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 | CHARM Finance PLC |
|---|---|
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Crowe U.K. LLP |
| Case Summary / Press Notice | N/A |
| Entity | CLS Holdings plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Conduit Holdings Limited |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | KPMG Audit Limited Bermuda |
| Case Summary / Press Notice | N/A |
| Entity | Cranswick plc |
| Balance Sheet Date | 23 September 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | CT Automative Group plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice |
Prior year restatements We sought clarification of the current and deferred tax consequences of prior-year restatements made in the year in relation to tooling sales and unrealised profits resulting from intra-group sales. The company satisfactorily responded to our enquiries and agreed to reassess its disclosure of unrecognised deferred tax assets in its next annual report. We also requested details of the accounting policy applied to tooling costs. The company satisfactorily responded to our enquiries. Discontinued operations We asked the company for more information about how the definition of a discontinued operation in IFRS 5, ‘Non-current Assets Held for Sale and Discontinued Operations’ was met in relation to a UK subsidiary that had ceased trading. The company satisfactorily responded to our enquiries. Earnings per share We requested an explanation as to why the weighted average number of ordinary shares outstanding, used in the earnings per share calculations for 2022 and 2021, was not adjusted to reflect a bonus element in relation to a post year end share issue at a discount, as required under IAS 33, ‘Earnings per Share’. The company explained that, based on the particular facts and circumstances of the transaction, the issue price was considered to be fair value, such that no adjustment was necessary. We closed our enquiry on that basis. |
| Entity | De La Rue plc |
| Balance Sheet Date | 25 March 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Direct Line Insurance 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 |
| Entity | Diversified Energy Company PLC |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Restricted cash We asked the company for further information about restricted cash balances, which are presented separately from cash and cash equivalents. The company provided the information requested and agreed to enhance the disclosure of restricted cash in future annual reports and accounts by including additional details of the nature of the balances, including why they are not considered to meet the definition of cash and cash equivalents. We also requested an explanation for the presentation of movements on restricted cash balances as financing activities in the consolidated statement of cash flows and a clarification of the nature of the cash flows. The company provided a satisfactory response explaining its rationale for the policy adopted, based on its specific arrangements. Royalties We sought clarification of the nature of the company’s royalty arrangements and the policy adopted for their recognition and measurement. The company explained the range of other parties that hold non-operating rights or other shared interests to whom various payments are made. They provided a satisfactory explanation of the accounting policy adopted and agreed to enhance their disclosures of these arrangements to provide greater clarity in future annual reports and accounts. |
| Entity | DPDGroup UK Ltd |
| Balance Sheet Date | 1 January 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 | Drax Group plc |
| Balance Sheet Date | 31 December 2022 |
| 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 |
| Entity | Equitix Capital Eurobond 6 Limited |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice |
Fair value measurement and related disclosures We asked the company to explain the basis on which it concluded that its investments constitute a single class of asset for the purposes of its IFRS 13, 'Fair Value Measurement' disclosures. It explained that all investments are classified as level 3 on the fair value hierarchy and are made in respect of long term assets that share the nature and characteristics typical of core infrastructure. The company confirmed that it considers the investments to have similar risks and to represent a single class of asset. It acknowledged that users may benefit from disclosure which disaggregates the investments by geography and agreed to provide this information in its 2023 annual report and accounts. We requested further information about the inputs used in the fair value measurement of investments, including those related to the long-term inflation rates, deposit interest rates and discount rate premiums. The company provided the requested information. It agreed to provide additional detail to clarify the periods covered by the inflation and deposit interest rates assumptions and to explain its approach to determining the discount rate premiums in its 2023 annual report and accounts. We sought information about the cash flow projection risks associated with its investments, including whether any of the assumptions made about the amount or timing of cash flows were significant unobservable inputs. The company was also asked to explain any assumptions made about its ability to extend the period over which the cash flows are projected. The company provided a satisfactory response and agreed to keep the disclosures under review to ensure that they remain appropriate for the investment portfolio’s composition in its 2023 annual report and accounts. The company was also asked to describe the valuation technique and inputs used to determine the fair value of its Eurobonds and the related fair value hierarchy level. The company provided a satisfactory explanation and agreed to clarify the disclosure in its 2023 annual report and accounts. |
| Entity | Esken Limited |
| Balance Sheet Date | 28 February 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Mazars LLP |
| Case Summary / Press Notice | N/A |
| Entity | Eurasia Mining PLC |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Grant Thornton (Ireland) |
| Case Summary / Press Notice |
We asked the company to explain the basis on which it decided not to disclose in its annual report and accounts information about two matters in litigation, which had been notified to the market. The company noted that disclosure would be seriously prejudicial to its position, for which there is a relevant statutory exemption from reporting in a company's strategic report. The company also confirmed for one matter that it considered the probability of economic outflow to be remote and that any possible outflow would not be material, such that it was not appropriate in its view to include disclosure of a contingent liability. On either of these grounds, disclosure is not required. The other matter was settled during 2023 and we did not consider it proportionate to pursue that point. |
| Entity | Ferrexpo plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | MHA MacIntyre Hudson |
| Case Summary / Press Notice |
Foreign currency risk We asked the company to explain why the significant foreign currency gains and losses recognised during the year did not appear to be consistent with the analysis of foreign currency risk exposure and sensitivities disclosed in the accounts. The company explained that this volatility related to intercompany balances which are eliminated on consolidation, and that this exposure was not reflected in the Group foreign currency risk disclosures. The company agreed to provide disclosures to explain this additional foreign currency exposure related to US dollar-denominated intercompany balances in the books of the Ukrainian subsidiaries. Functional currency We also asked the company to explain whether management considered the determination of the Ukrainian subsidiaries’ functional currency involved significant judgement under IAS 1 ‘Presentation of Financial Statements’, given that sales are generated in US dollars and staff and other operational costs are denominated in hryvnia. The company explained why they did not consider this matter to have involved significant judgement. |
| Entity | Foresight VCT Plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |