PEFC /16-01-01

PEFC UKAnnUAl REPoRt

01 CHAIRMAn’S REPoRtHugh Miller’s first report as Chairman of PEFC UK

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

04 PUBlIC AFFAIRS oUtREACHSummary of public affairs activities designed to raise awareness of the PEFC programme within the public sector

ContEntS

BoARd oF dIRECtoRSHugh Miller Chairman

Ross BradshawPat BurkeSteve CookJulia Griffin David LeslieJohn SandersonRob ShawMark Weatherbedsee page 8 for details

05 tIMBER IndUStRy InItIAtIvESA summary of PEFC’s engagement with a range of industry initiatives which aim to increase demand for sustainable timber

06 PEFC IntERnAtIonAlReport providing a snapshot of PEFC International’s activities in 2012

07 dEMAnd FoR CERtIFICAtIon Key forest and Chain of Custody certification facts and figures

08 BoARd oF dIRECtoRSA new appointment has enabled PEFC UK to add representation from the construction sector

10 ACCoUntSPEFC UK Financial information for 2012

13 EU tIMBER REGUlAtIonAn update on how PEFC’s 2013 Chain of Custody standard can help companies meet EUTR requirements.

PEFC UK lIMItEdProgramme for the Endorsement of Forest Certification Sheffield Technology Parks Cooper Buildings Arundel Street Sheffield S1 2NS t +44 (0)114 307 2334 e info@pefc.co.uk w www.pefc.co.uk

Registered in Scotland: Number 209443

CHAIRMAn’S REPoRt

November saw the UK team head off to

Vienna for the 2012 General Assembly.

PEFC International were able to report

that the certified forest area had grown

with newly-certified areas in Sweden and

Poland bringing the certified area to 237

million hectares. Encouragingly, while

demand for PEFC Chain of Custody has

naturally been affected by a challenging

global trading environment, the number

of PEFC-certified companies around the

world has risen to over 9,500 companies.

However, with less than 10% of the world’s

forest area certified, PEFC recognises

that it must do more to extend its

programme globally. We were therefore

delighted to learn that fifteen countries

are in the process of developing national

forest certification systems. Nine of

these countries attended a development

workshop which was held in tandem

with the 2012 General Assembly. The

workshop provided

an opportunity

for like-minded

organisations to

collaborate on

solutions to the

challenges they

face in developing

national sustainable forest management

systems. It brought representatives from

Bosnia & Herzegovina, Cameroon, Ghana,

Hungary, Indonesia, Mexico, Montenegro,

Myanmar, Nepal and Turkey together with

existing PEFC members from Austria, Italy,

Malaysia, Slovenia and Slovakia to share

their expertise and experience.

Here in the UK, it has been another busy

year on the marketing and communications

front. We remain dedicated to raising

PEFC’s profile across key industry sectors

to ensure that we add value, both to PEFC-

certified products and to the companies

that trade in them. PEFC brand recognition

continues to grow with leading companies

across the UK increasingly using the PEFC

logo on product to provide their customers

with assurances of responsible sourcing.

Earlier this year the EU Timber Regulation

came into force. This Regulation makes it a

criminal offence to place illegally harvested

timber and timber products on the EU

market. The legislation requires that ‘due

diligence’ is applied to all timber first placed

on the EU market and also that traders,

further down the supply chain, keep

track of where timber or timber products

were bought, and where applicable, who

they were sold to. It applies to everyone

trading timber and timber products in

the EU, including paper, furniture, wood

and fuel, therefore affecting thousands

of companies either producing timber

domestically or importing it from outside

HUGH MIllER oBE CHAIRMAn PEFC UK

Welcome to the 2013 Annual Report.

Over the past year, PEFC has continued

to work at both national and international

levels to raise the organisation’s profile

and grow market demand for certified

products.

01

fifteen countries are in the process

of developing national forest

certification systems

the EU. PEFC has revised its International

Chain of Custody Standard to assist

certified companies. Turn to page 13 to

find out how PEFC CoC can help your

company meet EUTR requirements.

I would like to thank the Finnish Forest

Foundation for their continuing support

– we simply could

not have achieved

all we have without

it. Thanks are also

due to Heritage

Envelopes for

helping PEFC keep

its stationery bill

in check. Their valuable in-kind donations

have enabled us to devote more of our

resources to growing the market for

PEFC-certified products to reward those

who have invested in responsible forest

management and Chain of Custody.

I would also like to record my appreciation

to my fellow PEFC UK Directors for time

they have devoted to our affairs over the

past year. PEFC UK benefits enormously

from the broad range of skills and

expertise they bring to the organisation.

Finally, I would like to thank Alun Watkins,

Tracey Reeve and Hilary Khawam who

continue to work so hard to take the

organisation forward.

we remain dedicated to

raising PEFC’s profile across key industry

sectors

UK Stakeholder Field Trip

Lockerbie and the Scottish Borders were the location of a PEFC Stakeholder Field Trip in April 2013. Co-hosted by Scottish Woodlands and James Jones & Sons – Scotland’s largest independent sawmiller – the visit was designed to demonstrate the harvesting of certified timber and sustainable forest management in action. It provided an opportunity for delegates to gain a fuller understanding of the important processes that underpin PEFC certification and UK-grown timber.

The group included stakeholders from a broad range of sectors including forestry, primary processing, financial services,

MARKEt oUtREACH

retail and the paper product manufacturing sectors. After seeing tree felling taking place in Tweedhopefootrig Forest, Moffat, the group were taken on a tour of the James Jones & Sons sawmill in Lockerbie to see the process behind transforming a log into a wide range of sawn timber products.

The trip provided a practical demonstration of Chain of Custody in action, showing the rigorous process behind certified wood. It also provided those who participated with an opportunity to consider how they could expand the use of certified wood products within their own sectors.

The trip closed with a visit to AW Jenkinson Forest Products and the attached biomass facility to see how the bi-products of

The PEFC brand is becoming more visible and continues to add real value

to companies who have invested in PEFC Chain of Custody certification.

Market outreach continues to be a priority for PEFC in the UK. This year

has been another busy one for the PEFC team on the communications

and marketing front with the introduction of the EUTR and the first

UK Stakeholder Day. The following is a snapshot of our activities and

progress over the past twelve months.

FoREStRy

the harvested logs such as chips, bark and sawdust are chipped and made into the basic ingredients of OSB, MDF, landscaping material and biomass fuel for the creation of zero carbon electricity at the E.ON station next door.

RFS Schools Excellence Awards

For the second consecutive year, PEFC UK co-sponsored a Royal Forestry Society Award –for Excellence in Schools. In 2012, educational organisations from the West Country were invited to enter projects aimed at increasing young people’s understanding and appreciation of the environmental, social and economic potential of trees, woodlands and forests and of the link between trees and everyday wood products.

Eight schools made it on to the shortlist and the winners ranged from a Nursery in Somerset to a Secondary School in Wiltshire. Midsomer Norton-based Free Rangers Forest School Nursery School came first and the runner up was Okehampton Primary School. Trowbridge Secondary John of Gaunt School was highly commended.

02

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Harvesting operation at Tweedhopefootrig Forest

RFS Woodlands Excellence Gold Award winners Welton Free Range Nursery School plant a Black Mulberry tree to mark their achievement.

PRInt And PAPERInaugural UK Stakeholder Day

PEFC UK hosted its first Stakeholder Day in London on the 26 June 2012, with the central theme of mitigating risk in the procurement of forest products. This included raising awareness of the obligations of the EUTR and discussions on the increase in regulatory controls and drivers for sustainable trading and how the pressures of the ‘mega trends’ of climate change and biodiversity have shot up the scale of interest at boardroom level.

This was the first in an annual opportunity for a broad range of PEFC’s UK stakeholders to come together to discuss key industry issues with a panel of industry experts spanning the timber, business consultancy, print and publishing and retailing sectors. The popular event closed with a networking drinks reception and the feedback from all attendees was extremely positive and a similar event will take place in October this year.

nEW PUBlICAtIonS

tIMBER And ConStRUCtIonTimber Expo & Ecobuild

PEFC UK has demonstrated its global reach at two key UK trade shows in the past twelve months. Exhibiting alongside the Sustainable Forestry Initiative (SFI) and the Malaysian Timber Certification Council (MTCC) enabled all three organisations to share a stand at Timber Expo 2012 and Ecobuild 2013. The key objective for both trade shows was to educate visitors on a wide range of issues surrounding the supply of legal and sustainable timber into the UK market.

With a huge focus on supplying the latest information on legal and sustainable forest certification and the introduction of the EUTR to the UK in 2013, visitors had never had a better chance to meet all three certification bodies at the same time.

Timber Expo and Ecobuild provided excellent forums to enable PEFC and its partners to engage with a broad range of stakeholders from across the timber and construction industry and PEFC UK will be exhibiting at again at Timber Expo 2013 in September and Ecobuild in 2014.

Several new titles have been added to the PEFC library over the past twelve months which are available to download from the PEFC UK website - www.pefc.co.uk

Hard copies are available on request by e-mailing info@pefc.co.uk Joinery, fit out

and Certified timber

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Growing Demand for the PEFC Logo

The number of publishers and brand owners opting to use the PEFC logo on their publications is rising steadily. PEFC’s distinctive ‘green trees’ brand is becoming far more visible as leading high street favourites such as Argos, Boden, John Lewis, Waitrose, Matalan, Zara, Specsavers and Next use it to denote responsible paper sourcing on their consumer-facing magazines, catalogues and promotional materials.

03

PEFC is the leading forest certification system

in the world with over 247 million hectares of

certified forests. Currently over 30 national

schemes including PEFC UK, the Sustainable

Forestry Initiative and the Malaysian Timber

Certification Scheme have been endorsed by

PEFC International.

www.pefc.co.uk

The Malaysian Timber Certification

Council (MTCC), established in October 1998,

is recognised as the leading timber certification

organisation for tropical forests with over 4.7

million hectares certified. The Malaysian Timber

Certification Scheme (MTCS) was PEFC-

endorsed in May 2009.

www.mtcc.com.my

The Sustainable Forestry Initiative (SFI)

was launched in 1994 and was endorsed by

PEFC in 2005. With 79 million hectares certified

across Canada and the United States, SFI has

strong acceptance in the global marketplace,

delivering a steady supply of timber and wood-

products from legal and responsible sources.

www.sfiprogram.org

This PEFC-certified timber USB contains a bumper amount of exclusive information including exemplar case studies using PEFC-certified timber, stunning images, background information and a special update on the EUTR regulations.

www.pefc.co.uk

PEFC - a world oF CErtiFiEd timbEr

Discussions ranged from the delivery and implementation of the government’s timber procurement policy, the EUTR regulation framework and the development of sustainability criteria for sustainable wood fuel and biomass and the role of certification in helping to fulfil them.

PUBlIC AFFAIRS oUtREACH 04

PEFC’s engagement with both public and private sectors has always been linked to the topical issues of the day and key current policy drivers. For 2012, the headline drivers were Rio +20, the incoming European Union Timber Regulations (EUTR) in early 2013, the development of sustainability criteria for biomass, and the award of the Central Point of Expertise on Timber (CPET) contract to a new operating partner.

WHItEHAll – dEFRA And dECC In October 2012, the delivery and operation contract for CPET was transferred from Proforest to a new contractor partnership managed by Efeca-LTS. PEFC is committed to working with both DEFRA and Efeca to support the promotion and implementation of the government’s influential timber procurement policy.

Earlier this year, PEFC held roundtable discussions with civil servant officials from the Department for Environment, Food and Rural Affairs (Defra) and the Department for Energy and Climate Change (DECC) to discuss the key policy areas for PEFC in 2012. These include, the future of CPET, the EUTR and renewable fuels such as

biomass.

PEFC’s public affairs campaign

across National, Devolved, Local

Government and the public sector

continues to run successfully in

tandem with its ambitious private

sector engagement programme.

dEvolvEd And loCAl GovERnMEntSIn previous years, PEFC has held a series of engagement meetings with decision-makers and policy-makers in the Devolved Governments. In 2011, PEFC met with elected representatives and public sector officials in Wales and Scotland and in 2012, PEFC broadened its outreach programme to Northern Ireland.

