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 | Helios Towers plc |
|---|---|
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Henry Boot Plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Hochschild Mining PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | InterContinental Hotels Group PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | JD Sports Fashion Plc |
| Balance Sheet Date | 3 February 2024 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Limited |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | John Swire & Sons Limited |
| Balance Sheet Date | 31 December 2022 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Limited |
| Quarter Published | December 2024 |
| Auditor (5) | KPMG 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. Strategic report We asked the company to explain how its strategic report met the disclosure requirements in s414C of the Companies Act 2006. The company provided an explanation but also agreed to supplement future strategic reports with additional information to deliver a more comprehensive analysis of the development, performance and position of the business. Principal activities and revenue We asked the company to provide us with more detail on the nature of its principal activities and to explain the basis on which revenue is recognised for each significant revenue stream. The company provided this and agreed to include additional information about the nature and timing of revenue recognised over time in the accounting policies in future annual reports and accounts. Interests in other entities We asked for clarification of the factors considered in the control assessment for the group’s holding in Cathay Pacific, which was disclosed as a critical accounting judgement. The company outlined the key contractual terms with other parties which formed the basis for the conclusion that the group does not control Cathay Pacific. The company agreed to enhance the key judgement disclosure in future annual report and accounts to include additional detail on these terms. |
| Entity | Just Group plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | Kier Group plc (3) |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Impairment testing of intangible assets Offsetting of bank overdraft The company clarified that it considered all bank accounts within its cash pooling arrangement, where the legal right of set-off existed, to be a single unit of account. Therefore, although it could not demonstrate an intention to settle period end amounts on a net basis, it did not consider this requirement to be relevant. We were not persuaded, on the basis of the information and explanations provided, that it was appropriate in the company’s circumstances to treat these balances as a single unit of account. The company accepted that separate presentation of subsidiary company overdrafts and cash balances within the consolidated balance sheet would be more appropriate and agreed to change its accounting policy with the prior year comparative balances re-presented accordingly. As this related to a primary statement, we asked the company to disclose that the matter had come to its attention as a result of our enquiry. |
| Entity | Land Securities Group Plc |
| Balance Sheet Date | 31 March 2024 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Ernst & Young LLP |
| Case Summary / Press Notice | N/A |
| Entity | Marstons PLC |
| Balance Sheet Date | 30 September 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | KPMG LLP |
| Case Summary / Press Notice |
Fair value measurement of level 3 assets We asked the company for quantitative details of the significant unobservable inputs used to measure the fair value of assets held at level 3 in the fair value hierarchy. We also asked how they may be able to improve their disclosure of information on fair value measurements in respect of property, plant and equipment carried at fair value. The company provided the relevant information and agreed to enhance their quantitative disclosure of unobservable inputs in future annual reports and accounts. Discount rates We requested further details of the basis of calculation for discount rates used by the company in impairment testing and the reasons for differences among the rates used for testing different assets. The company provided the additional information and explained the reasons for the differences. Debt covenants We asked the company why it had not disclosed the extent of headroom on financial covenants as at 30 September 2023 in its disclosures relating to the material uncertainty in relation to going concern in those accounts. The company agreed to consider the circumstances leading to its going concern conclusion, including covenant headroom, when preparing disclosures for future annual reports and accounts. |
| Entity | Mattioli Woods plc (3) |
| Balance Sheet Date | 31 May 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Moore Kingston Smith LLP |
| Case Summary / Press Notice |
Acquisition-related cash flows We asked the company to explain the basis on which contingent remuneration paid on acquisition of subsidiaries had been presented within investing activities rather than operating activities in the cash flow statement. The company recognised that the presentation of contingent remuneration in the cashflow statement was not in accordance with the requirements of IAS 7, ‘Statement of Cash Flows’, and agreed to restate the prior year cashflow statement to reflect this presentational change in its next annual report and accounts. As this affected a primary statement, the company also agreed to disclose that this matter had come to its attention as a result of our enquiry. We also requested a reconciliation of the outflow from acquisition of subsidiaries, shown in the cash flow statement, to the amounts disclosed in the notes regarding individual acquisitions during the year. The company explained that the difference related to an amount relating to working capital adjustments that was included within accruals at the year end. Adjusted cash generated from operations In response to our questioning, the company agreed to amend some inconsistencies in the reconciliation of adjusted cash generated from operations to statutory cash generated from operations in its future reporting. Goodwill impairment review We asked the company to explain the change in approach to goodwill impairment reviews to include software and right-of-use assets in, and deduct deferred tax liabilities and lease liabilities from, cash generating units (CGUs). The company agreed to explain these matters more clearly in the 2024 financial statements, as well as clarifying that, where the lease liabilities have been incorporated in the carrying amounts of CGUs, the carrying amounts of the liabilities have also been deducted from the calculated value in use as required by IAS 36, ‘Impairment of Assets’. Revenue recognition We requested further details of the process used to allocate revenue between performance obligations both for investment and asset management and for pension consultancy and administration. Satisfactory explanations were provided. Provisions for client claims We asked the company to explain the reason for taking expected insurance recoveries into account in determining the value of provisions for client claims. The company explained that insurance recoveries were not material. |
| Entity | McBride plc |
| Balance Sheet Date | 30 June 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice |
Unlawful dividends received by the parent from a subsidiary The parent company’s accounts disclosed that, after the balance sheet date, the Board became aware of certain unlawful dividends received from the subsidiary in prior years. These unlawful dividends were regularised before the 2023 accounts were approved and no liability to repay the unlawful dividends to the subsidiary was recognised in the parent company’s accounts at 30 June 2023. We asked the company to explain why a liability to repay the unlawful dividends had not been recognised at 30 June 2023. The company summarised the legal advice it had received to support this decision. Cost of sales We enquired about a restatement of the cost of inventories recognised in cost of sales, which was not explained in the notes to the financial statements. The company provided us with adequate explanations for the restatement and agreed to ensure compliance with the requirements of IAS 8 regarding any future restatements that may occur. We asked the company to explain an apparent discrepancy between the amount of the cost of inventories recognised as an expense in two different notes. The company explained the difference between the amounts and agreed to enhance its disclosures in future annual reports and accounts |
| Entity | Mobico Group PLC |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice | N/A |
| Entity | Mondi plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | No |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | PricewaterhouseCoopers LLP |
| Case Summary / Press Notice | N/A |
| Entity | OSB Group plc |
| Balance Sheet Date | 31 December 2023 |
| Exchange of Substantive Letters (1) | Yes |
| Scope of Review (2) | Full |
| Quarter Published | December 2024 |
| Auditor (5) | Deloitte LLP |
| Case Summary / Press Notice |
Interest payable on wholesale borrowings We asked the company to provide further information about the nature of the funding which gives rise to the interest payable on wholesale borrowings of £29.9 million and to explain how this amount was presented in statement of cash flows for the year ended 31 December 2023. The company satisfactorily explained that the interest payable on wholesale borrowings includes interest payable on the margin received on derivative collateral liabilities. The cash flows in respect of these amounts were reclassified from financing activities to operating activities during the year to reflect the operational nature of the activity. This did not result in a restatement of the 2022 comparatives as these amounts were not material. |