EQS-News: Allgeier is: clarifications on the result of Bafin Audit | 11.03.25

Munich, March 11, 2025 – Yesterday, the Federal German Financial Supervisory Authority (Bafin) published the results of its audit, announced on July 12, 2022, on the consolidated financial statements of Allgeier SE (ISIN De000A2GS633, WKN A2GS63) on December 31, 2020. As for this, the Board of Directors of Allge. the following:

The results published by Bafin refer exclusively to the issues regarding the disclosure of Spin-off of Nagarro, which entered into force on December 15, 2020, in Allgeier’s consolidated financial statements in accordance with the IFRS standards addressed in the publication. None of the conclusions refer to the individual financial statements of the companies involved. Therefore, the conclusions are not relevant to the determination of taxes attributed to events related to the spin-off and the liquidity of the group.

The published results refer only to the presentation of the declaration of comprehensive revenues for the operations interrupted in the consolidated financial statements on December 31, 2020. They have no effect on the presentation of the continuous operations of the Allgeier group on December 31, 2020. Thus, the findings have no effect on the consolidated financial statements from Allgeier for the next 2021. The efficacy of the Spin-off, which took place at the compulsory legal entry into the Commercial Register of December 15, 2020, is also not affected.

The following should be mentioned on specific conclusions:

1. Alleged underestimation of income in the IFRS situation of comprehensive income

Bafin criticizes the fact that a “result of the activity from say-off and sold worth at least 199 million EUR” resulting from the spin-off has not been reported in the interrupted operations. This assumption actually implies that a liability of dividends in the value of the fair values ​​of the ashtrays must be presented in the balance sheet, at the same time, due to the settlement of the annual general meeting of September 24, 2020 in terms of spin-off, which can then be dereganized on the basis of the spin-off The profit from the spin-off mentioned by Bafin December 15, 2020, because the responsibility for the resolved distribution, which had to be created in advance, was solved when the spin-off was executed. The accounting profit thus results from the distribution itself and from the resulting “settlement” of the distribution liability. Bafin is thus equivalent to the spine of the distribution of a cash -free dividend. The recognition of the distribution liability worth at least 199 million EUR and its compensation by the real distribution in the same amount results in the network of the two elements in the balance sheet. The disclosure of the balance sheet in the consolidated financial statements of December 31, 2020 is therefore correct and offers a true and correct vision of the net assets and the financial position of the Allgeier group on December 31, 2020. It should be mentioned that, regardless of the disclosure of IFRS, the entire Nagarro group actually left the Allgeier group with the spin-off and was transferred to the shareholders’ securities accounts. Only part of the transaction costs remained in the Allgeier group after Spin-off.

2. Disclosure of depreciation and depreciation according to IFRs

Bafin also criticizes the fact that the programmed depreciation of the non-current assets of the Nagarro group intended for the spin-off was performed until the day when the spin-off came into force in accordance with the civil law, that is December 15, 2020. However, in the IFRS presentation, the depreciation should only be taken into account, the distribution was highly probable. In Bafin’s opinion, this day was already the day of the annual General Assembly of September 24, 2020, and no, as it assumed by Allgeier SE, the Spin-off day of December 15, 2020. The disclosure of the programmed depreciation of the non-cure assets in the Nagarro group in the discontinued operations depends on the moment when the implementation was imprisoned. In the opinion of Allgeier, this was not yet the case at the annual General Assembly of September 24, 2020. In the end, there were objections in the minutes, a stock market leaflet had to be written and approved in a restricted time for the future listing of Nagarro, and, last but not least, it was the first year of the pandemic, which was a great year. There was no insignificant probability that the spin-off did not have taken place in 2020. Therefore, Allgeier was probably considered to be high enough once the entry into the commercial register, which is necessary for it to enter, was made and was accounted for. If the depreciation of the assets of the Nagarro group took place only until September 24, 2020, the result of the Nagarro group from interrupted operations, as reported in accordance with IFRS, would have been with 4.9 million EUR higher. In any case, only a pro-Rate result would have been displayed in the operations interrupted to the actual spin-off. The disclosure of the IFRS in the consolidated situation of the comprehensive revenues of Allgeier SE for the financial year 2020 has no effect on the real income or assets of the Nagarro group and also any effect on the continuous operations of the Allgeier group and the consolidated financial statements after December 31, 2020. For tax purposes, for tax purposes, for tax purposes. relevant for tax purposes.

3. Completely complete income for the period

Finally, Bafin criticizes the fact that the full total income for the period in the 2020 consolidated financial statements was underestimated by EUR 14,478 million. In this regard, Bafin refers to two disclosures made under the income account. In fact, an amount of EUR 1.6 million in the consolidated financial statements for reclassified actuarial earnings and an amount of -5.6 million EUR for foreign differences was reported. In both cases, there was a mistake in the presentation sign. The correct presentation would have been an amount of EUR +1.6 million for actuarial earnings and an amount of EUR +5.6 million for foreign exchange differences. The difference amounts to a total of EUR 14,478 million. This is a wrong statement in accordance with IFRS standards. It only affects the presentation of the interrupted activity in the declaration of comprehensive revenues. The correct prefixes were taken into account in the consolidated balance so that they are not affected by the error. Moreover, the disclosure has no effect on the continuous operations of the Allgeier group and no effect on the consolidated financial statements of the 2021.

In general, it can be stated that a sign error has occurred in presenting the interrupted operations, as described above. This presentation in accordance with IFRS standards has only affected the operations interrupted in the consolidated situation of comprehensive incomes. The result of at least 199 million EUR that must be shown in the operations interrupted in Bafin’s opinion was compensated by an appropriate distribution liability in the consolidated balance sheet. As if the date of interruption relevant for determining the depreciation in the interrupted operations, this is therefore simply a problem of reporting of IFRS. No substantial real profit remained in the Allgeier group after Spin-off, because the spin-off led to a complete transfer of assets and the value of the Nagarro group in the shareholders’ accounts. In any case, it should be mentioned that Allgeier’s continuous operations are also consolidated for the following years are not affected by IFRS reporting problems. The effectiveness of the spin-off and the consolidated financial statements of Nagarro are also not in question. These IFRS reporting issues have no tax relevance.

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Allgeier is a technology company for digital transformation. Allgeier Group companies guide their customers in Germany and abroad through the challenges of digital changes with comprehensive software and services and support the digitalization and transformation of critical business processes. With over 2,000 customers, the base of wide and stable customers consists of global corporations, high performance companies and clients in the public sector at all federal levels. The service portfolio varies from the company’s own software products and the development of high quality software to consulting, conception and long-term assistance for cloud software or other environments. In the two group segments IT enterprises and MGM Technology Partners, over 3,100 employees work a total of 48 locations around the world in the Dach, France, Spain, Portugal, Poland, Czech Republic, as well as in India, Vietnam, Canada and the US. In the financial year of 2023, the Allgeier group as a whole generated sales of EUR 489 million. According to Lünendonk® 2024 list, Allgeier is one of the most important IT service companies in Germany. Allgeier is listed on the regulated market of the Frankfurt Stock Exchange (WKN A2GS63, ISIN De000A2GS633). Additional information at: www.allgeier.com