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CARD Leasing and Finance Corporation

Financial Statements As at December 31, 2013 and for the period January 10 to December 31, 2013 and Independent Auditors’ Report

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C S 2 0 1 2 1 8 2 5 3

SEC Registration Number

C A R D L E A S I N G A N D F I N A N C E C O R P O R A T

I O N

(Company’s Full Name)

2 0 M . L . Q u e z o n S t . , C i t y S u b d i v i s

o i o n S a n P a b l o C i t y , L a g u n a

(Business Address: No. Street City/Town/Province)

Julius Adrian R. Alip (6349) 561-3268 (Contact Person) (Company Telephone Number)

1 2 3 1 A A F S

Month Day (Form Type) Month Day (Fiscal Year) (Annual Meeting)

Not Applicable

(Secondary License Type, If Applicable)

SEC None

Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

25 P=20,000,000 None

Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document ID Cashier

S T A M P S

Remarks: Please use BLACK ink for scanning purposes.

COVER SHEET

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors


20 M.L. Quezon St., City Subdivision

San Pablo City, Laguna

Report on the Financial Statements

We have audited the accompanying financial statements of CARD Leasing and Finance Corporation,

which comprise the statement of financial position as at December 31, 2013, and the statement of

income, statement of comprehensive income, statement of changes in equity, and statement of cash

flows for the period January 10 to December 31, 2013, and a summary of significant accounting

policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with Philippine Financial Reporting Standards for Small and Medium-sized Entities, and

for such internal control as management determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Philippine Standards on Auditing. Those standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting

policies used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinion.

SyCip Gorres Velayo & Co. 6760 Ayala Avenue 1226 Makati City Philippines

Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph

BOA/PRC Reg. No. 0001, December 28, 2012, valid until December 31, 2015 SEC Accreditation No. 0012-FR-3 (Group A), November 15, 2012, valid until November 16, 2015

A member firm of Ernst & Young Global Limited

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Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of

CARD Leasing and Finance Corporation as at December 31, 2013, and its financial performance and

its cash flows for the period January 10 to December 31, 2013 in accordance with Philippine Financial

Reporting Standards for Small and Medium-sized Entities.

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken

as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 23

to the financial statements is presented for purpose of filing with the Bureau of Internal Revenue and

is not a required part of the basic financial statements. Such information is the responsibility of the

management of CARD Leasing and Finance Corporation. The information has been subjected to the

auditing procedures applied in our audit of the basic financial statements. In our opinion, the

information is fairly stated, in all material respects, in relation to the basic financial statements taken

as a whole.

SYCIP GORRES VELAYO & CO.

Christian G. Lauron

Partner

CPA Certificate No. 95977

SEC Accreditation No. 0790-AR-1 (Group A),

March 1, 2012, Valid until March 1, 2015

Tax Identification No. 210-474-781

BIR Accreditation No. 08-001998-64-2012,

April 11, 2012, Valid until April 10, 2015

PTR No. 4225179, January 2, 2014, Makati City

March 14, 2014


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Report on the Financial Statements

We have audited the accompanying financial statements of CARD Leasing and Finance Corporation,

which comprise the statement of financial position as at December 31, 2013, and the statement of

income, statement of comprehensive income, statement of changes in equity, and statement of cash

flows for the period January 10 to December 31, 2013, and a summary of significant accounting

policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with Philippine Financial Reporting Standards for Small and Medium-sized Entities, and

for such internal control as management determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Philippine Standards on Auditing. Those standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the entity’s internal control. An audit also includes evaluating the appropriateness of the accounting

policies used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for

our audit opinion.

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Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of

CARD Leasing and Finance Corporation as at December 31, 2013, and its financial performance and

its cash flows for the period January 10 to December 31, 2013 in accordance with Philippine Financial

Reporting Standards for Small and Medium-sized Entities.

Report on the Supplementary Information Required Under Revenue Regulations 15-2010

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken

as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 23

to the financial statements is presented for purpose of filing with the Bureau of Internal Revenue and

is not a required part of the basic financial statements. Such information is the responsibility of the

management of CARD Leasing and Finance Corporation. The information has been subjected to the

auditing procedures applied in our audit of the basic financial statements. In our opinion, the

information is fairly stated, in all material respects, in relation to the basic financial statements taken

as a whole.


Christian G. Lauron

Partner








March 14, 2014

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The Stockholders and the Board of Directors




We have audited the financial statements of CARD Leasing and Finance Corporation (the Company)

as at December 31, 2013 and for period January 10 to December 31, 2013, on which we have rendered

the attached report dated March 14, 2014.

In compliance with Securities Regulation Code Rule 68, we are stating that the Company has

twenty-five (25) stockholders owning one hundred (100) or more shares.


Christian G. Lauron

Partner



March 1, 2012, valid until March 1, 2015



April 11, 2012, valid until April 10, 2015


March 14, 2014


Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph



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TO ACCOMPANY INCOME TAX RETURN





We have audited the financial statements of CARD Leasing and Finance Corporation (the Company)

for the period January 10 to December 31, 2013, on which we have rendered the attached report dated

March 14, 2014.

In compliance with Revenue Regulations V-20, we are stating that no partner of our Firm is related by

consanguinity or affinity to the president, manager or principal stockholder of the Company.


Christian G. Lauron

Partner








March 14, 2014


Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph



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CARD LEASING AND FINANCE CORPORATION

STATEMENT OF FINANCIAL POSITION DECEMBER 31, 2013

ASSETS

Current Assets

Cash (Note 4) P=7,217,494

Trade and other receivables (Note 5) 8,609,454

Inventories (Note 6) 2,414,149

Other current assets (Note 7) 1,422,041

Total Current Assets 19,663,138

Noncurrent Assets

Trade and other receivables - net of current portion (Note 5) 9,983,884

Equipment held for lease (Note 8) 30,519,035

Property and equipment (Note 9) 677,544

Intangible asset (Note 10) 2,270,833

Total Noncurrent Assets 43,451,296

P=63,114,434

LIABILITIES AND EQUITY

Current Liabilities

Trade and other payables (Note 11) P=5,615,867

Income tax payable 1,708,530

Loans payable (Note 12) 6,616,602

Total Current Liabilities 13,940,999

Noncurrent Liabilities

Loans payable - net of current portion (Note 12) 13,277,681

Retirement liabilities (Note 19) 1

Deferred tax liabilities (Note 20) 96,995

Total Noncurrent Liabilities 13,374,677

Total Liabilities 27,315,676

Equity

Capital stock (Note 13) 30,143,800

Retained earnings 5,428,637

Remeasurement gain on retirement plan (Note 19) 226,321

Total Equity 35,798,758

P=63,114,434

See accompanying Notes to Financial Statements.

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STATEMENT OF INCOME FOR THE PERIOD JANUARY 10 TO DECEMBER 31, 2013*

OPERATING INCOME

Sales from printing P=61,181,009

Cost of sales (Note 14) (50,152,240)

Gross income from printing 11,028,769

Rental and finance income (Note 15) 11,431,664

Interest income (Notes 4 and 16) 935,722

23,396,155

EXPENSES

Depreciation and amortization (Notes 8, 9 and 10) 5,660,337

Compensation and benefits (Note 17) 2,755,479

Seminars and meetings 1,027,496

Program monitoring and evaluation 906,449

Provision for credit losses (Note 5) 906,047

Insurance 782,538

Staff training and development 731,767

Taxes and licenses 667,502

Transportation and travel 343,522

Supplies and materials 293,283

Interest (Note 12) 216,380

Utilities 187,969

Management and other professional fees 166,120

Rental (Note 15) 120,000

Miscellaneous (Note18) 239,757

15,004,646

INCOME BEFORE INCOME TAX 8,391,509

PROVISION FOR INCOME TAX (Note 20) 2,962,872

NET INCOME AFTER TAX P=5,428,637

* The Company was registered with the Securities and Exchange Commission and started commercial operations on

January 10, 2013.


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STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD JANUARY 10 TO DECEMBER 31, 2013*

NET INCOME AFTER TAX P=5,428,637

CHANGE IN REMEASUREMENT GAIN

ON RETIREMENT PLAN - NET (Note 19) 323,316

INCOME TAX EFFECT (96,995)

TOTAL COMPREHENSIVE INCOME P=5,654,958


January 10, 2013.


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STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD JANUARY 10 TO DECEMBER 31, 2013*

Capital Stock

(Note 13) Retained

Earnings

Remeasurement

Gain on

Retirement Plan

(Note 19) Total

Balances at beginning of period P=– P=– P=– P=–

Issuance of capital stock 30,143,800 – – 30,143,800

Comprehensive income for the period – 5,428,637 226,321 5,654,958

Balance at end of period P=30,143,800 P=5,428,637 P=226,321 P=35,798,758


January 10, 2013.


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STATEMENT OF CASH FLOWS FOR THE PERIOD JANUARY 10 TO DECEMBER 31, 2013

CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax P=8,391,509

Adjustments for:

Depreciation and amortization (Notes 8, 9 and 10) 5,660,337

Provision for credit losses (Note 5) 906,047

Interest expense (Note 12) 216,380

Operating income before changes in operating assets and

liabilities 15,174,273

Changes in operating assets and liabilities:

Increase in:

Trade and other receivables (19,499,385)

Inventories (2,414,149)

Other current assets (1,422,041)

Increase in:

Trade and other payables 5,535,437

Retirement liabilities (Note 19) 323,317

Net cash used in operations (2,302,548)

Income taxes paid (1,254,342)

Net cash used in operating activities (3,556,890)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of:

Equipment held for lease (Note 8) (35,525,671)

Property and equipment (Note 9) (1,102,078)

Intangible asset (Note 10) (2,500,000)

Cash used in investing activities (39,127,749)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from:

Issuance of capital stock (Note 13) 30,143,800

Availment of loans (Note 12) 20,000,000

Discount from loans (105,717)

Interest paid (135,950)

Net cash provided by financing activities 49,902,133

CASH AT END OF PERIOD (Note 4) P=7,217,494


January 10, 2013.


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NOTES TO FINANCIAL STATEMENTS

1. Company Information

CARD Leasing and Finance Corporation (the Company) was registered with the Philippine

Securities and Exchange Commission (SEC) and started commercial operations on

January 10, 2013. The main purpose of the Company is to extend credit facilities to consumer and

industrial, commercial or agricultural enterprises by direct lending, or by discounting or factoring

commercial papers or account receivables or by buying and selling contracts without quasi-

banking activities.

The Company’s principal place of business is at 20 M.L. Quezon Street, City Subdivision, San

Pablo City, Laguna.

2. Summary of Significant Accounting Policies

Basis of Preparation

The accompanying financial statements have been prepared on a historical cost basis and are

presented in Philippine Peso, the Company’s functional currency. All values are rounded to the

nearest peso unless otherwise indicated.

Statement of Compliance

The accompanying financial statements of the Company have been prepared in accordance with

Philippine Financial Reporting Standards for Small and Medium-sized Entities (PFRS for SMEs).

Cash

Cash includes cash on hand and in banks. Cash in banks represent savings deposits in banks that

earn interest at the respective bank deposit rates and are subject to insignificant risk of changes in

value.

Trade and Other Receivables

Trade and other receivables are recognized at transaction price and carried at amortized cost using

effective interest method. At the end of each reporting period, the carrying amounts of trade and

others receivables are reviewed to determine whether there is any objective evidence that the

amounts are not recoverable. If so, an impairment loss is recognized immediately in the statement

of income.

If there is objective evidence that an impairment loss on trade and other receivables has been

incurred, the amount of the loss is measured as the difference between the asset’s carrying amount

and the present value of estimated future cash flows (excluding future credit losses that have not

been incurred) discounted at the financial asset’s original effective interest rate (i.e., the effective

interest rate computed at initial recognition). The carrying amount of the asset or group of assets

shall be reduced either directly or through the use of an allowance account. The amount of the

loss shall be recognized in the statement of income.

