOTING SUSTAINABLE CONSTRUCTION THROUGH

Architects, designers and those specifying building materials across UK construction projects are regularly turning to timber as a central part of the building structure, for interior design elements and as a way to deliver the next generation of energy efficient and sustainable buildings.

Timber is fully renewable and has the lowest embodied carbon of any commercially available building material. When specifying certified timber you can be confident that the material you are choosing is a simple and straightforward way to achieve a high-performance sustainable building fabric with fantastic additional thermal and acoustic performance.

Ickburgh School, London

PEFC/16-01-01

PEFC CHAIN OF CUSTODY CERTIFICATION

The Business Benefits of Certification

SOURCING RESPONSIBLY

Alun Watkins presents at a Learn Shop seminar

04

The conference entitled Addressing Deforestation: Joining

Forces to Stimulate Demand for Sustainable Forest

Products provided an opportunity for participants to hear a range

of expert opinion and gather stakeholder views on opportunities

and solutions where forest certification and PEFC might have a

positive impact.

CONSUMERS IN THE SPOTLIGHTDuring the morning session, participants heard the latest evidence

on growing consumer awareness and concern for global

deforestation. Consumers were clearly interested in playing their

part in addressing deforestation. They saw buying independently

verified wood and paper-based products originating from responsibly

managed forests, as a positive action they could take. The session

also included presentations which sought to understand consumers

behaviour, perceptions and expectations for sustainable products by

looking at research from the UK, France and the USA.

Innovative solutions for engaging consumers was the second key

topic addressed at the conference. Presentations ranged from

consumer products-driven deforestation to consumer buying

behaviour and market trends for sustainable forest products

in Asia, Western Europe and North America. The speakers

referenced case studies which demonstrated how NGOs, supply

chain participants and governments are engaging consumers on

sustainability and shaping markets for sustainable products. In

addition, newly-created public-private partnerships and platforms

are increasingly seeking to remove commodities directly linked to

deforestation from the supply chain.

ASIA AND AFRICA A PRIORITYThe day closed with a series of breakout groups. Participants were

asked to work together to identify opportunities for action and

collaboration to scale up forest certification to ensure sustainable

supply chains and brands. As a result of this exercise, PEFC was

able to confirm the priority it currently accords forest certification

developments in Asia especially China, India, Indonesia and

Vietnam.

However, it also reminded PEFC that it had more work to do in order

to grow demand for forest certification in Africa, particularly leveraging

existing progress in Cameroon, the Republic of Congo and Gabon.

ENGAGING CONSUMERS ON FOREST ISSUES The key message from PEFCs 5th International Stakeholder

Conference was that certification labels inspire consumer trust. The event, which was held in Paris last November, brought together

more than 150 stakeholders from around the world. Co-hosted by

PEFC International and PEFC France, the Stakeholder Dialogue

marked the final day of PEFCs 2014 Forest Certification Week.

PEFC Members

Countries developing a system for eventual PEFC endorsement (including some PEFC members)

Mexico

New Zealand

GhanaCameroon

Central African Republic

CongoDemocratic Republic

of the CongoSouth Africa

HungaryRomania

MacedoniaTurkey

IndiaNepal

MyanmarThailandVietnam

JapanRepublic of KoreaPhilippines

05

Companies are therefore

keen to demonstrate their

commitment to responsible

sourcing by developing

forest products procurement

policies.

Corporate social responsibility

reporting is now an everyday

management process while

financial institutions are

recognising that shareholder

value is protected through

greener procurement policies.

Over the past year, PEFC

has been working hard with

the packaging community

to explain the importance to consumers, brand owners and

agencies, of sourcing packaging materials from PEFC-certified

sources.

PEFCs first global consumer survey clearly demonstrated that

there is growing demand for more environmental information

to be displayed on packaging to help consumers make

informed choices. 54% of consumers said that they trusted

environmental labels that are displayed on packaging. Retailers,

brand owners and packaging suppliers can help meet these

customer demands by sourcing materials from certified

sources and using the PEFC label.

