Annual report preparation
The reporting year includes 12 months and usually coincides with the calendar year. In case if a new enterprise is established, the first reporting year may include a shorter or a longer period, but no longer than 18 months. Companies have to prepare an annual statement in accordance with the Act, which includes the following sections:
- Information about the company
- The Board report
- Balance sheet
- Profit and loss statement
- Cash flow statement
- Report of changes in equity
- Appendixes Copy of certified auditors report (for qualifying companies)
- Participant decision or protocol statement from participants meeting with the decision on the confirmation of annual report
When the organization is in complies with the certain procedure defined by the Annual Reports Act and meets certain criteria, it is allowed not to prepare the separate parts of the annual report. In Article 54 of the Annual Reports Act the following criteria are mentioned:
- Total balance — 400 000 euro
- Net turnover — 800 000 euro
- The average number of employees— 25
If the organization does not exceed two of these criteria, then it is permitted not to prepare:
- The Board report
- Cash flow statement
- Report on changes in equity
- Calculate and not to indicate deferred tax assets and liabilities in the financial statement
- It is allowed to prepare a shortened appendix.
The annual report must be presented to the State Revenue Service no later than one month after the approval of the annual report and not later than April 30. The company, whose activity size exceeds two mentioned criteria (i.e. total balance – 1 400 000 euro; net turnover – 3 400 000 euro; average number of employees – 250), and the company, which prepare consolidated annual report, submit annual report no later than July 31. Annual report is submitted to the State Revenue Service by using Electronic Declaration System (EDS).
Consolidated annual report preparation
Consolidated annual report is the annual report of the group that is prepared as a separate annual report of the enterprise, and provides information about all the group together, as one enterprise. In accordance with the Act, the liability of the parent company is to prepare consolidated annual report, if the parent company directly or indirectly received under the influence for at least one of the following statements:
- A majority vote of shareholders or members (> 50%), based on the participation of its subsidiary in the allocation of capital (regardless of participation rate)
- The right to appoint or remove the supervisors of subsidiary or majority of the members of the executive institutions (more than 50%), based on the participation of capital in subsidiary (regardless of participation rate)
- The right to use mentioned in 1st or the 2nd points of law, based on an agreement concluded with other shareholders or participants or subsidiaries in accordance with the statutes of the organization (regardless of participation of the subsidiary company in the distribution of capital)
Parent company of the group may not prepare consolidated annual report, if that, along with its subsidiaries, do not exceed at least two of these criteria for two consecutive years:
- Total balance — 1 400 000 euro
- Net turnover — 3 400 000 euro
- Average number of employees — 250
Certified auditor revision
The prepared consolidated annual report of the parent group should be reviewed by one or more certified auditors. In cases, when the consolidated annual report of the parent company and a consolidated annual report are reviewed by the same certified auditor, and both reports submitted at the same time, the auditors review on the consolidated and the annual report and can be combined.
A copy of consolidated annual report, with the confirmed annual report and certified auditors review should be submitted to the State Revenue Service no later than one month after consolidated annual report confirmation, and no later than 7 months after the end of the year. As the annual report, it is submitted by using EDS.