SEC Form 20-IS - iRemit Global Remittance

• 

1!I~lJllr 

June 25, 2012 

THE PHILIPPINE STOCK EXCHANGE, INC. 

3rd Floor, Philippine Stock Exchange Plaza 

Ayala Triangle, Ayala Avenue 

Makati City, Metro Manila 

Attention Ms. Janet A. Encarnacion 

Head, Disclosure Department 

Gentlemen: 

www.myiremit.com 

In accordance with the Securities Regulation Code, we are submitting herewith a 

copy of SEC Form 20-IS (Preliminary Information Statement) of I-Remit, Inc. for 

the Annual Stockholders' Meeting on July 31,2012. 

Thank you. 

~'ck-{7J/L 

BER A. TTE CINDY C. TIU 

First Vi e President & Chief Financial Officer 

iRemil Inc. 

26/F Discovery Centre, 25 ADS Avenue, Ortigas Center, Pasig City, 1605 Metro Manila, Philippines 

Trunkline: (632) 706-9999

COVER SHEET 

A 2 0 0 1 0 1 6 3 1 

SEC Registration Number 

I - R E M I T , I N C . A N D S U B S I D I A R I E S 

(Company’s Full Name) 

2 6 / F D i s c o v e r y C e n t r e , 2 5 A D B A v e 

n u e , O r t i g a s C e n t e r , P a s i g C i t y 

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

Ms. Maria Cecilia V. Soria (632) 632-0905 

(Contact Person) (Company Telephone Number) 

PRELIMINARY 

1 2 3 1 2 0 - I S 0 7 

Month Day (Form Type) Month Day 

(Fiscal Year) (Annual Meeting) 

(Secondary License Type, If Applicable) 

Dept. Requiring this Doc. Amended Articles Number/Section 

Total Amount of Borrowings 

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.

IRE:lftlr 

I-Remit, Inc. 

TO: ALL STOCKHOLDERS 

NOTICE OF ANNUAL STOKHOLDERS' MEETING 

www.myiremit.com 

NOTICE is hereby given that there will be an annual meeting of the stockholders of the 

Corporation on Tuesday, July 31, 2012 at 8:00 in the morning at the 42nd Floor, Discovery 

Centre,25 ADB Avenue, Ortigas Center, Pasig City, to consider the following: 

AGENDA 

I. Call to Order; 

II. Proof of Notice of Meeting; 

III. Certification of Quorum; 

IV. Approval of the Minutes of the Previous Meeting of Stockholders; 

V. Approval of 2011 Operations and Results; 

VI. Ratification of All Acts of the Board of Directors and Officers; 

VII. Election of Directors; 

VIII. Appointment of SyCip Gorres Velayo & Co. as External Auditors; 

IX. Other Matters; 

X. Adjournment. 

In accordance with the rules of the Philippine Stock Exchange, Inc., the close of business 

on July 6,2012 has been fixed as the record date for the determination of the stockholders entitled 

to notice of such meeting and any adjournment thereof, and to attend and vote thereat. 

Registration for those who are personally attending the meeting will start at 7:30 a.m. and 

end promptly at 8:00 a.m. All stockholders who will not, are unable, or do not expect to attend the 

meeting in person, but would wish to be represented thereat, are encouraged to fill out, date, sign, 

and send a proxy to the Corporation at 2704 East Tower, PSE Centre, Exchange Road, Ortigas 

Center, Pasig City, Metro Manila. All proxies should be received by the Corporation on or before 

Monday, July 23, 2011. The proxies submitted shall be validated by a Committee of Inspectors at 

the Corporation's offices at 3:00 in the afternoon of Tuesday, July 24, 2012. 

To avoid inconvenience in registering your attendance at the meeting, you are or your 

proxy is requested to bring identification paper(s) containing a photograph and signature, e.g., 

passport, driver's license, or credit card. 

Pasig City, Metro Manila, June 25,2012. 

26/F Discovery Centre, 25 ADB Avenue, Ortigas Center, Pasig City 1605 Philippines 

Telephone: (632) 706-9999 and (632) 706-2737 

Facsimile: (632) 706-2767

1. 

2. 

3. 

SECURITIES AND EXCHANGE COMMISSION 

SEC FORM 20-IS 

INFORMATION STATEMENT PURSUANT T ~ECTio f ref 0 ~~,' 

OF THE SECURITIES REGULATIO CODE " ~ v ~ 

r-' "C~ c: C::1DC\"OQ~\ 

Check the appropriate box: \ \ I "~2012 \. \\ 

1"1 Preliminary Information Statement IIr.: 1\ ~UN 25 ." ._ U 

I 1 Definitive Information Statement \ > ., '''. t ."'f>' '-t', U 

I ;' T ,-' . II 1 \...1 

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Name of Registrant as specified in its charter I-REMIT. I~C.n _ ___ TIME --- 

Province, country or other jurisdiction of incorporation or orgamzatio 

Metro Manila. PHILIPPINES 

4. SEC Identification Number A200101631 

5. SIR Tax Identification Number 210-407-466-000 

6. Address of Principal Office 

26/F Discovery Centre. 25 ADB Avenue. Ortigas Center, Pasig City 

Postal Code 

1605 

7. Registrant's telephone number, including area code (632) 706 - 9999 Loc. 100,105 and109 

8. Date, time, and place of meeting of security holders 

Date 

Time 

Venue 

July 31,2012 

8:00a.m. 

42"d Floor, Discovery Centre, 25 ADB Avenue, Ortigas Center, 

Pasig City 

9. Approximate date on which the Information Statement is first to be sent or given to security holders 

July 9, 2012 

10. Securities registered pursuant to Sections 8 and 12 of the Code (information on number of shares 

and amount of debt is applicable only to corporate registrants 

Title of Each Class 

Common Stock, Par Value PHP 1.00 

11. Are any or all of Registrant's securities listed on a Stock Exchange 

1"1 Yes I 1 No 

Number of Shares of Common Stock 

Outstanding (as of May 31,2012) 

602,729,800 

If yes, disclose the name of such Stock Exchange and the class of securities listed therein: 

The Philippine Stock Exchange. Inc .• Common Shares 

WE ARE NOT ASKING YOU FOR A PROXY 

AND YOU ARE REQUESTED NOT TO SEND US A PROXY

GENERAL INFORMATION 

Date, time and place of meeting of security holders: 

Date : July 31, 2012 

Time : 8:00 a.m. 

Place : 42 nd Floor, Discovery Centre, 25 ADB Avenue, Ortigas Center, Pasig City 

Registrant’s Mailing Address: 26 th Floor, Discovery Centre, 25 ADB Avenue, Ortigas Center, Pasig City 

The approximate date on which the Information Statement is first to be sent to security holders is 

July 9, 2012. 

Dissenters’ Right of Appraisal 

The matters to be voted upon in the Annual Stockholders’ Meeting of I-Remit, Inc. (hereinafter, the 

“Company”) on July 31, 2012 are not among the instances enumerated in Sections 42 and 81 of the 

Corporation Code of the Philippines whereby the right of appraisal, defined to be the right of any stockholder to 

dissent and demand payment for the fair value of his shares, may be exercised. The instances where the right 

of appraisal may be exercised are as follows: 

1. In case any amendment to the Articles of Incorporation has the effect of changing or 

restricting the rights of any stockholder or class of shares, or of authorizing preferences 

in any respect superior to those outstanding shares of any class, or of extending or 

shortening the term of corporate existence; 

2. In case of sale, lease, exchange, transfer, mortgage, pledge, or other disposition of all or 

substantially all of the corporate property and assets as provided in the Corporation 

Code; 

3. In case the Company decides to invest its funds in another corporation or business 

outside of its primary purpose; 

4. In case of merger or consolidation. 

Under Section 82 of the Corporation Code, the appraisal right may be exercised by any stockholder who shall 

have voted against the proposed corporate action, by making a written demand on the Company within thirty 

(30) days after the date on which the vote was taken for payment of the fair value of his shares. However, 

failure to make the demand within such period shall be deemed a waiver of the appraisal right. If the proposed 

corporate action is implemented or effected, the Company shall pay to such stockholder, upon surrender of the 

certificate or certificates of stock representing his shares, the fair value thereof as of the day prior to the date 

on which the vote was taken, excluding any appreciation or depreciation in anticipation of such corporate 

action. 

If within a period of sixty (60) days from the date the corporate action was approved by the stockholders, the 

withdrawing stockholder and the Company cannot agree on the fair value of the shares, it shall be determined 

and appraised by three (3) disinterested persons, one (1) of whom shall be named by the stockholder, another 

by the Company, and the third by the two (2) thus chosen. The findings of the majority of the appraisers shall 

be final, and their award shall be paid by the Company within thirty (30) days after such award is made, 

provided that no payment shall be made to any dissenting stockholder unless the Company has unrestricted 

retained earnings in its books to cover such payment, and that upon payment by the Company of the agreed 

or awarded price, the stockholder shall forthwith transfer his shares to the Company. 

Interest of Certain Persons in or Opposition to Matters to be Acted Upon 

a. No person who has been a Director or officer or a nominee for election as Director of the 

Company, or an associate of such persons, has a substantial interest, direct or indirect, 

in any manner to be acted upon other than the election of Directors for the period 2012 – 

2013; 

b. No Director of the Company has informed the Company in writing that he intends to 

oppose any action to be taken by the Company at the meeting. 

2

Voting Securities and Principal Holders Thereof 

CONTROL AND COMPENSATION INFORMATION 

A. As of May 31, 2012, the Company has 602,729,800 outstanding common shares. Each 

common share shall be entitled to one (1) vote with respect to all matters to be taken up 

during the Annual Stockholders’ Meeting. 

B. The record date for purposes of determining stockholders entitled to vote in the Annual 

Stockholders’ Meeting to be held on July 31, 2012 is set on July 6, 2012. 

C. In the forthcoming Annual Stockholders’ Meeting, stockholders shall be entitled to elect 

eleven (11) members of the Board of Directors. Each stockholder may vote such 

number of shares for as many as eleven (11) persons he may choose to be elected from 

the list of nominees, or he may cumulate said shares and give one (1) candidate as 

many votes as the number of his shares multiplied by eleven (11) shall equal, or he may 

distribute them on the same principle among as many candidates as he shall see fit, 

provided that the total number of votes cast by him shall not exceed the number of 

shares owned by him multiplied by eleven (11). 

D. Security Ownership of Beneficial Owners and Management 

(1) Security Ownership of Certain Record and Beneficial Owners 

As of May 31, 2012, the Company knows of no one who beneficially owns in 

excess of 5% of its common stock except as set forth in the following: 

Class 

Name and 

Address of 

Record Owner 

and Relationship 

with Issuer 

Common Stockholder on 

record of Issuer: 

PCD Nominee 

Corporation 

G/F Makati Stock 

Exchange 

Building 

6767 Ayala 

Avenue, Makati 

City (stockholder) 



Star Equities, Inc. 

2/F JTKC Center 

2155 Pasong 

Tamo, Makati City 


Record of Issuer: 

Surewell Equities, 

Inc. 

690-A Quirino 

Avenue, Tambo, 

Paranaque City 



JTKC Equities, 

Inc. 

2/F JTKC Center 

2155 Pasong 

Tamo, Makati City 

3 

Name and 

Address of 

Beneficial Owner 

and Relationship 

with Record 

Number of Per Cent 

Owner Citizenship Shares Held 

(Please see Note 

below) 

Filipino 240,706,388 38.9665% 

Same as Record 

Owner 


Owner 


Owner 

Filipino 174,260,047 28.2099% 

Filipino 134,248,290 21.7327% 

Filipino 47,771,295 7.7334%

Note: The PCD Nominee Corporation (“PCDNC”) is a wholly-owned subsidiary of the Philippine Central 

Depository, Inc. The Beneficial Owners of such shares of the Company registered under the name of 

PCDNC are PCD’s Participants who hold the shares in their own behalf or in behalf of their clients. No PCD 

Participant currently owns more than five per cent (5%) of the Company’s shares except Fidelity Securities, 

Inc., viz: 

Class 

Common 

Name and Address of Owner 

and Relationship with Issuer Citizenship 

Fidelity Securities, Inc.* Filipino 

2/F JTKC Centre 

2155 Pasong Tamo, Makati 

City 

4 

Number of 

Shares Per cent Held 

146,777,994 23.7610% 

* Fidelity Securities, Inc. (“Fidelity”) is a registered broker and dealer in securities and holds the shares of the 

Company in favor of beneficial owners who hold the shares in their own behalf or on behalf of their respective 

clients. 

The PCD shares of Fidelity include 68,839,952 shares lodged by JTKC Equities, Inc.; thus, the latter’s total 

shareholdings is 116,611,247 representing 18.8775% ownership. 

The shares of Star Equities, Inc. and JTKC Equities, Inc. shall be voted by 

John Y. Tiu, Jr. The shares of Surewell Equities, Inc. shall be voted by 

Bansan C. Choa. 

(2) Security Ownership of Management 

The following are the shares beneficially-owned by the Directors and Executive 

Officers of the Company as of May 31, 2012: 

Number 

Nature of 

Legal and 

Beneficial 

Per Cent 

Class Name of Beneficial Owner of Shares Ownership Citizenship of Class 

Common Bansan C. Choa 

855,800 

550,000 

Direct 

Indirect 

Filipino 

0.13854% 

0.08904% 

Common Harris Edsel D. Jacildo 111,930 Direct Filipino 0.01812% 

Common Armin V. Demetillo 55,110 Direct Filipino 0.00892% 

Common Calixto V. Chikiamco 110 Direct Filipino 0.00002% 

Common Gilbert C. Gaw 902,764 Direct Filipino 0.14614% 

Common Jose Joel Y. Pusta 110 Direct Filipino 0.00002% 

Common A. Bayani K. Tan 573,044 Direct Filipino 0.09277% 

Common Ben C. Tiu 1,199,033 Direct Filipino 0.19410% 

Common Ruben C. Tiu 416,856 Direct Filipino 0.06748% 

Common John Y. Tiu, Jr. 166,419 Direct Filipino 0.02694% 

Common Gregorio T. Yu 110 Direct Filipino 0.00002% 

Common Bernadette Cindy C. Tiu 

154,990 

466,950 

Direct 

Indirect 

Filipino 

0.02509% 

0.07559% 

(3) Voting Trust Holders of 5% or More 

The Company is not aware of any party which holds any voting trust or any 

other similar agreement for 5% or more of the Company’s voting securities. 

(4) Changes in Control 

Pending Material Legal Proceedings 

The Company is not aware of any arrangement that may result in a change in 

control of the Company. 

Except as disclosed herein, the Company is not aware of any pending legal proceedings involving the 

members of its Board of Directors and its Executive Officers material to an evaluation of their ability and 

integrity.

Directors, Executive Officers, Promoters and Control Persons 

The following are the incumbent Directors and Executive Officers of the Company who serve as such for a 

term of one (1) year from the date of their election or until their successors shall have been duly elected and 

qualified: 

Name Age Position Period Served 

Bansan C. Choa 58 Director; Chairman & Chief Executive Officer Aug 2002 to date 

Harris Edsel D. Jacildo 50 Director; President & Chief Operating Officer Aug 2002 to date 

Armin V. Demetillo 43 Director and Chairman, Executive Committee July 2009 to date 

Gregorio T. Yu 53 Independent Director and Chairman, Audit Committee May 2007 to date 

Jose Joel Y. Pusta 59 Independent Director Aug 2002 to date 

Calixto V. Chikiamco 62 Director Aug 2002 to date 

Gilbert C. Gaw 62 Director Aug 2002 to date 

A. Bayani K. Tan 56 Director May 2007 to date 

Ben C. Tiu 60 Director May 2001 to date 

John Y. Tiu, Jr. 35 Director Aug 2002 to date 

Ruben C. Tiu, Jr. 55 Director May 2007 to date 

Maria Cecilia V. Soria 35 Corporate Secretary July 2011 to date 

Darlene R. Vivas 29 Assistant Corporate Secretary July 2011 to date 

Ma. Elizabeth G. Yao 42 Senior Vice President Aug 2002 to date 

Ronald A. Benito 42 Senior Vice President Nov 2010 to date 

Bernadette Cindy C. Tiu 33 First Vice President & Chief Financial Officer Apr 2005 to date 

Fitzgerald S. Duba 48 First Vice President & Compliance Officer Nov 2007 to date 

Glenn L. Igual 50 Vice President Dec 2011 to date 

The business experience for at least the last five (5) years of the Company’s incumbent Directors and 

Executive Officers, and those who are also nominated for election as members of the Board of Directors for 

2012 – 2013, to serve for a period of one (1) year until successors shall have been qualified, follows: 

Bansan C. Choa 

Mr. Choa has served as Chairman and Chief Executive Officer of since 2005 and has been a Director since 

2002. He is involved in various businesses in the manufacturing, and construction and property development 

sectors. He currently holds the following positions: Chairman, Confed Properties, Inc. (1991 to date); 

Chairman, Surewell Equities, Inc. (2001 to date); Director, Sterling Bank of Asia, Inc. (A Savings Bank) (2007 

to date); Board Member, Professional Regulation Commission of Real Estate Service (2010 to date); 

President, Philippine Retirement, Inc. (2009 to date) Treasurer, Six Alps Corporation (1997 to date); Treasurer, 

Banwood Contruction Center, Inc. (1976 to date); Chairman, Flexi Woodworks, Inc. (1993 to date), Chairman, 

Sure Fortune Properties, Inc. (2001 to date), Chairman, OLGC Psychological Services (2001 to date); 

Chairman, Lucky Star Management, Ltd. (Hong Kong) (2001 to date); Chairman, Surewell Enterprise Ltd. 

(Hong Kong) (1998 to date); Chairman, Surewell Equities (Singapore) Pte. Ltd. (2001 to date). 

Mr. Choa is a licensed real estate broker (Professional Regulation Commission License No. 00002), appraiser 

(Professional Regulation Commission License No. 00002), and real estate consultant (Professional Regulation 

Commission License No. 00002). He is a certified public accountant (Professional Regulation Commission 

License No. 030924). He is active in the real property development and property management field and has 

served and continues to hold board and officer positions in housing and real property development 

organizations including the Organization of Socialized Housing Developers as Vice President (2001 to 2008), 

President(2008 to 2009) and Board Member (2010); Subdivision and Housing Developers Association as First 

Vice President (2008), Chairman (2004), Board Governor (2000 to 2010), and Board Advisor (2011 to date). 

He is also the Chairman of the Board of Trustees of Kassel Condominium Corporation (2001 to date). 

He was one of the finalists of the 2006 Entrepreneur of the Year award of the Ernst & Young global accounting 

firm. He is a nominee for Global Filipino Executive of the Year in the 2011 Asia CEO Awards Philippines. He 

is also a member of the Board of Trustees and the treasurer of Kabalikat ng Migranteng Pilipino, Inc. (KAMPI), 

a non-stock non-profit organization serving overseas Filipino workers. 

Mr. Choa obtained his master in business administration degree from the Ateneo de Manila University 

Graduate School of Business in 1985 and his bachelor’s degree in commerce from the De La Salle University 

in 1974. He is a certified public accountant (CPA) and a member of the Philippine Institute of Certified Public 

Accountants (PICPA). He was connected with the accounting firm of SyCip Gorres Velayo & Co. from 1974 to 

1976. 

5

Harris Edsel D. Jacildo 

Mr. Jacildo joined I-Remit, Inc. as Executive Vice President and Chief Operating Officer in February 2002. He 

has been a Director and the President and Chief Operating Officer of the Company since April 2003. He also 

currently holds the following positions: Director, Sterling Bank of Asia, Inc. (A Savings Bank) (2006 to date); 

Director, Lucky Star Management Ltd. (Hong Kong) (2003 to date); Director, Iremit Global Remittance Ltd. 

(United Kingdom) (2003 to date); Director, I-Remit Australia Pty Ltd (2002 to date). 

He is also a Trustee of the Kabalikat ng Migranteng Pilipino, Inc. (KAMPI) (2006 to date), a non-stock nonprofit 

organization serving overseas Filipino workers and likewise serves as a Director of the Association of 

Philippine Private Remittance Services, Inc. (APPRISE) (2007 to 2010), an organization of registered nonbank 

money remittance companies in the Philippines. 

Prior to joining I-Remit, Inc., he spent 20 years in the banking industry where he was initially working in the 

field of information technology while employed by the Pacific Banking Corporation (1982 – 1985). In 1985, he 

joined the remittance division of the Rizal Commercial Banking Corporation (RCBC) where he was a Systems 

Analyst until 1991 and was the head of its TeleMoney Asia-Pacific operations until 2002. 

Mr. Jacildo obtained his bachelor of science degree in applied economics from the De La Salle University in 

1982. He also completed the basic management program of the Asian Institute of Management in 1991. 

Armin V. Demetillo 

Mr. Demetillo has served as Director and Chairman of the Executive Committee of I-Remit, Inc. since July 17, 

2009. He is the Managing Director of Goldleaf Guard Services, Inc. (2002 to date); Executive Vice President, 

Rapid Security (2002 to date); and vice president, St. Thomas Security Corporation (2002 to date). Mr. 

Demetillo is the Founding President/Charter President of the Rotary Club of Pasay EDSA, R.I. District 3810. 

He also served as a member of the Board of Trustees of the Rotary Street Children Foundation (2005 to 

2007). In 2005 to 2006, he assumed the position of Chairman of the Board of Virlanie Foundation, Inc. (a 

street children foundation supported by Princess Caroline of Monaco, which received an award in Europe for 

its effort in protecting children’s rights). He became the Faculty Member/Academic Counselor in the College of 

Business and Economics, De La Salle University (1992 to 2002). 

Mr. Demetillo obtained his bachelor of arts degree, major in philosophy cum laude from the Saint Joseph 

Seminary College in 1990. 

Gregorio T. Yu 

Mr. Yu was a Director of I-Remit, Inc. from 2001 to 2004 and was re-elected as an Independent Director of the 

Company on May 18, 2007. He is currently the Chairman of CATS Automobile Corporation (2004 to date), 

Chairman of CATS Motors, Inc. (2000 to date), Chairman of CATS Asian Cars, Inc. (Mazda Greenhills) (2004 

to date), Director, Prople BPO, Inc. (formerly Summersault, Inc.) (2006 to date), Director and Treasurer of 

CMB Partners, Inc. (2003 to date), and President of the Domestic Satellite Corporation of the Philippines 

(2001 to date). He is also the Vice Chairman of the Board and the Chairman of the Executive Committee 

Sterling Bank of Asia, Inc. (A Savings Bank) (2006 to date) and Chairman and President of Lucky Star 

Network Communications Corporation (1994 to date). He is also concurrently a Director of the following 

companies: National Reinsurance Corporation, (2011 to date); iRipple, Inc. (2010 to date); Jupiter Systems, 

Inc. (2001 to date); Wordtext Systems, Inc. (2001 to date); Yehey, Inc. (2001 to date); Philequity Fund, Inc. 

(1994 to date) Philequity PSE Index Fund, Inc. (1999 to date); Philequity Dollar Income Fund, Inc. (1999 to 

date); Philippine Airlines (2011 to date); Unistar (2011 to date); Glyph Studios, Inc. (2012); Philequity Peso 

Bond Fund, Inc.; Philequity Strategic Growth Fund, Inc.; Philequity Foreign Currency Fixed Income Fund, Inc.; 

Philequity Balanced Fund; and Philequity Resources Fund, Inc. Mr. Yu is also a Trustee of the Government 

Service Insurance System (2010 to date). He is also a Board Member of Ballet Philippines (2009 to date) and 

Manila Symphony Orchestra (2009 to date), and a Trustee of the Xavier School, Inc. (1998 to date) and a 

Trustee and the Chairman, Ways and Means Committee of the Xavier School Educational and Trust Fund, 

Inc. (1998 to date). 

Mr. Yu was formerly the President and Chief Executive Officer of Belle Corporation (1989 – 2001). He was 

also a Director and a Member of the Executive Committee of The International Exchange Bank (1995 – 2006). 

He was also a Director of the following companies: Nexus Technologies, Inc. (2001 – 2011); R.S. Lim & Co., 

Inc. (1997- 2008); and Ivantage Corporation (1993 – 2006). He was also the President of the following 

organizations: Tagaytay Highlands International Golf Club (1991 – 2001); President, The Country Club and 

Tagaytay Highlands (1995 – 2001). He was also the President and Chief Executive Officer of Sinophil 

Corporation (1993 – 2001) and Pacific Online Systems Corporation (1994 – 2001). 

6

He was also the Vice Chairman of Philippine Global Communications (1996 – 2001) and the APC Group, Inc. 

(1994 – 2001). He was also connected with the Chase Manhattan Asia Limited as Director of Corporate 

Finance (1988 – 1999) and with The Chase Manhattan Bank, NA Asia Pacific Regional Headquarters as Vice 

President – Area Credit. He was also a Second Vice President of the Chase Manhattan Bank, NA Manila 

Offshore Banking Unit from 1983 to 1986. 

He was also the Assistant Vice President of R.S. Lim and Company, Inc. from 1978 to 1981 and a Lecturer in 

Economics at Dela Salle University from 1978 to 1980. 

Mr. Yu obtained his Master of Business Administration degree from The Wharton School, Graduate of the 

University of Pennsylvania in 1983. He obtained his bachelor of arts degree in economics summa cum laude 

from the De La Salle University in 1978. 

Jose Joel Y. Pusta 

Mr. Pusta has been a Director of I-Remit, Inc. since 2002. He was a Director and Vice President of Confed 

Properties, Inc. (1997 to 2009). He was also the Corporate Secretary and a Trustee of the Kabalikat ng 

Migranteng Pilipino, Inc. (KAMPI) (2003 to 2009), the President and a Trustee of the Kassel Condominium 

Corporation (2002 to 2009) and the Vice President and Financial Controller of Green Bank, Inc. (A Rural Bank) 

(2010-2011). 

Mr. Pusta obtained his bachelor of science in commerce degree (majored in accounting) from the University of 

San Carlos in Cebu City in 1974. He has also earned units leading to the master in business administration 

degree at the Ateneo de Manila University Graduate School of Business from 1985 to 1988. He is a certified 

public accountant (CPA) and a member of the Philippine Institute of Certified Public Accountants (PICPA) and 

the Institute of Internal Auditors, Philippines. 

Calixto V. Chikiamco 

Mr. Chikiamco has been a Director of I-Remit, Inc. since 2002. He is a former columnist of the Manila 

Standard and the Manila Times. He has authored two (2) books: “Reforming the System” (Orange 

Publications and Kalikasan Press, 1992) and “Why We Are Who We Are” (Foundation for Economic Freedom, 

1998). In 2001, he was awarded by the Archdiocese of Manila for the Best Business Column (“Agriculture, 

Not IT”, Manila Standard) in the Catholic Mass Media Awards. He is the founder and CEO of Mobilemoco, 

Inc.; founder and president of MRM Studios, Inc., a company involved in mobile entertainment, digital musical 

services, and e-commerce (2001 to date). He also concurrently holds the following positions: Director, UPCC 

Securities (1999 to date); Vice Chairman, CBY, Inc. (1999 to date); Director, Golden Sunrise (1984 to date); 

Director, APMC (1985 to date); Director, Foundation for Economic Freedom (1996 to date). He is also involved 

in several professional and civic organizations such as the Foundation for Economic Freedom where he is the 

President. He is also presently a columnist of Business World and a property rights consultant to the Asia 

Foundation. He is a member of the Philippine Internet Commerce Society and the Syracuse University Alumni 

Association. 

Mr. Chikiamco holds a master’s degree in professional studies in media administration from the Syracuse 

University (New York, USA). He obtained his bachelor’s degree in economics summa cum laude from the De 

La Salle University. 

Gilbert C. Gaw 

Mr. Gaw has been a Director of I-Remit, Inc. since 2002. He is a business engaged in steel manufacturing. 

He is currently a partner of JPSA Global Services (2003 to date), and a Director of Treasure Steelworks 

Corporation (2004 to date) and Zhangzhou Stronghold Steel Works Co., Ltd. (China) (2003 to date). 

He obtained his bachelor of science degree in electronics and communications engineering from the University 

of the East in 1973. 

A. Bayani K. Tan 

Atty. Tan was the Corporate Secretary of I-Remit, Inc. from 2001 until 2004 and has been a Director since May 

2007. He is currently a Director and Corporate Secretary of the following reporting companies: First Abacus 

Financial Holdings Corporation (1994 to date); Sinophil Corporation (1993 to date); TKC Steel Corporation 

(2007 to date); Tagaytay Highlands International Golf Club, Inc. (1993 to date); Destiny Financial Plans, Inc. 

(2003 to date as Director and 2009 to date as Corporate Secretary). 

7

Mr. Tan has also been the Corporate Secretary and a Director of Sterling Bank of Asia, Inc. (A Savings Bank) 

(2007 to date); FHE Properties, Inc. (1995 to date); Club Asia, Inc. (1999 to date). He is also a Director for the 

following private companies: Highlands Gourmet Specialist Corp. (2006 to date); Destiny LendFund, Inc. 

(2005 to date); and City Cane Corporation (1993 to date). 

He is the Corporate Secretary of the following companies: Belle Corporation (1994 to date); Pacific Online 

Systems Corporation (2007 to date); Vantage Equities, Inc. (1993 to date); Yehey! Corporation (2004 to date); 

Philequity Fund, Inc. (1997 to date); Philequity Peso Bond Fund, Inc. (2000 to date); Philequity Dollar Income 

Fund, Inc. (1999 to date); Philequity PSE Index Fund, Inc. (1999 to date); HSAI-Raintree, Inc. (1999 to date); 

Tagaytay Midlands Golf Club, Inc. (1997 to date); The Country Club at Tagaytay Highlands, Inc. (1995 to 

date); The Spa and Lodge at Tagaytay Highlands, Inc. (1999 to date); Monte Oro Grid Resources Corp. (2006 

to date); E-Business Services, Inc. (2001 to date); Hella-Phil., Inc. (1992 to date); JTKC Equities, Inc. (1998 to 

date); Goodyear Steel Pipe Corporation (1999 to date); Star Equities Inc. (2006 to date); Tera Investments, 

Inc. (2001 to date); The Discovery Leisure Company, Inc. (2001 to date); Touch Solutions, Inc. (2007 to date); 

and Karen Marie L. Ty Foundation, Inc. (1995 to date). 

He is a Trustee and the Corporate Secretary of Wellington Dee Ty Foundation, Inc. (2004 to date). He is also 

a Trustee (2004 to date) and currently is the Executive Vice President of UP Law ’80 Foundation, Inc. 

Atty. Tan is also the Managing Partner of the law firm of Tan Venturanza Valdez. He also concurrently holds 

the following positions: Managing Director, Shamrock Development Corporation (1988 to date); Trustee, SC 

Tan Foundation, Inc. (1986 to date); and Legal Counsel, Xavier School, Inc. (2005 to date). He is also a 

lecturer in Center for Global Practices (2009 to date). 

In the last five years, he has held the following positions: Director, Monte Oro Resources and Energy, Inc. 

(2005 – 2008); Director, Philequity Fund, Inc. (1997 – 2007); Director, Philequity Peso Bond Fund, Inc. (2000 – 

2007); Director, Philequity Dollar Income Fund, Inc. (1999 – 2007); Director, Philequity PSE Index Fund, Inc. 

(1999 – 2007); Director, APC Group, Inc. (1996 – 2006); Director, Metro Manila Turf Club, Inc. (1995 – 2006); 

Corporate Secretary, International Exchange Bank (1995 – 2006). 

Atty. Tan holds a Master of Laws degree from New York University, USA (class of 1988). He obtained his 

Bachelor of Laws degree from the University of the Philippines in 1980 where he was a member of the Order 

of the Purple Feather (the UP College of Law Honor Society) having ranked ninth in his class. Atty. Tan was 

admitted to the Philippine Bar in 1981 after placing sixth in the examinations. He also has a Bachelor of Arts 

Degree (Majored in Political Science) from San Beda College (class of 1976) from where he graduated class 

valedictorian and was awarded the medal for academic excellence. 

Ben C. Tiu 

Mr. Ben Tiu has been a Director of I-Remit, Inc. since 2001 and has also served as the Chairman and Chief 

Executive Officer of I-Remit, Inc. from 2001 to 2004. He is also the Chairman of the Boards of Sterling Bank of 

Asia, Inc. (A Savings Bank) (2007 to date), TKC Steel Corporation (2007 to date), and The Discovery Leisure 

Company (the group behind the Discovery Suites Hotel, The Country Suites at Tagaytay City and Discovery 

Shores Boracay) (2001 to date). He is the Corporate Nominee in the Philippine Stock Exchange of Fidelity 

Securities, Inc. (1998 to date). He is also a Director of Iremit Singapore Pte Ltd (2001 to date). He also 

concurrently holds the following positions: Chairman, Tera Investments, Inc. (2001 to date); President, JTKC 

Equities, Inc. (1993 to date); President, Union Pacific Ace Industries, Inc. (1978 to date); President, Britishwire 

Industries Corporation (1976 to date); President, Goodway Marketing Corporation (1998 to date); Executive 

Vice President, Hotel System Asia, Inc. (1996 to date); Executive Vice President, JTKC Realty Corporation 

(1989 to date); Executive Vice President, Pan Asean Multi Resources Corporation (1976 to date); Executive 

Vice President and Treasurer, Aldex Realty Corporation (1982 to date); and Vice President, Goodyear Steel 

Pipe Corporation (1976 to date). Mr. Tiu was also formerly the Vice Chairman of the Board and Chairman of 

the Executive Committee of the International Exchange Bank (1995 – 2006). 

He obtained his master in business administration degree from the Ateneo de Manila University Graduate 

School of Business in 1977 and his bachelor’s degree in mechanical engineering from the Loyola Marymount 

University, USA in 1975. 

8

John Y. Tiu, Jr. 

Mr. John Tiu has served as Director of I-Remit, Inc. since 2002. He is also presently Chairman and President 

of Tera Investments, Inc. (2003 to date); and a Director of Sterling Bank of Asia, Inc. (A Savings Bank) (2007 

to date). He is also the Director and Treasurer of the following companies: Star Equities Inc. (2006 to date); 

Touch Solutions, Inc. (2001 to date); JTKC Equities, Inc. (2003 to date); JTKC Land, Inc. (2003 to date); The 

Discovery Leisure Company, Inc. (2001 to date); Cay Islands Corporation; Palawan Cove Corporation; 

Sonoran Corporation; Tofino Corporation; Discovery Country Suites, Inc. (2004 to date). He is a Director of 

Oakridge Properties, Inc. (2003 to date), Enderun Colleges, Inc., JT Perle Corporation, One Cerrada 

Corporation, Sagesoft Solutions, Inc. and Tokyo Holdings, Inc. He is a Director and President of Southern 

Visayas Property Holdings, Inc. (2003 to date), Director and First Vice President of JTKC Realty Corporation 

(2005 to date) and the President of Fidelity Securities, Inc. (2002 to date). 

Mr. John Tiu obtained his bachelor of science in electrical engineering degree (minor in mathematics) from the 

University of Washington, USA in 1998. 

Ruben C. Tiu 

Mr. Ruben Tiu has served as Director of I-Remit, Inc. from 2002 to 2004 and was reappointed as such on May 

18, 2007. He currently holds the following positions: Director, Sterling Bank of Asia, Inc. (A Savings Bank) 

(2007 to date); Director, Star Equities Inc. (2006 to date); Director Tera Investments, Inc. (2001 to date); 

President, JTKC Realty Corporation (1988 to date); President, Pan-Asean Multi Resources Corporation (1988 

to date); President, Aldex Realty Corporation (1988 to date); President, Oakridge Properties, Inc. (1996 to 

date); Executive Vice President, JTKC Equities, Inc. (1993 to date). 

Mr. Ruben Tiu obtained his bachelor of science in business administration degree from the De La Salle 

University in 1976. 

Maria Cecilia V. Soria 

Atty. Atty. Soria is the incumbent Corporate Secretary of I-Remit, Inc. She is also the Assistant Corporate 

Secretary of the following companies: Sterling Bank of Asia, Inc. (A Savings Bank), E-Business Services Inc., 

FHE Properties Inc., Highlands Gourmet, iRipple, Inc., Philequity Management, Inc., Touch Solutions, Inc., 

and JTKC Equities, Inc. She obtained her Bachelor of Arts degree in Political Science and Bachelor of Laws 

degree from the University of the Philippines in 1998 and 2006, respectively. She is currently an associate of 

Tan Venturanza Valdez (2010 to date). She was formerly connected with Reyes-Fajardo & Associates (2009 

– 2010), SGV & Co. (a member practice of Ernst & Young) (2008 – 2009), and Medialdea Ata Bello & 

Guevarra law office (2007 – 2008). She was admitted to the Philippine bar in May 2007. 

Darlene R. Vivas 

Atty. Vivas is the incumbent Assistant Corporate Secretary of I-Remit, Inc. She is also the Assistant Corporate 

Secretary of the following companies: Jolliville Holdings Corporation; The Country Club at Tagaytay Highlands, 

Inc.; and Tagaytay Midlands Golf Club Inc. She obtained her bachelor of arts degree in political science from 

the University of the Philippines and bachelor of laws degree from San Beda College of Law in 2003 and 2009, 

respectively. She is currently an associate of Tan Venturanza Valdez (2011 to date). She was formerly 

connected with Pizarras & Associates (2009 – 2010) and Santos Parungao Aquino Abejo & Santos law office 

(2010). She was admitted into the Philippine bar in May 2010. 

Ma. Elizabeth G. Yao 

Ms. Yao joined I-Remit, Inc. in 2002 and has since been in charge of its Service and Operations Division. She 

was previously an equities sales officer of Belson Securities, Inc. (1997 – 2002). She was previously 

connected with the institutional sales group of Belson PrimeEast Capital (1996 – 1997) and was also a money 

market trader of the Security Bank Corporation (1995 – 1996). 

She obtained her bachelor’s degree in business administration from the University of the Philippines in 1994. 

She also attended the business administration program of the University of New Mexico (USA) from 1988 to 

1990. 

9

Ronald A. Benito 

Mr. Benito joined I-Remit, Inc. in 2010 and currently heads the Company’s international treasury unit in charge 

of trading its foreign currencies. He was previously connected with ICAP AP (Singapore) as director of new 

business initiatives (2007-2010) and vice president and deputy treasurer of Banco Santander Central Hispano 

(2001-2004). 

He obtained his bachelor of arts degree in economics cum laude from the University of Santo Tomas in 1991. 

He obtained his master of arts degree in international relations (school of politics) in 2005 from the University 

of Durham, United Kingdom and his master of science degree in economics and international business in 2007 

from City University London. 

Bernadette Cindy C. Tiu 

Ms. Tiu has been the Chief Financial Officer of I-Remit, Inc. since 2006. She was previously the Finance 

Manager of IRemit Global Remittance Limited in the United Kingdom (2003) and International Remittance 

(Canada) Ltd. (2004), both wholly-owned subsidiaries of the Company. She joined I-Remit, Inc. in Manila in 

2005 as Treasurer and Corporate Governance Head. She is a member of the Board of Trustees of Kabalikat 

ng Migranteng Pilipino, Inc. (KAMPI), a non-stock non-profit organization serving overseas Filipino workers 

(2012). 

She obtained her bachelor’s degree in business administration (majored in accounting and finance) from the 

Boston University School of Management in 2001. 

Fitzgerald S. Duba 

Mr. Duba joined I-Remit, Inc. in 2007 and is currently a First Vice President and the Company’s Compliance 

Officer. He was a Vice President and the head of the Corporate Strategy Division of the Rizal Commercial 

Banking Corporation (RCBC) from 2002 to 2005, where he was employed for 12 years. He was also a 

management consultant in the Management Services Division of SyCip Gorres Velayo & Co (SGV) and later, 

the Manila office of Andersen Consulting. 

He obtained his bachelor’s degree in industrial engineering from the University of the Philippines in 1987 and 

completed the basic banking course of the Asian Institute of Management in 1996. He also completed the 

corporate governance seminar of the Bangko Sentral ng Pilipinas (BSP) in 2000. He is a member of the 

Philippine Institute of Industrial Engineers. 

Glenn L. Igual 

Mr. Igual joined I-Remit, Inc. in 2010 and currently heads the Company’s Information and Technology Services 

Division in charge of Software solutioning and IT Infrastructure setup and management. He was previously 

connected with Ayala Systems Technology Inc. as General Manager for Trusted Hub Ltd’s Philippine business 

unit (2009 – 2010), and was the Corporate Secretary and a Director of Saffron Hill Phils., Inc. (2005 – 2010). 

He was formerly the Vice President of Information Technology Services of United Coconut Planters Life 

Assurance Corp. (2004 – 2008). He is also a Founder/Director of Cabana Fresh Moves Inc. (2008 to date). 

He obtained his bachelor of arts degree in computer management from the Polytechnic University of the 

Philippines in 1983. He completed his Strategic Business Economics Program in the University of Asia and 

the Pacific in 2004. He obtained his Fellow, Life Management Institute (FLMI) designation in 2003 from the 

Life Office Management Association (LOMA) in Atlanta, Georgia, a USA-based continuing education program 

and his IT Infrastructure Library (ITIL) certification in 2009. 

10

Nomination of Directors 

The Company’s Board of Directors, inclusive both of independent and regular Directors, were nominated by 

the Nomination Committee and elected during the annual stockholders’ meeting to serve for a term of one (1) 

year until their successors shall have been duly elected and qualified. Based on the By-laws of the Company, 

all nominations shall be submitted to the Nomination Committee by any stockholder of record on or before the 

30 th of January of each year to allow the Nomination Committee sufficient time to assess and evaluate the 

qualifications of the nominees. 

The Nomination Committee is responsible for providing the stockholders with an independent and objective 

evaluation and assurance that the membership of its Board is competent and will foster its long-term success 

and secure its competitiveness. It is likewise responsible for the review and evaluation of the qualifications of 

all persons nominated to positions requiring appointment by the Board and the assessment of the Board’s 

effectiveness in directing the process of renewing and replacing Board members. The Company’s Nomination 

Committee is composed of three (3) members, namely: Messrs. Bansan C. Choa, Armin V. Demetillo, 

Gregorio T. Yu (Independent Director), and Ms. Catherine M. Chan (Head, Human Capital Management 

Department). 

Independent Directors 

Pursuant to the principles of good corporate governance, the Company currently has two (2) independent 

directors. As used in Section 38 of the Securities Regulation Code (SRC), an independent director is a person 

who, apart from his fees and shareholdings, is independent of management and free from any business or 

other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of 

independent judgment in carrying out his responsibilities as a director of the Company. Each independent 

director of the Company shall submit to the Corporate Secretary a letter of confirmation stating that he holds 

no interest affiliated with the Company, management or the Company’s substantial shareholders at the time of 

his election or appointment and/or re-election as a director. 

The nominees for election to the Board of Directors are as follows: 

• Calixto V. Chikiamco 

• Bansan C. Choa 

• Armin V. Demetillo 

• Gilbert C. Gaw 

• Harris Edsel D. Jacildo 

• Jose Joel Y. Pusta 

• A. Bayani K. Tan 

• Ben C. Tiu 

• John Y. Tiu, Jr. 

• Ruben C. Tiu 

• Gregorio T. Yu 

The nominees for election as independent directors of the Board of Directors are as follows: 

• Jose Joel Y. Pusta 

• Gregorio T. Yu 

On June 22, 2012, during its meeting called for that purpose, the Company’s Nomination Committee indorsed 

the respective nominations given in favor of Mr. Gregorio T. Yu by Ms. Mary Jean J. Ocan and Mr. Jose Joel 

Y. Pusta by Mr. Eliodoro M. Alcain, Jr. Except as co-stockholders of the Company, the nominees Messrs. Yu 

and Pusta are not related to the respective persons nominating them, Ms. Ocan and Mr. Alcain, respectively. 

Copies of the certifications of qualifications of independent directors dated August 1 and 12, 2011 are attached 

as Annexes “B” and “B-1” and those dated June 25, 2012 are attached as Annexes “B-2” and “B-3”. 

Significant Employees 

The Company has no significant employees. 

Family Relationships among Directors 

Messrs. Ben C. Tiu, Ruben C. Tiu and John Y. Tiu, Jr. are siblings. 

