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 | Macfarlane 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) | Deloitte LLP |
| Case Summary / Press Notice |
We noted that the company’s annual report did not include a clear statement setting out 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 the Listing Rules. We also noted that the report did not include all the disclosures required in circumstances where a listed company’s report is not consistent with all of the TCFD recommendations and recommended disclosures. We closed our enquiries after the company agreed to provide a clearer TCFD compliance statement in its future reports, and to enhance its disclosures about any TCFD recommendations and recommended disclosures not included in such reports. |
| Entity | Mast Energy Developments PLC |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Crowe U.K. LLP |
| Case Summary / Press Notice |
This company was selected as part of our thematic review of TCFD disclosures of metrics and targets and, as such, only disclosures relevant to this area were reviewed. Statement of consistency with the TCFD Recommendations and Recommended Disclosures The company’s annual report did not include an explanation of the extent of the report’s consistency with the TCFD recommendations and recommended disclosures. We asked the company to confirm that such a statement would be included in future annual reports. The company agreed to provide a clear statement of the extent of consistency with the TCFD recommendations and recommended disclosures in its next annual report. This would include, if necessary, the identification of any information not included, an explanation of why it was not included, any steps taken or plans made in order to make those disclosures in the future, and the timeframe within which it expects to be able to do so. |
| Entity | Metro Bank PLC |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Mott MacDonald Group Limited |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | BDO LLP |
| Case Summary / Press Notice | N/A |
| Entity | NatWest 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) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Northern Electric plc |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
This company was selected as part of our thematic review of TCFD disclosures of metrics and targets and, as such, only disclosures relevant to these areas were reviewed. Statement of consistency with the TCFD Recommendations and Recommended Disclosures We were unable to find two documents referred to in the company’s TCFD disclosures on the Group website, or an explanation, as required by the Listing Rules, as to why disclosures had been provided outside the annual report. Based on the available information, it was unclear which disclosures were considered sufficient to comply with the four TCFD recommendations and 11 recommended disclosures. The company acknowledged that one document had not been uploaded to the specified website, and that another was not in an easily navigable location. The company agreed to provide a clear statement of consistency with the TCFD recommendations and recommended disclosures, including precise references to the relevant disclosures, in future annual reports and accounts; and to disclose the reasons for not including various disclosures in the annual report, where necessary. |
| Entity | Oxford Nanopore Technologies 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 |
| Entity | PayPoint Plc |
| Balance Sheet Date | 31 March 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 | Personal Assets Trust plc |
| Balance Sheet Date | 30 April 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 | Phoenix Group Holdings plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Pinewood Technologies Group PLC (formerly Pendragon 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 |
Parent company’s investment in subsidiaries We asked the company to clarify its approach to assessing the recoverable amount of its directly-held subsidiaries, with particular reference to amounts excluded from cash flow forecasting for cash generating units (CGUs) and adjustments overlaid on value-in-use estimates, and an apparent inconsistency relating to the extent of estimation uncertainty involved. Having received a satisfactory response to our enquiries, we encouraged the company to enhance its explanation of the methodology applied, where that differs from the assessment of CGUs for the consolidated accounts. The company also agreed to ensure that the key estimates disclosure relating to assets and liabilities in the parent company’s balance sheet in the 2023 annual report and accounts is reflective of any significant risk at 31 December 2023. Environmental report We invited the company to comment on our observations on aspects of its compliance with the Taskforce for Climate-related Financial Disclosures (TCFD) recommendations, as required by the Listing Rules, principally in respect of climate-related effects on strategy and relevant metrics and targets. The company agreed to enhance its TCFD disclosures by including in its 2023 annual report and accounts: an analysis of the key risks over defined short-, medium- and long-term horizons; risks, impacts and mitigations that are specific to its circumstances; further detail linking metrics to material risks and opportunities; clarification of the nature of metrics used to form views on likely trends in demand; and further details of carbon reduction targets, with the related timeline |
| Entity | Poundland Limited |
| Balance Sheet Date | 25 September 2022 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Mazars LLP |
| Case Summary / Press Notice | N/A |
| Entity | PPHE Hotel Group Limited |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Kost Forer Gabbay & Kasierer, member of Ernst & Young Global |
| Case Summary / Press Notice |
Financial liability in respect of income units sold to investors We sought to understand how changes in estimated future cash flows associated with the financial liability in respect of income units sold to investors were reflected in its measurement. The Company provided a satisfactory response, agreed to enhance its accounting policy, and committed to disclose the significant judgements taken in accounting for this transaction. Significant estimates We asked the Company to clarify whether deferred tax assets and fair value measurement of financial instruments were key sources of estimation uncertainty as defined by IAS 1, ‘Presentation of Financial Statements’. The Company explained these areas were not key sources of estimation uncertainty as defined by IAS 1 and agreed to revise their disclosure in this area. Restricted deposits and cash We questioned why assets classified as ‘Restricted deposits and cash’ were not included within cash and cash equivalents in the consolidated statement of financial position. The Company provided a satisfactory response. |
| Entity | Prudential plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | March 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | RM plc |
| Balance Sheet Date | 30 November 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | March 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
Financial covenants in debt facilities We asked the company to enhance its disclosure of loan covenants, to include ratio calculations and headroom. The company agreed to do so in its 2023 annual report and accounts, and to consider in future periods the continuing relevance of this additional information. Contract balances We sought an explanation for apparent inconsistency in, and omissions from, the company’s disclosure of contract balances. We received a satisfactory response, in which the company agreed to enhance its disclosures to comply with the requirements of IFRS 15, ‘Revenue from Contracts with Customers’ and to present separately amounts receivable from customers in respect of sales taxes. Impairment testing of goodwill We asked for information about the key assumptions used in estimating the recoverable amount of the RM Resources group of cash generating units and sensitivity to changes in those assumptions. The company explained its key assumptions and sensitivity, and agreed to provide relevant disclosures, in its 2023 comparative information and for future periods, where a reasonably possible change in one of the key assumptions could give rise to an impairment. Local Government Pension Scheme obligations We questioned the accounting policy applied by the company, which confirmed that it calculated the liability for benefits using an actuarial method in accordance with IAS 19, ‘Employee Benefits’. The company agreed to update its accounting policy disclosure and present the liability, which it considered not material at 30 November 2022, as a defined benefit obligation in future accounts. Assets subject to dilapidation obligations We sought clarification of the accounting entries made on recognising an increase in the provision for property dilapidations. The company explained that the relevant amount had been debited in error to profit or loss, rather than to the cost of the assets. It considered the effect to be immaterial to users of the financial statements owing to the short period over which the additional cost would have been depreciated. On that basis, we concluded it would not be proportionate to pursue this matter further. |