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 Supervision Committee’s Operating Procedures, 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 | Croda International Plc |
|---|---|
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |
| Entity | Devro plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |
| Entity | Diversified Energy Company PLC |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | East Imperial PLC |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | Crowe U.K. LLP |
| Case Summary / Press Notice | N/A |
| Entity | Elementis plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
We sought further information about the company’s assumptions in testing goodwill in its Talc cash generating unit for impairment. The company responded satisfactorily and agreed to disclose in its future annual reports and accounts: the long-term growth rate for the Talc CGU; an analysis of sensitivity to changes in that rate; and sensitivity analysis reflecting the upper end of the reasonably possible range of discount rates. We also asked the company to clarify the amounts and terms of its committed borrowing arrangements. The company explained that its term loans and revolving credit facility are guaranteed by group companies, and agreed to revise its disclosure accordingly. It also agreed to enhance its disclosure of the amounts of committed facilities, drawn and undrawn. |
| Entity | Empiric Student Property plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | Endeavour Mining plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice |
TCFD Recommendations and Recommended disclosures We noted that the company’s annual report did not include a clear statement explaining whether the report included climate‐related financial disclosures consistent with the recommendations and recommended disclosures of the Taskforce for Climate-related Financial Disclosures (TCFD), as required by paragraph 8 of Listing Rule 9.8.6R. We also identified a number of areas where improvements could be made to the company’s TCFD disclosures. We closed our enquiries after the company confirmed that it will provide a clearer statement that fulfils the requirements of the listing rules in its future reports. It agreed to provide explanations about any TCFD recommendations and recommended disclosures not included in its future reports, together with relevant explanations, as required by the listing rules. It also agreed to provide information about company-specific risks relating to climate change, and to consider the findings of our recent thematic review report, which includes our expectations on the connectivity between TCFD disclosures and the financial statements. |
| Entity | England and Wales Cricket Board Limited |
| Balance Sheet Date | 31 January 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Grant income We asked the company to quantify the funds received from HMRC for the furlough of staff and to explain why the payroll costs were offset by the related income, which is not permitted by FRS 102 or the Companies Act 2006. The company confirmed that the funds received of £1.7m for the furlough of staff had been incorrectly offset against administrative expenses. However, it concluded that the effect of this error and the amount to be disclosed was not material. The company provided us with an analysis to support their view. We also requested the company clarify its accounting for other grant income, for which the company provided a satisfactory response. |
| Entity | Essentra plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Experian plc |
| Balance Sheet Date | 31 March 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice | N/A |
| Entity | FDM Group (Holdings) plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
We requested an analysis of the ‘accruals and deferred income’ balance and a description of any material items of a dissimilar nature. The company provided this information. In closing the matter, we noted that:
We asked the company to explain the rationale for classifying amounts due from subsidiaries as current assets. The company provided an adequate explanation. We also queried the basis for classifying the related cash flows as operating. The company acknowledged that it would have been more appropriate to classify amounts advanced to subsidiaries as investing activities but noted that it intended to adopt FRS 101 ‘Reduced Disclosure Framework’ and take the exemption from presenting a statement of cash flows for the parent company in its future reporting. |
| Entity | Fresnillo plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Valuation and sensitivity of the Silverstream contract We asked the company for further information about:
The company provided the requested information and satisfactory explanations as well as agreeing to include certain additional disclosures in future accounts when required to do so. Presentation of note payable We asked the company to explain its rationale for presenting a short-term interest-bearing note payable within trade and other payables on the face of the balance sheet. The company satisfactorily explained its rationale, observing that the note payable had been separately presented on the face of the balance sheet in the company’s June 2022 interim results and confirming that it would retain this presentation in future accounts. Cash flow statement working capital adjustments We asked the company to explain how the working capital adjustment for trade and other payables was determined and to provide a reconciliation for the movement disclosed. The company provided the requested reconciliation and explained that, due to a typographical error, the movement had been incorrectly described as a decrease. Treatment and refining charges We asked the company to explain its rationale for deducting treatment and refining charges from revenue from sales of concentrates. The company provided a satisfactory explanation and agreed to clarify its explanation of the basis for the deduction in future accounts. |
| Entity | Fulham Parent Limited |
| Balance Sheet Date | 29 May 2021 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2022 |
| Auditor (5) | N/A |
| Case Summary / Press Notice |
Right-of-use assets recognised in respect of business combination We queried why the company disclosed that it had recognised an impairment of right-of-use assets acquired in a business combination, in the context of IFRS 3 ‘Business Combinations’, paragraph 28B. The company acknowledged that the term ‘impairment’ was inappropriately used to describe unfavourable lease terms in relation to market conditions in specific locations. Cyber-attack provision and reimbursement We questioned the company’s accounting treatment in relation to the cyber-attack provision and reimbursement from insurers. The company confirmed the amount recognised as a reimbursement asset and the fact that its receipt was considered virtually certain. In closing the matter, we explained our expectation that the reimbursement asset should be disclosed separately as required by IAS 37 paragraph 85 (c). The company also disclosed some amounts which have, or will be, settled directly by the insurers. We highlighted the requirement set out in paragraph 56 of IAS 37, which states that if the company remains liable for costs settled by other parties, it should recognise a provision for the full amount of the liability, along with a separate reimbursement asset if its receipt is virtually certain. Given that this related to a balance sheet gross up, with no effect on net assets, we did not consider it proportionate to pursue this matter further. Changes in net debt We asked the company to clarify its disclosure of changes in net debt within the notes to the accounts, as it appeared that the cash flows were overstated by the amount of issued new debt. The company acknowledged that there was a categorisation error in the note in respect of a £10m inflow of cash from the issue of new debt. The company undertook to amend the comparatives in the note in its next annual report and accounts. |
| Entity | Glencore plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Gresham Technologies plc |
| Balance Sheet Date | 31 December 2021 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2022 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |