Financial Statements 2017: delivery information for SuperSociedades.

Through Circular 201-000004 of November 10, 2017, the SuperSociedades set the deadlines and conditions under which Group 1 and 2 companies must send it their basic financial statements for 2017; the XBRL EXPRESS software will continue to be used for this process.

Last November 10, 2017, the Superintendence of Companies issued the single Circular number 201-000004 (published in the Official Gazette 50414 of November 11, 2017, which was circulated on the internet as of Tuesday, November 14, 2017), through which the conditions and terms in which the supervised companies, controlled and inspected companies of groups 1 and 2 of the convergence to international standards (regardless of whether they are in normal operating conditions or in voluntary liquidation processes) will have to submit to said control body both the information on their basic financial statements for the year 2017 and their business practices report.

In addition, in the particular case of soccer clubs with professional athletes that have been incorporated as corporations under the terms of Law 1445 of 2011, regardless of whether they belong to group 1 or 2 of the convergence to International Standards, and only if they are in normal operating conditions, such entities will have to report their basic financial statements for the year 2017 following the instructions of Circular 201-000003 of November 10, 2017.

In this regard, it is necessary to keep in mind that in the case of the 2016 reports the Supersociedades had issued on November 24, 2016 three different circulars (201-0000009 to require reports to Group 1 companies in normal operating conditions, 201-000010 to require reports to Group 2 companies in normal operating conditions and 201-000011 to require reports to companies of any group but that were in situations of voluntary liquidation).

In addition, although these 2016 circulars made no mention of the mandatory delivery of the business practices report, what finally happened was that about 8,000 companies received selective notices in which they were required to deliver such report before August 31, 2017.

According to the provisions of the new Circular 201-00004 of 2017, it is understood that once again the SuperSociedades decided (as it happened with the 2016 reports) not to require information to supervised, controlled or inspected companies that belong to group 3 of the convergence to international standards, which implies then that the Supersociedades no longer has valuable information that helps it to consolidate and examine the behavior of all the companies that do belong to the same economic sector.

Requirement of financial information for the year 2017

In accordance with the provisions of Circular 201-000004 of 2017, commercial companies that as of December 31, 2017 have the status of supervised and/or controlled before the SuperSociedades, and that belong to groups 1 and 2 of the convergence to international standards, will be obliged to deliver the reports mentioned in said circular. The same will be done by those companies that only have the status of inspected before the SuperSociedades that belong to group 1 or 2 that are not in situations of voluntary liquidation and which are requested by urban mail to deliver the information.

The following additional reports and documents are required for companies obliged to submit the information that are in normal operating conditions:

a. In the case of supervised and/or controlled companies: following the same instructions of what was the reporting requirement of 2016, these companies must use the XBRL EXPRESS software. In such Software they shall use the options: “01-10-Financial Statements-Full IFRS-Individual”, “01-20-Financial Statements-Full IFRS-Separate”, “01-40-Financial Statements-SMEs IFRS-Individual” or “01-50-Financial Statements-SMEs IFRS-Separate”. With these options, they will end up delivering XBRL extension files with the information (in thousands of pesos and comparatively for 2017 and 2016) of what would be their statement of financial position, income statement and statement of comprehensive income.

“certification of financial statements signed by legal representative, accountant and statutory auditor, notes to the financial statements, management report of the administrators and opinion of the statutory auditor.”

The aforementioned report must be delivered between April 3 and April 30, 2018 (depending on the last two digits of the NIT) accompanied again by 4 additional documents in PDF (scanned from the original), which, individually considered, must not exceed 2 megabytes and must be named with a single word. Such documents, which must be delivered no later than two working days after the delivery of the XBRL file, are: certification of financial statements signed by the legal representative, accountant and statutory auditor, notes to the financial statements, management report of the directors and opinion of the statutory auditor. Both XBRL and PDF files must be submitted through the Sirfin platform.

b. In the case of inspected companies: must make the same reports (also using the XBRL EXPRESS software) required for supervised and/or controlled companies and deliver them within the same deadlines. However, in relation to the additional documents in PDF, only the first two mentioned in the case of supervised and/or controlled companies are required to be submitted. The other two documents must be kept at the disposal of the Supersociedades to be delivered at the time they are requested by said entity. Both XBRL and PDF files must be submitted through the Sirfin platform.

