Legal Background

With the European Single Electronic Format (ESEF), financial reporting will enter the EU-uniform digital era.
Issuers whose securities are listed on a regulated market in the EU will be obligated to use the ESEF, within the framework of the Transparency Directive 2013/50 EU of the European Parliament. For financial years commencing as from 1 January 2020, issuers will be required to make their annual financial reports (e.g. HGB [Commercial Code] annual financial statements, IFRS consolidated financial statements) available to the public in the official format (XHTML) required by ESMA (European Securities and Markets Authority) via the Officially Appointed Mechanism (OAM), in Germany the Company Register.
On 18 June 2020, the German Bundestag passed the law for further implementation of the Transparency Directive Amendment Directive with regard to a uniform electronic format for annual financial reports (ESEF) according to which annual financial statements must be submitted to the Bundesanzeiger in ESEF reporting format. As a result, issuers will in future be required to prepare all their annual financial reports in XHTML format. If this requirement is not met, a fine may be imposed by BaFin [German Federal Financial Supervisory Authority].

In accordance with the Transparency Directive 2013/50 EU, the objective is to simplify reporting for the benefit of issuers, investors and competent authorities and to facilitate the accessibility, analysis and comparability of annual financial reports.

IFRS consolidated financial statements must also be labelled using inline XBRL in accordance with the 2013/50 EU Transparency Directive. The new labelling requirement will initially, for financial years as from 1 January 2020, affect the primary financial statement components of IFRS consolidated financial statements (such as balance sheet, statement of income and accumulated earnings, cash flow statement, statement of changes in equity) and also ten basic items of company information (e.g. name, registered office, legal form). For financial years commencing on or after 1 January 2022, the labelling obligation will also extend to information in Annexes. A technical solution is advisable to meet these increasingly more complex requirements.

You will generally under commercial law on disclosure in Germany be required to submit your annual financial reports to the Bundesanzeiger in ESEF reporting format. For compliance with ESMA requirements, your annual financial report will then automatically be forwarded to the Company Register where these reports will be made publicly available.
Issuers not subject to disclosure under commercial law, may submit their annual financial reports directly to the Company Register, in ESEF reporting format.