ANNEX 1

ANNEX 1 Official translation GOVERNMMENT OF THE REPUBLIC OF LITHUANIA RESOLUTION No 30 of 13 January 2004 ON THE IMPLEMENTATION OF THE LAW OF THE REPUBLIC OF LITHUANIA ON THE ACCUMULATION OF PENSIONS AND THE LAW OF THE REPUBLIC OF LITHUANIA ON THE SUPPLEMENTARY VOLUNTARY ACCUMULATION OF PENSIONS Vilnius Acting pursuant to Article 27(1) of the Law of the Republic of Lithuania on the Accumulation of Pensions (Valstybės žinios (Official Gazette) No 75-3472, 2003), Article 55(1) of the Law of the Republic of Lithuania on the Supplementary Voluntary Accumulation of Pensions (Valstybės žinios (Official Gazette) No 55-1765, 1999; No. 75-3473, 2003) and Article 2(5) of the Law of the Republic of Lithuania on Financial Statements of Entities (Valstybės žinios (Official Gazette) No 99-3516, 2001; No 123-5587,2003), the Government of the Republic of Lithuania has resolved: 1. To approve the following documents attached hereto: 1.1. the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds; 1.2. the Procedure for Drawing up the Financial Statements of Financial Brokerage Firms and Management Enterprises. 2. To establish that the financial statements for the year 2004 and later years shall be drawn up in accordance with the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds and the Procedure for Drawing up the Financial Statements of Financial Brokerage Firms. Prime Minister                                     Algirdas Brazauskas Minister of Finance                                         Dalia Grybauskaitė       APPROVED by Resolution No30 of the Government of the Republic of Lithuania of 13 January 2004 PROCEDURE FOR ACCOUNTING AND DRAWING UP THE FINANCIAL STATEMENTS OF PENSION FUNDS I. GENERAL PROVISIONS 1. The Procedure for Accounting and Drawing up the Financial Statements of Pension Funds (hereinafter referred to as the “Procedure”) shall establish the accounting of the pension fund of the pension accumulation companies and pension fund management enterprises (hereinafter referred to as “accumulation companies”) which manage the pension funds where a portion of the state social security contribution is accumulated and the pension funds of supplementary voluntary accumulation (hereinafter referred to as “pension funds), the composition of financial statements of the pension fund, the deadline for submitting the financial statements of the pension fund and the procedure for its drawing up. 2. The terms used in the Procedure are used within the meaning defined in the Law of the Republic of Lithuania on the Pension System Reform (Valstybės žinios (Official Gazette) No. 75-3472,2003), Law of the Republic of Lithuania on the Supplementary Voluntary Accumulation of Pensions (Valstybės žinios (Official Gazette) No 55-1765, 1999; No 75-3473, 2003), Law of the Republic of Lithuania on the Securities Market (Valstybės žinios (Official Gazette) No 16-4121996; No 112-40742001) and the Law of the Republic of Lithuania on Accounting (Valstybės žinios (Official Gazette) No 99-3515, 2001). 3. The accumulation company, when managing the accounting of the pension fund and drawing up the financial statements of the pension fund, shall be governed by the Accounting Law of the Republic of Lithuania, the generally accepted Accounting Principles laid down in the Business Accounting Standards and other legal acts, unless otherwise established in this Procedure. II. ACCOUNTING OF THE PENSION FUND 4. The accumulation company shall handle the accounting of every pension fund managed by it separately from the accounting of assets of the accumulation company, accounting of the assets of enterprises of collective investment managed by it and accounting of pension assets of other pension funds managed by it. Pension contributions and amounts transferred from other pension funds shall be included in the pension assets on the day of the receipt thereof. 5. The accumulation company shall draw up a chart of accounts of every pension fund managed by it, which shall be subject to the approval by the accumulation company director. The chart of accounts of the pension fund shall be drawn up having regard to the specimen chart of accounts of the pension fund and the relevant notes on the accounts presented in Annex 1 to this Procedure. 6. All economic transactions and economic events shall be supported by accounting documents. Data of the documents shall be grouped in accounting registers. 7. Before the financial statements have been drawn up the accounting must cover all economic transactions and economic events of the reporting period. At the end of the year the accounting data shall be supported with the data of stocktaking of assets and liabilities. III. COMPONENTS OF THE FINANCIAL STATEMENTS OF PENSION FUNDS AND TIME LIMITS FOR THE PRESENTATION OF THE FINANCIAL STATEMENTS 8. The accumulation company shall, by 1 September of every financial year, draw up and submit to the supervisory authorities the semi-annual financial statements, while by 1 May of the next year, the annual financial statements of each pension fund managed by it. In the cases of reorganisation, transformation, liquidation of the accumulation company and in other cases established by legal acts financial statements may be drawn up more frequently. 9. The annual financial statements and semi-annual financial statements of the pension fund shall consist of the following: 9.1. the balance sheet (according to Annex 2); 9.2. the statement of the changes in net assets (according to Annex 3); 9.3. the notes on the accounts. 10. The accumulation companies which draw up the financial statements of the pension fund may print forms of the financial statements themselves, omitting the items of the balance sheet and statement of changes in net assets, the sums whereof for the reporting period and the preceding reporting period equal zero, or supplement the statements by introducing additional items, where the items are material and necessary in order to correctly reflect the pension assets, liabilities and net assets. 11. The financial year of the pension fund shall coincide with the calendar year. 12. The financial statements shall be drawn up using the monetary unit of the Republic of Lithuania - litas. 13. The financial statements shall be drawn up in the Lithuanian language and, as necessary, also in a foreign language. 14. The annual financial statements of the pension fund shall be reviewed by an audit firm. 15. The financial statements shall be signed by the director of the accumulation company. The annual financial statements of the pension fund shall be approved by the board of the accumulation company. The financial statements of the pension fund shall be published in the cases and manner prescribed by laws and other legal acts. IV. BALANCE SHEET 16. The balance sheet shall show the pension assets, liabilities and net assets of the reporting period and at end of the preceding reporting period. The amounts of balances of separate items of the annual financial statements and semi-annual financial statements of the preceding reporting period must equal the amounts of balances of separate items of the balance sheet of the end of the preceding financial year. In case of discrepancies, these must be explained in the notes on the accounts. 