If any of the reporting companies, whether supervised, controlled or inspected, acts as the controlling company of a group of companies (and therefore must issue consolidated financial statements), it must additionally use the XBRL EXPRESS software and prepare the report with the consolidated financial figures of the economic or business group with the options “01-30-Full-IFRS-Consolidated” or “01-60-SME-IFRS-consolidated”. This report, which must also be accompanied by 4 special documents in PDF, (certification of consolidated financial statements, notes to the consolidated financial statements, special report of Article 29 of Law 222 of 1995 and the statutory auditor’s opinion), must be delivered no later than May 18, 2018 (regardless of the NIT of the reporting party) through the Sirfin platform.

In addition, if any of the reporting companies (having the status of supervised or controlled, regardless of whether it belongs to group 1 or 2) is in voluntary liquidation processes, it would no longer prepare the aforementioned reports in the XBRL EXPRESS software but must use option “16” of the STORM USER Software, thus generating STR extension files which are delivered in another special area of the Supersociedades portal enabled to receive such files. Additionally, the 2 additional PDF documents requested (certification of financial statements and notes to the financial statements) will also be delivered in another special area of the Supersociedades portal. The deadline to deliver their reports and reports would be May 30, 2018 regardless of the NIT number.

Similarly, if any reporting entity (whether supervised, controlled or inspected) is undergoing corporate restructuring processes (Law 550 of 1999), or corporate reorganization (Law 1116 of 2006), the circular reminds them that, in addition to the delivery of reports with the 2017 annual figures using the aforementioned XBRL EXPRESS software options, they must also comply with delivering the other quarterly reports that were required of them with Circulars 100-000004 and 100-000005 of August 2016 It is important to note that once the aforementioned reports and additional documents are delivered, the circular mentions that the Supersociedades will allow, as of May 15, 2018, that all interested parties may consult the figures that end up being delivered by the reporters. This will be achieved by accessing the Business Information Portal -PIE- (initially called Business Information System -SIE-) that the Supersociedades launched in May 2016; platform (which now contains the accesses to enter to consult information reported both in international standards and that previously reported in PCGA-COLGAAP) in which individualized reports of the different companies can be consulted.

In this regard, keep in mind that in June 2017 the Supersociedades published a special Excel file with the 2016 information of the “1000 largest companies of group 1” and the “1000 largest companies of group 2” (all this based on what had been their operating income), and that among these companies there were several with negative equity.

Business Practices Report requirement

In numeral 2 of Circular 201-000004 of 2017, it was indicated that the companies obliged to submit the business practices report for the year 2017 must do so between May 7 and May 21, 2018, having to use option 42 of the STORM USER software for its preparation. When the report is generated in a .STR file, it must be delivered virtually in the special area of the Supersociedades portal, without having to deliver other additional documents in PDF.

In view of the above, and as Circular 201-000004 of 2017 is not clear in defining which companies are obliged to deliver such report, we believe that such report is actually still only required to be delivered to supervised or controlled companies (excluding those in judicial liquidation, or voluntary liquidation and branches of foreign companies) since those criteria were used, for example, in the most recent occasion in which Supersociedades had mentioned the requirement of this report (see Circulars 201-00007 and 115-000008 of 2015, through which the 2015 reports were required).

“The responsibility for the preparation of the business practices report is only borne by those who, at the date of delivery of the same, have the status of administrators of the respective company.”

The responsibility for the preparation of the business practices report is only borne by those who, at the date of delivery of the report, have the status of administrators of the respective company (legal representative and boards of directors). In addition, if during the year the company had more than one financial cut, the report shall in any case be made as a single report for what happened during the entire year 2017.

In its application for the year 2016, the business practices report consisted of a questionnaire with a total of 77 questions divided into three sections that inquired about topics such as the following:

– Basic information: in this section inquired about the company’s identification data, the type of shares issued, whether or not it carried out profit distribution and with what modality (money, other shares), and whether or not it functioned as a parent or subordinate of another company.

– Corporate governance: in this section, which included 62 questions, there were some such as the following:

Does the company have a board of directors? Who appoints the company’s CEO? How is the remuneration of the company’s top management? Do any of the administrators participate directly or indirectly in the company’s capital stock? How are the company’s ethical guidelines communicated to employees?

– Social responsibility: in this section 8 other questions were asked, including the following:

Which are the company’s main stakeholders (managers, employees, suppliers)? Does the company have formal stakeholder engagement policies? Which corporate social responsibility actions have been carried out within the company (e.g., reducing the environmental impact of its operations; improving the working conditions of employees or collaborators)?

Source: www.actualicese.com