6 Independent Auditor's Report
Coverage OVERVIEW
100% (2023: 100%) of Group surplus before tax 100% (2023: 100%) of Group revenue 100% (2023: 100%) of Group total assets Carrying value of properties held for sale and work in progress Risk of impairment on specific developments where net realisable value is lower than stock cost Group financial statements as a whole based on Total Assets £27,500k based on 1.5% of group total assets Group specific materiality based on Revenue. £11,000k based on 1.75% of group total revenue
Key audit matters
2024
2023
2024
2023
Materiality
An overview of the scope of our audit 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 Board that may have represented a risk of material misstatement. The Group manages its operations from one location in the UK and has common financial systems, processes and controls. We performed an audit of the complete financial information of all three components within the Group, including the parent association.
As a consequence of the audit scope determined, we achieved coverage of 100% (2023: 100%) of revenue, 100% (2023: 100%) of surplus before tax and 100% (2023: 100%) of total assets. 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, including those 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.
KEY AUDIT MATTERS
As described in Note 3 (accounting policies) and Note 14 (stock), the Group carries properties for resale at the lower of cost and net realisable value. As at 31 March 2024, the Group held and properties for resale of £171m (2023: £193m). Within the properties held for resale, there were specific developments which had net realisable value below the stock cost. Risk of impairment on specific developments where net realisable value is lower than stock cost Note 3 (accounting policies) Note 14 (stock)
How the scope of our audit addressed the key audit matter
Our audit response involved the following: • We reviewed management’s forecast sales prices and costs to complete and sell by comparing to updated valuations; • Where land has recently been acquired for a development, we have agreed to land valuations to support the underlying valuation within the impairment assessment; • We reviewed the latest valuations and underlying assumptions for the relevant schemes at the year end to confirm whether net realisable value was greater than cost; • We reviewed the potential need for impairment, including review of management’s forecasts taking into account supply chain difficulties and cost of living increases, through testing of a sample of properties back to management’s forecasts and underlying assumptions. • We further scrutinised the assumptions used against 3rd party data such as property price trends and forecasts and carried out sensitivity analysis on these assumptions and on projects costs to complete to assess potential indicators of impairment. Key observations: We noted no exceptions through performing these procedures and no further impairment was required beyond the current amount in the financial statements.
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