17. The “Assets” side of the balance sheet shall show cash and cash equivalent, time deposits, investments and amounts receivable. 18. The balance sheet item “Cash and cash equivalents” shall show cash in bank accounts held in different currencies and cash equivalents. Cash equivalents are short-term liquid investments that are readily convertible to amounts of cash and that are subject to an insignificant risk of changes in value. Money market instruments shall be attributed to cash equivalents and shown under this item. Investments into equity securities shall not be attributed to cash equivalents. 19. The balance sheet item “Time deposits” shall show time deposits. 20. The balance sheet item “Investments” shall show securities and other investments entered in the balance sheet at their fair value at the end of the reporting period. The difference between the fair value of securities and other investments held at the beginning of the reporting period and the fair value at the end of the reporting period as well as the difference between the fair value of securities and other investments acquired during the reporting period at the end of the reporting period and their acquisition cost shall be attributed to the increase or decrease in the value of investments and shall be shown on the face of the changes in net assets. Changes in the value of investments according to separate securities and other investments shall be shown in the notes on the financial statements. 21. The balance sheet item “Receivables” shall show the amounts of trade in investments, guarantee contributions of the accumulation company not received at the end of the reporting period and other receivables. 22. The “Liabilities” side of the balance sheet “” shall show the amounts payable as well as liabilities for the purchase of investments, the deductions due to the accumulation company for the management and safekeeping of pension assets and other liabilities. Attributed to other liabilities shall be the amounts not transferred by the pension fund at the end of the reporting period to the other pension funds to which the participants transfer, as well as the amounts due to the participants and their heirs (the pension fund participants’ units of account converted into cash according to the procedure established by law) and other liabilities. 23. The value of the net assets (the difference between the assets and liabilities) must be equal to the sum of the values of the participants’ units of account. In the balance sheet the value of the net assets must be equal to the total balance in account 21, “Net Assets”. V. STATEMENT OF CHANGES IN NET ASSETS 24. The statement of changes in net assets (hereinafter referred to as the “Statement”) shall show the changes in the net assets in the reporting period and the preceding reporting period, the increase and decrease in the net assets. 25. The Statement shall show the change in the net assets from the beginning of the year. The amounts for the preceding reporting period presented in the column of the annual statement must equal by item the amounts of the statement’s segment of the preceding year’s reporting period. The amounts in the column of the semi-annual statement for the preceding reporting period must equal by separate items the amounts in the columns of the semi-annual statement of the preceding year’s reporting period. Where there are discrepancies, they must be explained in the notes on the accounts. 26. The amounts of net asset balances in the reporting period shown in the Statement must be equal to net asset balances shown in the balance sheet of the reporting period. 27. The items of the increase in the net assets presented in the Statement shall show: 27.1. pension contributions – received contributions; 27.2. amounts transferred from other pension funds – amounts received from other pension funds, which have been accumulated by the participants, when a participant transfers to the pension fund; 27.3. guarantee contributions of the accumulation company – guarantee contributions receivable and received from the accumulation company if the accumulation company assumes obligations to guarantee for the participants a certain rate of profitability, whereas the investment activities of the pension fund have not attained the profitability prescribed by the pension fund regulations; 27.4. interest and dividends – dividends and interest received and receivable; 27.5. gain on the sale of investments – profit received upon selling investments. The item shall show only the positive difference between the selling price of investments and their balance value. A negative difference shall be shown in this statement in the item “Losses from the Sale of Investments”; 27.6. amount of increase in the value of investments – amount of the increase in the value of investments due to their valuation at fair value; 27.7. increase in asset value due to the change in the foreign currency rate – positive changes arising from settlements in foreign currency, revaluation of the amounts receivable and payable, time deposits in foreign currency, cash equivalents denominated in foreign currency, foreign currency in bank accounts, investments denominated in foreign currency, due to the change in the official rate of the litas and change in the exchange rate between the litas and a foreign currency announced by the Bank of Lithuania; 27.8. other revenue – penalties and other revenue received and receivable that has not been included in items 27.1 – 27.7 of this Procedure. 28. The Statement’s items of the decrease in the net assets shall show: 28.1. pension benefits – amounts paid and payable to the participants and their heirs according to the procedure established by laws and pension fund rules; 28.2. amounts transferred to other pension funds – money payable and transferred to other pension funds, which has been accumulated by participants, when the participant transfers to another pension fund; 28.3. losses from the sale of investments – losses incurred due to the sale of investments, where the investments are sold for the price below their balance value; 28.4. amount of decrease in the value of investments – amount of decrease in the value of investments due to their valuation at fair value; 28.5. decrease in the value of investments due to the change in the foreign currency rate – negative changes arising from settlements in foreign currency, revaluation of the amounts receivable and payable, time deposits in foreign currency, cash equivalents denominated in foreign currency, foreign currency in bank accounts, investments denominated in foreign currency, due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania; 28.6. management costs – deductions to the accumulation company and the depository for the management and custody of the assets of pension funds, other costs related to the management of pension funds provided for in the pension fund rules; 28.7. other costs – costs not included in the items indicated in paragraphs 28.1 to 28.6 of this Procedure. 