CRR Case Summaries and Entity-specific Press Notices
The FRC publishes, on a quarterly basis, summaries of its findings from recently closed reviews that resulted in a substantive question to a company (‘Case Summaries’). In addition, it publishes the names of companies whose reviews were closed in the previous quarter without the need for a substantive question. No Case Summary is prepared for such reviews.
Case Summaries, which are available for cases closed in the quarter ending March 2021 onwards, are included in the table below. As, currently, the FRC is subject to existing legal restrictions on disclosing confidential information received from a company, the Case Summaries can only be disclosed with the company's consent. Where consent has been withheld by the company, that fact is disclosed in the table.
From March 2018 until March 2021, the FRC published the names of companies whose reviews were closed in the previous quarter but did not prepare Case Summaries. However, on an exceptional basis, specific cases may be publicised through entity-specific Press Notices, which can also be found in the table below.
The FRC’s reviews are based solely on the company’s annual report and accounts (or interim reports) and do not benefit from detailed knowledge of the company’s business or an understanding of the underlying transactions entered into. They are, however, conducted by staff of the FRC who have an understanding of the relevant legal and accounting framework. The FRC’s correspondence with the company provides no assurance that the annual report and accounts (or interim reports) are correct in all material respects; the FRC’s role is not to verify the information provided but to consider compliance with reporting requirements. The FRC’s correspondence is written on the basis that the FRC (which includes the FRC’s officers, employees and agents) accepts no liability for reliance on its letters or Case Summaries by the company or any third party, including but not limited to investors and shareholders.
Key
- Only a certain number of CRR’s reviews result in substantive questioning of the Board. Matters raised may cover questions of recognition, measurement and/or disclosure.
- CRR’s routine reviews of companies’ annual reports and accounts generally cover all parts over which the FRC has statutory powers (that is, strategic reports, directors’ reports and financial statements). Similarly, CRR’s routine reviews of companies’ interim reports will generally cover all information in that document. Limited scope reviews arise for a number of reasons, including those conducted when a company’s annual report and accounts or interim report are selected for thematic review or reviews that have been prompted by a complaint. In accordance with the FRC's Operating Procedures, for Corporate Reporting Review, CRR does not identify those companies whose reviews were prompted by a complaint.
- The FRC may ask a company to refer to its exchanges with CRR when the company makes a change to a significant aspect of its annual report and accounts or interim report in response to a review.
- Case closed after 1 January 2021 but performed under operating procedures that did not allow for the publication of Case Summaries.
- From the quarter ended June 2023, the FRC started identifying the auditor of the annual report and accounts, or the audit firm that issued a review report on the interim report, that was the subject of the CRR review. This information was also back-dated for closed cases publicised from the quarter ended September 2022. Cases marked N/A relate to those published prior to September 2022 or interim reviews that did not have a review opinion.’
Case Summaries
CRR Case Summaries and Entity-specific Press Notices (Excel version)
| Entity | Naked Wines plc |
|---|---|
| Balance Sheet Date | 3 April 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
Allocation of goodwill to operating segments We asked for information about the amounts disclosed in respect of the US segment and cash generating unit. The company provided this information and agreed to clarify in its future annual reports the reason for the difference between non-current assets allocated to the operating segments for the purposes of impairment analysis and those disclosed in the segmental analysis note. Impairment review of the parent company’s investment in intercompany loans We sought clarification of the terms of intercompany loans, and of the accounting policy for impairment applied to them, which did not appear clearly to comply with the requirements of IFRS 9, ‘Financial Instruments’. The company provided a satisfactory response, agreeing to revise its accounting policy disclosure. |
| Entity | Ninety One plc |
| Balance Sheet Date | 30 September 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | OVO Group Ltd |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
This company was selected as part of our thematic review of the UK's largest private companies and, as such, only disclosures included in the scope of the thematic were reviewed. Climate-related disclosures in the strategic report The company’s strategic report appeared to give more prominence to less material revenue streams from energy efficient services, with relatively little discussion on the core revenue producing activities that generated the majority of the company’s scope 3 emissions. The company accepted that its strategic report could have provided better clarity and context for its decarbonisation initiatives and its progress towards achieving net zero targets. We closed our enquiry after the company agreed to enhance its disclosures in its future annual report and accounts when it applies the new Companies Act climate-related financial disclosure requirements. |
| Entity | Pacific Horizon Investment Trust PLC |