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Derecognition of Financial Assets

A financial asset is derecognized only when:

1. the contractual rights to the cash flows from the financial asset have expired or are settled; or

2. the Company transfers to another party substantially all of the risks and rewards of ownership

of the financial asset; or

3. the Company, despite having retained some significant risks and rewards of ownership, has

transferred control of the asset to another party and the other party has the practical ability to

sell the asset in its entirety to an unrelated third party and is able to exercise that ability

unilaterally and without needing to impose additional restrictions on the transfer. In this case,

the Company derecognizes the asset, and recognizes separately any rights and obligations

retained or created in the transfer.

If a transfer does not result in derecognition because the Company has retained significant risks

and rewards of ownership of the transferred asset, the Company continues to recognize the

transferred asset in its entirety and recognizes a financial liability for the consideration received.

The asset and liability shall not be offset. In subsequent periods, the Company recognizes any

income on the transferred asset and any expense incurred on the financial liability.

Inventories

Inventories are stated at the lower of cost and estimated selling price less costs to complete and

sell. Costs of inventories include all costs of purchase and other costs incurred in bringing the

inventories to their present location and condition. The Company inventories are accounted for on

a first-in, first-out basis.

Inventories are recognized as an expense when sold, the Company shall recognize the carrying

amount of those inventories as an expense in the period in which the related revenue is recognized.

Other Current Assets

Other current assets pertain to value added tax (VAT) and prepaid expenses held by the Company

for consumption within the Company’s normal operating cycle. Input vat arises from the excess

of input vat on purchases over sales. Prepaid expenses pertain to advances and prepayments and

are measured at cost.

Equipment Held for Lease and Property and Equipment

Equipment held for lease and property and equipment are carried at cost less accumulated

depreciation, and any impairment in value.

The initial cost of equipment held for lease or property and equipment is comprised of its purchase

price and any directly attributable costs of preparing the asset for its intended use. Expenditures

incurred after the items of equipment held for lease or property and equipment have been put into

operation, such as repairs and maintenance, are charged against the statement of income. In

situations where it can be clearly demonstrated that the expenditures have resulted in an increase

in the future benefits expected to be obtained from the use of an item of equipment held for lease

or property and equipment beyond its originally assessed standard of performance, the

expenditures are capitalized as additional costs of the asset.

Depreciation is calculated using the straight-line method over the estimated useful life (EUL) of

three years for all items of equipment held for lease and property and equipment. The

depreciation method and the EUL of the equipment held for lease and property and equipment are

reviewed periodically to ensure that the period and method used are consistent with the expected

pattern of economic benefits from such assets.

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When equipment held for lease or property and equipment are retired or otherwise disposed of, the

cost and the related accumulated depreciation and any impairment in value are removed from the

accounts, and any resulting gain or loss is credited to or charged against the statement of income.

Intangible Asset

Intangible asset pertains to a well-developed program that is stated at cost less accumulated

amortization and any accumulated impairment loss. This is amortized over the estimated useful

life of 10 years using straight-line method. If there is an indication that there has been a

significant change in amortization date, useful life of an intangible asset, the amortization is

revised prospectively to reflect the new expectations.

The Company shall derecognise an intangible asset, and shall recognise in the statement of

income:

1. on disposal, or

2. when no future economic benefits are expected from its use or disposal.

Asset Impairment

At each reporting date, other current assets, equipment held for lease, property and equipment and

intangible assets are reviewed to determine whether there is any indication that those assets have

suffered an impairment loss. If there is an indication of possible impairment, the recoverable

amount of any affected asset (or group of related assets) is estimated and compared with its

carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its

estimated recoverable amount, and an impairment loss is recognized immediately in the statement

of income.

Similarly, at each reporting date, inventories are assessed for impairment by comparing the

carrying amount of each item of inventory with its selling price less cost to complete and sell. If

an item of inventory is impaired, its carrying amount is reduced to selling price less costs to

complete and sell, and an impairment loss is recognized immediately in the statement of income.

If an impairment loss subsequently reverses, the carrying amount of the asset (or group of related

assets) is increased to the revised estimate or its recoverable amount but not in excess of the

amount that would have been determined had no impairment loss been recognized for the asset (or

group of related assets) in prior years. A reversal of an impairment loss is recognized immediately

in the statement of income.

Trade and Other Payables

Trade payables are obligations on the basis of normal credit terms and do not bear interest. These

are recognized in the period in which the related money, goods, or services are received or when a

legally enforceable claim against the Company is established or when the corresponding assets or

expenses are recognized.

Loans Payable

Loans payable is initially recognized at the transaction price less directly attributable transaction

costs. After initial recognition, it is subsequently measured at amortized cost using the effective

interest method. Amortized cost is calculated by taking into account any discount or premium on

the issue and fees that are an integral part of the effective interest rate.

Derecognition of Financial liabilities

A financial liability (or a part of a financial liability) is derecognized only when it is extinguished

(i.e., when the obligation specified in the contract is discharged, is cancelled or expires). When an

existing financial liability is replaced by another from the same lender on substantially different

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terms, or the terms of an existing liability are substantially modified, such an exchange or

modification is treated as a derecognition of the original liability and the recognition of a new

liability, and the difference in the respective carrying amounts is recognized in the statement of

income.

Equity

Capital stock is recognized as issued when the stock is paid for or subscribed under a binding

subscription agreement and is measured at par value.

Retained earnings represent the cumulative balance of periodic net income or loss and dividend

declarations.

Revenue Recognition

Revenue is recognized to the extent that it is probable that economic benefits will flow to the

Company and the revenue can be reliably measured. Revenue is measured at the fair value of the

consideration received, excluding discounts and sales tax. The Company is acting as a principal in

all its arrangement transactions.

The following specific recognition criteria must also be met before revenue is recognized:

Sales from printing

Sales from printing are recognized when printing services are completed or rendered.

Rental and finance income

Leasing income pertains to income from operating and finance leases. Income from operating

lease is recognized on a straight-line basis over the lease term.

For finance lease, the excess of aggregate lease rentals plus the estimated residual value over the

cost of the leased equipment constitutes the unearned lease income. Residual values represent

estimated proceeds from the disposal of equipment at the time the lease is terminated. The

unearned lease income is amortized over the term of the lease, commencing on the month the lease

is executed, based on a pattern reflecting a constant periodic rate of return on the lessor's net

investment in the finance lease.