The survey also showed that:

Consumers want companies to label: Globally, more

than 80% of respondents wanted to see companies

sourcing certified material from sustainably managed

forests to use a certification label on product

Consumers trust certification: Using a certification

label is the most trusted means of communicating a

products sustainable credentials to consumers - more

than country of origin, brand or recommendations by

friends or media

Consumers value certification: Almost one-third of all

respondents said that they actively look for a certification

label on forest products.

The results of the survey showed that certification labels, such

as PEFCs, are the most trusted means of providing confidence

to consumers that wood-based products are responsibly-

sourced. So the key message to certified companies is that

using the PEFC label can be beneficial as customers now

want and expect it. By doing so, you are not only adding brand

value to your products, but also helping improve the overall

reputation of wood and wood-based products from sustainably

managed sources.

GROWING DEMAND FOR CERTIFIED PRODUCTSDemand for more environmental information on products to enable

consumers and those with responsibility for purchasing to make

informed choices is on the rise. Consumers are now far better informed

and more knowledgeable about their purchasing decisions and how they

affect the environment.

I agree34%

I disagree6%

I neither agreenor disagree

30%

I stronglydisagree

4%I strongly agree26%

Base: 1,000 men and women aged 16+ years per country.

Question: To what extent would you agree with the following statement: My shopping choices of opting for a labeled product can make a positive difference to the worlds forests?

PEFC/GfK Global Consumer Survey October 2014

My shopping choices of opting for a labeled product can make a positive difference to the worlds forests

06

PEFC undertook and supported a range of initiatives this year,

advancing the organisation along the journey towards a real

tipping point for certified sustainable forest management

and the various products forests provide. We were the first

certification system to sign the New York Declaration on

Forests, and provided valuable input into this joint initiative

by governments and business, with the ambitious goal of

halving deforestation by 2020 and ending it by 2030. We also

contributed to an important banking sector initiative the Soft

Commodities Compact designed to ensure responsible trade

in commodities such as timber, palm oil and soy. Our ongoing

work is helping re-shape the global perception of sustainable

forests: from international organisations to individual consumers.

Our collaborative approach is fast making PEFC the global

partner of choice for those engaged in sustainable forest

management, including family and small to large-scale forest

owners, civil society, multi-nationals, public-private initiatives

and governments. One of the latest organisations to collaborate

with PEFC is the Tropical Forest Alliance 2020, which seeks

to reduce tropical deforestation associated with the sourcing of

paper and pulp, palm oil, soy and beef.

We also continue to make progress in sustainable forest

management certification. By the end of 2014, over 260

million hectares of forests were PEFC-certified and over

16,000 companies now participate in PEFC Chain of Custody

certification.

In 2014, PEFC endorsement was awarded to the Argentine

Forest Certification System, the China Forest Certification

Scheme, and the Indonesian Forestry Certification Co-operation

now all the major timber-producing countries have PEFC-

endorsed national systems. We have laid the foundations to

enable the certification and the responsible management of

an unprecedented area of forests: thereby also supporting the

sustainable livelihoods of millions worldwide who depend on

forests. We are also promoting sustainable forest management

in approximately 20 other countries from Cameroon, Gabon and

the Republic of Congo, to India, Thailand and Vietnam. Finally,

the number of companies committing to using PEFC-certified

material continues to grow. This trend looks to continue under

the Consumer Goods Forums guidelines which aim to help

achieve zero net deforestation across supply chains by 2020.

As we continue connecting with consumers, we have taken

forest certification beyond our traditional sectors, to woody

biofuels, food and even textiles. These non-wood forest

products equally use materials from forests and can help us

to reach consumers from a different angle, whilst helping

to increase the relevancy of PEFC certification to locally-

dependent forest communities.

Thank you for your personal contribution in advancing our

urgent cause, big or small, be it in the forest or as a retailer,

manufacturer, consumer, donor, campaigner or professional.

