INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TRAFALGAR PROPERTY GROUP PLC

For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal, professional and regulatory responsibilities and reporting obligations to the members of Trafalgar Property Group plc. For the purposes of the table on pages 13 to 15 that sets out the key audit matters and how our audit addressed the key audit matters, the terms “we” and “our” refer to MHA. The Group financial statements, as defined below, consolidate the accounts of Trafalgar Property Group plc and its subsidiaries (the “Group”). The “Parent Company” is defined as Trafalgar Property Group plc, as an individual entity. The relevant legislation governing the Company is the United Kingdom Companies Act 2006 (“Companies Act 2006”).

Opinion

We have audited the financial statements of Trafalgar Property Group plc for the year ended 31 March 2025.

• The financial statements that we have audited comprise:
• the Consolidated Statement of Comprehensive Income
• the Consolidated Statement of Financial Position
• the Consolidated Statement of Changes in Equity
• the Consolidated Statement of Cash Flows
• Notes 1 to 20 to the consolidated financial statements, including material accounting policies
• the Company Balance Sheet
• the Company Statement of Changes in Equity and
• Notes 1 to 15 to the Company financial statements, including material accounting policies.

The financial reporting framework that has been applied in their preparation of the Group financial statements is applicable law and International Financial Reporting Standards as adopted in the United Kingdom (“UK adopted IFRS”). The financial reporting framework that has been applied in the preparation of the parent company financial statements 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 Group’s and of the Parent Company’s affairs as at 31 March 2025 and of the Group’s loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK adopted IFRS;
• the parent company financial statements 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 Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Group 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 as applied to listed entities, 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.

Material uncertainty related to going concern

We draw your attention to page 23 Going Concern section in the financial statements which sets out the directors’ assessment of the Group’s ability to continue as a going concern. The note explains that the Group has secured post-year-end funding, including proceeds from the sale of the Speldhurst property, which resulted in a partial extinguishment of outstanding mortgages, and a new longer-term facility to support the ongoing development of the Talbot Park project. Additional working capital funding was also secured through equity subscription and a convertible loan note entered into with an unconnected third party. The directors have also received a letter of support from a Director, C C Johnson, indicating his willingness to provide funding to the Group over the next twelve months from the date of signature of the financial statements. However, as this support is not legally binding, and given the ongoing uncertainty over the timing of future sales, access to additional funding, and the reliance on further financing from directors or third parties, the directors have concluded that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our audit opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of accounting included:

• The consideration of inherent risks to the Group’s and Parent company’s current operations and established business model.
•  The evaluation of how those risks might impact on the Group’s and Parent company’s available financial resources.
• •Review of the mathematical accuracy of the cash flow forecast prepared by management and corroboration of key data inputs to supporting documentation for consistency of assumptions used with our knowledge obtained during the audit.
• Challenging management for reasonableness of assumptions in respect of the timing and quantum of cash receipts and payments included in the cash flow forecast.
•  Holding discussions with management regarding future financing plans, and assessing the probability and likelihood of their availability and their impact on the cash flow forecast.
•  Evaluating the accuracy of historical forecasts against actual results to ascertain the accuracy of management’s forecasts.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Scope  

Overview of our audit approach

Key audit matter description

The Group and the Parent Company enters into a significant number of transactions with related parties, both intra-group transactions and with individuals related to the Group.

There is a risk that transactions (particularly any transactions which are not at arm’s length) and balances with related parties are undisclosed or misclassified.

Undisclosed Related Party Transactions

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those matters which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material Uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

How the scope of our audit responded to the key audit matter

Our audit work in this area included the following procedures:

Identifying the risk of material misstatement due to incomplete or inaccurate disclosure and classification of related party transactions and relationships, particularly where such transactions are not conducted on an arm’s length basis.

Obtaining management’s record of related parties – who they are, the nature of these relationships, whether any related party transactions have been entered into in the year and the nature of those transactions.

We performed independent searches of the Board of Directors’ other appointments and shareholdings and to identify any counterparties on the list which were not included in the related party disclosures.

We reviewed the movement on these balances during the year and examined underlying transactions by interrogating the purchase ledger, sales ledger, and general ledger to identify entries involving related parties. Where applicable, we utilised data analytics tools to assist in identifying potential related party transactions. Selected transactions and balance movements were then vouched to supporting evidence to assess completeness and accuracy of disclosure.

We reviewed the minutes of meetings of the board of directors to identify any undisclosed related party relationships.

We discussed with management the nature and purpose of these items and considered whether disclosure sufficiently addressed these matters.

In addition, we obtained written confirmation of the balances from all disclosed parties and confirmed key terms to agreements.

Key audit matters

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement.

The Group consists of seven reporting components. Based on our risk assessment and understanding of the Group, we identified two components — Trafalgar Property Group plc and Trafalgar New Homes Limited — as significant due to their financial significance and their susceptibility to risks of material misstatement. These components were subject to full scope audits performed by the group engagement team to obtain sufficient appropriate audit evidence in relation to the consolidated financial statements.

In determining the audit scope for other components, we considered both quantitative and qualitative factors, including the nature of activities, inherent risks, and our assessment of the risk of material misstatement at the group level.

As a result, audit of specified classes of transactions, account balances, and disclosures (COTABDs) were performed for four components: Trafalgar Retirement+ Limited, Selmat Limited, Combe Bank Homes (Oakhurst) Ltd and Combe Homes (Borough Green) Ltd. Specified audit procedures were performed on the remaining component: Life Hydroponics Limited.

All audit procedures were performed by the group engagement team. The group audit strategy, scope and procedures were designed to ensure that audit evidence was obtained in relation to all components contributing to the Group's financial position and performance. Our approach ensured appropriate audit coverage over components representing the Group’s principal business activities and areas of assessed risk.  

• Undisclosed related party transactions

Recurring

For page 2, click HERE

For page 3, click HERE