The members present their annual report and financial statements for the year ended 31 March 2024.
The principal activity of the limited liability partnership continued to be the provision of information technology solutions to its Member Councils.
There shall be no distribution of any profits to any member until they have been a member of the LLP for a period of at least three full financial years.
In the event that the members decide to distribute profits of the LLP, these shall be divided among the members in proportion to their respective interests.
Any losses of the LLP shall be borne by the members in proportion to their respective interests.
Members are not required to contribute any capital to the LLP.
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008).
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 limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members 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 limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and 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 Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of SEEMIS Group LLP (the 'LLP') for the year ended 31 March 2024 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the reconciliation of members' interests and notes to the financial statements, including 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).
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 Auditor responsibilities for the audit of the financial statements section of our report. We are independent of the limited liability partnership 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
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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's 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, except to the extent otherwise explicitly stated in our report, 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.
We have nothing to report in respect of the following matters where the Companies Act 2006 as applied to limited liability partnerships 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
We have not received all the information and explanations we require for our audit.
As explained more fully in the members' responsibilities statement set out on page 2, the members 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 members determine is 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 members are responsible for assessing the LLP'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 members either intend to liquidate the LLP or to cease operations, or have no realistic alternative but to do so.
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 auditor's 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.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
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.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to LLP and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
UK General Data Protection Regulations and the Data Protection Act 2018;
UK Generally Accepted Accounting Practice;
UK VAT legislation;
Companies Act 2006 as applied to Limited Liability Partnerships; and
Statement of Recommended Practice Accounting by Limited Liability Partnerships.
We gained an understanding of how the LLP is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through our review of the LLP's board of management meeting minutes.
We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
Management override of controls.
Revenue recognition.
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the LLP's procurement of legal and professional services;
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing judgements made by management in their calculation of accounting estimates for potential management bias;
Obtaining the LLP members' annual membership fees and charges schedule for the year and comparing this to the revenue recognised in the LLP's accounting records.
Selecting a sample of months and members and testing that the SMS charges incurred by the LLP for those months and members had been recharged to members and recognised as revenue in the LLP's accounting records.
Completion of appropriate checklists and use of our experience to assess the limited liability partnership’s compliance with the Companies Act 2006 as applied to limited liability partnerships;
Agreement of the financial statement disclosures to supporting documentation; and
Enquiry with management as to the limited liability partnership's compliance with UK General Data Protection Regulations and the Data Protection Act 2018.
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
Use of our 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 to limited liability partnerships. 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 auditor's 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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Further information on members' interests
The members’ remuneration is charged and is divided among the members in proportion to their respective interests.
At 31 March 2024, there were 32 members (2023: 32 members).
In the event of a winding up the amounts included in “Loans and other debts due to members” will rank equally with unsecured creditors. All assets and liabilities in the balance sheet are owned by all member Councils of SEEMIS Group LLP and in the event of the organisation winding up, will be split proportionately based on their individual members’ interest share.
The members continue to adopt a policy in relation to deferred hardware funding so that the closing balance is equal to the closing net book value of fixed assets plus funding received in relation to future hardware refresh.
SEEMIS Group LLP is a limited liability partnership incorporated in Scotland. The registered office is CMS Cameron McKenna Nabarro Olswang LLP, 1 West Regent Street, GLASGOW, G2 1AP.
The limited liability partnership's principal activities are disclosed in the Members' Report.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008).
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £ unless otherwise stated.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
FRS 102 includes a requirement for the financial statements to present a statement of cash flows. As explained in note 18, the LLP does not hold any cash or cash equivalent balances. Instead, it operates a facility with South Lanarkshire Council which facilitates all transactions on behalf of the LLP. Accordingly, as the LLP does not have any material cash flows, no statement of cash flows has been presented in these financial statements.
At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future.
The members, being all 32 Scottish local authorities, have agreed a three year financial plan through to March 2027 under which they are committed to providing ongoing funding to the limited liability partnership. Under this financial plan the members have also secured the funding of the limited liability partnership's capital development projects shown within notes 9 and 16.
With this financial plan in place, the members continue to adopt the going concern basis of accounting in preparing the financial statements.
The turnover of the LLP represents the value of services provided under the principal activities of the LLP and is stated net of VAT. Turnover arises wholly within the United Kingdom.
Membership fee income is recognised on an accruals basis. Income from the provision of services is recognised when the service has been performed.
Deferred income relating to assets is recognised on a systematic basis over the assets' expected useful life. Deferred income relating to revenue expenditure is recognised in income as the related expenditure is incurred.
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Assets in the course of construction are not depreciated while they are being constructed.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Tangible fixed asset funding
Certain hardware used by the business is funded by the members and the funding is recorded as deferred income. The funding is released to the profit and loss account over the expected useful life of the assets.
At each reporting period end date, the limited liability partnership reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the limited liability partnership estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss account.
The limited liability partnership has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the limited liability partnership's balance sheet when the limited liability partnership becomes party to the contractual provisions of the instrument.
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.
Basic financial assets, which include certain debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Financial assets classified as receivable within one year are not amortised.
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. 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 the profit and loss account.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in the profit and loss account.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the limited liability partnership transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities are classified according to the substance of the contractual arrangements entered into.
