DGAP-News

GRENKE AG: GRENKE informs about exonerating statements and points of criticism of BaFin's special auditor - Seite 4

The retroactive full consolidation leads to a change in the depiction of company acquisitions, notably exclusively in the consolidated financial statements according to IFRS. This has no effect on the Group's cash flow. No goodwill is shown in the consolidated Group's balance sheet for the franchises acquired after December 31, 2012, and thus since IFRS 10 came into effect. The acquisitions are accounted for directly in equity. Equity is reduced by around EUR 90 million compared with what has previously been shown. According to preliminary calculations, the balance sheet equity ratio is close to 16 percent, which corresponds to the Group's target level. However, this effect is largely neutral for the calculation of the regulatory equity ratio, as the regulatory equity is always adjusted for intangible assets such as goodwill.

As a result of the consolidation of the franchise companies, Mazars' comment that an impairment loss of approximately EUR 8 million would have had to be recognized for the former franchise company in Croatia as early as December 31, 2019 is obsolete. As no goodwill is recognized in the balance sheet for the company in Croatia under the new accounting treatment, no impairment losses are required.

The full consolidation of the franchise companies would have had nearly no impact on earnings in the fiscal year 2019. However, it will have a positive impact on earnings in 2020 due to the absence of goodwill amortization.

Related parties included in the notes

Mazars has criticized that Corina Stingaciu was not identified as a related party in the group accounting, although the relationship with Wolfgang Grenke appeared to be known within the GRENKE Group. According to now available information, GRENKE lists her and the entities controlled by her as related parties in the 2020 annual financial statements and will also provide this information for the previous year as a precautionary measure. This does not have any impact on the figures.