29. The net assets at the end of the reporting period shall be calculated by adding the Statement data of item “I. Net assets at the beginning of the reporting period” to the data shown in item “II. Increase, total” and subtracting the data presented in the Statement item “III. Decrease, total”. 30. The number of the units of account and the value of the account unit at the end of the last three reporting periods shall be shown in the statement. The semi-annual statement shall show the number of the units of account for the last three half years and the value of the account unit. The value of the unit of account shall be shown calculated with the accuracy of four decimal points. VI. NOTES ON THE ACCOUNTS 31. The notes shall be comprised of the following parts: 31.1. the general part; 31.2. the accounting policies; 31.3. the  remarks to the notes on the accounts. 32. The general part of the notes shall contain the information about the fund: the date of establishment of the pension fund; duration of activities of the pension fund where its activities are of a limited duration; the accumulation company managing the fund; the depository which has custody of the pension assets, the address, code number of its office; the audit company which performed the audit of the pension fund, the address, code number of its office and other related information. 33. The part of the notes on the accounting policies shall present information about the accounting policies applied by the pension fund which may affect the decisions taken by the users of the information of the financial statements. The part shall give a brief presentation of: 33.1. the legal acts according to which the financial statements have been drawn up; 33.2. the investment policy; 33.3. the financial risk management policy; 33.4. the principles for the recognition of the increase and decrease of assets; 33.5. the rules for the accumulation of deductions for the accumulation company and the depository; 33.6. the methods of investment valuation and the frequency of investment revaluation; 33.7. the rules for determining the value of the unit of account; 33.8. the cash equivalents (explaining what is attributed to cash and cash equivalents); 33.9. the structure of investment portfolio. 34. When the pension fund accounting policies are changed, the notes shall indicate the effect of the change on the pension assets and present comparative data recalculated according to the changed policies. Where the indicators of the reporting period cannot be compared with the indicators of the preceding reporting periods due to the change in the accounting policies, the notes shall present information about the recalculated data. The recalculated data shall be presented together with the comparative data calculated on the presumption that the accounting policies have not changed during the reporting period. 35. If the data of the financials statements drawn up do no coincide with the data of these statements of the preceding reporting period or if the data are missing, the reasons of data discrepancy or absence must be indicated. Since, in the first year of the pension fund activities, the data of its preceding reporting period cannot be presented in the financial statements with the balance sheet and statement of changes in the net assets, the accounting policies part of the notes shall indicate that the financial statements refer to the first year. 36. The remarks to the notes shall include only tables and/or textual information explaining material items of the financial statements. The remarks to the notes shall be numbered in succession. An item of the financial statement must be cross-referenced to the remark in the notes, which provides the explanation for that item. 37. The remarks to the notes shall comprise: 37.1. the table “Changes in the Value of Investments” (according to Annex 4) which shall show the changes within the reporting period in the value of investments included in the balance sheet due to their acquisition, sale or redemption and changes in the fair value (increase or decrease); 37.2. the table “Asset Structure at the End of the Reporting Period” (according to Annex 5) which presents, by type of assets (cash, cash equivalents, time deposits, amounts receivable) and issuers of investments, the fair value of assets and investments at the end of the reporting period, the comparative share of the corresponding assets and investments as compared with the balance sheet item “Assets, total”, expressed in percentage, and, depending on the type of assets and investment, the nominal value, where the investment has one, the interest rate, if any, date of completion of investment, where it is of a fixed term. Depending on the materiality of assets and investments, several tables may be presented instead of one table, indicating separately, for example, the structure of investments, only cash equivalents, only debt securities; 37.3. the information about the correction of errors (the amounts corrected shall be indicated and comparative information shall be presented); 37.4. a short description of after balance events in the period from the end of the financial year to the day of approval of the financial statements, which are related to the financial year and may have a material influence on the pension assets. 38. The following may be presented in the notes: 38.1. additional table “Structure of Assets at the End of the Reporting Period” in which, depending on the investment strategy, investments would be grouped according to the chosen investment strategy features: states, currencies of denomination of investments, trading lists of the securities exchange or other material features; 38.2. information not presented in the financial statements which is necessary in order to specify the circumstances that have affected or may affect the pension assets. VII. FINAL PROVISIONS 39. Pension accumulation agreements, accounting records and other documents, accounting registers, financial statements shall be kept according to the procedure established by the Archives Department of Lithuania under the Government of the Republic of Lithuania. _________________ ANNEX 1 to the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds SPECIMEN CHART OF ACCOUNTS OF THE PENSION FUND AND NOTES TO THE CHART 1.   SPECIMEN CHART OF ACCOUNTS OF THE PENSION FUND CLASS 1. ASSETS 10 CASH AND CASH EQUIVALENTS 101 Accounts in banks 102 Cash equivalents 11 TIME DEPOSITS 12 DEBT SECURITIES 120 Debt securities of governments and central banks or debt securities guaranteed by governments and central banks 1201 Cost of acquisition 1202 Increase in value 1203 Decrease in value 121 Other debt securities 1211 Cost of acquisition 1212 Increase in value 1213 Decrease in value 13 EQUITY SECURITIES 1301 Cost of acquisition 1302 Increase in value 1303 Decrease in value 14 INVESTMENT UNITS AND SHARES OF COLLECTIVE INVESTMENT UNDERTAKINGS 1401 Cost of acquisition 1402 Increase in value 1403 Decrease in value 15 OTHER INVESTMENTS 1501 Cost of acquisition 1502 Increase in value 1503 Decrease in value 16 AMOUNTS RECEIVABLE 161 Amounts receivable from investment sale transactions 162 Other amounts receivable CLASS 2. LIABILITIES AND NET ASSETS 20 LIABILITIES 201 Investment purchase liabilities 202 Amounts payable to the accumulation company 203 Amounts payable to the depository 204 Other payable amounts and liabilities 21 NET ASSETS 2101 Received pension contributions 2102 Amounts transferred from other funds 2103 Guarantee payments of the accumulation company 2104 Interest and dividends 2105 Profit from the sale of investments 2106 Increase in the value of investments 2107 Asset value increase due to change in foreign currency rates 2108 Other income 2110 Pension benefits 2111 Amounts transferred to other pension funds 2112 Losses from sale of investment 2113 Decrease in the value of investments 2114 Decrease in the value of assets due to change in foreign currency rates 2115 Management costs 2116 Other costs 2120 Summary of income and costs II NOTES TO SPECIMEN CHART OF ACCOUNTS CLASS 1. ASSETS 1. Account 10 “Cash and cash equivalents” shall include pension fund cash and cash equivalents. The account shall be 1.1 debited in the following cases (D10): 1.1.1. increase of cash on the bank account – with the amount increased (K 11, 12, 13, 14, 15, 16, 21); 1.1.2. upon receiving cheques and bond coupons at maturity – with the nominal value (K 12, 21); 1.1.3. acquisition of cash equivalents – with the nominal value (K10); 1.2. credited in the following cases (K 10): 1.2.1. upon loss of cash on the bank account – with the amount decreased (D 11, 12, 13, 14, 15, 16, 20, 21); 1.2.2. in case of transformation of cheques and bond coupons to cash – with the nominal value (D10); 1.2.3. upon decrease of cash equivalents – with the share decreased (D 10, 21). 2. Account 11 “Time deposits” shall include time deposits. The account shall be: 2.1. debited in the following cases (D 11): 2.1.1. after placing a time deposit with the bank – with the amount of the deposit (K 10); 2.1.2. after increase of the amount of the deposit – with the amount of the unpaid interest (K21); 2.1.3. after increase of the value of the deposit due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania where the deposit is kept in foreign currency – with the amount increased (K 21); 2.2. credited in the following cases(K11): 2.2.1. withdrawal of the time deposit from the bank – with the amount of the deposit (D10); 2.2.2. without expecting to recover the time deposit – with the amount of the deposit (D 21); 2.2.3. after decrease of the value of the deposit due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania where the deposit is kept in foreign currency – with the amount decreased (D 21). 3. Account 12 “Debt securities” shall include the debt securities into which cash of the pension fund is invested. With regard to the information presented in financial statements, the Account shall be divided into two separate accounts, according to the types of the debt securities held: Account 120 “Debt securities of governments and central banks or debt securities guaranteed by them” and Account 121 “Other debt securities”. The pension fund may also use more or less accounts of debt securities, taking into account the need for information and the types of the debt securities held. These accounts accumulate information about the cost of acquisition of the debt securities and increase or decrease in the value of the debt securities due to the valuation at fair value. The account shall be: 3.1. debited in the following cases (D 12): 3.1.1. purchase of debt securities – at the acquisition cost (K 10, 20); 3.1.2. in case of prepayment for the acquired share of debt securities - with the prepaid amount (K 16); 3.1.3. after increase in value of debt securities – with the amount increased due to the increase in the fair value of the securities (K 21); 3.2. credited in the following cases (K 12): 3.2.1. sale of the acquired debt securities– with the selling price (D 10, 16, 20); 3.2.2. sale of the debt securities at a price below the fair value – with the amount of the loss (D 21); 3.2.3. after redemption of the debt securities by the issuer – with the price of redemption (D 10); 3.2.4. after decrease in the value of debt securities – with the amount of the decrease due to decrease in the fair value of these securities (D 21). 4. Account 13 “Equity securities” shall include the equity securities (shares) in which the pension fund assets are invested. Taking into account the need for information and the types of the available equity securities the pension fund may also make use of more accounts of equity securities. These accounts store the information about the cost of acquisition of equity securities and the increase or decrease in the value of these securities due to their valuation at fair value is. The account shall be: 4.1. debited in the following cases:(D 13): 4.1.1. purchase of equity securities – with the acquisition cost (K 10, 20); 4.1.2. in case of prepayment for the acquired share of debt securities – with the prepaid amount (K 16); 4.1.3. after increase in value of debt securities – with the amount increased due to the increase in the fair value of these securities (K 21); 4.2. credited in the following cases:(K 13): 4.2.1.sale of the acquired debt securities– with the selling price (D 10, 16, 20); 4.2.2. sale of the debt securities at the price below the fair value – with the amount of the loss (D 21); 4.2.3. after decrease in the value of debt securities – with the amount of the decrease due to decrease in the fair value of these securities (D 21). 5. Account 14 “Investment units and shares of collective investment undertakings” shall include investments in the investment instruments confirming participation in the investment company with variable capital or investment fund. These accounts contain information about the acquisition cost of the investment instruments of the collective investment undertakings and the increase or decrease in their value due to their valuation at fair value. The account shall be 5.1. debited in the following cases(D 14): 5.1.1. acquisition of investment units and shares of collective investment undertakings – with the acquisition cost (K 10, 20); 5.1.2. in case of prepayment for the acquired share of investment units and shares of collective investment undertakings– with the prepaid amount (K 16); 5.1.3. after increase in value of investment units and shares of collective investment undertakings – with the amount increased (K 21); 5.2. credited in the following cases (K 14): 5.2.1. sale of the acquired investment units and shares of collective investment undertakings – with the selling price (D 10, 16, 20); 5.2.2. sale of the investment units and shares of collective investment undertakings at the price below the balance sheet value – with the amount of the loss (D 21); 5.2.3. after decrease in the value of investment units and shares of collective investment undertakings – with the amount decreased (D 21). 6. Account 15 “Other investments” shall include investments not entered in Accounts 12, 13, and 14. The account shall accumulate the information about the cost of investments accounted in it, the increase or decrease in their value due to their valuation at fair value. The account shall be: 6.1. debited in the following cases (D 15): 6.1.1. acquisition of investments – with the acquisition cost (K 10, 20); 6.1.2. in case of prepayment for the acquired share of investments – with the prepaid amount (K 16); 6.1.3. after increase in the fair value of investments – with the amount increased (K 21); 6.2. credited in the following cases (K15): 6.2.1. sale of the acquired investments – with the selling price (D 10, 16, 20); 6.2.2. sale of the acquired investments at the price below the balance sheet value – with the amount of the loss (D 21); 6.2.3. after decrease in the fair value of the investments – with the amount decreased (D 21). 7. Account 16 “Amounts receivable” shall include receivable amounts connected with the gain on investing activities and sale of investments. According to the information presented in financial statements, the Account shall be divided into separate Accounts: Account 161 “Amounts receivable from the sale of investments” which shall include settlements with purchasers of investments and Account 162 “Other amounts receivable”, reflecting other receivable amounts (dividends receivable, guarantee payments receivable by accumulation companies and other) and settlements for them in general. As necessary, the pension fund may also use more separate accounts for the amounts receivable. The account shall be: 7.1. debited in the following cases (D 16): 7.1.1. when gaining on the sale of investments - with the amount of the gain receivable (K 21); 7.1.2. when the purchaser fails to pay for the sold investments at once- with the unpaid amount (K 12, 13, 14, 15, 21); 7.1.3. when reporting the amounts and dividends receivable – with the amount receivable (K21); 7.1.4. when reporting the guarantee payments of the accumulation company – with the amount receivable (K 21); 7.1.5. when reporting the prepayments made – with the amount paid (K 10); 7.1.6. when payments is made in a foreign currency, entering the increase of the amounts receivable due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount increased (K 21); 7.2. credited in the following cases (K 16): 7.2.1. after receiving dividends, payments, cash for investments sold on credit and other amounts receivable – with the amount received (D 10); 7.2.2. after acquiring investments, part of which was prepaid – with the prepaid amount (K 16); 7.2.3. when payments are made in a foreign currency, entering the decrease of the amounts receivable due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania– with the amount decreased (D 21); 7.2.4. where the recovery of the amounts receivable is not expected – with the amount receivable (D 21). CLASS 2. LIABILITIES AND NET ASSETS 8. Account 20 “Liabilities” shall include the payable amounts and liabilities of the pension fund. According to the information presented in financial statements, the account shall be divided into separate accounts: 201 “ Investment purchasing liabilities”, 202 “Amounts payable to the accumulation company”, 203 “Amounts payable to the depository”, 204 “Other amounts payable and liabilities”. As necessary, more or less accounts including the liabilities and amounts payable in general can be used. Benefits payable to the participants, their heirs, other pension funds, liabilities to life insurance companies regarding the annuities purchased to the participants, the prepaid amounts received, amounts payable for the investments purchased, other amounts payable shall be included in the liabilities accounts. The account shall be: 8.1. debited (D 20): 8.1.1. when paying for the investments acquired – with the amount of the liability covered (K 10); 8.1.2. when settling accounts with the accumulation company and the depository– with the amount of the liabilities covered (K 10); 8.1.3. when paying pension benefits - with the amount of cash transferred (K 10); 8.1.4. after paying to the life insurance company– with the amount of cash transferred (K 10); 8.1.5. after transferring to another pension fund the amount accumulated by the participant when the participant transfers to another pension fund – with the amount of cash transferred (K 10); 8.1.6. after transferring the amount accumulated by the participant to the heirs after the participant’s death – with the amount transferred (K 10); 8.1.7. after selling the investments when the investments sold or a part thereof have been prepaid – with the prepaid amount received (K 12, 13, 14, 15); 8.1.8. when covering other liabilities entered in this account – with the share of other liabilities (K 10); 8.1.9. when payment is made in a foreign currency, entering the decrease of amounts payable due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount decreased (K 21); 8.1.10. when reporting decrease in liabilities – with the amount of the liability written off (K 21); 8.2. credited (K 20): 8.2.1. when reporting the purchase of investments on credit - with the cost of acquisition (D 12, 13, 14, 15); 8.2.2. when reporting the emergence of liability to the accumulation company and depository – with the amount of the liability (D 21); 8.2.3. in accordance with the procedure set forth in the pension rules, after the emergence of the liability to pay pension benefits to the participants and after converting into cash the units of account recorded in the pension account – with the amount of the liability (D 21); 8.2.4. after emergence of the liability, following the death of the participant, to pay to the heir the units of account accumulated by the participant, and, after converting the units of account into cash– with the amount of the liability (D 21); 8.2.5. after transfer of the participant to another pension fund, with the emergence of the liability to transfer the units of account accumulated by the participant to another pension fund, and, after converting into cash the units of account recorded in the pension account – with the amount of the liability (D 21); 8.2.6. after the purchaser prepays the intended investment purchases – with the prepaid amount received (D 10); 8.2.7. after emergence of other liabilities – with the amount of the liabilities (D 21); 8.2.8. when payment is made in a foreign currency, entering the increase in the amounts payable due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount increased (K 21). 9. Account 21 “Net Assets” shall include the changes in pension assets, the pension fund performance and units of account of participants. The Account is used to accumulate, according to its separate accounts – 2101 “Pension contributions received”, 2102 “Amounts transferred from other funds”, 2103 “Guarantee contributions by the accumulation company”, 2104 “Interest and dividends”, 2105 “Profit on the sale of investments”, 2106 “Increase in the value of investments”, 2107 “Increase in the value of assets due to the change in the foreign currency rate”, 2108 “Other income”- information about the increase in net assets and, according to separate accounts: 2110 “Pension benefits”, 2111 “Amounts transferred to other pension funds”, 2112 “Losses from sale of investments”, 2113 “Decrease in the value of investments”, 2114 “Decrease in the value of assets due to the change in the foreign currency rate”, 2115 “Management costs”, 2116 “Other costs” information about the decrease in the value of net assets is accumulated, whereas at the end of the year the accounts of the increase and decrease of net assets are closed by debiting Account D 2120 “Summary of income and costs” with the amounts of decrease in net assets (K 2110, 2111, 2112, 2113, 2114, 2115, 2116) accumulated in separate accounts and by crediting Account K 2120 ” Summary of income and costs” with the amounts of increase in net assets (D 2110, 2111, 2112, 2113, 2114, 2115, 2116) accumulated in separate accounts. More accounts of increase and decrease in net assets may be used having regard to the need for information. The account shall be: 9.1. debited in the following cases (D 21): 9.1.1. after emergence of liabilities to the accumulation company and depository – with the amount of the liability (K 20); 9.1.2. after emergence of the liability, according to the procedure established in the pension rules, to pay pension benefits to participants, and, after converting into money of the units of account recorded in the pension account– with the amount of the liability (K 20); 9.1.3. after emergence of the liability, following the death of the participant, to pay to the heir the accumulated units of account, and, after converting the units of account into cash - with the amount of the liability (K 20); 9.1.4. after emergence of the liability, upon the participant’s transfer to another pension fund, to transfer the units of account accumulated by the participant to another pension fund, and, after converting into cash the units of account recorded in the pension account - with the amount of the liability (K 20); 9.1.5. after emergence of other liabilities - with the amount of the liabilities (K 20); 9.1.6. after decrease in the value of debt securities, equity securities, investment units and shares of collective investment undertakings and other investments – with the decreased amount due to the decrease in their fair value (K 12, 13, 14, 15); 9.1.7. after decrease in foreign currency bank account, in deposits in foreign currency and cash equivalents denominated in foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the decreased amount (K 10, 11); 9.1.8. after increase of the amounts receivable for payment in a foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount increased (K 20); 9.1.9. after decrease of the amounts receivable for payment in a foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount decreased (K 16); 9.1.10. in case of deposits whose recovery is not expected – with the amount of the deposit (K11); 9.1.11. in case of amounts receivable whose recovery is not expected – with the amount receivable (K16); 9.2. credited in the following cases (K21): 9.2.1. upon receiving pension contributions – with the amount of contributions (D 10); 9.2.2. in case of amounts transferred from other pension funds – with the amount received (D 10); 9.2.3. when recording guarantee payments of the accumulation company – with the amount receivable (D 16); 9.2.4. after increase of the deposit – with the amount of the unpaid interest (D11); 9.2.5. in case of interest received – with the amount of interest received (D 10); 9.2.6. in case of dividends, interest and other income received and receivable – with the amount receivable (DD 10, 16); 9.2.7. gain on the sale of investments - with the amount of the gain receivable (D 16); 9.2.8. after increase in the foreign currency bank account, in deposits in foreign currency and cash equivalents denominated in foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the increased amount (D 10, 11); 9.2.9. after increase in the value of debt securities, equity securities, investment units and shares of collective investment undertakings and other investments – with the increased amount due to the increase in their fair value (D 12, 13, 14, 15); 9.2. 10. after increase of the amounts receivable for payment in a foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount increased (D 16); 9.2.11. after decrease of the amounts payable for payment in a foreign currency due to the change in the official rate of the litas and change in the exchange rate of the litas against a foreign currency announced by the Bank of Lithuania – with the amount decreased (D. 20); 9.2.12. after decrease in liabilities – with the amount of the liability written off (D 20). ANNEX 2 to the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds  (specimen form of balance sheet account) ____________________________________________________ (Name of the accumulation company) ____________________________________________________ (Code number, registered office address) (Stamp) ____________________________________________________ (Name of the pension fund) BALANCE SHEET DATA AS AT ___ _____________ 20 ____ ______________________ No. _____ (Date) (litas) No. Assets Notes No. Reporting period Preceding reporting period I. CASH AND CASH EQUIVALENTS II. TIME DEPOSITS III. INVESTMENTS 1. Debt securities 1.1. Debt securities of governments and central banks or guaranteed by governments and central banks 1.2. Other debt securities 2. Equity debt securities 3. Investment units and shares of collective investment undertakings 4. Other investments IV. AMOUNTS RECEIVABLE 1. Amounts receivable from investment sale transactions 2. Other amounts receivable ASSETS, TOTAL No. Liabilities and net assets Notes No. Reporting period Preceding reporting period V. LIABILITIES 1. Investment purchase liability 2. Amounts payable to the accumulation company and to the depository 3. Other amounts payable and liabilities VI. NET ASSETS (I+II+III+IV-V) LIABILITIES AND NET ASSETS, TOTAL ______________________________________ ____________  _____________________ (Position of the accumulation company’s director)     (Signature)        (Full name) ANNEX 3 to the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds  (specimen form of statement of changes in net assets) ____________________________________________________ (Name of the accumulation company) ____________________________________________________ (Code number, registered office address) (Stamp) ______________________________ STATEMENT OF CHANGES IN NET ASSETS (Name of the pension fund) DATA AS AT ___ _____________ 20____ ______________________ No. _____ (Date) (litas) No. Items Notes No. Reporting period Preceding reporting period I. NET ASSETS AT THE BEGINNING OF THE REPORTING PERIOD II. INCREASE, TOTAL 1. Pension contributions 2. Amounts transferred from other pension funds 3. Guarantee contribution of pension fund 4. Interest and dividends 5. Gain on the sale of investments 6. Amount of increase in the value of investments 7. Increase in the value of assets due to the change in the foreign currency rate 8. Other income III. DECREASE, TOTAL 1. Pension benefits 2. Amounts transferred to other pension funds 3. Losses from the sale of investments 4. Amount of decrease in the value of investments 5. Decrease in the value of assets due to the change in the foreign currency rate 6. Management costs 7. Other