Basic financial liabilities, including certain creditors, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The limited liability partnership participates in a defined benefit scheme for the benefit of its employees. The service cost of the pension provision relating to the period, together with the cost of any benefits relating to past service, is charged to the profit and loss account. A charge equal to the increase in present value of the scheme’s liabilities (because benefits are closer on settlement) and a credit equivalent to the limited liability partnership’s long term expected return on assets (based on the market value of the scheme’s assets at the start of the period) are included in the profit and loss account under ‘FRS 102 defined benefit pension adjustments’.
The difference between the market value of the assets of the scheme and the present value of accrued pension liabilities is shown as an asset or liability on the balance sheet. Any difference between the expected return on assets and that actually achieved is recognised in the statement of comprehensive income, along with the differences which arise from experience or assumption changes.
Grant income
Grants receivable are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Grants receivable are recognised in accordance with the accruals model. Grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.
In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
As outlined at note 13, the LLP is a participating employer in the Strathclyde Pension Fund, a multi-employer defined benefit scheme, and has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including: life expectancy, salary increases, asset valuations and the discount rate on corporate bonds. The LLP's designated members and the trustees of the pension fund take the advice of actuaries to estimate these factors so as to determine the net pension obligation in the balance sheet, and management rely on these estimates in preparing these financial statements. The assumptions reflect historical experience and current trends.
There is an £7,133,000 surplus as determined by the actuarial valuation. The closing asset is an actuarial calculation of future expected liabilities set against the LLP’s share of the pension scheme assets at 31 March 2024. This is not a recoverable asset for the LLP, the LLP has no entitlement to recover this amount from the pension scheme through a refund from the pension scheme or reduction of future contributions payable by the LLP to the pension scheme. In this situation, UK accounting standards explain that the LLP should not recognise the asset in the LLP’s financial statements.
The estimated useful lives of assets are outlined in note 1.5. Useful lives have been assessed based on historical experience and the periods over which management believe future economic benefits to be derived.
The deferral of funding income requires management to exercise judgement over the period to which the income relates. Deferred income is amortised on a systematic basis over the periods which the related costs are incurred or related assets are depreciated. An analysis of deferred income is outlined at note 12.
An analysis of the limited liability partnership's turnover is as follows:
The average number of persons (excluding members) employed by the partnership during the year was:
Their aggregate remuneration comprised:
Included within the pension costs is an actuarial adjustment of £4,000 credit (2023: £631,000 debit) in relation to the current service cost of the LLP's defined benefit pension obligations. These costs together with the interest credit on the LLP's defined benefit asset in note 7 (2023: interest charge on the LLP's defined benefit liability in note 8) have been separately presented in the LLP's profit and loss account.
Included in amounts due from members above is £1,740,054 (2023: £1,847,080) owed from South Lanarkshire Council as outlined in note 18.
The limited liability partnership participates in a defined benefit pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.
The valuation used for the disclosures has been based on the most recent actuarial valuation at 31 March 2024 performed by an independent qualified actuary to take account of the requirements of FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS102") in order to assess the liabilities of the scheme at 31 March 2024. Scheme assets are stated at their market value at 31 March 2024.
The financial position of the scheme is measured in accordance with the requirements of FRS102 which is based on the market value of the scheme’s assets at the balance sheet date with the liabilities being calculated using actuarial assumptions determined by the market conditions at that date. As such, it shows the value at a single point in time of a number which can vary significantly. The position disclosed is in accordance with the requirements of FRS102 and does not impact on the scheme’s future contribution requirements, this being determined by triennial actuarial valuations which are carried out on a long term basis.
The assumed life expectations on retirement at age 65 are:
The amounts included in the balance sheet arising from the limited liability partnership's obligations in respect of defined benefit plans are as follows:
Movements in the present value of defined benefit obligations:
The defined benefit obligations arise from plans funded as follows:
The major categories of plan assets as a percentage of total plan assets are as follows:
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
At 31 March 2024 the limited liability partnership had capital commitments as follows:
The number of key management personnel during the year totalled 5 (2023: 5) and remuneration during the year totalled £484,374 (2023: £501,274). The chairman's allowance for the year totalled £13,800 (2023: £10,992).
The principal activity of the limited liability partnership is the provision of information technology solutions mainly to local authorities. The turnover in the period is 100% (2023: 100%) with members.
The limited liability partnership has continued to operate with most funds received and disbursements made being processed through South Lanarkshire Council’s bank account. The amount due from South Lanarkshire Council as at 31 March 2024 was £1,740,054 (2023: £1,847,080). During the year, interest of £196,183 (2023: £74,192) was earned on this balance by the limited liability partnership.
South Lanarkshire Council also provides various accounting and finance services for the limited liability partnership. These are documented in a service level agreement between the two parties and services charged in the year ended 31 March 2024 were £84,470 (2023: £83,940). In addition, South Lanarkshire Council also charged £116,303 (2023: £109,727) which is mainly for property rental and services costs in relation to the primary business location at Almada Street, Hamilton.
Included within prepayments and accrued income is £403,687 (2023: £414,120) of accrued income relating to information technology solutions not yet invoiced to members as well as accrued grant funding of £378,180 (2023: £155,057) due from members not yet received.
During the year grant income of £508,180 (2023: £155,057) was receivable from members, all of which was accounted for as deferred income.
During the year Renfrewshire Council as the Lead Authority for Scotland Excel, a joint committee formed by all 32 Scottish Local Authorities to act as a procurement consortia, charged the limited liability partnership £35,550 (2023: £9,088). The balance outstanding at the year end was £nil (2023: £8,588).