Company Names Published in December 2021

On 18 March, the Government published a consultation Restoring trust in audit and corporate governance, which contains a number of proposals for enhancing the regulation of corporate reporting. One proposal is to give the regulator a statutory power to publish a summary of its findings of its individual reviews of company reports and accounts.  
 
As an interim step towards greater transparency of its corporate reporting review function, the FRC is publishing summaries of its findings of recently closed substantive reviews.  As, currently, we are subject to existing legal restrictions on disclosing confidential information received from companies, the summaries can only be disclosed with the consent of the relevant companies. The following key applies to the information in the table below.  

Key 
 

  1. Only a certain number of CRR’s reviews of company reports and accounts result in substantive questioning of the Board. Matters raised may cover questions of recognition, measurement and/or disclosure.

  2. CRR’s routine reviews generally cover all parts of companies’ reports and accounts over which the FRC has statutory powers (that is, strategic reports, directors’ reports and accounts). Limited scope reviews arise for a number of reasons, including those conducted when company reports and accounts are selected for thematic review, and may include reviews that have been prompted by a complaint. In accordance with the Conduct Committee’s operating procedures, CRR does not identify those companies whose reviews were prompted by a complaint.

  3. 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 report and accounts in response to a review.

 
In the table, we list the names of those companies with whom we have recently closed substantive enquiries into their reports and accounts. We indicate whether or not they have consented to publication; where they have, the case summary is provided in an expandable section.
 
We also list the names of those companies whose reports and accounts we have recently reviewed but where we did not raise a substantive enquiry and where, therefore, there are no matters to summarise and consent was not sought. 

Entity
Balance Sheet date
Exchange of Substantive Correspondence (1)
Scope of Review (2)
Consent to Publish Summary
A.G. Barr P.L.C.
31 January 2021
No
Limited
N/A
AB Dynamics plc (3)
31 August 2020
Yes
Full
Yes

Inventory write-down

We requested further information about the write-down of inventories in the year including the specific circumstances giving rise to this adjustment. To the extent the write-down related to inventory brought forward from the prior year, we asked for the rationale for treating the adjustment as a change in accounting estimate rather than a prior period error in accordance with IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’. We were satisfied by the company’s response.

Acquisition of DRI

In relation to the acquisition of Dynamic Research Incorporated (“DRI”) in 2019, we sought an explanation for the adjustment to the provisional fair value of goodwill following finalisation of the deferred tax position. We were satisfied with the company’s explanation and its undertaking to disclose, in the 2021 accounts, why no deferred tax liability arose on the assets acquired.

Impairment testing of goodwill

We asked the company to explain how the pre-tax discount of 6%, used to determine the value in use of the principal cash generating units, was calculated, including how it was derived from the company’s post-tax weighted average cost of capital, which was also 6%. The company provided the information requested, indicating in its response that there had been no adjustment to the post-tax weighted average cost of capital to reflect a pre-tax rate. In this instance, we considered that this issue was unlikely to have a significant impact on the company’s accounts. In closing the matter, we requested that the company apply paragraph A20 of IAS 36 ‘Impairment of Assets’ in the future, which states that when the basis used to estimate the discount rate is post-tax, that basis is adjusted to reflect a pre-tax rate.

Policy for leases

We asked the company to describe its accounting policy for leases which it provided together with an undertaking to disclose the policy in its next accounts.

Short term deposits

We queried whether the maturity threshold of short-term deposits included in cash and cash equivalents related to three months or less remaining from the date of acquisition or the reporting date and, where relevant, requested details of those deposits with a maturity greater than three months from the date of acquisition. The company clarified that short term deposits included an amount of £5m with a maturity date of more than three months from the date of acquisition. As, on reflection, the company did not consider the £5m deposit to meet the definition of cash equivalents in paragraph 7 of IAS 7 ‘Statement of Cash Flows’, it undertook to reclassify retrospectively those deposits from cash and cash equivalents to short term investments in its 2021 accounts.

Other finance expense

We asked for an explanation of other finance expense of £0.6m included in the consolidated statement of comprehensive income. The company provided the information requested and undertook to make clear the nature of this expense in the comparative information to the 2021 accounts.