PEFC INTERNATIONALBEN GUNNEBERG, SECRETARY GENERAL, PEFC COUNCIL

PEFCs work and progress has excelled in many different areas in

2014. An important indicator as to how far weve come in promoting

sustainable forest management was the outcome of the first PEFC/ GfK Global Consumer Survey, revealing the extent to which

consumers trust the PEFC label and their desire to see it used on

products. The results demonstrate the huge potential that supply

chains and retailers have in giving the sustainable forest management

movement a massive boost, simply by using labels more.

Japans SGEC scheme joins PEFC

Photo PEFC Asia Promotions

07

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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CONTINENTAL CERTIFIED FOREST AREA

GLOBAL GROWTH IN PEFC-CERTIFIED FOREST AREA GLOBAL GROWTH IN CHAIN OF CUSTODY NUMBERS

UK CHAIN OF CUSTODY AND PEFC LOGO LICENSES

A little over 9% of the global

forest area is currently certified,

the majority of it to PEFC

endorsed schemes.

GROWTH OF FORESTRY AND COC

YEAR YEAR

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North America:154,254,058 ha

Asia: 4,661,816 ha

Europe: 89,333,190 ha

Oceania: 10,398,358 ha

Central & South America: 4,557,809 ha

08

HUGHMILLER

JOHN SANDERSON

STEVE COOK

BOARD OF DIRECTORS

Hugh Miller OBE graduated in forestry from

the University of Aberdeen in 1964. For

the next two decades he led research into

forest biogeochemistry at the Macaulay

Institute for Soil Research, during which time

he published extensively and in 1981 was

awarded the Scientific Achievement Award

of the International Union of Forest Research

Organizations. In 1984 he was appointed

Professor and Head of the Department of

Forestry in the University of Aberdeen, retiring

in 2004. He is a Fellow of the Institute of

Chartered Foresters and was President from

1994 to 1996. In 2007, the Institute awarded

him its Medal. He was made a Fellow of the

Royal Society of Edinburgh in 1985.

John Sanderson is Director, Head of

Environment, UK & Ireland for UPM-Kymmene,

a global forest products group with core

businesses in printing papers, speciality

papers, label materials and wood products.

John has worked exclusively for UPM since

graduating from the University of Wales over

twenty years ago with a degree in wood

science and forestry. Increasing environmental

focus and concern from UPMs customers has

led to an unprecedented increase in demand

for environmental education, commitment

and performance from suppliers. Johns

current role provides environmental support

and steering to UPMs UK activities, including

paper production, paper sales, forestry and

waste paper procurement.

Steve Cook is a Principal Sustainable

Development Manager for Willmott Dixons

in-house sustainability consultancy Re-

Thinking. His role involves providing technical

and practical support on materials, carbon,

waste and sustainable procurement to all

divisions within the Willmott Dixon Group.

Steve, who has twenty four years experience

in the construction industry, also chairs the

UK Contractors Group (UKCG) Materials Task

Group which, through engagement with the

construction industry, is helping its members

develop organisational policy to improve the

procurement of materials. He is also a Scheme

Council member of the Eco-Reinforcement,

responsible sourcing scheme and Co-chair of

Grown in Britain.

PEFC is a membership association which represents a wide range of stakeholder

interests. All PEFC-certified companies in the UK automatically become members of the organisation. Additionally, PEFC also counts organisations from a broad range of

sectors, which share PEFCs commitment to sustainable forest management, amongst

its members. These include the Country Land & Business Association, Timber Trade

Federation, the Paper and Board Association, Confederation of Paper Industries, Wood

Panel Industries Federation and the Structural Timber Association. The forestry sector

is represented by CONFOR, the Commonwealth Forestry Association and the United

Kingdom Woodland Assurance Standard (UKWAS).

Since its inception, PEFC UK has

recognised the importance of having

key stakeholder groups represented

on its Governing Board. We are

fortunate enough to be able to call

upon the expertise of senior figures

from a broad range of industry sectors

involved in both forestry and those

trading in forest products.