costs IV. NET ASSETS AT THE END OF THE REPORTING PERIOD End of reporting period A year ago Two years ago V. VALUE OF UNIT OF ACCOUNT VI. NUMBER OF UNITS OF ACCOUNT ______________________________________ ____________  _____________________ (Position of the accumulation company’s director)     (Signature)        (Full name) ANNEX 4 to the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds (sample table for the notes) CHANGE IN THE VALUE OF INVESTMENTS (litas) Change Balance sheet items End of preceding reporting period Acquired Sold (redeemed) Increase in value Decrease in value End of reporting period Debt securities Debt securities of governments and central banks or those guaranteed by them Other debt securities Equity securities Investment units and shares of collective investment undertakings Other investments Total ANNEX 5 to the Procedure for Accounting and Drawing up the Financial Statements of Pension Funds (sample table for the notes) ASSETS STRUCTURE AT THE END OF THE REPORTING PERIOD (litas) Name of assets or of the issuer Name of the state into whose securities investment was made Name of the currency in which assets are denominated Nominal value (if any) Annual interest rate (if any) Date of maturity of deposit, investment (if a time investment) Fair value Comparative share of assets, investment (in percentage) Total X X X X X 100% –––––––––––––––– APPROVED by Resolution No 30 of the Government of the Republic of Lithuania of 13 January 2004 PROCEDURE FOR DRAWING UP THE FINANCIAL STATEMENTS OF FINANCIAL BROKERAGE FIRMS AND MANAGEMENT ENTERPRISES I. GENERAL PROVISIONS 1. The procedure for drawing up the financial statements of financial brokerage firms and management enterprises (hereinafter referred to as the “Procedure”) shall set the requirements for the drawing up of financial statements, composition of financial statements and characterisation of accounts of financial brokerage firms and management enterprises (hereinafter referred to as “enterprises”). 2. The terms used in the Procedure are used within the meaning defined in the Law of the Republic of Lithuania on Accounting (Valstybės žinios (Official Gazette), No 99-3515, 2001,) Law of the Republic of Lithuania on Financial Statements of Entities (Valstybės žinios (Official Gazette), No 99-3516, 2001), Law of the Republic of Lithuania on Consolidated Accounts of Entities (Valstybės žinios (Official Gazette), No 99-3517, 2001), Law of the Republic of Lithuania on Securities Market (Valstybės žinios (Official Gazette), No 16-412, 1996; No 112-4074,2001), Law of the Republic of Lithuania on Financial Institutions (Valstybės žinios (Official Gazette), No 91-3891, 2002,) Law of the Republic of Lithuania on Collective Investment Undertakings (Valstybės žinios (Official Gazette), No 74-3424, 2003), Law of the Republic of Lithuania on the Supplementary Voluntary Accumulation of Pensions (Valstybės žinios (Official Gazette), No 55-1765, 1999;No 75-3473, 2003) and the Rules on Calculation of Capital Adequacy of Financial Brokerage Firms approved by Resolution No 26 of the Securities Commission of the Republic of Lithuania of 21 November 1997 (Valstybės žinios (Official Gazette), No 108-2754, 1997; No 72-3337, 2003). 3. When keeping accounts and drawing up financial statements enterprises shall be guided by this Procedure and Business Accounting Standards. II. REQUIREMENTS FOR DRAWING UP FINANCIAL STATEMENTS 4. The enterprises shall draw up annual financial statements after the termination of their respective financial year according to the data of the last day of the financial year. Where a decision has been taken to liquidate or reorganise the enterprise, the enterprise shall draw up a balance sheet according to both the data as at the date of decision making and the data as at the date of the liquidation and reorganisation. 5. The registered new enterprises shall prepare the balance sheet of the beginning of business activity. 6. The financial statements shall be drawn up using the monetary unit of the Republic of Lithuania litas. 7. The financial statements shall be drawn up in the Lithuanian language and, as necessary, also in a foreign language. 8. All economic operations and economic events of the enterprise must be accounted prior to the drawing up of the financial statements. Accounting data shall be based on the data of stocktaking of assets and liabilities. 9. When the generally accepted accounting principles, the requirements set in this Procedure and the Business Accounting Standards are insufficient to give a true and fair view of an enterprise’s financial position and performance results, additional information shall be presented. Any departure from the requirements of this Procedure and the Business Accounting Standards, its reasons and effects upon the enterprise‘s assets, equity and liabilities shall be disclosed in the notes on the accounts. 10. The data of the reporting year and of the preceding financial year shall be presented in the financial statements. 11. It shall be possible not to include in the financial statements the items of the balance sheet and off-balance-sheet accounts, the profit/loss account, the cash flow statement and the statement of changes in equity for which there is no amount, save where there is a corresponding item for the preceding financial year. The items of the financial statements may be supplemented by inserting lines where this is necessary in order to give a true and fair view of an enterprise’s financial position, performance results and cash flows. 12. The balances in separate items of the financial statements for the beginning of the reporting financial year must correspond to the balances in separate items of the financial statements for the end of the preceding financial year. 13. Where it is impracticable to compare items of the financial statements for the reporting and preceding financial year due to the form of a report, a change of accounting principles or for other reasons, the balances for the end of the preceding financial year may be amended to enable comparison thereof. The notes on the accounts shall disclose the reason for the amendment, method of calculation and the resulting differences. 14. The enterprise’s financial statements shall be signed by the director of the enterprise. 15. The financial statements shall be approved in accordance with the procedure set forth in the Articles of Association of an enterprise. III. COMPONENTS OF THE FINANCIAL STATEMENTS AND THEIR DESCRIPTION 16. The financial statements shall consist of the following: 16.1. the balance sheet and off-balance-sheet items account (according to Annex 1); 16.2. the profit/loss account (according to Annex 2); 16.3. the cash flow statement (according to Annex 3); 16.4. the statement of changes in equity (according to Annex 4); 16.5. the notes on the accounts (according to Annex 5). 17. The balance sheet shall show the total assets, equity capital and liabilities of an enterprise on the last day of the financial year. 18. The off-balance sheet account shall state the assets transferred in trust, financial derivatives, guarantees and assurances given and received and other off-balance-sheet liabilities of the enterprise. 