W D L (Contracting) Limited - Limited company accounts 17.3

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 2017

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

5

Statement of Comprehensive Income

6

Statement of Financial Position

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

DIRECTORS:

Mr M Lewis

Mr R A Lewis

Mr A Spiteri

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 2017.

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.

The performance of the company this financial year shows a single digit improvement on the disappointing dip in turnover we

experienced last year, although both gross and net profit margins remain a concern. A net profit figure of £279,594 was achieved

which is a reduction of 5.2% reduction on last year.

KEY FINANCIAL HIGHLIGHTS

2017

2016

2015

Turnover

£24,140,739

£23,825,885

£27,326,187

Turnover growth

1.32%

(12.81%

)

10.02%

Gross profit margin

12.46%

13.35%

9.15%

Profit before tax

1.20%

1.24%

1.01%

We can report a marked improvement in both turnover and profitability for the first half of the current financial year and expect this

positive performance to carry on through the coming winter. Cash flow remains positive.

The difficulties experienced with the availability of construction materials has eased though we are expecting above inflation

increases in our basic raw materials.

PRINCIPAL RISKS AND UNCERTAINTIES

The performance of the company during the first half of the new financial year has again been satisfactory. Our forecast for the year

ended 31 March 2017 indicates that turnover will be on a par with the year ending 31 March 2016. Cashflow forecasts remains

positive.

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

15 November 2017

The directors present their report with the financial statements of the company for the year ended 31 March 2017.

PRINCIPAL ACTIVITY

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

DIVIDENDS

No dividends will be distributed for the year ended 31 March 2017.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 April 2016 to the date of this report.

Mr M Lewis

Mr R A Lewis

Mr A Spiteri

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 £10,620.

FUTURE DEVELOPMENTS

The future prospects of the company and our industry remain positive despite concerns about Brexit and proposed interest rate

increases. 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

15 November 2017

We have audited the financial statements of W D L (Contracting) Limited for the year ended 31 March 2017 on pages six to

fourteen. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom

Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'.

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 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. 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 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 Strategic Report and 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 statements

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 31 March 2017 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'; and

-	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, based on the work undertaken in the course of our 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

has been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the company

and its environment, we have not identified any material misstatements in the Strategic Report or the Report of the Directors.

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:

-	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.

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

16 November 2017

TURNOVER

3

24,139,739

23,825,885

Cost of sales

(21,131,107

)

(20,645,089

)

GROSS PROFIT

3,008,632

3,180,796

Distribution costs

(224,200

)

(213,280

)

Administrative expenses

(2,500,097

)

(2,677,900

)

284,335

289,616

Other operating income

-

250

OPERATING PROFIT

5

284,335

289,866

Interest receivable and similar income

4,259

5,221

PROFIT BEFORE TAXATION

288,594

295,087

Tax on profit

6

(59,032

)

(59,017

)

PROFIT FOR THE FINANCIAL YEAR

229,562

236,070

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

229,562

236,070

CURRENT ASSETS

Stocks

8

572,350

389,202

Debtors

9

7,261,537

4,952,300

Cash at bank and in hand

1,190,006

3,107,600

9,023,893

8,449,102

CREDITORS

Amounts falling due within one year

10

(5,597,204

)

(4,551,986

)

NET CURRENT ASSETS

3,426,689

3,897,116

TOTAL ASSETS LESS CURRENT LIABILITIES

3,426,689

3,897,116

CREDITORS

Amounts falling due after more than one year

11

(855,026

)

(847,482

)

PROVISIONS FOR LIABILITIES

14

(1,357,215

)

(2,064,748

)

NET ASSETS

1,214,448

984,886

CAPITAL AND RESERVES

Called up share capital

15

1

1

Retained earnings

16

1,214,447

984,885

SHAREHOLDERS' FUNDS

1,214,448

984,886

The financial statements were approved by the Board of Directors on 15 November 2017 and were signed on its behalf by:

Mr R A Lewis - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2015

1

1,348,815

1,348,816

Changes in equity

Dividends

-

(600,000

)

(600,000

)

Total comprehensive income

-

236,070

236,070

Balance at 31 March 2016

1

984,885

984,886

Changes in equity

Total comprehensive income

-

229,562

229,562

Balance at 31 March 2017

1

1,214,447

1,214,448

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.

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.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate

resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going

concern basis of accounting in preparing the financial statements.

