S.L. 544.2 Art. 2Form of Political Party Accounts. Cap. 544. THE Annual Report General Statement Independent Income and Statement Statement Statement Notes to the Party [(e.g. the Party) description of are operating national units, exclusively for THE Annual Report Scope of the The scope statements manner of financi

The annual audited statements of accounts of political parties shall be made, and shall in terms of articles 28 and 29 of the

Financing of Political Parties Act be presented to the Electoral Commission to be made available for public inspection and posted on the website of the Electoral Commission, in general, in the form stipulated in the Schedule.

SCHEDULE THE POLITICAL PARTY Annual Report and Financial Statements 31 December 2016 (The dates mentioned in this document are only quoted by way of example for guidance) POLITICAL PARTY & Financial Statements - 31st December, 2016

CONTENTS Information

Administrators report of Administrators responsibilities Party Auditors’ Report

Expenditure Account of Financial Position of Changes in Equity of Cash Flows Financial Statements

Registration Number ................. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

GENERAL INFORMATION

Governance of the Party (Identify the authority by which the Party adopts the financial statements Executive Committee or similar body elected by the Party)].

Members of the Executive Committee (or similar body elected by

(Name 1) (Chairman) (Name 2) (Vice Chairman) (Name 3)

(Name 4) (Name 5)

Registered address (Address 1)

(Address 2) (Address 3) (Address 4)

Auditors

(Name of auditor/audit firm) (Address 1) (Address 2)

(Address 3) (Address 4)

Structure of the Party Explain the structure of the party. This should include a summary the head office operations, central units of the party and the branch/constituency organisation. The geographical areas in which the party and/or units should also be explained e.g. if restricted to certain constituencies, cross-border. Relationships with foundations/bodies raising funds party purposes (if they exist) should be explained. POLITICAL PARTY & Financial Statements - 31st December, 2016

GENERAL INFORMATION - continued financial statements of the financial statements (the parts of the party to which the financial relate) should be defined in this section. Reference may be made to the accounting by accounting units not included within the scope of the statements. by the Executive Committee (or similar body elected by the Party) and behalf by:

1) (Name 2) (Name 3) (Denomination) (Denomination) (Treasurer)

THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

ADMINISTRATORS REPORT

<<The annual report of corporate entities generally include a report statement from the governing body, which provides an overview of review, in terms of operations and financial results. Such report scope for outlining the strategy of the organisation in the immediate term. Typically, such statement is penned and signed by the Chairman Secretary of the governing body.>> POLITICAL PARTY & Financial Statements - 31st December, 2016

STATEMENT OF RESPONSIBILITIES OF THE ADMINISTRATORS

administrators are required by the Financing of the Political Parties Act (Cap. prepare financial statements which give a true and fair view of the state of the Party as at the end of each reporting period and of the surplus or that period.

the financial statements, the administrators are responsible for:

ensuring that the financial statements have been drawn up in accordance with the Accountancy Profession (General Principles for Small and Medium-Sized Entities) Regulations (S.L. 281.03) and the Schedule accompanying and forming an integral part of those Regulations as amended by the notes in these financial statements;

selecting and applying appropriate accounting policies;

making accounting estimates that are reasonable in the circumstances;

ensuring that the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the Party will continue in business as a going concern.

administrators are also responsible for designing, implementing and internal control as the administrators determine is necessary to enable preparation of financial statements that are free from material misstatement, due to fraud or error, and that comply with the Act. They are also for safeguarding the assets of the Party and hence for taking steps for the prevention and detection of fraud and other irregularities. financial statements of the General Party for the year ended 31 December included in the Annual Report XXX, which is published in hard-copy orm and may be made available on the Party’s website. The administrators are responsible for the maintenance and integrity of the Annual the website in view of their responsibility for the controls over, and the the website. Access to information published on the party’s website is in other countries and jurisdictions, where legislation governing the on and dissemination of financial statements may differ from requirements or practice in Malta. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

INDEPENDENT AUDITORS’ REPORT POLITICAL PARTY & Financial Statements - 31st December, 2016

STATEMENT OF INCOME AND EXPENDITURE ACCOUNT 2016 2015 € €

and subscriptions donations fundraising activities commercial activities fundraising income from ancillary events remitted by branches income income legacies results of controlled entities fundraising income

Total income before notional income income

Total income expenses fundraising activities commercial activities election costs and amortisation expenses expenses payable

Total expenditure before donations in kind kind and notional donations Total Expenditure

Surplus/(deficit) for the financial year

Transfers (to)/from controlled entities

Amount transferred to accumulated fund

The notes on pages x to xx are an integral part of these financial statements. POLITICAL PARTY & Financial Statements - 31st December, 2016

STATEMENT OF FINANCIAL POSITION December

2016 2015 € €

assets assets and equipment property controlled entities investments assets receivables equivalents

TOTAL ASSETS

AND LIABILITIES

reserve fund Total equity liabilities liabilities

Total liabilities

TOTAL EQUITY AND LIABILITIES THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

STATEMENT OF FINANCIAL POSITION - continued

The financial statements in this document have been authorised for Executive Committee (or on (Date) similar body elected by the Party) signed on its behalf by:

(Name 1) (Name 2) (Name (Denomination) (Denomination) (Treasurer)

(Date)

The notes on pages x to xx are an integral part of these financial statements. POLITICAL PARTY & Financial Statements - 31st December, 2016

STATEMENT OF CHANGES IN EQUITY

Revaluation Other Accumulated Total reserve reserve fund € € € €

ending 31 December 2015

Surplus/(deficit) for the year (to)/from controlled

December 2015

ending 31 December 2016

Surplus/(deficit) for the year (to)/from controlled

December 2016

notes on pages x to xx are an integral part of these financial statements. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

STATEMENT OF CASHFLOWS

Year ended Notes 2016

Cash flows from operating activities

Cash generated (from/(used in) operations Interest received Interest paid Income tax paid Net cash generated from/(used in) operating activities

Cash flows from investing activities Purchases of intangible assets Purchases of property, plant and equipment Proceeds from disposal of property, plant and equipment Purchases of investment property Loan to controller entities Purchases of other financial investments Proceeds from disposal of financial investments Dividends received from controlled entities Dividends received from investments Net cash used in investing activities

Cash flows from financing activities Repayment of borrowings Net cash used in financing activities

Net movement in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

The notes on pages x to xx are an integral part of these financial statements. POLITICAL PARTY & Financial Statements - 31st December, 2016

THE FINANCIAL STATEMENTS Summary of significant accounting policies principal accounting policies applied in the preparation of these individual financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation financial statements are prepared in accordance with the provisions of Financing of Political Parties Act (Cap. 544) enacted in Malta, the guidelines issued by the Electoral Commission and in accordance with the Accountancy Profession (General Principles for Small and Medium-Sized Entities) Regulations (S.L. 281.03) and the Schedule accompanying and forming an integral part of those Regulations as amended by the notes in financial statements

Functional and presentation currency

Functional and presentation currency included in the financial statements are measured using the currency primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in euro, which Party’s functional and presentation currency.

Transactions and balances Foreign currency transactions are translated into the functional currency the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies are recognised in income and expenditure.

Property, plant and equipment property, plant and equipment is initially recorded at historical cost. and buildings, comprising mainly the party headquarters, offices and are shown at fair value based on periodic, but at least triennial, valuations by external independent valuers, less subsequent depreciation for buildings. Valuations are carried out on a regular basis such that the carrying amount of property does not differ materially from that which would be determined using fair values at the end of the reporting period. Any accumulated depreciation at the date of revaluation is eliminated against the carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. All other property, plant and equipment is at historical cost less depreciation and impairment losses. Historical includes expenditure that is directly attributable to the acquisition of the

THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued

Subsequent costs are included in the asset’s carrying amount as a separate asset, as appropriate, only when it is probable economic benefits associated with the item will flow to the cost of the item can be measured reliably. The carrying replaced part is derecognised. All other repairs and maintenance to income or loss during the financial period in which they are

Increases in the carrying amount arising on revaluation of land are credited directly to a revaluation reserve in shareholders’ Decreases that offset previous increases of the same asset against the revaluation reserve directly in equity; all other charged to income or loss. Each year the difference between based on the revalued carrying amount of the asset charged to and depreciation based on the asset’s original cost is transferred revaluation reserve to retained earnings.

Land is not depreciated as it is deemed to have an Depreciation on other assets is calculated using the straight-line allocate their cost or revalued amounts to their residual values estimated useful lives, as follows: % Buildings x Garage tools and equipment xx - xx Office furniture and equipment xx - xx Motor vehicles xx

The assets’ residual values and useful lives are reviewed, appropriate, at the end of each reporting period.

An asset’s carrying amount is written down immediately to amount if the asset’s carrying amount is greater than recoverable amount (note XX).

Gains and losses on disposals are determined by comparing with carrying amount and are recognised in income or loss. assets are sold, the amounts included in the revaluation reserve the assets are transferred to retained earnings. POLITICAL PARTY & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued Investment property Investment property, principally comprising freehold office buildings, is for long-term rental yields or for capital appreciation or both, and is not occupied by the Party. Property that is being constructed or developed for use as investment property is classified as property, plant and equipment and stated at cost until construction or development is complete, which time it is reclassified and subsequently accounted for as investment property.

Investment property is measured initially at its historical cost, including related transaction costs (and borrowing costs). Historical cost includes expenditure that is directly attributable to the acquisition of the items. Borrowing costs which are incurred for the purpose of acquiring or constructing a qualifying investment property are capitalised as part of its in accordance with accounting policy 1.15. After initial recognition, investment property is carried at fair value, representing open market value determined annually, less subsequent depreciation for buildings. Fair value based on active market prices, adjusted, if necessary, for any difference in nature, location or condition of the specific asset. If the information is available, the Party uses alternative valuation methods such as recent on less active markets or discounted cash flow projections.

Investment property valuations are reviewed annually by professional valuers. Investment property that is being redeveloped for continuing use as investment property which the market has become less active continues to be measured at value. The fair value of investment property reflects, among other things, rental income from current leases and assumptions about rental income from future leases in the light of current market conditions. The fair also reflects, on a similar basis, any cash outflows that could be expected in respect of the property. fair value of investment property does not reflect future capital expenditure that will improve or enhance the property and does not reflect related future benefits from this future expenditure other than those a rational market participant would take into account when determining the of the property. Subsequent expenditure is capitalised to the asset’s carrying amount only it is probable that future economic benefits associated with the expenditure will flow to the Party and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to income or during the financial period in which they are incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued Increases in the carrying amount arising on revaluation property are credited directly in equity and shown as a revaluation the accumulated fund. Decreases that offset previous increases asset are debited against the revaluation reserve directly in equity; decreases are charged to income or loss. Each year the difference depreciation based on the revalued carrying amount of the asset income or loss and depreciation based on the asset’s original transferred from the revaluation reserve to retained earnings.

Land is not depreciated as it is deemed to have an indefinite capitalised cost of buildings is amortised using the straight-line a maximum of XXX years, in accordance with their useful lives are reviewed, and adjusted if appropriate, at the end of period.

Investment properties are derecognised either when they have of or when the investment property is permanently withdrawn no future economic benefit is expected from its disposal.

If an investment property becomes owner-occupied, it is property, plant and equipment. Its fair value at th reclassification becomes its cost for subsequent accounting purposes. the Party decides to dispose of an investment property without the Party continues to treat the property as an investment Similarly, if the Party begins to redevelop an existing investment for continued future use as investment property, it remains property during the redevelopment.

1.5 Investments in controlled and jointly controlled entities Investments in controlled entities are accounted for by the equity accounting and are initially recognised at cost.

Equity accounting involves recognising in the statement expenditure, the controlled entity’s share of the associate’s profit the year and the share of post-acquisition movements recognised in reserves. The cumulative post-acquisition movements adjusted against the cost of the investment. POLITICAL PARTY & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued Party’s investment in associated undertaking is carried in the balance at an amount that reflects its share of the net assets of the associate and includes goodwill (net of any accumulated impairment loss) on acquisition. Equity accounting is discontinued when the carrying amount of an investment in an associated undertaking reaches zero, unless the Party has incurred obligations or guaranteed obligations in respect of the associated undertaking. On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the and loss account.

Financial instruments Financial instruments, other than investments in controlled entities, are classified in the following categories: loans and receivables and available-for-sale. The classification depends on the purpose for which the financial were acquired. The Administrators determine the classification of its financial assets at initial recognition and re-evaluates this designation at reporting date.