09

ROSSBRADSHAW

PAT BURKE

ROB SHAW

MARK WEATHERBED

Ross Bradshaw has worked in the paper

manufacturing industry for over twenty five

years. He began his career in manufacturing

by training as a paper maker in Aberdeen.

Working in heavy industry while living in a

rural setting, led to an early interest in the

effects of the paper making industry on the

environment and the positive role it plays. He

has worked with a number of industry groups

including the Paper and Board Association

and Stationers Company, the City of London

livery company for the Communications and

Content industries, where he is a Liveryman.

Currently, Ross runs his own paper agency

business representing a number of speciality

paper mills from the USA and Europe, offering

bespoke publishing and packaging papers. He

is one of PEFC UKs longest serving directors,

joining the Board in 2007.

Pat Burke works at Prowood as Business

Development Manager. Prowood Limited is

an independent, privately owned importer,

sawmiller and distributor of high quality

Softwoods and Hardwoods. Pats timber trade

experience is eclectic, having held previous

senior positions encompassing all timber

product sectors. Pat has chaired the UK

Timber Trade Federations National Softwood

Division and also the North East Timber Trade

Association. He has also held positions within

Forests Forever and various TTF commodity

committees as well as serving on the Boards of

the British Woodworking Federation, Proskills

and the Wood Industry Training Board.

Rob Shaw, FICFor, CMIOSH, graduated from

Aberdeen University in 1988 and joined

Scottish Woodlands Ltd. In 1998 he helped

achieve FSC Resource and Group Scheme

Management status for the company, a first

within the UK. Between 1999 and 2002

he carried out international certification

consultancy work in Latvia, and Slovakia.

Currently running his own consultancy

business, Rob retains an active interest in all

UK forest certification issues. He is the UK

Coordinator for CANZUS - an international

owners and producers group which promotes

practical solutions for Certification issues

globally.

Mark Weatherbed joined the PEFC Board in

January 2008, representing the UK paper

and print industry sectors. He has held senior

procurement positions in a number of global

businesses from the publishing, outsourcing,

consultative and packaging industry sectors,

as head of raw materials sourcing. Mark has

been a key instigator and driver of sustainable

sourcing programmes in many prominent

private and public sector contracts. He

currently serves as Procurement Director,

Head of Raw Materials, Europe for DS Smith.

JULIA GRIFFIN

DAVID LESLIE

Julia Griffin is a member of B&Qs Social

Responsibility team and her area of expertise

is timber and peat. B&Q is a UK home

improvement retailer, owned by Kingfisher

PLC. Julia works with the Commercial,

Quality Assurance teams and suppliers to

monitor timber and forest products sourced

by the business to ensure they meet the

requirements of B&Qs Timber & Paper Policy

& Buying Standard. She is also responsible

for reporting performance to the B&Q Board,

Kingfisher Board Network and BM TRADA for

Chain of Custody. Julia has been the timber

expert in B&Qs Social Responsibility team for

ten years and has first-hand experience of the

practicalities and challenges associated with

implementing and adhering to a responsible

timber sourcing policy.

David Leslie is General Manager, Harvesting

& Operations for James Jones and Sons Ltd,

Scotlands largest independent sawmiller

and one of the leading suppliers of British

timber in the UK. He is responsible for the

Groups roundwood procurement, sawmill

co-products and haulage. In addition to his

PEFC role, David is a member of the Grampian

Forestry Forum, a board member of SIRT (The

Strategic Integrated Research in Timber), a

member of both the Institute of Chartered

Foresters and the steering group of the Forest

Industry Safety Accord (FISA). David was

appointed to the PEFC UK Board in January

2012.

10

STATEMENT OF DIRECTORS RESPONSIBILITIESThe directors are responsible for preparing the Report of the

Directors and the financial statements in accordance with

applicable law and regulations.

Company law requires the directors to prepare financial

statements for each financial year. Under that law the directors

have elected to prepare the financial statements in accordance

with United Kingdom Generally Accepted Accounting Practice

(United Kingdom Accounting Standards and applicable law).

