PEFC UKANNUAL REPORT

CONTENTS01 CHAIRMAN’S REPORT

Chairman Ross Bradshaw reflects on PEFC UK’s progress over the past year

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

04 MARKET DRIVERS FOR CERTIFIED TIMBERThe policies and initiatives that are driving demand for certified timber in the UK market

06 PEFC INTERNATIONAL’S ACTIVITIESHighlights of PEFC International’s activities in 2015

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 stakeholder sectors

10 ACCOUNTSPEFC UK financial information for 2014-15

13 PICKING UP THE PACE IN ASIA Regional views on developing and supporting forest certification in Asia.

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 DIRECTORSRoss Bradshaw (Chairman)Pat BurkeSteve CookJulia Griffin Simon HartDavid LeslieAnders OlssonJohn SandersonRob ShawSee pages 8-9 for details

01ROSS BRADSHAW, PEFC UK

We also said farewell to another long standing Board member

in 2015. PEFC UK was fortunate enough to benefit from Mark

Weatherbed’s expertise in print management and the global

packaging sector for more than six years and we also wish him well

for the future.

However, we have found two excellent replacements with forestry

and packaging expertise. Simon Hart joined the Board in October

2015 while Anders Olsson joined in January 2016. Simon is currently

General Manager of Egger Forest Management and brings over

30 years’ forestry experience to the PEFC UK Board. Anders is the

Commercial Director for the UK and Ireland and Strategic Account

Lead with WestRock, the corrugated and consumer packaging

specialist, formed when MeadWestvaco merged with RockTenn in

2015. The Board and secretariat are looking forward to benefiting

from Simon and Anders’ long experience in the forestry and global

consumer packaging sectors.

One of the highlights of 2015 was the re-endorsement of PEFC’s

sustainable forest management scheme by the Central Point of

Expertise on Timber (CPET). CPET’s latest review of the public sector

timber procurement policy (TPP) Category A Evidence, concluded

that both PEFC and FSC remain 100% compliant with the Category

A legality criteria. Both schemes were also found to be over 90%

compliant with the sustainability criteria and as such continue to

deliver the CPET requirements for legality and sustainability. We are

pleased that PEFC remains at the forefront of responsible sourcing

and sustainable forestry in the UK.

PEFC also increased its visibility on the high street in 2015. Several

high street fast-food retailers have now committed to using PEFC-

certified packaging for their products. In June, KFC supplier Delta

Packaging won a supplier award from the fast-food retailer after

switching to using PEFC-certified board. Pizza Hut had aleady started

using PEFC-certified material for its chicken buckets and McDonald’s

has also committed to using certified packaging materials for its

European restaurants. It is excellent news that companies accounting

for such a large proportion of our high street food outlets, have

pledged to source their packaging sustainably to help protect the

world’s forests. Let’s hope others will follow their lead.

As ever, special thanks are due to the many individuals and

organisations that enable PEFC to achieve as much as it does in

the UK. Without the help and financial support of the Finnish Forest

Foundation our marketing and communications programme would

not be as successful. Our thanks are also extended to Heritage

Envelopes for helping PEFC to keep its stationery bill under control

and to AB Packaging Group for sponsoring several well-received

PEFC events over the past year.

I would also like to record my appreciation to fellow Board members

for the time they have generously devoted to our affairs over the past

year. Finally, I would like to thank the PEFC UK team of Alun Watkins,

Tracey Reeve and Hilary Khawam for their enthusiasm and tireless

work taking the organisation forward.

CHAIRMAN’S REPORT

Welcome to PEFC UK’s 11th Annual

Report and my first since taking over the

Chairmanship from Hugh Miller. Hugh

retired from PEFC UK at the July 2015

Annual General Meeting. After three years

as Chairman, everyone is extremely grateful

to him for giving his time and expertise

so freely and we wish him a very long and

happy retirement.

KFC supplier Delta Packaging won a supplier award

02MARKET OUTREACHThe PEFC brand is increasingly well-known and understood. It is providing added value to hundreds of UK companies who have invested in certification. To expand this even further, market outreach remains the PEFC team’s number one priority. This year has been another busy one for the PEFC team and the following provides a snapshot of our market outreach activities over the past twelve months.

Structural Timber AwardsMore than 500 leaders and innovators from across the UK construction sector gathered at the NEC, Birmingham in November, for the inaugural Structural Timber Awards. The awards aim to recognise outstanding projects, innovative

products and companies promoting excellence in structural timber across the UK. The big winner on the night was Sky’s Believe in Better Building which won five awards. B&K Structures, which provided the cross laminated timber (CLT) and glulam frame for the project, took home the overall Winner of Winners Award, as well as Best Commercial Project of the Year, Best Low Energy Project and the Best Education Project, which was sponsored by PEFC UK.

The awards were hosted by the Chairman of the Structural Timber Association, Andrew Carpenter with guest speaker, the architect, television personality, lecturer and writer George Clarke.

TIMBER AND CONSTRUCTION

Confor Woodland ShowLast autumn PEFC UK participated in the Confor Woodland Show. Held on the Longleat Estate in Wiltshire, visitors to the show included forest owners and growers, woodland owners, foresters, contractors, timber buyers and processors alongside many others with an interest in the rural environment.

PEFC UK promoted our recently-developed small woodland certification system. This simple and cost-effective online solution aims to assist the UK’s small and medium-sized private forest owners to become PEFC-certified. Ultimately, we hope it will help increase the UK’s certified forest area and boost the supply of certified material to the UK primary processing sector and its customers.

FORESTRY

Alun Watkins presents the award for Best Education Project to Nick Milestone, Managing Director of B&K Structures.

Image © Countrywide Publications

Image © Radar Communications

03

PEFC Sustainable Forest Management – an Online Certification System for UK Woodland Owners.

Packaging InnovationsIn September, PEFC UK joined forces with the Sustainable Forestry Initiative (SFI) and the PEFC-certified AB Packaging Group, to exhibit for the second year in succession at Packaging Innovations. The two-day show was held in its new home at London Olympia. The busy event saw more than 4,000 visitors – double the number who attended the first show six years ago. The show provided us with valuable opportunities to meet with leading brand owners, retailers and their suppliers to promote the PEFC label as a clear assurance of responsible sourcing.

High Street Restaurants Choose Certified PackagingLast year, PEFC was delighted to learn that several high street fast-food retailers have committed to using PEFC-certified packaging for their products. In June, Delta Packaging won two Global Connectivity awards at a 2015 KFC supplier event, for switching KFC material to PEFC-certified board. This switch enabled Delta to apply the PEFC label onto KFC packaging to provide their customers with assurances of responsible sourcing.

However, KFC aren’t the only high street chain to recognise the importance of sourcing certified materials. Pizza Hut has been using PEFC-certified board for its chicken buckets for some time and last year McDonald’s committed to using certified packaging materials in its restaurants throughout Europe. We are delighted that companies accounting for such a large proportion of the high street fast-food trade have pledged to source sustainable packaging to help protect the world’s forests. We hope that others will now follow these market leaders.

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

These publications can be downloaded from the PEFC UK website: www.pefc.co.uk/publications Printed copies can be obtained by e-mailing info@pefc.co.uk

PEFC has recently released a new outreach video, Forests Matter, to promote the values and benefits of responsibly-sourced forest products. It highlights the fact that globally some 1.6 billion people rely on forests, and that two out of three land species live in them. The video explains the importance of managing forests sustainably so that they can continue to thrive and provide a wide range of benefits for future generations.

The video is available free of charge as an MP4 file. To request a copy, email info@pefc.co.uk or it can be viewed on the PEFC UK website: www.pefc.co.uk/news-publications/videos

PAPER AND PACKAGING NEW PUBLICATIONS FROM PEFC

FORESTS MATTER – NEW VIDEO FROM PEFC

PEFC: Promoting Sustainable Cladding & Decking through Certified Timber

Greening Gardens with PEFC-Certified Timber

Promoting Sustainable Forest Management Around the World – PEFC and FSC

Alun Watkins and Peter Andrews of the British Retail Consortium

04

PUBLIC SECTOR PROCUREMENTCPET 2015 Update The latest

review by the

Central Point

of Expertise on

Timber (CPET),

on public

sector timber

procurement policy (TPP) Category A Evidence, saw PEFC

Chain of Custody once again providing assurances of legal

and sustainable timber sourcing. In 2014, both PEFC and FSC

were put forward for the TPP Category A Evidence certified

scheme review. After an independent technical panel reviewed

the evidence, Defra approved the results in September 2015.