Loans and receivables and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after reporting date. These are classified as non-current assets.

Available-for-sale financial assets

Investments intended to be held for an indefinite period of time, which may sold in response to needs for liquidity or changes in interest rates, are classified as available-for-sale. They are included in non-current assets management intends to dispose of the investment within 12 months of reporting date. In the latter instance, the investment is classified within assets.

Recognition and measurement investment securities are initially recognised at cost. Available-for-sale securities are subsequently re-measured at fair value based on the price appearing to be the latest available dealing price based on market quotations. Gains and losses arising from changes in the fair value of securities classified as available-for-sale are recognised in equity. When the securities are disposed of or impaired, the related accumulated fair value adjustments, are included in the income and expenditure statement as gains losses from investment securities. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

Summary of significant accounting policies -continued All purchases and sales of investments are recognised on which is the date that the entity commits itself to purchase or Cost of purchase includes transaction costs. A financial asset its carrying amount is greater than its estimated recoverable amount of the impairment loss for assets carried at fair value the difference between the asset’s carrying amount and the present expected future cash flows discounted at the current market of similar financial assets.

1.6 Financial instruments 1.6.2 Impairment of financial assets A financial asset or a group of financial assets is impaired and losses are incurred if there is objective evidence of impairment one or more events that occurred after the initial recognition ‘loss event’) and that loss event (or events) has an impact on future cash flows of the financial asset or group of financial be reliably estimated.

If there is objective evidence that an impairment loss on financial carried at amortised cost has been incurred, the amount measured as the difference between the asset’s carrying amount present value of estimated future cash flows (excluding future that have not been incurred) discounted at the financial asset’s effective interest rate (i.e. the effective interest rate computed recognition). The amount of the loss shall be recognised in the expenditure account. If, in a subsequent period, the am impairment loss decreases and the decrease can be related objectively event occurring after the impairment was recognised, the recognised impairment loss shall be reversed. The reversal shall a carrying amount of the financial asset that exceeds what the would have been had the impairment not been recognised impairment is reversed. The amount of the reversal shall be the income and expenditure account.

If there is objective evidence that an impairment loss has been an unquoted equity instrument that is not carried at fair value value cannot be reliably measured, the amount of the impairment measured as the difference between the carrying amount of asset and the present value of estimated future cash flows discounted current market rate of return for a similar financial asset. Such losses shall not be reversed. POLITICAL PARTY & Financial Statements - 31st December, 2016

Summary of significant accounting policies -continued a decline in the fair value of an available-for- sale financial asset has recognised directly in equity and there is objective evidence that the is impaired, the cumulative loss that had been recognised directly in shall be reclassified from equity to the income and expenditure account as a reclassification adjustment even though the financial asset has been derecognised.

amount of the cumulative loss that is removed from equity and recognised in the income and expenditure account shall be the difference between the acquisition cost (net of any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in the income and expenditure account.

Impairment losses recognised in the income and expenditure account for an investment in an equity instrument classified as available- for-sale shall not reversed through the income and expenditure account. If, in a subsequent the fair value of a debt instrument classified as available- for-sale increases and the increase can be objectively related to an event occurring the impairment loss was recognised in the income and expenditure account, the impairment loss shall be reversed, with the amount of the reversal recognised in the income and expenditure account.

Inventories Inventories are measured at the lower of cost and net realisable value. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price in the ordinary course of business less estimated costs necessary to make the sale.

Receivables and loan to controlled entities

Receivables comprise amounts due for merchandise sold or services performed in the ordinary course of operations. If collection is expected in year or less (or in the normal operating cycle of the business if longer), are classified as current assets. If not, they are presented as non-current

Receivables and the loan to controlled entities are recognised initially at After initial recognition, these are accounted for at amortised cost and remeasured to take cognisance of impairment losses. Amortised cost is the measurement amount adjusted for the amortisation of any difference between the initial and maturity amounts using the effective interest method. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued A provision for impairment is established when there is objective that the party will not be able to collect all amounts due according original terms of the receivables. Significant financial difficulties debtor, probability that the debtor will enter bankruptcy reorganisation, and default or delinquency in payments are indicators that the receivable is impaired. The amount of the difference between the asset’s carrying amount and the present estimated future cash flows, discounted at the original effective The carrying amount of the asset is reduced through the use of account, and the amount of the loss is recognised in expenditure. When a receivable is uncollectible, it is written allowance account for trade and other receivables. Subsequent amounts previously written off are credited against income and

1.9 Cash and cash equivalents Cash comprises cash on hand and demand deposits. Cash short-term investments that are held to meet short-term cash rather than for investment or other purposes. Bank overdrafts, repayable on demand and form an integral part of the management, are a component of cash and cash equivalents.