Interest income

Interest income pertains to interest on receivables financed and on cash in banks. Interests on

receivables financed are included in the face value of the receivables with a corresponding credit

to the `Unearned income’ account. This is amortized to income over the term of the financing

agreement using the effective interest method.

Interest on cash in banks are recognized as interest accrues, taking into account the effective yield

on the asset.

Cost and Expense Recognition

Costs and expenses are recognized in the statement of income when decrease in future economic

benefit related to a decrease in an asset or an increase in a liability has arisen that can be measured

reliably.

Costs and expenses are recognized in the statement of income:

On the basis of a direct association between the costs incurred and the earning of specific

items of income;

On the basis of systematic and rational allocation procedures when economic benefits are

expected to arise over several accounting periods and the association can only be broadly or

indirectly determined; or

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Immediately when expenditure produces no future economic benefits or when, and to the

extent that, future economic benefits do not qualify or cease to qualify, for recognition in the

statements of financial position as an asset.

Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of

the arrangement and requires an assessment of whether the fulfillment of the arrangement is

dependent on the use of a specific asset or assets and the arrangement conveys a right to use the

asset. A reassessment is made after inception of the lease only if one of the following applies:

a. There is a change in contractual terms, other than a renewal or extension of the arrangement;

b. A renewal option is exercised or extension granted, unless that term of the renewal or

extension was initially included in the lease term;

c. There is a change in the determination of whether fulfillment is dependent on a specified

asset; or

d. There is a substantial change to the asset.

Where a reassessment is made, lease accounting shall commence or cease from the date when the

change in circumstances gave rise to the reassessment for scenarios (a), (c) or (d) above, and at the

date of renewal or extension period for scenario (b).

Company as lessor

Finance leases, where the Company transfers substantially all the risk and benefits incidental to

ownership of the leased item to the lessee, are included in the statement of financial position under

‘Trade and other receivables”. A lease receivable is recognized at an amount equivalent to the net

investment in the lease, equivalent to the cost of the leased asset. All income resulting from the

receivable is included under “Rental and finance income” in the statement of income.

Leases where the Company does not transfer substantially all the risk and benefits of ownership of

the assets are classified as operating leases. Initial direct costs incurred in negotiating operating

leases are added to the carrying amount of the leased asset and recognized over the lease term on

the same basis as the rental income. Contingent rents are recognized as revenue in the period in

which they are earned.

Company as lessee

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are

classified as operating leases. Operating lease payments are recognized as an expense in the

statement of income on a straight-line basis over the lease term.

Borrowing Cost

All borrowing costs are recognized in the statement of income in the period in which they are

incurred.

Retirement Liabilities

The Company has a funded noncontributory defined benefit retirement plan.

The Company’s retirement costs are actuarially determined using the projected unit credit method

and incorporates assumptions concerning employee’s projected salaries. The pension is

recognized during the employee’s period of service and discounted using the market yields of

government bonds. Actuarial gains and losses are recognized in the period in which they occur in

other comprehensive income as an accounting policy election.

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Income Taxes

Current tax

Current tax assets and liabilities for the current period are measured at the amount expected to be

recovered from or paid to the taxation authorities.

Deferred tax

Deferred tax is provided, using the balance sheet liability method, on all temporary differences at

the reporting date between the tax bases of assets and liabilities and their carrying amounts for

financial reporting purposes.

Deferred tax liabilities are recognized for all temporary differences that are expected to increase

taxable profit in the future. Deferred tax assets are recognized for all deductible temporary

differences, carryforward of unused tax credits from the excess of minimum corporate income tax

(MCIT) over the regular corporate income tax (RCIT) and unused net operating loss carryover

(NOLCO). Deferred tax assets are measured at the highest amount that, on the basis of current or

estimated future taxable profit, is more likely than not to be recovered. The Company is not yet

subject to MCIT as it only started its commercial operations in 2013.

The net carrying amount of deferred tax assets is reviewed at each reporting date and is adjusted to

reflect the current assessment of future taxable profits. Any adjustment is recognized in the

statement of income.

Deferred tax is calculated at the tax rates that are expected to apply to the taxable profit (loss) of

the periods in which it expects the deferred tax assets to be realized or the deferred tax liability to

be settled, on the basis of tax rates that have been enacted or substantively enacted by the end of

the reporting period. A valuation allowance is provided, on the basis of past years and future

expectations, when it is not probable that taxable profits will be available against which the future

income tax deductions can be utilized.

Provisions

Provisions are recognized when: (a) the Company has an obligation at the reporting date as a

result of a past event; (b) it is probable (i.e., more likely than not) that the entity will be required to

transfer economic benefits in settlement; (c) and the amount of the obligation can be estimated

reliably. Where the Company expects some or all of the provision to be reimbursed, the

reimbursement is recognized as a separate asset but only when the reimbursement is virtually

certain. If the effect of the time value of money is material, provisions are discounted using a

current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where

discounting is used, the increase in the provision due to the passage of time is recognized as a

borrowing cost. Provisions are reviewed at each reporting date and adjusted to reflect the current

best estimates.

Related Party Transactions

Related party transactions pertain to transfers of resources, services or obligations between related

parties, regardless of whether a price is charged. Related party transactions are recorded upon

actual transfer of resources, services or obligations. Related party transactions are reported under

“Trade and other receivables” or “Trade and other payables” accounts in the statements of

financial position, as appropriate.

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Contingencies

Contingent liabilities are not recognized in the financial statements. They are disclosed unless the

possibility of an outflow of resources embodying economic benefits is remote. Contingent assets

are not recognized in the financial statements but are disclosed when an inflow of economic

benefits is probable.

Events after the Reporting Period

Post year-end events that provide additional information about the Company’s financial position at

reporting date (adjusting events) are reflected in the financial statements. Post year-end events

that are not adjusting events are disclosed in the notes to the financial statements, when material.

3. Significant Accounting Judgments and Estimates

The preparation of financial statements in accordance with PFRS for SMEs requires the Company

to make judgments and estimates that affect the reported amounts of assets, liabilities, income, and

expenses, and disclosures relating to contingent assets and contingent liabilities. Future events

may occur which may cause the assumptions used in arriving at the estimates to change. The

effects of any change in judgments and estimates are reflected in the financial statements as they

become reasonably determinable.

