Executive Summary

On 25 January 2016, a draft bill implementing the Directive 2013/34/EU on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings and the Directive 2014/95/EU amending Directive 2013/34/EU as regards disclosure of non-financial information and diversity policies by certain large undertakings and groups, was published for public consultation. The public consultation will be completed on Wednesday, 10/2/2016.

The proposed bill intends to bring inter alia essential changes to the publication of financial statements, the time frame of Ordinary General Shareholders Assemblies, management reports as well as corporate governance. Law 4308/2014 transposed into Greek national law the provisions of Directive 2013/34/EU concerning the drafting of the annual financial statements. What is imminent is the transposition of the provisions for management reports along with the conditions for publication of all the statements.

Detailed Discussion

Management report

The management report refers to non-financial information of a company. The obligation for preparation of a management report already existed in Greek legislation, but the draft bill introduces several amendments as follows:

•    The context of the management report of the Board of Directors addressed to the General Assembly is significantly amended.
•    The small companies (with assets up to 350.000 euros, turnover up to 700.000 euros and maximum 10 employees) are exempted from the obligation to prepare management reports, provided that they include some essential information in the notes to the balance sheet.
•    Especially the large companies (with more than 500 employees during the financial year) and public-interest entities shall provide information about their business policies and their activities, such as information regarding environmental impact and employee matters, so as to ensure greater transparency and fight corruption.
•    The management report is mandatory to be published together with the rest financial statements.
•    Apart from the Société Anonyme (SA), all the above mentioned for the management report apply also to Limited Liability Companies and Private Limited Liability Companies after the respective amendments of Laws 3190/1955 and 4072/2012 conserning Limited Liability Companies and Private Limited Liability Companies respectively.

Corporate Governance Statement

•    Under the current regime, the corporate governance statement forms a mandatory part of the management report. The proposed bill also gives the possibility to prepare the corporate governance report either in a separate report that is published together with the management report or in a document, which is published on the company’s website.
•    The large companies are obliged to disclose in the corporate governance statement diversity policies in relation to the administrative, management and supervisory bodies with regard to aspects such as age, gender or educational and professional backgrounds.
•    The aforementioned statement applies also to partnerships, in case the member having unlimited liability is a corporate entity.

Publication requirements

•    Until now, the financial statements are necessarily published in the General Commercial Registry (G.E.M.I) 20 days before the General Assembly. Under the draft bill the aforementioned obligation changes and the financial statements shall be published in G.E.M.I only after approval from the General Assembly.
•    SAs shall publish the duly approved financial statements, the management report as well as the opinion submitted by the statutory auditor or audit firm within 11 months from the end of the respective financial year, as opposed to less than 6 months under the previous regime.
•    The small companies are exempted from the obligation to publish the management report and the profit and loss statements.
•    Bound to publish the financial statements and the management report will also be the partnerships (General and Limited partnerships), under the new bill.  However, the bill exempts the small partnerships with assets up to 350.000 euros, turnover up to 700.000 euros and maximum 10 employees.
•    Under Law 4281/2014, the publication of financial statements in newspapers and electronic means, except G.E.M.I, has become optional. The provision entered into force in 31/12/2015. The proposed bill further clarifies this specific provision.

New timeframe for Annual Ordinary Shareholders’ Assemblies

•    According to the draft bill, the General Assembly shall convene at least once a year and within 10 months from the end of the financial year (until now the timeframe was 6 months as of the end of the financial year).
•    The same rule also applies to Limited Liability Companies and Private Limited Liability Companies.