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 | 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 |
| 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. |