Meetings were held with officials in the Northern Ireland Central Procurement Directorate under the Northern Ireland Executive Department for Finance and Personnel and Chief Executive of the Forest Service Northern Ireland.The objective of these meetings was to brief both organisations on the PEFC scheme and its role in helping to fulfil the due diligence requirements of the EU Timber Regulation and to discuss the Northern Ireland Executive’s

sustainable forest management policies. During this engagement, PEFC developed relationships with key policy-makers and increased awareness of the PEFC programme.

At local government level, PEFC expanded its outreach campaign to all English Metropolitan Borough Councils. PEFC targeted efforts on council officers with responsibilities for sustainable procurement. Meetings were held with Trafford Council, Bolton Council and Barnsley Council’s procurement services firm, NPS Group.

A further meeting was arranged with the Scottish Sustainable Network, a Scottish Government funded programme, to work with sustainable development officers from Scottish local authorities to help deliver the Scottish Government’s Sustainable Development programme.

These meetings served to promote CPET at a local level and to brief these key local authorities, and local authority delivery programmes, on certification and sustainable procurement, while encouraging them to adopt inclusive procurement policies.

In broadening its public affairs programme, PEFC UK aims to ensure that certification, responsible procurement and sustainable forest management are understood and implemented throughout government.

PRoMotInG tHE USE oF tIMBER 0505

Wood FIRSt And Wood FIRSt PlUSAs the demand for timber in construction increases, so will the demand for sustainably-managed forest areas. The Wood First campaign aims to introduce a rule in UK planning guidance that requires wood to be considered, where feasible, as the primary construction material in all publicly-funded newbuild and refurbishment projects, from housing and leisure centres to bridges and schools.

The project is an ambitious undertaking and involves a multi-stakeholder funding and operations team of Wood for Good, UK Timber Trade Federation, Forestry Commission Scotland, TRADA and other industry bodies. It will also involve consultation and input from wider timber industry organisations as well as extensive engagement and input from external stakeholders, including contractors groups, architects and professional institutions.

Building on the strength of Wood First, a multi-stakeholder collaborative research and development project called Wood First Plus aims to create an online hub containing all of the data necessary to robustly promote timber and timber products as first choice, primary and preferred construction materials, along with a PR and marketing programme to communicate this data to key audiences.

PEFC UK is also involved with providing support and data to Wood Campus. This new free resource is the UK’s timber portal, providing a range of learning and information tools for professional users of wood, from customers and staff of builders’ merchants to architects and specifiers.

GRoWn In BRItAIn PEFC UK has also lent its support to the Grown in Britain initiative which aims to secure a sustainable future for the UK’s woodlands and forests. The development and implementation of the Grown in Britain programme will be supported by a panel comprising Chief Executives from retailers, contractors, developers and corporations who are in a position to influence the way timber is procured and presented to consumers. Chaired by Chief Executive of BRE, Dr Peter Bonfield, the programme’s three core aims are to:

l create a new and stronger market pull for products derived from UK forests

l develop private sector funding to support the planting and management of woodland and forests as part of corporate social responsibility strategies

This year PEFC has supported a number of timber industry initiatives

including the Wood for Good, UK Timber Trade Federation’s Wood First

and Wood First Plus campaigns, Wood Campus and Grown In Britain.

l connect and harness together the positive energy and feelings towards UK forests and promote a ‘wood’ culture that captures personal health and fitness, community and encourages the use of more forest products.

tHE Wood AWARdS 2012Many schemes using PEFC-certified timber were amongst the entries into The Wood Awards – the UK’s premier architecture and furniture competition – that recognises, encourages and promotes outstanding design, craftsmanship and installation in wood. Several of the 2012 schemes using PEFC-certified sources were showcased as exemplar case studies in a PEFC 2012 Press Pack, including Lincoln Castle Heritage Skills Centre, Preston Manor School, London and the Strand East Tower. The press resource included exclusive material, background information on PEFC and an image library.

Strand East Tower is a landmark timber sculpture which symbolises the regeneration in the Lower Lea Valley in East London. The glulam used in its construction is 100% PEFC-certified Siberian Larch from Austria.

Photo © Wood Awards 2012

More importantly, while the global certified area has grown modestly in this period, demand for Chain of Custody certification has increased despite tough global economic conditions.

