Telsiai, Lithuania, 2017-02-10 17:00 CET (GLOBE NEWSWIRE) -- On 10 February 2017, AB ŽEMAITIJOS PIENAS (the “Company”) received Decision No. 241-17 of the Director of the Supervision Service of the Bank of Lithuania “Regarding imposition of a measure of impact on the company” (the “Decision”). By the Decision the Company was, inter alia, obligated to make it public, indicating that:
1. By the Decision of the Director of the Supervision Service of the Bank of Lithuania, the Company was warned about violation of Article 22 of the Law of the Republic of Lithuania on Securities.
2. In the opinion of the Supervision Service of the Bank of Lithuania, financial statements of the Company for 2015 do not meet requirements of IAS 2 “Inventories”, IAS 16 “Property, Plant and Equipment” and IAS 39 “Financial Instruments: Recognition and Measurement”.
3. The impact of the violations on the financial statements is as follows:
3.1. As the Company did not assess, as on 31 December 2015, the current value of amounts receivable from related persons – AB Klaipėdos Pienas and AB Žemaitijos Pieno Investicija in the amount of EUR 3.612 million, of future cash flows discounted at the initial actual interest rate on such financial assets, it is impossible to establish the exact impact on the financial condition and financial results of the Company and the group. However, taking into account that impairment of all amounts receivable from related companies was recognised, which was not reasonable, it should be considered that, upon evaluation of the current value of the amounts receivable from related companies, the assets and the net result of the Company and the group for 2015 would increase.
3.2. As the Company did not substantiate, as on 31 December 2015, impairment of the inventories (fermented cheese in the aging process) of the Company and the group (EUR 4.366 million and EUR 4.676 million, respectively), it is impossible to accurately establish the impact on the financial condition and financial results of the Company and the group. However if, at the end of 2015, the net realisable value of inventories (fermented cheese in the aging process) of the Company and the group, which was not substantiated by the Company, were established to be different from that established by the Company, then the value of inventories of the Company and the group, as on 31 December 2015, could be more or less than indicated in the financial statements for 2015.
3.3. Taking into account that the period of useful life of fixed tangible assets, which are fully depreciated, but are still used in operations, was set shorter than usefulness of the assets for the economic entity (the Company and the group), expenses of the Company and the group for previous periods were increased and the value of assets was reduced.
4. Financial statements will be corrected retrospectively and forwards, assessed and published together with the audited financial statements of the Company for 2016, unless the Company decided to file a complaint against the Decision in court, as indicated below.
The Company also notes that the Decision presents the opinion of the Bank of Lithuania on the issues discussed above, in connection with the financial statements of the Company for 2015, which does not necessarily coincide with the position of the Company. After the management of the Company analyses the Decision and in case it does not agree to the position of the Bank of Lithuania stated therein, it will consider a possibility to complain against the Decision in court under the procedure set by applicable legal acts.
Lawyer G. Keliauskas + 370 444 22208