Judgments and estimates are continually evaluated and are based on expectations of future events

that are believed to be reasonable under the circumstances.

Critical judgments and estimates that have a significant risk of material adjustment to the carrying

amounts of assets and liabilities within the next financial year include:

Judgments

a. Operating leases

Company as a lessor under operating leases

The Company has entered into leases of “Equipment held for lease”. The Company has

determined that it retains all the significant risks and rewards of ownership of these properties

which are leased out on operating leases (see Note 15).

Company as lessee under operating lease

The Company has entered into a cancellable lease agreement on the premises it occupies. The

Company has determined that the lessor retains all significant risks and rewards of ownership

of the premises it leases (see Note 15).

b. Finance leases

The Company has entered into finance leases as a lessor. The Company has determined that it

transfers all the significant risks and rewards of ownership of these properties which are leased

out under finance leases (see Note 15).

c. Going concern

The Company’s management has made an assessment of the Company’s ability to continue as

a going concern and is satisfied that the Company has the resources to continue in business for

the foreseeable future. Furthermore, management is not aware of any material uncertainties

that may cast significant doubt upon the Company’s ability to continue as a going concern.

Therefore, the financial statements continue to be prepared on the going concern basis.

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Estimates

a. Impairment of trade and other receivables

The Company assesses its trade receivables for impairment at each reporting date. As at

December 31, 2013, the Company determined that there is no objective evidence that the

amounts are not recoverable. The carrying amounts of trade and other receivables are

disclosed in Note 5.

b. Impairment of nonfinancial assets

The Company assesses impairment of other current assets, equipment held for lease, property

and equipment and intangible asset whenever events or changes in circumstances indicate that

the carrying amount of an asset may not be recoverable. The factors that the Company

considers important which could trigger an impairment review include significant

underperformance relative to expected historical or projected future operating results and

significant changes in the manner of use of the acquired assets or the strategy for overall

business.

Inventories are assessed for impairment by comparing the carrying amount of each item of

inventory with its selling price less cost to complete and sell.

No impairment loss for nonfinancial assets was recognized in 2013. As at December 31,

2013, the carrying values of inventories, other current assets, equipment held for lease,

property and equipment and intangible asset are disclosed in Notes 6, 7, 8, 9 and 10,

respectively.

c. Estimated useful lives of equipment held for lease, property and equipment and intangible

asset

The Company reviews annually the EUL of equipment held for lease, property and equipment

and intangible asset based on the period over which these are expected to be available for use.

It is possible that future results of operations could be materially affected by changes in these

estimates. A reduction in the EUL of these assets would increase recorded depreciation and

amortization and decrease the carrying values.

The accounting policy for the estimated useful lives of equipment held for lease, property and

equipment and intangible asset are disclosed in Note 2 to the financial statements.

d. Recognition of deferred tax asset

Deferred tax assets are recognized for all temporary differences that are expected to reduce

taxable profit in the future and for the carryforward of unused tax losses and unused tax

credits. The Company reviews the net carrying amount of a deferred tax asset at each

reporting date and shall adjust the valuation allowance to reflect the current assessment of

future taxable profits. Such adjustment shall be recognized in the statement of income, except

that an adjustment attributable to an item of income or expense recognized as other

comprehensive income shall also be recognized in other comprehensive income.

As at December 31, 2013, the Company recognized deferred tax assets but provided full

valuation allowance on the basis of future expectations as disclosed in Note 20.

d. Present value of retirement liabilities

The determination of the liability and pension cost is dependent on the selection of certain

assumptions by management. Those assumptions used in the calculation of pension cost are

described in Note 19.

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4. Cash

This account consists of:

Petty cash P=10,000

Cash in banks 7,207,494

P=7,217,494

Cash in banks consist of savings deposit accounts, earning at annual interest rates ranging from

0.25% to 1.00%. Interest income earned from cash in banks amounted to P=0.05 million in 2013

(see Note 16).

5. Trade and Other Receivables


Trade:

Lease receivables P=14,094,741

Receivables financed 8,211,338

22,306,079

Less unearned income 4,185,693

18,120,386

Other receivables:

Receivables from related parties (Note 21) 1,349,643

Accounts receivable 29,356

19,499,385

Less allowance for credit losses 906,047

Total trade and other receivables 18,593,338

Less noncurrent portion 9,983,884

Current portion P=8,609,454

Lease receivable pertains to finance lease of transportation vehicles, computer equipment and

gadgets. As at December 31, 2013, there are no receivables pertaining to operating leases.

Receivable financed consists of loans to employees of the Company’s related parties.

An analysis of trade receivables as at December 31, 2013 is presented as follows:

Lease

receivables

Receivables

financed Total

Trade P=14,094,741 P=8,211,338 P=22,306,079

Less unearned income 2,404,964 1,780,729 4,185,693

11,689,777 6,430,609 18,120,386

Less allowance for credit losses 584,516 321,531 906,047

11,105,261 6,109,078 17,214,339

Less noncurrent portion 5,835,656 4,148,228 9,983,884

Current portion P=5,269,605 P=1,960,850 P=7,230,455

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Movements in the allowance for credit losses are as follows:

Lease

receivables

Receivables

finance Total

Balance at beginning of period P=– P=– P=–

Provision during the period 584,516 321,531 906,047

Balance at end of period 584,516 321,531 906,047

Less noncurrent portion 307,140 103,203 410,343

Current portion P=277,376 P=218,328 P=495,704

Impairment of trade and other receivables is assessed collectively.

The reconciliation of gross investment in the lease and the present value of minimum lease

payments receivable as at December 31, 2013 is presented as follows:

Not later than

1 year

Later than 1 year

up to 5 years

Gross investment P=6,863,309 P=7,231,432

Less unearned income 1,316,328 1,088,636

Net investment 5,546,981 6,142,796

Less allowance for credit losses 277,376 307,140

Net investment P=5,269,605 P=5,835,656

6. Inventories


Supplies P=1,707,529

Ink and toners 706,620

P=2,414,149

Supplies pertain to forms, slips and ledgers available for sale to clients.

