CI&T to restate previous financial statements for FY22 and Q1 to Q3 2023

CI&T announced that, in connection with the preparation of its financial statements for 2023, in consultation with its independent registered public accounting firm, KPMG, identified certain non-cash accounting errors related to deferred income accounting for tax-deductible goodwill. As a result, the audit committee of the board concluded that the company’s audited consolidated financial statements for 2022 included in its annual report on Form 20-F and unaudited condensed consolidated interim financial statements for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023, should no longer be relied upon. The corrective adjustments required are expected to be non-cash in nature and will not increase the amount of income tax to be paid in the future. The corrective adjustments are not expected to impact “net revenue,” “operating profit before financial income and tax,” or any other line of statement of profit and loss that is above “profit before income tax” for the Non-Reliance Periods. The corrective adjustments are not expected to impact Adjusted EBITDA for the Non-Reliance Periods or cash and cash equivalents at the end of the Non-Reliance Periods. The company intends to file the 2023 Form 20-F as soon as possible and, therefore, does not plan to amend its 2022 Form 20-F. The company also intends to furnish to the SEC, as soon as possible, a current report on Form 6-K showing the impact of the restatement of its unaudited condensed consolidated interim financial statements for the periods ended March 31, 2023, June 30, 2023 and September 30, 2023. Income tax expense was R$40.5M understated in 2022 and by R$30.9M for the nine months ended September 30, 2023. Income tax expense was overstated by R$10.3M for 2022 and by R$4.1M for the nine months ended September 30, 2023. The company estimates the net impact of these adjustments will increase Income Tax Expense by approximately R$30.2M for 2022 and R$26.7M in the nine months ended September 30, 2023. As a result, Net Income should be reduced by approximately R$30.2M in 2022 and R$26.7M in the nine months ended September 30,2023. The reclassifications will reduce current assets in R$ 19.6M, reduce current liabilities in R$30.4M and increase non-current liabilities in R$ 10.8M. These reclassifications have no impact on statements of profit or loss, comprehensive income, changes in equity and cash flows. The company expects that the restatement described above will be attributable to a material weakness in the company’s internal control.