Langley Waterproofing Systems Limited - Limited company accounts 20.1

REGISTERED NUMBER: 03727617 (England and Wales)

LANGLEY WATERPROOFING SYSTEMS LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2019

Page

Company Information

1

Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

7

Income Statement

8

Other Comprehensive Income

9

Balance Sheet

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

to

20

DIRECTORS:

R N Williams

A Silvestri

T A Kerr

D W Wincott

SECRETARY:

Ms E M Churchman

REGISTERED OFFICE:

Langley House Lamport Drive

Heartlands Business Park

Daventry

Northamptonshire

NN11 8YH

REGISTERED NUMBER:

03727617 (England and Wales)

AUDITORS:

Fortus Audit LLP

1 Rushmills

Northampton

Northamptonshire

NN4 7YB

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

REVIEW OF BUSINESS

Langley Waterproofing Systems Limited is a subsidiary of Langley UK Limited. The principal activities of the company

during the year were the design, supply and marketing of specialist roofing products, materials, solutions and services

for the building and construction sector throughout the UK.

There were no significant changes in the activities of the company during the period. The company has continued to

focus on staff development through its learning & development programme, strengthening relationships with our

customers in existing and new geographic areas and in new market sectors. It has a continual development

programme to introduce new and innovative products & services.

The directors are conscious of the wider economic and political uncertainties affecting the sector and continue to

monitor and adapt as required, ensuring the continued profitable trading of the business.

PRINCIPAL RISKS AND UNCERTAINTIES

Risk assessment is an ongoing process reviewed monthly at Board Meetings. Principal risks of the business have been

identified and recorded in a Risk Register which enables the directors to assess the adequacy and effectiveness of the

measures for controlling the risk.

The key risks are:

COVID-19

COVID-19 constraints in the market will impact all businesses in 2020. The construction sector is affected, but it has

never entirely shut down during the lockdown period. Trading has continued, albeit at lower levels. Directors have

moved rapidly to protect its employees by accessing the CJRS and its working capital by accessing the CBILS. Much

of the Group's activity is with public sector bodies and ongoing constraints is a distraction from normal government

business. The directors are aware and continually monitor how public sector borrowing to fund COVID-19 initiatives

may impact funding in the next fiscal year.

UK Trading Risks/ Brexit distractions

Whilst the UK has now left the EU uncertainty remains as to what our future trading relationship will look like. The

election of a new Parliament has stabilised the situation, but the status of negotiations is unclear given other more

immediate distractions. A pro-active focus on product quality and compliance keeps us ahead of regulatory

requirements and the Group seeks to offset pressure on margins through its continual improvement programme.

Health & Safety Risks

The company has a strong record of health & safety performance and this is scrutinised monthly at Board and

Management meetings and quarterly at health and safety committee meetings. Training above the legal requirements

is conducted, and independent audits of external sites are conducted monthly.

Exchange Risks

The company is exposed to currency movements on purchases from Europe. The company uses forward currency

contracts to mitigate against foreign exchange fluctuations.

Credit Risk

In view of the current economic environment the risk of bad debt receives strong focus. Reviewed and reported to

Board monthly this is an area where close focus by our credit controllers ensures we remain close to our customers

and can identify early any warning signs.

Liquidity Risk

The company has sufficient cash for its business needs.

FINANCIAL KEY PERFORMANCE INDICATORS

Management use a range of performance measures to monitor and manage the business. The key financial

performance indicators are revenue, gross & net margins and total net worth of the business.

KPIs

2019

2018

Turnover

£15,617,202

£14,687,906

Gross profit %

48.54%

44.87%

Operating profit %

12.16%

5.59%

Net assets

£1,976,479

£7,217,036

The significant reduction in shareholder funds is as a result of a s75 and s77 HMRC approved capital reduction

demerger.

This report was approved by the board and signed on its behalf.

ON BEHALF OF THE BOARD:

D W Wincott - Director

5 May 2020

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

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was the design, supply and marketing of specialist

roofing products, materials, solutions and services for the building and construction sector throughout the UK.

DIVIDENDS

Total dividends paid in the year were £6,019,452 (2018 £NIL).

