Following inquiries by ASIC, Epsilon Healthcare Limited (Epsilon) and HSC Technology Group Limited (HSC) have made amendments to the financial report, and operating and financial review (OFR), (respectively) for the half-year ended 30 June 2022.
Epsilon wrote down the value of goodwill and plant and equipment in its medicinal cannabis business by $6,082,936 in its financial report for the half-year ended 30 June 2022.
Following a review of Epsilon’s financial report for the year ended 31 December 2021, ASIC had raised concerns relating to the carrying value of the goodwill, and the free cash flow projections used in its impairment model.
Separately, HSC updated its material business risks in the OFR in its half-year report for 30 June 2022.
ASIC reviewed the financial report of HSC for the year ended 31 December 2021 and raised concerns about the quality of disclosure of business risks in its OFR.
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Directors are reminded the OFR provides an important complement to the financial report by telling the story about the drivers of the company’s results, and its strategies and financial prospects. This includes the material non-generic risks to achieving the financial prospects described.
As outlined in ASIC media release 22-153MR, ASIC calls for better disclosure of business risks and asset values following financial reports review, asset values and disclosure of business risks are a focus area for financial reporting.