11

Involvement in Certain Legal Proceedings 

As a result of the delay in the delivery of the facilities of the Universal Leisure Club, Inc. (ULCI), some of its 

members have initiated legal actions against ULCI, the Universal Rightfield Property Holdings, Inc. (URPHI) 

and the Universal Leisure Corp. (ULCorp), as well as their respective incumbent and former officers and 

directors, including their former Corporate Secretary, A. Bayani K. Tan. The cases filed include: 

i. Civil actions for breach of contract, specific performance, quieting of title and 

reimbursement, damages with request for receivership and preliminary attachment (Civil 

Case Nos. MC03-075, MC03-077, and MC04-082) before the RTC of Mandaluyong City, 

which cases have been settled and the RTC Mandaluyong has, on 08 February 2006, 

promulgated a Joint Decision approving the Settlement Agreement, Supplemental 

Agreement, and Second Supplemental Agreement re: Civil Case Nos. MC03-077 and 

MC04-082. RTC Mandaluyong, noting the settlement of Civil Case Nos. MC03-077 and 

MC04-082, likewise issued an Order dated 18 May 2006 re: Civil Case No. MC-075 

holding that the aforementioned settlement agreement likewise puts an end to Civil Case 

No. MC03-075, as it involves substantially similar factual antecedents, and holding 

further that the complaint and counterclaims of the parties are withdrawn with prejudice. 

While the main cases have been settled, a group of ULCI members who were not 

included in the settlement and are not in favor of its terms have initiated suit to nullify the 

same. RTC Mandaluyong has rejected such moves to assail the settlement, prompting 

said group to elevate their complaint to the Court of Appeals. The Court of Appeals 

partially granted the group’s prayer and revived the writs of attachment and garnishment 

but only to such extent as to cover the remaining claims. Respondents filed a timely 

petition with the Supreme Court, where it is currently pending. 

ii. A Complaint for Estafa (docketed as I.S. No. 08-K-19713) filed before the City 

Prosecutor of Manila. A Counter-Affidavit has already been filed before the City 

Prosecutor seeking to dismiss the Complaint for lack of cause of action. 

Except as provided above, the Company is not aware of any of the following events wherein any of its 

directors, executive officers, nominees for election as director, executive officers, underwriter or control 

persons were involved during the past five (5) years up to the latest date. 

(1) Any bankruptcy petition filed by or against any business of which any of the above 

persons was a general partner or executive officer either at the time of the bankruptcy 

or within two years prior to that time; 

(2) Any order or judgment, or decree, not subsequently reversed, suspended or vacated, by 

any court of competent jurisdiction, domestic or foreign, permanently or temporarily 

enjoining, barring, suspending or otherwise limiting the involvement of any of the above 

persons in any type of business, securities, commodities or banking activities; and 

(3) Any findings by a domestic or foreign court of competent jurisdiction (in civil action), the 

SEC or comparable foreign body, or a domestic or foreign exchange or electronic 

marketplace or self-regulatory organization, that any of the above persons has violated 

a securities or commodities law, and the judgment has not been reversed, suspended, 

or vacated. 

The Company and its major subsidiaries and associates are not involved in, nor are any of their properties 

subject to, any material legal proceedings that could potentially affect their operations and financial 

capabilities. 

Certain Relationships and 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. Parties are 

also considered to be related if they are subject to common control or common significant influence. Related 

parties may be individuals or corporate entities. 

In the ordinary course of business, the Group transacts with its related parties. Under the Group’s existing 

policies, these transactions are made substantially on the same terms and conditions as transactions with 

other individuals and businesses of comparable risks. The Group engages in transactions with related parties 

consisting primarily of the following: 

12

(a) Delivery fees earned from clients of associates are as follows: 

2011 2010 2009 

Hwa Kung Hong & Co., Ltd. (HKHCL) P=46,127,251 P=33,202,567 P=25,364,567 

IRemit Singapore Pte Ltd (ISPL) 24,463,777 25,080,948 27,016,303 

P=70,591,028 P=58,283,515 P=52,380,870 

(b) The Parent Company, as Lessor, entered into four (4) Lease Agreements (please refer to Properties), 

covering its occupancy of its offices at the 25 th , 26 th and 27 th floors of the Discovery Center, at No. 25 ADB 

Avenue, Ortigas Center, Pasig City, with Oakridge Properties, Inc., a related party by virtue of JTKC 

Equities, Inc.’s ownership of the Discovery Leisure Company, Inc. which in turn owns Oakridge 

Properties, Inc. Rent expense amounted to PHP 9.96 million, PHP 9.25 million and PHP 8.17 million in 

2011, 2010, and 2009, respectively. 

(c) I-Remit, Inc. has office sharing arrangements with Surewell Equities Pte. Ltd. in Singapore for an initial 

term of two (2) years. Mr. Bansan C. Choa, Chairman and Chief Executive Officer, is a shareholder in 

said company. Rent expense amounted to PHP 0.90 million in 2011. 

(d) The Parent Company maintains deposit accounts with the Sterling Bank of Asia, Inc. (A Savings Bank) 

amounting to PHP118.6 million and PHP129.7 million as of December 31, 2011 and 2010, respectively. 

These deposits earned PHP0.43 million, PHP1.12 million and PHP1.16 million interest income in 2011, 

2010 and 2009, respectively. In 2011 and 2010, the Company has funded its retirement plan amounting 

to PHP 6.9 million and PHP 5.2 million, respectively, and maintained with Sterling Bank of Asia, Inc. (A 

Savings Bank). The said bank’s majority shareholders are: JTKC Equities, Inc., Surewell Equities, Inc. 

and Star Equities Inc. 

In the normal course of doing business, there were occasions when the stockholders would be advancing 

funds for working capital requirements of the Company. Reciprocally, there would also be occasions when the 

Company would have excess funds and would employ these to advance funds to some of its affiliates, payable 

on demand. In prior years, advances were made to foreign offices which, as these still in the process of 

starting their commercial operations, were then owned by the stockholders or associates or companies owned 

by the stockholders. The funds were then used either as working capital, to maintain cash balances in bank 

accounts or for provision of cash bonds. Presently, these foreign offices are either subsidiaries or affiliates of 

I-Remit, Inc. 

Further to the Company’s usual course of business, it also advances funds to its subsidiaries, associates, and 

affiliates. These are accounts receivable from subsidiaries, associates, and affiliates pertaining to remittance 

transactions. These also consist of advances made to subsidiaries, associates, and affiliates for working 

capital to maintain cash balances in bank accounts and to cover other financial and operating requirements. 

The receivables are usually settled on the next banking day. On the other hand, advances made to cover 

financial and operating requirements are due on demand. 

In addition to the related information disclosed elsewhere in the consolidated financial statements, the 

following are the yearend balances in respect of transactions with related parties which were carried in terms 

that prevail in arm’s length transactions during the year: 

2011 2010 

Due from related parties - Associates: 

IRemit Singapore Pte Ltd (ISPL) P=16,034,603 P=16,104,921 

Hwa Kung Hong & Co., Ltd. (HKHCL) 8,986,123 10,888,056 

P=25,020,726 P=26,992,977 

Due to related parties – Directors: P=- P=1,431,156 

Advances to associates pertain to unpaid delivery fees. These are non-interest bearing and are due on 

demand. 

Advances to directors are non-interest bearing and are due on demand. 

As of December 31, 2011 and 2010, no provision for credit losses has been recognized for the amounts due 

from related parties. 

In 2010, the Parent Company recognized dividend income amounting PHP0.6 million from dividends declared 

by IRemit Singapore Pte Ltd. In 2009, the Parent Company’s dividend income includes dividends declared by 

IRemit Singapore Pte Ltd (PHP14.40 million), International Remittance (Canada) Ltd. (PHP9.54 million), 

Worldwide Exchange Pty Ltd (PHP3.93 million), I-Remit Australia Pty Ltd (PHP3.30 million) and Power Star 

Asia Group Limited (PHP3.07 million). 

13

The compensation of the key management personnel of the Group in 2011, 2010 and 2009 are as follows: 


Short-term employee benefits P=27,036,984 P=21,059,431 P=19,232,031 

Post-employment benefits 1,571,444 549,541 721,632 

Share-based payment – – 435,303 

P=28,608,428 P=21,608,972 P=20,388,966 

The law firm of Tan Venturanza Valdez is among the firms engaged by the Company to render legal services. 

Atty. A. Bayani K. Tan, a Director of the Company, is a managing partner of this firm while Atty. Maria Cecilia 

V. Soria, the current Corporate Secretary, and Atty. Darlene R. Vivas, Assistant Corporate Secretary, are 

associates. During the year, the Company paid Tan Venturanza Valdez certain legal fees that the Company 

believes to be reasonable for the services rendered. 

Except as disclosed above, there are no transactions or arrangements with parties that fall outside of the 

definition of “related parties” under SFAS/IAS No. 24 but with whom the registrant or its related parties have or 

has had relationships with. 

Disagreement with Director 

None of the Directors have resigned or have declined to stand for re-election to the Board of Directors since 

the date of the last annual meeting of the stock holders because of a disagreement with the Company on any 

matter relating to the Company’s operations, policies, or practices. 

Compensation of Directors and Executive Officers 

The following table summarizes the aggregate compensation paid or which has accrued during the last two (2) 

calendar years and to be paid in the ensuing calendar year to the Company’s Chief Executive Officer and four 

(4) other most highly compensated officers: 

Year Name Position Aggregate Compensation 

Bansan C. Choa Chairman & CEO 

2012 

(Estimate) 


(Actual) 


(Actual) 

Harris E. D. Jacildo President & COO 

Ma. Elizabeth G. Yao SVP 

Ronald A. Benito SVP 

Bernadette Cindy C. Tiu FVP & CFO 

14 

P=9,351,421.64 

All other officers and directors as a group unnamed P=10,444,171.05 




P=8,658,723.75 







P=8,658,723.75 




The Company’s Directors have not received any form of compensation from inception up to the present other 

than a per diem for each meeting attended. There is no employment contract between the Company and the 

above-named executive officers or current executive officers. In addition, except as provided below, there are 

no compensatory plans or arrangements with respect to the named executive officers that resulted in or will 

result from the resignation, retirement or termination of such executive director or from a change-in-control in 

the Company.

On July 20, 2007, the Company’s Board of Directors approved a proposal to set up a Special Stock Purchase 

Program (“SSPP”) of 15,000,000 shares for the employees of the Company who have been in service for at 

least one (1) calendar year as of June 30, 2007 as well as members of the Board, resource persons and 

consultants of the Company (collectively referred to as the “Participants”). A Notice of Exemption under 

Section 10.2 of the Securities Regulation Code was filed with the SEC on September 13, 2007. 

Notwithstanding the aforesaid confirmation by the SEC of the exempt status of the SSPP shares, the SEC 

nonetheless required the Company to include the SSPP shares among the shares of the Company which were 

registered with the SEC prior to the conduct of its initial public offering on October 17, 2007. The registration 

of the Company shares, together with the SSPP shares, was rendered effective on October 5, 2007. 

All 15,000,000 shares were exercised. The shares subject to the SSPP were sold at par value or PHP1.00 per 

share. Total shares amounting to PHP11.74 million were paid in full, while the difference totaling PHP3.26 

million were paid by way of salary loan. The shares acquired through the SSPP were subject to a lock-up 

period of two (2) years from the date of issue, which ended on September 19, 2009. 

The sale was further subject to the condition that should the officer or employee resign from the Company 

prior to the expiration of the lock-up period, the shares purchased by such resigning employee or officer shall 

be purchased at cost by the Company as Treasury stock. As of December 31, 2009, twenty four (24) 

employees resigned and their shares totaling 808,100 were bought back by the Company. 

As approved by the Company’s Board, the fair value of the shares issued under the SSPP was measured at 

the grant date using the price-earnings multiple model, taking into account the terms and conditions upon 

which the shares were granted. The fair value at grant date was PHP1.33 per share. This transaction also 

resulted in an increase in equity by PHP1.53 million, PHP2.16 million and PHP1.00 million recognized as 

“Share-based payment’ under equity in 2009, 2008 and 2007 respectively. 

On September 19, 2009, which was the end of the lock-up period, the 808,100 shares bought back at cost 

were transferred to the Company’s retirement fund upon reimbursement of the PHP0.81 million paid by the 

Company for those shares. 

The expense arising from the share-based payment plan is recognized over the two-year lock-up period. The 

expense recognized under Salaries, Wages, and Employee Benefits in the statements of income amounted to 

PHP1.53 million in 2009, PHP2.16 million in 2008, and PHP1.00 million in 2007. 

Independent Public Accountants 

The accounting firm of SyCip Gorres Velayo & Co. (“SGV”) will be nominated and recommended to security 

holders for appointment as External Auditors for the period 2012 – 2013. Representatives of SGV are 

expected to be present in the Annual Shareholders’ Meeting to respond to appropriate questions and to make 

a statement if they so desire. In compliance with SRC Rule 68(3)(b)(iv) as amended on the rotation of 

External Auditors, the audit of the financial statements of the Company was handled and certified by the 

engagement partner, Ms. Josephine Adrienne A. Abarca, effective calendar year 2010. 

The Company’s Board of Directors reviews and approves the engagement of the Company’s external auditors, 

who are appointed upon the recommendation of the Audit Committee. The Audit Committee is composed of 

the following: Mr. Gregorio T. Yu (Independent Director) as Chairman, and Messrs. Bansan C. Choa, John Y. 

Tiu, Jr. and Harris E. D. Jacildo as Members. 

Engagement agreements are executed for every type of engagement which provides for the scope of work, 

timetable, fees, engagement team, etc. for each project. 

The audit and audit-related fees paid by the Company in the last two (2) years are as follows: 

Fees 2010 2009 

A. Audit and Audit-Related Fees 

1. Audit of the Registrant’s annual financial statements or services that 

are normally provided by the external auditor in connection with the 

statutory and regulatory filings or engagements 

2. Other assurance and related services by the external auditor that are 

reasonably related to the performance of the audit or review of the 

Registrant’s financial statements 

15 

PHP577,500.00 

(exclusive of VAT) 

PHP 550,000.00 

(exclusive of VAT) 

--- --- 

B. Tax Fees --- --- 

C. All Other Fees --- ---

Compensation Plans 

As described above, the Company has the SSPP or a stock option plan covering the employees of the 

Company who have been in service for at least one (1) calendar year as of June 30, 2007 as well as members 

of the Board, resource persons and consultants of the Company. A total of 15,000,000 shares of the 

Company, at a par value of PHP1.00 per share, were allocated under the SSPP. 

ISSUANCE AND EXCHANGE OF SECURITIES 

Authorization or issuance of Securities other than for Exchange 

On June 17, 2011, the Board of Directors authorized the declaration of 55,308,800 common shares stock 

dividend, with a par value of one peso (PHP 1.00) per share or an aggregate par value of PHP 55,308,800.00, 

out of the unrestricted retained earnings of the Company as of December 31, 2010. The stock dividend, which 

is equivalent to 10% of the issued and outstanding shares of the Company, was taken from its unissued 

capital stock. Pursuant to the provisions of the Corporation Code, the aforementioned stock dividend 

declaration was submitted for stockholders’ approval during their annual meeting on July 29, 2011. On 

September 6, 2011, the PSE approved the listing of additional 55,308,800 common shares to cover said stock 

dividend declaration. On September 08, 2011, the stock dividend was paid to all of the Company’s 

stockholders of record as of August 15, 2011. 

16

OTHER MATTERS 

Action with Respect to Reports 

The Company will seek the stockholders’ approval of the Minutes of the 2011 Stockholders’ Meeting during 

which the following were taken up: (i) Call to Order; (ii) Certification of Notice and Quorum; (iii) Approval of the 

Minutes of the Previous Stockholders’ Meeting; (iv) President’s Report and 2011 Financial Statements; (v) 

Ratification of All Acts and Resolutions of the Board of Directors, Officers and Management of the Company; 

(vi) Election of Directors; and (vii) Appointment of SGV & Co. as External Auditors. 

Management reports will be submitted for approval by the stockholders at the meeting. Approval of the reports 

will constitute approval and ratification of the acts of Management for the past year. 

Acts of the Board of Directors 

The items covered with respect to the ratification of the acts of the Board of Directors and officers for the past 

year up to the date of the meeting are those items entered into in the ordinary course of business, such as, but 

not limited to: the opening of bank accounts and designation of bank signatories; the availment of credit and 

banking facilities and approvals concerning daily operations in the Company’s foreign offices. 

The minutes of the Annual Stockholder’s meeting held on July 29, 2011 and the relevant resolutions approved 

by the Board of Directors for ratification by the stockholders are attached as Annexes “E” and “F”. 

Voting Procedures 

(a) Actions to be taken at the Annual Stockholders’ Meeting shall require the vote of the 

stockholders representing at least a majority of the Company’s outstanding capital 

stock. 

(b) The approval of the declaration of stock dividend shall require the affirmative vote of 

stockholders representing at least two-thirds of the issued and outstanding capital stock 

of the Company. 

(c) Three (3) inspectors shall be appointed by the Board of Directors before or at each 

meeting of the stockholders, at which an election of directors shall take place; if no such 

appointment shall have been made or if the inspectors appointed by the Board of 

Directors refuse to act or fail to attend then the appointment shall be made by the 

presiding officer of the meeting. 

(d) Stockholders may vote at all meetings either in person or by proxy duly given in writing 

in favor of any person of their confidence and each stockholder shall be entitled to one 

vote for each share of stock standing in his name in the books of the Corporation; 

provided, however, that in the election of Directors, each stockholder shall be entitled to 

cumulate his votes in the manner provided for by law. 

(e) The By-Laws of the Company is silent as to the method by which votes are to be 

counted. In practice, however, the same is done by the raising of hands or viva voce. 

(f) With respect to the election of eleven (11) directors, each stockholder may vote such 

number of shares for as many as eleven (11) persons he may choose to be elected 

from the list of nominees, or he may cumulate said shares and give one (1) candidate 

as many votes as the number of his shares multiplied by eleven (11) shall equal, or he 

may distribute them on the same principle among as many candidates as he shall see 

fit, provided that the total number of votes cast by him shall not exceed the number of 

shares owned by him multiplied by eleven (11). 

(g) Upon confirmation by the inspectors that there is a mathematical impossibility for certain 

nominees to be elected into office based on proxies held and votes present or 

represented in the meeting, the actual casting and counting of votes for the election of 

Directors may be dispensed with. 

(h) Counting of the votes will be done by the Corporate Secretary with the assistance of the 

external auditors and the Company's stock transfer agent. 

Items 10, 11, 12, 13, 14, 16, 17 and 18 are not responded to in this report, the Company having no intention to 

take any action with respect to the information required therein. 

17

SIGNATURES 

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in 

this report is true, complete and correct. 

By: 

I-REMIT, INC. 


E CINDY C. TIU 

esident & Chief Financial Officer 

ch 

18

Business and General Information 

I-REMIT, INC. 

I-Remit, Inc. (“I-Remit”, “Parent Company”, or “Company”) is a company in the Philippines engaged in the 

business of servicing the remittance needs of overseas Filipino workers (“OFWs”) and other migrant workers. 

The Parent Company was duly registered with the Securities and Exchange Commission (“SEC”) on March 5, 

2001 with SEC Registration No. A200101631. It started commercial operations on November 11, 2001. 

The Parent Company and its subsidiaries (“Group”) are primarily engaged in the business of fund transfer and 

remittance services, from abroad into the Philippines or otherwise, of any form or kind of currencies or monies, 

either by electronic, telegraphic, wire or any other mode of transfer; as well as the delivery of such funds or 

monies, both in the domestic and international market, by providing courier or freight forwarding services; and 

conducting foreign exchange transactions as may be provided by law and other allied activities relative 

thereto; provided that the foreign exchange transactions of the Parent Company shall be limited to ordinary 

money changing activity or “spot” foreign currency transaction; provided further that the Parent Company shall 

not engage in the business of being a commodity future broker or otherwise shall engage in financial 

derivatives activities such as foreign currency swaps, forwards, options or other similar instruments as defined 

under Bangko Sentral ng Pilipinas (“BSP”) Circular No. 102, Series of 1995. 

The Parent Company is duly registered as a Remittance Agent, with Certificate Number FX-2005-000364 

issued by the BSP on May 10, 2005, and supervised by the BSP. It is subject to applicable provisions of law 

and BSP rules and regulations, as well as the provisions of the Anti-Money Laundering Act of 2001 (Republic 

Act. No. 9160, as amended by Republic Act No. 9194 and Republic Act No.10167) and The Terrorism 

Financing Prevention and Suppression Act of 2012 (Republic Act No. 10168), and their implementing rules 

and regulations. 

I-Remit, Inc. has been registered as a remittance network provider with the Australian Transaction Reports 

and Analysis Centre effective April 13, 2012, with Registration Number RNP100035640-001. 

The Parent Company’s list of services also includes auxiliary services such as liaising and coordinating with, 

and accepting and distributing membership contributions, loan amortization payments, and premium payments 

to various government and non-government entities such as the Social Security System, the Home 

Development Mutual Fund, the Philippine Retirement Authority and the Philippine Health Insurance 

Corporation, as well as various insurance, pre-need and real estate companies. 

The registered office and principal place of business of the Parent Company is 26/F Discovery Centre, ADB 

Avenue, Ortigas Center, Pasig City, 1605 Metro Manila, Philippines. 

The Company also operates in various countries through subsidiaries, associates, or affiliates, and via tie-ups 

and strategic partnerships. Tie-up and partnership arrangements are utilized when the potential volume of 

remittances do not justify the investment of equity. 

The Company currently operates in 24 countries and territories worldwide. 

The Company’s presence in various countries hosting OFWs and Filipino migrants and several strategic 

partnerships and tie-ups with various local and international banks, pawnshops, couriers, and 

telecommunications companies makes it the largest independent local remittance company. 

The Company’s subsidiaries are as follows: 

International Remittance (Canada) Ltd., a wholly-owned subsidiary, was incorporated on July 16, 2001. It 

started initially as a tie-up and partner of I-Remit, Inc., establishing its operations in three (3) major provinces 

in Canada, namely: British Columbia, Alberta and Ontario. In 2005, I-Remit, Inc. acquired 65% ownership in 

the company that subsequently increased to 95% in 2006, and eventually consolidated to 100% on June 29, 

2007. International Remittance (Canada) Ltd. has seven (7) offices in Canada: two (2) in British Columbia; 

three (3) in Ontario; and two (2) in Alberta. The Filipino community is the third largest minority group in 

Canada. There are 350,000 Filipino migrant families and about 500,000 Filipinos in Canada mostly in Toronto, 

Montreal, and Vancouver. However, the Commission on Filipinos Overseas in its Stock Estimate of Overseas 

Filipinos (December 2009) estimates that there are 639,686 Filipinos in the country. It is registered as a 

money service business with the Financial Transactions and Reports Analysis Centre of Canada, with 

registration number M08160706. 

19

I-Remit Australia Pty Ltd, a wholly-owned subsidiary, is a company organized under the Australian 

Corporations Act 2001 and registered with the Australian Securities and Investments Commission with 

Australian Company Number 103 107 982. It was incorporated on December 10, 2002 in Victoria, Australia 

and as of June 29, 2007, the Company’s ownership in I-Remit Australia has been consolidated to 100%. It 

has no regular employees and has not engaged, since incorporation, in any material activities other than those 

related to the maintenance of a bank account with ANZ Bank (Australia and New Zealand Banking Group 

Limited) where I-Remit, Inc.’s subsidiary and tie-ups in Australia deposit the remittances that they receive for 

the purpose of eventually transferring the accumulated balance to I-Remit, Inc.’s bank account in the 

Philippines. 

IREMIT Remittance Consulting GmbH, a wholly-owned subsidiary, was incorporated on July 20, 2005 in 

Vienna, Austria, as IREMIT EUROPE Remittance Consulting AG (74.9% owned). It was granted a remittance 

license on July 25, 2007 by the Financial Monetary Authority of Austria. It started commercial operations on 

September 16, 2007. There are about 30,000 Filipinos in Austria. In November 2009, IREMIT EUROPE 

Remittance Consulting AG was registered by Banca D’Italia Eurosistema in the general list of financial 

intermediaries as a provider of money transfer services under Article 106 of the legislative decree 385/1993 of 

Italy’s Banking Law. On April 18, 2010, it opened a branch in Rome. On August 1, 2010, it opened its second 

branch in Milan. On April 28, 2011, IREMIT EUROPE Remittance Consulting AG stopped its money 

remittance operations in Rome and Milan in Italy in accordance with Article 75 of the Transitional and Final 

Provisions of Austrian Payment Services Act, which stipulated that credit institutions that have held 

authorizations pursuant to Article 1 paragraph 1 no 23 BWG, as amended by the Federal Act Federal Law 

Gazette No. 35/2003, prior to December 25, 2009, have only until April 30, 2011 to carry out their money 

remittance operations. On May 5, 2011, the Parent Company acquired the 25.1% ownership interest in 

IREMIT EUROPE Remittance Consulting AG from the noncontrolling stockholder. The acquisition increased 

the Parent Company’s ownership interest in IREMIT EUROPE Remittance Consulting AG to 100.0% from 

74.9%. Consequently, on October 11, 2011, IREMIT EUROPE Remittance Consulting AG changed its legal 

name to IREMIT Remittance Consulting GmbH and changed its legal status from a stock company to a limited 

liability company. It also amended its Articles of Incorporation to include management consultancy in its 

business activities. In December 2011, IREMIT Remittance Consulting GmbH sold assets relating to its 

operations in Italy to a third party. These assets, with an aggregate carrying amount of PHP 7.29 million, were 

sold for a consideration of PHP 72.43 million thereby resulting to a gain on sale of PHP 65.14 million. 

IRemit Global Remittance Limited, a wholly-owned subsidiary, is a private limited company in the United 

Kingdom and Wales that was incorporated on June 22, 2001. It is registered with The Registrar of Companies 

for England and Wales, Companies House with Company Number 04239974. It started commercial operations 

in July 2001. Initially, the Company had a 96% equity interest in the IRemit Global Remittance Limited until it 

was sold on January 18, 2004. I-Remit, Inc. repurchased it on June 29, 2007 and acquired 100% ownership 

interest. The Financial Services Authority has granted IRemit Global Remittance Limited the authorization to 

operate the money remittance business, with Firm Reference Number 537568, effective April 15, 2011 under 

the Payment Services Regulations 2009, the transposition into English law of the European Union (EU) 

Payment Services Directive (2007/64/EC) that is applicable in all EU and European Economic Area countries. 

As an authorized institution, it operates branches in Rome and Milan in Italy and has also received approval to 

operate a branch in Ireland. It has agents in the United Kingdom, Germany and Austria. It is also registered 

with Her Majesty’s Customs and Excise with Money Laundering Registration Number 12130185. Filipinos are 

the fourth largest source of immigrants to the United Kingdom. There are approximately 200,000 Filipinos 

living and working in the United Kingdom as nurses, caregivers in public and private nursing homes, medical 

professionals and chambermaids. Italy is the second most popular destination of overseas Filipino workers in 

Europe. Numbering about 200,000, the vast majority of Filipinos work in the domestic service sector while 

there are also a number employed in the nursing field and other skilled and semi-skilled occupational groups. 

I-Remit New Zealand Limited, a wholly-owned subsidiary was incorporated on September 11, 2007. Its 

registration was approved by the New Zealand Ministry of Economic Development last September 11, 2007. It 

is registered with the Registrar of Companies of New Zealand, Companies Office with Company Number 

1984331. The company started operating commercially on February 13, 2008. There are over 20,000 Filipinos 

in New Zealand. 

K.K. I-Remit Japan, a wholly-owned subsidiary was incorporated on June 10, 2011. The Kanto Local Finance 

Bureau approved its registration as a Funds Transfer Company effective December 7, 2011, with Registration 

Number KLFB00019. It is a member of the Japan Payment Service Association. K.K. I-Remit Japan started 

operating commercially on May 14, 2012 in Tokyo. A branch in Nagoya will be opened this year. There are 

about 150,000 Filipinos in Japan. 

20

Lucky Star Management Limited, a wholly-owned subsidiary, was incorporated on March 16, 2001 as a limited 

liability company under the Companies Ordinance of Hong Kong whose principal activity is the provision of 

remittance services. It is registered with the Companies Registry with Company Number 750525. It was the 

first international branch of I-Remit, Inc. and, to date it has four (4) branches in Hong Kong: two (2) at the 

Central District, one (1) at the Admiralty, and one (1) in Tsuen Wan. Hong Kong is one of the top destinations 

of land-based OFWs in Asia. There are on average around 140,000 Filipinos in Hong Kong, most of whom 

find work as domestic household helpers. 

Power Star Asia Group Limited, a wholly-owned subsidiary, was incorporated on April 28, 2008 under the 

Companies Ordinance of Hong Kong. It is engaged in foreign exchange trading activities. It was acquired by 

I-Remit, Inc. on November 12, 2008 with the purchase of its 1,000,000 outstanding shares for a total 

consideration of HKD1,000,000 with the intention of outsourcing some of the Parent Company’s foreign 

exchange activities to a company located in one of the regional financial centers in Asia. It is registered with 

the Companies Registry with Company Number 1232132. 

Worldwide Exchange Pty Ltd (consisting of direct voting interest of 70% and indirect voting interest through I- 

Remit Australia Pty Ltd of 30%) was incorporated on September 29, 2003 in Queensland, Australia. It is duly 

registered with the Australian Securities and Investments Commission in Queensland, Australia with Australian 

Company Registration Number 106493047. It started commercial operations in September 2002. It currently 

has two (2) branches located in Blacktown, New South Wales, and in Perth, Western Australia. The Filipino- 

Australian community is composed of approximately 200,000 immigrants, many of whom moved to Australia 

from the Philippines in the early 1980’s. 

The Company’s associates are as follows: 

IRemit Singapore Pte Ltd (49% owned) is a private limited company incorporated in Singapore whose principal 

business activity is to carry on the business of money remittance services. It was incorporated on May 11, 

2001 and started commercial operations in October 2001. It is duly registered with the Registrar of 

Companies and Businesses Singapore, Accounting and Corporate Regulatory Authority with Company 

Number 200103087H. It is also registered with and has a license from the Monetary Authority of Singapore 

under Section 8(3) of the Money-changing and Remittance Businesses Act (Chapter 187), with Registration 

Number 01038. There are about 136,000 Filipinos in Singapore who work as household workers, medical 

workers, IT professionals, and construction workers. 

Hwa Kung Hong & Co. Ltd. (49% owned) is a company engaged in the remittance business in Taiwan. It has 

offices in Taipei and Kaohsiung. It has Taipei City Business Number 00078598-2 and Business Enterprise 

(For Profit) Unified Number 14033431. On January 9, 2009, the Board of I-Remit, Inc. authorized the 

acquisition of up to 49% of the outstanding capital stock of Hwa Kung Hong & Co. Ltd. The acquisition of the 

shares was completed on July 1, 2009. 

21

Properties 

I-Remit, Inc. and its subsidiaries do not own any real estate properties. I-Remit, Inc. is leasing its 

headquarters located at the 25th, 26th, and 27th floors of the Discovery Centre, a condominium office and 

residential building, located at 25 ADB Avenue, Ortigas Center, Pasig City from Oakridge Properties, Inc. In 

addition, certain departments of the Company are holding office at the 8th floor of the Wynsum Corporate 

Plaza, a condominium office building located at 22 F. Ortigas Jr. Road (formerly Emerald Avenue), Ortigas 

Center, Pasig City. 

Current Rent 

per Month 

Contract Period 

exclusive of Term 

Unit & Location Address Area (sqm) VAT (PHP) (years) Start End 

Unit 2503, 25/F 25 ADB Avenue, Ortigas 199.70 131,572.35 6 months Feb. 1, Aug. 31, 

Discovery Centre Center, Pasig City 

extension 2012 2012 

Unit 2603, 26/F 25 ADB Avenue, Ortigas 199.70 159,480.42 2 Dec. 1, 2011 Nov. 30, 



Unit 2604 & 2605, 25 ADB Avenue, Ortigas 551.80 456,454.48 2 Dec. 1, 2011 Nov. 30, 

26/F Discovery 

Centre 

Center, Pasig City 


Unit 2703, 27/F 25 ADB Avenue, Ortigas 199.70 133,998.70 2 Feb. 1, 2011 Jan. 31, 



8/F Wynsum 

22 F. Ortigas Jr. Road, 287.00 157,850.00 2 Sep. 1, 2010 Aug. 31, 

Corporate Plaza Ortigas Center, Pasig City 


Five (5) parking 22 F. Ortigas Jr. Road, 

--- 17,500.00 2 Sep. 1, 2010 Aug. 31, 

spaces, Wynsum 

Corporate Plaza 

Ortigas Center, Pasig City 


The Company has no plans or intention to acquire real properties in the next twelve (12) months. 

Legal Proceedings 

The Company and its subsidiaries, affiliates and associates are not involved in, nor are any of their properties 

subject to, any material legal proceedings that could potentially affect their operations and financial 

capabilities. 

Market for Issuer’s Common Equity and Related Stockholder Matters 

The common shares of the Company were listed in the Philippine Stock Exchange (PSE) beginning October 

17, 2007. 

Quarter end stock price ranges for 2009, 2010, 2011 and first quarter 2012 are as follows: 

Quarter Ending Date High Low Close 

March 31, 2009 PHP 4.80 PHP 3.70 PHP 4.45 

June 30, 2009 PHP 4.65 PHP 4.00 PHP 4.10 

September 30, 2009 PHP 4.60 PHP 3.85 PHP 4.00 

December 31, 2009 PHP 7.00 PHP 3.70 PHP 6.10 

March 31, 2010 PHP 6.20 PHP 4.70 PHP 4.85 



December 31, 2010 PHP 4.08 PHP 3.20 PHP 3.34 




December 31, 2011 PHP 2.50 PHP 2.00 PHP 2.45 


The stock prices at June 22, 2012 were: PHP 2.58 (High); PHP 2.54 (Low); PHP 2.57 (Close). 

Holders 

There were eighteen (18) shareholders of record as of May 31, 2012. Common shares outstanding amounted 

to 602,729,800 as of May 31, 2012. 

22

These eighteen (18) shareholders as of May 31, 2012, the number of common shares held and the 

percentage of total shares outstanding held by each are as follows: 

Name Citizenship Total Common Shares Percentage (%) 

1 PCD Nominee Corporation – Filipino Filipino * 240,706,388 38.9665 

2 Star Equities Inc. Filipino 174,260,047 28.2099 

3 Surewell Equities, Inc. Filipino 134,248,290 21.7327 

4 JTKC Equities, Inc. Filipino 47,771,295 7.7334 

5 JPSA Global Services Co. Filipino 18,700,000 3.0272 

6 PCD Nominee Corporation – Non-Filipino Foreign 1,855,370 0.3004 

7 Alba, Willy S. Filipino 88,000 0.0142 

8 Lim, Ernesto B. Filipino 70,900 0.0115 

9 Lim, Nieves Q. &/or Charis Honeylet Q. Lim Filipino 10,000 0.0016 

10 GTS Insurance Brokers, Inc. Filipino 5,000 0.0008 

11 Cruz, Napoleon D. Sr. and/or Luisa I. Cruz Filipino 3,000 0.0005 

12 Soriano, Victor Martin J. Filipino 2,000 0.0003 

13 Ona, Edgardo V. Filipino 2,000 0.0003 

14 Olayres, Norberto F. and/or Olayres, Felisa J. Filipino 1,000 0.0002 

15 Hapi Iloilo Corporation Filipino 1,000 0.0002 

16 M. J. Soriano Trading, Inc. Filipino 1,000 0.0002 

17 Au, Owen Nathaniel S. ITF: Li Marcus Au Filipino 400 0.0001 

18 Gaw, Gilbert C. Filipino 110 0.0000 

Total 617,725,800 100.0000 

* The PCD shares include 68,839,952 shares lodged by JTKC Equities, Inc.; thus, the latter’s total shareholdings is 116,611,247 representing 

18.8775% ownership. 

Dividends 

In 2008, the Company authorized the declaration of cash dividends amounting to PHP22,000,000 or 

PHP0.0391 per share, payable to all of its shareholders-of-record as of May 15, 2008 and paid and distributed 

to the shareholders on June 10, 2008. 

In 2009, the Company authorized the declaration of cash dividends amounting to PHP26,000,000 or 

PHP0.0471 per share, payable to all its shareholders-of-record as of April 7, 2009 and paid and distributed to 

the shareholders on May 6, 2009. 

On March 19, 2010, the Board of Directors of the Company declared cash dividends amounting to 

PHP26,603,532, representing 20% of the Company’s consolidated net income for the period ended December 

31, 2009 or PHP0.0481 per share, payable to all of its shareholders-of-record as of April 8, 2010 and paid and 

distributed to the shareholders on May 5, 2010. 

On June 17, 2011, the Board of Directors authorized the declaration of 55,308,800 common shares stock 

dividend, with a par value of one peso (PHP 1.00) per share or an aggregate par value of PHP 55,308,800.00, 

out of the unrestricted retained earnings of the Company as of December 31, 2010. The stock dividend, which 

is equivalent to 10% of the issued and outstanding shares of the Company, was taken from its unissued 

capital stock. Pursuant to the provisions of the Corporation Code, the aforementioned stock dividend 

declaration was submitted for stockholders’ approval during their annual meeting on July 29, 2011. On 

September 6, 2011, the PSE approved the listing of additional 55,308,800 common shares to cover said stock 

dividend declaration. On September 08, 2011, the stock dividend was paid to all of the Company’s 

stockholders of record as of August 15, 2011. 

On June 22, 2012, the Board of Directors of the Company authorized the declaration of cash dividends in the 

total amount of PHP 120,000,000.00 or approximately PhP 0.1993 per share, based on the Company’s 

602,071,800 issued and outstanding common shares as of the end of trading on the said date, payable to all 

of its shareholders-of-record as of 12 July 2012. Payment date will be on or before 07 August 2012. 

The Company’s Board of Directors is authorized to declare dividends. Pursuant to Sections 43 and 143 of the 

Corporation Code of the Philippines, Section 5 of the Securities Regulation Code, and SEC Memorandum 

Circular No. 11, Series of 2008 (Guidelines on the Determination of Retained Earnings Available for Dividend 

Declaration), dividends may be declared and paid out of the unrestricted retained earnings which shall be 

payable in cash, property or stock to all stockholders on the basis of outstanding stock held by them, as often 

and at such time as the Board of Directors may determine and in accordance with law and applicable rules 

and regulations. Cash and property dividend declarations do not require any further approval from the 

23

Company’s shareholders. Any stock dividend declaration requires the approval of shareholders holding at 

least two-thirds (2/3) of the Company’s total outstanding capital stock. 

Pursuant to existing Philippine regulations, cash dividends declared by the Company must have a record date 

of not less than ten (10) days or more than thirty (30) days from the date the cash dividends are declared. 

With respect to stock dividends, the record date is to be not less than ten (10) days nor more than thirty (30) 

days from the shareholders’ approval, provided however, that the set record date is not to be less than ten (10) 

trading days from receipt of the PSE of the notice of the said record date. If no record date is set, under the 

SEC rules, the record date will be deemed fixed at fifteen (15) days from the date of stock dividend 

declaration. In the event that a stock dividend is declared in connection with an increase in authorized capital 

stock, the corresponding record date is to be fixed by the SEC. 

With the listing of the Company’s shares in the PSE, the Company intends to maintain an annual dividend 

payment ratio for its shares of up to 20% of its consolidated net income from the preceding fiscal year, subject 

to the requirements of applicable laws and regulations and the absence of circumstances which may restrict 

the payment of dividends. Circumstances which may restrict the payment of dividends include, but are not 

limited to, situations when the Company undertakes major projects and developments requiring substantial 

cash expenditures or when it is restricted from paying dividends by its loan covenants. The Company’s Board, 

may, at any time, modify such dividend payout ratio depending upon the results of operations and future 

projects and plans of the Company. 

Other than statutory limitations, there are no restrictions that prevent the Company from paying dividends on 

common equity. 

Recent Sale of Unregistered or Exempt Securities Including Recent Issuance of Securities Constituting 

an Exempt Transaction 

Since the Company’s Listing Date on October 17, 2007, there has been no recent sale of unregistered or 

exempt securities including recent issuances of securities constituting an exempt transaction. 

Except as disclosed in the Management’s Discussion and Analysis of Financial Conditions and Results of 

Operations, the Company is not aware of any known trends, commitments, events or uncertainties that will 

have a material impact on the Company’s liquidity. The Company has not defaulted in paying its currently 

maturing obligations. In addition, obligations of the Company are guaranteed up to a certain extent by the 

Company’s majority stockholders. Neither is the Company aware of any events that will trigger a direct or 

contingent obligation that is material to the Company, including any default or acceleration of an obligation. 

There are no material off-balance sheet transactions, arrangements, obligations (including contingent 

obligations), and other relationships of the Company with unconsolidated entities or other persons created 

during the reporting period. 

The Company has no material commitments for capital expenditures. 

Except as disclosed in the Management’s Discussion and Analysis of Financial Conditions and Results of 

Operations, the Company is not aware of any trends, events or uncertainties that have had or that are 

reasonably expected to have a material favorable or unfavorable impact on sales, revenue or income from 

continuing operations. 

There are no significant elements of income or loss that did not arise from the Company’s continuing 

operations. Likewise, there are no seasonal aspects that had a material effect on the financial condition or 

results of operations. 

The Company does not expect any purchase of significant properties or any significant changes in the number 

of employees in the next twelve (12) months. 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 

There have been no changes in or disagreements with accountants on accounting and financial disclosure. 

DIRECTORS AND EXECUTIVE OFFICERS 

Please refer to the discussion on “Directors, Executive Officers, Promoters and Control Persons” in the main 

body of the Information Statement. 

24

CORPORATE GOVERNANCE 

The Company practices the principles of good corporate governance – transparency, accountability, fairness 

and responsibility – in reporting financial and non-financial information about its activities, and in its manner of 

conducting business with its customers, investors, staff, stockholders, and its various publics. 

The basic foundation and framework for corporate governance of I-Remit, Inc. is contained in its Articles of 

Incorporation and its By-Laws and in their subsequent amendments. 

In ensuring adherence to the principles of good corporate governance, the Board establishes the vision, 

strategic direction, key objectives, and the major policies and procedures for the management of the 

Company. The Board also ensures that internal control mechanisms are in place and adequate for good 

governance. 

Manual on Corporate Governance 

On June 22, 2007, the Board of Directors approved and adopted the Company’s Manual on Corporate 

Governance (“Manual”) pursuant to SEC Memorandum Circular No. 2, Series of 2002 issued by the Securities 

and Exchange Commission on April 5, 2002. The Manual contains the principles of good corporate 

governance and best practices and is intended to be kept updated with new governance-related regulatory 

issuances. The Manual also established and defined the responsibilities and functions of the Board and 

various Board committees necessary for good corporate governance, i.e., Audit Committee; Compensation 

and Remuneration Committee; and the Nominations Committee. The Manual also defined the functions of the 

Corporate Secretary and prescribes the roles of the Company’s external and internal auditors. 

On February 18, 2011, the Board of Directors adopted the Company’s Revised Manual on Corporate 

Governance in compliance with SEC Memorandum Circular No. 6, Series of 2009: Revised Code of 

Corporate Governance. 

In addition, the Company also has a Conduct, Discipline and Ethics (CODE) Manual that was first adopted on 

May 1, 2004 and subsequently revised on July 7, 2004. This manual contains guidelines on matters involving 

work performance; professionalism; behavior and dealings with employees, directors, customers, and 

business partners; and handling of assets, records and information. This manual is in the process of being 

revised to include standards on matters of good corporate governance such as insider trading and the 

avoidance of conflict of interest situations. 

Independent Directors 

In accordance with SEC Memorandum Circular No. 16, Series of 2002, also known as the Guidelines on the 

Nomination and Election of Independent Directors, two (2) of the eleven members of the Board of Directors 

are Independent Directors in the persons of Messrs. Jose Joel Y. Pusta and Gregorio T. Yu. 

As used in Section 38 of the Securities and Regulations Code (“SRC”), an independent director is a person 

who, apart from his fees and shareholdings, is independent of management and free from any business or 

other relationship which could, or could reasonably be perceived to, materially interfere with his exercise of 

independent judgment in carrying out his responsibilities as a Director of the Company. 

