Following the entering into force of law 11/2018 of 28th December, which modifies the Commercial Code, the Capital Companies Act and the Account Auditing Act, the new article 44 of the Commercial Code adds non-financial information statements to the documents making up the consolidated annual accounts.
I. Affected companies
The statement of non-financial information must be included in the consolidated management report when companies formulating consolidated accounts meet the following requirements:
a) the average number of employees employed by the companies in the group during the financial year is more than 500.
b) they are considered to be public-interest entities in accordance with account auditing legislation, or, during two consecutive financial years, at the date of closing of each one of them, they meet at least one of the following circumstances:
(i) total consolidated assets exceed Euro 20,000,000.
(ii) the net amount of consolidated annual turnover exceeds Euro 40,000,000.
(iii) average number of employees employed during the financial year is more than 250.
During the first two financial years following the incorporation of a group of companies, the parent company shall be obliged to prepare consolidated non-financial information statements, to include all subsidiaries and for all of the countries where it operates, when, upon the close of the first financial year, it fulfils at least two of the three conditions set forth in section b) above, and provided that upon the close of the financial year it also meets the requirements mentioned in letter a).
II. Contents of the consolidated non-financial information statements
The following shall be included in the non-financial information statements
a) a brief description of the business model of the group;
b) a description of the policies which the group applies tosaid questions, which shall include the due diligence procedures applied to the identification, evaluation, prevention and mitigation of risks and significant impacts as well as the control and verification thereof, including information on the measures adopted;
c) the results of such policies, which should include key indicators of the relevant non-financial results, which allow the follow up and evaluation of progress and which favour comparability between companies and sectors;
d) the principal risks related to such matters linked to the activities of the group; and
e) key indicators regarding non-financial results which are relevant to a specific business activity.
Furthermore, the consolidated non-financial information statement shall include significant information on the following issues:
(i) information regarding environmental issues;
(ii) information regarding social issues and staff matters;
(iii) information regarding respect for human rights;
(iv) information regarding the fight against corruption and bribery;
(v) information on the company; and
(vi) any other significant information
If the group of companies does not apply any of the contemplated policies, the company must offer a clear and substantiated explanation to that effect in the consolidated non-financial information statement.
III. Approval by the General Meeting
It shall be obligatory for the report on the non-financial information to be presented as a separate item on the agenda for approval in the general shareholder’s meeting of the company.
IV. Publication
The non-financial information statement shall be made available to the public free of charge and shall be easily accessible on the website of the company within the six months following the date of closing of the financial year and for the following five years.
Mika Tsuyuki
Vilá Abogados
For further information, please contact:
15th of January 2019