FUTURE DEVELOPMENTS

The directors are committed to long-term creation of shareholder value. Successful implementation of a growth

strategy is resulting in good forecasts for 2020 despite the sector remaining highly competitive. Current performance

levels and forecasts indicate the Company is on track to achieve expectations for the year.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2019 to the date of this

report.

R N Williams

A Silvestri

T A Kerr

D W Wincott

FINANCIAL INSTRUMENTS

The company utilises various financial instruments including loans, cash and various items such as trade debtors and

trade creditors that arise directly from its operations. The main purpose of these is to raise finance for the company's

operations. The existence of these financial instruments exposes the company to a number of financial risks, which are

described in more detail in the Strategic Report.

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). 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, Fortus Audit LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

D W Wincott - Director

5 May 2020

Opinion

We have audited the financial statements of Langley Waterproofing Systems Limited (the 'company') for the year

ended 31 December 2019 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet,

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 December 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 four, 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.

Emma Jones FCCA (Senior Statutory Auditor)

for and on behalf of Fortus Audit LLP

1 Rushmills

Northampton

Northamptonshire

NN4 7YB

5 May 2020

TURNOVER

3

15,617,202

14,687,906

Cost of sales

8,036,283

8,097,678

GROSS PROFIT

7,580,919

6,590,228

Distribution costs

604,479

532,414

Administrative expenses

5,077,592

5,240,554

5,682,071

5,772,968

1,898,848

817,260

Other operating income

1

3,177

OPERATING PROFIT

5

1,898,849

820,437

Group loan write off

6

1,207,817

-

691,032

820,437

Interest receivable and similar income

-

1,802

PROFIT BEFORE TAXATION

691,032

822,239

Tax on profit

7

(87,863

)

13,521

PROFIT FOR THE FINANCIAL YEAR

778,895

808,718

PROFIT FOR THE YEAR

778,895

808,718

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

778,895

808,718

FIXED ASSETS

Intangible assets

9

19,000

39,000

Tangible assets

10

91,108

91,051

Investments

11

151,200

151,200

261,308

281,251

CURRENT ASSETS

Stocks

12

698,973

484,094

Debtors

13

3,034,054

8,844,404

Cash at bank

780,151

229,807

4,513,178

9,558,305

CREDITORS

Amounts falling due within one year

14

2,780,696

2,610,551

NET CURRENT ASSETS

1,732,482

6,947,754

TOTAL ASSETS LESS CURRENT LIABILITIES

1,993,790

7,229,005

PROVISIONS FOR LIABILITIES

17

17,311

11,969

NET ASSETS

1,976,479

7,217,036

CAPITAL AND RESERVES

Called up share capital

18

1,000

1,000

Retained earnings

19

1,975,479

7,216,036

SHAREHOLDERS' FUNDS

1,976,479

7,217,036

The financial statements were approved by the Board of Directors and authorised for issue on 5 May 2020 and were signed on its behalf by:

D W Wincott - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 January 2018

1,000

6,407,318

6,408,318

Changes in equity

Total comprehensive income

-

808,718

808,718

Balance at 31 December 2018

1,000

7,216,036

7,217,036

Changes in equity

Dividends

-

(6,019,452

)

(6,019,452

)

Total comprehensive income

-

778,895

778,895

Balance at 31 December 2019

1,000

1,975,479

1,976,479

1.	STATUTORY INFORMATION

Langley Waterproofing Systems 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 directors have considered the impact of COVID-19 in relation to their assessment of going concern and in

their opinion have taken all reasonable steps to mitigate these factors. As at the point of authorising the

accounts, and for the foreseeable future, the directors consider the going concern assumption to still be

appropriate. The directors acknowledge that given the currently rapidly changing business and social

environment, there are likely to be significant unknown factors which may present themselves. Such factors are

considered by the directors to represent a general inherent level of risk in relation to the going concern

assumption albeit not quantifiable at this time

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 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 requirement of Section 33 Related Party Disclosures paragraph 33.7.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company's accounting policies, 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.