For the schemes to meet the Category A criteria, it is mandatory

to meet 100% of the legality criteria and at least 70% of the

sustainability criteria.

Defra announced that both schemes remain 100% compliant

with the Category A legality criteria and both are over 90%

compliant with the sustainability criteria. The report explained

that these very high scores demonstrate the significant

progress made in international forest certification since the first

evaluation conducted in 2004. It also praised PEFC and FSC for

having made substantial improvements to their schemes since

2010.

CPET has played a significant role in supporting the

increased uptake of sustainable timber in the public sector

and in providing support to government buyers and suppliers

implementing the UK government TPP. The first assessment

was conducted in 2004 and the second in 2010. The most

recent assessment in 2015 was undertaken to ensure

PEFC and FSC continue to provide assurance of legality and

sustainability, particularly in light of new criteria on the updated

definitions of ‘legal’ and ‘sustainable’ sources.

PRIVATE SECTOR PROCUREMENTNextGeneration Joining the Dots – the annual

sustainability benchmarking

report of the 25 largest

homebuilders in the UK

was published in December

2015. This annual exercise,

first conducted in 2004, is

an industry-driven initiative

to promote best practice in

sustainability within the UK’s

housing sector.

Spotting and making sense of sustainability mega-trends,

NextGeneration is the only sustainability benchmark designed

specifically for the UK private housing sector and is overseen

by an Executive Committee that includes the Homes and

Communities Agency and the UK Green Building Council,

with Jones Lang LaSalle acting as the initiative’s secretariat.

The initiative is designed to help the industry understand the

opportunities and risks posed by the sustainable housing agenda

through benchmarking, networking and knowledge-transfer.

In 2014, 130 benchmarking criteria were created based on

best practice standards and guidance, and as an important

material in the UK housebuilding sector, timber sourcing and

Chain of Custody certification was a key area of concern.

Participating organisations sought to ensure that only legal

timber is purchased, with a supply chain audit showing that the

appropriate documentation for certified timber was in place and

to trace all uncertified timber and paper products back to the

forest source. Importantly, companies should demonstrate that

they have either PEFC or FSC Chain of Custody Certification for

all timber purchased, and require all suppliers and contractors

to prove that they have Chain of Custody certificates for any

timber purchased.

MARKET DRIVERS FOR CERTIFIED TIMBER The demand for certified forest products is being driven by a wide range of complex

factors both nationally and globally. The specification of PEFC-certified timber throughout

the construction and joinery sectors is growing exponentially and is viewed as a way of

delivering sustainable materials and assurances of responsible procurement.

BUILDING STANDARDS Using PEFC-certified timber helps achieve Excellent and

Outstanding BREEAM ratings and helps meet SAP targets and

Passivhaus performance levels. It also plays a pivotal role in

satisfying the requirements of Part L and Part E of the Building

Regulations.

The U.S. Green Building Council (USGBC) recently altered the

Leadership in Energy and Environmental Design (LEED) system

and issued an Alternative Compliance Path (ACP) that will lead

to the procurement of more PEFC-certified timber both in the

UK and globally. This ACP rewards building projects that use:

“wood products from certified sources as defined by ASTM

D7612-10”. This includes internationally recognised voluntary

forest certification standards such as PEFC’s. The ACP will

apply to all LEED v4 rating systems including Homes v4 and to

all LEED 2009 rating systems.

UK architects, building designers, specifiers and planners can

now benefit from this expanded range of responsibly-sourced

timber and forest products that are now eligible for LEED. The

construction

industry is one

of the largest buyers

of timber products and has a huge

influence on the demand for certified timber.

With LEED now including PEFC-certified timber, construction

projects can in the future obtain both LEED and PEFC Project

Chain of Custody certification.

Green building standards such as LEED and BREEAM

together with industry and private sector responsible sourcing

initiatives are vital in driving demand for certified timber. They

send a strong signal to forest owners that their investment

in sustainable forest management and certification is valued

and appreciated by both companies and customers requiring

assurances of responsible sourcing.

CASE STUDY BSkyB - Believe in Better BuildingPEFC sponsored the Best Education Project

at the 2015 Structural Timber Awards and

the winner was BSkyB’s new educational

facility for graduates, apprentices and

staff training in Osterley, West London.

The 3,800m2 ‘Believe in Better’ building

encompasses a three-storey linear building

with an additional storey accommodating a

restaurant and roof terrace.

Main contractor Mace appointed B&K

Structures to provide an optimised hybrid

structure for the build – comprising a glulam

frame with cross laminated timber (CLT) floor, roof and

stability walls, together with perimeter wall cassettes.

The structure was designed to deliver permanent quality,

adaptability and long term energy efficiency, to meet the

sustainability objectives.

The building was awarded with a BREEAM Excellent

rating – demonstrating that it not only meets but exceeds

best practice in sustainable building design, construction

and operation through a widely recognised measure of

environmental performance of a building.

PEFC-certified CLT was a key structural and sustainable element of BIBB’s success

Image © B&K Structures

05

06

While sustainable forest management

is directly referenced in SDG15: Life on

Land, it is inherently an important part of

most – if not all – of the SDGs.

The SDGs are designed to help us

better communicate the holistic nature

of our work. They recognise the positive

contributions forests make rather than

treating them as a threatened natural

resource requiring conservation. They

make it easier for us to identify and

strengthen the links between sustainable

forest management and the other SDGs

that don’t specifically reference forestry,

be it poverty alleviation, food security, good

health, education or any of the other goals.

This will lead to new partnerships and joint

activities with people and organisations

that we still have to engage with on our

sustainability journey.

Better communication of the holistic

nature of our work was at the heart of our

activities in 2015 at both international and

national levels. For example, in Belgium

a travelling exhibition about forests

moved from school to school, increasing

the awareness of teachers and school

children to the future of our forests, while

an interactive wooden cube in the Czech

Republic, introduced the general public

to sustainable forest management. In

Finland, the forest was brought into the

heart of Helsinki with the PEFC Wood

Works X Puuguru installation and PEFC-

certified wood took centre stage at the

Expo Milano 2015, being the construction

material of choice for many of the Expo

pavilions.

In addition to reaching out to the general

public, we also highlighted our activities

and contributed to the proceedings of

major international conferences – from

the World Forestry Congress in Durban,

South Africa to the FOREST EUROPE

Ministerial Conference in Madrid and the

COP21 Climate Conference in Paris.

In numerous face-to-face meetings,

seminars and training sessions, we

explained the benefits of PEFC

Sustainable Forest Management and

Chain of Custody certification to forest

owners and companies along the timber

supply chain.

All of our activities contribute to our

progress in promoting sustainable forest

management certification. By the end of

2015, more than 272 million hectares

of forests and over 18,000 companies

were covered through PEFC certification.

Furthermore, New Zealand achieved PEFC

endorsement and Ghana, India and Hungary

joined our family. Additionally, the first

hectares of forests in China and Indonesia

became PEFC-certified.

I am confident that we are on the right

path to making the best contribution to

sustainable forest management and to

improving the lives of the many people

that depend on forest resources for their

livelihoods. In closing, I would like to thank

you all for your personal contributions to

our common and vital cause.

PEFC INTERNATIONALBEN GUNNEBERG, SECRETARY GENERAL, PEFC COUNCIL

The adoption of the Sustainable Development Goals

(SDGs) by the 193 countries of the UN General Assembly

was one of the most remarkable achievements of the

last year for me, along with the Paris Agreement. The

SDGs capture the most pressing issues of our times

and the most challenging targets towards a sustainable

future in 17 aspirational, easy to communicate goals.Image © PEFC International and Jorge Romero (JRPD)

07

0

50

100

150

200

250

300

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

0.0

32.441.1 46.1 50.9 55.3

187.7 193.8 194.4

217.7 223.5 229.6245.1

237.4253.1

263.2

2015

272.0

0

2,000

4,000

6,000

8,000

10,000

12,000

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

59463

1,100

1,9052,362

2,9013,545

4,420

6,166

7,688

8,7979,529

9,99610,591

2015

10,744

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

GROWTH OF FORESTRY AND COC

YEAR YEAR

Certi

fied

fore

st ar

ea (m

. ha)

Num

ber o

f CoC

cer

tifica

tes

CONTINENTAL CERTIFIED FOREST AREA

A little over 9% of the global

forest area is currently certified,

the majority of it to PEFC

endorsed schemes. Total:272m ha

59%

31%

4%

2%

4%

North America:161,813,817 ha

Asia: 11,010,138 ha

Europe: 83,747,382 ha

Oceania: 10,400,000 ha

Central & South America: 5,091,596 ha

PEFC members with endorsed systems

PEFC members progressing towards endorsement

Countries actively developing systems

GLOBAL GROWTH OF PEFC MEMBERSHIP

08

STEVE COOK

BOARD OF DIRECTORS

ROSSBRADSHAW

PAT BURKE

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 PEFC UK’s longest serving director,

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. Pat’s timber trade

experience is eclectic, having held previous

senior positions encompassing all timber

product sectors. Pat has chaired the UK

Timber Trade Federation’s 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.

Steve Cook is Principal Sustainable

Development Manager for Willmott Dixon’s

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, 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 PEFC’s commitment to sustainable forest management, amongst

its membership. 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 forestry and those trading in

forest products.

09

JOHN SANDERSON

SIMONHART

ROB SHAW

ANDERS OLSSON

Simon Hart, FICFor, FRICS, joined Egger

Forestry in 2013 to head up a new forest

management division offering the full range

of forestry services to private owners in the

north of England and Scotland. Simon brings

over 30 years’ experience in the forestry

world, mainly in commercial conifers. His

knowledge includes acquisitions, economic

appraisals, management and valuations. He

also runs Egger’s forest certification scheme

and sits on the UK Woodland Assurance

Standard Steering Group. Prior to joining

Egger, Simon worked for UPM Tilhill, mainly

in forestry investment, but since 2000 he

has also audited woodlands to the UKWAS

standard. He is a Fellow of both the Institute

of Chartered Foresters and RICS and a

Registered Valuer.

John Sanderson is Head of Environment

and Responsibility, 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 UPM’s customers has

led to an unprecedented increase in demand

for environmental education, commitment

and performance from suppliers. John’s

current role provides environmental support

and steering to UPM’s UK activities, including

paper production, paper sales, forestry and

waste paper procurement.

Rob Shaw FICFor, CMIOSH, graduated with

a First Class Honours Degree 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. He was SEQ & Contracts

Director for Scottish Woodlands for 8 years,

leaving in 2014 to establish his own Forestry

and Risk Management Consultancy. He retains

an active interest in all forest certification

issues, having been a member of the UKWAS

Steering Group for many years until 2010.

He is also the Chair of the Forestry Advisory

Committee of the Scottish School of Forestry,

and a Director of Highland Hospice.

Anders Olsson has nearly 20 year’s industry

experience in the global consumer packaging

sector. He is currently Commercial Director

for the UK and Ireland and Strategic Account

Lead with WestRock, the corrugated and

consumer packaging specialist which was

formed when MeadWestvaco merged with

RockTenn in 2015. Prior to the formation of

WestRock, Anders was Commercial Director

for the UK and Ireland with MeadWestvaco

for just over 3 years, joining them in 2012

from packaging beverage specialist, Tetra

Pak, where he held a variety of positions from

1997, most recently as Marketing and Key

Account Director for Ireland.

JULIA GRIFFIN

DAVID LESLIE

Julia Griffin is a member of B&Q’s 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&Q’s Timber & Paper Policy & Buying

Standard. She is also responsible for reporting

performance to the B&Q Board, Kingfisher

Board Network and Exova BMTRADA for Chain

of Custody. Julia has been the timber expert

in B&Q’s Social Responsibility team for eleven

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,

Scotland’s largest independent sawmiller

and one of the leading suppliers of British

timber in the UK. He is responsible for the

Group’s 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 company’s

transactions and disclose with reasonable accuracy at any time

the financial position of the company and enable them to ensure

that the financial statements comply with the Companies Act

2006. They are also responsible for safeguarding the assets

of the company and hence for taking reasonable steps for the

prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO 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 company’s 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

company’s auditors are aware of that information.

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

appointment at the forthcoming 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:

R N Bradshaw – 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 2015. 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 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.