Under company law the directors must not approve the financial

statements unless they are satisfied that they give a true and

fair view of the state of affairs of the company and of the

surplus or deficit of the company for that period. In preparing

these financial statements, the directors are required to:

select suitable accounting policies and then apply them

consistently;

make judgements and accounting estimates that are

reasonable and prudent;

prepare the financial statements on the going concern

basis unless it is inappropriate to presume that the

company will continue in business.

The directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the companys

transactions and disclose with reasonable accuracy at any time

the financial position of the company and enable them to ensure

that the financial statements comply with the Companies Act

2006.

They are also responsible for safeguarding the assets of

the company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORSSo 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 companys auditors are unaware, and each

director has taken all the steps that he or she ought to have

taken as a director in order to make himself or herself aware

of any relevant audit information and to establish that the

companys auditors are aware of that information.

AUDITORSThe auditors, MMG Archbold CA, will be proposed for re-

appointment at the forthcoming PEFC UK Ltd Annual General

Meeting. This report has been prepared in accordance with

the special provisions of Part 15 of the Companies Act 2006

relating to small companies.

ON BEHALF OF THE BOARD:

H G Miller Chairman

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF PEFC UK LIMITEDWe have audited the financial statements of PEFC UK Limited

for the year ended 31 July 2014. The financial reporting

framework that has been applied in their preparation is

applicable law and the Financial Reporting Standard for Smaller

Entities (effective April 2008) (United Kingdom Generally

Accepted Accounting Practice applicable to Smaller Entities).

This report is made solely to the companys 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 companys 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 companys members as a body, for our audit

work, for this report, or for the opinions we have formed.

AUDITED ACCOUNTS

The directors shown below have held office during the whole of the period from 1 August 2013 to the date of this report.

H G Miller

R N Bradshaw

M R Weatherbed

Mrs J Griffin

R Shaw

J A Sanderson

D S Leslie

P J Burke

S Cook

DIRECTORS

11RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORSAs explained more fully in the Statement of Directors

Responsibilities, the directors are responsible for the preparation

of the financial statements and for being satisfied that they give

a true and fair view.

Our responsibility is to audit and express an opinion on the

financial statements in accordance with applicable law and

International Standards on Auditing (UK and Ireland). Those

standards require us to comply with the Auditing Practices

Boards (APBs) Ethical Standards for Auditors, including

APB Ethical Standard - Provisions Available for Small Entities

(Revised), in the circumstances set out in note ten to the

financial statements.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTSAn audit involves obtaining evidence about the amounts

and disclosures in the financial statements sufficient to give

reasonable assurance that the financial statements are free

from material misstatement, whether caused by fraud or error.

This includes an assessment of: whether the accounting

policies are appropriate to the companys circumstances and

have been consistently applied and adequately disclosed; the

reasonableness of significant accounting estimates made

by the directors; and the overall presentation of the financial

statements.

In addition, we read all the financial and non-financial

information in the Report of the Directors to identify material

inconsistencies with the audited financial statements. If we

become aware of any apparent material misstatements or

inconsistencies we consider the implications for our report.

OPINION ON FINANCIAL STATEMENTSIn our opinion the financial statements:

give a true and fair view of the state of the companys

affairs as at 31 July 2014 and of its surplus for the year

then ended;

have been properly prepared in accordance with United

Kingdom Generally Accepted Accounting Practice

applicable to Smaller Entities; and

have been prepared in accordance with the requirements of

the Companies Act 2006.

OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006In our opinion the information given in the Report of the

Directors for the financial year for which the financial

statements are prepared is consistent with the financial

statements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTIONWe have nothing to report in respect of the following matters

where the Companies Act 2006 requires us to report to you if,

in our opinion:

adequate accounting records have not been kept, or

returns adequate for our audit have not been received from

branches not visited by us; or

the financial statements are not in agreement with the

accounting records and returns; or

certain disclosures of directors remuneration specified by

law are not made; or

we have not received all the information and explanations

we require for our audit; or

the directors were not entitled to prepare the financial

statements in accordance with the small companies regime

and take advantage of the small companies exemption in

preparing the Report of the Directors.