The key source of estimation uncertainty that has a significant effect on the amounts recognised in the financial

statements is the valuation of stock. Provision should be made when the cost is greater than the estimated

selling price. Management are involved in making these decisions on a line by line basis.

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and

the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or

receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also

be met before revenue is recognised:

Revenue from the sales of goods is recognised when all of the following conditions are satisfied:

- the Company has transferred the significant risks and rewards of ownership to the buyer

- the Company retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold

- the amount of revenue can be reliably measured

- it is probable that the Company will receive the consideration due under the transaction

- the costs incurred or to be incurred in respect of the transaction can be measured reliably

Revenue from a contract to provide services is recognised in the period in which the services are provided in

accordance with the stage of completion of the contract when all of the following conditions are satisfied:

- the amount of revenue can be measured reliably

- it is probable that the Company will receive the consideration due under the contract

- the stage of completion of the contract at the end of the reporting period can be measured reliably

- the costs incurred and the costs to complete the contact can be measured reliably

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

25% on cost

Motor vehicles

-

25% on cost

Computer equipment

-

33% on cost

Stocks

Stocks are valued at the lower of cost and estimated selling price, after making due allowance for obsolete and

slow moving items.

Financial instruments

Basic financial assets, including trade and other receivables and cash and bank balances, are initially

recognised at transaction price, unless the arrangement constitutes a financing transaction, where the

transaction is measured at the present value of the future receipts discounted at a market rate of interest. Such

assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective

evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying

amount and the present value of the estimated cash flows discounted at the asset’s original effective interest

rate. The impairment loss is recognised in profit or loss.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are

settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another

party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has

been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third

party without imposing additional restrictions.

Basic financial liabilities, including trade and other payables, and loans from fellow Group companies, are

initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the

debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of

business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year

or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction

price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is

discharged, cancelled or expires.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there

is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis

or to realise the asset and settle the liability simultaneously.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 balance sheet date.

Deferred tax

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

balance sheet 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.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's

pension scheme are charged to profit or loss in the period to which they relate.

Investments

Unlisted investments, whose market value can be reliably determined, are remeasured to market value at each

balance sheet date. Gains and losses on remeasurement are recognised in the Statement of Income and

Retained Earnings for the period. Where market value cannot be reliably determined, such investments are

stated at historic cost less impairment.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

2,119,123

2,325,970

Social security costs

304,861

313,132

Other pension costs

87,875

156,659

2,511,859

2,795,761

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

2019

2018

Directors

2

2

Management

9

10

Administration

29

49

40

61

2019

2018

£

£

Directors' remuneration

417,478

399,692

Directors' pension contributions to money purchase schemes

20,926

81,550

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

Money purchase schemes

2

3

Information regarding the highest paid director is as follows:

2019

2018

£

£

Emoluments etc

238,284

167,727

Pension contributions to money purchase schemes

10,780

10,500

5.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2019

2018

£

£

Hire of plant and machinery

12,435

10,945

Other operating leases

120,000

120,000

Depreciation - owned assets

85,884

35,617

Profit on disposal of fixed assets

(2,045

)

-

Computer software amortisation

20,000

20,000

Auditors' remuneration

9,000

25,000

6.	EXCEPTIONAL ITEMS

2019

2018

£

£

Group loan write off

(1,207,817

)

-

7.

TAXATION

Analysis of the tax (credit)/charge

The tax (credit)/charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

42,351

21,049

Prior year over provision

(135,555

)

-

Total current tax

(93,204

)

21,049

Deferred tax

5,341

(7,528

)

Tax on profit

(87,863

)

13,521

Reconciliation of total tax (credit)/charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2019

2018

£

£

Profit before tax

691,032

822,239

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

131,296

156,225

Effects of:

Expenses not deductible for tax purposes

235,429

28,767

Income not taxable for tax purposes

-

(5,489

)

Adjustments to tax charge in respect of previous periods

(135,555

)

(106,977

)

Group relief

(185,643

)

(51,477

)

Research & development

(138,731

)

-

Deffered tax

5,341

(7,528

)

Total tax (credit)/charge

(87,863

)

13,521