media release (23-018MR)

ASIC calls for improved material business risk disclosure in annual reports


ASIC reminds company directors to ensure material business risks are adequately disclosed in annual reports, to better inform shareholders and prospective investors.

ASIC’s 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 ASIC’s concerns that the risks had not been sufficiently disclosed in the operating and financial review (OFR) of the directors’ report.

The entities are:

  • MedAdvisor Limited, which made disclosures in its AGM Presentation released on 30 November 2022; 
  • Alcidion Group Limited, which made disclosures in its 2022 AGM Presentation released on 30 November 2022;
  • WOTSO Property (WOTSO), which made disclosures in its Business Update December 2022 released on 8 December 2022;
  • Webcentral Limited, which made disclosures in its Corporate Governance Updates released on 18 January 2023. 

Separately, WOTSO also provided improved disclosure of its use of non-IFRS financial information in its Business Update December 2022. ASIC had raised concerns with WOTSO that adjustments made to calculate Funds from Operations and Adjusted Net Asset Value had not been sufficiently disclosed. 

ASIC Commissioner Danielle Press said, ‘ASIC 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’s 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.’

ASIC encourages investors and other interested parties to review the additional materials disclosed by these entities in their OFRs. ASIC 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.

ASIC 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’ report.


The directors’ report of a listed entity must contain information that shareholders would reasonably require to make an informed assessment of the entity’s operations, financial position and business strategies, and prospects for future financial years.

The part of the directors’ report containing this information is referred to as an ‘operating and financial review’.

ASIC Regulatory Guide 247 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.

ASIC Regulatory Guide 230 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.

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