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Alliance Pharma plc
31 December 2020
No
Limited
N/A
Allianz Technology Trust Plc
31 December 2020
No
Full
N/A
Anglo-Eastern Plantations Plc
30 June 2020
No
Limited
N/A
Ascential plc
31 December 2020
No
Limited
N/A
Avon Protection plc
30 September 2020
Yes
Full
Yes

Explanations for using alternative performance measures ‘APMs’

We noted an apparent inconsistency between references to non-adjusted measures in the segment reporting accounting policy and adjusted profit measures used for internal reporting. We asked for clarification of the metrics used internally by the Directors and Group Executive team to measure and manage the business.

The company acknowledged the apparent inconsistency and clarified that adjusted measures are used to manage and assess the performance of operating segments. The company agreed to enhance both the segment reporting accounting policy and operating segments note in future annual reports and accounts.

APM Reconciliations

We commented on the lack of reconciliations for organic cash conversion and return on capital employed (‘ROCE’) to amounts presented in the financial statements. We also highlighted that explanations had not been provided for the adjustments to profit detailed in the financial review. We asked how the directors had satisfied themselves that they had complied with the guidance in paragraphs 26 and 28 of the ESMA Guidelines1.

The company agreed to include reconciliations for organic cash conversion and ROCE to the financial statements and explanations for items excluded from adjusted operating profit in future annual reports and accounts. The company undertook that additional disclosures in respect of adjustments to reported measures would similarly be provided.

The company’s response detailed misstatements in the reported FY20 ROCE metric. The directors did not consider the misstatements to be material. The company committed to disclosing the corrected FY20 ROCE in future annual reports and accounts.

Classification of revolving credit facility as a current liability

We asked for more information about the classification of an amount of £31.0m presented as a current liability which appeared to relate to the company’s revolving credit facility. The company confirmed that the balance had been correctly classified as current since, at the balance sheet date, it expected to repay the £31.0m drawing on the revolving credit facility in less than twelve months.

1 https://www.esma.europa.eu/sites/default/files/library/2015/10/2015-esma-1415en.pdf

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Bakkavor Group Plc
31 December 2020
No
Limited
N/A
Balfour Beatty plc
31 December 2020
No
Limited
N/A
Barclays PLC
31 December 2020
No
Full
N/A
Big Yellow Group PLC
31 March 2021
No
Limited
N/A
BP p.l.c.
31 December 2020
No
Limited
N/A
Brighton Pier Group PLC
28 June 2020
Yes
Full
Yes

Going concern

The company disclosed that its going concern assessment required the Directors to make a number of estimates and assumptions (for example, about the impact and duration of the Covid-19 pandemic and the company’s ability to renegotiate debt covenants where necessary). We asked whether the going concern conclusion required significant judgement, which should be disclosed in accordance with paragraph 122 of IAS 1, ‘Presentation of Financial Statements’.

We closed the matter after the company satisfactorily explained why it believed the assessment did not require significant judgement.

Terminal growth rate used in impairment reviews

The company had applied a higher terminal growth rate in its 2020 impairment reviews than in the previous year. We asked why it was appropriate to use the higher rate, given the operational challenges faced by the company as a result of the pandemic.

We closed the matter after the company satisfactorily explained the external evidence that it had used to determine the 2020 rate. The company also satisfactorily explained that, based on the same evidence, a similar growth rate should have been used in 2019; however, any resulting revisions to the previous impairment reviews would not have resulted in an impairment loss in that year.

Sensitivity of impairment reviews

We asked the company to clarify the sensitivity of its impairment calculations to changes in assumptions. In particular, we asked why certain cash generating units (‘CGUs’) were not affected by large decreases in the long-term growth rate. In addition, we noted that the company’s disclosures stated that certain CGUs were sensitive to small to moderate changes in the discount rate or the long-term growth rate. We asked for the basis on which the company was satisfied that additional impairment losses should not have been recognised for those CGUs.

We closed the matter after the company provided us with satisfactory explanations, as well as an undertaking to reconsider its disclosures when it prepares its 2021 report and accounts. In closing the matter, we explained our expectation that the company should quantify the small to moderate changes referred to in its disclosures.

Forecast periods used in impairment reviews

We asked the company to explain why impairment reviews for certain CGUs included cash flow forecasts for periods longer than the CGU’s property leases.

We were satisfied by the company’s explanation of the basis on which it complied with IAS 36, ‘Impairment of Assets’, and its undertaking to improve its future disclosures. We were also satisfied with the company’s explanation that the matter did not require significant judgement, as described in paragraph 122 of IAS 1.

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British American Tobacco p.l.c.
30 June 2020
No
Limited
N/A
C&C Group Plc
28 February 2021
No
Limited
N/A
Calisen Group (Holdings) Limited
31 December 2020
No
Limited
N/A
Camellia Plc
31 December 2020
No
Limited
N/A
Capita plc
31 December 2020
Yes
Full
Yes

Parent company balance sheet- investments in subsidiaries and amounts owed by subsidiary undertakings

We asked the company to clarify whether the recoverable amount of the company’s investments in subsidiaries had been calculated as at 31 December 2020, and, if so, explain the analysis undertaken. The company confirmed that an impairment review had been performed and provided a summary of its analysis. The company undertook to enhance the disclosures in relation to any impairment reviews and to include in the strategic report an explanation of why the directors consider the market value of the company is significantly less than the net assets of the parent company, where this continues to be the case.

The company satisfactorily explained its policy for the assessment of credit risk in relation to amounts owed by subsidiary undertakings.

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Centamin plc
31 December 2020
No
Limited
N/A
Chesnara plc
31 December 2020
Yes
Full
Yes

Fair value measurement of mortgage-backed assets

We asked the company for quantitative details of the significant unobservable inputs used to measure the fair value of mortgage-backed assets held at level 3 in the fair value hierarchy. We also asked for quantitative information regarding the effect of reasonably possible changes in unobservable inputs on level 3 financial assets.

The company provided the information requested and agreed to enhance its disclosures in this respect in future annual reports and accounts.

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Coats Group plc
31 December 2020
No
Limited
N/A
ConvaTec Group Plc
31 December 2020
No
Limited
N/A
Costain Group PLC
31 December 2020
No
Limited
N/A
Croda International Plc
31 December 2020
No
Limited
N/A
Croda International Plc
31 December 2020
No
Limited
N/A
Currys plc
02 May 2021
No
Limited
N/A
DCC plc
31 March 2021
No
Limited
N/A
Devro plc
31 December 2020
No
Limited
N/A
Dignity Plc
31 December 2020
No
Limited
N/A
Direct Line Insurance Group Plc
31 December 2020
No
Full
N/A
Diversified Energy Company PLC (Previously Diversified Gas & Oil PLC)
31 December 2020
No
Limited
N/A
Domino’s Pizza Group plc (3)
27 December 2020
Yes
Full
Yes

Classification of cash flows in relation to sub-lease receipts

We asked the company to reconsider the classification of cash receipts in relation to sub-leases, which had been classified as inflows from financing activities in the group cash flow statement. They did not appear to meet the definition of financing activities in paragraph 6 of IAS 7, ‘Statement of Cash Flows’, which are those that ‘result in changes in the size and composition of the contributed equity and borrowings of the entity’.

The company agreed to classify sub-lease receipts as investing activities in the group cash flow statement in its accounts for the period ended 26 December 2021, and to restate comparative period information as appropriate. The company agreed to disclose the fact that the matter had come to its attention as a result of our enquiry.

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DS Smith Plc
30 April 2021
No
Limited
N/A
Ernst & Young LLP
03 July 2020
No
Limited
N/A
EVRAZ plc
31 December 2020
No
Limited
N/A
Experian Plc
31 March 2020
No
Limited
N/A
F&C Investment Trust PLC
31 December 2020
No
Full
N/A
Forterra plc
31 December 2020
No
Limited
N/A
Gamma Communications plc
31 December 2020
No
Limited
N/A
GlobalData Plc
31 December 2020
No
Limited
N/A
Greencoat UK Wind PLC +
31 December 2020
Yes
Full
Yes

Strategic report

We asked the company to consider how it could improve the disclosures in its strategic report relating to the significance of subsidies to the current and future development, performance and position of the company’s business. The company agreed to provide additional quantitative disclosures to help users understand the remaining periods of subsidy, including a graphical overview of different revenue components of the portfolio, showing how fixed revenues and merchant revenues are expected to change over the life of the portfolio.

Variable consideration payable for acquisitions

We sought additional information about variable consideration contingent on the performance of acquired wind farms. We observed that we expect future disclosures to include the relevant accounting policy and any related significant judgements, should the effects of potential purchase price adjustments or other commitments under a contract become material in future. We also noted that users would benefit from an explanation of the company’s potential exposure to construction risk on specific projects.

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Greggs plc
02 January 2021
No
Full
N/A
Gulf Marine Services PLC
31 December 2020
No
Limited
N/A
Hammerson plc
31 December 2020
No
Full
N/A
Harland & Wolff Group Holdings plc (Previously InfraStrata plc)
31 July 2020
Yes
Limited
Yes

Deferred salary

We asked the company to explain the accounting treatment applied, in the 2018, 2019 and 2020 accounts, to the deferred salary paid to executive directors during the year ended 31 July 2020. We also asked how the directors had concluded that the company had complied with the relevant disclosure requirements, in respect of the deferred salary, in its 2018 and 2019 annual reports and accounts.

The company acknowledged that, in hindsight, it would have been appropriate to disclose the deferred salary as a contingent liability in its 2018 and 2019 annual reports and accounts. We note that the company gave the relevant disclosures in its 2020 annual report.

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Hikma Pharmaceuticals PLC
31 December 2020
No
Full
N/A
Hill & Smith Holdings PLC
31 December 2020
No
Limited
N/A
Hostelworld Group plc
31 December 2020
No
Limited
N/A
Howden Joinery Group Plc
31 December 2020
No
Limited
N/A
Hunting PLC
31 December 2020
No
Limited
N/A
Indivior PLC
31 December 2020
No
Limited
N/A
Informa PLC
31 December 2020
No
Limited
N/A
ITV plc
31 December 2020
No
Limited
N/A
John Lewis Partnership plc
30 January 2021
No
Limited
N/A
John Wood Group PLC
31 December 2020
No
Limited
N/A
Johnson Service Group PLC
31 December 2020
No
Limited
N/A
Kaz Minerals Limited
31 December 2020
No
Limited
N/A
Kier Group plc (3)
30 June 2020
Yes
Full
Yes

Cash flow statement

We questioned why loan repayments from joint ventures were classified as financing, rather than investing, activities in the consolidated cash flow statement. The company acknowledged that this was incorrect and agreed to correct this in its next report and accounts and to restate the comparatives. As the change affected a primary statement, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry.

Deferred taxation

We asked for more information on the nature of the evidence supporting the recognition of the deferred tax asset included in the accounts and the basis on which the company determined that the disclosures complied with the requirements of IAS 12 ‘Income Taxes’.

The company provided the information requested. It agreed to enhance the disclosures in its future reporting,including disclosure of the period over which the deferred tax asset is expected to be utilised, the forecasts used, and the methodology applied. We suggested that it would be helpful to disclose details of the sensitivity analysis performed.

We also enquired about the company’s disclosures of estimation uncertainty relating to deferred taxation under IAS 1 'Presentation of Financial Statements'. The company explained that its disclosures of estimation uncertainty in relation to deferred taxation were not required by IAS 1. It agreed to clearly distinguish additional voluntary disclosures from those made to satisfy the requirements of IAS 1, paragraph 125 in its future reporting.

Free cash flow and movements in net debt

We asked for more information about the measures of free cash flow and movements in net debt included as alternative performance measures (APMs). We asked the company to explain how it concluded that the reconciliations, labelling and commentary on these measures were in line with the requirements of the ESMA Guidelines on APMs. We also asked whether the strategic report should have included more details about the Group’s cash flow performance.

The company provided the information requested and agreed to provide clearer, more granular, reconciliations and labelling, and enhanced commentary on these APMs in its future reporting.

The company also acknowledged that the commentary provided on cash flow performance in the strategic report could have been clearer. It agreed to provide a more comprehensive commentary in future reports.

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Kingfisher plc
28 January 2021
No
Limited
N/A
Linklaters LLP
30 April 2020
No
Limited
N/A
Lookers plc
31 December 2020
No
Limited
N/A
M.P. Evans Group PLC
31 December 2020
No
Limited
N/A
Macfarlane Group PLC
31 December 2020
No
Limited
N/A
Man Group plc
31 December 2020
No
Full
N/A
Marston’s PLC
31 December 2020
Yes
Full
Yes

Debt covenants

We asked the company to provide more information about the covenants attaching to certain borrowings, which had been waived or amended in the period under review. The company satisfactorily responded to our query. It agreed to disclose the nature of its financial covenants and the extent of headroom available in its future annual reports and accounts for any period in which there is a material uncertainty as to going concern or where significant judgement has been exercised in determining that no material uncertainty exists.

Fair value measurement of land and buildings

We challenged the company’s classification of the fair value measurement of its pub estate in Level 2 of the hierarchy set out in IFRS 13 ‘Fair Value Measurement’. We noted that ‘fair maintainable trade’ (‘FMT’), an unobservable input into the fair valuation calculation, appeared significant to the overall measurement. IFRS 13 states that the lowest-level input that is significant to the entire measurement determines the level of that measurement in the hierarchy. The company agreed to adopt Level 3 classification and to provide the relevant additional disclosures required by IFRS 13, paragraph 93, in its future annual reports and accounts.

Impairment testing and value in use estimation

We sought an explanation for the significant increase in the discount rate used for testing goodwill for impairment. The company provided a satisfactory response and agreed to include explanatory disclosure in the future, were there to be a significant movement in the discount rate used in an impairment review.

We asked the company for further details about the key assumptions used in its ‘value in use’ impairment calculations, the sensitivity of carrying amounts to changes those assumptions and the carrying amount calculated for the ‘Pubs and Bars’ segment. We considered the information and explanations the company provided. We observed that, where estimation uncertainty over key assumptions used in asset-by-asset assessments (individually immaterial) carries significant risk of resulting in a material adjustment on an aggregated basis, we expect future disclosures of estimation uncertainty to reflect this.

Impairment of financial assets in the parent company accounts

We sought clarification of disclosures in the parent company accounts relating to subordinated intercompany loan notes. The company acknowledged that an amount disclosed as ‘accumulated impairment losses’ included the effect of discounting at the original effective interest rate. It agreed to distinguish that element from impairment losses in its future annual reports and accounts. The company also agreed to disclose details of the estimation uncertainty relating to impairment of this asset.

Depreciation of effective freehold land and buildings

We asked the company to explain its calculation of depreciation on effective freehold land and buildings. The company provided details of the charge on non-pub properties and explained that the pub estate is considered to have a residual value equal to its carrying amount (hence no depreciation). We encouraged the company to include disclosure of that assumption to aid users’ understanding of the accounting treatment.

Cash flows from operating activities

In response to our enquiry, the company agreed to present the net cash flow from operating activities starting from an IFRS measure of profit or loss in its future financial statements.

Deferred tax

We asked for further information about the recognition of deferred tax assets and liabilities and the calculation of deferred tax movements on the revaluation of properties. We considered the information and explanations provided. The company agreed to disclose the evidence supporting the recognition of deferred tax assets in its future accounts. We also observed that we expect to see relevant disclosure where management exercises significant judgement in forecasting taxable profitability when assessing the utilisation of tax losses.

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Melrose Industries PLC
31 December 2020
No
Limited
N/A
Midwich Group plc
31 December 2020
No
Limited
N/A
Morgan Advanced Materials plc
31 December 2020
No
Limited
N/A
Naked Wines plc
29 March 2021
No
Limited
N/A
Natwest Group PLC
31 December 2020
No
Full
N/A
Neptune Group Midco Limited
31 December 2020
No
Limited
N/A
Network International Holdings Plc
31 December 2020
No
Full
N/A
Ocado Group plc
31 December 2020
No
Full
N/A
PageGroup plc
31 December 2020
No
Limited
N/A
Persimmon Plc
31 December 2020
No
Limited
N/A
Phoenix Group Holdings plc
31 December 2020
No
Limited
N/A
Platinum Retail Limited
30 April 2020
Yes
Limited
Yes

We questioned why certain disclosures relating to energy and carbon reporting and to the company’s engagement with suppliers, customers and others, required under Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, were not provided within the director’s report. The company explained that it had inadvertently overlooked these disclosures and agreed to provide the relevant information in future annual reports.

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PZ Cussons plc (3)
31 May 2020
Yes
Full
Yes

Discontinued operations

We asked the company to explain why the gain on sale from certain businesses appeared to have been presented as part of continuing operations. The company acknowledged that the gain on sale should have been presented as part of discontinued operations. It agreed to restate the comparatives in its next annual report and accounts to correct this.

We also questioned the cash flow statement presentation of the consideration from the disposal of a business which had been presented within cash flows from operating activities. The company acknowledged that the disposal proceeds should have been presented as part of investing activities. It agreed to restate the comparatives in its next annual report and accounts to present the cash flows from the disposal within investing activities.

Since these restatements affected the primary financial statements, we asked the company to disclose the fact that the matter had come to its attention as result of our enquiry in its next annual report and accounts.

Impairment

We asked the company for further information on the assumptions used in the impairment assessment of goodwill and intangible assets. The company provided satisfactory responses to our questions. The company acknowledged that a change in the methodology used to derive the discount rate in the year should have been disclosed in accordance with paragraph 39 of IAS 8, and that clearer narrative disclosures of the reason for the impairment would have been appropriate.

Alternative performance measures

We questioned why EBITDA did not appear to have been adjusted for amortisation. The company explained that there was an error in the FY19 calculation of EBITDA and in the FY20 presentation of the reconciliation of EBITDA. The company agreed to correct these in the next annual report and accounts.

Exceptional items

We asked the company why certain exceptional items were not representative of the underlying trading of the company, given they appeared to occur each year. The company provided the requested explanations, and also noted that in future it does not plan to identify items as exceptional in the income statement.

Interim Financial Information to 30 November 2020

We asked the company for an explanation of why foreign exchange reserves associated with Nutricima were not reclassified to profit or loss on disposal in the six months ended 30 November 2020. The company explained that it did not consider the disposal of the trade and assets to meet the definition of a full or partial disposal as described by IAS 21, and that the amounts would be reclassified to profit or loss when this definition was met during the 6 months ended 31 May 2021.

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Quilter plc
31 December 2020
No
Limited
N/A
Reckitt Benckiser Group plc
31 December 2020
No
Limited
N/A
Relx plc
31 December 2020
Yes
Full
Yes

Uncertain tax positions

The notes to the financial statements included details of a key source of estimation uncertainty relating to the estimation of provisions against uncertain tax positions.

We asked the company for further information on the exposure to uncertain tax positions and how they had met the disclosure requirements of paragraphs 125 to 129 of IAS 1 ‘Presentation of financial statements’.

The company explained that the provision comprised a number of discrete items, none of which were material individually or when aggregated with related items. The company agreed to provide enhanced disclosures in the next annual report.

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Renew Holdings plc
30 September 2020
No
Limited
N/A
Renewi plc
31 March 2021
No
Limited
N/A
Rentokil Initial plc
31 December 2020
No
Limited
N/A
Rightmove plc
31 December 2020
No
Full
N/A
Rio Tinto plc
31 December 2020
Yes
Full
Yes

Funding of Oyu Tolgoi

We asked the company for further information about the accounting policy applied to certain funding transactions involving the non-controlling interest shareholder in Oyu Tolgoi LLC, a Mongolian subsidiary of the group.

The company explained the accounting for these funding transactions, including the judgement that amounts recoverable from the non-controlling interest should be recorded in equity as adjustments to the non-controlling interest balance, rather than a financial asset. The company agreed to enhance the disclosures explaining this accounting policy in its next annual report and accounts.

Alternative performance measures (APMs)

We sought an explanation as to how the company had addressed the requirements of the ESMA Guidelines on APMs to give sufficient prominence to measures directly stemming from the financial statements when compared to the equivalent APMs.

The company explained how it had considered the requirements, and undertook to include references to IFRS measures of performance and cash flows in the Chairman’s and CEO’s statements in its next annual report.

Deferred tax assets

We asked the company to provide additional information about movements in deferred tax assets recognised, the judgements associated with their recognition, and the expiry dates of certain tax losses for which deferred tax assets had been recognised.

The company provided the requested information on these assets, and agreed to enhance the disclosures relating to the expiry dates of the associated tax losses in its next annual report and accounts.

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Rotork plc
31 December 2020
No
Limited
N/A
Secure Income REIT Plc
31 December 2020
No
Limited
N/A
SEGRO plc
31 December 2020
No
Limited
N/A
Serica Energy plc
31 December 2020
No
Limited
N/A
Shaftesbury PLC
30 September 2020
No
Limited
N/A
Smart Metering Systems plc
31 December 2020
No
Limited
N/A
Smiths News plc
29 August 2020
Yes
Full
Yes

Parent company’s investment in subsidiary

We requested information about the impairment review performed for the parent company’s investment in its subsidiary. The company provided an analysis of the assessment performed. We closed the matter based on the company’s undertaking to improve the disclosure of the impairment review in the next annual accounts, by providing additional information about the assumptions made and their sensitivity to changes.

Supply chain financing arrangements

We asked the company to clarify whether it had used supply chain financing or similar types of arrangements. We also asked it to explain the impact of any such transactions on the balance sheet, cash flow statement and key metrics such as net debt.

The company explained that it had utilised certain vendor management finance arrangements, which allowed the company to request early payment of some of its invoices from certain customers. It provided the information requested and agreed to improve the disclosures in the next annual accounts to the extent that they remained relevant.

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St Matthews Group (UK) Limited
31 August 2020
Yes
Limited
Yes

We questioned why certain disclosures relating to energy and carbon reporting and to the company’s engagement with employees, suppliers, customers and others, required under Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, were not provided within the director’s report. We also noted that the company was required to include in its strategic report a statement which describes how the director has had regard to the matters set out in section 172(1)(a) to (f), Companies Act 2006, when performing his duty under section 172. The company explained that it had inadvertently overlooked these disclosures and agreed to provide the relevant information in future annual reports.

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Standard Life Investments Property Income Trust Limited
31 December 2020
No
Full
N/A
Sumo Group plc
31 December 2020
No
Limited
N/A
Ten Entertainment Group plc
27 December 2020
No
Limited
N/A
The Very Group Limited
30 June 2020
No
Limited
N/A
The Weir Group PLC
31 December 2020
No
Limited
N/A
Tritax Big Box REIT Plc
31 December 2020
No
Full
N/A
Vistry Group PLC
31 December 2020
No
Limited
N/A
Vivo Energy plc
31 December 2020
No
Limited
N/A
Wates Group Limited
31 December 2020
No
Limited
N/A
Xaar PLC
31 December 2020
Yes
Limited
Yes

This company was selected as part of our thematic review of companies’ disclosure of alternative performance measures (‘APMs’); as such, only the disclosures in relation to APMs were reviewed.

Adjusted EBITDA

We asked the company to explain the difference between the amount of depreciation of property plant and equipment disclosed within the reconciliation of adjusted EBITDA, and the depreciation charge disclosed elsewhere in the notes to the accounts. The company provided a satisfactory analysis and clarified that the main difference related to an impairment charge. The company also stated that the depreciation of right of use assets was not added back when arriving at the adjusted EBITDA. In closing this matter, we observed that we would expect the nature of the reconciling items, and the reasons for their selection, to be clarified in future.

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XP Power Limited
31 December 2020
No
Limited
N/A
Young & Co’s Brewery P.L.C.
29 March 2021
No
Limited
N/A