19. The profit/loss account shall show the total income earned by an enterprise over the financial year as well as the expenditure incurred in order to earn the income and performance results. 20. The cash flow statement shall show the receipts and disbursements of cash and cash equivalents of the enterprise over the financial year. 21. The statement of changes in equity shall show the increase and decrease in equity over the financial year. 22. The notes on the accounts shall provide a detailed analysis of the balance sheet and off-balance sheet accounts, the profit (loss) account, analysis of the cash flow statement and the statement of changes in equity as well as additional information not required to be presented in financial statements, and other information necessary to give a true and fair view of an enterprise’s financial position. 23. At the beginning of the financial statements the following shall be given: 23.1. enterprise’s name, code number and address of the registered office; 23.2. date of drawing up of the financial statement; 23.3. level of precision of the figures (indicators) used in the financial statements (indicating, whether the indicators are presented in litas, thousands of litas, etc.). 24. The financial statements shall preserve the headings of items used in sample statements and the numbering and ordering of the items. The items of financial statements shall be entered according to the notes presented in Annex 6 to the Procedure. 25. The enterprises shall draw up their annual financial statements at the end of their fiscal year. 26. The enterprises shall draw up their interim financial statements when necessary or with the regularity established by other legal acts, presenting the data of the reporting period and preceding reporting period. The balances in the balance sheet and off-balance sheet items of the interim financial statement for the beginning of the reporting period should equal the balances of the balance sheet and off-balance sheet for the end of the preceding financial year, while the balances of other accounts of the interim financial statements for the beginning of the preceding reporting period should equal the balances in the accounts of the corresponding interim financial statements for the end of the preceding financial year. IV. FINAL PROVISIONS 27. The procedure for keeping financial statements shall be set by the Law of the Republic of Lithuania on Accounting. 28. The financial statements of the enterprises, which have been liquidated, shall be kept in accordance with the procedure set by the Law on Archives. 29. The director of the enterprise shall be liable for the drawing up of the enterprise’s financial statements, which do not meet the requirements of this Procedure. _________________ ANNEX 1  Procedure for Drawing up the Financial Statements of Financial Brokerage Firms and Management Enterprises  (specimen form of balance sheet and off-balance-sheet-items account) ____________________________________________________ (Name of the enterprise) ____________________________________________________ (Code number, registered office address) (Stamp) BALACE SHEET AND OFF-BALANCE-SHEET ITEM ACCOUNT ACCORDING TO DATA AS AT ___ _____________ 20 ____ ______________ No. ______ (Date) i. BALANCE SHEET (litas) No. Assets Notes No. Financial year Previous financial year I. CASH AND CASH EQUIVALENTS II. AMOUNTS RECEIVABLE FOR ENTERPRISE’S SERVICES 1 III. OTHER AMOUNTS RECEIVABLE 1 IV. PREPAYMENTS V. TRADING-BOOK SECURITIES 2 V.1. Debt securities V.1.1. Government securities V.1.2. Other debt securities V.2. Equity securities V.3. Other securities VI. NON-TRADING- BOOK SECURITIES 2 VI.1. Debt securities VI.1.1. Government securities VI.1.2. Other debt securities VI.2. Equity securities VI.3. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED UNDERTAKINGS 3 VI.4. Other securities VII. GUARANTEE PAYMENTS VIII. INTANGIBLE ASSETS 4 VIII.1. Development VIII.2. Goodwill VIII.3. Patents, licences VIII.4. Software VIII.5. Other intangible assets IX. TANGIBLE ASSETS IX.1. Inventory IX.2. Tangible long-term assets 4 IX.2.1. Land IX.2.2. Buildings and structures IX.2.3. Machinery and equipment IX.2.4. Vehicles IX.2.5. Other tangible assets TOTAL ASSETS Liabilities and equity capital Note No. Financial year Previous financial year I. AMOUNTS PAYABLE AND LIABILITIES TO CREDIT AND FINANCIAL INSTITUTIONS 5 II. AMOUNTS PAYABLE AND LIABILITIES RELATING TO THE SERVICES PROVIDED BY THE ENTERPRISE 5 III. DEBT SECURITIES ISSUED 6 IV. OTHER AMOUNTS PAYABLE AND LIABILITIES 5 IV.1. Tax liabilities IV.2. Liabilities related to labour relations IV.3. Leasing (financial lease) liabilities IV.4. Prepayments received IV.5. Other amounts payable and liabilities V. PROVISIONS 7 VI. GRANTS AND SUBSIDIES 8 VII. FIDUCIARY LOANS 9 VIII. CAPITAL 10 VIII.1. Authorised (subscribed) VIII.2. Unpaid subscribed (-) VIII.3. Own shares (-) IX. SHARE PREMIUM X. RESERVE X.1. Legal reserve X.2. For acquisition of own shares X.3. Other reserve XI. ASSET REVALUATION RESERVE XI.1. Tangible long-term assets revaluation reserve XI.2. Financial assets revaluation reserve XII. RETAINED PROFIT/LOSS XII.1. Current year profit/loss TOTAL LIABILITIES AND EQUITY CAPITAL, II. OFF-BALANCE SHEET ITEMS (litas)  Off-balance sheet items Note No. Financial year Previous financial year I. CLIENTS’ CASH II. CLIENTS’ SECURITIES III. AMOUNTS RECEIVABLE RELATED TO TRANSACTIONS FOR CUSTOMER ACCOUNTS IV. FINANCIAL DERIVATIVES 11 X X IV.1. Interest rate contracts X X IV.1.1. Amounts receivable IV.1.2. Amounts payable IV.2. Other V. FINANCIAL GUARANTEES AND SURETY GRANTED 12 VI. FINANCIAL GUARANTEES AND SURETY RECEIVED 12 VII. OTHER OFF-BALANCE SHEET LIABILITIES 13 ______________________________________ ____________  _____________________ (Position of the director of the enterprise)                       (Signature)        Full name) ANNEX 2 Procedure for Drawing up the Financial Statements of Financial Brokerage Firms and Management Enterprises  (specimen form of profit/loss statement) ____________________________________________________ (Name of the enterprise) ____________________________________________________ (Code number, registered office address) PROFIT/LOSS STATEMENT ACCORDING TO DATA AS AT ___ _____________ 20 ____ ______________ No. ______ (Date) (litas)  No. Items Note No. Financial year Previous financial year I. OPERATING PROFIT/LOSS I.1. Securities broker’s commission income I.2. Securities broker’s commission costs I.3. Revenue from services to clients I.4. Costs of services to clients I.5. Management income I.6. Management costs I.7. Trading-book profit/loss I.7.1. Realised profit/loss I.7.2. Unrealised profit/loss I.7.3. Dividends I.7.4. Interest II. PROFIT/LOSS ON FINANCIAL AND INVESTMENT ACTIVITIES II.1. Non- trading-book profit/loss II.1.1. Realised profit/loss II.1.2. Unrealised profit/loss II.1.3. Dividends II.1.4. Interest II.2.1. Income from foreign exchange transactions II.2.2. Foreign exchange transactions costs II.3. Interest II.3.1. Revenue II.3.2. Costs II.4. Income from subsidiaries and associated undertakings III …