1.10 Financial liabilities

The Party recognises a financial liability in its statement position when it becomes a party to the contractual provisions instrument. Financial liabilities are recognised initially transaction costs. These liabilities are subsequently measured cost. The Party derecognises a financial liability from its financial position when the obligation specified in the arrangement is discharged, is cancelled or expires.

1.11 Other Payables

Payables are obligations to pay for goods or services that have in the ordinary course of operations from suppliers. Accounts classified as current liabilities if payment is due within one in the normal operating cycle of the business if longer). If presented as non-current liabilities. POLITICAL PARTY & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued and other payables are recognised initially at cost, net of transaction incurred, and subsequently measured in accordance with the policy described above. On derecognition, any difference between the carrying amount and the redemption or settlement amount is recognised in income expenditure.

Borrowings

Borrowings are recognised initially at cost, net of transaction costs incurred, subsequently measured in accordance with the policy described in note Financial Liabilities. On derecognition, any difference between the carrying amount and the redemption or settlement amount is recognised in profit or

Borrowings are classified as current liabilities unless the Party has an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period.

Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to the recognised amounts and there is an intention to settle on a net or realise the asset and settle the liability simultaneously.

Leases The Party is the lessee of assets in which a significant portion of the risks and rewards of ownership are effectively retained by the lessor are classified as operating Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis the period of the lease.

The Party is the lessor leased out under operating leases are included in property, plant and equipment in the statement of financial position and are accounted for in accordance with accounting policy Property Plant and Equipment. They are depreciated over their expected useful lives on a basis consistent with owned property, plant and equipment. Rental income from operating is recognised in profit or loss on a straight-line basis over the lease

THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued 1.15 Borrowing costs Borrowing costs which are incurred for the purpose of constructing qualifying property, plant and equipment, investment or property held for development and resale are capitalised cost. Qualifying assets are assets that necessarily take a substantial time to get ready for their intended use or sale. Borrowing capitalised while acquisition or construction is actively underway, period of time that is required to complete and prepare the intended use. Capitalisation of borrowing costs is ceased once substantially ready for its intended use or sale is complete and if the development of the asset is suspended. All other borrowing expensed. Borrowing costs are recognised for all int instruments on an accrual basis using the effective interest method. costs include the effect of amortising any difference between proceeds and redemption value in respect of the Party’s interest-bearing borrowings.

1.16 Income recognition

Income is recognised in the financial statements when there certainty that particular resource is receivable, the Party’s becomes legally enforceable and when its monetary determined. Monetary donations and membership income are accounted funds are received which, in view of the nature of such determined by the Party to be the point in time when there is that the economic benefits associated with the revenue will entity. When the risk and rewards pertaining to events of a fundraising not attach to the Party, only the net surplus or deficit is accounted respective title in the financial statements.

Legacies are accounted for as income, during the period when the asset transferred to the party by way of legacy becomes the Party. Loans payable that are waived are accounted for as donations when such waiver becomes effective and enforceable by the party. POLITICAL PARTY & Financial Statements - 31st December, 2016

Summary of significant accounting policies - continued a third party bears the cost or refrains from charging part or all the connected to a commercial supply of a good or service that the Party otherwise been liable for, the fair value attached to the commercial transaction which does not constitute an obligation for payment to the Party, deemed as notional income and accounted under income in the Statement Income and Expenditure. Services of volunteers and party members who provide the services free of charge is not treated as notional income, and accordingly not accounted for. Interest income is recognised on a time-proportion basis using the effective interest method. Dividend income is recognised when the right to receive payment is established. THE POLITICAL PARTY Annual Report & Financial Statements - 31st December, 2016