AB Akola Group's Administrative Agreement with Bank of Lithuania
AB Akola Group's Administrative Agreement with the Bank of Lithuania
The Bank of Lithuania has recently reached an Administrative Agreement with AB Akola Group, where the company is subject to sanctions that include a warning and a directive for public disclosure. This accord was initiated after a thorough, unannounced inspection highlighted specific compliance breaches that the company committed. AB Akola has acknowledged these violations and committed to rectifying the issues outlined by the Bank of Lithuania.
Compliance Breaches Identified
During the inspection, the Bank identified significant breaches concerning the adherence to international accounting standards. Most notably, AB Akola Group failed to follow the correct procedures while compiling its consolidated financial statements for the 2022-2023 and 2023-2024 fiscal periods. This lapse primarily occurred when the organization improperly recognized revenue from fertilizer sales before transferring physical control of these assets to buyers, causing complications in their accounting practices.
Specific Violations Noted
Two critical violations were addressed in the agreement:
- The company did not comply with specific international accounting standards while preparing its 6-month (Q1 and Q2) financial statements.
- The annual reports for 2021-2022 and 2022-2023 lacked sufficient detail concerning the remuneration of management and supervisory personnel, which cast doubt on the clarity and reliability of the financial information presented.
Impact on Financial Statements
The consequences of these breaches have been substantial. AB Akola Group's consolidated statements reflected an inflated revenue figure due to improper accounting practices. Specifically, their reported consolidated revenue was overstated by 9% for Q2 2022-2023 and 4% for the 6-month period. This pattern continued into the following year, with similar discrepancies noted in their subsequent reports.
Corrective Actions Taken
In response to the findings, AB Akola Group has agreed to correct its accounting methods going forward. The company will ensure that all future financial statements, including the 9-month (Q3) 2024-2025 reports, comply fully with the relevant International Financial Reporting Standards. This commitment signifies the company's acknowledgment of past errors and its dedication to maintaining transparency and compliance in its financial reporting.
Public Disclosure Requirements
The Administrative Agreement includes instructions for AB Akola Group to make public disclosures concerning the identified breaches. These disclosures are in response to various articles and clauses that highlight the need for transparency in financial reporting. Furthermore, issues regarding the remuneration disclosure policies for management personnel in previous years have also been mandated for public announcement.
Future Compliance and Improvements
AB Akola Group has promised to undertake measures that go above and beyond mere compliance. The organization is focused on establishing robust systems to prevent future breaches and strengthen its overall governance. The company's commitment demonstrates its readiness to foster accountability and maintain aligned practices with industry standards.
Conclusion and Contact Information
AB Akola Group is taking significant steps to remedy its past non-compliances and improve its financial reporting integrity. This commitment to transparency is crucial not only for its stakeholders but also for the public trust it seeks to uphold. For further details, individuals can contact:
Mažvydas Šileika, CFO of AB Akola Group
Mobile: +370 619 19 403
Email: m.sileika@akolagroup.lt
Frequently Asked Questions
What triggered the Administrative Agreement with the Bank of Lithuania?
The agreement was initiated following an unannounced inspection that revealed compliance breaches in financial reporting standards by AB Akola Group.
What specific breaches did AB Akola Group commit?
The breaches included improper revenue recognition prior to transferring control of assets and incomplete disclosures regarding management remuneration in annual reports.
What measures is AB Akola Group taking to correct these issues?
AB Akola Group has committed to rectifying its accounting practices and ensuring compliance with international regulations in future financial statements.
How will AB Akola Group inform the public about these breaches?
The company is mandated to make public announcements concerning the breaches and the steps taken to address them in accordance with regulatory requirements.
Who can be contacted for more information regarding the agreement?
Individuals can reach out to Mažvydas Šileika, the CFO of AB Akola Group, for further inquiries or information.
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