Skip to main content

AB Akola group enters into an administrative agreement with the Bank of Lithuania

Written by Customer Service on . Posted in Public Companies.

The Bank of Lithuania has entered into an Administrative Agreement with AB Akola group (hereinafter also the Company) and imposed sanctions in the form of a warning and instruction to make a public announcement, and the Company undertook to cease and remedy the breaches specified in the Administrative Agreement and to make a public announcement about the sanctions imposed on the Company.

The Bank of Lithuania, having carried out a targeted unscheduled inspection of the Company, identified the following breaches on the part of the Company, details of which are provided below:

  • The Company failed to comply with certain international accounting standards when compiling the 6-month (Q1 and Q2) 2022–2023 and 2023–2024 consolidated financial statements of the company group AB Akola group. The Company recognised the revenue from the sale of fertilisers and other goods under the long-term sale and purchase agreements that provided for an additional storage service before the passing of control of the fertilisers to the buyers, i.e. the Company had not physically transferred such assets to the buyers, stored the assets in the Company’s warehouses.
  • The Company failed to disclose in its 2021–2022 and 2022–2023 annual reports all required specific information on the remuneration of each member of the management and supervisory bodies, and the information it provided was not clear, complete, consistent and comparable.

AB Akola group has been issued with a warning on account of breaches of paragraphs 31 and 38 of International Financial Reporting Standard (IFRS) 15 and paragraph 13 of International Accounting Standard (IAS) 8:

  • The 6-month (Q1 and Q2) 2022–2023 and the 6-month (Q1 and Q2) 2023–2024 consolidated financial statements of the company group AB Akola group are non-compliant with the requirements of paragraphs 31 and 38 of International Financial Reporting Standard 15 and paragraph 13 of International Accounting Standard 8;
  • the breach has the following impact on the 6-month (Q1 and Q2) 2022–2023 and the 6-month (Q1 and Q2) 2023–2024 consolidated financial statements (revenue) of the company group AB Akola group: such accounting resulted in an overstatement of the consolidated revenue of the company group AB Akola group for Q2, i.e. by 9% of the total consolidated revenue of the company group AB Akola group for Q2 2022–2023 and by 4% of the consolidated revenue of the company group AB Akola group for the 6-month period in 2022–2023; by 6% of the total consolidated revenue of the company group AB Akola group for Q2 2023–2024 and by 3% of the total consolidated revenue of the company group AB Akola group for the 6-month period in 2023–2024. This consequently resulted in an overstatement of the consolidated total profit, i.e. by EUR 5.8 million in the aggregate consolidated total profit of the company group AB Akola group for Q2 2022–2023 and EUR 5.8 million in the aggregate consolidated total profit of the company group AB Akola group for the 6-month period in 2022–2023, and by EUR 2.4 million in the aggregate consolidated total profit of the company group AB Akola group for Q2 2023–2024 and by EUR 2.7 million in the aggregate consolidated total profit of the company group AB Akola group for the 6-month period in 2023–2024. Accordingly, the Q2 and 6-month consolidated financial statements of the company group AB Akola group recognised a higher consolidated net result (profit) of the company group AB Akola group than it should have been had the irregularity specified above not occurred, while the consolidated revenue of the company group AB Akola group for the subsequent interim reporting periods (Q3 and 9-month period) and, respectively, the net result (profit), due to premature recognition of the revenue for Q2 and 6-months and recognition of related cost of goods, were lower than they should have been had the irregularity in question not occurred;
  • AB Akola group has undertaken to cease and remedy the breach: to prepare and make publicly available the 9-month (Q3) 2024–2025 consolidated financial statements of the company group AB Akola group, as well as subsequent financial statements, by ensuring they are in full compliance with paragraphs 31 and 38 of International Financial Reporting Standard 15 and paragraph 13 of International Accounting Standard 8, and to release publicly a revised notification of 19 February 2025 about the financial results of the company group AB Akola group for the 6-month period (Q1 and Q2) 2024–2025, disclosing the impact of the breach on the following financial statements: such accounting resulted in an overstatement of the consolidated revenue of the company group AB Akola group for Q2, i.e. by 6% of the total consolidated revenue of the company group AB Akola group for Q2 2024–2025 and by 4% of the total consolidated revenue of the company group AB Akola group for the 6-month period in 2024–2025. This consequently resulted in an overstatement of the consolidated total profit, i.e. by EUR 3.8 million in the aggregate consolidated total profit of the company group AB Akola group for Q2 2024–2025 and EUR 4.4 million in the aggregate consolidated total profit of the company group AB Akola group for the 6-month period in 2024–2025. Accordingly, the Q2 and 6-month consolidated financial statements of the company group AB Akola group recognised a higher consolidated net result (profit) of the company group AB Akola group than it should have been had the irregularity in question not occurred.

AB Akola group has been instructed to make a public announcement on account of the breaches of Article 233(1) of the Republic of Lithuania Law on Financial Reporting by Undertakings (as of 1 July 2024, similar requirements are established in Article 25 of the Republic of Lithuania Law on Financial Reporting of Undertakings and Groups of Undertakings), Clause 17 of the Rules on the Disclosure of Information approved by Resolution No 03-127 of the Board of the Bank of Lithuania of 22 August 2017 “Regarding the Approval of the Rules on the Disclosure of Information”, and Article 12(3) of the Republic of Lithuania Law on Securities:

  • AB Akola group failed to disclose in its 2021–2022 and 2022–2023 annual reports all required specific information on the remuneration of each member of the management and supervisory bodies: salary and other employment-based benefits paid to the members of the management board, including remuneration received by the members of the management board from any company within the group of companies of AB Akola group, and that the information provided was not clear, complete, consistent and comparable. AB Akola group failed to properly disclose information concerning compliance with principle 7.5 contained in the Corporate Governance Code for the Companies Listed on Nasdaq Vilnius by stating that the remuneration policy did not include a system of financial incentives, while AB Akola group did offer financial incentives to those holding managerial positions for their work in other companies within the group;
  • AB Akola group has remedied the breach and undertakes to use its best endeavours to prevent the recurrence of any such breach.

Please contact for further information:
Mažvydas Šileika, CFO of AB Akola Group
Mob. +370 619 19 403
E-mail m.sileika@akolagroup.lt

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Important Notice for Investors:

The services and products offered by Goldalea Capital Ltd. are intended exclusively for professional market participants as defined by applicable laws and regulations. This typically includes institutional investors, qualified investors, and high-net-worth individuals who have sufficient knowledge, experience, resources, and independence to assess the risks of trading on their own.

No Investment Advice:

The information, analyses, and market data provided are for general information purposes only and do not constitute individual investment advice. They should not be construed as a basis for investment decisions and do not take into account the specific investment objectives, financial situation, or individual needs of any recipient.

High Risks:

Trading in financial instruments is associated with significant risks and may result in the complete loss of the invested capital. Goldalea Capital Ltd. accepts no liability for losses incurred as a result of the use of the information provided or the execution of transactions.

Sole Responsibility:

The decision to invest or not to invest is solely the responsibility of the investor. Investors should obtain comprehensive information about the risks involved before making any investment decision and, if necessary, seek independent advice.

No Guarantees:

Goldalea Capital Ltd. makes no warranties or representations as to the accuracy, completeness, or timeliness of the information provided. Markets are subject to constant change, and past performance is not a reliable indicator of future results.

Regional Restrictions:

The services offered by Goldalea Capital Ltd. may not be available to all persons or in all countries. It is the responsibility of the investor to ensure that they are authorized to use the services offered.

Please note: This disclaimer is for general information purposes only and does not replace individual legal or tax advice.