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

31.3.17

31.3.16

£

£

Wages and salaries

5,570,661

5,342,850

Social security costs

528,898

477,500

Other pension costs

117,728

81,741

6,217,287

5,902,091

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

31.3.17

31.3.16

Production and sales

150

159

Office management

25

25

175

184

31.3.17

31.3.16

£

£

Directors' remuneration

135,573

192,308

Directors' pension contributions to money purchase schemes

19,800

1,800

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

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

31.3.17

31.3.16

£

£

Hire of plant and machinery

2,405,208

2,837,267

Auditors' remuneration

22,038

24,260

Taxation compliance services

2,000

2,000

Pensions

117,728

81,740

6.

TAXATION

Analysis of the tax charge

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

31.3.17

31.3.16

£

£

Current tax:

UK corporation tax

59,032

59,017

Tax on profit

59,032

59,017

7.

DIVIDENDS

31.3.17

31.3.16

£

£

shares of each

Interim

-

600,000

8.

STOCKS

31.3.17

31.3.16

£

£

Long term work-in-progress

259,834

198,040

Raw materials

312,516

191,162

572,350

389,202

9.

DEBTORS

31.3.17

31.3.16

£

£

Amounts falling due within one year:

Trade debtors

1,325

-

Other debtors

112

24,225

Amounts receivable on contracts

3,200,292

1,316,780

Retentions receivable

51,055

280,851

Amounts due from group undertakings

2,758,555

2,343,928

VAT repayable

289,172

139,034

6,300,511

4,104,818

Amounts falling due after more than one year:

Retentions receivable

961,026

847,482

Aggregate amounts

7,261,537

4,952,300

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

31.3.17

31.3.16

£

£

Bank loans and overdrafts (see note 12)

86,505

83,070

Trade creditors

2,870,702

1,597,331

Corporation tax

59,030

59,016

Social security and other taxes

283,639

271,233

Other creditors

155,606

273,006

Excess payments on account

96,154

566,062

Amounts due to group undertakings

1,773,938

316,942

Accrued expenses

271,630

1,385,326

5,597,204

4,551,986

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

31.3.17

31.3.16

£

£

Retentions receivable provision

855,026

847,482

12.

LOANS

An analysis of the maturity of loans is given below:

31.3.17

31.3.16

£

£

Amounts falling due within one year or on demand:

Bank overdrafts

86,505

83,070

13.	SECURED DEBTS

The following secured debts are included within creditors:

31.3.17

31.3.16

£

£

Bank overdrafts

86,505

83,070

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

31.3.17

31.3.16

£

£

Other provisions

Provision for foreseeable losses

245,000

560,000

Provisions for site costs

1,112,215

1,504,748

1,357,215

2,064,748

Other

provisions

£

Balance at 1 April 2016

2,064,748

Profit and loss account

(707,533

)

Balance at 31 March 2017

1,357,215

15.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

31.3.17

31.3.16

value:

£

£

1

Ordinary

£1

1

1

16.

RESERVES

Retained

earnings

£

At 1 April 2016

984,885

Profit for the year

229,562

At 31 March 2017

1,214,447

Called up share capital represents the nominal value of shares that have been issued.

Retained earnings includes all current and prior period retained profit and losses.

17.	PENSION COMMITMENTS

The company operates a defined contribution scheme for certain employees and contributes to separate individual defined

contribution schemes for certain directors. The assets of all schemes are held separately from those of the company in

independently administered funds.

The pension cost charge represents contributions payable by the company to the funds and amounted to £117,728 (2016 -

£81,740), the amount outstanding at the year end was £5,415 (2016: £4,146).

18.	ULTIMATE PARENT COMPANY

The company's ultimate parent undertaking is W D Lewis (Holdings) Limited, a company incorporated in England and

Wales.

19.	RELATED PARTY DISCLOSURES

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

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

owned subsidiaries within the group.

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, Penderyn, Aberdare, Rhondda

Cynon Taff, CF44 9JY.

20.	ULTIMATE CONTROLLING PARTY

The ultimate controlling parties at the year end were Mr R Lewis and Mr M Lewis by virtue of their equal shareholdings in

WD Lewis (Holdings) Limited.

21.	GUARANTEES

HSBC Bank hold a first fixed charge over book and other debts, chattels, goodwill and uncalled capital both present and

future and a first floating charge over all assets and undertaking both present and future.

A company unlimited multilateral guarantee has been given by W D Lewis (Holdings) Limited, William D Lewis (Aberdare)

Limited, WDL (Contracting) Limited, WDL Homes Limited and WDL (Concrete Products) Limited to guarantee the

liabilities of HSBC Bank plc.