PEFC has worked hard to stimulate market demand for forest certification and we are pleased to see an increasing number of public and private procurement policies providing incentives for both forest management and Chain of Custody certification. As a result, we are witnessing the contribution that responsible forest management makes to sustainable livelihoods, rural development and poverty alleviation.

As we move to the next phase of PEFC’s development, our core mission remains to promote SFM for the benefit of society and our members; to achieve this we continue to extend our impact beyond the traditional forest sector.

PEFC IntERnAtIonAl

We want to clarify the value of working forests within the context of today’s leading issues. Consider for example a corporation seeking to reduce its environmental footprint; or the energy industry wanting to harness woody biomass; or a government aiming to reduce carbon dioxide emissions – each goal, at some stage, links to forest certification. We can add value to decision-making in sectors previously considered outside our remit. We can demonstrate the relevance of forest certification to climate change mitigation; by showing how PEFC’s forest management processes can ensure sustainability within the emerging bio-energy business; and by applying our know how in prioritising land uses, sustainable forest management.

Although we have been busy broadening our impact, we recognise that we need first and foremost to provide world-class forest management and Chain of Custody standards. We monitor our standards continuously to ensure that they are adaptive, forward-looking and clearly expressed. So for example we have recently revised our Chain of Custody standard to meet the requirements of the new European Union Timber Regulation.

PEFC is now well positioned to expand the global area of certified forests. We are experiencing a tremendous interest in bringing PEFC

06Ben Gunneberg Secretary General, PEFC Council

Standards development workshop - Vienna, November 20122012 was a pivotal year for

PEFC. As we approach the end

of our latest five-year strategic

plan, it is reassuring to see that

we have achieved our main goal:

the firm establishment, legitimacy

and acceptance of PEFC in the

sustainable forest management

(SFM) arena.

certification to ever more countries with China becoming the latest country to submit its national forest certification system for endorsement.

An important aspect in our work towards promoting SFM, mainstreaming forest certification, improving markets for certified products, and advancing knowledge and collaboration, is our small grants programme. The Collaboration Fund, only in its second year, has directly invested 247,000 CHF and leveraged an almost equivalent amount through co-funding requirements. It has supported eleven projects, implemented by 10 organisations across 14 countries, and encouraged the collaborative involvement of an additional 30 partner organisations.

We still have a long way to go to mainstream sustainable forest management certification, but we believe that by working together, we can reach our common goals faster.

GloBAl GRoWtH In PEFC-CERtIFIEd FoRESt AREA2012 saw newly-certified forests in Poland and Sweden help increase the global PEFC-certified forest area to 237 million hectares.

GloBAl GRoWtH In CHAIn oF CUStody nUMBERSDespite a challenging global economic climate remaining challenging, demand for PEFC Chain of Custody certification increased by 22% in 2012.

0

50

100

150

200

250

2005 2006 2007 2008 2009 2010

217,4 223,5

2011 2012

226,8 231,0 237,0

187,7 193,8 194,4

23622901

3545

4420

6166

7688

2005 2006 2007 2008 2009 20100

2000

4000

6000

8000

10000

7814

2011

9548

2012

Y E A R Y E A R

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GRoWtH In CERtIFIEd FoRESt AREA And CHAIn oF CUStody

UK CHAIn oF CUStody And PEFC loGo lICEnSESWith the UK economy remaining fairly flat in 2012, unsurprisingly Chain of Custody numbers remained static with new companies entering to the programme replacing those dropping out.

BREAKdoWn oF CERtIFIEd FoRESt AREA By ContInEntA little over 9% of the global forest area is currently certified, the majority of it to PEFC-endorsed schemes.

Num

ber o

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ders

/Con

trac

ts

0

300

600

900

1200

1500

2005 2006 2007 2008 2009 2010 2011 2012

logo licenses

chain of custody numbers

Europe 27%

North America 67%

Asia 0.1% Central & S. America 1.5%

Oceania 4.4%

total237m ha

Y E A R

07

RoSS BRAdSHAW

Ross Bradshaw has worked in the paper 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 Agents’ 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 UK’s longest serving directors, joining the Board in 2007.

HUGH MIllER oBE CHAIRMAn

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.

Hugh 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.

PAt BURKE

Pat Burke is Business Development Manager at Alexander Cleghorn Limited, a specialist manufacturer of particleboard products. This is complemented with softwood consultancy work with Ludgores Importers Limited. He was previously Group Purchasing Director at Arnold Laver Timber World and prior to this, worked for Jewson, Meyer International and The Graham Group. Pat is the current Chair of the UK Timber Trade Federation’s National Softwood Division as well as a former Chair of the North East Timber Trade Association and has 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.

PEFC UK has long 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

sectors including paper, packaging, forestry, the timber supply chain and

retail.

The appointment of Steve Cook of Willmott Dixon to the Board in

October 2012 has further strengthened the professional competencies

PEFC UK’s directors bring to the organisation. Steve brings with him a

wealth of experience and expertise which will help us better understand

and meet the requirements of UK construction contractors.

08BoARd oF dIRECtoRS 08

JoHn SAndERSon

John Sanderson is Director, Global Environmental Market Support 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 is designed to address this market interest head on by educating customers and end users about the industry’s sustainability credentials.

MARK WEAtHERBEd

Mark Weatherbed joined the PEFC Board in Jan 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 and is currently managing a number of raw material categories for the DS Smith acquisition of SCA Packaging.

RoB SHAW

Rob Shaw FICFor, CMIOSH, graduated from Aberdeen University in 1988 and joined Scottish Woodlands Ltd. In 1998 he helped achieved 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. In 2007 he was appointed SEQ & Contracts Director and now oversees the Utility and Landscaping Division in addition to certification and safety issues.

Scottish Woodlands runs one of the largest Group Certification schemes in the UK, and is dual-certified, with the ability to supply both FSC and PEFC labelled timber into the major markets. He retains an active interest in all UK Forest Certification issues, having been a member of the UKWAS Steering Group for many years until 2010, and is the UK Coordinator for CANZUS – an international owners and producers group which promotes practical solutions for certification issues globally.

StEvE CooK

Steve Cook is a 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. Additionally, he has developed the Group’s Sustainable Procurement Policy. Steve, who has twenty three 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 to develop organisational policy to improve the procurement of materials. He is also a Scheme Council member of the Eco-Reinforcement, responsible sourcing scheme and chairs the Grown in Britain contractors’ task group.

JUlIA GRIFFIn

Julia Griffin is a member of B&Q’s Social Responsibility team and her area of expertise is timber. 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 and the Kingfisher Board Network. Julia has been the timber expert in B&Q’s Social Responsibility team for eight years and has first-hand experience of the practicalities and challenges associated with implementing and adhering to a responsible timber sourcing policy.

dAvId lESlIE

David Leslie is General Manager, Harvesting & Operations for James Jones and Sons Ltd. James Jones is Scotland’s largest independent sawmiller and one of the leading suppliers of British timber in the United Kingdom. He is responsible for the Group’s roundwood procurement, sawmill co-products and haulage.

In addition to his PEFC role, David chairs the Private Sector Timber Forecast Group, is a member of the Grampian Forestry Forum, a board member of SIRT (Strategic Integrated Research in Timber) and is a member of the Institute of Chartered Foresters.

David was appointed to the PEFC UK Board in January 2012.

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:

l select suitable accounting policies and then apply them consistently;

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

l 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.

Audited Accounts for year ending 31st July 2012

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

Auditors

The 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 - Director.

10AUdItEd ACCoUntS

dIRECtoRSThe directors shown below have held office during the whole of the period from 1 August 2011 to the date of this report.

H G Miller

R N Bradshaw

M R Weatherbed

Mrs J Griffin

R Shaw

J A Sanderson

Other changes in directors holding office are as follows:

P D L Latham - resigned 10 January 2012

D S Leslie - appointed 10 January 2012

P J Burke - appointed 10 January 2012

S Cook - appointed after 31 July 2012

but prior to the date of this report.

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 2012. 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.