Ink and toners are used in the Company’s rendering of printing services.

The cost of inventories recognized under “Cost of sales” in the statement of income amounted to

P=50.15 million (see Note 14).

7. Other Current Assets


Input value-added taxes (VAT) P=1,182,498

Prepaid expense 239,543

P=1,422,041

Input VAT arising from acquisitions of equipment held for lease, property and equipment and

other purchases are recoverable within one year.

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Prepaid expense pertains to advances to employee for staff training and development subject to

liquidation and prepaid insurance for Board of Directors.

8. Equipment Held for Lease

The composition of and movements in this account follow:

Transportation

Equipment

Computer

Equipment

Furniture

and Fixtures Total

Cost

Balance at beginning

of period P=– P=– P=– P=–

Additions 22,641,041 11,907,633 976,997 35,525,671

Balance at end of period 22,641,041 11,907,633 976,997 35,525,671

Accumulated

Depreciation


of period – – – –

Depreciation 3,102,451 1,824,598 79,587 5,006,636

Balance at end of period 3,102,451 1,824,598 79,587 5,006,636

Net book value P=19,538,590 P=10,083,035 P=897,410 P=30,519,035

9. Property and Equipment


Printing

Equipment

Computer

Equipment

Furniture

and Fixtures Total

Cost


of period P=– P=– P=– P=–

Additions 955,086 79,465 67,527 1,102,078

Balance at end of period 955,086 79,465 67,527 1,102,078

Accumulated

Depreciation


of period – – – –

Depreciation 382,136 20,503 21,895 424,534

Balance at end of period 382,136 20,503 21,895 424,534

Net book value P=572,950 P=58,962 P=45,632 P=677,544

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10. Intangible Asset

This account pertains to project development cost paid by the Company to CARD Business

Development Service Foundation (BDSF), Inc., a stockholder, for a well-developed program and

marketing strategy for solar, printing and leasing services.


Cost

Balance at beginning of period P=–

Additions 2,500,000

Balance at end of period 2,500,000

Accumulated Amortization

Balance at beginning of period –

Amortization (229,167)

Balance at end of period (229,167)

Net book value P=2,270,833

As at December 31, 2013, the remaining amortization period of the intangible asset is 9.08 years

11. Trade and Other Payables


Trade payables P=3,970,267

Accrued expenses 1,455,233

Interest payable 80,430

Withholding taxes payable 73,944

Payable to related parties (Note 21) 35,993

P=5,615,867

Trade payables are due to suppliers for inventory and other purchases.

Accrued expenses pertain mainly to accumulated vacation leave, short-term employee benefits and

unpaid professional fees.

Interest payable pertains to interest on loans (see Note 12).

12. Loans Payable

On October 4 and December 4, 2013, the Company entered into loan agreements with CARD

Mutual Benefit Association (MBA), Inc. to support the Company’s initial operation. Each loan

amounted to P=10.00 million, bears interest of 5.00% per annum and is set to mature in 2016.

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An analysis of loans payable as at December 31, 2013 is presented as follows:

Loans payable P=20,000,000

Less discounts on loans 105,717

19,894,283

Less noncurrent portion 13,277,681

Current portion P=6,616,602

Interest expense during the period amounted to P=0.22 million.

13. Equity

Capital Stock

As at December 31, 2013, the Company’s capital stock consists of:

Shares Amount

Common stock - P=100 par value,

1,000,000 authorized shares

Subscribed 700,000 P=70,000,000

Subscription receivable – (39,856,200)

700,000 P=30,143,800

14. Cost of Sales

The rollforward analysis of this account follows:

Inventories at beginning of period P=–

Purchases during the period 52,566,389

Inventories available for sale 52,566,389

Inventories at end of period 2,414,149

P=50,152,240

15. Leases

Finance leases - Company as a lessor

The Company entered into finance lease agreements with the employees of related parties with

interest rates from 9% to 14% per annum, with terms from six months to seven years term of

payments. In 2013, finance income recognized under “Rental and finance income” in the

statement of income amounted to P=2.21 million.

Operating leases - Company as a lessor

The Company entered into, with its related parties, cancellable operating leases of its “Equipment

held for lease” for terms of up to 18 months. In 2013, rental income recognized under “Rental and

finance income” in the statement of income amounted to P=9.22 million.

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Operating leases - Company as a lessee

The Company leases its office premises from a related party for a period of three year. The lease

is renewable upon mutual agreement between the Company and lessor. In 2013, rental expense

recognized in the statement of income amounted to P=0.12 million.

Rental and finance income


Operating leases P=9,217,091

Finance leases 2,214,573

P=11,431,664

16. Interest Income


Interest from receivable financed P=882,868

Interest income from cash in banks 52,854

P=935,722

The effective interest rates in financing the receivables range from 9.00% to 14.00% in 2013.

17. Compensation and Benefits


Salaries and wages P=1,178,682

Short-term employee benefits 1,156,205

Retirement benefits (Note 19) 420,592

P=2,755,479

18. Miscellaneous


Advertising P=75,800

Communication and postage 63,326

Processing fee 52,500

Information technology 15,583

Bank service charge 15,535

Repair and maintenance 7,637

Representation 6,472

Supervision and examination 2,784

Miscellaneous 120

P=239,757

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19. Retirement Benefits

The Company, Rizal Rural Bank (Taytay), Inc. (RRBI), CARD Bank, Inc., CARD MRI

Development Institute, Inc. (CMDI), CARD MBA, Inc., CARD SME Bank, Inc., CARD MRI

Insurance Agency (CAMIA), Inc., CARD Business Development Service Foundation (BDSF),

Inc., BotiCARD, Inc., CARD MRI Information Technology (CMIT) and CARD, Inc. maintain a

funded and formal noncontributory defined benefit retirement plan – the CARD MRI Multi-

Employer Retirement Plan (the Plan) – covering all of their regular employees. The Plan has a

projected unit cost format and is financed solely by the Company and its related parties. The Plan

provides lump sum benefits equivalent to at least 120% of latest month salary for every year of

service, a fraction of at least six (6) months being considered as one whole year upon retirement,

death, total and permanent disability, involuntary separation (except cause) or voluntary separation

after completion of at least one year of service with the participating companies.

Retirement expense recognized in statement of income amounting to P=0.42 million is lumped

under “Compensation and benefits” account.

The management performed an Asset-Liability Matching Study (ALM) annually. The overall

investment policy and strategy of the Company’s defined benefit plans is guided by the objective

of achieving an investment return which, together with contributions, ensures that there will be

sufficient assets to pay pension benefits as they fall due while also mitigating the various risk of

the plans.

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Changes in net defined benefit liability of funded funds in 2013 are as follow:

Net benefit cost in consolidated statement of income

Remeasurements in other comprehensive income

January 1,

2013 Current

service cost Net interest Subtotal Benefits Paid Transfer

(from) to plan

Return on

plan assets (excluding

amount

included in net interest)

Actuarial

changes arising from

changes in

demographic assumptions

Actuarial

changes arising from

changes in

financial assumptions Subtotal

Contribution by employer

December 31, 2013

Present value of defined benefit

obligation P=– P=420,592 P=– P=420,592 P=– P=4,977,154 P=– P=– (P=321,591) (P=321,591) P=– P=5,076,155

Fair value of plan assets – – – – – (4,977,154) (1,725) – – (1,725) (97,275) (5,076154)

Net defined benefit liability (asset) P=– P=420,592 P=– P=420,592 P=– P=– (P=1,725) P=– (P=321,591) (P=323,316) (P=97,275) P=1

The principal actuarial assumptions used in determining retirement liability for the Company’s retirement plan as at December 31 are shown below:

Discount rate 6.29%

Future salary increases 12.00%

The major categories of plan assets as a percentage of the fair value of the total plan assets in 2013 are as follow:

Cash and cash equivalents P=2,751,783

Unquoted long term investments

Debt securities 2,163,457

Equity securities 31,980

Other assets 128,934

P=5,076,154

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20. Income Taxes

RA 9337, An Act Amending National Internal Revenue Code, provides that RCIT rate shall be

30.00 %. Interest expense allowed as a deductible expense is reduced by 33.00% of interest

income subjected to final tax.

In addition, effective September 1, 2002, Revenue Regulation No. 10-2002 provides for the

ceiling on the amount of Entertainment, amusement and recreation (EAR) expense that can be

claimed as a deduction against taxable income. Under the regulation, EAR allowed as a

deductible expense is limited to the actual EAR paid or incurred (booked under ‘Representation

and entertainment’ in the statements of comprehensive income) but not to exceed 1.00% of net

revenue for companies engaged in the sale of services.

An MCIT of 2.00% on modified gross income is computed and compared with RCIT. Any excess

of MCIT over RCIT is deferred and can be used as a tax credit against future income tax liability

for the next three years. Imposition of MCIT will commence on the Company’s fourth taxable

year immediately following the year in which the Company commenced its business operations.

The Company is not yet eligible for MCIT being in its first year of operation.

In addition, NOLCO is allowed as a deduction from taxable income in the next three years from

the period of incurrence.

The provision for income tax consists of:

Current P=2,952,301

Final 10,571

P=2,962,872

The current income tax pertains to RCIT.

The Company’s deferred tax liabilities amounting to P=0.09 million arise from the remeasurement

gain on retirement plan. The deferred tax is directly deducted against other comprehensive

income.

The Company’s deferred tax assets consist of:

Retirement expense recognized in

statement of income P=96,995

Allowance for credit losses 271,814

Accumulated leave credits 76,662

445,471

Less valuation allowance 445,471

P=–

The Company recognized a valuation allowance against the full balance of the deferred tax assets

because, on the basis of future expectations, the management considers it is not probable that

taxable profits will be available against which future income tax deductions can be utilized.

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Reconciliation between the statutory income tax and the effective income tax follows:

Statutory income tax P=2,517,453

Tax effects of:

Valuation allowance for deferred tax assets 445,471

Interest income subject to final tax (5,285)

Nondeductible expense 5,233

Provision for income tax P=2,962,872

21. Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the

other party or exercise significant influence over the other party in making financial and operating

decisions. The Company’s related parties include:

key management personnel, close family members of key management personnel and entities

which are controlled, significantly influenced by or for which significant voting power is held

by key management personnel or their close family members,

post-employment benefit plans for the benefit of the Company’s employees, and

affiliates within the CARD MRI Group.

The Company has several business relationships with related parties. Transactions with such

parties are made in the ordinary course of business and on substantially same terms, including

interest and collateral, as those prevailing at the time for comparable transactions with other

parties. These transactions also did not involve more than the normal risk of collectability or

present other unfavorable conditions.

Transactions with retirement plans

Certain post-employment benefit plans are considered as related parties. CARD MRI’s Multi-

Employer Retirement Plan (MERP) is managed by the CARD Employee Multipurpose

Cooperative (EMPC). Part of the plan assets are invested in time deposits and special savings

accounts with the affiliated banks.

Remunerations of Directors and other Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning,

directing and controlling the activities of the Company, directly or indirectly. The Company

considers the members of the board of directors and senior management to constitute key

management personnel for purposes of Section 33 of PFRS for SMEs.

The compensation of key management personnel included under ‘Compensation and benefits’ in

the statement of income amounted to P=0.41 million.

Other related party transactions

Transactions between the Company and its key management personnel meet the definition of

related party transactions. Transactions between the Company and its affiliates within the CARD

MRI, also qualify as related party transactions.

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*SGVFS007211*

Cash and cash equivalents, accounts payable and accounts receivable

Cash and cash equivalents, accounts payable and accounts receivable held by the Company for

key management personnel and affiliates as at December 31, 2013 follow:

Category Amount / Volume Outstanding Balance Nature, Terms and Conditions

CARD Bank (other related party)

Cash in banks P=3,723,120 These are savings account used in operations

with annual interest rate of 1% Deposits P=43,558,724

Withdrawals 39,835,604

Accounts receivable 120,000 These are billings for the issuance of supplies

Billings 34,970,267 Collections 34,850,267

Accounts payable – Share of various expenses

Billings 284,809 Payments 284,809

CARD Inc. (shareholder)

Accounts payable 500 Fund for purchases of CARD Inc-Cabio Unit. Billings 344,666 and payment for rental of office premises.

Payments 344,166

Accounts receivable 1,113,865 These are billings for the issuance of supplies Billings 26,610,808

Collections 25,496,943

Subscription receivable 5,025,000 Subscription receivable for the 21%

subscribed shares.

CMDI (other related party)

Accounts receivable – These are billings for issuance of supplies Billings 503,161 and operating lease transactions

Collections 503,161

Share of various expenses Accounts payable 1,603 Billings 1,603

Payments –

CARD MBA (other related party) Loan payable 20,000,000 Loan agreement, bears interest of 5% per

Annum within 3 years and mature on 2016 Interest payable 80,430 Pertains to interest on loan payable

Accounts payable 24,593 Remittance for the month of December 2013

Billings 336,562 Payments 311,969

Accounts receivable 46,778 Over remittance of loan redemption fee

Billings 5,495,656 based on CARD MBA computation Collections 5,448,878

CARD SME (other related party)

Accounts receivable – These are billings for issuance of supplies Billings 7,204,711 and operating lease transactions

Collection 7,204,711

CAMIA (other related party) Accounts receivable 69,000 These are billings for the issuance of

Billings 214,160 annual report and supplies

Collections 145,160

CARD BDSFI (shareholder)

Accounts receivable – Billings of supplies and lease transactions

Billings 9,686,439

Share of expenses on telephone bills

Collection 9,686,439

Accounts payable 9,297

Billings 8,034,286 and other charges. Payments 8,024,989

Subscription receivable 14,000,000 Subscription receivable for the 40%

subscribed shares. Project development cost 2,500,000 Payment for a well develop program and

marketing strategy for solar, printing and

leasing services classified by the Company as Intangible asset.

CARD EMPC (shareholder)

Accounts receivable – These are billings for issuance of supplies Billings 300,193 and operating lease transactions

Collection 300,193

Subscription receivable 3,250,000 Subscription receivable for the 10% subscribe shares.

BotiCARD (other related party)

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Category Amount / Volume Outstanding Balance Nature, Terms and Conditions

Accounts receivable P=– These are billings for issuance of supplies Billings P=319,374 and operating lease transactions

Collections 319,374

CMIT (other related party) Accounts receivable – These are billings for issuance of supplies

Billings 227,925 and operating lease transactions

Collections 227,925

RRBI (other related party)

Accounts receivable – These are billings for issuance of supplies

Billings 2,147,708 and operating lease transactions Collections 2,147,708

22. Approval of the Release of the Financial Statements

The accompanying financial statements of the Company were reviewed and approved for release

by the Company’s Board of Directors on March 14, 2014.

23. Supplementary Information under Revenue Regulations (RR) No. 15-2010

On November 25, 2010, the BIR issued RR 15-2010 to amend certain provisions of

RR No. 21-2002 which provides that starting 2010, the notes to the financial statements shall

include information on taxes, duties and licenses paid or accrued during the year.

The components of ‘Taxes and licenses’ recognized in the statement of income follow:

Documentary stamp tax P=350,000

Business permits and licenses 317,502

P=667,502

The following withholding taxes are categorized into:

Total

Remittances

Balance as at

December 31,

2013

Expanded withholding taxes P=889,543 P=164,480

Withholding tax on compensation and benefits 126,557 31,404

P=1,016,100 P=195,884

Value added tax (VAT)

The NIRC of 1997 also provides for the imposition of VAT on sales of goods and services.

Accordingly, the Company’s sales are subject to output VAT while its importations and purchases

from other VAT-registered individuals or corporations are subject to input VAT. VAT rate is

12.00%, effective February 1, 2006.

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Details of the Company’s net sales/receipts output VAT and input VAT accounts in 2013 are as

follows:

Details of the Company’s input tax claimed are as follows:

Balance at beginning of period P=−

Current year’s purchases of:

Goods other than capital goods 8,716,478

Services 80,587

Total input VAT available 8,797,065

Claims against output VAT 7,614,567

Balance of input VAT at end of period P=1,182,498

Details of the Company’s net output tax are as follows:

Output VAT during the year P=7,894,550

Application of input VAT 7,894,550

Balance of output VAT at end of period P=−

Tax Contingencies

The Company did not receive any final tax assessments in 2013 nor did it have tax cases under

preliminary investigation, litigation and/or prosecution in courts or bodies outside the

administration of Bureau of Internal Revenue.

*SGVFS007211*


ON SUPPLEMENTARY SCHEDULES

The Stockholders and the Board of Directors




We have audited in accordance with Philippine Standards on Auditing, the financial statements of

CARD Leasing and Finance Corporation as at December 31, 2013 and have issued our report thereon

dated March 14, 2014. Our audit was made for the purpose of forming an opinion on the basic

financial statements taken as a whole. The schedule required for financing companies is the

responsibility of the Company's management. This schedule is presented for purposes of complying

with Securities Regulation Code Rule 68, As Amended (2011) and is not part of the basic financial

statements. This schedule has been subjected to the auditing procedures applied in the audit of the

basic financial statements and, in our opinion, fairly state, in all material respects, the information

required to be set forth therein in relation to the basic financial statements taken as a whole.


Christian G. Lauron

Partner



March 1, 2012, valid until March 1, 2015



April 11, 2012, valid until April 10, 2015


March 14, 2014


Tel: (632) 891 0307 Fax: (632) 819 0872 ey.com/ph



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INDEX TO THE FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES

Schedule I: Additional schedules required for financing companies

*SGVFS007211*

SCHEDULE I


ADDITIONAL SCHEDULES REQUIRED FOR FINANCING COMPANIES

AS AT DECEMBER 31, 2013

Total receivables to total assets

2013

Total receivables P=18,593,338

Total assets 63,114,434

Total receivables to total assets 29.46%

Total DOSRI receivables to net worth

2013

Total DOSRI receivables, net of related bills payable P=−

Total net worth 32,784,792

Total DOSRI receivables to net worth −%

Amount of receivables from a single corporation to total receivables

2013

Receivables from a single corporation P=1,350,612

Total receivables 18,593,338

Total receivables from a single corporation to total receivables 7.26%

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