| Balance Sheet Date | 31 July 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Pan African Resources PLC |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Distributable profits We observed that the company had made a number of dividend payments when the amount of the company’s net assets was less than the aggregate of its called-up share capital and undistributable reserves, in contravention of the net assets test set out in section 831 of the Companies Act 2006 (the Act). The company explained the steps that it intends to take to rectify its non-compliance with the requirements of the Act. |
| Entity | PricewaterhouseCoopers LLP |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Crowe U.K. LLP |
| Case Summary / Press Notice |
Retirement benefit asset We sought an explanation for the basis on which the recognised retirement benefit asset was considered recoverable. The LLP provided a satisfactory response and agreed to disclose this basis in its next annual report and accounts. |
| Entity | ProCook Group plc |
| Balance Sheet Date | 2 April 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Mazars LLP |
| Case Summary / Press Notice |
Lawfulness of dividends paid during the year to 3 April 2022 We noted that a dividend had been proposed during the company’s first accounting reference period. We asked the company whether its auditor had made a report stating whether, in their opinion, the initial accounts had been properly prepared, and whether a copy of the auditor’s report had been delivered to the registrar. The company confirmed that a copy of the unqualified auditor’s report had been delivered to the registrar. Deferred tax asset We requested details of the evidence supporting the recognition of a deferred tax asset relating to carried forward losses. The company provided this information and agreed to provide more clarity about the evidence supporting such deferred tax assets in its future annual reports and accounts. Impairment testing of non-financial assets We asked the company whether there is any interdependence between the cash inflows generated by the ecommerce platforms and those generated by the individual stores, as well as details of any allocation of ecommerce revenue, costs, or assets to the stores for the purposes of impairment testing. We were satisfied with the company’s response and encouraged the company to provide further details of the treatment of ecommerce platforms and related cash flows in future annual reports and accounts. |
| Entity | RSL Finance (No.1) Plc |
| Balance Sheet Date | 31 May 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Bright Graham Murray |
| Case Summary / Press Notice | N/A |
| Entity | Ruffer Investment Company Limited |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Sky UK Limited |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | June 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
This company was selected as part of our thematic review of the UK's largest private companies and, as such, only disclosures included in the scope of the thematic were reviewed. Investment in subsidiaries We asked the company to explain the nature and purpose of a group recapitalisation transaction that was completed in the year. The company provided this information and agreed to enhance its disclosures in its next annual report and accounts. We also queried the events and circumstances that gave rise to a significant impairment to the company’s investment in subsidiaries. The company provided an explanation and agreed to disclose this in its next annual report and accounts. We closed our enquiry on this basis but, given the quantum of the impairment, we encouraged the company to provide more granular information about the events and circumstances leading to the recognition of the impairment loss both in the strategic report and in the financial statements should similar circumstances arise in the future. |
| Entity | Sosandar Plc (3) |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Saffery Champness LLP |
| Case Summary / Press Notice |
Impairment of loan to subsidiary We asked the company to explain the circumstances relevant to a loan to its subsidiary. In the comparative period it had been disclosed as having been waived but, in the year to 31 March 2023, it was shown as outstanding but fully impaired. The company explained that the change was required as the waiver had not been formalised but the loan was considered to be fully impaired because it was expected that it would be formally waived in the future. We were not persuaded by the company’s rationale that an intended waiver would result in an impairment. However, we did not consider it proportionate to pursue the matter further. The company agreed to enhance its disclosure of credit risk associated with the loan in its forthcoming financial statements. Company’s cash flow statement In response to our query about the presentation of cash flows relating to the loan to the subsidiary, the company explained that the increase in the gross amount of the loan was omitted in error, and agreed to restate the company’s comparative statement of cash flows in the annual report for 31 March 2024. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention because of our enquiry |
| Entity | St James's Place plc (3) |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Cash flows on sale of business loans to partners We requested an explanation of the basis for classifying cash flows on sale of business loans to partners as investing given that the company classifies other cash flows arising from these loans as operating activities. The company acknowledged that it was more appropriate to classify the cash flows as operating and undertook to restate the consolidated cash flow statement accordingly. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as a result of our enquiry. |
| Entity | Supermarket Income REIT plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Target Healthcare REIT Plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Tate & Lyle PLC |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |