W D L (Contracting) Limited - Limited company accounts 18.2

REGISTERED NUMBER: 03886047 (England and Wales)

W D L (Contracting) Limited

Strategic Report, Report of the Directors and

Audited Financial Statements

for the Year Ended 31 March 2019

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

7

Statement of Financial Position

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

Mr M Lewis

Mr R A Lewis

SECRETARY:

Mr M Lewis

REGISTERED OFFICE:

Stuart Quarry

Chapel Road

Penderyn

Rhondda Cynon Taff

CF44 9JY

REGISTERED NUMBER:

03886047 (England and Wales)

AUDITORS:

O'Brien & Partners

Chartered Accountants

& Statutory Auditors

Highdale House

7 Centre Court

Treforest Industrial Estate

Pontypridd

Rhondda Cynon Taff

CF37 5YR

SOLICITORS:

Marchant Harries & Co

Bute Chambers

17-19 Cardiff Street

Aberdare

Rhondda Cynon Taff

CF44 7DP

The directors present their strategic report for the year ended 31 March 2019.

REVIEW OF BUSINESS

The annexed financial statements indicate the results for the year along with the financial standing and accounting details of the

company.

The company continues to operate as a ground working contractor to the major UK house builders within South East Wales.

Demand for new housing continues to be strong helping the major house builders to push ahead with large scale developments

throughout South Wales. As a consequence of this increase demand the company's workload has also increased resulting in a marked

improvement in turnover and net profit.

KEY FINANCIAL HIGHLIGHTS

2019

2018

2017

Turnover

£38,034,060

£31,817,810

£24,140,739

Turnover growth

19.54%

31.81%

1.32%

Gross profit margin

9.34%

9.67%

12.46%

Profit before tax

4.08%

2.13%

1.20%

The demand for new housing remains robust but we are experiencing a slight decrease in turnover and profit levels for the year ended

2020, perhaps, due to the uncertainties created by Brexit.

PRINCIPAL RISKS AND UNCERTAINTIES

The difficulties experienced with the availability of construction material continues and has in fact increased during the year. There

are also indications of above inflation increases in our basic raw materials which we have to consider when tendering for contracts.

This can be problematic when projects are delayed.

The future prospects of the company remain positive as the much publicised shortage of housing in the country ensures demand for

our services.

ON BEHALF OF THE BOARD:

Mr M Lewis - Director

18 December 2019

The directors present their report with the financial statements of the company for the year ended 31 March 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of civil engineering.

DIVIDENDS

An interim dividend of £2,500,000 per share was paid on . The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 March 2019 will be £ 2,500,000 .

DIRECTORS

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

Mr M Lewis

Mr R A Lewis

FINANCIAL INSTRUMENTS

The company's principal financial instruments comprise bank balances, bank overdrafts, trade debtors, trade creditors and group inter

company loans. The main purpose of these instruments is to raise funds for the company's operations and to finance the company's

operations.

Due to the nature of the financial instruments used by the company there is no exposure to price risk. The company's approach to

managing other risks applicable to the financial instruments concerned is shown below.

In respect of bank balances the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility

through the use of overdrafts at floating rates of interest.

Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the

regular monitoring of amounts outstanding for both time and credit limits.

Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Financial support from parent and other subsidiary undertakings is provided and available to support financing the company's

operations.

DONATIONS

During the year the company made charitable donations totalling £12,563 (2018: £3,467)

FUTURE DEVELOPMENTS

The future prospects of the company and our industry remain positive despite concerns about Brexit.. The company actively tenders

for development contracts and continues to be successful in being awarded new contracts. The company continues to invest in IT

systems and also in its workforce.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in

accordance with applicable law and regulations.

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

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

Accounting Standards and applicable law), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable

in the UK and Republic of Ireland'. 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 profit or loss 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 AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of

which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order

to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, O'Brien & Partners, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr M Lewis - Director

18 December 2019

Opinion

We have audited the financial statements of W D L (Contracting) Limited (the 'company') for the year ended 31 March 2019 which

comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Notes to the

Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been

applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard

102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted

Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2019 and of its profit for the year then ended;

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

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

Basis for opinion

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

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

section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit

of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in

accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our opinion.

Conclusions relating to going concern

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

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

-

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

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and

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

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

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

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

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

otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are

required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other

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

are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not

identified material misstatements in the Strategic Report or the Report of the Directors.

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

opinion:

-	adequate accounting records have not been kept, 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.

Responsibilities of directors

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

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

directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due

to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either

intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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

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

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

misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the

aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's

website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006.

Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them

in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the

opinions we have formed.

Lewis Van Emden (Senior Statutory Auditor)

for and on behalf of O'Brien & Partners

Chartered Accountants

& Statutory Auditors

Highdale House

7 Centre Court

Treforest Industrial Estate

Pontypridd

Rhondda Cynon Taff

CF37 5YR

18 December 2019

TURNOVER

3

38,034,060

31,817,810

Cost of sales

34,479,918

28,847,503

GROSS PROFIT

3,554,142

2,970,307

Distribution costs

321,453

277,704

Administrative expenses

1,689,541

2,018,603

2,010,994

2,296,307

OPERATING PROFIT

5

1,543,148

674,000

Interest receivable and similar income

9,342

2,863

PROFIT BEFORE TAXATION

1,552,490

676,863

Tax on profit

6

296,173

130,284

PROFIT FOR THE FINANCIAL YEAR

1,256,317

546,579

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,256,317

546,579

CURRENT ASSETS

Stocks

8

917,357

631,751

Debtors

9

7,146,541

7,332,471

Cash at bank and in hand

1,755,005

2,492,509

9,818,903

10,456,731

CREDITORS

Amounts falling due within one year

10

5,868,680

6,239,925

NET CURRENT ASSETS

3,950,223

4,216,806

TOTAL ASSETS LESS CURRENT LIABILITIES

3,950,223

4,216,806

CREDITORS

Amounts falling due after more than one year

11

(914,758

)

(846,240

)

PROVISIONS FOR LIABILITIES

14

(2,668,121

)

(1,759,539

)

NET ASSETS

367,344

1,611,027

CAPITAL AND RESERVES

Called up share capital

15

1

1

Retained earnings

16

367,343

1,611,026

SHAREHOLDERS' FUNDS

367,344

1,611,027

The financial statements were approved by the Board of Directors on 18 December 2019 and were signed on its behalf by:

Mr M Lewis - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2017

1

1,214,447

1,214,448

Changes in equity

Dividends

-

(150,000

)

(150,000

)

Total comprehensive income

-

546,579

546,579

Balance at 31 March 2018

1

1,611,026

1,611,027

Changes in equity

Dividends

-

(2,500,000

)

(2,500,000

)

Total comprehensive income

-

1,256,317

1,256,317

Balance at 31 March 2019

1

367,343

367,344

1.	STATUTORY INFORMATION

W D L (Contracting) Limited is a private company, limited by shares , registered in England and Wales. The company's

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

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in

theses financial statements are rounded to the nearest £.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group

prepared publicly available consolidated financial statements, including this company, which are intended to give a true and

fair view of the assets, liabilities, financial position and profit or loss of the group.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

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

•

the requirements of Section 4 Statement of Financial Position paragraph 4.12(a)(iv);

•

the requirements of Section 7 Statement of Cash Flows;

•

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

•

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

•

the requirements of Section 12 Other Financial Instruments paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

The financial statements of the company are consolidated in the financial statements of WD Lewis (Holdings) Limited.

These consolidated financial statements are available from its registered office, Stuart Quarry, Chapel Road, Penderyn,

Rhondda Cynon Taff, CF44 9JY.

Significant judgements and estimates

The application of the company's accounting policies, the management is required to make judgements, estimates and

assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates

and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual

results may differ from these estimates.

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

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

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

Turnover

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

goods supplied or services rendered, net of discounts and rebates allowed by the company and value added tax.

Long term contract retention income is only recognised as turnover if received by the date of approval of the company's

financial statements for that financial year.

Contract turnover is calculated as that proportion of total contract value which revenue generated to date bears to total

expected revenue for that contract. Revenues derived from variations on contracts are recognised only when they have been

accepted by the customer.

Inventories

Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving

items.

Taxation

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

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

Current or deferred taxation assets and liabilities are not discounted.

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

enacted by the statement of financial position date.

Taxation and deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of

financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in

which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted

or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be

recovered against the reversal of deferred tax liabilities or other future taxable profits.

Employee benefits

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under

which the company pays fixed contributions into a separate entity. Once contributions have been paid the company has no

further payment obligations. The contributions are recognised as an expense when they are due. Amounts not paid are

shown in accruals in the balance sheet. The assets of the plan are held separately from the company in independently

administered funds.

Other employee benefits such as paid holiday arrangements are recognised as an expense in the period in which they are

incurred.

Provisions

Provisions are recognised when he company has a present legal or constructive obligation as a result of past events; it is

probable that an outflow of resources will be required to settle the obligation; and the amount of the obligation can be

estimated reliably.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a

pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The

increase in the provision due to passage of time is recognised as a finance cost.

Long term contracts

Long term contract balances are stated at net cost less foreseeable losses less any applicable payments on account. The

amount recorded as turnover in respect of long term contracts is ascertained by reference to the value of work carried out to

date, less all attributable profits accumulated on contracts less than 60% complete at the balance sheet date and less 45% of

attributable profits on contracts more than 60% and less than 100% complete at the balance sheet date. Attributable profit is

recognised as the difference between measured contract valuations and related costs. Amounts recoverable on contracts are

shown within debtors in the balance sheet. Full provision is made for losses on all contracts in the period in which they are

first foreseen.

3.

TURNOVER

The company operates in the UK and all of its turnover is attributable to the UK market.

4.	EMPLOYEES AND DIRECTORS

31.3.19

31.3.18

£

£

Wages and salaries

7,422,492

6,861,630

Social security costs

741,762

702,141

Other pension costs

199,030

139,119

8,363,284

7,702,890

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

31.3.19

31.3.18

Production and sales

191

167

Office management

26

25

217

192

31.3.19

31.3.18

£

£

Directors' remuneration

-

278,965

Directors' pension contributions to money purchase schemes

-

20,215

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

Money purchase schemes

-

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.3.19

31.3.18

£

£

Hire of plant and machinery

3,625,873

2,975,025

Auditors' remuneration

22,000

23,298

Taxation compliance services

2,000

2,000

Pensions

199,031

139,119

6.

TAXATION

Analysis of the tax charge

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

31.3.19

31.3.18

£

£

Current tax:

UK corporation tax

296,173

130,284

Tax on profit

296,173

130,284

Reconciliation of total tax charge included in profit and loss

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

31.3.19

31.3.18

£

£

Profit before tax

1,552,490

676,863

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

294,973

128,604

Effects of:

Disallowable expenses

1,200

1,680

Total tax charge

296,173

130,284

7.

DIVIDENDS

31.3.19

31.3.18

£

£

shares of each

Interim

2,500,000

150,000

8.

STOCKS

31.3.19

31.3.18

£

£

Long term work-in-progress

511,955

240,626

Raw materials

405,402

391,125

917,357

631,751

9.

DEBTORS

31.3.19

31.3.18

£

£

Amounts falling due within one year:

Other debtors

2

5

Amounts receivable on contracts

4,251,071

3,652,536

Retentions receivable

280,849

228,908

Amounts due from group undertakings

1,383,535

2,283,169

VAT repayable

316,326

321,613

6,231,783

6,486,231

Amounts falling due after more than one year:

Retentions receivable

914,758

846,240

Aggregate amounts

7,146,541

7,332,471

Amounts due to group undertakings are unsecured, interest free, have no fixed repayment date and are repayable on demand.

10.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

31.3.19

31.3.18

£

£

Bank loans and overdrafts (see note 12)

81,488

66,400

Trade creditors

3,629,753

3,912,491

Corporation tax

36,173

130,284

Social security and other taxes

503,452

535,984

Other creditors

399,133

306,264

Excess payments on account

484,024

656,537

Amounts due to group undertakings

282,481

385,937

Accrued expenses

452,176

246,028

5,868,680

6,239,925

Amounts owed to group undertakings are unsecured, interest free, have no fixed repayment date and are repayable on

demand.

11.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

31.3.19

31.3.18

£

£

Retentions receivable provision

914,758

846,240

12.

LOANS

An analysis of the maturity of loans is given below:

31.3.19

31.3.18

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

81,488

66,400

13.	SECURED DEBTS

The following secured debts are included within creditors:

31.3.19

31.3.18

£

£

Bank overdrafts

81,488

66,400

The bank overdraft is secured by way of a group unlimited multilateral guarantee given by the company and its parent W D

Lewis (Holdings) Limited and fellow subsidiaries William D Lewis (Aberdare) Limited, W D L (Concrete Products) Limited

and W D L Homes Limited.

14.	PROVISIONS FOR LIABILITIES

31.3.19

31.3.18

£

£

Other provisions

Provision for foreseeable losses

996,000

430,000

Provisions for site costs

1,672,121

1,329,539

2,668,121

1,759,539

Other

provisions

£

Balance at 1 April 2018

1,759,539

Profit and loss account

908,582

Balance at 31 March 2019

2,668,121

15.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.3.19

31.3.18

value:

£

£

1

Ordinary

£1

1

1