The topic of the obligation for public limited liability companies to prepare annual reports in accordance with the ESEF (European Single Electronic Format) requirements has generated considerable interest among Polish capital market participants for several years. There were several reasons for this: new formulas for reporting financial results, the need to implement an IT tool to prepare such a file, and changes in the date of entry into force of the new regulations. Originally, the ESEF was to apply to reports for financial years beginning on or after 1 January 2020, but the EU and Polish local institutions decided to voluntarily postpone the introduction of the regulation in our country by one year. This decision was taken in the middle of the reporting period of listed companies, which also caused quite a stir. The situation is now clear: all annual reports starting from 1 January 2021 will compulsorily have to be prepared in ESEF format.
The Polish Financial Supervision Authority (PFSA) has allowed companies on the Warsaw Stock Exchange to send ESEF reports on a voluntary basis and has prepared a gateway to send production versions of the reports. 149 issuers have taken advantage of this opportunity. 30 of them prepared reports using the dedicated Comarch ESEF application. All these reports have passed validation as intended by the regulators.
Comarch also converted its 2020 annual report (including consolidated report) to iXBRL format using this application. They are available on the website: https://www.comarch.com/investors/periodical-reports/2020/
“Preparations for reporting in the ESEF format had been under way at Comarch for a long time, so despite the possibility of postponing reporting in the new format, we decided not to change the original plan and to report in the new format already this year. Finally, the creation of reports in the Comarch Group in the new format went quite smoothly. Undoubtedly, in the whole process of preparing the report, an important role was played by the tool, which must generate documents compliant with the regulation but also help in the substantive side of reporting as much as possible. The tool's various functional capabilities, including integration with a spreadsheet or fast and effective PDF to XHTML conversion, help with this”, describes Agnieszka Pasich of Comarch's Investor Relations Department.
“Providing a production environment with the possibility to voluntarily submit ESEF reports has proven to be a very good solution for capital market participants. It is just a pity that the official change in the rules about the possibility to voluntarily prepare reports in ESEF was taken so late, which caused a lot of confusion in the market, nevertheless we are aware that this decision depended not only on local but also on EU regulators. The most determined and regulation-prepared companies had the chance to learn about the paths and processes that must be followed for the new reporting. In addition, the work done by the Investor Relations or Finance teams will definitely improve the preparation of subsequent reports. ESEF reporting to date has also benefited providers of ESEF reporting systems. We have also gained a lot of experience. We now have very detailed substantive and technical knowledge, which we use on an ongoing basis with the support of other clients reporting in ESEF to make reporting even more efficient”, says Paweł Krupa, product manager of Comarch ERP systems.
It is high time to reach for the ESEF
Companies that have not yet adapted their annual reports to the ESEF requirements should start preparing to publish their financial reports according to the new rules. An essential element is the acquisition and implementation of a dedicated IT tool to support the interactive reporting process.
“There are a number of applications available on the market with more or less advanced functionalities that allow the user to create annual reports while following ESEF guidelines. Such tools should enable the report to be saved in appropriate formats so that it can be opened without any problems in any web browser as well as by IT programmes that collect and process data. In addition, applications make it possible to organise the information they contain, which makes reports more legible”, says Paweł Krupa.
One of the IT tools that can be used by companies listed on the Warsaw Stock Exchange and other EU exchanges is Comarch ESEF. Almost 70 companies decided to purchase the application. These include: Apator S.A., APS Energia S.A., Auto Partner S.A., Erbud S.A., Grupa Kapitałowa Vistula Retail Group Inter Cars S.A., Korporacja KGL S.A., Master Pharm S.A., Unimot S.A., P.A. Nova S.A., Vigo System S.A. or X-Trade Brokers Dom Maklerski S.A.
“We are currently seeing increased interest from companies in the ESEF topic. This is certainly related to the upcoming deadlines for preliminary examinations by auditors who will want to validate sample reports prepared by issuers in the new format”, adds Paweł Krupa.
In addition to the standard functionalities required to prepare an ESEF compliant report, this application can be integrated with EXCEL spreadsheet, which is still the most popular solution used by issuers to prepare consolidated reports. This will allow you to automate your work, as data entered into the spreadsheet will immediately update in the application. Finished reports can also be exported to PDF or DOCX formats. The ability to back up the report has also been made available. In addition, at any time while working on a report, the system user can run validations that check the correctness of the tagged information.
“The validator built in Comarch ESEF application, analyses reports in accordance with ESMA regulator’s guidelines and additionally works almost identically to the one currently available on the PFSA gateway. We deliberately designed the solution so that issuers checking the report in our application would be confident of the validation result on the PFSA production gateway. This is an important argument for customers choosing our application”, says Jacek Krupa.
The system is available in both cloud and desktop versions. You can also use the demo version of the application, which presents the basic functionalities necessary to prepare a report.