AUDITED ACCOUNTS

The directors shown below have held office during the whole of the period from 1 August 2014 to the date of this report.

Other changes in directors holding office are as follows:

H G Miller - resigned 7 July 2015

M R Weatherbed - resigned 7 July 2015

S Hart and A Olsson were appointed as directors after 31

July 2015 but prior to the date of this report.

R N Bradshaw

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 Board’s Ethical Standards for Auditors.

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 company’s 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

and to identify any information that is apparently materially

incorrect based on, or materially inconsistent with, the

knowledge acquired by us in the course of performing the audit.

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 company’s

affairs as at 31 July 2015 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

from the requirement to prepare a Strategic Report or 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

5th April 2016

FOR YEAR ENDING 31ST JULY 2015

12

BREAKDOWN OF PEFC UK LTD EXPENDITURE FOR THE YEAR ENDED 31ST JULY 2015

PEFC UK INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31ST JULY 2015

INCOME AND EXPENDITURE

Notes 2015 2014

£ £

TURNOVER 2 446,390 489,513

Administrative expenses 418,947 445,446

OPERATING SURPLUS 3 27,443 44,067

Interest receivable and similar income 15 9

SURPLUS ON ORDINARY ACTIVITIES BEFORE TAXATION 4 27,458 44,076

Tax on surplus on ordinary activities 5,542 8,846

SURPLUS FOR THE FINANCIAL YEAR 21,916 35,230

Turnover £446,3903%

8%

10%

28%24%

27%

PEFC council fees: 28%

Marketing, communications and consultancy: 24%

Office rent, salaries, admin and IT: 27%

Travel, subsistence and sundry expenses: 8%

Meetings, including AGM and GA: 10%

Subscriptions and sponsorship: 3%

13PICKING UP THE PACE IN ASIAPEFC has been gaining momentum for some time in developing and supporting forest

certification in Asia. Across the region many countries are striving towards sustainability

and committing to responsible sourcing, not only because of their customers’ demands,

but also because they are committed to a healthy future for forests in the region. Here’s

what some of the key players in the region have to say.

PEFC certification is proving to be a fundamental part of providing access to wider markets for those trading in forest products, while protecting the environmental and social benefits that forests provide. Importantly, consumers in Asia and beyond are now increasingly adjusting their buying preferences, recognising that labels on products can provide them with solid assurance of a product’s sustainable credentials.

“In 2015, our first year with PEFC endorsement, we certified more than 5.5 million hectares of forests in China and were awarded the prize for largest growth of certified area amongst the PEFC family. Now with China’s new Forest Certification Regulation in effect, we anticipate even further acceleration of growth in both forest and Chain of Custody certification.”

Wang Wei, China Forest Certification Council (CFCC)

CHINA

“After joining PEFC Council in 2014, we worked hard to finalise our national certification system in 2015 and submit to PEFC for its assessment process. In 2016, we anticipate having PEFC-recognised forest certification finally in Japan.”

Kiyoo Nakagawa, Sustainable Green Ecosystem Council

JAPAN

“PEFC offers us the opportunity to have a standard more relevant for India. With the official acceptance of NCCF into the PEFC Council in 2015, we are now making good progress with stakeholders to develop our national system and working to actively promote PEFC Chain of Custody throughout the country.”

Sachin Raj Jain, Network for Certification and Conservation of Forests (NCCF)

INDIA

“2015 was a landmark year for PEFC in Indonesia, as 727,078 hectares of forest achieved PEFC Certification. From here, we will focus on further expansion, further integration into supply chains, and advancing our initiative to establish group certification for small landholdings and community forests.”

Dradjad Wibowo, Indonesian Forestry Certification Cooperative (IFCC)

INDONESIA

“MTCC celebrated its 14th anniversary of operating the MTCS in 2015 by bringing together over 100 stakeholders for an open forum combined with an appreciation event. We’re proud that certified products from our 4.66 million hectares of MTCS-certified forest are currently exported to 45 countries, and will continue striving to promote Malaysia’s forest sector.”

Yong Teng Koon, Malaysian Timber Certification Council (MTCC)

MALAYSIA

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 l’AeroportGeneva 1215Switzerlandt +41 22 799 4540e info@pefc.orgw www.pefc.org

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