RESPECtIvE RESPonSIBIlItIES oF dIRECtoRS And AUdItoRS As 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 (APB’s) 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 StAtEMEntS An 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. 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:

l give a true and fair view of the state of the company’s affairs as at 31 July 2012 and of its surplus for the year then ended;

l have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and

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

oPInIon on otHER MAttER PRESCRIBEd By tHE CoMPAnIES ACt 2006 In 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 ExCEPtIon 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:

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

l the financial statements are not in agreement with the accounting records and returns; or

l certain disclosures of directors’ remuneration specified by law are not made; or

l we have not received all the information and explanations we require for our audit; or

l 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, United Kingdom DD1 1RQ

25 April 2013

11

BREAKdoWn oF PEFC UK ltd ExPEndItUREfor the Year Ended 31 July 2012

PEFC UK InCoME And ExPEndItURE ACCoUnt for the Year Ended 31 July 2012

2012 2011 £ £ Turnover 2 449,347 440,307

Administrative expenses 402,928 471,129

46,410 (30,822)

other operating income 12,156

Operating Surplus/(deficit) 3 58,575 (30,822)

Interest receivable and similar income 96 218

58,671 (30,604)

Interest payable and similar charges 457 -

Surplus/(deficit) on ordinary activities before taxation 58,214 (30,604)

Tax on surplus/(deficit)on ordinary activities 4 (259) (121)

Surplus/(deficit) for the Financial Year 58,473 (30,483)

12InCoME And ExPEndItURE

office, rent, salaries, administrationsubscriptions, sponsorship, and sundry expenses

travel, subsistence and sundry expenses

PEFC Council fees

meetings, including Board and AGM

advertising, communications and consultants

£449,347

11% 25%

4%

25%27%

8%

13EU tIMBER REGUlAtIon UPdAtE

Key Elements of the EUTR Due Diligence System (DDS)

The EUTR DDS includes 3 elements to minimise the risk that timber products are illegal:

l Information Companies must have access to information specifying the timber and timber products, country of harvest, species, quantity, details of the supplier and information on compliance with national legislation

lRisk assessment Based on the information provided and criteria set out in the EUTR, companies must assess the risk of illegal timber in their supply chain. Supplies with “negligible” risk may be traded further

lRisk mitigation In case of “non-negligible” risk timber products being illegal, risk mitigation measures can minimise the risk effectively. Measures may range from requiring additional information from suppliers and/or requesting the supplier to obtain PEFC certification.

Meeting EUTR Requirements through PEFC Chain of Custody Certification

PEFC-certified companies have always been required to exclude ‘controversial sources’ from certified material and are therefore well-placed to comply with the additional requirements imposed by the EUTR. The 2013 PEFC Chain of Custody standard, with its integral PEFC Due Diligence System, will be fully aligned with the Regulation. As all PEFC-certified companies are required to implement the revised Standard after its approval in May 2013, PEFC Chain of Custody certification represents an efficient tool to demonstrate compliance with EUTR requirements.

PEFC fulfils the EUTR requirements for third-party certification systems because:

l its standards are publicly available and requires compliance with all relevant requirements of the applicable legislation

l it requires certification bodies to undertake annual checks, including field visits, to verify compliance with certification requirements, including the applicable legislation

To find out more about how PEFC could help your company meet EUTR requirements, visit the PEFC website

www.pefc.co.uk

In order to combat illegal logging, the European Union Timber Regulation (EUTR) was introduced earlier this year. The Regulation prohibits the placing of illegally harvested timber on the European market and sets out requirements that companies within the European Union (EU) must meet to minimise the risk of illegal timber being traded. It requires companies placing timber or timber products on the European market (both imported and domestic) to implement a Due Diligence System (DDS). Companies trading wood products within the EU are responsible for keeping records of their suppliers and customers to allow for traceability.

Photo: PEFC Germany

l Chain of Custody certification, which is verified by certification bodies, traces timber and forest products through the supply chain. All timber must be harvested in accordance with applicable legislation, originating either from sustainably managed, PEFC-certified forests or from forest management activities that are considered as non-controversial and in compliance with applicable legislation

l its Due Diligence System provides controls to ensures that the risk of timber from controversial sources (including illegal harvesting) entering the supply chain is minimised.

Illegal logging has severe economic, environmental and social impacts.

It is associated with deforestation and climate change, can undermine

the efforts and livelihoods of legitimate operators and also create

conflicts over land and resources.

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Photo: Gary Ramsay

PEFC/16-33-626

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