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 | The Berkeley Group Holdings Plc |
|---|---|
| Balance Sheet Date | 31 October 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |
| Entity | The Biotech Growth Trust Plc |
| Balance Sheet Date | 31 March 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 | The European Smaller Companies Trust 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 | The Rank Group Plc (3) |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice |
Leases We asked the company to explain the difference between lease payments of £66.6m shown in the note of movements in lease liabilities, and £43.6m for lease principal payments shown in the cash flow statement. We also asked why the note of movements in lease liabilities showed £47.8m of additions to lease liabilities while another note showed only £19.1m of additions to right-of-use assets. The company explained the errors giving rise to these differences and agreed to restate the comparative amounts in the cash flow statement and associated notes in the 2024 annual report and accounts to:
As the latter change affected a primary statement, the company also agreed to disclose that this matter had come to its attention as a result of our enquiry. |
| Entity | Trifast plc |
| Balance Sheet Date | 31 March 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 | TR Property Investment Trust plc |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice |
Sale of investments We asked the company to explain the difference between the sale of investments figure, as disclosed in both the group and company cash flow statements, and the amount included in the ‘investments held at fair value’ note. The company explained that the difference arose due to clerical errors in extracting the figures from core systems and reconciliations to populate the annual report. The company agreed to update the disclosures in the notes to the 2024 financial statements and to include an explanatory footnote outlining the correction made. The company will also consider whether any enhancements can be made to the presentation of the ‘investments held at fair value’ note to provide clearer or more useful information to users. |
| Entity | Urban Logistics REIT plc |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | RSM UK Audit LLP |
| Case Summary / Press Notice |
We asked the company to clarify the key unobservable inputs used to value the development property component of the investment property portfolio, as this information had not been disclosed. We also noted that disclosures of the inputs used in the valuation of completed properties did not appear to be sufficiently disaggregated to provide meaningful information to readers. In this context, we asked for management’s view on how the disclosures about the valuation of investment property, which is classified as Level 3 in the fair value hierarchy, could be enhanced in order to meet the requirements of IFRS 13 ‘Fair Value Measurement’. The company provided the information requested and agreed to enhance disclosures about these assumptions in future reports. These changes include providing further disaggregation of the property portfolios by property size and location, and disclosing average values in addition to the range of assumptions. |
| Entity | Van Elle Holdings plc |
| Balance Sheet Date | 30 April 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice |
Cash flow statement We asked the company to explain an inconsistency between its cash flow statement, which disclosed a cash inflow of £1,544k from hire purchase financing, and other disclosures which indicated that the amount was a non-cash transaction. We closed our enquiries after the company explained that it had received cash in relation to a secured loan from its hire purchase financing provider and confirmed that it would classify the balance as a secured financing liability in its next accounts. The company also confirmed that it would remove the references to this being a non-cash transaction from its disclosures. Presentation of expected credit losses We questioned why the amount of expected credit losses presented in the income statement appeared to include the balance sheet movement in trade receivables that had been written off against the allowance account. We decided not to pursue the matter further after the company acknowledged that the amount had been incorrectly included in its income statement disclosure but explained that the error was not material. We also observed that the disclosures indicated that the company had incurred an expected credit loss charge of £220k in relation to its contract assets. We asked it to confirm if this was the case and, if so, why the amount had not been included in the expected credit losses presented in its income statement. We closed our enquiry after the company explained that the amount represented a reversal of revenue, rather than an impairment loss. In closing the matter, we explained that we expect the company to correctly describe the amount in future accounts. |
| Entity | Warehouse REIT plc |
| Balance Sheet Date | 31 March 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice |
We asked the company to explain the large difference between the present value of its minimum lease payments and the minimum undiscounted lease payments disclosed for head lease obligations. The company explained that this difference was due to the very long term of the headleases, and the consequential impact of discounting. In addition, the company explained that the weighted average unexpired lease term disclosed in the accounts related only to the rental income portfolio, and not the headlease obligation, which the company agreed to clarify in its future reports and accounts. |
| Entity | Watches of Switzerland Group PLC |
| Balance Sheet Date | 29 October 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 | Westcoast Group Holdings Limited (3) |
| 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. Statement of cash flows We asked the company to explain why the interest expense on invoice discounting facilities had been classified as a financing activity when other information in the accounts suggested that the debt factoring related to a non-recourse arrangement, resulting in derecognition of the associated financial assets on factoring. The company confirmed that this interest expense related to an additional invoice discounting facility, which was an arrangement with recourse. It also explained the borrowings linked to this facility had been incorrectly classified as cash and cash equivalents in the cash flow statement and agreed to restate the comparative figures included in its next annual report and accounts. As the restatement affected a primary statement, we asked the company to disclose that the matter had come to its attention as a result of our enquiry. The company also agreed to provide additional disclosure about the with-recourse invoice discounting facility, including improved labelling of the associated borrowings, in future annual reports and accounts. |
| Entity | Young & Co.'s Brewery, P.L.C. |
| Balance Sheet Date | 3 April 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | June 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice |
IFRS 13 'Fair Value Measurement' We asked the company how they may be able to improve disclosure of information on fair value measurements in respect of its property, plant and equipment carried at fair value. The company agreed to improve various aspects of their disclosures, such as disaggregating information about the significant unobservable inputs used under the EBITDA valuation approach by bands of income and providing further information about the sensitivities of valuations, the spot value approach, leasehold properties and ‘unallocated assets’. |
| Entity | abrdn European Logisitics Income plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice |
Investment property valuation We asked the company to explain the distinction between the capitalisation rate and discount rate used in the investment property valuation. The company satisfactorily explained the distinction between these two rates and agreed to provide additional clarification in its 2023 annual report and accounts. We requested additional information about the sensitivity disclosures and particularly whether these represented the effects on valuation from the combined movement in the assumptions. The company confirmed that these did represent the combined effect and agreed to disclose the independent effects of these movements in its 2023 annual report. We asked why comparative information for the key unobservable inputs to the investment property valuation and sensitivity analyses had not been provided in the accounts. The company acknowledged that comparatives should have been provided and agreed to include comparatives in its 2023 annual report and accounts. |
| Entity | abrdn UK Smaller Companies Growth Trust plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |
| Entity | Admiral Group plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |