Company Registration Number
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NORTH LANARKSHIRE PROPERTIES LLP
INFORMATION
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NORTH LANARKSHIRE PROPERTIES LLP
CONTENTS
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NORTH LANARKSHIRE PROPERTIES LLP
MEMBERS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
The members present their annual report together with the audited financial statements of North Lanarkshire Properties LLP (the "LLP") for the year ended 31 March 2023.
Principal activities
The LLP was incorporated on
The principal activity of the LLP is the rental of property.
Turnover increased by 5% to £6.67m (2022: £6.35m). Net assets increased by 18.5% to £47.70m (2022: £40.27m), mainly attributable to a profit before tax and pensions in the year of £7.36m (2022: £1.83m).
Designated Members
North Lanarkshire Council and NL Property Investments Limited were designated members of the LLP throughout the period.
Members' capital and interests
Each member's subscription to the capital of the LLP is determined by their share of the profit and is repayable following retirement from the LLP.
Details of changes in members' capital in the year ended 31 March 2023 are set out in the Reconciliation of members' interests.
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NORTH LANARKSHIRE PROPERTIES LLP
MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
Members' responsibilities statement
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law, (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008), requires the members to prepare financial statements for each financial year. Under that law the members 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, (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 LLP and of the profit or loss of the LLP for that period.
In preparing these financial statements, the members are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgments 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 LLP will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the LLP's transactions and disclose with reasonable accuracy at any time the financial position of the LLP and to enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the LLP and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Disclosure of information to auditors
Each of the persons who are members at the time when this Members' report is approved has confirmed that:
∙so far as that member is aware, there is no relevant audit information of which the LLP's auditors are unaware, and
∙that member has taken all the steps that ought to have been taken as a member in order to be aware of any relevant audit information and to establish that the LLP's auditors are aware of that information.
This report was approved by the members and signed on their behalf by:
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NORTH LANARKSHIRE PROPERTIES LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH LANARKSHIRE PROPERTIES LLP
We have audited the financial statements of North Lanarkshire Properties LLP (the 'LLP') for the year ended 31 March 2023, which comprise the Statement of comprehensive income, the Balance sheet, the Reconciliation of members' interests and the related notes, 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).
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 LLP in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the LLP's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
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NORTH LANARKSHIRE PROPERTIES LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH LANARKSHIRE PROPERTIES LLP (CONTINUED)
The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The members are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
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NORTH LANARKSHIRE PROPERTIES LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH LANARKSHIRE PROPERTIES LLP (CONTINUED)
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 an Auditors' report 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
∙the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and knowledge of the LLP to identify or recognise non-compliance with applicable laws and regulations;
∙we identified the laws and regulations applicable to the company through discussions with directors and other management and review of appropriate industry knowledge. Key laws and regulations we identified during the audit were the UK Companies Act 2006 and tax legislation, UK employment legislation, UK health and safety legislation and relevant common law in respect of commercial leasing practices;
∙we assessed the extent of compliance with the laws and regulations identified above by making enquiries of management; and
∙identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the LLP’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
∙making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
∙considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙performed analytical procedures as a risk assessment tool to identify any unusual or unexpected relationships;
∙tested journal entries recorded on the LLP’s finance system to identify unusual transactions that may indicate override of controls;
∙reviewed key judgements and estimates for any evidence of management bias.
∙reviewed the application of accounting policies with focus on those with heightened estimation uncertainty.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
∙agreeing financial statement disclosures to underlying supporting documentation and
∙enquiring of management to identify actual and potential litigation and claims.
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NORTH LANARKSHIRE PROPERTIES LLP
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF NORTH LANARKSHIRE PROPERTIES LLP (CONTINUED)
Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.
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 Auditors' report.
This report is made solely to the LLP's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, as applied by Part 12 of The Limited Liability Partnerships (Accounts and Audit) (Applications of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the LLP's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the LLP and the LLP's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants and Statutory Auditors
Glasgow
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NORTH LANARKSHIRE PROPERTIES LLP
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
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NORTH LANARKSHIRE PROPERTIES LLP
REGISTERED NUMBER: SO304142
BALANCE SHEET
AS AT 31 MARCH 2023
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NORTH LANARKSHIRE PROPERTIES LLP
REGISTERED NUMBER: SO304142
BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2023
The financial statements were approved and authorised for issue by the members and were signed on their behalf by:
The notes on pages 11 to 23 form part of these financial statements.
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RECONCILIATION OF MEMBERS' INTERESTS
FOR THE YEAR ENDED 31 MARCH 2023
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The LLP is a limited liability partnership and is incorporated in Scotland. The LLP's registration number is SO304142 and the registered office address is Civic Centre, Windmillhill Street, Motherwell, Lanarkshire, ML1 1AB. The address of its place of business is Suite G03 Dalziel building, 7 Scott Street, Motherwell, ML1 1PN.
These financial statements have been presented in Pounds Sterling, rounded to the nearest pound, as this is the currency of the primary economic environment in which the entity operates.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Section 1A of Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006 and the requirements of the Statement of Recommended Practice "Accounting by Limited Liability Partnerships".
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the LLP's accounting policies (see note 3).