Derek Grant MA (Hons) CA (Senior Statutory Auditor)

for and on behalf of:

MMG Archbold

Statutory Auditor

Chapelshade House

78-84 Bell Street

Dundee DD1 1RQ

United Kingdom

8th April 2015

FOR YEAR ENDING 31ST JULY 2014

12

BREAKDOWN OF PEFC UK LTD EXPENDITURE FOR THE YEAR ENDED 31ST JULY 2014

PEFC UK INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST JULY 2014

INCOME AND EXPENDITURE

2014 2013

Turnover 489,513 484,031

Administrative expenses 445,446 450,902

44,067 33,129

Other operating income - 15,498

Operating Surplus/(deficit) 44,067 48,627

Interest receivable and similar income 9 24

48,651

Surplus/(deficit) on ordinary activities before taxation 44,076 48,651

Tax on surplus/(deficit)on ordinary activities 8,846 7,133

Surplus/(deficit) for the Financial Year 35,230 41,518

Turnover 490,000

3%

7%

25%

25%

9%

27%

4%

Projects: 3%

Subscriptions and sponsorship: 4%

Meetings, including board, AGM and GA: 7%

Travel, subsistence and sundry expenses: 9%

Office rent, salaries, admin and IT: 25%

PEFC council fees: 25%

Marketing, communications and consultancy: 27%

13

While PEFC forest certification has been established in the UK

for five years, to date there has been very little interest from small

to medium-sized woodland owners. Our research tells us that

they currently view forest certification as being both onerous and

expensive. As a result, the growth of the UK certified forest area

has stalled. This is having a growing impact on the UK primary

processing sector which needs an increasing supply of certified

timber to meet customer demand.

It has long been recognised that a cost-effective certification solution

was required to enable small to medium-sized woodland owners

to participate in certification. Certified materials are increasingly

requested by a growing number of forest product users including

retailers, the construction sector and energy suppliers.

Such a solution is now available. PEFC UK, in conjunction with

Dutch consultants Evan Buytendijk BV, has developed an online

forest certification system which aims to provide:

a cost-effective solution designed to assist small and medium-

sized private forest owners to become certified

an aid to group certification managers to enable them to

function more efficiently and reduce costs

a user-friendly means of assessing the compatibility of existing

forest management plans with those required by UKWAS

more consistent audits via online checklists.

We hope that this will result in an increase in the UKs certified

forest area, thereby providing a greater supply of certified material

to the UK primary processing sector and its customers.

CERTIFICATION FOR SMALL WOODLAND OWNERSMore than one million hectares of UK forests have been certified to PEFCs sustainable forest management standard since 2010. The certification covers all the Forestry Commission forests in England, Scotland and Wales and some 500 privately owned

forest estates, including a number in Northern Ireland, managed through the Scottish

Woodlands and UPM Tilhill forest group certification schemes. PEFC endorses the UK Woodland Assurance Standard as the basis for certification in the UK.

This project was part funded by the PEFC Collaboration Fund. The Fund seeks to support

efforts to advance sustainable forest management and forest certification around the world

by members and partner organisations. Through its competitive small grants programme,

PEFC encourages locally relevant advancements in the sustainable management of

forests. PEFC has awarded almost 450,000 Swiss Francs to twenty projects through the

Collaboration Fund since 2011.

PEFC COLLABORATION FUND

PEFC UKSheffield Technology ParksCooper BuildingsArundel StreetSheffield S1 2NSt +44 (0)114 307 2334e info@pefc.co.ukw www.pefc.co.uk

PEFC COUNCILWorld Trade Centre 110 Route de lAeroportGeneva 1215Switzerlandt +41 22 799 4540e info@pefc.orgw www.pefc.org

PEFC/16-01-01