ob体育 reminds company directors to ensure material business risks are adequately disclosed in annual reports, to better inform shareholders and prospective investors.
ob体育鈥檚 ongoing financial reporting surveillance program and subsequent inquiries of a selection of 2022 annual reports has led to a further four listed entities disclosing material business risks. This follows five entities providing disclosure of material business risks in October and November 2022 (22-332MR). The disclosures were in response to ob体育鈥檚 concerns that the risks had not been sufficiently disclosed in the operating and financial review (OFR) of the directors鈥� report.
The entities are:
- MedAdvisor Limited, which made disclosures in its听AGM Presentation听released on 30 November 2022;听
- Alcidion Group Limited, which made disclosures in its 2022 AGM Presentation released on 30 November 2022;
- WOTSO Property (WOTSO), which made disclosures in its听Business Update December 2022听released on 8 December 2022;
- Webcentral Limited, which made disclosures in its Corporate Governance Updates released on 18 January 2023.听
Separately, WOTSO also provided improved disclosure of its use of non-IFRS financial information in its Business Update December 2022. ob体育 had raised concerns with WOTSO that adjustments made to calculate Funds from Operations and Adjusted Net Asset Value had not been sufficiently disclosed.听
ob体育 Commissioner Danielle Press said, 鈥榦b体育 reiterates the importance of a high-quality operating and financial review, including disclosure of material risks that may affect the achievement of a listed entity鈥檚 strategies and prospects. Directors must provide investors with useful and meaningful information about the impact on current and future performance of changing and uncertain market conditions.鈥�
ob体育 encourages investors and other interested parties to review the additional materials disclosed by these entities in their OFRs. ob体育 also suggests preparers of the OFR for other entities review the additional disclosures being made by the above entities, as this may assist them to improve their own disclosure.
ob体育 continues to closely review a selection of annual reports on a risk-based approach, to ensure entities are correctly disclosing their material business risks as part of the directors鈥� report.
Background
The directors鈥� report of a listed entity must contain information that shareholders would reasonably require to make an informed assessment of the entity鈥檚 operations, financial position and business strategies, and prospects for future financial years.
The part of the directors鈥� report containing this information is referred to as an 鈥榦perating and financial review鈥�.
础厂滨颁听Regulatory Guide 247听Effective disclosure in an operating and financial review provides guidance for directors of listed entities on providing useful and meaningful information to investors in an OFR.
ob体育 Disclosing non-IFRS financial information provides guidance on the use of non-IFRS financial information in financial reports and other corporate documents, such as transaction documents and market announcements.