The following principal accounting policies have been applied:
The directors have prepared cash flow forecasts for a period beyond 12 months from the date of approval of these financial statements which indicate that the LLP will have sufficient funds, through its operating cash flows and cash reserves to meet its liabilities as they fall due for that period. As a result, the directors continue to adopt the going concern basis in preparing the financial statements. The property portfolio is financed by a term loan. Projections indicate the LLP will be able to continue to service the debt through capital and interest payments. As part of the term loan agreement, the LLP must comply with a forward-looking debt service cover ratio which takes account of working capital movements. The LLP is in regular contact with the loan provider to ensure covenant compliance is closely monitored and communicated. Moreover a letter of comfort has been provided by NLC to the loan provider which states that if required they would provide financial support to NLP to ensure covenant compliance. The term loan is due for repayment in October 2023. At the date of signing the financial statements. The LLP is in advanced discussions in respect of re-financing the loan. The directors are comfortable that this exercise will be concluded prior to the repayment date of the loan in October 2023.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Grants of a revenue nature are recognised in the Statement of Comprehensive Income in the same period as the related expenditure.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
Defined benefit pension plan
A division of profits is the mechanism by which the profits of an LLP become a debt due to members. A division may be automatic or discretionary, may relate to some or all of the profits for a financial period and may take place during or after the end of a financial period.
An automatic division of profits is one where the LLP does not have an unconditional right to avoid making a division of an amount of profits based on the members' agreement in force at the time, whereas a discretionary division of profits requires a decision to be made by the LLP, which it has the unconditional right to avoid making.
The LLP divides profits discretionarily. Discretionary divisions of profits are recognised as amounts due to members, although may be used to offset amounts which have been drawn by members, which are recognised as loan assets repayable.
Profits of the LLP which are not yet divided among the members are shown under 'Other reserves' on the Balance sheet, pending a discretionary decision to divide the profits.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
2.Accounting policies (continued)
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Provisions Provisions are recognised where the LLP has an obligation, as a result of a past event, that can be measured reliably and where the outcome is less than probable, but more than remote, no provision is recorded but a contingent liability is disclosed in the financial statements if material. The recording of provisions is an area which requires the exercise of management judgement includes provision for doubtful debts. Investment Property Valuation The LLP's investment properties are revalued annually by RICS registered valuers. The valuation is subject to location and expected future rental income. As a result, the valuation of the investment properties incorporated into the financial statements is subject to a degree of uncertainty and is made on the basis of assumptions which may prove to be inaccurate, particularly in periods of volatility or low transaction flow in the market. If any of the assumptions used prove to be differing from the valuation incorporated into the financial statements and the difference could have a material effect on the financial statements. There is a degree of judgement involved in that the value of the investment properties will ultimately be determined by the market. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Pension Liability The LLP has valued the pension liability using actuarial assumptions from a qualified actuary which have been reviewed and are considered reasonable and appropriate. Assumptions in respect of discount rates and inflation will vary from year to year, as will the value of assets and will be dependent on circumstances at the date of valuation. The liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the Balance Sheet date less the fair value of plan assets at the Balance Sheet date (if any) out of which the obligations are to be settled. Where the performance of the scheme in any given period results in a surplus position at the year end, management consider the likelihood that the Partnership will receive future economic benefits via reduced contributions or rebates from the scheme. If these benefits can be reliably quantified and receipt is considered highly probable the value of the recognised asset is restricted to only those amounts deemed as recoverable. Where the economic benefit cannot be reliably quantified or the timing of receipt is uncertain, management have determined that no asset will be recognised. Management consider this policy to be prudent and aligned with the requirements of FRS 102.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The most recent valuation of the property portfolio was carried out by BNP Paribas Real Estate, Chartered Valuation Surveyors and members of the Royal Institute of Chartered Surveyors (RICS) at fair value. The date of the valuation was 31 March 2023. The valuation carried out was a full valuation on all properties in the portfolio. The 2023 valuations were carried out in line with the RICS Valuation - Global Standards 2020. The properties were valued on the basis of Fair Value with reference to up to date tenancy information. Values are derived from the current market rents and investment property yields for comparable real estate adjusted if necessary for any difference in the nature, location or condition of the specific asset.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Loans and other debts due to members may be further analysed as follows:
Loans and other debts due to members rank equally with debts due to ordinary creditors in the event of a winding up.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
The contributions are determined by a qualified actuary on the basis of triennial valuations using the credit method. The most recent valuation was at 31 March 2023 which has been updated to reflect conditions at the balance sheet date. The assumptions that have the most significant effect on the results of the valuation are those relating to the rate for discounting fund assets and the rate of increase in salaries and pensions. It was assumed that the asset discounting rate would be 4.75% per year, that salary increases would average 3.65% per year and that present and future pensions would increase at a rate of 2.95% per year. The contribution for the year ended 31 March 2023 was £60,000. The agreed contribution rate for future years is 19.3%. Assumptions in respect of discount rates and inflation will vary from year to year, as will the value of assets and will be dependent on circumstances at the date of valuation.
In line with the stated accounting policy and having given due consideration to the requirements of FRS 102, the Directors have determined that recognition of the net pension asset within the financial statements is not appropriate given the lack of quantifiable economic benefit the LLP expects to receive, and the undeterminable timing of any inflow should it arise.
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
13.Pension commitments (continued)
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
13.Pension commitments (continued)
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NORTH LANARKSHIRE PROPERTIES LLP
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
Grants have been received and recognised in the prior year totalling £2,092,792 in relation to assisting with the construction of a property which has been completed in the prior year. A proportion of the grant may become repayable should any part of the property be sold within 15 years of the date of completion.
The ultimate parent undertaking and controlling party is
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