In accordance with SEC Notice on Certificate of Qualification dated October 20, 2006, the Independent 

Directors of I-Remit, Inc. have, in August 2011, executed sworn Certifications of Independent Directors stating 

that they possess all the qualifications and none of the disqualifications to serve as Independent Directors of 

the Parent Company, as provided for in Section 38 of the Securities Regulation Code. The Certifications of 

Independent Directors have been submitted to the Securities and Exchange Commission on August 16, 2011. 

25

Committees of the Board of Directors 

In aid of good corporate governance, the Company’s Board created each of the following committees and 

appointed members thereto from among themselves during the organizational meeting of the Board on July 

29, 2011. Each member of their respective committees named below began holding office on July 29, 2011 

and will serve until his successor shall have been duly qualified and elected. 

Executive Committee 

Except as provided in Section 35 of the Corporation Code, the Executive Committee has and 

exercises all such powers as may be delegated to it by the Board. It acts on matters in 

accordance with the authorities granted to it in case a full Board meeting cannot be convened. 

The actions and decisions of the Executive Committee are reported to and are ratified by the 

Board. 

The Executive Committee is composed of the following: Mr. Armin V. Demetillo as Chairman, and 

Messrs. Bansan C. Choa, Gilbert C. Gaw, Harris E. D. Jacildo, and Ben C. Tiu as Members. 

Audit Committee 

The Audit Committee is responsible for assisting the Board in its fiduciary responsibilities by 

providing an independent and objective assurance to the Company’s management and 

shareholders of the continuous improvement of the Company’s risk management systems and 

business operations, and the proper safeguarding and use of the Company’s resources and 

assets. It also ensures that the Board will take appropriate corrective action in addressing control 

and compliance issues of the Company. 

The Company’s Audit Committee shall have no less than three (3) members at least two (2) of 

whom are Independent Directors, one of whom shall serve as the Committee’s Chairman. The 

Committee reports to the Board and meets twice every month. 

The Audit Committee is composed of the following: Mr. Gregorio T. Yu (Independent Director) as 

Chairman, and Messrs. Bansan C. Choa, John Y. Tiu, Jr. and Harris E. D. Jacildo as Members. 

Compensation and Remuneration Committee 

The Compensation and Remuneration Committee is responsible for objectively recommending a 

formal and transparent framework of remuneration and evaluation for the members of the Board 

and the Company’s Executive Officers. The committee is also responsible for providing oversight 

on the remuneration of the Executive Officers and other key personnel and for ensuring that 

compensation is always consistent with the Company’s culture, corporate strategy and control 

environment. 

The Compensation and Remuneration Committee is composed of three (3) members of the 

Board, one of whom is an Independent Director. The committee is composed of the following: 

Messrs. Bansan C. Choa, Armin V. Demetillo and Gregorio T. Yu (Independent Director). 

Nomination Committee 

The Nomination Committee is responsible for implementing a process that ensures that all 

Directors to be nominated for election at the Annual Stockholders’ Meeting are all qualified and 

have none of the disqualifications for Directors as provided in the Company’s By-Laws and 

Manual on Corporate Governance. The Committee provides the shareholders with an 

independent and objective evaluation and assurance that the members of the Board will foster the 

Company’s long-term success and competitiveness. The Nomination Committee is also 

responsible for reviewing and evaluating the qualifications of all persons nominated to positions 

requiring appointment by the Board and for assessing the Board’s effectiveness in directing the 

process of reviewing and replacing Board members. The Committee is also responsible for 

reviewing the qualifications of executives prior to movement, promotion, or hiring. 

The By-Laws of the Company require that all nominations for Directors shall be submitted to the 

Nomination Committee by any stockholder of record on or before January 30 of each year to 

allow for sufficient time to assess and evaluate the qualifications of the nominees. All 

nominations for Independent Directors shall be signed by the nominating stockholder and shall 

bear the acceptance and conformity of the persons nominated. 

26

The Nomination Committee is composed of three (3) members of the Board, including one (1) 

independent director and one (1) non-voting member in the person of the Human Resources 

Manager. The Nomination Committee reports directly to the Board and meets whenever 

necessary to review and evaluate the qualifications of all persons nominated to the Board, as well 

as those nominated to other positions requiring appointment by the Board. 

The Nomination Committee is composed of Messrs. Bansan C. Choa, Armin V. Demetillo, 

Gregorio T. Yu (Independent Director), and Ms. Catherine M. Chan (Head, Human Capital 

Management Department). 

The Company’s Certificate of Compliance with the Manual (SEC Form MCG-2002) was submitted by the 

Compliance Officer to the SEC and disclosed to the Philippine Stock Exchange on January 5, 2012. Based on 

the results of the evaluation performed, there has been no significant deviation and, in general, the Company 

has complied with most of the provisions and requirements of the Manual, SEC Memorandum Circular No. 6 

Series of 2009: Revised Code of Corporate Governance, and the leading practices and principles of good 

corporate governance for the year 2011. 

The Company accomplished and submitted the 2011 Corporate Governance Guidelines for Listed Companies 

Disclosure Template of The Philippine Stock Exchange, Inc. on March 28, 2012. 

The Company’s Management’s Discussion and Analysis of Financial Conditions and Results of Operations are 

attached as Annex “A”. The Company’s Financial Statements as of December 31, 2011 and 2010, and for the 

years ended December 31, 2011, 2010 and 2009 are attached as Annexes “C” and “C-1”. The Company’s 

SEC Form 17-Q for the first quarter of year 2012 is attached as Annex “D”. 

UPON WRITTEN REQUEST OF ANY SHAREHOLDER OF RECORD ENTITLED TO NOTICE OF AND 

VOTE AT THE MEETING, THE COMPANY SHALL FURNISH SAID SHAREHOLDER WITH A COPY OF 

THE COMPANY’S ANNUAL REPORT ON SEC FORM 17-A WITHOUT CHARGE. ANY SUCH WRITTEN 

REQUEST SHALL BE ADDRESSED TO: 

MARIA CECILIA V. SORIA 

CORPORATE SECRETARY, I-REMIT, INC. 

2704 EAST TOWER, PHILIPPINE STOCK EXCHANGE CENTRE 

EXCHANGE ROAD, ORTIGAS CENTER 

1605 PASIG CITY, METRO MANILA 

PHILIPPINES 

27

Plan of Operation 

MANAGEMENT’S DISCUSSION AND 

ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 

1 

Annex “A” 

The Company’s strategy is anchored on expansion and gaining a larger share of the inward remittances of 

overseas Filipino workers (OFWs) and tapping the potential of other international remittance corridors. The 

Company aims to identify and tap a wider customer base in each of the countries where it operates through 

focused marketing efforts and expansion of distribution reach and capabilities by opening new offices, or 

engaging new agents and tie-ups. 

The Financial Services Authority (FSA) of the United Kingdom has authorized the Company’s wholly-owned 

subsidiary, IRemit Global Remittance Limited (IGRL), to operate the money remittance business effective April 

15, 2011 under the Payment Services Regulations 2009, the transposition into English law of the European 

Union (EU) Payment Services Directive (2007/64/EC). As an authorized payment institution, IGRL may 

provide payment services including money remittance in all EU and European Economic Area states through 

“passporting” by establishing branches, engaging agents, or providing cross-border services. Currently, it has 

four (4) branches: two (2) in the United Kingdom and two (2) in Italy (Rome and Milan). It also has 25 agents: 

23 in the United Kingdom, one (1) in Austria and one (1) in Germany. It currently has “passporting” rights in 

Italy, Austria, Ireland, and Germany. The Company intends to utilize the “passporting” rights of IGRL in 

opening additional branches and engaging more agents in Europe. 

I-Remit’s wholly-owned subsidiary, K.K. I-Remit Japan has been registered as a funds transfer company in 

accordance with the Payment Services Act of Japan. It has an office in Tokyo and has authorization to open 

in Nagoya. These offices will offer remittance services to Filipinos. The Company is considering expanding its 

services in the country by opening additional branches that will also offer money transfer services to workers 

of other nationalities in Japan. 

I-Remit has been in partnership with the Bank of China since 2008 to service the remittance needs primarily of 

expatriate Chinese, initially in Italy, the United Kingdom, and Canada. The Company intends to extend its 

services to expatriate Chinese in Japan. 

Recently, the Company signed an agreement with Bank Internasional Indonesia, a unit of Malaysian Banking 

Berhad, in line with its bid to reach out to the non-Filipino remittance market. This partnership between I-Remit 

and one of the largest banks in Indonesia will enable the Company to reach overseas Indonesians and their 

beneficiaries across the country of more than 17,500 islands through the bank’s 368 branches and more than 

1,190 automated teller machines. Both the Philippines and Indonesia have large populations of overseas 

workers and expatriates. They are also among the world’s biggest recipients of remittance inflows, with the 

Philippines receiving USD 21.3 billion and Indonesia USD 7.1 billion, according to the 2010 Migration and 

Remittances Factbook of the World Bank. 

I-Remit utilize the potential of the offices of its subsidiaries and affiliates abroad to tap other international 

remittance corridors and provide its services to customers of various nationalities that need to send money 

back to their home countries. 

The Company provides world-class remittance services at very competitive prices. It provides the widest 

choices of remittance modes to its customers. Presently, it is strong in the bank-to-bank transactions that 

credit remittances to any bank of choice in the Philippines. The Company also utilizes various technological 

platforms and establishes strategic partnerships with banks and other financial institutions, making it possible 

for online and same-day crediting of accounts or delivery of remittances. 

iDol or I-Remit Direct Online was initially introduced to the Company’s customers in Canada. This facility 

allows remitters to avail of the Company’s remittance services through the Internet. iDOL allows the Company 

to reach out to a wider base of customers particularly in countries with large territorial areas. The facility is 

also scheduled to be introduced to remittance customers in the United Kingdom, Australia, Singapore, Japan, 

New Zealand, Hong Kong, Italy, Austria, and Taiwan.

The nationwide coverage of the Company’s door-to-door service reaches more beneficiaries than other 

remittance companies with delivery area spanning 17 regions in the country. The iNotify (remittance pick-up) is 

an alternative service method where beneficiaries in the Philippines can claim remittances from any of the 

Company’s more than 7,100 (as of June 7, 2012) designated pay-out centers nationwide within 24 hours after 

receipt of the remittance from the its foreign offices. The Company also opened new remittance corridors by 

introducing iNotify Foreign, a method of remittance from one country to another. Both Filipinos and non- 

Filipinos abroad can remit money and the designated beneficiaries can just pick up the proceeds from the 

Company’s offices in these countries. 

The Company also revolutionized the use of the debit card in the remittance industry. The iRemit Visa Debit 

Card is a personalized debit and ATM card-in-one. It is the fastest service mode of the Company which 

features real-time crediting of remittances from abroad. It enables both senders and beneficiaries to easily 

withdraw cash from about 11,000 Bancnet, Megalink, and Expressnet ATMs in the Philippines. It also provides 

access to Visa ATMs worldwide and can handle mobile and internet banking transactions. As a debit card, it is 

also accepted in tens of millions of Visa-affiliated merchant establishments, and 1.8 million ATMs in more than 

200 countries worldwide. The Company is promoting this alternative delivery channel aggressively to its 

customers. 

Furthermore, the Company continues to diversify its offerings to include socially-relevant services such as 

collecting premium and contribution payments of OFWs to our country’s programs such as the SSS, Pag-IBIG, 

Philippine Retirement Authority, and PhilHealth. The Company is also accepting home mortgage amortization 

payments, insurance premiums, donations to CBN Asia, appliance purchase payments, airline booking 

payments, and orders from Jollibee, the largest fast-food chain in the Philippines. 

The company’s wide network coverage of OFW-host countries and several strategic partnerships and tie-ups 

with various local and international banks, pawnshops, couriers and mobile phone companies make it the 

largest independent local remittance company. 

Aside from wide choices of remittance methods, the Company continuously upgrades the level and quality of 

customer service. It has its own Manila-based 24x7 customer service support center. Customers now have 

easy, convenient access to customer services through a dedicated team of customer support officers who 

manage and support its foreign offices, associates and clients. This team of highly trained professionals also 

handles status inquiries and complaints. The initiative greatly enhances customer convenience and the 

Company’s responsiveness to the remitters and beneficiaries’ welfare. 

The Company also capitalizes on its technology platform to support business growth and provide more 

innovative services around the globe. It established host-to-host connectivity with strategic partner banks to 

greatly improve transaction speed. It utilizes the latest in advanced banking technology to ensure fast, reliable 

and secure delivery of remittances. The company defines and maintains information security policies that 

follow leading industry standards through the use of firewalls, secure socket layer (SSL) encryption, anti-virus 

and anti-spam measures, and user-defined access controls. Its major application systems also have multiple 

security features to protect the integrity of application and data. 

Apart from the security of its information systems and resources, the Company also aims to comply with all 

anti-money laundering regulations of the Bangko Sentral ng Pilipinas and of the monetary authorities and 

financial intelligence units of all host countries it operates in. One of the significant aspects of the company’s 

compliance program with respect to anti-money laundering/counter-terrorism financing is the proper 

establishment of the true identity of its customers through the proper customer due diligence (CDD) 

procedures. All of the Company’s foreign offices have duly appointed compliance officers who are responsible 

for implementing all aspects of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations 

and guidelines in complying with the specific AML and CTF regulations. These policies and regulations 

essentially adopt the recommendations of the Financial Action Task Force (FATF), the inter-governmental 

body organized for the development and promotion of national and international policies to combat money 

laundering and terrorist financing. The Company periodically undertakes internal reviews and when required 

by a particular country, its subsidiaries and affiliates are subjected to external audits or compliance 

examinations. 

The Company also aims to develop and increase customer awareness of its brand through advertising and 

promotional activities and by actively participating in the activities of Filipino communities in the countries 

where it operates in. It also reinforces its presence in the countries that it operates in by participating actively 

in the activities of Filipino communities and promoting the Company’s services through Filipino organizations. 

2

Full Years 

2011 compared to 2010 

I-Remit realized a consolidated net income of PHP 136.1 million in 2011, an increase of PHP 70.1 million or 

106.4% over the consolidated net income of PHP 65.9 million in 2010. The consolidated net income in 2011 

and 2010 are 17.3% and 8.7% of the 2011 and 2010 revenue, respectively. 

Revenues increased by 3.4% or PHP 26.1 million from PHP 761.8 million in 2010 to PHP 787.9 million in 2011 

mainly due to the increase in realized foreign exchange gains. Foreign exchange gains increased by 4.6% or 

PHP 12.1 million from PHP 262.1 million in 2010 to PHP 274.2 million in 2011. The Company’s revenue from 

delivery fees grew by 2.9% or PHP 14.5 million from PHP 498.7 million in 2010 to PHP 513.3 million in 2011 

largely because of the appreciation of the Philippine peso against the U.S. dollar. The Company’s fees are 

largely settled in U.S. dollars. The average peso-dollar exchange rate was PHP 45.11 in 2010 against PHP 

43.31 in 2011, a gain of 4.0% or PHP 1.80 per dollar. In December 2011, the average peso-dollar exchange 

rate was PHP 43.65 per dollar. The value of transactions grew by 16.7% or USD 202.3 million from USD 

1.213 billion in 2010 to USD 1.415 billion in 2011. The number of transactions processed by the Company 

grew by only 2% from 2.737 million in 2010 to 2.794 million in 2011. Other fees decreased by 60.69% or PHP 

0.5 million from PHP 0.9 million in 2010 to PHP 0.4 million in 2011 due to lesser number of amendments and 

retrievals recorded in 2011. 

Costs of services decreased by 2.3% or PHP 4.7 million from PHP 204.1 million in 2010 to PHP 199.4 million 

in 2011. Total costs of services in 2011 and 2010 are 25.3% and 26.8% of the 2011 and 2010 revenue, 

respectively. These are mainly due to the decrease in delivery charges by 49.8% or PHP 14.9 million from 

PHP 29.9 million in 2010 to PHP 15.0 million in 2011 brought about by the huge reduction in door-to-door 

transactions in 2011. These are partly offset by the increase in the cost of fulfilling delivery of remittances to 

beneficiaries mostly in the form of bank charges by 5.8% or PHP 10.2 million from PHP 174.2 million in 2010 

to PHP 184.4 million in 2011. 

Other operating income (loss)-net increased by 56.9% or PHP 9.7 million from PHP 17.0 million in 2010 to 

PHP 26.8 million in 2011. Total other operating income (loss)-net in 2011 and 2010 are 3.40% and 2.24% of 

the 2011 and 2010 revenue, respectively. These are mainly due to the PHP 21.7 million refund of GST 

previously paid by International Remittance (Canada) Limited (IRCL) and Worldwide Exchange Pty Ltd 

(WEPL) to the government of Canada and Australia, respectively. Both entities are exempt from paying GST. 

These are partly offset by the decline in net trading gains by PHP 5.5 million or 223.8% from PHP 2.5 million in 

2010 to –PHP 3.1 million in 2011 due to unrealized capital loss accrued from investment on stocks by Power 

Star Asia Group Limited (PSAGL). PSAGL invested on stocks at an average cost of 126.90 marked at 126.30 

as of the close of December 31, 2011. 

Total operating expenses was higher by PHP 11.4 million (2.6%) from PHP 435.9 million in 2010 to PHP 447.3 

million in 2011. Total other operating expenses in 2011 and 2010 are 56.8% and 57.2% of the 2011 and 2010 

revenue, respectively. These are mainly on account of higher rental, salaries, wages and employee benefits, 

photocopying and supplies, entertainment, amusement and recreation, communication, light and water and 

other operating expenses. The increase in these expense items are related mainly to the Company’s 

expansion as it opened new offices in Canada, Italy and Japan. Rental expenses increased by 15.4% from 

PHP 46.4 million in 2010 to PHP 53.5 million in 2011 due to the yearly escalation applied by lessors on rented 

office premises. Salaries, wages and employee benefits expenses increased by 2.4% from PHP 208.5 million 

in 2010 to PHP 213.5 million in 2011. Photocopying and supplies expenses increased by 24.7% from PHP11.7 

million in 2010 to PHP 14.6 in 2011 due to higher production of visa cards and kits in 2011. Entertainment, 

amusement and recreation expenses increased by 56.6% from PHP 3.8 million in 2010 to PHP 6.0 million in 

2011 mainly due to the development of offices/tie-ups in Japan, Kuwait, Saudi Arabia and Oman. 

Communication, light and water increased by 6.4% from PHP 22.1 million in 2010 to PHP 23.5 million in 2011 

due to increase in number of remittance transactions in 2011 which required more communication between the 

company and its customers. Along with this, electricity bills also increased as more transactions required 

extended processing time. Other operating expenses increased by 34.0% from PHP 21.0 million in 2010 to 

PHP 28.2 million in 2011 mainly due to disallowed Input VAT for years 2005 and 2006 (PHP 2.1 million), 

license fee paid for the start in operation of K.K. I-Remit Japan (PHP 3.9 million), cost of payroll outsourced to 

Prople BPO, Inc. and increase in association dues charges by lessors of the Parent Company (PHP 1.1 

milllion). These are partly offset by lower marketing, professional fees, transportation and travel, depreciation 

and amortization expenses. Marketing expenses decreased by 14.7% from PHP 42.6 million in 2010 to PHP 

36.3 million in 2011 while transportation and travel expenses decreased by 10.7% from PHP 26.7 million in 

2010 to PHP 23.8 million in 2011 due to cost cutting measures implemented by the Parent Company in all its 

foreign subsidiaries. Professional fees decreased by 8.8% from PHP 39.7 million in 2010 to PHP 36.2 million 

in 2011 due to termination of three (3) retainer contracts of the Parent Company and cessation of operation in 

Austria. Depreciation and amortization decreased by 13.3% from PHP 13.3 million in 2010 to PHP 11.5 million 

in 2011 due to higher number of office equipment fully depreciated in 2011. 

3

Interest income increased by 10.8% or PHP 1.3 million from PHP 12.5 million in 2010 to PHP 13.9 million in 

2011. Interest income in 2011 and 2010 are 1.8% and 1.6% of the 2011 and 2010 revenue, respectively. 

These are mainly due to higher deposits resulting from higher volume of transactions in 2011. 

Interest expense increased by 31.2% or PHP 9.1 million from PHP 29.2 million in 2010 to PHP 38.3 million 

2011. Interest expense in 2011 and 2010 are -4.9% and -3.8% of the 2011 and 2010 revenue, respectively. 

These are mainly due to higher availment of loans from bank partners during 2011 and higher annual interest 

rates on the Parent Company’s unsecured, short-term interest-bearing peso-denominated bank loans ranging 

from 5.00% to 7.00% in 2011 and 5.50% to 6.00% in 2010. 

In February 2010, IREMIT Remittance Consulting GmbH (formerly IREMIT EUROPE Remittance Consulting 

AG) started its remittance business in Italy. On April 28, 2011, IREMIT Remittance Consulting GmbH 

(IRCGmbH) stopped its money remittance operations in Rome and Milan in Italy in accordance with Article 75 

of the Transitional and Final Provisions of Austrian Payment Services Act, which stipulated that credit 

institutions that have held authorizations pursuant to Article 1 paragraph 1 no 23 BWG, as amended by the 

Federal Act Federal Law Gazette No. 35/2003, prior to December 25, 2009, have only until April 30, 2011 to 

carry out their money remittance operations. 

In December 2011, IRCGmbH sold assets relating to its operations in Italy to a third party. These assets, with 

an aggregate carrying amount of PHP 7.29 million, were sold for a consideration of PHP 72.43 million thereby 

resulting to a gain on sale of PHP 65.14 million. 

The results of IRCGmbH’s operation in Italy follow: 


Delivery fees PHP5,289,202 PHP7,486,658 

Realized foreign exchange gains - net 1,006,867 673,204 

6,296,069 8,159,862 

Cost of services 596,703 3,749,195 

Gross income 5,699,366 4,410,667 

Other income - net 615,909 38,935 

Operating expenses (45,024,921) (34,754,501) 

Loss from operations (PHP38,709,646) (PHP30,304,899) 

Gain on sale of assets 65,139,395 − 

Income (Loss) from discontinued operations PHP26,429,749 (PHP30,304,899) 

The total assets of the Company decreased by PHP 82.1 million or 3.5% to PHP 2.273 billion as of December 

31, 2011 against PHP 2.356 billion as of December 31, 2010. Cash and cash equivalents increased by PHP 

7.4 million or 0.8% from PHP 883.8 million in 2010 to PHP 891.2 million in 2011. Financial assets at fair value 

through profit or loss amounted to PHP 125.2 million at end-2011 against PHP 102.9 million at end-2010, 

increasing by PHP 22.3 million or 21.6%. Financial assets at fair value through profit or loss in 2011 and 2010 

are 5.5% and 4.4% of the total assets in 2011 and 2010, respectively. These assets consist mainly of 

investments in debt securities (listed overseas) held for trading. Power Star Asia Group Limited started 

investing on stocks in 2011. Accounts receivable declined by PHP 125.8 million or 11.9% from PHP 1,059.3 

million in 2010 to PHP 933.5 million in 2011. Accounts receivable in 2011 and 2010 are 41.0% and 45.0% of 

the total assets in 2011 and 2010, respectively. These are mainly due to improved collection of advances to 

agents and foreign subsidiaries in 2011. Other receivables increased by PHP 31.0 million or 37.1% from PHP 

83.4 million in 2010 to PHP 114.4 million in 2011. Other receivables in 2011 and 2010 are 5.0% and 3.5% of 

the total assets in 2011 and 2010, respectively. These are mainly due to nontrade receivable from the sale of 

various assets of IREMIT Remittance Consulting GmbH related to the discontinued operations in Italy which 

was subsequently collected in March 2012 and partly offset by the application of receivables from noncontrolling 

shareholders of IREMIT Remittance Consulting GmbH and Worldwide Exchange Pty Ltd amounting 

to PHP 12.3 million and PHP 25.01 million, respectively, against the acquisition costs. Other current assets 

declined by PHP 7.4 million or 20.4% from PHP 36.3 million in 2010 to PHP 28.9 million in 2011. Other 

current assets in 2011 and 2010 are 1.3% and 1.5% of the total assets in 2011 and 2010, respectively. These 

are mainly due to lower balances of prepaid expenses and visa cards inventory. 

The Company’s non-current assets declined by PHP 9.7 million or 5.1% from PHP 190.3 million at end-2010 

to PHP 180.6 million at end-2011. Total noncurrent assets in 2011 and 2010 are 7.9% and 8.0% of the total 

assets in 2011 and 2010, respectively. These are mainly due to the equity in net earnings of IRemit Singapore 

Pte Ltd of PHP 1.5 million and Hwa Kung Hong & Co., Ltd. of PHP 0.6 million in 2011, lesser investment on 

fixed assets in 2011, deferred tax asset on additional net loss of I-Remit New Zealand Limited in 2011 and 

issuance of tax credit certificates by the BIR for Input VAT for the years 2005 and 2006 amounting to PHP 

1.71 million and PHP 3.82 million, respectively. 

4

Total liabilities declined by PHP 171.6 million or 15.8% from PHP 1.084 billion at end-2010 to PHP 912.7 

million at end-2011 mainly due to lower level of current liabilities. Total liabilities in 2011 and 2010 are 40.1% 

and 46.0% of the total liabilities and equity in 2011 and 2010, respectively. Current liabilities decreased by 

PHP 170.8 million or 15.7% from PHP 1.083 billion in 2010 to PHP 912.6 million in 2011. Total current 

liabilities in 2011 and 2010 are 40.1% and 46.0% of the total liabilities and equity in 2011 and 2010, 

respectively. Beneficiaries and other payables increased by PHP 40.6 million or 20.3% from PHP 199.5 

million in 2010 to PHP 240.1 million in 2011. Beneficiaries and other payables in 2011 and 2010 are 10.6% 

and 8.5% of the total liabilities and equity in 2011 and 2010, respectively. These are mainly due to additional 

channels opened in 2011 for the delivery of remittances to beneficiaries. Interest-bearing loans decreased by 

PHP 211 million or 24.1% from PHP 877 million in end-2010 to PHP 666 million in end-2011. Interest-bearing 

loans in end-2011 and end-2010 are 29.3% and 37.2% of the total liabilities and equity in end-2011 and end- 

2010, respectively. These are mainly due to lesser loan exposure at end-2011 mainly brought about by 

improved collection of accounts receivable. 

The Company’s stockholders’ equity as of December 31, 2011 stood at PHP 1.361 billion, higher by PHP 89.4 

million or 7.0% against the end-2010 level of PHP 1.271 billion. Total equity in 2011 and 2010 are 59.9% and 

54.0% of the total liabilities and equity in 2011 and 2010, respectively. Capital stock increased by PHP 55.3 

million or 9.8% from PHP 562.4 million in 2010 to PHP 617.7 million in 2011. Capital stock in 2011 and 2010 

are 27.2% and 23.9% of the total liabilities and equity in 2011 and 2010, respectively. These are mainly due to 

the distribution of stock dividend to stockholders on September 8, 2011. Capital paid-in excess of par value 

decreased by PHP 38.3 million or 8.9% from PHP 429.5 million in 2010 to PHP 391.2 million in 2011. Capital 

paid-in excess of par value in 2011 and 2010 are 17.2% and 18.2% of the total liabilities and equity in 2011 

and 2010, respectively. The decrease in capital paid-in excess of par value in 2011 represents excess of 

acquisition cost over the carrying value of the non-controlling interests acquired in 2011 (IREMIT Remittance 

Consulting GmbH and Worldwide Exchange Pty Ltd). Treasury stock increased by PHP 12.9 million or 32.1% 

from -PHP 40.1 million in 2010 to -PHP 53.0 million in 2011. Treasury stock in 2011 and 2010 are -2.3% and - 

1.7% of the total liabilities and equity in 2011 and 2010, respectively. The increase in Treasury stock in 2011 

represents buy-back of 5,544,000 shares. 

Below are the comparative key performance indicators of the Company (Parent Company and subsidiaries): 

Performance Indicator Definition December 31, 2011 December 31, 2010 

Return on Equity (ROE) 

Net income* over average stockholders’ equity during the 

period 

10% 5% 

Return on Assets (ROA) Net income* over average total assets during the period 5% 3% 

Earnings per Share (EPS) Net income* over average number of outstanding shares PHP 0.22 PHP 0.11 

Sales Growth 

Total transaction value in USD in present period over the 

previous year 

17% 10% 

Gross Income Revenue less total cost of services (PHP millions) 588.4 557.6 

* Net Income attributable to equity holders of the Parent Company and Minority Interest. EPS computed using Net Income 

attributable to equity holders of the Parent Company for the year ended December 31, 2011 and for the year ended 

December 31, 2010 are PHP 0.23 and PHP 0.13, respectively. 

Below are the comparative key performance indicators of the Company’s subsidiaries: 

International Remittance (Canada) Ltd. 



Net income over average stockholders’ equity during the 

period 

56% 3% 

Return on Assets (ROA) Net income over average total assets during the period 22% 1% 

Earnings per Share (EPS) Net income over average number of outstanding shares PHP 43.64 PHP 1.80 

Sales Growth 


previous year 

2% 3% 


Lucky Star Management Limited 




period 

-3% 89% 

Return on Assets (ROA) Net income over average total assets during the period -1% 26% 

Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 1.33) PHP 30.53 

Sales Growth 


previous year 

-25% 8% 


5

IRemit Global Remittance Limited 




period 

-767% 39% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 108,090.79) PHP 10,191.13 

Sales Growth 


previous year 

28% 1% 


I-Remit Australia Pty Ltd 




period 

0.4% 1% 

Return on Assets (ROA) Net income over average total assets during the period 0.2% 0.2% 

Earnings per Share (EPS) Net income over average number of outstanding shares PHP 7,306.00 PHP 14,435.50 

Sales Growth 


previous year 

- - 


Worldwide Exchange Pty Ltd 




period 

6% 5% 



Sales Growth 


previous year 

11% 20% 


I-Remit New Zealand Limited 




period 


Return on Assets (ROA) Net income over average total assets during the period -24% -9% 

Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 3,046.61) (PHP 1,129.10) 

Sales Growth 


previous year 

23% 38% 


IREMIT Remittance Consulting GmbH 




period 

194% -193% 

Return on Assets (ROA) Net income over average total assets during the period 14% -74% 

Earnings per Share (EPS) Net income over average number of outstanding shares PHP 141.86 (PHP 666.31) 

Sales Growth 


previous year 

-19% 94% 


Power Star Asia Group Limited 




period 

30% 38% 



Sales Growth 


previous year 

- - 


6


I-Remit realized a consolidated net income of PHP 65.9 million in 2010, a decrease of PHP 67.2 million or 

50.5% over the consolidated net income of PHP 133.1 million in 2009. 

Revenues decreased by 1.1% or PHP 8.7 million from PHP 778.7 million in 2009 to PHP 769.9 million in 2010 

mainly due to the decline in realized foreign exchange gains. Foreign exchange gains dropped by 8.6% or 

PHP24.9 million from PHP287.7 million in 2009 to PHP262.8 million in 2010. The value of transactions grew 

by 9.9% or USD109.5 million from USD1.103 billion in 2009 to USD1.213 billion in 2010. The Company’s 

revenue from delivery fees grew by only 3.2% or PHP15.9 million from PHP490.4 million in 2009 to PHP506.2 

million in 2010 largely because of the appreciation of the Philippine peso against the U.S. dollar. The 

Company’s fees are largely settled in U.S. dollars. The average peso-dollar exchange rate was PHP47.63 in 

2009 against PHP45.08 in 2010, a gain of 5.3% or PHP2.55 per dollar. In December 2010, the average pesodollar 

exchange rate was PHP43.95 per dollar. The number of transactions processed by the Company grew 

by only 2% from 2.683 million in 2009 to 2.737 million in 2010. 

Total operating expenses was higher by PHP58.3 million (14.1%) from PHP412.4 million in 2009 to PHP470.7 

million in 2010 mainly on account of higher rental, marketing, and professional fee expenses. Rental 

expenses increased by 28.1% from PHP39.3 million in 2009 to PHP50.4 million in 2010. Marketing expenses 

increased by 32.0% from PHP33.0 million in 2009 to PHP43.5 million in 2010. Professional fees increased by 

46.9% from PHP29.7 million in 2009 to PHP43.6 in 2010. The increase in these expense items are related 

mainly to the Company’s expansion as it opened new offices in Canada and Italy. 

Other income decreased by 62.8% or PHP54.3 million from PHP86.4 million in 2009 to PHP32.1 million in 

2010 mainly due to the decline in net trading gains on debt securities (listed overseas) held for trading and 

lower other income consisting of interest income, rebates, and unrealized foreign exchange gain. Net trading 

gains declined by PHP30.3 million or 92.4% from PHP32.8 million in 2009 to PHP2.5 million in 2010. 

The total assets of the Company decreased by PHP131.9 million or 5.3% to PHP2.356 billion as of December 

31, 2010 against PHP2.488 billion as of December 31, 2009. Cash and cash equivalents decreased by 

PHP79.0 million or 8.2% from PHP962.8 million in 2009 to PHP883.8 million in 2010. Financial assets at fair 

value through profit or loss amounted to PHP102.9 million at end-2010 against PHP65.8 million at end-2009, 

increasing by PHP37.1 million or 56.4%. These assets consist of investments in debt securities (listed 

overseas) held for trading. Receivables declined by PHP80.2 million or 7.0% from PHP1.139 billion in 2009 to 

PHP1.059 billion in 2010. The Company’s non-current assets declined by PHP300,928 or 0.2% from 

PHP190,039,196 at end-2009 to PHP190,340,124 at end-2010. 

Total liabilities declined by PHP151.4 million or 12.2% from PHP1.235 billion at end-2009 to PHP1.084 billion 

in 2010 mainly due to a lower level of current liabilities. Current liabilities decreased by PHP148.6 million or 

12.1% from PHP1.232 billion in 2009 to PHP 1.083 billion in 2010. 

The Company’s stockholders’ equity as of December 31, 2010 stood at PHP 1.271 billion, higher by PHP19.5 

million or 1.6% against the end-2009 level of PHP 1.252 billion. 





period 

5% 11% 



Sales Growth 


previous year 

10% 2% 





7






period 

3% 33% 



Sales Growth 


previous year 

3% 11% 






period 

89% 47% 



Sales Growth 


previous year 







period 

39% 60% 



Sales Growth 


previous year 

1% -17% 






period 

1% 176% 

Return on Assets (ROA) Net income over average total assets during the period 0.2% 24% 

Earnings per Share (EPS) Net income over average number of outstanding shares PHP 14,435.50 PHP 1,859,480.93 

Sales Growth 


previous year 

- - 






period 

5% 41% 



Sales Growth 


previous year 

20% -5% 






period 

20% 81% 



Sales Growth 


previous year 

38% 595% 


8

IREMIT EUROPE Remittance Consulting AG 




period 

-193% -189% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 666.31) (PHP 243.17) 

Sales Growth 


previous year 

94% 43% 






period 

38% 89% 



Sales Growth 


previous year 

- - 



I-Remit realized a consolidated net income of PHP 133.1 million in 2009, an increase of PHP 3.2 million or 

2.4% over the consolidated net income of PHP 129.98 million in 2008. 

Revenues increased by PHP 16.6 million (2.2%) to PHP 778.6 million in 2009 from PHP 762.0 million in 2008 

mainly due to the 11.9% increase in transaction count (from 2,397,180 in 2008 to 2,683,639 in 2009) and a 

1.9% increase in USD remittance volume (from USD 1,083.6 million in 2008 to USD 1,104.0 million in 2009). 

Of the total transaction count in 2009, the percentage contributions per region are as follows: Asia-Pacific, 

43%; Middle East, 28%; North America, 16%; and Europe, 9%. In terms of USD remittance volume, the 

regional contributions are as follows: Asia-Pacific, 33%; Europe, 12%, Middle East, 20%, and North America, 

17%. The Company’s market share in 2009 was 6.4% from 6.6% in 2008 based on the BSP-reported figure of 

total inward remittances to the Philippines of USD 17.3 billion. Accordingly, the Company’s gross income 

decreased by PHP 17.7 million or -3.1% from PHP 565.4 million in 2008 to 547.7 million in 2009. 

Total operating expenses were higher by PHP 15.0 million (3.8%) from PHP 397.4 million in 2008 to PHP 

412.4 million in 2009 mainly on account of higher salaries, wages and employee benefits, and rental 

expenses. Other income increased by 156.7% or PHP 52.7 million from PHP 33.7 million in 2008 to PHP 86.4 

million in 2009 mainly due to net trading gains on debt securities (listed overseas) held for trading and higher 

other income of subsidiaries such as rebates and sub-lease rental income. Interest expense was higher by 

PHP 35.2 million (260.4%) from PHP 13.5 million in 2008 to PHP 48.7 million in 2009 due to increased loans. 

The total assets of the Company increased by PHP 514.5 million or 26.1% to PHP 2.488 billion as of 

December 31, 2009 against PHP 1.974 billion as of the same period in 2008. Cash and cash equivalents 

increased by PHP 130.2 million or 15.6% from PHP 832.6 million in 2008 to PHP 962.8 million in 2009. 

Financial assets at FVPL amounting to PHP 65.8 million consisted of investments in debt securities (listed 

overseas) held for trading. Receivables increased by PHP 310.6 million or 33.2% from PHP 936.9 million in 

2008 to PHP 1,247.5 million in 2009. Other current assets increased by PHP 2.0 million or 10.0% from PHP 

20.3 million to PHP 22.3 million mainly because of a higher level of Visa cards inventory. Property and 

equipment decreased by PHP 3.1 million or 9.9% from PHP 30.9 million in 2008 to PHP 27.8 million in 2009 

on account of higher depreciation and amortization expenses. Goodwill increased by PHP 6.1 million or 6.6% 

from PHP 91.5 million in 2008 to PHP 97.6 million in 2009 due to exchange adjustment. Deferred tax asset 

increased by PHP 2.5 million or 305.1% from PHP 0.8 million in 2008 to PHP 3.3 million in 2009. Other 

noncurrent assets increased by PHP 4.6 million or 13.2% from PHP 34.7 million in 2008 to PHP 39.3 million in 

2009. 

Total liabilities increased by PHP 378.2 million or 44.1% from PHP 857.5 million in 2008 to PHP 1,235.7 

million in 2009 mainly due to higher level of current liabilities. Current liabilities increased by PHP 380.0 

million or 44.6% from PHP 852.1 million in 2008 to PHP 1,232.1 million in 2009 due to the increase in interestearning 

loans by PHP 350.0 million or 60.3% from PHP 580.0 million in 2008 to PHP 930.0 million in 2009. 

The Company’s stockholders’ equity as of December 31, 2009 stood at PHP 1.252 billion, higher by PHP 

136.4 million or 12.2% against the year-end 2008 level of PHP 1.116 billion. 

9





period 

11% 12% 



Sales Growth 


previous year 

2% 42% 










period 

33% 62% 



Sales Growth 


previous year 

11% 35% 






period 

47% 61% 



Sales Growth 


previous year 

20% 7% 

Gross Income Revenue less total cost of services (PHP millions) 21.4 20.9 





period 

60% 5% 


Earnings per Share (EPS) Net income over average number of outstanding shares PHP 10,021.79 PHP 666.34 

Sales Growth 


previous year 

-17% -4% 






period 

176% 108% 


Earnings per Share (EPS) Net income over average number of outstanding shares PHP 1,859,480.93 PHP 1,623,710.00 

Sales Growth 


previous year 

- - 






period 

41% 91% 



Sales Growth 


previous year 

-5% 40% 


10





period 

81% 104% 



Sales Growth 


previous year 

595% - 


IREMIT EUROPE Remittance Consulting AG 




period 

-189% 56% 



Sales Growth 


previous year 

43% - 






period 

89% 90% 



Sales Growth 


previous year 

- - 


Interim Period 

March 31, 2012 vs. December 31, 2011 

The total assets of the Company increased by PHP 51.4 million or 2.3% to PHP 2.325 billion as of March 31, 

2012 against PHP 2.273 billion as of December 31, 2011. 

Cash and cash equivalents increased by PHP 260.6 million or 29.2% from PHP 891.2 million as of December 

31, 2011 to PHP 1.151 billion as of March 31, 2012. Cash and cash equivalents as of March 31, 2012 and 

December 31, 2011 are 49.5% and 39.2% of the total assets as of March 31, 2012 and December 31, 2011, 

respectively. Financial assets at FVPL, which consist of investments in private debt securities (listed 

overseas) held for trading, decreased by PHP 16.2 million or -12.9% from PHP 125.2 million as of December 

31, 2011 to PHP 109.0 million as of March 31, 2012. Financial assets at FVPL as of March 31, 2012 and 


respectively. Accounts receivable decreased by PHP 151.8 million or -16.3% from PHP 933.5 million as of 

December 31, 2011 to PHP 781.8 million as of March 31, 2012. Accounts receivable as of March 31, 2012 

and December 31, 2011 are 33.6% and 41.1% of the total assets as of March 31, 2012 and December 31, 

2011, respectively. Other receivables decreased by PHP 31.6 million or -27.7% from PHP 114.4 million as of 

December 31, 2011 to PHP 82.8 million as of March 31, 2012. Other receivables as of March 31, 2012 and 


respectively. Other current assets decreased by PHP 13.8 million or -47.5% from PHP 28.9 million as of 

December 31, 2011 to PHP 15.2 million as of March 31, 2012. 

Investments in associates decreased by PHP 4.4 million or -19.1% from PHP 23.0 million as of December 31, 

2011 to PHP 18.6 million as of March 31, 2012. Property and equipment-net increased by PHP 4.1 million or 

21.5% from PHP 19.2 million as of December 31, 2011 to PHP 23.3 million as of March 31, 2012. Goodwill 

increased by PHP 0.3 million or 0.3% from PHP 92.7 million as of December 31, 2011 to PHP 93.0 million as 

of March 31, 2012 due to foreign exchange adjustment. Deferred tax asset increased by PHP 2.2 million or 

44.3% from PHP 5.0 million as of December 31, 2011 to PHP 7.2 million as of March 31, 2012. Software 

costs–net increased by PHP 0.1 million or 9.7% from PHP 1.4 million as of December 31, 2011 to PHP 1.6 

million as of March 31, 2012. Other noncurrent assets increased by PHP 1.8 million or 4.7% from PHP 38.9 

million as of December 31, 2011 to PHP 40.8 million as of March 31, 2012. 

11

Total liabilities increased by PHP 25.2 million or 2.8% from PHP 912.7 million as of December 31, 2011 to 

PHP 937.9 million as of March 31, 2012. Total liabilities as of March 31, 2012 and December 31, 2011 are 

40.3% and 40.1% of the total liabilities and equity as of March 31, 2012 and December 31, 2011, respectively. 

Current liabilities increased by PHP 25.2 million or 2.8% from PHP 912.6 million as of December 31, 2011 to 

PHP 937.8 million as of March 31, 2012 mainly due to the increase in Beneficiaries and other payables by 

PHP 63.3 million or 26.4% from PHP 240.0 million as of December 31, 2011 to PHP 303.4 million as of March 

31, 2012. Interest-bearing loans decreased by PHP 48.0 million or -7.2% from PHP 666.0 million as of 

December 31, 2011 to PHP 618.0 million as of March 31, 2012. Interest-bearing loans consist of unsecured, 

short-term peso-denominated loans from various local financial institutions with interest rates ranging from 

5.0% to 6.75% per annum in First Quarter 2012 and 5.0% to 7.0% in 2011. Total current liabilities as of March 

31, 2012 and December 31, 2011 are 40.3% and 40.1% of the total liabilities and equity as of March 31, 2012 

and December 31, 2011, respectively. 

Accounts payable and other liabilities increased by PHP 73.2 million or 29.7% to PHP 319.8 million as of 

March 31, 2012 compared with PHP 246.6 million as of December 31, 2011. Accounts payable and other 

liabilities as of March 31, 2012 and December 31, 2011 are 13.8% and 10.8% of the total liabilities and equity 

as of March 31, 2012 and December 31, 2011, respectively. Comprising Accounts payable and other liabilities 

are payables to beneficiaries of PHP 232.9 million, payables to agents, couriers and trading clients of PHP 

34.6 million, accrued expenses of PHP 17.2 million, withholding tax payable of PHP 2.2 million, advances from 

related parties of PHP 12.2 million, income tax payable of PHP 16.4 million, payables to government agencies 

of PHP 1.4 million, and other non-trade payables of PHP 2.9 million. 

Noncurrent liabilities amounting to PHP 0.12 million as of March 31, 2012 consist of retirement liability of PHP 

0.09 million and deferred tax liability of PHP 0.03 million. 

The Company’s stockholders’ equity as of March 31, 2012 stood at PHP 1.387 billion, higher by PHP 26.2 

million or 1.9% against the year-end 2011 level of PHP 1.361 billion due to higher net income. Total 

stockholders’ equity as of March 31, 2012 and December 31, 2011 are 59.7% and 59.9% of the total liabilities 

and equity as of March 31, 2012 and December 31, 2011, respectively. 

The Bangko Sentral ng Pilipinas reported last month that money transfers by overseas Filipinos grew by 5.8% 

to USD1.587 billion in February 2012 from USD1.5 billion a year earlier. On a year-to-date basis, the total 

remittance inflows amounted to USD3.144 billion in January to February of 2012, growing by 5.6% against the 

inflows of USD2.977 billion in the first two (2) months of 2011. The continued inflow of remittances is 

supported by the sustained demand for Filipino manpower in various foreign labor markets. The Philippine 

Overseas Employment Administration (POEA) recently announced that it expects over a million highly skilled 

Filipino workers would be hired abroad this year. The latest data from the POEA showed that for the period 

January-March 2012, job orders for professional and technical, service and production workers increased 

24.6% to 200,010 compared with the same period last year. These are mainly intended for employment 

opportunities in Saudi Arabia, United Arab Emirates, Qatar, Taiwan, Kuwait, Singapore and Hong Kong, 

among others. 

Below are the comparative key performance indicators of the Company and its subsidiaries: 

Mar. 31, 2012 Dec. 31, 2011 

Performance Indicator Definition 

(Three Months) (Full Year) 



period 

2% 10% 



Sales Growth 


previous year 

47% 17% 



attributable to equity holders of the Parent Company for the period ended March 31, 2012 and for the year ended December 

31, 2011 are PHP 0.06 and PHP 0.23, respectively. 

12








period 

0.5% 56% 



Sales Growth 


previous year 

-5% 2% 








period 

-7% -3% 



Sales Growth 


previous year 

-14% -25% 








period 

-96% -767% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 20,881.96) (PHP 108,090.79) 

Sales Growth 


previous year 

61% 28% 








period 

0.1% 0.4% 



Sales Growth 


previous year 

- - 








period 

0.3% 6% 



Sales Growth 


previous year 

32% 11% 








period 

19% 40% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 1,908.51) (PHP3,046.61) 

Sales Growth 


previous year 

39% 23% 

Gross Income Revenue less total cost of services (PHP millions) -0.7 5.3 

13







period 

-22% 194% 



Sales Growth 


previous year 

-99% -19% 








period 

8% 30% 



Sales Growth 


previous year 

- - 


March 31, 2012 vs. March 31, 2011 

I-Remit realized a consolidated net income of PHP 33.4 million in First Quarter 2012, an increase of PHP 5.0 

million or 17.6% over the consolidated net income of PHP 28.4 million in First Quarter 2011. The consolidated 

net income in First Quarter 2012 and First Quarter 2011 are 16.7% and 13.2% of the First Quarter 2012 and 

First Quarter 2011 revenue, respectively. 

Revenues decreased by PHP 15.0 million or -7.0% to PHP 199.3 million in First Quarter 2012 from PHP 214.3 

million in First Quarter 2011. Accordingly, the Company’s gross income decreased by PHP 17.3 million or - 

10.4% from PHP 165.5 million in First Quarter 2011 to PHP 148.2 million in First Quarter 2012. The gross 

income in First Quarter 2012 and First Quarter 2011 are 74.4% and 77.2% of the First Quarter 2012 and First 

Quarter 2011 revenue, respectively. 

Transaction count increased by 4.4% from 698,007 in First Quarter 2011 to 728,465 in First Quarter 2012). 

USD remittance volume increased by 47.3% from USD 320.4 million in First Quarter 2011 to USD 471.8 

million in First Quarter 2012). Of the total transaction count in First Quarter 2012, the percentage contributions 

per region are as follows: Asia-Pacific, 43%; Middle East, 29%; North America, 13%; and Europe, 12%. In 

terms of USD remittance volume, the regional contributions are as follows: Asia-Pacific, 26%; Middle East, 

13%, North America, 10%, and Europe, 9%. 

Other operating income increased by PHP 12.7 million from a net loss of PHP 3.8 million in First Quarter 2011 

to an income of PHP 8.9 million in First Quarter 2012. 

Total operating expenses was lower by PHP 8.5 million or -7.0% from PHP 120.7 million in First Quarter 2011 

to PHP 112.2 million in First Quarter 2012 mainly on account of lower professional fees, salaries, wages and 

employee benefits, transportation and travel, and marketing expenses. Total operating expenses in First 

Quarter 2012 and First Quarter 2011 are 56.30% and 56.32% of the First Quarter 2012 and First Quarter 2011 

revenue, respectively. Interest expense was lower by PHP 2.6 million from PHP 8.3 million in First Quarter 

2011 to PHP 5.8 million in First Quarter 2012. 

The total assets of the Company decreased by PHP 212.4 million or -8.4% to PHP 2.325 billion as of March 

31, 2012 against PHP 2.537 billion as of March 31, 2011. Cash and cash equivalents increased by PHP 190.4 

million or 19.8% from PHP 961.4 million as of March 31, 2011 to PHP 1.151 billion as of March 31, 2012. 

Cash and cash equivalents as of March 31, 2012 and March 31, 2011 are 49.5% and 37.9% of the total assets 

as of March 31, 2012 and March 31, 2011, respectively. Financial assets at FVPL, which consist of 

investments in private debt securities (listed overseas) held for trading, stood at PHP 109.0 million as of March 

31, 2012, a decrease of PHP 2.0 million or -1.8% against PHP 111.0 million as of March 31, 2011. 

Receivables decreased by PHP 387.8 million or -31.0% from PHP 1.252 billion as of March 31, 2011 to PHP 

864.6 million as of March 31, 2012. Receivables as of March 31, 2012 and March 31, 2011 are 37.2% and 

49.3% of the total assets as of March 31, 2012 and March 31, 2011, respectively. Other current assets 

decreased by PHP 2.7 million or -15.1% from PHP 17.9 million as of March 31, 2011 to PHP 15.2 million as of 

March 31, 2012. Investments in associates decreased by PHP 2.9 million or -13.6% from PHP 21.6 million as 

of March 31, 2011 to PHP 18.6 million as of March 31, 2012. Property and equipment-net decreased by PHP 

4.8 million or -17.0% from PHP 28.1 million as of March 31, 2011 to PHP 23.3 million as of March 31, 2012. 

14

Goodwill decreased by PHP 1.5 million or -1.6% from PHP 94.5 million as of March 31, 2011 to PHP 93.0 

million as of March 31, 2012 due to foreign exchange adjustment. Deferred tax asset increased by PHP 1.9 

million or 36.5% from PHP 5.3 million as of March 31, 2011 to PHP 7.2 million as of March 31, 2012. Software 

costs–net decreased by PHP 1.0 million or -38.8% from PHP 2.6 million as of March 31, 2011 to PHP 1.6 

million as of March 31, 2012. Other noncurrent assets decreased by PHP 2.3 million or -5.4% from PHP 43.1 

million as of March 31, 2011 to PHP 40.8 million as of March 31, 2012. 

Total liabilities decreased by PHP 313.0 million or -25.0% from PHP 1.250 billion as of March 31, 2011 to PHP 

937.9 million as of March 31, 2012. Total liabilities as of March 31, 2012 and March 31, 2011 are 40.3% and 

49.3% of the total liabilities and equity as of March 31, 2012 and March 31, 2011, respectively. Current 

liabilities decreased by PHP 312.4 million or -25.0% from PHP 1.250 billion as of March 31, 2011 to PHP 

937.8 million as of March 31, 2012 mainly due to the decrease in beneficiaries and other payables by PHP 

229.8 million or -43.1 from PHP 533.2 million as of March 31, 2011 to PHP 303.4 million as of March 31, 2012 

as well as to interest-bearing loans by PHP 83.0 million or -11.8 from PHP 701.0 million as of March 31, 2011 

to PHP 618.0 million as of March 31, 2012. Interest-bearing loans consist of unsecured, short-term pesodenominated 

loans from various local financial institutions with interest rates ranging from 5.0% to 6.75% per 

annum in First Quarter 2012 and 5.0% to 6.0% in First Quarter 2011. Total current liabilities as of March 31, 

2012 and March 31, 2011 are 40.3% and 49.3% of the total liabilities and equity as of March 31, 2012 and 

March 31, 2011, respectively. 

Accounts payable and other liabilities decreased by PHP 229.4 million or -41.8% to PHP 319.8 million as of 

March 31, 2012 compared with PHP 549.2 million as of March 31, 2011. Accounts payable and other liabilities 

as of March 31, 2012 and March 31, 2011 are 13.8% and 21.6% of the total liabilities and equity as of March 

31, 2012 and March 31, 2011, respectively. Comprising accounts payable and other liabilities are payables to 

beneficiaries of PHP 232.9 million, payables to agents, couriers and trading clients of PHP 34.6 million, 

accrued expenses of PHP 17.2 million, withholding tax payable of PHP 2.2 million, advances from related 

parties of PHP 12.2 million, income tax payable of PHP 16.4 million, payables to government agencies of PHP 

1.4 million, and other non-trade payables of PHP 2.9 million. Noncurrent liabilities amounting to PHP 0.12 

million as of March 31, 2012 consist of retirement liability of PHP 0.09 million and deferred tax liability of PHP 

0.03 million. 

The Company’s stockholders’ equity as of March 31, 2012 stood at PHP 1.387 billion, higher by PHP 100.6 

million or 7.8% against the March 31, 2011 level of PHP 1.286 billion due to higher net income and stock 

dividend. Total stockholders’ equity as of March 31, 2012 and March 31, 2011 are 59.7% and 50.7% of the 

total liabilities and equity as of March 31, 2012 and March 31, 2011, respectively. 

The Bangko Sentral ng Pilipinas reported last month that money transfers by overseas Filipinos grew by 5.8% 

to USD1.587 billion in February 2012 from USD1.5 billion a year earlier. On a year-to-date basis, the total 

remittance inflows amounted to USD3.144 billion in January to February of 2012, growing by 5.6% against the 

inflows of USD2.977 billion in the first two (2) months of 2011. The continued inflow of remittances is 

supported by the sustained demand for Filipino manpower in various foreign labor markets. The Philippine 

Overseas Employment Administration (POEA) recently announced that it expects over a million highly skilled 

Filipino workers would be hired abroad this year. The latest data from the POEA showed that for the period 

January-March 2012, job orders for professional and technical, service and production workers increased 

24.6% to 200,010 compared with the same period last year. These are mainly intended for employment 

opportunities in Saudi Arabia, United Arab Emirates, Qatar, Taiwan, Kuwait, Singapore and Hong Kong, 

among others. 


Mar. 31, 2012 Mar. 31, 2011 


(Three Months) (Three Months) 



period 

2% 2% 



Sales Growth 


previous year 

47% 9% 



attributable to equity holders of the Parent Company for the periods ended March 31, 2012 and March 31, 2011 are PHP 

0.06 and PHP 0.05, respectively. 

15








period 

0.5% 5% 



Sales Growth 


previous year 

-5% 7% 








period 

-7% 19% 



Sales Growth 


previous year 

-14% -29% 








period 

-96% 5% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 20,881.96) PHP 1,650.29 

Sales Growth 


previous year 

61% 15% 








period 

0.1% 0.1% 



Sales Growth 


previous year 

- - 








period 

0.3% -40% 

Return on Assets (ROA) Net income over average total assets during the period 0.04% -5% 

Earnings per Share (EPS) Net income over average number of outstanding shares PHP 0.13 (PHP 15.52) 

Sales Growth 


previous year 

32% 21% 








period 

19% 11% 


Earnings per Share (EPS) Net income over average number of outstanding shares (PHP 1,908.51) (PHP 719.31) 

Sales Growth 


previous year 

39% 19% 

Gross Income Revenue less total cost of services (PHP millions) -0.7 1.4 

16







period 

-22% 149% 



Sales Growth 


previous year 

-99% 19% 








period 

8% 11% 



Sales Growth 


previous year 

- - 


17

P 

A 2 0 0 1 0 1 6 3 1 







Mr. Bansan C. Choa 706-9999 


1 2 3 1 A A F S 










S T A M P S 

COVER SHEET 

Remarks: Please use BLACK ink for scanning purposes. 

*SGVMC116502*

I-REMIT, INC. AND SUBSIDIARIES 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

1. Corporate Information 

I-Remit, Inc. (the Parent Company) was incorporated in the Philippines and was registered with 

the Securities and Exchange Commission (SEC) on March 5, 2001 and started commercial 

operations on November 11, 2001. 

The Parent Company, which is domiciled in the Philippines, has its registered office and principal 

place of business at the 26/F Discovery Centre, 25 ADB Avenue, Ortigas Center, Pasig City. The 

Parent Company’s common shares were listed with the Philippine Stock Exchange on 

October 17, 2007. 

The Parent Company and its subsidiaries (collectively referred to as “the Group”), except Power 

Star Asia Group Limited (PSAGL), are primarily engaged in the business of fund transfer and 

remittance services of any form or kind of currencies or monies, either by electronic, telegraphic, 

wire or any other mode of transfer; delivery of such funds or monies, both in the domestic and 

international market, by providing either courier or freight forwarding services; and conduct of 

foreign exchange transactions as may be allowed by law and other allied activities relative thereto. 

PSAGL, on the other hand, provides financial advisory and other services. 

The Group is 28.91% owned by STAR Equities, Inc., 19.34% owned by JTKC Equities, Inc., 

22.27% owned by Surewell Equities, Inc., 3.10% owned by JPSA Global Services Co., and the 

rest by the public. The Parent Company is the ultimate parent company of the Group. 

The Parent Company’s subsidiaries and associates follow: 

Subsidiaries: 

International Remittance 

Country of 

Incorporation 

Functional 

Currency 

Effective Percentage of Ownership 

December 31 


(Canada) Ltd. (IRCL) Canada 

Canadian 

Dollar (CAD) 100.00 100.00 100.00 

Lucky Star Management 

Hong Kong 

Limited (LSML) Hong Kong Dollar (HKD) 100.00 100.00 100.00 

IRemit Global Remittance United Great Britain 

Limited (IGRL) Kingdom Pound (GBP) 100.00 100.00 100.00 


Australian 

(IAPL) Australia Dollar (AUD) 100.00 100.00 100.00 

Worldwide Exchange Pty 

Australian 

Ltd (WEPL)* 

IREMIT Remittance 

Consulting GmbH 

Australia Dollar (AUD) 100.00 65.00 65.00 

(IRCGmbH)** Austria Euro (EUR) 100.00 74.90 74.90 

I-Remit New Zealand 

New Zealand 

Limited (INZL) New Zealand Dollar (NZD) 

Hong Kong 

100.00 100.00 100.00 

PSAGL Hong Kong Dollar (HKD) 

Japanese 

100.00 100.00 100.00 

K.K. Iremit Japan (KKIJ) Japan 

Yen (JPY) 100.00 – – 

(Forward) 

*SGVMC116502*

Associates: 

IRemit Singapore Pte Ltd 

Country of 

Incorporation 

- 2 - 

Functional 

Currency 


December 31 


(ISPL) Singapore 

Singapore 

Dollar (SGD) 49.00 49.00 49.00 

Hwa Kung Hong & Co., 

New Taiwan 

Ltd. (HKHCL) Taiwan 

Dollar (NTD) 49.00 49.00 49.00 

* Consists of direct voting interest of 70.00% and indirect voting interest through IAPL of 30.00% 

**Formerly IREMIT EUROPE Remittance Consulting AG (IERCAG) 

On March 25, 2011, the Parent Company acquired 35.00% ownership interest in WEPL from the 

noncontrolling stockholders for a consideration of P=12.30 million. The carrying value of the 

noncontrolling interest at acquisition was P=1.09 million. The difference of P=11.21 million 

between the consideration paid and the carrying value of the noncontrolling interest was 

recognized as equity adjustment and deducted from ‘Capital paid-in excess of par value’. The 

acquisition increased the Parent Company’s effective ownership in WEPL to 100.00% from 

65.00%. 

On May 5, 2011, the Parent Company acquired the 25.10% ownership interest in IERCAG from 

the noncontrolling stockholder for a consideration of P=25.02 million. The carrying value of the 

noncontrolling interest at acquisition was P=2.05 million deficit. The difference of P=27.06 million 

between the consideration paid and the carrying value of the noncontrolling interest was 

recognized as equity adjustment and deducted from ‘Capital paid-in excess of par value’. The 

acquisition increased the Parent Company’s ownership interest in IERCAG to 100.00% from 

74.90%. 

Consequently, on October 11, 2011, IERCAG changed its legal name to IREMIT Remittance 

Consulting GmbH (IRCGmbH) and changed its legal status from a stock company to a limited 

liability company. It also amended its Articles of Incorporation to include management 

consultancy in its business activities. 

On June 10, 2011, the Parent Company incorporated KKIJ in Japan to provide remittance services. 

KKIJ has not started commercial operations as of March 23, 2012. 

2. Summary of Significant Accounting Policies 

Basis of Preparation 

The accompanying consolidated financial statements of the Group have been prepared on a 

historical cost basis except for financial assets at fair value through profit or loss (FVPL) that have 

been measured at fair value. The financial statements are presented in Philippine peso, the Parent 

Company’s functional and presentation currency, and all values are rounded to the nearest peso 

except when otherwise indicated. 

Each entity in the Group determines its own functional currency and items included in the 

financial statements of each entity are measured using that functional currency. The respective 

functional currencies of the subsidiaries and associates are presented in Note 1. 

*SGVMC116502*

- 3 - 

Statement of Compliance 

The accompanying consolidated financial statements have been prepared in compliance with 

Philippine Financial Reporting Standards (PFRS). 

Basis of Consolidation 

The financial statements of subsidiaries are prepared for the same reporting year as the Parent 

Company, using consistent accounting policies. 

Subsidiaries are all entities over which the Group has the power to govern the financial and 

operating policies generally accompanying a shareholding of more than one half of the voting 

rights. The existence and effect of potential voting rights that are currently exercisable or 

convertible are considered when assessing whether the Group has control over the entity. 

All significant intra-group balances, transactions, income and expenses and profits and losses 

resulting from intra-group transactions are eliminated in full. 

Subsidiaries are consolidated from the date on which control is transferred to the Group. Control 

is achieved when the Group has the power to govern the financial and operating policies of an 

entity so as to obtain benefits from its activities. Consolidation of subsidiaries ceases when 

control is transferred out of the Group. 

The results of subsidiaries acquired or disposed of during the year are included in the consolidated 

statement of income from the date of acquisition up to the date of disposal, as appropriate. 

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an 

equity transaction. If the Group losses control over the subsidiary, it: 

• derecognizes the assets (including goodwill) and liabilities of the subsidiary; 

• derecognizes the carrying amount of any noncontrolling interest; 

• derecognizes the related other comprehensive income recorded in equity and recycle the same 

to profit or loss or retained earnings; 

• recognizes the fair value of the consideration received; 

• recognizes the fair value of any investment retained; and 

• recognizes any surplus or deficit in profit or loss. 

Business Combinations and Goodwill 

Business combinations from January 1, 2010 

Business combinations are accounted for using the acquisition method. The cost of an acquisition 

is measured as the aggregate of the consideration transferred, measured at acquisition date fair 

value and the amount of any noncontrolling interest in the acquiree. For each business 

combination, the acquirer measures the noncontrolling interest in the acquiree either at fair value 

or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred 

are expensed and included in operating expenses. 

When the Group acquires a business, it assesses the financial assets and liabilities assumed for 

appropriate classification and designation in accordance with the contractual terms, economic 

circumstances and pertinent conditions as at the acquisition date. This includes the separation of 

embedded derivatives in host contracts by the acquiree. 

*SGVMC116502*

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If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s 

previously held equity interest in the acquiree is remeasured to fair value at the acquisition date 

through profit or loss. 

Any contingent consideration to be transferred by the acquirer will be recognized at fair value at 

the acquisition date. Subsequent changes to the fair value of the contingent consideration which is 

deemed to be an asset or liability will be recognized in accordance with Philippine Accounting 

Standards (PAS) 39 either in profit or loss or as a change to other comprehensive income. If the 

contingent consideration is classified as equity, it should not be remeasured until it is finally 

settled within equity. 

Goodwill is initially measured at cost, being the excess of the aggregate of fair value of the 

consideration transferred and the amount recognized for noncontrolling interest over the net 

identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair 

value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss. 

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For 

the purpose of impairment testing, goodwill acquired in a business combination is, from the 

acquisition date, allocated to each of the Group’s cash-generating units (CGU) that are expected to 

benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are 

assigned to those units. 

Business combinations prior to January 1, 2010 

In comparison to the above-mentioned requirements, the following differences apply: 

Business combinations were accounted for using the purchase method. Transaction costs directly 

attributable to the acquisition formed part of the acquisition costs. The noncontrolling interest 

(formerly known as minority interest) was measured at the proportionate share of the acquiree’s 

identifiable net assets. 

Business combinations achieved in stages were accounted for as separate steps. Any additional 

acquired share of interest did not affect previously recognized goodwill. 

When the Group acquired a business, embedded derivatives separated from the host contract by 

the acquiree were not reassessed on acquisition unless the business combination resulted in a 

change in the terms of the contract that significantly modified the cash flows that otherwise would 

have been required under the contract. 

Contingent consideration was recognized if, and only if, the Group had a present obligation, the 

economic outflow was more likely than not and a reliable estimate was determinable. Subsequent 

adjustments to the contingent consideration were recognized as part of goodwill. 

Noncontrolling Interest 

Noncontrolling interest represents the portion of profit or loss and net assets not owned, directly or 

indirectly, by the Parent Company. 

Noncontrolling interests are presented separately in the consolidated statement of income, 

consolidated statement of comprehensive income, and within equity in the consolidated balance 

sheet, separately from equity attributable to the equity holder of the Parent Company’s 

shareholders’ equity. Any losses applicable to the noncontrolling interests are allocated against 

the interests of the noncontrolling interest even if this results in the noncontrolling interest having 

a deficit balance. 

*SGVMC116502*

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Changes in Accounting Policies 

The accounting policies adopted are consistent with those of the previous financial year except for 

the adoption of the following new and amended PFRS, Philippine Accounting Standards (PAS) 

and Philippine Interpretations which became effective on January 1, 2011: 

• PAS 24 Amendment, Related Party Disclosures 

• PAS 32 Amendment, Financial Instruments: Presentation - Classification of Rights Issues 

• Philippine Interpretation International Financial Reporting Interpretations Committee (IFRIC) 

14 Amendment, Prepayments of a Minimum Funding Requirement 

• Philippine Interpretation IFRIC 19, Extinguishing Financial Liabilities with Equity 

Instruments 

The adoption of new standards, amendments and interpretations above did not have impact to the 

Group except for the adoption of PAS 24 Amendment, Related Party Transactions. 

PAS 24 Amendment, Related Party Transactions 

PAS 24 clarifies the definitions of a related party. The new definitions emphasize a symmetrical 

view of related party relationships and clarify the circumstances in which persons and key 

management personnel affect related party relationships of an entity. In addition, the amendment 

introduces an exemption from the general related party disclosure requirements for transactions 

with government and entities that are controlled, jointly controlled or significantly influenced by 

the same government as the reporting entity. The amendment only affects the disclosures and has 

no impact on the Group’s financial position or performance. 

Improvements to PFRS 2010 

Improvements to PFRSs, an omnibus of amendments to standards, deal primarily with a view to 

removing inconsistencies and clarifying wording. There are separate transitional provisions for 

each standard. The adoption of the following amendments resulted in changes to accounting 

policies but did not have any impact on the financial position or performance of the Group. 

PFRS 3, Business Combinations (Revised) 

The measurement options available for noncontrolling interest (NCI) were amended. Only 

components of NCI that constitute a present ownership interest that entitles their holder to a 

proportionate share of the entity’s net assets in the event of liquidation should be measured at 

either fair value or at the present ownership instruments’ proportionate share of the acquiree’s 

identifiable net assets. All other components are to be measured at their acquisition date fair 

value. 

The amendments to PFRS 3 are effective for annual periods beginning on or after July 1, 2011. 

The Group, however, adopted these as of January 1, 2011 and changed its accounting policy 

accordingly as the amendment was issued to eliminate unintended consequences that may arise 

from the adoption of PFRS 3. 

PFRS 7, Financial Instruments - Disclosures 

The amendment was intended to simplify the disclosures provided by reducing the volume of 

disclosures around collateral held and improving disclosures by requiring qualitative information 

to put the quantitative information in context. The Group reflects the revised disclosure 

requirements in Note 4. 

*SGVMC116502*

- 6 - 

PAS 1, Presentation of Financial Statements 

The amendment clarifies that an entity may present an analysis of each component of other 

comprehensive income maybe either in the statement of changes in equity or in the notes to the 

financial statements. 

Other amendments resulting from the 2010 Improvements to PFRSs to the following standards did 

not have any impact on the accounting policies, financial position or performance of the Group: 

• PFRS 3, Business Combinations (Contingent consideration arising from business combination 

prior to adoption of PFRS 3 (as revised in 2008)) 

• PFRS 3, Business Combinations (Un-replaced and voluntarily replaced share-based payment 

awards) 

• PAS 27, Consolidated and Separate Financial Statements 

• PAS 34, Interim Financial Statements 

The following interpretation and amendments to interpretations did not have any impact on the 

accounting policies, financial position or performance of the Group: 

• Philippine Interpretation IFRIC 13, Customer Loyalty Programmes (determining the fair value 

of award credits) 


Instruments 

Foreign Currency Translation 

The consolidated financial statements are presented in Philippine peso, which is the Parent 

Company’s functional currency. Each subsidiary in the Group determines its own functional 

currency and items included in the financial statements of each entity are measured using that 

functional currency. 

Transactions and balances 

Transactions denominated in foreign currencies are recorded using the exchange rate at the date of 

the transaction. Outstanding financial assets and liabilities denominated in foreign currencies are 

restated in Philippine pesos based on the Philippine Dealing System (PDS) closing rate prevailing 

at the balance sheet date. Exchange differences arising on translation are taken directly to the 

consolidated statement of income. 

Non-monetary items that are measured in terms of historical cost in a foreign currency are 

translated using the exchange rates as at the dates of the initial transactions. Non-monetary items 

measured at fair value in a foreign currency are translated using the exchange rates at the date 

when the fair value was determined. Any goodwill arising on the acquisition of a foreign 

operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on 

the acquisition are treated as assets and liabilities of the foreign operation and translated at the 

closing rate. 

Foreign subsidiaries 

As of the balance sheet date, the assets and liabilities of subsidiaries with functional currency 

differs from the Philippine peso are translated into the Parent Company’s presentation currency 

(the Philippine peso) at the PDS closing rate prevailing at the balance sheet date, and their income 

and expenses are translated using the PDSWAR for the year. Exchange differences arising on 

translation are recognized in other comprehensive income. Upon disposal of a foreign entity, the 

*SGVMC116502*

- 7 - 

deferred cumulative amount previously recognized in other comprehensive income (included 

under ‘Cumulative translation adjustment’ in the equity section of the consolidated balance sheet) 

relating to the particular foreign operation is recognized in the consolidated statement of income. 

Cash and Cash Equivalents 

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid 

investments that are readily convertible to known amounts of cash, with original maturities of 

three months or less from the dates of placement and that are subject to an insignificant risk of 

changes in fair value. 

Financial Instruments 

Initial Recognition 

Financial instruments within the scope of PAS 39 are classified as financial assets at FVPL, loans 

and receivables, held-to-maturity (HTM) investments, available-for-sale (AFS) investments, 

financial liabilities at FVPL and other financial liabilities. The classification of financial 

instruments at initial recognition depends on the purpose for which the financial instruments were 

acquired and their characteristics. All financial assets and financial liabilities are recognized 

initially at fair value plus any directly attributable cost of acquisition or issue, except in the case of 

financial assets and financial liabilities at FVPL. Management determines the classification of its 

instruments at initial recognition and, where allowed and appropriate, re-evaluates such 

designation at every balance sheet date. 

Financial instruments are recognized in the consolidated balance sheet when the Group becomes a 

party to the contractual provisions of the instrument. In the case of regular way of purchase or 

sale of financial assets, recognition and derecognition, as applicable, are done using settlement 

date accounting. Settlement date accounting refers to (a) recognition of an asset on the day it is 

received by the Group, and (b) the derecognition of an asset and recognition of any gain or loss on 

disposal on the day that it is delivered by the Group. 

The subsequent measurement bases for financial instruments depend on its classification. 

As of December 31, 2011 and 2010, the Group has no AFS investments, HTM investments and 

financial liabilities at FVPL. 

Subsequent Measurement 

Financial assets at FVPL 

Financial assets at FVPL includes financial assets held for trading (HFT) and financial assets 

designated upon initial recognition at fair value through profit or loss. Financial assets are 

classified as HFT if they are acquired for the purpose of selling and repurchasing in the near term. 

Included in this classification are debt securities which have been acquired principally for trading 

purposes. 

The Group evaluates its HFT investments to determine whether the intention to sell them in the 

near term is still appropriate. When in rare circumstances the Group is unable to trade these 

financial assets due to inactive markets and management’s intention to sell them in the foreseeable 

future significantly changes, the Group may elect to reclassify these financial assets. The 

reclassification to loans and receivables, AFS or HTM depends on the nature of the asset. This 

evaluation does not affect any financial assets designated at FVPL using the fair value option at 

designation, these instruments cannot be reclassified after initial recognition. 

*SGVMC116502*

- 8 - 

HFT investments are recorded in the consolidated balance sheet at fair value. Changes in fair 

value are recognized as ‘Net trading gains’ in the consolidated statement of income. Interest 

earned is recognized as interest income included under ‘Other income’ in the consolidated 

statement of income. Quoted market prices, when available, are used to determine the fair value 

of these financial instruments. If quoted market prices are not available, their fair values are 

estimated based on inputs that are observable in the market. 

Classified under this category are the Group’s HFT investments in debt and equity securities. 

Loans and Receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that 

are not quoted in an active market. After initial measurement, receivables are carried at amortized 

cost using the effective interest method less any allowance for credit losses. Amortized cost is 

calculated by taking into account any discount or premium on acquisition and fees and costs that 

are an integral part of the effective interest rate (EIR). Gains and losses are recognized in the 

consolidated statement of income when the receivables are derecognized or impaired, as well as 

through the amortization process. Receivables are classified as current assets when the Group 

expects to realize or collect the asset within twelve months from the balance sheet date. Otherwise, 

these are classified as non-current assets. 

Classified under this category are the Group’s ‘Cash and cash equivalents’, ‘Accounts receivable’, 

‘Other receivables’ and refundable deposits included under ‘Other noncurrent assets’. 

Other financial liabilities 

Issued financial instruments or their components, which are not designated as at FVPL, are 

classified as other financial liability, where the substance of the contractual arrangement results in 

the Group having an obligation either to deliver cash or another financial asset to the holder, or to 

satisfy the obligation other than by the exchange of a fixed amount of cash or another financial 

asset for a fixed number of its own equity shares. These include liabilities arising from operations 

or borrowings. The components of issued financial instruments that contain both liability and 

equity elements are accounted for separately, with the equity component being assigned the 

residual amount after deducting from the instrument as a whole the amount separately determined 

as the fair value of the liability component on the date of issue. 

After initial measurement, other financial liabilities are subsequently measured at amortized cost 

using the EIR method. 

Other financial liabilities are classified as current liabilities when the Group expects to settle the 

liability within twelve months from the balance sheet date. Otherwise, these are classified as noncurrent 

liabilities. 

Other financial liabilities include ‘Beneficiaries and other payables’ and ‘Interest-bearing loans’. 

Determination of fair value 

The fair value for financial instruments traded in active markets at the balance sheet date is based 

on their quoted market prices or dealer price quotations (bid price for long positions and ask price 

for short positions), without any deduction for transaction costs. When current bid and ask prices 

are not available, the price of the most recent transaction provides evidence of the current fair 

value as long as there has not been a significant change in economic circumstances since the time 

of the transaction. 

*SGVMC116502*

- 9 - 

For all other financial instruments not listed in an active market, the fair value is determined by 

using appropriate valuation methodologies. Valuation methodologies include net present value 

techniques, comparison to similar instruments for which market observable prices exist, option 

pricing models, and other relevant valuation models. 

Day 1 difference 

Where the transaction price in a non-active market is different from the fair value from other 

observable current market transactions in the same instrument or based on a valuation technique 

whose variables include only data from an observable market, the Group recognizes the difference 

between the transaction price and fair value (a Day 1 difference) in the consolidated statement of 

income unless it qualifies for recognition as some other type of asset. In cases where use is made 

of data which is not observable, the difference between the transaction price and model value is 

only recognized in the consolidated statement of income when the inputs become observable or 

when the instrument is derecognized. For each transaction, the Group determines the appropriate 

method of recognizing the Day 1 difference amount. 

Derecognition of Financial Assets and Liabilities 

Financial asset 

A financial asset (or, where applicable a part of a financial asset or part of a group of similar 

financial assets) is derecognized when: 

• the rights to receive cash flows from the asset have expired; 

• the Group retains the right to receive cash flows from the asset, but has assumed an obligation 

to pay them in full without material delay to a third part under a ‘pass through’ arrangement; 

or 

• the Group has transferred its rights to receive cash flows from the asset and either (a) has 

transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor 

retained substantially all the risks and rewards of the asset, but has transferred control of the 

asset. 

When the Group has transferred its rights to receive cash flows from an asset or has entered into a 

pass-through arrangement, and has neither transferred nor retained substantially all the risks and 

rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the 

Group’s continuing involvement in the asset. Continuing involvement that takes the form of a 

guarantee over the transferred asset is measured at the lower of the original carrying amount of the 

asset and the maximum amount of consideration that the Group could be required to repay. 

Financial liability 

A financial liability is derecognized when the obligation under the liability is discharged, 

cancelled or has expired. When an existing financial liability is replaced by another from the same 

lender on substantially different 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 consolidated statement of income. 

Offsetting Financial Instruments 

Financial assets and financial liabilities are offset and the net amount reported in the consolidated 

balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized 

amounts and there is an intention to settle on a net basis, or to realize the asset and settle the 

liability simultaneously. 

*SGVMC116502*

- 10 - 

Impairment of Financial Assets 

The Group assesses at each balance sheet date whether there is an objective evidence that a 

financial asset or group of financial assets is impaired. A financial asset or a group of financial 

assets is deemed to be impaired if, and only if, there is an objective evidence of impairment as a 

result of one or more events that has occurred after the initial recognition of the asset (an incurred 

‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the 

financial asset or the group of financial assets that can be reliably estimated. Evidence of 

impairment may include indications that the borrower or a group of borrowers is experiencing 

significant financial difficulty, default or delinquency in interest or principal payments, the 

probability that they will enter bankruptcy or other financial reorganization, and where there are 

observable data that indicates that there is a measurable decrease in the estimated future cash 

flows, such as changes in arrears or economic conditions that correlate with defaults. 

Financial assets carried at amortized cost 

For financial assets carried at amortized cost, the Group first assesses whether objective evidence 

of impairment exists individually for financial assets that are individually significant, or 

collectively for financial assets that are not individually significant. 

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is 

measured as the difference between the asset’s carrying amount and the present value of the 

estimated future cash flows (excluding future credit losses that have not been incurred). The 

carrying amount of the asset is reduced through the use of an allowance account and the amount of 

loss is charged to the consolidated statement of income. Interest income continues to be 

recognized based on the original EIR of the asset. Receivables, together with the associated 

allowance accounts, are written off when there is no realistic prospect of future recovery and all 

collateral has been realized. If subsequently, the amount of the estimated impairment loss 

decreases because of an event occurring after the impairment was recognized, the previously 

recognized impairment loss is reduced by adjusting the allowance account. If a future write-off is 

later recovered, any amounts formerly charged are credited to profit or loss. 

If the Group determines that no objective evidence of impairment exists for an individually 

assessed financial asset, whether significant or not, it includes the asset in a group of financial 

assets with similar credit risk characteristics and collectively assesses for impairment. Those 

characteristics are relevant to the estimation of future cash flows for groups of such assets by 

being indicative of the debtors’ ability to pay all amounts due according to the contractual terms of 

the assets being evaluated. Assets that are individually assessed for impairment and for which an 

impairment loss is, or continues to be, recognized are not included in a collective assessment for 

impairment. 

The present value of the estimated future cash flows is discounted at the financial asset’s original 

EIR. If a financial asset has a variable interest rate, the discount rate for measuring any 

impairment loss is the current EIR, adjusted for the original credit risk premium. 

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis 

of such credit risk characteristics as geographical classification. Future cash flows in a group of 

financial assets that are collectively evaluated for impairment are estimated on the basis of 

historical loss experience for assets with credit risk characteristics similar to those in the group. 

Historical loss experience is adjusted on the basis of current observable data to reflect the effects 

of current conditions that did not affect the period on which the historical loss experience is based 

and to remove the effects of conditions in the historical period that do not exist currently. 

*SGVMC116502*

- 11 - 

Estimates of changes in future cash flows reflect, and are directionally consistent with changes in 

related observable data from period to period (such as changes in payment status, or other factors 

that are indicative of incurred losses in the group and their magnitude). The methodology and 

assumptions used for estimating future cash flows are reviewed regularly by the Group to reduce 

any differences between loss estimates and actual loss experience. 

Investments in Associates 

The Group’s investments in its associates are accounted for using the equity method of 

accounting. An associate is an entity in which the Group has significant influence. The Group’s 

investments in associates include its 49.00% interest in ISPL and HKHCL, entities based in 

Singapore and Taiwan, respectively. 

Under the equity method, the investment in the associate is carried in the consolidated balance 

sheet at cost plus post acquisition changes in the Group’s share in the net assets of the associate. 

The consolidated statement of income reflects the share in the results of operations of the 

associate. Where there has been a change recognized directly in the equity of the associate, the 

Group recognizes its share of any changes, as applicable, in the consolidated statement of changes 

in equity. Unrealized gains and losses resulting from transactions between the Group and the 

associate are eliminated to the extent of the interest in the associate. 

The Group’s share in the net income (loss) of its associates is shown in the consolidated statement 

of income as ‘Equity in net earnings of associates’. This is the profit attributable to equity holders 

of the associate and therefore is profit after tax and noncontrolling interests in the subsidiaries of 

the associates. 

The financial statements of the associates are prepared for the same reporting period as the Parent 

Company. 

After application of the equity method, the Group determines whether it is necessary to recognize 

an impairment loss on the Group’s investment in its associates. The Group determines at each 

balance sheet date whether there is any objective evidence that the investment in the associate is 

impaired. If this is the case, the Group calculates the amount of impairment as the difference 

between the recoverable amount of the associate and its carrying value and recognizes the amount 

as impairment loss in the consolidated statement of income. 

Upon loss of significant influence over the associate, the Group measures and recognizes any 

remaining investment at its fair value. Any difference between the carrying amount of the 

associate upon loss of significant influence and the fair value of the retaining investment and 

proceeds from disposal is recognized in profit or loss. 

Property and Equipment 

Property and equipment is stated at cost less accumulated depreciation and amortization and any 

impairment in value. 

The initial cost of property and equipment comprises its purchase price and any directly 

attributable costs of bringing the property and equipment to its working condition and location for 

its intended use. 

*SGVMC116502*

- 12 - 

Expenditures incurred after the property and equipment have been put into operation, such as 

repairs and maintenance are normally charged to operations in the year in which the costs are 

incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in 

an increase in the future economic benefits expected to be obtained from the use of an item of 

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

are capitalized as an additional cost of property and equipment. 

Depreciation and amortization is calculated on a straight-line basis over the estimated useful life of 

the property and equipment as follows: 

Office and communication equipment 3 years 

Transportation and delivery equipment 3 to 5 years 

Furniture and fixtures 3 to 5 years 

Leasehold improvements 5 years or the term of the lease, 

whichever is shorter 

The carrying values of property and equipment are reviewed for impairment when events or 

changes in circumstances indicate the carrying value may not be recoverable. If any such 

indication exists and where the carrying values exceed the estimated recoverable amount, the asset 

or CGU are written down to their recoverable amount (see policy on Impairment of Nonfinancial 

Assets). 

An item of property and equipment is derecognized upon disposal or when no future economic 

benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the 

asset (calculated as the difference between the net disposal proceeds and the carrying amount of 

the asset) is included in the consolidated statement of income in the year the asset is derecognized. 

The asset’s residual values, useful lives and methods of depreciation and amortization are 

reviewed, and adjusted if appropriate, at each financial year-end to ensure that these are consistent 

with the expected pattern of economic benefits from the items of property and equipment. 

Intangible Assets 

Intangible assets acquired separately are measured on initial recognition at cost. Following initial 

recognition, intangible assets are carried at cost less any accumulated amortization and any 

accumulated impairment losses. 

The useful lives of intangible assets are assessed to be either finite or indefinite. 

Intangibles assets with finite lives are amortized over the useful economic life and assessed for 

impairment whenever there is an indication that the intangible assets may be impaired. The 

amortization period and the amortization method for an intangible asset with a finite useful life are 

reviewed at least at each balance sheet date. Changes in the expected useful life or the expected 

pattern of consumption of future economic benefits embodied in the asset is accounted for by 

changing the amortization period or method, as appropriate, and treated as changes in accounting 

estimates. The amortization expense on intangible assets with finite lives is recognized in the 

consolidated statement of income in the expense category consistent with the function of the 

intangible asset. Intangible assets with indefinite useful lives are tested for impairment annually 

either individually or at the CGU level. Such intangibles are not amortized. The useful life of an 

intangible asset with an indefinite life is reviewed annually to determine whether indefinite life 

assessment continues to be supportable. If not, the change in the useful life assessment from 

indefinite to finite is made on a prospective basis. 

*SGVMC116502*

- 13 - 

Gains or losses arising from the derecognition of an intangible asset are measured as the difference 

between the net disposal proceeds and the carrying amount of the asset and are recognized in the 

consolidated statement of income when the asset is derecognized. 

Software costs 

Software costs are carried at cost less accumulated amortization and any impairment in value. The 

cost of the asset is the amount of cash or cash equivalents paid or the fair value of the other 

considerations given up to acquire the asset at the time of its acquisition or production. Software 

costs are amortized on a straight-line basis over the estimated useful life of three (3) years. 

Goodwill 

Any excess of the acquisition cost over the fair values of the identifiable net assets acquired is 

recognized as goodwill. Goodwill represents the excess of the acquisition cost over the fair value 

of their identifiable net assets at the date of acquisition of IRCL, IGRL, IAPL, LSML and WEPL 

(see Note 13). Following initial recognition, goodwill is measured at cost less any accumulated 

impairment losses. Goodwill is reviewed for impairment annually (see accounting policy on 

Impairment of Nonfinancial Assets). 

Impairment of Nonfinancial assets 

Investments in associates 

The Group assesses at each balance sheet date whether there is any indication that its investments 

in associates may be impaired. If any indication exists, the Group estimates the asset’s 

recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value 

less cost to sell and its value in use. Where the carrying amount of an asset or CGU exceeds its 

recoverable amount, the asset is considered impaired and is written down to its recoverable 

amount. 

Property and equipment and software costs 

At each balance sheet date, the Group assesses whether there is any indication that its property and 

equipment and software costs may be impaired. When an indicator of impairment exists or when 

an annual impairment testing for an asset is required, the Group makes a formal estimate of 

recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and 

its value in use and is determined for an individual asset, unless the asset does not generate cash 

inflows that are largely independent of those from other assets or groups of assets, in which case 

the recoverable amount is assessed as part of the CGU to which it belongs. Where the carrying 

amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered 

impaired and is written down to its recoverable amount. In assessing value in use, the estimated 

future cash flows are discounted to their present value using a pre-tax discount rate that reflects 

current market assessments of the time value of money and the risks specific to the asset (or 

CGU). In determining fair value less cost to sell, recent market transactions are taken into 

account, if available. If no such transactions can be identified, an appropriate evaluation model is 

used. These calculations are corroborated with available fair value indicators. 

An impairment loss is charged to operations in the year in which it arises, unless the asset is 

carried at a revalued amount, in which case the impairment loss is charged to the revaluation 

increment of the said asset. 

An assessment is made at each balance sheet date as to whether there is any indication that 

previously recognized impairment losses may no longer exist or may have decreased. If such 

indication exists, the recoverable amount is estimated. A previously recognized impairment loss is 

reversed only if there has been a change in the estimates used to determine the asset’s recoverable 

*SGVMC116502*

- 14 - 

amount since the last impairment loss was recognized. If that is the case, the carrying amount of 

the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying 

amount that would have been determined, net of depreciation and amortization, had no impairment 

loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated 

statement of income unless the asset is carried at a revalued amount, in which case the reversal is 

treated as a revaluation increase. After such a reversal, the depreciation and amortization expense 

is adjusted in future years to allocate the asset’s revised carrying amount, less any residual value, 

on a systematic basis over its remaining life. 

Goodwill 

Goodwill is reviewed for impairment annually or more frequently if events or changes in 

circumstances indicate that the carrying value may be impaired. 

Impairment is determined for goodwill by assessing the recoverable amount of the CGU (or group 

of CGUs) to which the goodwill relates. Where the recoverable amount of the CGU (or group of 

CGUs) is less than the carrying amount of the CGU (or group of CGUs) to which goodwill has 

been allocated, an impairment loss is recognized immediately in the consolidated statement of 

income. Impairment losses relating to goodwill cannot be reversed for subsequent increases in its 

recoverable amount in future periods. The Group performs its annual impairment test of goodwill 

at the balance sheet date. 

Input Value Added Tax (VAT) 

Input VAT represents VAT imposed on the Parent Company by its suppliers for the acquisition of 

goods and services as required by Philippine taxation laws and regulations. This will be claimed 

as tax credits. Input VAT is stated at its estimated net realizable values. 

Revenue Recognition 

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

Group and the revenue can be reliably measured. The Group assesses its revenue arrangements 

against specific criteria in order to determine if it is acting as principal or agent. The following 

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

Delivery fees 

Revenue from delivery fees is recognized as the service is rendered net of amounts payable to 

principals (i.e., partner remittance companies) for fees billed on their behalf. 

Service revenue 

Service revenue is recognized when the service is rendered. 

Interest income 

Interest on financial instruments measured at amortized cost and interest bearing HFT investments 

is recognized based on the effective interest rate (EIR) method. 

The EIR method is a method of calculating the amortized cost of a financial asset or a financial 

liability and allocating the interest income or interest expense over the relevant period. The EIR is 

the rate that exactly discounts estimated future cash payments or receipts throughout the expected 

life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of 

the financial asset or financial liability. When calculating the EIR, the Group estimates cash flows 

from the financial instrument (for example, prepayment options) but does not consider future 

credit losses. The calculation includes all fees and points paid or received between parties to the 

contract that are an integral part of the EIR, transaction costs and all other premiums or discounts. 

*SGVMC116502*

- 15 - 

Once a financial asset or a group of financial assets has been written down as a result of an 

impairment loss, interest income is recognized thereafter using the rate of interest used to discount 

the future cash flows for the purpose of measuring the impairment loss. 

Net trading gain/loss 

Trading gain/loss represents results arising from trading activities, including all gains and losses 

from changes in fair value of HFT investments. 

Other income 

Other income from processing remittance is recognized as the service is rendered. 

Rebates 

Rebates pertaining to refunds of bank service charges are recognized upon collection. 

Cost and Expenses 

Costs and expenses encompass losses as well as those expenses that arise in the course of the 

ordinary business activities of the Group. The following specific recognition criteria must also be 

met before costs and expenses are recognized: 

Cost of services 

This includes all expenses associated with the specific delivery fees. Such costs are recognized 

when the related delivery fees have been recognized. 

Operating expenses 

Operating expenses constitute costs incurred related to advertising and administering the business 

and are recognized when incurred. 

Taxes and licenses 

This includes all other taxes, local and national, including real estate taxes, licenses and permit 

fees included under ‘Other operating expenses’ in the consolidated statement of income. 

Retirement Benefits 

The Parent Company has a noncontributory defined benefit retirement plan administered by a 

trustee, covering its permanent employees. 

The retirement cost of the Parent Company is determined using the projected unit credit method. 

Under this method, the current service cost is the present value of retirement benefits payable in 

the future with respect to services rendered in the current period. 

The liability recognized in the consolidated balance sheet in respect of defined benefit retirement 

plan is the present value of the defined benefit obligation at the balance sheet date less the fair 

value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past 

service costs. The defined benefit obligation is calculated annually by an independent actuary 

using the projected unit credit method. The present value of the defined benefit obligation is 

determined by discounting the estimated future cash outflows using interest rates on Philippine 

government bonds that have terms to maturity approximating the terms of the related retirement 

liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial 

assumptions are credited to or charged against income when the net cumulative unrecognized 

actuarial gains and losses at the end of the previous period exceeded 10.00% of the higher of the 

defined benefit obligation and the fair value of plan assets at that date. These gains or losses are 

recognized over the expected average remaining working lives of the employees participating in 

the plan. 

*SGVMC116502*

- 16 - 

Past-service costs, if any, are recognized immediately in income, unless the changes to the 

retirement plan are conditional on the employees remaining in service for a specified period of 

time (the vesting period). In this case, the past-service costs are amortized on a straight-line basis 

over the vesting period. 

The defined benefit asset or liability comprises the present value of the defined benefit obligation 

less past service costs not yet recognized and less the fair value of plan assets out of which the 

obligations are to be settled directly. The value of any asset is restricted to the sum of any past 

service cost not yet recognized and the present value of any economic benefits available in the 

form of refunds from the plan or reductions in the future contributions to the plan. 

Leases 

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

the arrangement at the inception date of whether the fulfillment of the arrangement is dependent 

on the use of a specific asset or assets or 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 the 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. 

When 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) and at the date 

of renewal or extension for scenario (b). 

Group as a 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 

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

Group as a lessor 

Leases in which the Group does not transfer substantially all the risks and benefits of ownership of 

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

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

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

they are earned. 

Share-based Payment 

The Parent Company granted a stock purchase program to certain officers, employees and 

individuals (see Note 19) that is subject to a lock-up or vesting period of two (2) years and which 

ended on September 19, 2009. The Parent Company accounted for the share-based payment as an 

equity-settled transaction. The cost of equity-settled transactions is measured by reference to the 

fair value of the equity instrument at the date at which they are granted. The expense is 

recognized as part of ‘Salaries, wages and employee benefits’ in the consolidated statement of 

income over the lock-up period of two (2) years. The cumulative expense recognized for equitysettled 

transactions at each balance sheet date until the vesting date reflects the extent to which the 

vesting period has expired and the Group’s best estimate of the number of equity instruments that 

will ultimately vest. The expense in the consolidated statement of income for the period 

represents the movement in cumulative expense recognized at the beginning and end of the period. 

*SGVMC116502*

- 17 - 

Income Taxes 

Current tax 

Current tax assets and liabilities for the current and prior periods are measured at the amount 

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used 

to compute the amount are those that are enacted or substantially enacted at the balance sheet date. 

Deferred tax 

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

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

financial reporting purposes. 

Deferred tax liabilities are recognized for all taxable temporary differences, including asset 

revaluations. Deferred tax assets are recognized for all deductible temporary differences, 

carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over the 

regular corporate income tax (RCIT), if any, and unused net operating loss carryover (NOLCO), if 

any, to the extent that it is probable that taxable income will be available against which the 

deductible temporary differences and carryforward of unused tax credits from excess MCIT over 

RCIT and unused NOLCO can be utilized. 

Deferred tax liabilities are not provided on non-taxable temporary differences associated with 

investments in associates where the timing of the reversal of the temporary differences can be 

controlled and it is probable that the temporary differences will not reverse in the foreseeable 

future. 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to 

the extent that it is no longer probable that sufficient taxable income will be available to allow all 

or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at 

each balance sheet date and are recognized to the extent that it has become probable that future 

taxable income will allow the deferred tax assets to be recovered. 

Deferred tax assets and deferred tax liabilities are measured at the tax rates that are applicable to 

the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that 

have been enacted or substantially enacted at the balance sheet date. 

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set 

off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable 

entity and the same taxation authority. 

Current tax and deferred tax relating to items recognized directly in equity are also recognized in 

equity and not in the consolidated statement of income. 

Discontinued Operations 

A discontinued operation is a component of the Group’s business that represents a separate major 

line of business or geographical area of operations that had been disposed of or is held for sale, or 

is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued 

operation occurs upon disposal or when the operation meets the criteria to be classified as held for 

sale, if earlier. When an operation is classified as a discontinued operation, the comparative 

consolidated statement of income are re-presented as if the operation had been discontinued from 

the start of the comparative period. In the consolidated statement of income of the reporting 

period, and of the comparable period of the previous year, income and expenses from 

*SGVMC116502*

- 18 - 

discontinued operations are reported separately from normal income and expenses down to the 

level of profit after taxes. The resulting profit or loss (after taxes) is reported separately in the 

consolidated statement of income. 

Borrowing Costs 

Borrowing costs are recognized as an expense when incurred. 

Equity 

Capital stock is measured at par value for all shares issued and outstanding. When the shares are 

sold at a premium, the difference between the proceeds and the par value is credited to ‘Capital 

paid-in excess of par value’ account. Direct costs incurred related to issuance of equity, such as 

underwriting, accounting and legal fees, printing costs and taxes are charged to ‘Capital paid-in 

excess of par value’ account. If the ‘Capital paid-in excess of par value’ is not sufficient, the 

excess is charged to profit or loss. 


equity transaction. The excess of acquisition cost over the carrying value of the noncontrolling 

interest is charged against the ‘Capital paid-in excess of par value’. 

When the Group issues more than one class of stock, a separate account is maintained for each 

class of stock and the number of shares issued. 

‘Retained earnings’ represents accumulated earnings (losses) of the Group less dividends declared. 

Own equity instruments which are reacquired (treasury shares) are recognized at cost as ‘Treasury 

stock’ and deducted from equity. No gain or loss is recognized in the consolidated statement of 

income on the purchase, sale, issue or cancellation of the Group’s own equity instruments. Any 

difference between the carrying amount and the consideration is recognized in ‘Capital paid-in 

excess of par value’. 

Earnings per Share 

Basic earnings per share (EPS) is computed by dividing net income for the year attributable to the 

equity holders of the Parent Company by the weighted average number of common shares issued 

and outstanding during the year, after giving retroactive effect to any stock dividends or stock 

splits, if any, declared during the year. Diluted EPS is computed by dividing net income 

applicable to common stockholders attributable to equity holder of the Parent Company by the 

weighted average number of common shares issued and outstanding during the year after giving 

effect to assumed conversion of dilutive potential common shares. 

The weighted average number of ordinary shares outstanding during the period is the number of 

ordinary shares outstanding at the beginning of the period, adjusted by the number of ordinary 

shares bought back or issued during the period multiplied by a time-weighting factor. The timeweighting 

factor is the number of days that the shares are outstanding as a proportion of the total 

number of days in the period; a reasonable approximation of the weighted average is adequate in 

many circumstances. 

Dividends 

Cash dividends on common shares are recognized as a liability and deducted from equity when 

declared and approved by the Board of Directors (BOD) of the Parent Company. Stock dividends 

are deducted from equity when declared and approved by the BOD and stockholders of the Parent 

Company. 

*SGVMC116502*

- 19 - 

Related party relationships and 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. Parties are also considered to be related if they are subject to common control or 

common significant influence. Related parties may be individuals or corporate entities. 

Provisions 

Provisions are recognized when the Group has a present obligation (legal or constructive) as a 

result of a past event, it is probable that an outflow of assets embodying economic benefits will be 

required to settle the obligation and a reliable estimate can be made of the amount of the 

obligation. Where the Group expects a provision to be reimbursed, the reimbursement is 

recognized as a separate asset but only when the reimbursement is virtually certain. The expense 

relating to any provision is presented in the consolidated statement of income, net of any 

reimbursement. 

Contingencies 

Contingent liabilities are not recognized in the consolidated financial statements. These are 

disclosed unless the possibility of an outflow of resources embodying economic benefits is 

remote. A contingent asset is not recognized in the consolidated financial statements but disclosed 

when an inflow of economic benefits is probable. 

Events After the Reporting Period 

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

the balance sheet 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 consolidated financial 

statements when material. 

Segment Reporting 

The Group’s operating businesses are organized and managed separately within a particular 

economic environment or geographical area, with each segment representing a strategic business 

unit which is subject to risks and rewards that are different from those of other segments. 

Financial information on business segments is presented in Note 27. 

Standards Issued but not Effective 

The Group will adopt the following standards and interpretations enumerated below when these 

become effective. Except as otherwise indicated, the Group does not expect the adoption of these 

new and amended PFRS and Philippine Interpretations to have significant impact on its financial 

position and performance. 

Effective in 2012 

PFRS 7 Amendments, Financial Instruments: Disclosures - Disclosures - Transfers of Financial 

Assets 


The amendments will allow users of financial statements to improve their understanding of 

transfer transactions of financial assets (for example, securitizations), including understanding the 

possible effects of any risks that may remain with the entity that transferred the assets. The 

amendments also require additional disclosures if a disproportionate amount of transfer 

transactions are undertaken around the end of a reporting period. 

*SGVMC116502*

- 20 - 

PAS 12 Amendment, Income Taxes - Deferred Tax: Recovery of Underlying Assets 

The amendment to PAS 12 is effective for annual periods beginning on or after January 1, 2012. 

It provides a practical solution to the problem of assessing whether recovery of an asset will be 

through use or sale. It introduces a presumption that recovery of the carrying amount of an asset 

will normally be through sale. 


PAS 1, Financial Statement Presentation – Presentation of Items of Other Comprehensive Income 

(OCI) 

The amendment effective for annual periods beginning or after July 1, 2012, changes the grouping 

of items presented in OCI. Items that could be reclassified (or “recycled”) to profit or loss at a 

future point in time would be presented separately from items that will never be reclassified. 

PAS 27 Revised, Separate Financial Statements 

The revised PAS 27 is effective for annual periods beginning on or after January 1, 2013. It 

establishes that as a consequence of the new PFRS 10, Consolidated Financial Statement and 

PFRS 12, Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to 

accounting for subsidiaries, jointly controlled entities, and associates in separate financial 

statements. 

PFRS 7 Revised, Financial Instruments: Disclosures – Offsetting Financial Assets and Financial 

Liabilities 

The revised PFRS 7 effective for annual periods beginning on or after January 1, 2013, requires an 

entity to disclose information about rights of set-off and related arrangements (such as collateral 

agreements). The new disclosures are required for all recognized financial instruments that are set 

off in accordance with PAS 32. These disclosures also apply to recognized financial instruments 

that are subject to an enforceable master netting arrangement or ‘similar agreement’, irrespective 

of whether they are set-off in accordance with PAS 32. 

PFRS 10, Consolidated Financial Statements 

The standard, effective for annual periods beginning on or after January 1, 2013, establishes 

principles for the presentation and preparation of consolidated financial statements when an entity 

controls one or more other entities. The Group will assess the impact of the amendment on its 

financial position and performance when they become effective. 

PFRS 11, Joint Arrangements 

PFRS 11 provides for a more realistic reflection of joint arrangements by focusing on the rights 

and obligations of the arrangement, rather than its legal form. The standard addresses 

inconsistencies in the reporting of joint arrangements by requiring a single method to account for 

interests in jointly controlled entities. The standard is effective for annual periods beginning on or 

after January 1, 2013. 

PFRS 12, Disclosure of Interests in Other Entities 

PFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of 

interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated 

structured entities. The standard is effective for annual periods beginning on or after January 1, 

2013. The Group will assess the impact of the amendment on its financial position and 

performance when they become effective. 

*SGVMC116502*

- 21 - 

PFRS 13, Fair Value Measurement 

This standard represents the completion of the joint project to establish a single source for the 

requirements on how to measure fair value under PFRS. This standard does not change when an 

entity is required to use fair value, but rather, describes how to measure fair value under PFRS, 

when fair value is required or permitted to be used. This standard is effective for annual periods 

beginning on or after January 1, 2013. The Group will assess the impact of the amendment on its 

financial position and performance when they become effective. 

PAS 19 Amendments, Employee Benefits - Defined Benefit Plans 

The amendments focus on the following key areas: the elimination of the option to defer the 

recognition of gains and losses resulting from defined benefit plans (the corridor approach); the 

elimination of options for the presentation of gains and losses relating to those plans; and the 

improvement of disclosure requirements that will better show the characteristics of defined benefit 

plans and the risks arising from those plans. The amendments to the recognition, presentation and 

disclosure requirements will ensure that the financial statements provide investors and other users 

with a clear picture of an entity’s commitments resulting from defined benefit plans. The 

amendments to PAS 19 are effective for annual periods beginning on or after January 1, 2013. 

The Group will assess the impact of the amendment on its financial position and performance 

when they become effective. 

Effective 2014 

PAS 32 Amendment, Financial Instruments: Presentation – Offsetting Financial Assets and 

Financial Liabilities 


This clarifies the meaning of “currently has a legally enforceable right to set-off” and the 

application of the PAS 32 offsetting criteria to settlement systems (such as central clearing house 

systems) which apply gross settlement mechanisms that are not simultaneous. 


PFRS 9, Financial Instruments: Classification and Measurement 

The standard is effective for annual periods beginning on or after January 1, 2015. It reflects the 

first phase on the replacement of PAS 39, Financial Instruments: Recognition and Measurement 

and applies to classification and measurement of financial assets and financial liabilities as defined 

in PAS 39. The Group will assess the impact of the amendment on its financial position and 


Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate 

This Interpretation, effective for annual periods beginning on or after January 1, 2015, covers 

accounting for revenue and associated expenses by entities that undertake the construction of real 

estate directly or through subcontractors. The Interpretation requires that revenue on construction 

of real estate be recognized only upon completion, except when such contract qualifies as 

construction contract to be accounted for under PAS 11, Construction Contracts, or involves 

rendering of services in which case revenue is recognized based on stage of completion. Contracts 

involving provision of services with the construction materials and where the risks and reward of 

ownership are transferred to the buyer on a continuous basis will also be accounted for based on 

stage of completion. 

*SGVMC116502*

- 22 - 

3. Significant Accounting Judgments and Estimates 

The preparation of the financial statements in compliance with PFRS requires the Group to make 

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

expenses and disclosure of contingent assets and contingent liabilities. Future events may occur 

which will cause the assumptions used in arriving at the estimates to change. The effects of any 

change in estimates are reflected in the financial statements as they become reasonably 

determinable. 

Judgments and estimates are continually evaluated and are based on historical experience and 

other factors, including expectations of future events that are believed to be reasonable under the 

circumstances. 

Judgments 

a. Functional Currency 

PAS 21 requires management to use its judgment to determine the entity’s functional currency 

such that it most faithfully represents the economic effects of the underlying transactions, 

events and conditions that are relevant to the entity. In making this judgment, the Group 

considers the following: 

• the currency that mainly influences sales prices for financial instruments and services (this 

will often be the currency in which sales prices for its financial instruments and services 

are denominated and settled); 

• the currency in which funds from financing activities are generated; and 

• the currency in which receipts from operating activities are usually retained. 

Each entity in the Group determines its own functional currency being the currency that 

mainly influences each entity’s revenues and costs and expenses. The functional currency of 

the Parent Company is the Philippine peso, while those of the Parent Company’s subsidiaries 

are disclosed in Note 1. 

b. Fair value of financial instruments 

The fair values of financial instruments that are not quoted in active markets are determined 

using valuation techniques. The fair values of financial assets and financial liabilities of the 

Group are disclosed in Note 4. 

c. Operating leases 

Group as lessee 

The Group has entered into commercial property leases as a lessee for its office premises. The 

Group has determined that it has not acquired the significant risks and rewards of ownership 

of the leased properties and so account for the contracts as operating leases. 

Group as lessor 

The Group has entered into commercial property leases as lessor. The Group has determined, 

based on an evaluation of the terms and conditions of the arrangements, that it retains all the 

significant risks and rewards of ownership of these properties and accounts for the contracts as 

operating leases. 

*SGVMC116502*

- 23 - 

d. Discontinued Operations 

Management has assessed that the Italy operations disposed by IRCGmbH in 2011 constitutes 

a disposal group as its business operations and cash flows can be clearly distinguished 

operationally (see Note 28). 

e. Contingencies 

The Group is currently involved in various proceedings. The estimate of the probable costs 

for the resolution of these claims has been developed in consultation with outside counsel 

handling the defense in these matters and is based upon an analysis of potential results. The 

Group currently does not believe these proceedings will have a material effect on the Group’s 

financial position. It is possible, however, that future results of operations could be materially 

affected by changes in the estimates or in the effectiveness of the strategies relating to these 

proceedings (see Note 29). 

f. Determination of whether the Group is acting as a principal or an agent 

The Group assesses its revenue arrangements against the following criteria to determine 

whether it is acting as a principal or an agent: 

• whether the Group has primary responsibility for providing the goods and services; 

• whether the Group has inventory risk; 

• whether the Group has discretion in establishing prices; and 

• whether the Group bears the credit risk. 

If the Group has determined it is acting as a principal, revenue is recognized on a gross basis 

with the amount remitted to the other party being accounted for as part of costs and expenses. 

If the Group has determined it is acting as an agent, only the net amount retained is recognized 

as revenue. 

The Group assessed its revenue arrangements and concluded that it is acting as principal in 

some arrangements and as an agent in other arrangements. 

g. Going concern 

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

going concern and is satisfied that the Group 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 Group’s ability to continue as a going concern. Therefore, 

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

Estimates 

a. Credit losses on receivables 

The Group reviews its receivables at each balance sheet date to assess whether an allowance 

for credit losses should be recorded in the consolidated balance sheet. In particular, judgment 

by management is required in the estimation of the amount and timing of future cash flows 

when determining the level of allowance required. Such estimates are based on assumptions 

about a number of factors such as the length of the Group’s relationship with counterparties 

(e.g., agents and couriers), current credit status, average age of accounts, collection and 

historical loss experience. Actual results may differ, resulting in future changes to the 

allowance. 

*SGVMC116502*

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As of December 31, 2011, accounts receivable and other receivables are carried in the 

consolidated balance sheet at P=0.93 billion and P=0.11 billion, respectively (see Notes 8 and 9). 

As of December 31, 2010, accounts receivable and other receivables are carried in the 

consolidated balance sheet at P=1.06 billion and P=0.08 billion, respectively. The Group has 

assessed that there is no need to recognize impairment losses on its receivables as of 

December 31, 2011 and 2010. 

b. Impairment of nonfinancial assets 

(i) Investments in associates 

The Group assesses impairment on its investments in associates whenever events or 

changes in circumstances indicate that the carrying amount of the assets may not be 

recoverable. Among others, the factors that the Group considers important, which could 

trigger an impairment review on its investments in associates, include the following: 

• deteriorating or poor financial condition; 

• recurring net losses; and 

• significant changes with an adverse effect on the associate have taken place during the 

period, or will take place in the near future, in the technological, market, economic, or 

legal environment in which the associate operates. 

(ii) Goodwill 

The Group determines whether goodwill is impaired at least on an annual basis. This 

requires an estimation of the recoverable amount, which is the higher of the net selling 

price or value in use of the CGU to which the goodwill is allocated. 

The Group’s impairment test for goodwill is based on value in use calculations that use a 

discounted cash flow model. The cash flows are derived from the budget for the next five 

years and do not include restructuring activities that the Group is not yet committed to or 

significant future investments that will enhance the asset base of the CGU being tested. 

The recoverable amount is most sensitive to the discount rate used for the discounted cash 

flow model as well as the expected future cash-inflows and the growth rate used for 

extrapolation purposes. 

(iii) Property and equipment and software costs 

The Group assesses impairment on property and equipment and software costs whenever 

events or changes in circumstances indicate that the carrying amount of the asset may not 

be recoverable. The factors that the Group considers important, which could trigger an 

impairment review, include the following: 

• significant underperformance relative to expected historical or projected future 

operating results; 

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

overall business; and 

• significant negative industry or economic trends. 

The Group recognizes an impairment loss whenever the carrying amount of the asset 

exceeds its recoverable amount. The recoverable amount is determined based on the 

asset’s value in use computation, which considers the present value of estimated future 

cash flows expected to be generated from the continued use of the asset. 

*SGVMC116502*

- 25 - 

As of December 31, 2011 and 2010, no impairment losses were recognized on the Group’s 

nonfinancial assets, including goodwill. The carrying values of the Group’s nonfinancial 

assets follow: 


Investments in associates (Note 11) P=23,064,091 P=20,932,236 

Property and equipment - net (Note 12) 19,207,458 27,013,308 

Goodwill (Note 13) 92,655,340 93,092,118 

Software costs - net (Note 14) 1,450,944 2,081,746 

c. Estimated useful lives of property and equipment and software costs 

The Group reviews the estimated useful lives of property and equipment and software costs 

annually based on the expected asset utilization after considering the expected future 

technological developments and market behavior. Significant changes in these estimates 

resulting from changes in the factors aforementioned could possibly affect the future results of 

operations. Any decrease in the estimated useful life of the property and equipment and 

software costs would decrease their respective balances and increase the recorded depreciation 

and amortization (see Note 2). 

As of December 31, 2011 and 2010, the carrying values of Property and equipment and 

Software costs follow: 


Property and equipment (Note 12) P=19,207,458 P=27,013,308 

Software costs (Note 14) 1,450,944 2,081,746 

In 2011, 2010 and 2009, the Group recognized depreciation and amortization in the 

consolidated statements of income amounting to P=13.27 million, P=14.07 million and 

P=14.22 million, respectively. 

d. Recognition of deferred tax assets 

The Group reviews the carrying amounts of deferred tax assets at each balance sheet date and 

reduces it to the extent that it is no longer probable that sufficient taxable income will be 

available to allow all or part of the deferred tax assets to be utilized. Significant judgment is 

required to determine the amount of deferred tax assets that can be recognized, based upon the 

likely timing and level of future taxable income together with future tax planning strategies. 

As of December 31, 2011 and 2010, the Group’s recognized deferred tax assets amounted to 

P=4.98 million and P=4.23 million, respectively. As of December 31, 2011 and 2010, the 

Group’s recognized deferred tax liabilities amounted to P=31,969 and P=29,765, respectively. 

As of December 31, 2011 and 2010, the Parent Company did not recognize net deferred tax 

assets on existing deductible temporary differences amounting to P=2.80 million and 

P=2.85 million, respectively. Management believes that it is not highly probable that these 

temporary differences will be realized in the future (see Note 25). 

e. Present value of net retirement obligation 

The cost of defined benefit retirement plan and other post employment benefits are determined 

using actuarial valuations. The actuarial valuation involves making assumptions about 

discount rates, expected rates of return on assets, future salary increases, mortality rates and 

future retirement increases. Due to the long-term nature of these benefits, such estimates are 

subject to significant uncertainty. 

*SGVMC116502*

- 26 - 

The assumed discount rates were determined using the market yields on Philippine 

government bonds with terms consistent with the expected employee benefit payout as of the 

consolidated balance sheet date. Refer to Note 18 for the details of assumptions used in the 

calculation. As of December 31, 2011 and 2010, the Group recognized retirement asset of 

P=0.37 million and retirement liability of P=0.78 million, respectively. In 2011, 2010 and 2009, 

the Group recognized retirement expense amounting to P=5.75 million, P=2.38 million and 

P=3.02 million, respectively (see Note 18). 

f. Share-based payment transactions 

The Group determined the cost of its equity-settled share based program at grant date using 

the price earnings multiple model taking into account the terms and conditions upon which the 

shares were granted. At yearend, the Group estimates the number of equity instruments that 

will ultimately vest. The Group recognized cost of equity-settled share based payments 

amounting to P=1.53 million in 2009 (see Note 19). The vesting period of the stock purchase 

program ended on September 19, 2009. 

4. Fair Value Measurement 

The following tables summarize the carrying amounts and fair values of the Group’s financial 

assets and financial liabilities: 


Carrying Value Fair Value Carrying Value Fair Value 

Financial Assets 


Debt securities P=112,624,807 P=112,624,807 P=102,905,294 P=102,905,294 

Equity securities 

Loans and receivables: 

Cash and cash equivalents 

12,601,457 12,601,457 – – 

Cash on hand 47,998,476 47,998,476 52,322,332 52,322,332 

Cash in banks 806,000,555 806,000,555 821,315,584 821,315,584 

Short-term deposits 

Accounts receivable 

37,236,592 37,236,592 10,180,031 10,180,031 

Agents 930,022,937 930,022,937 1,025,016,072 1,025,016,072 

Couriers 

Other receivables 

3,523,052 3,523,052 34,283,201 34,283,201 

Nontrade receivable 72,432,683 72,432,683 – – 

Related parties 25,020,726 25,020,726 26,992,977 26,992,977 

Officers and employees 9,514,306 9,514,306 9,686,457 9,686,457 

Interest receivable 3,624,850 3,624,850 3,512,291 3,512,291 

Noncontrolling shareholders – – 39,981,243 39,981,243 

Others 

Other noncurrent assets: 

3,838,695 3,838,695 3,267,906 3,267,906 

Refundable deposits 17,291,585 17,018,242 14,099,442 12,755,091 

Total 

Other Financial Liabilities 

Beneficiaries and other payables: 

P=2,081,730,721 P=2,081,457,378 P=2,143,562,830 P=2,142,218,479 

Beneficiaries P=155,140,304 P=155,140,304 P=144,960,550 P=144,960,550 

Agents, couriers and trading clients 65,550,071 65,550,071 44,773,236 44,773,236 

Accrued expenses 14,801,411 14,801,411 2,701,805 2,701,805 

Payable to suppliers 1,391,836 1,391,836 2,958,634 2,958,634 

Advances from related parties – – 1,431,156 1,431,156 

Others – – 5,165 5,165 

Interest-bearing loans 666,000,000 666,000,000 877,000,000 877,000,000 

Total P=902,883,622 P=902,883,622 P=1,073,830,546 P=1,073,830,546 

*SGVMC116502*

- 27 - 

The following methods and assumptions were used to estimate the fair value of the financial 

instruments: 

Cash and cash equivalents, Account receivables, Other receivables, Beneficiaries and other 

payables and Interest-bearing loans - carrying amounts approximate fair values due to the 

relatively short-term maturities of these instruments. 

Financial assets at FVPL - fair values are based on quoted market prices. 

Refundable deposits - fair values are based on the present value of future cash flows discounted 

using prevailing interest rates ranging from 2.71% to 8.00% and 4.05% to 10.19% as at 

December 31, 2011 and 2010, respectively. 

Fair Value Hierarchy 

The Group uses the following hierarchy for determining and disclosing the fair value of financial 

instruments by valuation technique: 

Level 1: quoted prices in active markets for identical assets or liabilities; 

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or 

liability, either directly (as prices) or indirectly (derived from prices); and 

Level 3: inputs that are not based on observable market data or unobservable inputs. 

As of December 31, 2011 and 2010, the financial instruments carried at fair value only pertains to 

the Group’s financial assets at FVPL, which consist of investments in debt and equity securities 

(see Note 7). The fair values of these debt and equity securities are based on quoted prices 

(Level 1). There were no transfers between Level 1 and Level 2 fair value measurements, and no 

transfers into and out of Level 3 fair value measurement in 2011 and 2010. 

5. Financial Risk Management Objectives and Policies 

The Group’s principal financial instruments mainly comprise of short-term loans from banks. The 

main purpose of these financial instruments is to raise funds for the Group’s fulfillment or delivery 

of remittance transactions to beneficiaries. The Group also has various other financial assets and 

liabilities such as cash and cash equivalents, accounts receivables, and accounts payable to 

beneficiaries, which arise directly from its remittance operations. 

The main risks arising from the Group’s financial instruments are credit risk, foreign currency 

risk, cash flow interest rate risk, fair value interest rate risk and liquidity risk. The BOD reviews 

and approves policies for managing each of these risks and these are summarized below: 

Credit Risk 

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to perform its 

obligations during the life of the transaction. This includes risk of non-payment by borrowers or 

issuers, failed settlement of transactions and default on contracts. 

The nature of its business exposes the Group to potential risk from difficulties in recovering 

transaction money from foreign partners. Receivables from agents arise as a result of its 

remittance operations in various regions of the globe. In order to address this, the Group has 

maintained the following credit policies: (a) implement a contract that incorporates a bond and 

advance payment cover such that the full amount of the transaction will be credited to the Group 

*SGVMC116502*

- 28 - 

prior to their delivery to the beneficiaries, which applies generally to all new agents of the Group 

and in certain cases to old agents; (b) all foreign offices and agents must settle their accounts 

within the agreed credit terms, otherwise, the fulfillment or delivery of their remittance 

transactions will be put on hold; (c) evaluation of individual potential partners and preferred 

associates’ creditworthiness, as well as a close look into the other pertinent aspects of their 

partners’ businesses which assures the Group of the financial soundness of their partner firms; and 

(d) receivable balances are monitored daily by the regional managers with the result that the 

Group’s exposure to bad debts is not significant. 

Receivables from agents and couriers are highly collectible and have a turnover ranging from 1 to 

5 days and 30 to 60 days, respectively. Other receivables, which include advances to related 

parties, are also highly collectible and are due in less than one year. 

The table below shows the maximum credit exposure of the Group per account classification as of 

December 31, 2011 and 2010 (see Notes 6, 7, 8, 9 and 14): 


Financial assets at FVPL P=125,226,264 P=102,905,294 


Cash and cash equivalents* 843,237,147 831,495,615 

Accounts receivable 933,545,989 1,059,299,273 


Nontrade receivable 72,432,683 − 

Related parties 25,020,726 26,992,977 

Officers and employees 9,514,306 9,686,457 

Interest receivable 3,624,850 3,512,291 

Noncontrolling shareholders – 39,981,243 

Others 3,838,695 3,267,906 

Other noncurrent assets 

Refundable deposits 17,291,585 14,099,442 

P=2,033,732,245 P=2,091,240,498 

* excludes cash on hand 

Maximum exposure for financial instruments recorded at fair value as shown above represent the 

risk exposure as of respective balance sheet dates but not the maximum risk exposure that could 

arise in the future as a result of changes in value. 

The table below shows the maximum credit exposure of the Group per geographical classification 

as of December 31, 2011 and 2010: 


Asia Pacific P=1,742,418,296 P=1,869,788,619 

Middle East 108,885,265 106,023,556 

North America 74,982,548 58,180,050 

Europe 107,446,136 57,248,273 

Total P=2,033,732,245 P=2,091,240,498 

The Group classifies its neither past due nor impaired receivables as high grade. High grade 

financial assets includes instruments with credit ratings of excellent, strong, good, or satisfactory, 

wherein the borrower has a low probability of default and could withstand the normal business 

cycle. Financial assets at FVPL are also assessed as high grade since these are issued by reputable 

companies. 

*SGVMC116502*

- 29 - 

As at December 31, 2011, the Group has past due but not impaired receivables from agents 

amounting to P=8.77 million. These receivables have been outstanding for more than six months 

but less than one year. No impairment was recognized relative to these receivables. There are no 

past due but not impaired receivables as of December 31, 2010. 

Foreign Currency Risk 

Foreign currency risk is the risk to earnings or capital arising from changes in foreign exchange 

rates. It is the Group’s policy that all daily foreign currencies, which arise as a result of its 

remittance transactions, must be traded daily with bank partners only at prevailing foreign 

exchange rates in the market. The daily closing foreign exchange rates shall be the guiding rate in 

providing wholesale rates and retail rates to foreign offices and agents, respectively. The trading 

proceeds will be used to pay out bank loans and other obligations of the Group. 

The tables below summarize the Group’s exposure to foreign exchange risk. Included in the tables 

are the Group’s foreign currency-denominated monetary assets and liabilities as of 

December 31, 2011 and 2010, and their PHP equivalent. 


Cash and Cash 

PHP 

Currency 

Equivalents Receivables Payables Total Equivalent 

CAD 1,774,317 2,993,761 (52,132) 4,715,946 P=201,888,510 

EUR 1,079,751 370,790 (58,203) 1,392,338 78,985,839 

HKD 12,632,975 10,000 (106,006) 12,536,969 70,680,963 

SGD 440,811 1,628,629 – 2,069,440 69,903,060 

AUD 792,392 765,809 (45,767) 1,512,434 66,901,848 

USD 1,263,619 246,093 – 1,509,712 66,185,751 

GBP 166,587 851,560 (23,301) 994,846 67,396,873 

NTD – 20,248,641 – 20,248,641 29,205,344 

NZD 128,013 268,978 (5,630) 391,361 13,192,205 

QAR 275 – – 275 3,311 

Net exposure P=664,343,704 


Cash and Cash 

PHP 

Currency 

Equivalents Receivables Payables Total Equivalent 

CAD 1,109,576 2,765,810 (121,524) 3,753,862 P=164,519,939 

EUR 1,303,292 360,688 (96,888) 1,567,092 90,850,617 

HKD 5,410,983 14,370,305 (154,859) 19,626,429 110,564,310 

SGD 89,587 1,254,112 – 1,343,699 45,565,156 

AUD 470,898 718,244 (14,991) 1,174,151 52,360,146 

USD 1,026,855 901,651 – 1,928,506 84,545,703 

GBP 153,415 570 (25,738) 128,247 8,715,202 

NTD – 23,731,378 – 23,731,378 35,581,120 

NZD 128,277 105,825 (5,412) 228,690 7,659,688 

QAR 275 – – 275 3,312 

Net exposure P=600,365,193 

*SGVMC116502*

- 30 - 

The following tables set forth for the year indicated the impact of reasonably possible changes in 

the rates of other currencies on pretax income. 


Change in 

Change in 

nominal 

nominal 

foreign currency Effect on foreign currency Effect on 

Currency 

exchange rate pretax income exchange rate pretax income 

CAD +2.81 P= 10,959,401 -1.60 (P= 6,238,760) 

EUR +7.36 9,585,817 -0.25 (324,205) 

SGD +1.95 4,038,058 -0.66 (1,363,182) 

AUD +2.95 3,715,845 -2.94 (3,714,735) 

GBP +4.40 3,573,796 -1.06 (856,884) 

NTD +0.10 1,985,663 -0.12 (2,434,616) 

USD +0.91 1,373,837 -1.94 (2,928,840)) 

NZD +3.50 1,099,962 -2.44 (766,071) 

HKD +0.11 169,062 -0.26 (399,917) 

QAR +0.24 66 -0.53 (147) 


Change in 

Change in 

nominal 

nominal 

foreign currency Effect on foreign currency Effect on 

Currency 


CAD +1.75 P=6,041,607 -2.09 (P=7,215,405) 

EUR +8.87 7,430,736 -3.04 (2,546,724) 

SGD +0.32 429,984 -1.87 (2,512,717) 

AUD +0.13 125,764 -7.05 (6,820,290) 

GBP +8.01 118,164 -3.57 (52,665) 

NTD +0.01 237,314 -0.12 (2,847,765) 

USD +3.55 6,846,196 -1.61 (3,104,895) 

NZD +1.03 226,486 -3.09 (679,457) 

HKD +0.41 637,042 -0.08 (124,301) 

QAR +1.73 476 -4.08 (1,122) 

Translation Risk 

The Group’s consolidated statement of financial position is exposed to foreign exchange 

fluctuations as these affect the translation of subsidiaries’ net assets and income and expenses 

denominated in foreign currencies. The following tables set forth for the year indicated the impact 

of reasonably possible changes in the rates of other currencies on equity. 

Change in nominal 

foreign currency 




Effect on 

Effect on 

Currency 

exchange rate 

equity exchange rate 

equity 

HKD +0.11 P=5,233,309 -0.26 (P=12,369,640) 

CAD +2.81 2,386,352 -1.60 (1,358,777) 

EUR +7.36 1,578,924 -0.25 (53,632) 

NZD +3.50 (955,612) -2.44 666,198 

AUD +2.95 600,471 -2.94 (598,435) 

GBP +4.40 (12,964) -1.06 3,123 

*SGVMC116502*

- 31 - 





Effect on foreign currency 

Effect on 

Currency 

exchange rate 

equity exchange rate 

equity 

HKD +0.41 P=14,638,271 -0.08 (P=2,856,248) 

CAD +1.75 855,520 -2.09 (1,021,735) 

EUR +8.87 (299,049) -3.04 102,493 

NZD +1.03 (189,295) -3.09 567,885 

AUD +0.13 25,632 -7.05 (738,995) 

GBP +8.01 355,672 -3.57 (158,520) 

Cash Flow Interest Rate Risk 

Interest rate risk arises from the possibility that changes in interest rates will affect future cash 

flows of financial instruments. 

As of December 31, 2011 and 2010, the Group’s exposure to cash flow interest rate risk is 

minimal. The Group’s policy is to manage its interest cost by entering only into fixed rate shortterm 

loans from banks. 

Fair Value Interest Rate Risk 

Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due 

to changes in market interest rates. 

The Group accounts for its debt investments at fair value. Thus, changes in the benchmark interest 

rate will cause changes in the fair value of quoted debt instruments. 

The following table demonstrates the sensitivity to a reasonably possible change in interest rates, 

with all other variables held constant, of the Group’s profit before tax as of December 31, 2011 

and 2010. There is no impact on the Group’s equity other than those already affecting the profit or 

loss. 


Increase in Sensitivity of Increase in Sensitivity of 

basis points trading gains basis points trading gains 

USD Interest Rate +50bps (2,016,773) +50bps (1,495,140) 

USD Interest Rate -50bps 2,099,428 -50bps 1,226,880 

Equity Price Risk 

Equity price risk is the risk to earnings or capital arising from changes in stock exchange indices 

relating to its quoted equity securities. The Group’s exposure to equity price risk relates primarily 

to its investments in equity securities. 

The Group’s policy is to maintain the risk to an acceptable level. Movement of share price is 

monitored regularly to determine impact on its consolidated balance sheet. 

Based on the historical movement of the stock exchange index, management’s assessment of 

reasonable possible change was determined to be an increase (decrease) of 5.00% in 2011, 

resulting to a possible effect of increase (decrease) of P=0.63 million in the 2011consolidated 

statement of income. 

Liquidity Risk 

Liquidity or funding risk is the risk that an entity will encounter difficulty in raising funds to meet 

commitments associated with financial instruments. 

*SGVMC116502*

- 32 - 

The Group’s objective is to maintain a balance between continuity of funding and flexibility 

through the use of short-term debts. In addition, the Group maintains credit facilities with local 

banks. As of December 31, 2011 and 2010, the Parent Company has unused credit facilities 

amounting to P=1.48 billion and P=1.02 billion, respectively (see Note 16). 

Financial assets 

Maturity profile of financial assets held for liquidity purposes is shown below. Analysis of debt 

securities at FVPL into maturity groupings is based on the expected date on which these assets 

will be realized. For other assets, the analysis is based on the remaining period from the end of the 

reporting period to the contractual maturity date, or if earlier, the expected date the assets will be 

realized. 

Financial liabilities 

The maturity grouping is based on the remaining period from the end of the reporting period to the 

contractual maturity date. When a counterparty has a choice of when the amount is paid, the 

liability is allocated to the earliest period in which the Group can be required to pay. 

The tables below summarize the maturity profile of the Group’s financial instruments based on 

undiscounted contractual payments. 


Less than 5 days 5 to 30 days 30 to 60 days 

Over 60 days 

but less than 

one year Total 



Financial assets at fair value through 

P=853,999,031 P=37,236,592 P=– P=– P=891,235,623 

profit or loss – – 125,226,264 

– 125,226,264 

Accounts receivable 921,249,158 – 3,523,052 8,773,779 933,545,989 

P=1,775,248,189 P=37,236,592 P=128,749,316 P=8,773,779 P=1,950,007,876 



Beneficiaries P=155,140,304 P=– P=– P=– P=155,140,304 

Agents, couriers and trading clients 65,550,071 – – – 65,550,071 

Accrued expenses – – 14,801,411 – 14,801,411 

Advances from related parties – – – – – 

Payable to suppliers – – 1,391,836 – 1,391,836 

Others – – − – − 

Interest-bearing loans 95,050,139 571,866,010 – – 666,916,149 

P=315,740,514 P=571,866,010 P=16,193,247 P=– P=903,799,771 



Over 60 days 

but less than 




Financial assets at fair value through 

P=873,637,916 P=10,180,031 P=– P=– P=883,817,947 

profit or loss – – 102,905,294 

– 102,905,294 

Accounts receivable 1,025,016,072 – 34,283,201 – 1,059,299,273 

P=1,898,653,988 P=10,180,031 P=137,188,495 P=– P=2,046,022,514 



Beneficiaries P=144,960,550 P=– P=– P=– P=144,960,550 

Agents, couriers and trading clients 44,773,236 – – – 44,773,236 

Payable to suppliers – – 2,958,634 – 2,958,634 

Accrued expenses – – 2,701,805 – 2,701,805 

Advances from related parties – – 1,431,156 – 1,431,156 

Others – – 5,165 – 5,165 

Interest-bearing loans 395,273,055 483,077,528 – – 878,350,583 

P=585,006,841 P=483,077,528 P=7,096,760 P=– P=1,075,181,129 

*SGVMC116502*

6. Cash and Cash Equivalents 

This account consists of: 

- 33 - 


Cash on hand P=47,998,476 P=52,322,332 

Cash in banks (Note 24) 806,000,555 821,315,584 

Short-term deposits 37,236,592 10,180,031 

P=891,235,623 P=883,817,947 

Cash in banks earn interest at the respective bank deposit rates. Short-term deposits are made for 

varying periods of up to three months and earn interest at the respective short-term deposit rates. 

In 2011, 2010 and 2009, interest income amounted to P=3.14 million, P=3.47 million and 


The Group’s cash and cash equivalents denominated in foreign currency, with corresponding 

Philippine peso (PHP) equivalent, are as follows: 

December 31, 2011 December 31, 2010 

Amount PHP equivalent Amount PHP equivalent 

CAD 1,774,317 P=75,958,092 1,109,576 P=48,629,219 

HKD 12,609,757 71,222,227 5,410,983 30,482,448 

EUR 1,079,751 61,253,141 1,303,292 75,557,071 

USD 1,263,619 55,397,074 1,026,855 45,017,323 

AUD 792,392 35,051,104 470,898 20,999,248 

SGD 440,811 14,890,037 89,587 3,037,917 

GBP 166,587 11,285,606 153,415 10,425,529 

NZD 128,013 4,315,137 128,277 4,296,479 

QAR 275 3,311 275 3,312 

P=329,375,729 P=238,448,546 

Cash in banks earn interest rates in 2011, 2010 and 2009 ranging as follows for: 

PHP-Denominated 0.50% to 2.00% 

Foreign Currency-Denominated 0.25% to 0.50% 

7. Financial Assets at Fair Value Through Profit or Loss 



Debt securities P=112,624,807 P=102,905,294 

Equity securities 12,601,457 – 

P=125,226,264 P=102,905,294 

Debt securities are bonds issued by various foreign private corporations and foreign government 

and are listed overseas. As of December 31, 2011 and 2010, the carrying amount includes net 

unrealized gain of P=0.01 million and P=0.57 million, respectively. Interest income earned in 2011, 

2010 and 2009 amounted to P=10.72 million, P=9.04 million and P=7.28 million, respectively. 

*SGVMC116502*

- 34 - 

Equity securities are common shares of various foreign corporations. As of December 31, 2011, 

the carrying amount includes net unrealized loss of P=3.37 million. 

Gains and losses from fair value changes of financial assets at FVPL are included in ‘Net trading 

gains’ in the consolidated statements of income. 

8. Accounts Receivable 

This account consists of receivables from: 


Agents P=930,022,937 P=1,025,016,072 

Couriers 3,523,052 34,283,201 

P=933,545,989 P=1,059,299,273 

Receivables from agents pertain to advances made to fund the remittance transactions to 

beneficiaries. These are settled within 1 to 5 days from transaction date. 

Receivables from couriers pertain to advances made to the courier companies to ease up the doorto-door 

delivery of the remittances to the beneficiaries. These are settled within 30 to 60 days 

from transaction date. 

9. Other Receivables 

Other receivables consist of: 


Nontrade receivable P=72,432,683 P=– 

Related parties (Note 24) 25,020,726 26,992,977 


Interest receivable 3,624,850 3,512,291 


Others 3,838,694 3,267,906 

P=114,431,259 P=83,440,874 

Nontrade receivable pertains to the receivable from the sale of various assets of IRCGmbH related 

to the discontinued operations in Italy (see Note 28). The receivable was subsequently collected in 

March 2012. 

The amounts due from noncontrolling shareholders pertain to the noncontrolling shareholders of 

IRCGmbH and WEPL. In 2011, the Parent Company acquired additional interest in IRCGmbH 

and WEPL and the receivables amounting to P=12.30 million and P=25.01 million, respectively, 

were applied against the acquisition costs (see Note 1). The remaining balance of P=2.67 million, 

was subsequently collected in July 2011. 

Advances to officers and employees are non-interest bearing and are due on demand. 

*SGVMC116502*

10. Other Current Assets 


- 35 - 


Receivable from Bureau of Internal Revenue (BIR) P=13,160,535 P=13,160,535 

Prepaid expenses 9,907,410 14,882,159 

Visa cards inventory 3,371,662 8,054,220 

Advances to suppliers and contractors 1,087,500 50,000 

Refundable taxes 1,208,422 – 

Office supplies 190,328 199,689 

Creditable withholding tax 2,979 − 

P=28,928,836 P=36,346,603 

Receivable from the BIR pertains to the excess payments made by the Parent Company in 2007 

for the Initial Public Offering (IPO) percentage tax. As of December 31, 2011, the case is pending 

resolution with the Court of Tax Appeals. The Parent Company believes that it will be able to 

obtain the refund from the BIR. 

Prepaid expenses include prepayments for interest, rent, association dues and insurance. 

Refundable taxes pertain to the advance income taxes paid by LSML at the beginning of the year 

based on the tax assessment on the projected income. In 2011, LSML operations resulted to a loss 

making the advance tax payments either refundable or applicable to other tax obligations. 

11. Investments in Associates 

The Parent Company’s investments in associates consist of the following: 


Acquisition cost: 

ISPL P=12,600,000 P=12,600,000 

HKHCL 3,573,974 3,573,974 

16,173,974 16,173,974 

Accumulated equity in net earnings: 

Balance at beginning of year 4,758,262 2,850,188 

Equity in net earnings during the year 2,131,855 2,504,455 

Dividends – (596,381) 

Balance at end of year 6,890,117 4,758,262 

P=23,064,091 P=20,932,236 

Acquisition of associates 

HKHCL 

On July 1, 2009, the Parent Company acquired 49.00% ownership interest in HKHCL, for a 

consideration of NTD2.45 million (P=3.57 million). HKHCL is a remittance business based in 

Taiwan. 

*SGVMC116502*

- 36 - 

ISPL 

On June 29, 2007, the Parent Company acquired 49.00% ownership interest in ISPL through the 

execution of a deed of assignment by the previous stockholders (who are also stockholders of the 

Parent Company) of the entity for a consideration of P=12.60 million. ISPL is a remittance 

business based in Singapore. 

The following tables present the summarized financial information of the Parent Company’s 

associates as of and for the years ended December 31, 2011 and 2010: 


Balance Sheets Statements of Income 

Total Total 

Gross 

Assets Liabilities Revenue 

(In thousands) 

Income Net Income 

HKHCL P=26,875 P=23,906 P=19,340 P=13,151 P=1,223 

ISPL 73,254 49,703 55,924 31,894 3,127 

P=100,129 P=73,609 P=75,264 P=45,045 P=4,350 



Total 

Gross 

Assets Total Liabilities Revenue 


Income Net Income 

HKHCL P=24,398 P=22,561 P=21,010 P=14,287 P=359 

ISPL 61,209 40,638 56,130 33,198 4,754 

P=85,607 P=63,199 P=77,140 P=47,485 P=5,113 



Total 

Gross Net Income 

Assets Total Liabilities Revenue 


Income (Loss) 

HKHCL P=74,159 P=42,914 P=38,046 P=37,708 P=13,027 

ISPL 31,970 30,572 21,096 14,295 (966) 

P=106,129 P=73,486 P=59,142 P=52,003 P=12,061 

12. Property and Equipment 

The composition of and movements in this account follow: 

Office and 

Communication 

Equipment 

Transportation 

and Deliver 

Equipment 


Furniture 

and Fixtures 

Leasehold 

Improvements Total 

Cost 

Balance at beginning of year P=43,553,651 P=7,002,071 P=10,147,352 P=30,636,325 P=91,339,399 

Additions 5,425,325 35,315 473,849 1,175,690 7,110,179 

Disposals (2,711,355) – (1,518,214) (1,984,214) (6,213,783) 

Exchange adjustments 194,442 1,073 (23,832) (132,178) 39,505 

Balance at end of year 46,462,063 7,038,459 9,079,155 29,695,623 92,275,300 

Accumulated Depreciation and 

Amortization 

Balance at beginning of year 33,075,135 3,046,690 6,497,396 21,706,870 64,326,091 

Depreciation and amortization 5,889,913 1,329,460 962,326 3,079,596 11,261,295 

Disposals (738,675) – (776,847) (628,335) (2,143,857) 

Exchange adjustments (131,317) 74 (16,230) (228,214) (375,687) 

Balance at the end of the year 38,095,056 4,376,224 6,666,645 23,929,917 73,067,842 

Net Book Value at End of Year 8,367,007 2,662,235 2,412,510 5,765,706 19,207,458 

*SGVMC116502*

Office and 

Communication 

Equipment 

- 37 - 


and Delivery 

Equipment 


Furniture 

and Fixtures 

Leasehold 


Cost 


Additions 6,135,953 3,116,461 1,074,464 3,712,282 14,039,160 

Disposals (195,500) (2,202,818) (91,412) – (2,489,730) 

Exchange adjustments (923,547) 3,920 (290,382) (162,038) (1,372,047) 



Amortization 


Depreciation and amortization 5,770,034 1,330,203 1,255,968 4,188,639 12,544,844 

Disposals (88,344) (708,790) (25,900) – (823,034) 

Exchange adjustments (539,029) 2,679 (124,394) (76,859) (737,603) 

Balance at the end of the year 33,075,135 3,046,690 6,497,396 21,706,870 64,326,091 

Net Book Value at End of Year P=10,478,516 P=3,955,381 P=3,649,956 P=8,929,455 P=27,013,308 

As of December 31, 2011 and 2010, the cost of fully depreciated property and equipment still in 

use by the Group amounted to P=22.64 million and P=18.28 million, respectively. 

Details of depreciation and amortization follow: 

Consolidated 


Property and equipment - net P=11,261,295 P=12,544,844 P=12,554,531 

Software costs - net (Note 14) 2,006,374 1,525,720 1,665,896 

P=13,267,669 P=14,070,564 P=14,220,427 

Depreciation and amortization amounting to P=1.76 million and P=0.80 million pertains to the 

discontinued operations in Italy for the years ended December 31, 2011 and 2010, respectively 

(see Note 28). 

13. Goodwill 

Movements in goodwill follow: 


Balance at beginning of year P=93,092,118 P=97,582,106 

Foreign exchange adjustment (436,778) (4,489,988) 

Balance at end of year P=92,655,340 P=93,092,118 

The Group’s goodwill relate to the excess of the acquisition cost over the ownership interest 

acquired by the Parent Company in IGRL, IAPL, IRCL, LSML and WEPL, as follows: 

IGRL and IAPL 

On June 2, 2007, the Parent Company’s BOD approved the acquisition of 100.00% ownership 

interest in both IGRL and IAPL for a consideration of P=71.20 million and P=8.55 million, 

respectively. IGRL and IAPL are based in United Kingdom and Australia, respectively. These 

entities, which are in the remittance business, have the same operations as the Parent Company. 

Accordingly, on June 29, 2007, the Parent Company acquired 100.00% ownership interest in 

*SGVMC116502*

- 38 - 

IGRL and IAPL through the execution of deeds of assignment by the previous stockholders (who 

are also the stockholders of the Parent Company) of both entities. Under the deeds of assignment, 

the existing advances by the Parent Company to certain stockholders were applied as payment for 

the purchase of IGRL and IAPL. 

WEPL 

On June 2, 2007, the Parent Company’s BOD also approved the acquisition of 20.00% ownership 

interest in WEPL for a consideration of P=5.60 million. WEPL was incorporated and is based in 

Australia, and has the same operations as the Parent Company. Accordingly, on June 29, 2007, 

the Parent Company acquired 20.00% ownership interest in WEPL through the execution of a 

deed of assignment by the previous stockholders (who are also stockholders of the Parent 

Company) of the entity. Under the deed of assignment, the existing advances of the Parent 

Company to certain stockholders were applied as payment for the purchase of WEPL. On 

September 4, 2007, an additional 15.00% ownership interest in WEPL was acquired by the Parent 

Company for a consideration of P=3.43 million. 

On March 25, 2011, the Parent Company’s BOD approved the acquisition of another 35.00% 

ownership interest in WEPL for a consideration of AUD0.27 million (P=12.30 million). As 

discussed in Note 1, WEPL is effectively 100.00% owned by the Parent Company through its 

direct interest of 70.00% and indirect interest of 30.00% through IAPL. 

IRCL 

On October 1, 2004, the Parent Company’s BOD approved the acquisition of 65.00% of IRCL for 

a consideration of P=10.34 million. IRCL, which was incorporated on July 16, 2001, is based in 

Canada, and has the same operations as the Parent Company. The fair value of the net assets of 

IRCL at acquisition date is P=8.25 million and the fair value of the 65.00% ownership interest was 

P=5.36 million. The difference of P=4.98 million between the consideration paid and the fair value 

of the interest acquired in IRCL was recognized as goodwill. On July 26, 2006, the additional 

30.00% ownership interest from a noncontrolling stockholder in IRCL was transferred to the 

Parent Company at no additional cost. 


interest from a noncontrolling stockholder for a consideration of P=3.10 million taking its 

ownership in IRCL to 100.00%. Accordingly on June 29, 2007, IRCL’s noncontrolling 

stockholder executed a deed of assignment to transfer the ownership interest to the Parent 

Company. Under the deed of assignment, the existing advances by the Parent Company to a 

certain stockholder was applied as payment for the purchase of IRCL. The fair value of the net 

assets of IRCL at acquisition date was P=11.50 million, and the fair value of the additional interest 

acquired was P=0.57 million. The difference of P=2.53 million between the consideration paid and 

the noncontrolling interest acquired in IRCL was recognized as goodwill. 

LSML 

LSML was incorporated on March 16, 2001, is based in Hong Kong, and has the same operations 

as the Parent Company. On June 2, 2007, the Parent Company’s BOD approved the acquisition of 

49.00% ownership interest in LSML for a consideration of P=24.70 million thereby taking its 

ownership in LSML to 100.00%. Accordingly, on June 29, 2007, the noncontrolling stockholder 

of LSML (who is also a stockholder of the Parent Company) executed a deed of assignment to 

transfer its ownership interest to the Parent Company. Under the deed of assignment, the existing 

advances by the Parent Company to the stockholder were applied as payment for the purchase of 

LSML. The fair value of the net assets of LSML at acquisition date was P=8.23 million and the fair 

*SGVMC116502*

- 39 - 

value of the additional interest acquired was P=4.03 million. The difference of P=20.67 million 

between the consideration paid and the noncontrolling interest acquired in LSML was recognized 

as goodwill. 

Goodwill acquired through business combinations has been allocated to five individual CGUs as 

follows: 


IGRL P=50,833,394 P=50,991,293 

LSML 19,695,652 19,681,102 

IAPL 8,555,256 8,624,783 

IRCL 7,268,177 7,440,857 

WEPL 6,302,861 6,354,083 

P=92,655,340 P=93,092,118 

The recoverable amount of the CGUs have been determined based on value-in-use calculation 

using cash flow projections from financial budgets approved by senior management covering a 

five-year period. The discount rates applied to cash flow projections range from 8.55% to 10.60% 

in 2011and 7.31% to 8.83% in 2010, and cash flows beyond the five year-period were extrapolated 

using a steady growth rate of 1.00% in 2011 and 0.13% to 1.43% in 2010. 

The calculation of the value-in-use of the CGUs are most sensitive to the following assumptions: 

• Growth rate - The forecasted growth rate is based on a very conservative steady growth rate 

that does not exceed the long term average rate for the industry. 

• Pre-tax discount rates - Discount rates reflect management’s estimate of the risks specific to 

each CGU. This is the benchmark used by management to assess operating performance. 

With regard to the assessment of the value-in-use of each CGU, management believes that no 

reasonably possible change in any of the above key assumptions would cause the carrying value 

of the goodwill to materially exceed its recoverable amount. 

14. Software Costs - net and Other Noncurrent Assets 

Movements in software costs follow: 


Cost 


Additions 2,034,070 852,274 

Disposals (941,474) – 

Foreign exchange adjustment (237,921) 106,946 

Balance at end of year 

Accumulated Amortization 

13,239,304 12,384,629 

Balance at beginning of year 10,302,883 8,720,725 

Amortization (Note 12) 2,006,374 1,525,720 

Disposals (459,811) – 

Foreign exchange adjustment (61,086) 56,438 


Net Book Value at end of year P=1,450,944 P=2,081,746 

*SGVMC116502*

Other noncurrent assets consist of: 

- 40 - 


Input VAT P=21,242,725 P=28,493,804 


Deferred input VAT 326,057 350,550 

Others 44,000 44,000 

P=38,904,367 P=42,987,796 

The Parent Company has applied for tax credits on Input VAT with the BIR and is waiting for the 

issuance of Tax Credit Certificates (TCCs). In 2011, the BIR issued two tax credit certificates to 

the Parent Company for its Input VAT filed for years 2005 and 2006 amounting to P=1.71 million 

and P=3.82 million, respectively. Management of the Company believes that it will able to collect 

the rest of the TCCs applicable to its outstanding claims. The carrying amounts are already net of 

claims disallowed by the BIR amounting to P=2.06 million, nil and P=1.34 million in 2011, 2010 and 

2009, respectively (see Note 22). 

Refundable deposits pertain to the security deposits made by the Parent Company and some of its 

subsidiaries in relation to rental lease agreements for the office spaces in the Philippines, Hong 

Kong, United Kingdom, Canada and Italy. 

15. Beneficiaries and Other Payables 



Beneficiaries P=155,140,304 P=144,960,550 

Agents, couriers and trading clients 65,550,310 44,773,236 

Accrued expenses 14,801,171 2,701,805 

Payable to SSS, Philhealth and HDMF 1,636,232 620,661 

Withholding tax payable 1,543,424 2,045,708 

Payable to suppliers 1,391,836 2,958,634 

Output VAT 17,875 − 

Due to related parties (Note 24) – 1,431,156 

Others – 5,165 

P=240,081,152 P=199,496,915 

Payables to beneficiaries, agents, couriers and trading clients are noninterest-bearing and are 

normally settled within 1 to 30 days. 

Accrued expenses include the Group’s accrual for various operating expenses such as vacation and 

sick leave benefits, courier charges, training and development, professional fees and utilities. 

*SGVMC116502*

16. Interest-Bearing Loans 

- 41 - 

This account pertains to the Parent Company’s unsecured, short-term interest-bearing pesodenominated 

bank loans. 

As of December 31, 2011 and 2010, the outstanding loans payable of the Parent Company 

amounted to P=666.00 million and P=877.00 million, respectively. 

In 2011, 2010 and 2009, these loans bear annual interest rates ranging from 5.00% to 7.00%, 

5.50% to 6.00%and 7.00% to 8.00%, respectively. In 2011, 2010 and 2009, the Parent Company 

recognized interest expense of P=38.32 million, P=29.21 million and P=48.68 million, respectively. 

The Parent Company has unused credit facilities with various banks aggregating to P=1.48 billion 

and P=1.02 billion as of December 31, 2011 and 2010, respectively. 

17. Equity 

Capital Stock 

The Parent Company’s capital stock consists of: 


Number of 

Shares Amount 

Number of 

Shares Amount 

Number of 

Shares Amount 

Common Stock 

Authorized - P=1 par value 

per share 1,000,000,000 P=1,000,000,000 1,000,000,000 P=1,000,000,000 1,000,000,000 P=1,000,000,000 

Issued: 

Balance at beginning 

of the year 562,417,000 P=562,417,000 562,417,000 P=562,417,000 562,417,000 P=562,417,000 

Stock dividends 55,308,800 55,308,800 – – – – 

Balance at end of the year 617,725,800 617,725,800 562,417,000 562,417,000 562,417,000 562,417,000 

Treasury stock: 


of the year (9,329,000) (40,115,150) (9,329,000) (40,115,150) (10,006,200) (40,792,350) 

Acquisitions (5,544,000) (12,872,058) – – (130,900) (130,900) 

Reissaunce – – – – 808,100 808,100 

Balance at end of the year (14,873,000) (52,987,208) (9,329,000) (40,115,150) (9,329,000) (40,115,150) 

Issued and outstanding 602,852,800 P=564,738,592 553,088,000 P=522,301,850 553,088,000 P=522,301,850 

On September 13, 2007, the SEC approved the registration of 140,604,000 common shares with 

offer price of P=4.68 and 454,950,000 outstanding shares with par value of P=1.00. There are 17 

registered common stockholders as of December 31, 2011 and 13 registered common stockholders 

as of December 31, 2010 and 2009. Shares lodged with the Philippine Central Depository are 

registered under the name of PCD Nominee Corporation and as such are treated as being held by 

only one shareholder. 

Capital Paid-in Excess of Par Value 

The Parent Company’s capital paid-in excess of par value is composed of excess of proceeds on 

issuance of the Parent Company’s shares amounting to P=429.51 million and excess of acquisition 

costs over the carrying value of the noncontrolling interests acquired in 2011 amounting to 

P=38.28 million (see Note 1). 

*SGVMC116502*

- 42 - 

Dividends 

On March 23, 2009, the BOD of the Parent Company declared cash dividends amounting to 

P=26.01 million or P=0.0471 per share, payable to shareholders-of-record as of April 7, 2009. The 

declaration was subsequently ratified and confirmed by the Parent Company’ shareholders during 

their annual meeting held on July 17, 2009. The payment of dividends was made on May 6, 2009. 


P=26.60 million or P=0.0481 per share, payable to shareholders-of-record as of April 8, 2010. The 

declaration was subsequently ratified and confirmed by the Parent Company’ shareholders during 

their annual meeting held on July 23, 2010. The payment was made on May 5, 2010. 

On June 17, 2011, the BOD of the Parent Company authorized the declaration of stock dividends 

equivalent to 10% of outstanding shares of 553,088,000 in favor of its stockholders-of-record as of 

August 15, 2011. The declaration was subsequently ratified and confirmed by the Parent 

Company’s stockholders during their annual meeting held on July 29, 2011. 

Accumulated net earnings of the subsidiaries amounting to P=200.65 million and P=121.85 million 

as of December 31, 2011 and 2010, respectively, are not available for dividend declaration. This 

accumulated equity in net earnings becomes available for dividend upon receipt of cash dividends 

from the investees by the Parent Company. 

Treasury Stock 

On August 15, 2008, the Parent Company’s BOD approved the buy-back program to acquire up to 

ten million (10,000,000) of its shares, representing approximately 1.87% of the Parent Company’s 

total outstanding common shares, from the market. The Parent Company purchased 9,329,000 

shares (P=40.11 million) in 2008 under the buy-back program. 

In 2009 and 2008, the Parent Company purchased 130,900 shares (P=0.13 million) and 

548,500 shares (P=0.55 million), respectively, under the SSPP. The 808,100 shares (including 

128,700 shares purchased in 2007) purchased under the SSPP, were subsequently transferred in 

September 2009 to the retirement fund of the Parent Company (see Notes 18 and 19). 

On September 16, 2011, the BOD of the Parent Company adopted a resolution authorizing the 

buy-back of up to ten million (10,000,000) of its shares from the market. The Parent Company 

purchased 4,873,000 shares (P=11.35 million) under this buy-back program. 

In 2011, the Parent Company also purchased 671,000 shares (P=1.52 million) under the buy-back 

program approved on August 15, 2008 as discussed above. 

Capital Management 

The Group’s capital is composed of its equity, which amounts to P=1.36 billion and P=1.27 billion as 

of December 31, 2011 and 2010, respectively. 

The Group’s capital management activities seek to ensure that it maintains a healthy capital ratio 

in order to support its businesses and maximize shareholder’s value by optimizing the level and 

mix of its capital resources. Decisions on the allocation of capital resources are being performed as 

part of the strategic planning review. 

The Group manages its capital structure and makes adjustments to it, in light of changes in 

economic conditions. To maintain or adjust the capital structure, the Group may adjust the 

dividend payment to shareholders, return capital to shareholders or issue new shares. No changes 

were made in the objectives, policies or processes during the years ended December 31, 2011 and 


*SGVMC116502*

- 43 - 

The Group’s objective is to ensure that there are no known events that may trigger direct or 

contingent financial obligation that is material to the Company, including default or acceleration 

of an obligation. 

The Group is not subject to externally imposed capital requirements. 

18. Retirement Plan 

The Parent Company has a noncontributory defined benefit retirement plan covering substantially 

all of its regular employees. Under this retirement plan, all qualified employees are entitled to 

cash benefits after satisfying age and service requirements. 

Provisions for pension obligations are established for benefits payable in the form of retirement 

pensions. Benefits are dependent on years of service and the respective employee’s latest monthly 

salary. 

The Parent Company determined its transitional liability for defined benefit retirement plan merely 

as the present value of the obligation since the Parent Company had no plan assets at the date of 

the adoption. Transitional liability is amortized prospectively over five (5) years starting on 

January 1, 2005. 

The latest actuarial valuation report on the retirement plan is dated December 31, 2011. 

The principal actuarial assumptions used in determining the retirement liability of the Parent 

Company as of January 1, 2011 and 2010 follow: 


Discount rate 9.69% 11.25% 

Future salary increases 8.00% 9.00% 

Expected return on plan assets 6.00% 6.00% 

Average remaining working life (in years) 32.1 31.8 

The discount rates used to arrive at the present value of the obligation as of December 31, 2011 

and 2010 are 6.70% and 9.69%, respectively. 

The amounts recognized in the consolidated balance sheets follow: 


Present value of obligation P=22,524,680 P=21,847,360 

Fair value of plan assets 21,816,324 15,196,930 

Deficit 708,356 6,650,430 

Unrecognized actuarial loss (1,076,750) (5,872,169) 

Retirement (asset) liability (P=368,394) P=778,261 

*SGVMC116502*

- 44 - 

The movements in the fair value of plan assets in 2011 and 2010 are as follows: 



Contributions 6,895,233 5,229,490 

Expected return on plan assets 1,118,673 738,073 

Actuarial loss (1,394,512) (2,643,029) 

Benefits paid from plan assets – (548,626) 


The actual return on the plan assets of the Parent Company in 2011 and 2010 amounted to a loss 

of P=0.28 million and P=1.90 million, respectively. 

The Parent Company expects to contribute P=6.53 million to its retirement fund in 2012. 

The movements in the present value of obligation follow: 



Current service cost 4,618,548 2,143,246 

Interest cost 2,117,009 1,134,058 


Actuarial (gain) loss (6,058,237) 9,038,166 


The amounts of retirement expense included in ‘Salaries, wages and employee benefits’ in the 

consolidated statements of income follow: 


Current service cost P=4,618,548 P=2,143,246 P=1,819,273 

Interest cost 2,117,009 1,134,058 999,326 

Expected return on plan assets (1,118,673) (738,073) – 

Actuarial (gain) loss recognized 131,694 (163,104) (53,418) 

Amortization of transitional liability – – 252,228 

P=5,748,578 P=2,376,127 P=3,017,409 

The movements in the retirement (asset) liability recognized in the balance sheets are as follows: 


Balance at beginning of year P=778,261 P=3,631,624 

Retirement expense 5,748,578 2,376,127 

Contributions (6,895,233) (5,229,490) 

Balance at end of year (P=368,394) P=778,261 

Movements in the unrecognized actuarial (gains) losses are as follows: 


Balance at beginning of year P=5,872,169 (P=5,972,130) 

Actuarial loss (gain) during the year (4,663,725) 11,681,195 

Actuarial (loss) gain recognized (131,694) 163,104 


*SGVMC116502*

The major categories of plan assets follow: 

- 45 - 


Private equity securities* P=9,245,139 P=10,249,745 

Deposits in banks 7,613,374 2,047,387 

Government debt securities 4,763,467 2,760,719 

Interest receivable 215,615 162,126 

Trust fee payable (21,271) (23,047) 

P=21,816,324 P=15,196,930 

*This includes P=0.81 million of the Parent Company’s own equity securities bought under the SSPP (see Note 19). 

The amounts of experience adjustments relating to the plan liabilities of the Parent Company 

follow: 

2011 2010 2009 2008 2007 

Present value of obligation 22,524,680 P=21,847,360 P=10,080,516 P=6,574,511 P=7,770,113 

Fair value of plan assets 21,816,324 15,196,930 12,421,022 3,168,050 − 

Deficit (surplus) 708,356 6,650,430 (2,340,506) 3,406,461 7,770,113 

Changes in actuarial assumptions (498,493) 9,932,542 1,070,082 (3,766,312) (9,785,892) 

Experience adjustments on plan 

liabilities (5,559,744) (894,376) (382,676) (206,448) 4,176,250 

Experience adjustments on plan assets (1,394,512) (2,643,029) 4,452,972 – − 

The subsidiaries are not required to establish and accrue retirement obligation. 

19. Special Stock Purchase Program (SSPP) 

On July 20, 2007, the Parent Company’s BOD approved the proposal to set up a SSPP totaling 

15,000,000 shares for the employees of the Parent Company who have been in the service for at 

least one (1) calendar year as of June 30, 2007, as well as its BOD members, resource persons and 

consultants (collectively referred to as “the Participants”). A Notice of Exemption under Section 

10.2 of the Securities Regulations Code had been approved by the SEC on September 13, 2007. 

Notwithstanding the aforesaid confirmation by the SEC of the exempt status of the SSPP shares, 

the SEC nonetheless required the Parent Company to include the SSPP shares among the shares 

of the Parent Company which were registered with the SEC prior to the conduct of its Initial 

Public Offering in October 2007. The registration of the Parent Company shares, together with 

the SSPP shares, was rendered effective on October 5, 2007. 

All 15,000,000 shares were exercised. The shares subject to the SSPP were sold at par value or 

P=1.00 per share. Total shares amounting to P=11.74 million were paid in full, while the difference 

totaling P=3.26 million were paid by way of salary loan. Shares acquired through SSPP are subject 

to a lock-up period of two years from date of issue, which ended on September 19, 2009. 

The sale is further subject to the condition that should the officer or employee resign from the 

Parent Company prior to the expiration of the lock-up period, the shares purchased by such 

resigning employee or officer shall be purchased at cost by the Parent Company as Treasury stock. 

As of December 31, 2009, 24 employees resigned (9 in 2009, 13 in 2008 and 2 in 2007) and their 

shares totaling 808,100 (130,900 in 2009, 548,500 in 2008 and 128,700 in 2007) were bought 

back by the Parent Company at par value. 

*SGVMC116502*

- 46 - 

As approved by the Parent Company’s BOD, the fair value of the shares issued under the SSPP 

was measured at the grant date using the price-earnings multiple model taking into account the 

terms and conditions upon which the shares were granted. The fair value at grant date was 

P=1.33 per share. This transaction also resulted in an increase in equity by P=1.53 million, 

P=2.16 million and P=1.00 million in 2009, 2008 and 2007, respectively. 

On September 19, 2009, which is the end of the lock up period, the 808,100 shares bought back at 

cost was transferred to the Parent Company’s retirement fund upon reimbursement of the 

P=0.81 million paid by the Parent Company for those shares. 

The expense arising from the share-based payment plan is recognized over the two-year lock-up 

period. The expense recognized under ‘Salaries, wages and employee benefits’ in the statements 

of income amounted to P=1.53 million in 2009. 

20. Operating Lease Commitments 

The Parent Company has entered into the following lease agreements for its office spaces: 

(a) On September 30, 2008, a lease agreement with Sta. Elena Divisoria Condo was made for a 

period of 60 months commencing on October 1, 2008 to September 30, 2013 with a 10.00% 

escalation rate effective on the second year up to the fifth year of the lease term. The contract 

was cancelled in May 2009. 

(b) A lease agreement with Wynsum Realty was entered into for a period of 24 months 

commencing on September 1, 2008 to August 31, 2010 with a 5.00% escalation on the 

monthly rental on the second year of the lease term. The contract was renewed for another 

period of 2 years from September 1, 2010 to August 31, 2012 with the same terms. 

(c) On February 7, 2007, a lease agreement with Oakridge Properties (Unit 2503) was made for a 

period of 36 months commencing on February 1, 2007 to January 31, 2010 with a 10.00% 

escalation on the monthly rental payable effective on the 13th and 25th month of the lease 

term. The contract was renewed for another period of 2 years from February 1, 2010 to 

January 31, 2012 with the same terms. 

(d) A lease agreement with Oakridge Properties (Unit 2603) was entered into for a period of 12 

months, which commenced on December 1, 2008 and expired on November 30, 2009. The 

contract was renewed for a period of 2 years commencing on December 1, 2009 to 

November 30, 2011 with a 10.00% escalation on the monthly rental on the 13th month of the 

lease term. The contract was renewed for another period of 2 years from December 1, 2011 to 

November 30, 2013 with the same terms. 

(e) On January 6, 2009, a lease agreement with Oakridge Properties (Unit 2703) was entered into 

for a period of 24 months commencing February 1, 2009 to January 31, 2011 with a 10.00% 

escalation rate on the aggregate monthly rental effective on the 13th month of the lease term. 

The contract was renewed for a period of 2 years from February 1, 2011 to January 31, 2013 

with the same terms. 

*SGVMC116502*

- 47 - 

(f) On July 1, 2011, the Parent Company entered into a sublease agreement with Surewell 

Equities Pte Ltd., one of the stockholders of the Parent Company, for the use of the latter’s 

office space in Singapore for an initial term of two (2) years. 

The subsidiaries have their respective operating lease agreements for their office spaces. The 

lease contracts are for periods ranging from 1 to 10 years and may be renewed under the terms and 

conditions mutually agreed upon by the subsidiaries and the lessors. 

Rent expense of the Group amounted to P=57.43 million, P=50.38 million, and P=39.33 million in 

2011, 2010 and 2009, respectively. P=3.92 million and P=4.02 million of the total rent expense 

pertain to rent expense of the discontinued operations of Italy for the years ended 


Future minimum rentals payable under non-cancelable operating leases are as follows: 


Within one year P=43,590,836 P=51,662,348 

After one year but not more than five years 53,212,917 71,152,989 

P=96,803,753 P=122,815,337 

In 2007, WEPL subleased its office space in Liverpool for a period of 20 months commencing on 

August 2007 to April 2009. 

21. Marketing Expenses 



Marketing and promotions P=27,746,400 P=34,637,750 P=22,120,718 

Advertising and publicity 9,617,140 8,883,266 10,856,700 

P=37,363,540 P=43,521,016 P=32,977,418 

Expenses amounting to P=1.02 million and P=0.93 million pertain to the marketing expenses of the 

discontinued operations of Italy for the years ended December 31, 2011 and 2010, respectively 

(see Note 28). 

22. Other Operating Expenses 



Taxes and licenses P=9,020,616 P=7,910,719 P=4,531,430 

Repairs and maintenance 4,770,543 4,902,356 4,634,302 

Association dues 3,230,078 1,927,949 2,066,643 

Business development 2,974,651 2,679,500 943,210 

Fines and penalty 2,992,353 − − 

Disallowance of input VAT by BIR 2,058,616 – 1,338,804 

Insurance 1,974,703 1,835,663 1,726,711 

Donations and contributions – 1,155,280 1,209,115 

Other charges − − 4,982,042 

Miscellaneous 1,213,551 652,704 1,730,305 

P=28,235,111 P=21,064,171 P=23,162,562 

*SGVMC116502*

- 48 - 

‘Business development’ pertains to various expenses incurred for development of potential foreign 

offices and other related expenses. 

‘Miscellaneous’ includes expenses for recruitment, Christmas party expenses, and Christmas 

giveaways. 

Other charges of the Group in 2009 pertain mainly to goods and services tax (GST) written off. 

23. Realized Foreign Exchange Gains - Net and Other Income 

‘Realized foreign exchange gains - net’ represents currency exchange income (net of losses) 

arising primarily from trading third currencies to Philippine pesos. These third currencies are 

sourced from the remittance transactions. 

‘Other income’ consists of: 


GST refund P=21,668,641 P=– P=– 

Unrealized foreign exchange gain - net 1,205,505 1,769,202 5,172,171 

Rebates 2,881,469 6,728,713 14,608,204 

Others 4,060,301 6,081,539 12,488,020 

P=29,815,916 P=14,579,454 P=32,268,395 

GST refund pertains to refund of GST previously paid by IRCL and WEPL to the government of 

Canada and Australia, respectively. Both entities are exempt from paying GST. 

Interest income pertains to interest earned from deposits, short-term placements with banks and 

financial assets at FVPL. 

Rebates pertain to refund of bank service charges and foreign exchange special rates relating to the 

remittance transactions of WEPL. 

‘Others’ pertains to commission from processing of remittance from one foreign office to another. 

In 2009, this also includes WEPL’s income from sublease of office space (see Note 20). 

24. Related Party Transactions 





*SGVMC116502*

- 49 - 

In the ordinary course of business, the Group transacts with its related parties. Under the Group’s 

existing policies, these transactions are made substantially on the same terms and conditions as 

transactions with other individuals and businesses of comparable risks. The Group engages in 

transactions with related parties consisting primarily of the following: 

(a) Delivery fees earned from clients of associates are as follows: 


HKHCL P=46,127,251 P=33,202,567 P=25,364,567 

ISPL 24,463,777 25,080,948 27,016,303 

P=70,591,028 P=58,283,515 P=52,380,870 

(b) The Parent Company leases office spaces from Oakridge Properties (see Note 20). Rent 

expense amounted to P=9.96 million, P=9.25 million and P=8.17 million in 2011, 2010 and 2009, 

respectively. Oakridge Properties is owned by JTKC, one of the stockholders of the Parent 

Company. 

(c) The Parent Company entered into a sublease agreement with Surewell Equities Pte Ltd., one 

of the stockholders of the Parent Company (see Note 20). Rent expense amounted to 

P=0.90 million in 2011. 

(d) The Parent Company’s retirement fund is maintained with Sterling Bank of Asia (SBA), an 

affiliate due to common stockholders, as trustee (see Note 18). The Parent Company also has 

deposits amounting to P=118.62 million and P=129.71 million with SBA as of 

December 31, 2011 and 2010, respectively. These deposits earned P=0.43 million, 

P=1.12 million and P=1.16 million interest income in 2011, 2010 and 2009, respectively. 

In addition to the related information disclosed elsewhere in the consolidated financial statements, 

the following are the yearend balances in respect of transactions with related parties which were 

carried in terms that prevail in arm’s length transactions during the year: 


Due from related parties (Note 9): 

Associates 

ISPL P=16,034,603 P=16,104,921 

HKHCL 8,986,123 10,888,056 

Due to related parties (Note 15): 

P=25,020,726 P=26,992,977 

Directors P= − P=1,431,156 

Advances to associates pertain to unpaid delivery fees. These are non-interest bearing and are due 

on demand. 

Advances to directors are non-interest bearing and are due on demand. 

As of December 31, 2011 and 2010, no provision for credit losses has been recognized for the 

amounts due from related parties. 

*SGVMC116502*

- 50 - 

In 2010, the Parent Company recognized dividend income amounting P=0.60 million from 

dividends declared by ISPL. In 2009, the Parent Company’s dividend income includes dividends 

declared by ISPL (P=14.40 million), IRCL (P=9.54 million), WEPL (P=3.93 million), IAPL (P=3.30) 

and PSAGL (P=3.07 million). 

The compensation of the key management personnel of the Group in 2011, 2010 and 2009 are as 

follows: 




Share-based payment − – 435,303 

P=28,608,428 P=21,608,972 P=20,388,966 

25. Income Taxes 

The provision for income tax consists of: 


Current: 

RCIT P=36,053,005 P=28,576,367 P=40,862,007 

Final 589,871 643,945 1,534,105 

Deferred (745,224) (921,460) (2,471,568) 

P=35,897,652 P=28,298,852 P=39,924,544 

Parent Company 

Republic Act (RA) No. 9337, An Act Amending National Internal Revenue Code, provides that the 

RCIT rate shall be 35.00% until December 31, 2008. Starting January 1, 2009, the RCIT rate shall 

be 30.00%. It also provides that the interest allowed as a deductible expense is reduced by an 

amount equivalent to 42.00% until December 31, 2008 and 33.00% starting January 1, 2009 of 

interest income subjected to final tax. 

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

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

income tax liability for the next three years. In addition, current tax regulations provide for the 

ceiling on the amount of entertainment, amusement and recreation (EAR) expenses that can be 

claimed as a deduction against taxable income. The actual EAR expenses incurred by the Parent 

Company was P=4.46 million, P=2.84 million and P=2.62 million in 2011, 2010 and 2009, 

respectively. The allowed EAR limit was P=4.90 million, P=2.80 million and P=2.74 million in 2011, 

2010 and 2009, respectively. Under the regulation, EAR expenses allowed as deductible expense 

for taxpayers engaged in the sale of services, including exercise of profession and use of lease 

properties, like the Parent Company, is limited to the actual EAR paid or incurred but not to 

exceed 1.00% of net revenue. 

RA No. 9504, An Act Amending National Internal Revenue Code, provides that starting 

July 1, 2008, the optional standard deduction (OSD) equivalent to 40.00% of gross income may be 

claimed as an alternative deduction in computing for the RCIT. For the 2011 and 2010 RCIT 

computation, the Parent Company elected to claim itemized expense deductions instead of the 

OSD. 

*SGVMC116502*

- 51 - 

The table below shows the income tax rates provided on the assessable profit for the year of each 

subsidiary: 


PSAGL 16.50% 16.50% 

LSML 16.50% 16.50% 

IAPL 30.00% 30.00% 

WEPL 30.00% 30.00% 

INZL 28.00% 30.00% 

IGRL 21.00% 21.00% 

IRCL 34.20% 34.20% 

As of December 31, 2011 and 2010, the deferred tax assets and liability recognized by the Group 

relates to the tax effects of the following: 


Deferred tax assets on: 

Unused tax losses P=4,980,348 P=3,669,877 

Unused tax credits − 443,755 

Accumulated depreciation − 119,288 

Subtotal 

Less deferred tax liability on: 

4,980,348 4,232,920 

Capital allowance 31,969 29,765 

Net deferred tax assets P=4,948,379 P=4,203,155 

The Parent Company did not set up deferred tax assets on the following temporary differences: 


Temporary differences on: 

Accrued interest expense P=1,994,506 P=2,074,213 

Accrued courier charges − 393,793 

Others 808,582 381,961 

P=2,803,088 P=2,849,967 

The management of the Parent Company believes that it is not highly probable that these 

temporary differences will be realized in the future. 

A reconciliation of the statutory income tax rates and the effective income tax rates in 2011, 2010 

and 2009 follows: 


Statutory income tax 30.00% 30.00% 30.00% 

Tax effects of: 

Nondeductible (nontaxable) expenses 

(income) (0.58) (1.62) (3.91) 

Interest income subject to final tax (0.17) (0.34) (0.44) 

Unrecognized deferred tax asset (0.04) (0.71) (1.82) 

Difference in tax jurisdiction (8.33) 2.71 (0.77) 

Effective income tax 20.88% 30.04% 23.06% 

*SGVMC116502*

26. Earnings Per Share 

- 52 - 

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to 

ordinary equity holders of the Parent Company by the weighted average number of ordinary shares 

outstanding during the year. 

The following reflects the income and share data used in the basic earnings per share 

computations: 


a. Net income from continuing operations P=109,633,447 P=96,219,135 P=133,148,358 

b. Income/(loss) from discontinued operations 26,429,749 (30,304,899) − 

c. Net income (a+b) 136,063,196 65,914,236 133,148,358 

d. Net income attributable to ordinary equity 

holders of the Parent Company for basic 

earnings 138,069,380 77,551,227 136,379,766 

e. Weighted average number of shares for 

basic earnings per share 607,014,606 608,396,800 607,823,506 

f. Basic earnings per share (c/e) 0.22 0.11 0.22 

g. Basic earnings per share attributable to 

ordinary equity holders of the Parent 

Company (d/e) 0.23 0.13 0.22 

h. Basic earnings per share from continuing 

operations (a/e) 0.18 0.16 0.22 

i. Basic earnings (loss) per share attributable 

to equity holders of the Parent Company 

from discontinued operations (b/e) 0.04 (0.05) − 

As of December 31, 2011, 2010 and 2009, there are no dilutive potential common shares. 

27. Segment Reporting 

The Group’s operating businesses are organized and managed separately according to 

geographical areas representing strategic business units. These segments are the bases on which 

the Group reports its segment information. Transactions among segments are conducted at market 

rates on an arm’s length basis. The Group only reports a geographical segment analysis and no 

secondary business segment was presented since all operations relate to the remittance business. 

Segment assets are those operating assets that are employed by a segment in its operating activities 

that are either directly attributable to the segment or can be allocated to the segment on a 

reasonable basis. 

Segment liabilities are those operating liabilities that result from the operating activities of a 

segment and that are either directly attributable to the segment or can be allocated to the segment 

on a reasonable basis. 

*SGVMC116502*

- 53 - 

Segment information as of and for the years ended December 31, 2011, 2010 and 2009 follow 

(amounts in thousands): 

Philippines Asia Pacific Europe 


North 

America 

Adjustments 

and eliminations Total 

Financial Performance 

Revenue P=490,087 P=131,329 P=64,288 P= 103,124 (P=969) P=787,859 

Cost of services (175,332) (3,440) (10,384) (10,271) − (199,427) 

Gross income 314,755 127,889 53,904 92,853 (969) 588,432 

Operating expenses (213,536) (67,598) (78,730) (94,336) 6,876 (447,324) 

Other income (expense) (21,949) 14,071 (1,450) 17,901 (4,150) 4,423 

Income before income tax 79,270 74,362 (26,276) 16,418 1,757 145,531 

Provision for income tax (23,764) (10,830) (1,034) (270) − (35,898) 

Net income 55,506 63,532 (27,310) 16,148 1,757 109,633 

Noncontrolling interest − − − − 2,006 2,006 

Net income attributable to equity 

holders of the Parent Company P=55,506 P=63,532 (P=27,310) P=16,148 P=3,763 P=111,639 

Financial Position 

Total assets P=2,161,338 P=356,540 P=125,544 P= 87,150 (P=456,573) P=2,273,999 

Total liabilities P=959,263 P=82,971 P=113,573 P=50,795 (P=293,925) P=912,677 

Other Segment Information 

Capital expenditures P=2,593 P=158 P=1,489 P=2,681 P= − =6,921 P 

Depreciation and amortization P=6,535 P=1,307 P=1,534 P=2,131 P= − =11,507 P 


North Adjustments 

Philippines Asia Pacific Europe America and eliminations Total 


Revenue P=463,249 P=128,963 P= 60,481 P=109,058 P=– P=761,751 

Cost of services (180,569) (2,665) (9,411) (11,532) – (204,177) 

Gross income 282,680 126,298 51,070 97,526 – 557,574 

Operating expenses (204,595) (67,535) (66,600) (97,186) – (435,916) 

Other income (expense) (21,110) 20,957 490 675 1,848 2,860 

Income before income tax 56,975 79,720 (15,040) 1,015 1,848 124,518 

Provision for income tax (16,430) (11,242) (278) (349) – (28,299) 

Net income 40,545 68,478 (15,318) 666 1,848 96,219 

Noncontrolling interest 


– – – – 11,637 11,637 

holders of the Parent Company P=40,545 P=68,478 (P=15,318) P=666 P=13,485 P=107,856 


Total assets P= 2,298,118 P=256,831 P=85,245 P=62,144 (P=346,188) P=2,356,150 

Total liabilities P= 1,138,677 P=53,107 P=84,182 P=40,718 (P=232,437) P=1,084,247 


Capital expenditures P=5,949 P=1,015 P=6,081 P=994 P=– P=14,039 

Depreciation and amortization P=8,059 P=1,800 P= 1,341 P=2,075 P=– P=13,275 

*SGVMC116502*

- 54 - 


North Adjustments 

Philippines Asia Pacific Europe America and eliminations Total 


Revenue P=473,446 P=119,824 P=73,103 P=112,284 P=– P=778,657 

Cost of services (198,769) (2,502) (17,047) (12,619) – (230,937) 

Gross income 274,677 117,322 56,056 99,665 – 547,720 

Operating expenses (179,005) (69,321) (73,965) (90,068) – (412,359) 

Other income (expense) 60,933 53,687 2,167 517 (79,592) 37,712 

Income before income tax 156,605 101,688 (15,742) 10,114 (79,592) 173,073 

Provision for income tax (27,198) (9,060) (278) (3,389) – (39,925) 

Net income 129,407 92,628 (16,020) 6,725 (79,592) 133,148 

Noncontrolling interest 


– – – – 3,231 3,231 

holders of the Parent Company P=129,407 P=92,628 (P=16,020) P=6,725 (P=76,361) P=136,379 


Total assets P=2,404,902 P=248,228 P=73,889 P=81,580 (P=320,488) P=2,488,111 

Total liabilities P=1,160,025 P=103,799 P=21,373 P=60,602 (P=110,115) P=1,235,684 


Capital expenditures P=1,914 P=1,192 P=729 P=5,548 P=– P=9,383 

Depreciation and amortization P=8,615 P=1,755 P=1,574 P=2,276 P=– P=14,220 

The Group has no intersegment revenues and costs of services in 2011 and 2010. 

The Group has no significant customers which contributes 10% or more of the consolidated 

revenues. 

Segment assets as of December 31, 2011 and 2010 do not include investments in subsidiaries 

amounting to P=279.16 million and P=228.98 million, respectively and inter-segment receivables 

amounting to P=291.98 million and P=211.64, respectively, which are eliminated on consolidation. 

Capital expenditures, which pertain to property, plant and equipment acquired, are disclosed 

according to the asset’s physical location. 

The Group’s share in net income of associates amounting to P=2.05 million, P=2.50 million and 

P=6.15 million in 2011, 2010 and 2009, respectively, are included under Asia Pacific. 

28. Discontinued Operations 

In February 2010, IRCGmbH (formerly IERCAG) started its remittance business in Italy. On 

April 28, 2011, IRCGmbH stopped its money remittance operations in Rome and Milan in Italy in 

accordance with Article 75 of the Transitional and Final Provisions of Austrian Payment Services 

Act, which stipulated that credit institutions that have held authorizations pursuant to Article 1 

paragraph 1 no 23 BWG, as amended by the Federal Act Federal Law Gazette No. 35/2003, prior 

to December 25, 2009, have only until April 30, 2011 to carry out their money remittance 

operations. 

In December 2011, IRCGmbH sold assets relating to its operations in Italy to a third party. These 

assets, with an aggregate carrying amount of P=7.29 million, were sold for a consideration of 

P=72.43 million thereby resulting to a gain on sale of P=65.14 million. 

*SGVMC116502*

- 55 - 

The results of IRCGmbH’s operation in Italy follow: 


Delivery fees P=5,289,202 P=7,486,658 

Realized foreign exchange gains - net 1,006,867 673,204 

6,296,069 8,159,862 

Cost of services 596,703 3,749,195 

Gross income 5,699,366 4,410,667 

Other income - net 615,909 38,935 

Operating expenses (45,024,921) (34,754,501) 

Loss from operations (P=38,709,646) (P=30,304,899) 

Gain on sale of assets 65,139,395 − 

Income (Loss) from discontinued operations P=26,429,749 (P=30,304,899) 

The net cash flows incurred by IRCGmbH in its Italy operations are as follows: 


Operating P=27,911,882 (P=29,509,273) 

Financing (27,911,882) 30,152,409 

P= − P=643,136 

29. Contingencies 

The Group has various contingencies arising in the ordinary conduct of business which have 

pending decision with the courts or are being contested, the outcome of which are not presently 

determinable. 

In the opinion of management and its legal counsel, the eventual liability under these lawsuits or 

claims, if any, will not have a material or adverse effect on the Group’s financial position and 

results of operations. The information usually required by PAS 37 is not disclosed on the grounds 

that it can be expected to prejudice the outcome of these lawsuits, claims and assessments. 

30. Approval of the Release of the Financial Statements 

The accompanying consolidated financial statements were approved and authorized for issue by 

the Parent Company’s BOD on March 23, 2012. 

*SGVMC116502*


INDEX TO THE 

CONSOLIDATED FINANCIAL STATEMENTS 

AND SUPPLEMENTARY SCHEDULES 

December 31, 2011 

Schedu le Content Page No. 

Part 1 

I Schedule 

of Retained Earnings Available for Dividend Declaration 

(Part 1 4C, 

Annex 68-C) 

II Schedule of all effective standards and interpretations under PFRS 

(Part 1 4J) 

III Map showing 

relationships between and among parent, subsidiaries, an 

associate, 

and joint venture (Part 1 4H) 

Part 2 

A Financial 

Assets 8 

B Amounts 

Receivable from Directors, Officers, Employees, Related Parties 

and Principal 

Stockholders (Other than Affiliates) 

9 

C Amounts 

Receivable from Related Parties which are eliminated during the 

consolidation of financial statements 10 

D Intangible Assets - Other Assets 11 

E Long-Term 

Debt 12 

F Indebtedness 

to Related Parties (included in the consolidated statement of 

position) 13 

G Guarantees of Securities of Other Issuers 14 

H Capital Stock 15 

1 

2 - 6 

7

- 1 - 

I-REMIT, INC. 

SCHEDULE OF RETAINED EARNINGS 

AVAILABLE FOR DIVIDEND DECLARATION 

DECEMBER 31, 2011 

Schedule I 

Unappropriated retained 

earnings, as adjusted to available for dividend 

distribution, beginning 

P=161,219,561 

Add: Net income earned 

during the year 

Net income during 

the year 55,506,145 

Less: Unrealized foreign 

exchange gains - net (except those attributable 

to cash and cash 

equivalents) 1,205,505 

Subtotal 

54,300,640 

Add: Realized income categorized as unrealized in previous years 6,419,981 

Net income actually earned 

during the year 60,720,621 

Less: Dividend declarations 

during the year 55,308,800 

Treasury shares 

12,872,058 

Subtotal 

(7,460,237) 

Retained earnings available for dividend distribution, ending P=153,759,324

- 2 - 

I-REMIT, INC. 

SCHEDULE OF ALL EFFECTIVE STANDARDS 

AND INTERPRETATIONS UNDER PFRS 


Schedule II 

Page 1 of 5 

PFRSs 

Adopted/Not adopted/ 

Not applicable 

PFRS 1, First-time Adoption of Philippine Financial Reporting Standards Not applicable 

PFRS 2, Share-based Payment Adopted PFRS 3, Business Combinations Adopted 

PFRS 4, Insurance Contracts 


PFRS 5, Non-current Assets Held for Sale and Discontinued Operati ons 

Adopted 

PFRS 6, Exploration for and Evaluation of Mineral Resources Not applicable 

PFRS 7, Financial Instruments: Disclosures Adopted 

PFRS 8, Operating Segments Adopted 

PAS 1, Presentation of Financial Statements Adopted 

PAS 2, Inventories Not applicable 

PAS 7, Statement of Cash Flows Adopted 

PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors Adopted 

PAS 10, Events after the Reporting Period 

Adopted 

PAS 11, Construction Contracts Not applicable 

PAS 12, Income Taxes Adopted PAS 16, Property, Plant and Equipment Adopted 

PAS 17, Leases Adopted 

PAS 18, Revenue Adopted 

PAS 19, Employee Benefits 

PAS 20, Accounting for Government Grants and Disclosure of Government 

Adopted 

Assistance 


PAS 21, The Effects of Changes in Foreign Exchange Rates Adopted 

PAS 23, Borrowing Costs 

Adopted 

PAS 24, Related Party Disclosures Adopted 

PAS 26, Accounting and Reporting by Retirement Benefit Plans Not applicable 

PAS 27, Consolid ated and Separate Financial Statements Adopted 

PAS 28, Investments in Associates 

Adopted 

PAS 29, Financial Reporting in Hyperinflationary Economies Not applicable 

PAS 31, Interests in Joint Ventures Not applicable 

PAS 32, Financial Instruments: Presentation Adopted 

PAS 33, Earnings per Share Adopted

- 3 - 

Schedule II 

Page 2 of 5 

PFRSs 

Adopted/Not adopted/ 


PAS 34, Interim Financial 

Reporting Adopted 

PAS 36, Impairment of Assets Adopted 

PAS 37, Provisions, Contingent Liabilities and Contingent Assets Adopted 

PAS 38, Intangible Assets Adopted 

PAS 39, Financial Instruments: Recognition and Measurement Adopted 

PAS 40, Investment Property Not applicable 

PAS 41, Agriculture 

Philippine Interpretation 

IFRIC–1, Changes in Existing Decommissioning, 


Restoration and Similar Liabilities Philippine Interpretation 

IFRIC–2, Members' Shares in Co-operative 

Not 

Applicable 

Entities and Similar Instruments 

Philippine Interpretation IFRIC–4, Determining whether an Arrangement 

Not Applicable 

contains a Lease Philippine Interpretation 

IFRIC–5, Rights to Interests arising from 


Decommissioning, Restoration and 

Environmental Rehabilitation Funds 

Philippine Interpretation IFRIC–6, Liabilities arising from Participating in 


a Specific Market - Waste Electrical and Electronic Equipment 


IFRIC–7, Applying the Restatement Approach 


under PAS 29, Financial 

Reporting in Hyperinflationary Economies Not Applicable 

Philippine Interpretation IFRIC–9, Reassessment of Embedded Derivatives 

Philippine Interpretation IFRIC–10, Interim Financial Reporting and 

Not Adopted 

Impairment Adopted 

Philippine Interpretation IFRIC–12, Service Concession Arrangements Not Applicable 

Philippine Interpretation IFRIC–13, Customer Loyalty Programmes 


IFRIC–14, PAS 19 - The Limit on a Defined 


Benef it Asse t, Minimum Funding Requirements and their Interaction 

Philippine Interpretation IFRIC–16, Hedges of a Net Investment in a 

Adopted 

Forei gn Oper ation 

Philippine Interpretation IFRIC–17, Distributions of Non-cash Assets to 


Owners Not applicable 

Philippine Interpretation IFRIC–18, Transfers of Assets from Customers 

Philippine Interpretation IFRIC–19, Extinguishing Financia l Liabilities 


with Equity Instruments Not Applicable Philippine Interpretation SIC–7, Introduction of the Euro Philippine Interpretation SIC–10, Government Assistance - No 

Specific 

Not applicable Relation t o Operating Activities Not applicable Philippine Interpretation SIC–12, Consolida tion - Special Purpose Entities Philippine Interpretation SIC–13, Jointly Controlled Entities - Non- 

Not Applicable Moneta ry Contributions by Venturers Not Applicable 

Philippine Interpretation SIC–15, Operating Leases – Incentives 


SIC–21, Income Taxes - Recovery of Revalued 


Non-Depreciable Assets 

Not Applicable

- 4 - 

Schedule II 

Page 3 of 5 


SIC–25, Income Taxes - Changes in the Tax Status 

of an Entity or its Shareholders 



SIC–27, Evaluating the Substance of Transactions 

Involving the Legal Form 

of a Lease Not Applicable 


SIC–29, Service Concession Arrangements: 

Disclosures Not Applicable 

Philippine Interpretation SIC–31, Revenue - Barter Transactions Involving 

Advertising Services Not Applicable 

Philippine Interpretation SIC–32, Intangible Assets - Web Site Costs Not applicable 

PIC Q&A No. 2006-01: 

PAS 18, Appendix, paragraph 9 - Revenue 

recognition for sales of property units under pre-completion 

contracts 


PIC Q&A No. 2006-02: PAS 27.10(d) - Clarification 

of criteria for 

exempti on from presenting consolidated financial statements Not Applicable 


PAS 40.27 - Valuation of bank real and other 

properties acquired 

(ROPA) Not Applicable 

PIC Q&A No. 2008-01 

(Revised): PAS 19.78 - Rate used in discounting 

post-employment 

benefit obligations Not Applicable 


PAS 20.43 - Accounting for government loans 

with low interest 

rates under the amendments to PAS 20 Not Applicable 


Framework.23 and PAS 1.23 - Financial 

statements prepared on a basis other than going concern 



PAS 39.AG71-72 - Rate used in determining the 

fa ir valu e of government 

securities in the Philippines Not Applicable 


PAS 1R.16 - Basis of preparation of financial 

statements Adopted 


PAS 1.10(f) - Requirements for a Third Statement 

of Financial Position Not Applicable

- 5 - 

Schedule II 

Page 4 of 5 

Important: If an entit y has early adopted any of the following pronouncements, please take note of 

the: (1) additional disclosures the entity has to make for the early adoption of the said 

pronouncement s and (2) the existing pronouncements 

that the entity may have to mark as “Not 

applicable”: 

Applicable to annual Early 

Pronouncemen ts issued 

but period beginning on application 

not yet effective 

Amendments to PFRS 7: 

or after 

allowed Remarks 

Disclosures-Transfers of 

Financial 

To be adopted 

Asse ts 

July 1, 2011 Yes when effective 

Amendments to PFRS 7: 

Disclosures-Offsetting Financial 

Assets and Financial Liabilities 

January 1, 2013 Not mentioned 

To be adopted 

when effective 

PFRS 9, Financial Instruments January 1, 2015 Yes Adopted 

PFRS 10, Consolidated Financial 

Statements 

January 1, 2013 Yes 

To be adopted 




To be adopted 


PFRS 12, Disclosure of Interests 

in 

Other Entities 


To be adopted 




To be adopted 


Amendments to PAS 1: Presentation 

To be adopted 

of Items of Other Comprehensive 

Income 

July 1, 2012 Yes when effective 

Amendments to PAS 12-Deferred 

Tax: Recovery of Underlying 

Assets 


To be adopted 


PAS 19, Employee Benefits 

(Revised) 


To be adopted 


PAS 27, Separate Financial 

Statements 


To be adopted 


PA S 28, Investments in Associates 

and Joint Ventures 

January 1, 2013 Yes Not applicable 

Amendments to PAS 32, Offsetting 

Financial Assets and Financial 

Liabilities 


To be adopted 


Philippine Interpretation IFRIC-15, 

Agreements for the Construction 

of 

Real Estate 

Philippine Interpretation IFRIC-20, 

Deferred by SEC and 

FRSC 

No 

To be adopted 


Strippin g Costs in the Production Phase of a Surface Mine PIC Q&A No. 2011-02: PFRS 

3.2 - 

January 1, 2013 Yes Not applicable 

Common Control Business 

Combinations 

January 1, 2012 Yes Not applicable

- 6 - 

Schedule II 

Page 5 of 5 

Applicable to annual Early 

Pronouncements issued but period beginning on application 

not yet effective 

or after allowed Remarks 

PIC Q&A No. 2011-03: Accounting 

for Inter-company Loans 


To be adopted 


PIC Q&A No. 2011-04: PAS 

32.37- 

38 - Costs of Public Offering 

of 

Shares 


To be adopted 


PIC Q&A No. 2011-05: PFRS 

1.D1- 

D8 - Fair Value or Revaluation 

as 

Deemed Cost 

January 25, 2012 Not mentioned 

To be adopted 

when effective

- 7 - 


MAP SHOWING RELATIONSHIPS BETWEEN AND AMONG PARENT, 

SUBSIDIARIES, AN ASSOCIATE, AND JOINT VENTURE 

Schedule III

Name of issuing entity and 

association of each issue 

- 8 - 

I-Remit, Inc. and Subsidiaries 

Schedule A – Financial Assets 


Number of shares or 

principal amount of bonds 

or notes 

Amount shown on the 

balance sheet 

Income accrued 

Debt securities 

Republic of Venezuela 

$782,748 P=35,313,120 P=3,563,146 

Citic Pacific Ltd. 

402,000 16,834,560 996,362 

FTP Finance Ltd 300,650 13,842,918 899,532 

Royal Capi tal BV 

301,775 13,388,736 726,518 

Claudius Limited Notes 

208,000 8,753,971 732,756 

Various private corporations 

599,579 24,491,502 1,940,997 

Equity securities (shares) 

P=112,624,807 P=8,859,311 

SHS General Motors 5,400 4,798,639 P=– 

Apple Inc 


3,551,040 – 

HSBC Holdings 

10,000 

3,326,316 – 

Global X Silver ( SIL) 

1,000 

925,462 – 

P=12,601,457 P=– 

P=125,226,264 P=8,859,311

Name of Debtor 

- 9 - 


Schedule B - Amounts Receivable from Directors, Officers, Employees, Related Parties and 

Principal Stockholders (Other than Related Parties) 


Balance at 

beginning of 

period Additions 

Amounts 

Collected 

Amounts 

Written-off Current 

Non- 

Current 

Balance at end 

of period 

Annie Angeles P=338,944 P=– P= 203,242 

P=– P= 135,702 P= – P=135,702 

Bansan Choa 281,891 – – 

– 281,891 – 281,891 

Bernadette Tiu 7,864,414 11, 126 239,287 – 7, 

636,253 – 7,636,253 

Catherine Chan – 27, 493 13,747 – 13,746 – 13,746 

Ian Chryzl Gonzales – 2,999 

– – 

2,999 – 2,999 

Dina Simbulan 56,124 – – – 56,124 – 56,124 

Fatima Ramos – 2,800 2,800 – 

0 – 

0 

Gabriel de Guzman – 864 864 – 

0 – 

0 

Joanna Badilla – 2,800 2,800 – 

0 – 

0 

Jonathan Bunag – 64,143 50,000 – 14,143 – 14,143 

Joselyn Bagalan – 2, 577 

– 

– 

2,577 – 2,577 

Juan Miguel Guerero – 10,000 10,000 – 

0 – 

0 

Junell Dasun – 16,086 – – 16,086 – 16,086 

Justine Castellon 272,310 – – – 272,310 – 272,310 

Karen Remo – 955 

955 – 

0 – 

0 

Ma Cristina Castellejo – 503, 405 

43,077 

– 460,328 – 460,328 

Michael Velasco – 

1, 841 

1,841 

– 

0 – 0 

Paul Art Vidallo – 1,926 

1,926 – 

0 – 0 

Paul Erick Villaluz – 1,518 

– – 

1,518 – 1,518 

Ronald Santos 222,362 – – – 22 2,362 – 222,362 

P=9,036,045 P=650, 533 

P=570,539 P= – P= 9,116,039 P=– P=9,116,039

Name of Debtor 

- 10 - 

I-Remit, Inc. and Subsidiaries Schedule C - Amounts Receivable from Related Parties which are eliminated 

during the consolidation of financial statements) 


Balance at 

beginning of 

period Additions 

Amounts 

Collected 

Amounts 

Written-off Current 

Non- 

Current 

Balance at end 

of period 

Lucky Star Management Ltd. P=4,454,735 P=15,392,560 P=4,633,819 P= – P=1 5,213, 476 

P=– P=15,213, 

476 

Iremit Global Remittance Ltd 5,099,127 26,168,530 10,846,363 – 20,421,294 – 20,421, 

294 

Worldwide Exchange Pty. Ltd 94,113 25,973,348 1,893,496 – 24,173 ,965 

– 24,173, 

965 

International Remittance Canada Ltd. 71,646 43,316,090 1,096,561 – 42,291,175 – 42,291, 

175 

Iremit New Zealand Limited 9,285,149 11,594,400 3,824 – 20,875,725 – 20,875, 

725 

Power Star Group Asia Ltd. – 33,166 – 

– 

33,166 – 33, 

166 

K.K. Iremit Japan – 5,611,520 – 

– 5,611,520 – 5,611, 

520 

Iremit Europe Remittance Consulting AG 54,579,655 34,162,850 25,931,196 – 62,811,309 – 62,811, 

309 

Iremit Australia Pyt. Ltd – 697,587 323, 847 

– 

373 ,740 

– 373, 

740 

P=73,584,425 P=162,950,051 P=44,729,106 P= – P=191,805,370 P=– P=191,805, 

370

- 11 - 


Schedule D - Intangible Assets - Other Assets 


Description (i) Beginning 

Balance 

Additions at Cost 

(ii) 

Charged to cost 

and expenses 

Charged to other 

accounts 

Other changes 

additions 

(iii) 

(deductions) 

Ending Balance 

Goodwill 93,092,118 – – – (436,778) 92,655,340 

Software 2,081, 747 2,034,070 (2, 4 56,524) 

– (208,349) 1,450,944 

_______________________________________________ (I) 

The information required 

shall be grouped into ( a) intangibles shown under 

the caption 

intangible 

assets and (b) de ferrals shown under the 

caption Other Assets in the related 

balance sheet. 

Show by major 

classifications. 

(II) 

For each change representing 

other 

than an acquisition, 

clearly 

state the na ture of the 

change and the other accounts affected. 

Describe 

cost of 

additions representing other 

than cash expenditures. 

(III) 

If provision for amortization 

of int 

angible assets is credited in the books 

di rectly to the intangible 

asset account, 

the amounts 

shall 

be stated 

with explanations, including 

the accounts 

charged. 

Clearly state 

the nature 

of deductions 

if these 

represent anything 

other 

than regular 

amortization.

Title of issue and 

type of obligation (i) 

Amount authorized 

by indenture 

- 12 - 


Schedule E - Long-Term Debt 


Amount shown under caption “Current 

portion of long-term debt’ in related 

balance sheet (ii) 

None to Report 

Amount shown under caption 

“Long-Term Debt” in related 

balance sheet (iii) 

Interest 

Rate 

% 

Maturity 

Date

- 13 - 


Schedule F - Indebtedness to Related Parties 

(included in the consolidated financial statement of position) 


Name of Related Parties (i) Balance at beginning of period Balance at end of period (ii) 

__________________________________________________ 

None to Report 

(i) 

The related parties named shall be grouped as in Schedule 

D. The 

informatio 

n called shall be stated for any persons whose 

investments 

shown separately in such related schedule. 

(ii) 

For each affiliate named in the first column, explain 

in a note hereto the nature 

and purpose 

o f any material increase during the period 

that 

is in excess of 10 percent of the related b alance at either the beginning 

or end 

of the period.

Name of issuing entity of 

securities guaranteed by 

the company for which 

this statement is filed 

Title of issue of each class 

of securitie s guaranteed 

_____________________________________________________ - 14 - 


Schedule G - Guarantees of Securities of Other Issuers 


Total amount of 

guaranteed and 

outstanding (i) 

None 

to Report 

Amount owned by person 

of which statement is Nature of guarantee (ii) 

filed 

(i) Indicate in a note 

any 

significant changes since 

the date of 

the last balance sheet file. If this schedule 

is filed in support 

of consolidated 

financial statements, 

there shall be set forth guarantees by any person 

included 

in the consolidation except such guarantees 

of securities 

which 

are inclu ded in the consolidated 

balance sheet. 

(ii) There m ust be a brief 

statement of the nature 

of the guarantee, 

such 

as “Guarantee 

of principal and interest”, “Guarantee 

of Interest”, 

or 

“Guarantee of Divid ends”. If the guarantee is of interest, dividends, 

or both, 

state the annual aggregate 

amount of interest 

or dividends 

so 

guaranteed.

Title of Issue (i) 

Number of 

shares 

authorized Common stock 

- P= 1 par value 1,000,000,000 

_________________________________________________ - 15 - 


Schedule H - Capital Stock 


Number of 

shares issued 

and 

outstanding as 

shown under 

the related 

balance sheet 

caption 

602,852,800 

Number of 

shares reserved 

for options, 

warrants, 

conversion 

and 

other 

rights 

Number of 

shares held by 

related parties 

(ii) 

– 443,819,584 

Directors, 

officers and Others (iii) 

employees 

(i) 

Include in this col umn each type of issue authorized 

(ii) 

Related parties referred to include persons 

for which 

separate financial 

statements 

are filed and those 

included 

in the consolidated financial 

statements, other than the issuer of the particular security. 

(iii) 

Indi cate in a note any significant changes 

since 

the date of the 

last balance 

sheet file 

110 

159,033,106

P 

I - R E M I T , I N C . 


A 2 0 0 1 0 1 6 3 1 





Mr. Bansan C. Choa 706-9999 


1 2 3 1 A A F S 










S T A M P S 

COVER SHEET 

Remarks: Please use BLACK ink for scanning purposes. 

*SGVMC116501*

I-REMIT, INC. 

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS 

1. Corporate Information 

I-Remit, Inc. (the Parent Company) was incorporated in the Philippines and was registered with 

the Securities and Exchange Commission (SEC) on March 5, 2001 and started commercial 

operations on November 11, 2001. 

The Parent Company, which is domiciled in the Philippines, has its registered office and principal 

place of business at the 26/F Discovery Centre, 25 ADB Avenue, Ortigas Center, Pasig City. The 

Parent Company’s common shares were listed with the Philippine Stock Exchange (PSE) on 

October 17, 2007. 

The Parent Company and its subsidiaries (collectively referred to as “the Group”), except Power 

Star Asia Group Limited (PSAGL), are primarily engaged in the business of fund transfer and 

remittance services of any form or kind of currencies or monies, either by electronic, telegraphic, 

wire or any other mode of transfer; delivery of such funds or monies, both in the domestic and 

international market, by providing either courier or freight forwarding services; and conduct of 

foreign exchange transactions as may be allowed by law and other allied activities relative thereto. 

PSAGL, on the other hand, provides financial advisory and other services. 

The Group is 28.91% owned by STAR Equities, Inc., 19.34% owned by JTKC Equities, Inc., 

22.27% owned by Surewell Equities, Inc., 3.10% owned by JPSA Global Services Co., and the 

rest by the public. The Parent Company is the ultimate parent company of the Group. 

The Parent Company’s subsidiaries and associates are as follows: 

Subsidiaries: 

International Remittance 

Country of 

Incorporation 

Functional 

Currency 


December 31 


(Canada) Ltd. (IRCL) Canada 

Canadian 

Dollar (CAD) 100.00 100.00 100.00 

Lucky Star Management 

Hong Kong 

Limited (LSML) Hong Kong Dollar (HKD) 100.00 100.00 100.00 

IRemit Global Remittance United Great Britain 

Limited (IGRL) 

Kingdom Pound (GBP) 100.00 100.00 100.00 


Australian 

(IAPL) Australia 

Dollar (AUD) 100.00 100.00 100.00 

Worldwide Exchange Pty 

Australian 

Ltd (WEPL)* 

IREMIT Remittance 

Consulting GmbH 

Australia 

Dollar (AUD) 100.00 65.00 65.00 

(IRCGmbH)** Austria Euro (EUR) 100.00 74.90 74.90 

I-Remit New Zealand 

New Zealand 

Limited (INZL) New Zealand Dollar (NZD) 

Hong Kong 

100.00 100.00 100.00 

PSAGL Hong Kong Dollar (HKD) 

Japanese 

100.00 100.00 100.00 

K.K. Iremit Japan (KKIJ) 

(Forward) 

Japan 

Yen (JPY) 100.00 – –

Associates: 

IRemit Singapore Pte Ltd 

Country of 

Incorporation 

- 2 - 

Functional 

Currency 


December 31 


(ISPL) Singapore 

Singapore 

Dollar (SGD) 49.00 49.00 

Hwa Kung Hong & Co., 

New Taiwan 

Ltd.(HKHCL) Taiwan 

Dollar (NTD) 49.00 49.00 

* Consists of direct voting interest of 70.00% and indirect voting interest through IAPL of 30.00% 

**Formerly IREMIT EUROPE Remittance Consulting AG (IERCAG) 

2. Summary of Significant Accounting Policies 

Basis of Preparation 

The accompanying financial statements of the Parent Company have been prepared on a historical 

cost basis. The Parent Company’s financial statements are presented in Philippine peso, the 

Parent Company’s functional and presentation currency, and all values are rounded to the nearest 

peso except when otherwise indicated. 

Statement of Compliance 

The accompanying financial statements of the Parent Company have been prepared in compliance 

with Philippine Financial Reporting Standards (PFRS). 

Changes in Accounting Policies 

The accounting policies adopted in the preparation of the parent company financial statements are 

consistent with those of the previous financial year except for the adoption of the following new 

and amended PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretations which 

became effective on January 1, 2011. 

• PAS 24 Amendment, Related Party Disclosures 

• PAS 32 Amendment, Financial Instruments: Presentation - Classification of Rights Issues 

• Philippine Interpretation International Financial Reporting Interpretations Committee (IFRIC) 

14 Amendment, Prepayments of a Minimum Funding Requirement 


Instruments 

The adoption of new standards, amendments and interpretations above did not have impact to the 

Parent Company except for the adoption of PAS 24 Amendment, Related Party Transactions. 

PAS 24 Amendment, Related Party Transactions 

PAS 24 clarifies the definitions of a related party. The new definitions emphasize a symmetrical 

view of related party relationships and clarify the circumstances in which persons and key 

management personnel affect related party relationships of an entity. In addition, the amendment 

introduces an exemption from the general related party disclosure requirements for transactions 

with government and entities that are controlled, jointly controlled or significantly influenced by 

the same government as the reporting entity. The amendment only affects the disclosures and has 

no impact on the Parent Company’s financial position or performance. 

Improvements to PFRS 2010 

The omnibus amendments to PFRSs were issued in 2010 primarily with a view to remove 

inconsistencies and clarify wording. There are separate transitional provisions for each standard. 

49.00 

49.00 

*SGVMC116501*

- 3 - 

The adoption of the following amendment resulted in changes to accounting policies but did not 

have any impact on the financial position or performance of the Parent Company. 

PFRS 7, Financial Instruments - Disclosures 

The amendment was intended to simplify the disclosures provided by reducing the volume of 

disclosures around collateral held and improving disclosures by requiring qualitative information 

to put the quantitative information in context. The Parent Company reflects the revised disclosure 

requirements in Note 4. 

PAS 1, Presentation of Financial Statements: The amendment clarifies that an entity may present 

an analysis of each component of other comprehensive income maybe either in the statement of 

changes in equity or in the notes to the financial statements. 

Other amendments resulting from the 2010 Improvements to PFRSs to the following standards did 

not have any impact on the accounting policies, financial position or performance of the Parent 

Company: 

• PFRS 3, Business Combinations (Contingent consideration arising from business combination 

prior to adoption of PFRS 3 (as revised in 2008)) 

• PFRS 3, Business Combinations (Un-replaced and voluntarily replaced share-based payment 

awards) 

• PAS 27, Consolidated and Separate Financial Statements 

• PAS 34, Interim Financial Reporting 

The following interpretation and amendments to interpretations did not have any impact on the 

accounting policies, financial position or performance of the Parent Company: 

• Philippine Interpretation IFRIC 13, Customer Loyalty Programmes (determining the fair value 

of award credits) 


Instruments 

Foreign Currency Transactions and Translations 

The functional and presentation currency of the Parent Company is the Philippine peso. 

Transactions denominated in foreign currencies are recorded in Philippine peso using the 

exchange rate at the date of the transaction. For financial reporting purposes, foreign currencydenominated 

accounts are translated into their equivalents in Philippine pesos based on the 

Philippine Dealing System (PDS) closing rate prevailing at the balance sheet date (for assets and 

liabilities). Foreign exchange differences arising from revaluation and translation of foreign 

currency-denominated monetary assets and liabilities are credited to or charged against operations 

in the year in which the rates change. Non-monetary items that are measured in terms of historical 

cost in a foreign currency are translated using the exchange rates as at the dates of the initial 

transactions. 

Cash and Cash Equivalents 

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid 

investments that are readily convertible to known amounts of cash, with original maturities of 

three months or less from the dates of placement and that are subject to an insignificant risk of 

changes in fair value. 

*SGVMC116501*

- 4 - 

Financial Instruments 


Financial instruments within the scope of PAS 39 are classified as financial assets at fair value 

through profit or loss (FVPL), loans and receivables, held-to-maturity (HTM) investments, 

available-for-sale (AFS) investments, financial liabilities at FVPL and other financial liabilities. 

The classification of financial instruments at initial recognition depends on the purpose for which 

the financial instruments were acquired and their characteristics. All financial assets and financial 

liabilities are recognized initially at fair value plus any directly attributable cost of acquisition or 

issue, except in the case of financial assets and financial liabilities at FVPL. Management 

determines the classification of its instruments at initial recognition and, where allowed and 

appropriate, re-evaluates such designation at every balance sheet date. 

Financial instruments are recognized in the consolidated balance sheet when the Parent Company 

becomes a party to the contractual provisions of the instrument. In the case of regular way of 

purchase or sale of financial assets, recognition and derecognition, as applicable, are done using 

settlement date accounting. Settlement date accounting refers to (a) recognition of an asset on the 

day it is received by the Parent Company, and (b) the derecognition of an asset and recognition of 

any gain or loss on disposal on the day that it is delivered by the Parent Company. Receivables, 

beneficiaries and other payables, and interest-bearing loans are recognized when cash is received 

by the Parent Company or advanced to the borrowers/beneficiaries. 

The subsequent measurement bases for financial instruments depend on its classification. 

As of December 31, 2011 and 2010, the Parent Company has no financial assets and financial 

liabilities at FVPL, AFS investments and HTM investments. 


Loans and receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable payments that 

are not quoted in an active market. After initial measurement, receivables are carried at amortized 

cost using the effective interest method less any allowance for credit losses. Amortized cost is 

calculated by taking into account any discount or premium on acquisition and fees and costs that 

are an integral part of the effective interest rate (EIR). Gains and losses are recognized in the 

parent company statement of income when the receivables are derecognized or impaired, as well 

as through the amortization process. Receivables are classified as current assets when the Parent 

Company expects to realize or collect the asset within twelve months from the balance sheet date. 

Otherwise, these are classified as non-current assets. 

Classified under this category are the Parent Company’s ‘Cash and cash equivalents’, ‘Accounts 

receivable’, ‘Other receivables’ and refundable deposits included under ‘Other noncurrent assets’. 


Issued financial instruments or their components, which are not designated as at FVPL, are 

classified as other financial liability, where the substance of the contractual arrangement results in 

the Parent Company having an obligation either to deliver cash or another financial asset to the 

holder, or to satisfy the obligation other than by the exchange of a fixed amount of cash or another 

financial asset for a fixed number of its own equity shares. These include liabilities arising from 

operations or borrowings. The components of issued financial instruments that contain both 

liability and equity elements are accounted for separately, with the equity component being 

assigned the residual amount after deducting from the instrument as a whole the amount separately 

determined as the fair value of the liability component on the date of issue. 

*SGVMC116501*

- 5 - 

After initial measurement, other financial liabilities are subsequently measured at amortized cost 

using the EIR method. 

Other financial liabilities are classified as current liabilities when the Parent Company expects to 

settle the liability within twelve months from the balance sheet date. Otherwise, these are 

classified as non-current liabilities. 

Other financial liabilities include ‘Beneficiaries and other payables’ and ‘Interest-bearing loans’. 


The fair value for financial instruments traded in active markets at the balance sheet date is based 

on their quoted market prices or dealer price quotations (bid price for long positions and ask price 

for short positions), without any deduction for transaction costs. When current bid and ask prices 

are not available, the price of the most recent transaction provides evidence of the current fair 

value as long as there has not been a significant change in economic circumstances since the time 

of the transaction. 

For all other financial instruments not listed in an active market, the fair value is determined by 

using appropriate valuation methodologies. Valuation methodologies include net present value 

techniques, comparison to similar instruments for which market observable prices exist, option 

pricing models, and other relevant valuation models. 


Where the transaction price in a non-active market is different from the fair value from other 

observable current market transactions in the same instrument or based on a valuation technique 

whose variables include only data from an observable market, the Parent Company recognizes the 

difference between the transaction price and fair value (a Day 1 difference) in the parent company 

statement of income unless it qualifies for recognition as some other type of asset. In cases where 

use is made of data which is not observable, the difference between the transaction price and 

model value is only recognized in the parent company statement of income when the inputs 

become observable or when the instrument is derecognized. For each transaction, the Parent 

Company determines the appropriate method of recognizing the Day 1 difference amount. 



A financial asset (or, where applicable a part of a financial asset or part of a group of similar 

financial assets) is derecognized when: 


• the Parent Company retains the right to receive cash flows from the asset, but has assumed an 

obligation to pay them in full without material delay to a third part under a ‘pass through’ 

arrangement; or 

• the Parent Company has transferred its rights to receive cash flows from the asset and either 

(a) has transferred substantially all the risks and rewards of the asset, or (b) has neither 

transferred nor retained substantially all the risks and rewards of the asset, but has transferred 

control of the asset. 

When the Parent Company has transferred its rights to receive cash flows from an asset or has 

entered into a pass-through arrangement, and has neither transferred nor retained substantially all 

the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the 

extent of the Parent Company’s continuing involvement in the asset. Continuing involvement that 

*SGVMC116501*

- 6 - 

takes the form of a guarantee over the transferred asset is measured at the lower of the original 

carrying amount of the asset and the maximum amount of consideration that the Parent Company 

could be required to repay. 



cancelled or has expired. When an existing financial liability is replaced by another from the same 

lender on substantially different 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 amount of a 

financial liability (or part of a financial liability) extinguished or transferred to another party and 

the consideration paid, including any non-cash assets transferred or liabilities assumed, shall be 

recognized in the parent company statement of income. 


Financial assets and financial liabilities are offset and the net amount reported in the balance sheet 

if, and only if, there is a currently enforceable legal right to offset the recognized amounts and 

there is an intention to settle on a net basis, or to realize the asset and settle the liability 

simultaneously. 


The Parent Company assesses at each balance sheet date, whether there is an objective evidence 

that a financial asset or group of financial assets is impaired. A financial asset or a group of 

financial assets is deemed to be impaired if, and only if, there is an objective evidence of 

impairment as a result of one or more events that has occurred after the initial recognition of the 

asset (an incurred ‘loss event’) and that loss event (or events) has an impact on the estimated 

future cash flows of the financial asset or the group of financial assets that can be reliably 

estimated. Evidence of impairment may include indications that the borrower or a group of 

borrowers is experiencing significant financial difficulty, default or delinquency in interest or 

principal payments, the probability that they will enter bankruptcy or other financial 

reorganization, and where there are observable data that indicates that there is a measurable 

decrease in the estimated future cash flows, such as changes in arrears or economic conditions that 

correlate with defaults. 


For financial assets carried at amortized cost, the Parent Company first assesses whether objective 

evidence of impairment exists individually for financial assets that are individually significant, or 

collectively for financial assets that are not individually significant. 

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is 

measured as the difference between the asset’s carrying amount and the present value of the 

estimated future cash flows (excluding future credit losses that have not been incurred). The 

carrying amount of the asset is reduced through the use of an allowance account and the amount of 

loss is charged to the parent company statement of income. Interest income continues to be 

recognized based on the original EIR of the asset. Receivables, together with the associated 

allowance accounts, are written off when there is no realistic prospect of future recovery and all 

collateral has been realized. If subsequently, the amount of the estimated impairment loss 

decreases because of an event occurring after the impairment was recognized, the previously 

recognized impairment loss is reduced by adjusting the allowance account. If a future write-off is 


*SGVMC116501*

- 7 - 

If the Parent Company determines that no objective evidence of impairment exists for an 

individually assessed financial asset, whether significant or not, it includes the asset in a group of 

financial assets with similar credit risk characteristics and collectively assesses for impairment. 

Those characteristics are relevant to the estimation of future cash flows for groups of such assets 

by being indicative of the debtors’ ability to pay all amounts due according to the contractual 

terms of the assets being evaluated. Assets that are individually assessed for impairment and for 

which an impairment loss is, or continues to be, recognized are not included in a collective 

assessment for impairment. 

The present value of the estimated future cash flows is discounted at the financial asset’s original 

EIR. If a financial asset has a variable interest rate, the discount rate for measuring any 

impairment loss is the current EIR, adjusted for the original credit risk premium. 

For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis 

of such credit risk characteristics as geographical classification. Future cash flows in a group of 

financial assets that are collectively evaluated for impairment are estimated on the basis of 

historical loss experience for assets with credit risk characteristics similar to those in the group. 

Historical loss experience is adjusted on the basis of current observable data to reflect the effects 

of current conditions that did not affect the period on which the historical loss experience is based 

and to remove the effects of conditions in the historical period that do not exist currently. 

Estimates of changes in future cash flows reflect, and are directionally consistent with changes in 

related observable data from period to period (such as changes in payment status, or other factors 

that are indicative of incurred losses in the group and their magnitude). The methodology and 

assumptions used for estimating future cash flows are reviewed regularly by the Parent Company 

to reduce any differences between loss estimates and actual loss experience. 

Investments in Subsidiaries and Associates 

Subsidiaries 

Investments in subsidiaries in the parent company financial statements are accounted for at cost. 

Subsidiaries of the Parent Company are shown in Note 1. 

Associates 

The Parent Company’s investments in its associates are accounted for at cost. An associate is an 

entity in which the Parent Company has significant influence. The Parent Company's investments 

in associates include its 49.00% interest in ISPL and HKHCL, entities based in Singapore and 

Taiwan, respectively. 

Property and Equipment 

Property and equipment is stated at cost less accumulated depreciation and amortization and any 

impairment in value. 

The initial cost of property and equipment comprises its purchase price and any directly 

attributable costs of bringing the property and equipment to its working condition and location for 

its intended use. 

Expenditures incurred after the property and equipment have been put into operation, such as 

repairs and maintenance are normally charged to operations in the year in which the costs are 

incurred. In situations where it can be clearly demonstrated that the expenditures have resulted in 

an increase in the future economic benefits expected to be obtained from the use of an item of 

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

are capitalized as an additional cost of property and equipment. 

*SGVMC116501*

- 8 - 

Depreciation and amortization is calculated on a straight-line basis over the estimated useful life of 

the property and equipment as follows: 

Office and communication equipment 3 years 

Transportation and delivery equipment 3 to 5 years 

Furniture and fixtures 3 to 5 years 

Leasehold improvements 5 years or the term of the lease, 

whichever is shorter 

The carrying values of property and equipment are reviewed for impairment when events or 

changes in circumstances indicate the carrying value may not be recoverable. If any such 

indication exists and where the carrying values exceed the estimated recoverable amount, the asset 

or cash-generating units (CGU) are written down to their recoverable amount (see policy on 

Impairment of Nonfinancial Assets). 

An item of property and equipment is derecognized upon disposal or when no future economic 

benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the 

asset (calculated as the difference between the net disposal proceeds and the carrying amount of 

the asset) is included in the parent company statement of income in the year the asset is 

derecognized. 

The asset’s residual values, useful lives and methods of depreciation and amortization are 

reviewed, and adjusted if appropriate, at each financial year-end to ensure that these are consistent 

with the expected pattern of economic benefits from the items of property and equipment. 

Software costs 

Software costs are carried at cost less accumulated amortization and any impairment in value. The 

cost of the asset is the amount of cash or cash equivalents paid or the fair value of the other 

considerations given up to acquire the asset at the time of its acquisition or production. Software 

costs are amortized on a straight-line basis over its estimated useful life of three (3) years. 

The asset’s amortization period and amortization method are reviewed at least at each balance 

sheet date. Changes in the expected useful life or the expected pattern of consumption of future 

economic benefits embodied in the asset is accounted for by changing the amortization period or 

method, as appropriate, and treated as changes in accounting estimates. 

Impairment of Nonfinancial assets 

Investments in subsidiaries and associates 

The Parent Company assesses at each balance sheet date whether there is any indication that its 

investments in subsidiaries and associates may be impaired. If any indication exists, the Parent 

Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher 

of an asset’s or CGU’s fair value less cost to sell and its value in use. Where the carrying amount 

of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written 

down to its recoverable amount. 

Property and equipment and software costs 

At each balance sheet date, the Parent Company assesses whether there is any indication that its 

property and equipment and software costs may be impaired. When an indicator of impairment 

exists or when an annual impairment testing for an asset is required, the Parent Company makes a 

formal estimate of recoverable amount. Recoverable amount is the higher of an asset’s (or 

CGU’s) fair value less costs to sell and its value in use and is determined for an individual asset, 

unless the asset does not generate cash inflows that are largely independent of those from other 

*SGVMC116501*

- 9 - 

assets or groups of assets, in which case the recoverable amount is assessed as part of the CGU to 

which it belongs. Where the carrying amount of an asset (or CGU) exceeds its recoverable 

amount, the asset (or CGU) is considered impaired and is written down to its recoverable amount. 

In assessing value in use, the estimated future cash flows are discounted to their present value 

using a pre-tax discount rate that reflects current market assessments of the time value of money 

and the risks specific to the asset (or CGU). In determining fair value less cost to sell, recent 

market transactions are taken into account, if available. If no such transactions can be identified, 

an appropriate valuation model is used. These calculations are corroborated by available fair 

value indicators. 

An impairment loss is charged to operations in the year in which it arises, unless the asset is 

carried at a revalued amount, in which case the impairment loss is charged to the revaluation 

increment of the said asset. 

An assessment is made at each balance sheet date as to whether there is any indication that 

previously recognized impairment losses may no longer exist or may have decreased. If such 

indication exists, the recoverable amount is estimated. A previously recognized impairment loss is 

reversed only if there has been a change in the estimates used to determine the asset’s recoverable 

amount since the last impairment loss was recognized. If that is the case, the carrying amount of 

the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying 

amount that would have been determined, net of depreciation and amortization, had no impairment 

loss been recognized for the asset in prior years. Such reversal is recognized in the parent 

company statement of income unless the asset is carried at a revalued amount, in which case the 

reversal is treated as a revaluation increase. After such a reversal, the depreciation and 

amortization expense is adjusted in future years to allocate the asset’s revised carrying amount, 

less any residual value, on a systematic basis over its remaining life. 

Input Value Added Tax (VAT) 

Input VAT represents VAT imposed on the Parent Company by its suppliers for the acquisition of 

goods and services as required by Philippine taxation laws and regulations. This will be claimed 

as tax credits. Input VAT is stated at its estimated net realizable values. 

Revenue Recognition 

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

Parent Company and the revenue can be reliably measured. The Parent Company assesses its 

revenue arrangements against specific criteria in order to determine if it is acting as principal or 

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

Delivery fees 

Revenue from delivery fees is recognized as the service is rendered net of amounts payable to 

principals (i.e., partner remittance companies) for fees billed on their behalf. 

Service revenue 

Service revenue is recognized when the service is rendered. 

Interest income 

Interest on financial instruments measured at amortized cost is recognized based on the EIR 

method. 

The EIR method is a method of calculating the amortized cost of a financial asset or a financial 

liability and allocating the interest income or interest expense over the relevant period. The EIR is 

the rate that exactly discounts estimated future cash payments or receipts throughout the expected 

*SGVMC116501*

- 10 - 

life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of 

the financial asset or financial liability. When calculating the EIR, the Parent Company estimates 

cash flows from the financial instrument (for example, prepayment options) but does not consider 

future credit losses. The calculation includes all fees and points paid or received between parties 

to the contract that are an integral part of the EIR, transaction costs and all other premiums or 

discounts. 

Once a financial asset or a group of financial assets has been written down as a result of an 

impairment loss, interest income is recognized thereafter using the rate of interest used to discount 

the future cash flows for the purpose of measuring the impairment loss. 

Dividends 

Dividend income is recognized when the Parent Company’s right to receive payment is 

established. 

Rebates 

Rebates pertaining to refunds of bank service charges are recognized upon collection. 

Costs and Expenses 

Costs and expenses encompass losses as well as those expenses that arise in the course of the 

ordinary business activities of the Parent Company. The following specific recognition criteria 

must also be met before costs and expenses are recognized: 

Cost of services 

This includes all expenses associated with the specific delivery fees. Such costs are recognized 

when the related delivery fees have been recognized. 

Operating expenses 

Operating expenses constitute costs incurred related to advertising and administering the business 

and are recognized when incurred. 


This includes all other taxes, local and national, including real estate taxes, licenses and permit 

fees included under ‘Other operating expenses’ in the parent company statement of income. 

Retirement Benefits 

The Parent Company has a noncontributory defined benefit retirement plan administered by a 

trustee, covering its permanent employees. 

The retirement cost of the Parent Company is determined using the projected unit credit method. 

Under this method, the current service cost is the present value of retirement benefits payable in 

the future with respect to services rendered in the current period. 

The liability recognized in the parent company balance sheet in respect of defined benefit 

retirement plan is the present value of the defined benefit obligation at the balance sheet date less 

the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses 

and past service costs. The defined benefit obligation is calculated annually by an independent 

actuary using the projected unit credit method. The present value of the defined benefit obligation 

is determined by discounting the estimated future cash outflows using interest rates on Philippine 

government bonds that have terms to maturity approximating the terms of the related retirement 

liability. Actuarial gains and losses arising from experience adjustments and changes in actuarial 

assumptions are credited to or charged against income when the net cumulative unrecognized 

*SGVMC116501*

- 11 - 

actuarial gains and losses at the end of the previous period exceeded 10.00% of the higher of the 

defined benefit obligation and the fair value of plan assets at that date. These gains or losses are 

recognized over the expected average remaining working lives of the employees participating in 

the plan. 

Past-service costs, if any, are recognized immediately in income, unless the changes to the 

retirement plan are conditional on the employees remaining in service for a specified period of 

time (the vesting period). In this case, the past-service costs are amortized on a straight-line basis 

over the vesting period. 

The defined benefit asset or liability comprises the present value of the defined benefit obligation 

less past service costs not yet recognized and less the fair value of plan assets out of which the 

obligations are to be settled directly. The value of any asset is restricted to the sum of any past 

service cost not yet recognized and the present value of any economic benefits available in the 

form of refunds from the plan or reductions in the future contributions to the plan. 

Leases 

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

the arrangement at the inception date of whether the fulfillment of the arrangement is dependent 

on the use of a specific asset or assets or 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 the 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. 

When 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) and at the date 

of renewal or extension for scenario (b). 

Parent Company as a lessee 

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

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

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

Share-based Payment 

The Parent Company granted a stock purchase program to certain officers, employees and 

individuals (see Note 17) that is subject to a lock-up or vesting period of two (2) years and which 

ended on September 19, 2009. The Parent Company accounted for the share-based payment as an 

equity-settled transaction. The cost of equity-settled transactions is measured by reference to the 

fair value of the equity instrument at the date at which they are granted. The expense is 

recognized as part of ‘Salaries, wages and employee benefits’ in the statement of income over the 

lock-up period of two (2) years. The cumulative expense recognized for equity-settled 

transactions at each balance sheet date until the vesting date reflects the extent to which the 

vesting period has expired and the Parent Company’s best estimate of the number of equity 

instruments that will ultimately vest. The expense in the statement of income for the period 

represents the movement in cumulative expense recognized at the beginning and end of the period. 

*SGVMC116501*

- 12 - 

Income Taxes 

Current tax 

Current tax assets and liabilities for the current and prior periods are measured at the amount 

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used 

to compute the amount are those that are enacted or substantively enacted at the balance sheet 

date. 

Deferred tax 

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

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

financial reporting purposes. 

Deferred tax liabilities are recognized for all taxable temporary differences, including asset 

revaluations. Deferred tax assets are recognized for all deductible temporary differences, 

carryforward of unused tax credits from excess minimum corporate income tax (MCIT) over the 

regular corporate income tax (RCIT), if any, and unused net operating loss carryover (NOLCO), if 

any, to the extent that it is probable that taxable income will be available against which the 

deductible temporary differences and carryforward of unused tax credits from excess MCIT over 

RCIT and unused NOLCO can be utilized. 

Deferred tax liabilities are not provided on non-taxable temporary differences associated with 

investments in associates where the timing of the reversal of the temporary differences can be 

controlled and it is probable that the temporary differences will not reverse in the foreseeable 

future. 

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to 

the extent that it is no longer probable that sufficient taxable income will be available to allow all 

or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at 

each balance sheet date and are recognized to the extent that it has become probable that future 

taxable income will allow the deferred tax assets to be recovered. 

Deferred tax assets and deferred tax liabilities are measured at the tax rates that are applicable to 

the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that 

have been enacted or substantially enacted at the balance sheet date. 

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set 

off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable 

entity and the same taxation authority. 

Current tax and deferred tax relating to items recognized directly in equity are also recognized in 

equity and not in the consolidated statement of income. 

Borrowing Costs 

Borrowing costs are recognized as an expense when incurred. 

Equity 

Capital stock is measured at par value for all shares issued and outstanding. When the shares are 

sold at a premium, the difference between the proceeds and the par value is credited to ‘Capital 

paid-in excess of par value’ account. Direct costs incurred related to issuance of equity, such as 

underwriting, accounting and legal fees, printing costs and taxes are chargeable to ‘Capital paid-in 

excess of par value’. If the ‘Capital paid-in excess of par value’ is not sufficient, the excess is 

charged to profit or loss. 

*SGVMC116501*

- 13 - 


equity transaction. The excess of acquisition cost over the carrying value of the noncontrolling 

interest (formerly known as minority interest) is charged against the ‘Capital paid-in excess of par 

value’. 

When the Parent Company issues more than one class of stock, a separate account is maintained 

for each class of stock and the number of shares issued. 

‘Retained earnings’ represents accumulated earnings (losses) of the Parent Company less 

dividends declared. 

Own equity instruments which are reacquired (treasury shares) are recognized at cost and 

deducted from equity as ‘Treasury stock’. No gain or loss is recognized in the parent company 

statement of income on the purchase, sale, issue or cancellation of the Parent Company’s own 

equity instruments. Any difference between the carrying amount and the consideration is 

recognized in ‘Capital paid-in excess of par value’. 

Dividends 

Cash dividends on common shares are recognized as a liability and deducted from equity when 

declared and approved by the Board of Directors (BOD) of the Parent Company. Stock dividends 

are deducted from equity when declared and approved by the BOD and stockholders of the Parent 

Company. 

Related party relationships and transactions 





Provisions 

Provisions are recognized when the Parent Company has a present obligation (legal or 

constructive) as a result of a past event, it is probable that an outflow of assets embodying 

economic benefits will be required to settle the obligation and a reliable estimate can be made of 

the amount of the obligation. Where the Parent Company expects a provision to be reimbursed, 

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

certain. The expense relating to any provision is presented in the parent company statement of 

income, net of any reimbursement. 

Contingencies 

Contingent liabilities are not recognized in the parent company financial statements. These are 

disclosed unless the possibility of an outflow of resources embodying economic benefits is 

remote. A contingent asset is not recognized in the parent company financial statements but 

disclosed when an inflow of economic benefits is probable. 

Events After the Reporting Period 

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

position at the balance sheet date (adjusting events) are reflected in the parent company financial 

statements. Post year-end events that are not adjusting events are disclosed in the notes to the 

parent company financial statements when material. 

*SGVMC116501*

- 14 - 

Standards Issued but not yet Effective 

The Parent Company will adopt the following standards and interpretations enumerated below 

when these become effective. Except as otherwise indicated, the Parent Company does not expect 

the adoption of these new and amended PFRS and Philippine Interpretations to have significant 

impact on its financial position and performance. 


PFRS 7 Amendments, Financial Instruments: Disclosures - Disclosures - Transfers of Financial 

Assets 


The amendments will allow users of financial statements to improve their understanding of 

transfer transactions of financial assets (for example, securitizations), including understanding the 

possible effects of any risks that may remain with the entity that transferred the assets. The 

amendments also require additional disclosures if a disproportionate amount of transfer 

transactions are undertaken around the end of a reporting period. 

PAS 12 Amendment, Income Taxes - Deferred Tax: Recovery of Underlying Assets 


It provides a practical solution to the problem of assessing whether recovery of an asset will be 

through use or sale. It introduces a presumption that recovery of the carrying amount of an asset 

will normally be through sale. 


PAS 1, Financial Statement Presentation - Presentation of Items of Other Comprehensive Income 

(OCI) 

The amendment effective for annual periods beginning or after July 1, 2012, changes the grouping 

of items presented in OCI. Items that could be reclassified (or “recycled”) to profit or loss at a 

future point in time would be presented separately from items that will never be reclassified. 

PAS 27 Revised, Separate Financial Statements 

The revised PAS 27 is effective for annual periods beginning on or after January 1, 2013. It 

establishes that as a consequence of the new PFRS 10, Consolidated Financial Statement and 

PFRS 12, Disclosure of Interests in Other Entities, what remains of PAS 27 is limited to 

accounting for subsidiaries, jointly controlled entities, and associates in separate financial 

statements. 

PFRS 7 Revised, Financial instruments: Disclosures - Offsetting Financial Assets and Financial 

Liabilities 

The revised PFRS 7 effective for annual periods beginning on or after January 1, 2013, requires an 

entity to disclose information about rights of set-off and related arrangements (such as collateral 

agreements). The new disclosures are required for all recognized financial instruments that are set 

off in accordance with PAS 32. These disclosures also apply to recognized financial instruments 

that are subject to an enforceable master netting arrangement or ‘similar agreement’, irrespective 

of whether they are set-off in accordance with PAS 32. 

PFRS 10, Consolidated Financial Statements 

The standard, effective for annual periods beginning on or after January 1, 2013, establishes 

principles for the presentation and preparation of consolidated financial statements when an entity 

controls one or more other entities. The Parent Company will assess the impact of the amendment 

on its financial position and performance when they become effective. 

*SGVMC116501*

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PFRS 11 provides for a more realistic reflection of joint arrangements by focusing on the rights 

and obligations of the arrangement, rather than its legal form. The standard addresses 

inconsistencies in the reporting of joint arrangements by requiring a single method to account for 

interests in jointly controlled entities. The standard is effective for annual periods beginning on or 

after January 1, 2013. 

PFRS 12, Disclosure of Interests in Other Entities 

PFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of 

interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated 

structured entities. The standard is effective for annual periods beginning on or after January 1, 

2013. The Parent Company will assess the impact of the amendment on its financial position and 



This standard represents the completion of the joint project to establish a single source for the 

requirements on how to measure fair value under PFRS. This standard does not change when an 

entity is required to use fair value, but rather, describes how to measure fair value under PFRS, 

when fair value is required or permitted to be used. This standard is effective for annual periods 

beginning on or after January 1, 2013. The Parent Company will assess the impact of the 

amendment on its financial position and performance when they become effective. 

PAS 19 Amendments, Employee Benefits - Defined Benefit Plans 

The amendments focus on the following key areas: the elimination of the option to defer the 

recognition of gains and losses resulting from defined benefit plans (the corridor approach); the 

elimination of options for the presentation of gains and losses relating to those plans; and the 

improvement of disclosure requirements that will better show the characteristics of defined benefit 

plans and the risks arising from those plans. The amendments to the recognition, presentation and 

disclosure requirements will ensure that the financial statements provide investors and other users 

with a clear picture of an entity’s commitments resulting from defined benefit plans. The 

amendments to PAS 19 are effective for annual periods beginning on or after January 1, 2013. 

The Parent Company will assess the impact of the amendment when this becomes effective. 


PAS 32 Amendment, Financial Instruments: Presentation - Offsetting Financial Assets and 

Financial Liabilities 


This clarifies the meaning of “currently has a legally enforceable right to set-off” and the 

application of the PAS 32 offsetting criteria to settlement systems (such as central clearing house 

systems) which apply gross settlement mechanisms that are not simultaneous. 


PFRS 9, Financial Instruments: Classification and Measurement 

The standard is effective for annual periods beginning on or after January 1, 2015. It reflects the 

first phase on the replacement of PAS 39, Financial Instruments: Recognition and Measurement 

and applies to classification and measurement of financial assets and financial liabilities as defined 

in PAS 39. The Parent Company will assess the impact of the amendment on its financial position 

and performance when they become effective. 

Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate 

This Interpretation, effective for annual periods beginning on or after January 1, 2015, covers 

accounting for revenue and associated expenses by entities that undertake the construction of real 

*SGVMC116501*

- 16 - 

estate directly or through subcontractors. The Interpretation requires that revenue on construction 

of real estate be recognized only upon completion, except when such contract qualifies as 

construction contract to be accounted for under PAS 11, Construction Contracts, or involves 

rendering of services in which case revenue is recognized based on stage of completion. Contracts 

involving provision of services with the construction materials and where the risks and reward of 

ownership are transferred to the buyer on a continuous basis will also be accounted for based on 

stage of completion. 

3. Significant Accounting Judgments and Estimates 

The preparation of the parent company financial statements in compliance with PFRS requires the 

Parent Company to make judgments and estimates that affect the reported amounts of assets, 

liabilities, income and expenses and disclosure of contingent assets and contingent liabilities. 

Future events may occur which will cause the assumptions used in arriving at the estimates to 

change. The effects of any change in estimates are reflected in the parent company financial 

statements as they become reasonably determinable. 

Judgments and estimates are continually evaluated and are based on historical experience and 

other factors, including expectations of future events that are believed to be reasonable under the 

circumstances. 

Judgments 

a. Functional Currency 

PAS 21 requires management to use its judgment to determine the entity’s functional currency 

such that it most faithfully represents the economic effects of the underlying transactions, 

events and conditions that are relevant to the entity. In making this judgment, the Parent 

Company considers the following: 

• the currency that mainly influences sales prices for financial instruments and services (this 

will often be the currency in which sales prices for its financial instruments and services 

are denominated and settled); 

• the currency in which funds from financing activities are generated; and 

• the currency in which receipts from operating activities are usually retained. 

The Parent Company determined its functional currency to be Philippine peso, being the 

currency that mainly influences the Parent Company’s revenues and cost and expenses. 

b. Operating leases 

Parent Company as lessee 

The Parent Company has entered into commercial property leases as a lessee for its office 

premises. The Parent Company has determined that it has not acquired the significant risks 

and rewards of ownership of the leased properties and so account for the contracts as operating 

leases. 

c. Fair value of financial instruments 

The fair values of financial instruments that are not quoted in active markets are determined 

using valuation techniques. The fair values of financial assets and financial liabilities of the 

Parent Company are disclosed in Note 4. 

*SGVMC116501*

- 17 - 

d. Contingencies 

The Parent Company is currently involved in various proceedings. The estimate of the 

probable costs for the resolution of these claims has been developed in consultation with 

outside counsel handling the defense in these matters and is based upon an analysis of 

potential results. The Parent Company currently does not believe these proceedings will have 

a material effect on the Parent Company’s financial position. It is possible, however, that 

future results of operations could be materially affected by changes in the estimates or in the 

effectiveness of the strategies relating to these proceedings (see Note 24). 

e. Determination of whether the Parent Company is acting as a principal or an agent 

The Parent Company assesses its revenue arrangements against the following criteria to 

determine whether it is acting as a principal or an agent: 

• whether the Parent Company has primary responsibility for providing the goods and 

services; 

• whether the Parent Company has inventory risk; 

• whether the Parent Company has discretion in establishing prices; and 

• whether the Parent Company bears the credit risk. 

If the Parent Company has determined it is acting as a principal, revenue is recognized on a 

gross basis with the amount remitted to the other party being accounted for as part of costs and 

expenses. 

If the Parent Company has determined it is acting as an agent, only the net amount retained is 

recognized as revenue. 

The Parent Company assessed its revenue arrangements and concluded that it is acting as 

principal in some arrangements and as an agent in other arrangements. 

Estimates 

a. Credit losses on receivables 

The Parent Company reviews its receivables at each balance sheet date to assess whether an 

allowance for credit losses should be recorded in the parent company balance sheet. In 

particular, judgment by management is required in the estimation of the amount and timing of 

future cash flows when determining the level of allowance required. Such estimates are based 

on assumptions about a number of factors such as length of the Parent Company’s relationship 

with counterparties (e.g., agents and couriers), current credit status, average age of accounts, 

collection and historical loss experience. Actual results may differ, resulting in future changes 

to the allowance. 

As of December 31, 2011, accounts receivable and other receivables are carried in the parent 

company balance sheet at P=1.00 billion and P=0.14 billion, respectively. As of 

December 31, 2010, accounts receivable and other receivables are carried in the balance sheet 

at P=1.12 billion and P=0.14 billion, respectively. The Parent Company has assessed that there 

is no need to recognize impairment losses on its receivables as of December 31, 2011 and 


*SGVMC116501*

- 18 - 

b. Impairment of nonfinancial assets 

(i) Investments in subsidiaries and associates 

The Parent Company assesses impairment on its investments in subsidiaries and associates 

whenever events or changes in circumstances indicate that the carrying amount of the 

assets may not be recoverable. Among others, the factors that the Parent Company 

considers important, which could trigger an impairment review on its investments in 

subsidiaries and associates, include the following: 

• deteriorating or poor financial condition; 

• recurring net losses; and 

• significant changes with an adverse effect on the subsidiary/associate have taken place 

during the period, or will take place in the near future, in the technological, market, 

economic, or legal environment in which the subsidiary/associate operates. 

(ii) Property and equipment and software costs 

The Parent Company assesses impairment on property and equipment and software costs 

whenever events or changes in circumstances indicate that the carrying amount of the 

asset may not be recoverable. The factors that the Parent Company considers important, 

which could trigger an impairment review, include the following: 

• significant underperformance relative to expected historical or projected future 

operating results; 

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

overall business; and 

• significant negative industry or economic trends. 

The Parent Company recognizes an impairment loss whenever the carrying amount of the 

asset exceeds its recoverable amount. The recoverable amount is determined based on the 

asset’s value in use computation, which considers the present value of estimated future cash 

flows expected to be generated from the continued use of the asset. 

As of December 31, 2011 and 2010, no impairment losses were recognized on the Parent 

Company’s nonfinancial assets. The carrying values of the Parent Company’s nonfinancial 

assets as of December 31 follow: 


Investments in subsidiaries and associates (Note 10) P=295,334,077 P=245,149,252 

Property and equipment - net (Note 11) 7,094,474 9,493,115 


c. Estimated useful lives of property and equipment and software costs 

The Parent Company reviews the estimated useful lives of property and equipment and 

software costs annually based on the expected asset utilization after considering the expected 

future technological developments and market behavior. Significant changes in these estimates 

resulting from changes in the factors aforementioned could possibly affect the future results of 

operations. Any decrease in the estimated useful life of the property and equipment and 

software costs would decrease their respective balances and increase the recorded depreciation 

and amortization. 

*SGVMC116501*

- 19 - 

As of December 31, 2011 the carrying values of Property and equipment and Software costs 

follow: 


Property and equipment - net (Note 11) P=7,094,474 P=9,493,115 


In 2011, 2010 and 2009, the Parent Company recognized depreciation and amortization in the 

statements of income amounting to P=6.54 million, P=8.06 million and P=8.61 million, 

respectively. 

d. Recognition of deferred tax assets 

The Parent Company reviews the carrying amounts of deferred tax assets at each balance sheet 

date and reduces it to the extent that it is no longer probable that sufficient taxable income will 

be available to allow all or part of the deferred tax assets to be utilized. Significant judgment 

is required to determine the amount of deferred tax assets that can be recognized, based upon 

the likely timing and level of future taxable income together with future tax planning 

strategies. 

As of December 31, 2011 and 2010, the Parent Company did not recognize net deferred tax 

assets on existing deductible temporary differences amounting to P=2.80 million and 

P=2.85 million, respectively. Management believes that it is not highly probable that these 

temporary differences will be realized in the future (see Note 23). 

e. Present value of net retirement obligation 

The cost of defined benefit retirement plan and other post-employment benefits are 

determined using actuarial valuations. The actuarial valuation involves making assumptions 

about discount rates, expected rates of return on assets, future salary increases, mortality rates 

and future retirement increases. Due to the long-term nature of these benefits, such estimates 

are subject to significant uncertainty. 

The assumed discount rates were determined using the market yields on Philippine 

government bonds with terms consistent with the expected employee benefit payout as of the 

consolidated balance sheet date. Refer to Note 16 for the details of assumptions used in the 

calculation. As of December 31, 2011 and 2010, the Parent Company recognized retirement 

asset of P=0.37 million and retirement liability of P=0.78 million, respectively. In 2011, 2010 

and 2009, the Parent Company recognized retirement expense amounting to P=5.75 million, 

P=2.38 million and P=3.02 million, respectively (see Note 16). 

f. Share-based payment transactions 

The Parent Company determined the cost of its equity-settled share based program at grant 

date using the price earnings multiple model taking into account the terms and conditions 

upon which the shares were granted. At yearend, the Parent Company estimates the number 

of equity instruments that will ultimately vest. The Parent Company recognized cost of 

equity-settled share based payments amounting to P=1.53 million in 2009 (see Note 17). The 

vesting period of the stock purchase program ended on September 19, 2009. 

*SGVMC116501*

4. Fair Value Measurement 

- 20 - 

The following tables summarize the carrying amounts and fair values of the Parent Company’s 

financial assets and financial liabilities: 


Carrying Value Fair Value Carrying Value Fair Value 

Financial Assets 



Cash on hand P=24,772,521 P=24,772,521 P=41,745,551 P=41,745,551 

Cash in banks 


642,750,978 642,750,978 685,920,368 685,920,368 

Agents 993,280,050 993,280,050 1,081,402,745 1,081,402,745 

Couriers 


3,523,052 3,523,052 34,283,201 34,283,201 

Related parties 137,260,244 137,260,244 97,767,888 97,767,888 

Advances to officers and employees 2,526,259 2,526,259 2,991,428 2,991,428 

Noncontrolling shareholders – – 39,981,243 39,981,243 

Others 3,457,329 3,457,329 1,166,686 1,166,686 

Refundable deposits 4,568,661 4,492,159 4,099,931 3,860,098 

Total P=1,812,139,094 P=1,812,062,592 P=1,989,359,041 P=1,989,119,208 

Other Financial Liabilities 


Beneficiaries P=155,140,304 P=155,140,304 P=144,960,550 P=144,960,550 

Advances from related parties 79,753,117 79,753,117 74,161,090 74,161,090 

Agents, couriers and trading clients 44,404,974 44,404,974 27,101,817 27,101,817 

Accrued expenses 7,019,510 7,019,510 6,250,462 6,250,462 

Payable to suppliers 1,391,836 1,391,836 2,958,634 2,958,634 

Others 476,730 476,730 803,350 803,350 

Interest-bearing loans 666,000,000 666,000,000 877,000,000 877,000,000 

Total P=954,186,471 P=954,186,471 P=1,133,235,903 P=1,133,235,903 

The following methods and assumptions were used to estimate the fair value of the financial 

instruments: 

Cash and cash equivalents, Accounts receivable, Other receivables, Beneficiaries and other 

payables and Interest-bearing loans - carrying amounts approximate fair values due to the 

relatively short-term maturities of these instruments. 

Refundable deposits - fair values are based on the present value of future cash flows discounted 

using prevailing interest rates ranging from 1.56% to 2.14% and 2.31% to 3.12% as at 


As of December 31 2011 and 2010, the Parent Company has no financial instruments carried at 

fair value. 

5. Financial Risk Management Objectives and Policies 

The Parent Company’s principal financial instruments mainly comprise of short-term loans from 

banks. The main purpose of these financial instruments is to raise funds for the Parent Company’s 

fulfillment or delivery of remittance transactions to beneficiaries. The Parent Company also has 

various other financial assets and liabilities such as cash and cash equivalents, accounts receivable 

and accounts payable to beneficiaries, which arise directly from its remittance operations. 

*SGVMC116501*

- 21 - 

The main risks arising from the Parent Company’s financial instruments are credit risk, foreign 

currency risk, cash flow interest rate risk, and liquidity risk. The BOD reviews and approves 

policies for managing each of these risks and these are summarized below: 

Credit Risk 

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to perform its 

obligations during the life of the transaction. This includes risk of non-payment by borrowers or 

issuers, failed settlement of transactions and default on contracts. 

The nature of its business exposes the Parent Company to potential risk from difficulties in 

recovering transaction money from foreign partners. Receivables from foreign offices and agents 

arise as a result of its remittance operations in various regions of the globe. In order to address 

this, the Parent Company has maintained the following credit policies: (a) implement a contract 

that incorporates a bond and advance payment cover such that the full amount of the transaction 

will be credited to the Parent Company prior to their delivery to the beneficiaries, which applies 

generally to all new agents and in certain cases to old agents; (b) all foreign offices and agents 

must settle their accounts within the agreed credit terms, otherwise, the fulfillment or delivery of 

their remittance transactions will be put on hold; (c) evaluation of individual potential partners and 

preferred associates’ creditworthiness, as well as a close look into the other pertinent aspects of 

their partners’ businesses which assures the Parent Company of the financial soundness of their 

partner firms; and (d) receivable balances are monitored daily by the regional managers with the 

result that the Parent Company’s exposure to bad debts is not significant. 

The Parent Company’s receivables from agents and courier companies are highly collectible and 

have a turnover ranging from 1 to 5 days and 30 to 60 days, respectively. The other receivables, 

which include advances to related parties, are also highly collectible and are due in less than one 

year. 

The table below shows the maximum credit exposure of the Parent Company per account 

classification as of December 31, 2011 and 2010 (see Notes 6, 7, 8 and 12): 



Cash and cash equivalents* P=642,750,978 P=685,920,368 



996,803,102 1,115,685,946 

Related parties 137,260,244 97,767,888 

Advances to officers and employees 2,526,259 2,991,428 


Others 

Other noncurrent assets 

3,457,329 1,166,686 


Total 

* excludes cash on hand 

P=1,787,366,573 P=1,947,613,490 

*SGVMC116501*

- 22 - 

The table below shows the maximum credit exposure of the Parent Company per geographical 

classification as of December 31, 2011 and 2010: 


Asia Pacific P=1,386,607,212 P=1,742,336,664 

North America 169,629,594 54,214,381 

Europe 122,244,502 52,265,667 

Middle East 108,885,265 98,796,778 

Total P=1,787,366,573 P=1,947,613,490 

The Parent Company classifies its neither past due nor impaired receivables as high grade. High 

grade financial assets includes instruments with credit ratings of excellent, strong, good, or 

satisfactory, wherein the borrower has a low probability of default and could withstand the normal 

business cycle. 

As at December 31, 2011, the Parent Company has past due but not impaired receivables from 

agents amounting to P=8.77 million. These receivables have been outstanding for more than six 

months but less than one year. No impairment was recognized relative to these receivables. There 

are no past due but not impaired receivables as of December 31, 2010. 


Foreign currency risk is the risk to earnings or capital arising from changes in foreign exchange 

rates. It is the Parent Company’s policy that all daily foreign currencies, which arise as a result of 

its remittance transactions, must be traded daily with bank partners only at prevailing foreign 

exchange rates in the market. The daily closing foreign exchange rates shall be the guiding rate in 

providing wholesale rates and retail rates to foreign offices and agents, respectively. The trading 

proceeds will be used to pay out bank loans and other obligations of the Parent Company. 

The tables below summarize the Parent Company’s exposure to foreign exchange risk. Included 

in the tables are the Parent Company’s foreign currency-denominated monetary assets and 

liabilities and their PHP equivalent. 

Cash and Cash 

Equivalents Receivables Total 


PHP 

Equivalent 

Cash and Cash 

Equivalents Receivables Total 

PHP 

Equivalent 

Currency 

CAD − 3,899,810 3,899,810 P=166,949,916 139,422 3,312,925 3,452,347 P=151,305,487 

EUR 600,992 702,086 1,303,078 73,922,243 321,739 515,999 837,738 48,567,036 

SGD 440,811 1,628,629 2,069,440 69,903,060 89,587 1,254,112 1,343,699 45,565,156 

USD 1,263,619 246,093 1,509,712 66,185,751 1,026,855 901,651 1,928,506 84,545,703 

AUD 45,588 1,215,971 1,261,559 55,804,483 184,346 783,071 967,417 43,141,040 

GBP 14,873 796,606 811,479 54,974,473 14,752 – 14,752 1,002,493 

NTD − 20,248,641 20,248,641 29,205,344 – 23,731,378 23,731,378 35,581,120 

NZD 4,809 309,338 314,147 10,589,449 7,518 212,371 219,889 7,364,909 

HKD 23,219 1,496,086 1,519,305 8,565,572 – 1,553,760 1,553,760 8,753,014 

QAR 275 – 275 3,311 275 – 275 3,312 

Net exposure P=536,103,602 P=425,829,270 

*SGVMC116501*

- 23 - 

The following tables set forth for the year indicated the impact of reasonably possible changes in 

the rates of other currencies on pretax income. 

Currency 



exchange rate 

Effect on 

pretax 

income 




exchange rate 

Effect on 

pretax 

income 

CAD +2.81 P=10,959,401 -1.60 (P=6,238,760) 

EUR +7.36 9,585,817 -0.25 (324,205) 

SGD +1.95 4,038,058 -0.66 (1,363,182) 

AUD +2.95 3,715,845 -2.94 (3,714,735) 

GBP +4.40 3,573,796 -1.06 (856,884) 

NTD +0.10 1,985,663 -0.12 (2,434,616) 

USD +0.91 1,373,837 -1.94 (2,928,840) 

NZD +3.50 1,099,962 -2.44 (766,071) 

HKD +0.11 169,062 -0.26 (399,917) 

QAR +0.24 66 -0.53 (147) 





Effect on foreign currency Effect on 

Currency 


CAD +1.75 P=6,041,607 -2.09 (P=7,215,405) 

EUR +8.87 7,430,736 -3.04 (2,546,724) 

SGD +0.32 429,984 -1.87 (2,512,717) 

AUD +0.13 125,764 -7.05 (6,820,290) 

GBP +8.01 118,164 -3.57 (52,665) 

NTD +0.01 237,314 -0.12 (2,847,765) 

USD +3.55 6,846,196 -1.61 (3,104,895) 

NZD +1.03 226,486 -3.09 (679,457) 

HKD +0.41 637,042 -0.08 (124,301) 

QAR +1.73 476 -4.08 (1,122) 

There is no other impact on the Parent Company’s equity other than those already affecting the 

profit or loss. 


Interest rate risk arises from the possibility that changes in interest rates will affect future cash 

flows of financial instruments. 

As of December 31, 2011 and 2010, the Parent Company’s exposure to cash flow interest rate risk 

is minimal. The Parent Company’s policy is to manage its interest cost by entering only into fixed 

rate short-term loans from banks. 


Liquidity or funding risk is the risk that an entity will encounter difficulty in raising funds to meet 

commitments associated with financial instruments. 

The Parent Company’s objective is to maintain a balance between continuity of funding and 

flexibility through the use of short-term debts. In addition, the Parent Company maintains credit 

facilities with local banks. As of December 31, 2011 and 2010, the Parent Company has unused 

credit facilities amounting to P=1.48 billion and P=1.02 billion, respectively (see Note 14). 

*SGVMC116501*

- 24 - 


Maturity profile of financial assets held for liquidity purposes is shown below. The analysis is 

based on the remaining period from the end of the reporting period to the contractual maturity 

date, or if earlier, the expected date the assets will be realized. 


The maturity grouping is based on the remaining period from the end of the reporting period to the 

contractual maturity date. When counterparty has a choice of when the amount is paid, the 

liability is allocated to the earliest period in which the Parent Company can be required to pay. 

The tables below summarize the maturity profile of the Parent Company’s financial instruments 

based on undiscounted contractual payments. 


Over 60 days 

but less than 

Less than 5 days 5 to 30 days 30 to 60 days one year Total 



Cash on hand P=24,772,521 P=– P=– P= − =24,772,521 P 

Cash in banks 


642,750,978 − − − 642,750,978 

Agents 984,506,271 − − 8,773,779 993,280,050 

Couriers − − 3,523,052 − 3,523,052 

P=1,652,029,770 P=– P=3,523,052 P=8,773,779 P=1,664,326,601 


Beneficiaries and other 

payables: 

Beneficiaries 

Advances from related 

P=155,140,304 P=– P=– P= − =155,140,304 P 

parties 

Agents, couriers and 

– – 79,753,117 

− 79,753,117 

trading clients 44,404,974 – – 

− 44,404,974 

Accrued expenses – – 7,019,510 − 7,019,510 

Payable to suppliers – – 1,391,836 − 1,391,836 

Others – – 476,730 − 476,730 

Interest-bearing loans 95,050,139 571,866,010 − − 666,916,149 

P=294,595,417 P=571,866,010 P=88,641,193 P= − =955,102,620 P 



Over 60 days 

but less than 




Cash on hand P=41,745,551 P=– P=– P=– P=41,745,551 

Cash in banks 


685,920,368 – – – 685,920,368 

Agents 1,081,402,745 – – − 1,081,402,745 

Couriers – – 34,283,201 – 34,283,201 

P=1,809,068,664 P=– P=34,283,201 P=− P=1,843,351,865 


Beneficiaries and other 

payables: 

Beneficiaries 

Advances from related 

P=144,960,550 P=– P=– P=− P=144,960,550 

parties 

Agents, couriers and 

– – 74,161,090 

− 74,161,090 

trading clients 27,101,817 – – 

− 27,101,817 

Accrued expenses – – 6,250,462 − 6,250,462 

Payable to suppliers – – 2,958,634 − 2,958,634 

Others – – 803,350 − 803,350 

Interest-bearing loans 395,273,055 483,077,528 – − 878,350,583 

P=567,335,422 P=483,077,528 P=84,173,536 P=− P=1,134,586,486 

*SGVMC116501*

6. Cash and Cash Equivalents 


- 25 - 


Cash on hand P=24,772,521 P=41,745,551 

Cash in banks (Note 22) 642,750,978 685,920,368 

P=667,523,499 P=727,665,919 

Cash in banks earn interest at the respective bank deposit rates. 

In 2011, 2010 and 2009, interest income amounted to P=2.95 million, P=3.22 million and 


The Parent Company’s cash and cash equivalents denominated in foreign currency, with 

corresponding Philippine peso (PHP) equivalent, are as follows: 

December 31, 2011 December 31, 2010 

Amount PHP equivalent Amount PHP equivalent 

USD 1,263,619 P=55,397,057 1,026,855 P=45,017,323 

EUR 600,992 34,093,651 321,739 18,652,502 

SGD 440,811 14,890,031 89,587 3,037,917 

AUD 45,588 2,016,565 184,346 8,220,734 

GBP 14,873 1,007,585 14,752 1,002,493 

NZD 4,809 162,105 7,518 251,806 

HKD 23,219 130,905 − − 

QAR 275 3,312 275 3,312 

CAD – – 139,422 6,110,427 

P=107,701,211 P=82,296,514 

Cash in banks earn interest rates in 2011, 2010 and 2009 ranging as follows for: 

PHP-Denominated 0.50% to 2.00% 

Foreign Currency-Denominated 0.25% to 0.50% 

7. Accounts Receivable 

This account consists of receivables from: 


Agents P=993,280,050 P=1,081,402,745 

Couriers 3,523,052 34,283,201 

P=996,803,102 P=1,115,685,946 

Receivables from agents pertain to advances made to fund the remittance transactions to 

beneficiaries. These are settled within 1 to 5 days from transaction date. 

Receivables from couriers pertain to advances made to the courier companies to ease up the doorto-door 

delivery of the remittances to the beneficiaries. These are settled within 30 to 60 days 

from transaction date. 

*SGVMC116501*

8. Other Receivables 


- 26 - 


Related parties (Note 22) P=137,260,244 P=97,767,888 


Noncontrolling shareholders (Note 10) – 39,981,243 

Others 3,457,329 1,166,686 

P=143,243,832 P=141,907,245 

Receivable from the noncontrolling shareholders pertain to the Parent Company’s advances to the 

noncontrolling shareholders of IRCGmbH and WEPL. In 2011, the Parent Company acquired 

additional interest in IRCGmbH and WEPL. The receivable from noncontrolling shareholders of 

IRCGmbH and WEPL amounting to P=25.01 million and P=12.30 million, respectively, were 

applied against the acquisition costs (see Note 10). The remaining P=2.67 million was settled in 

July 2011. 

‘Others’ includes advances to contractors and trading clients for foreign exchange transactions. 

These outstanding receivables are due within one year. 

9. Other Current Assets 



Receivable from Bureau of Internal Revenue (BIR) P=13,160,535 P=13,160,535 

Prepaid expenses 5,579,968 1,895,811 

Visa cards inventory 3,371,662 8,054,220 

Suppliers and contractors 1,087,500 50,000 

Office supplies 190,328 199,689 

Creditable withholding tax 2,979 – 

P=23,392,972 P=23,360,255 

Receivable from BIR pertains to the excess payments made by the Parent Company in 2007 for 

the Initial Public Offering (IPO) percentage tax. As of December 31, 2011, the case is pending 

resolution with the Court of Tax Appeals. The Parent Company believes that it will be able to 

obtain the refund from the BIR. 

Prepaid expenses include prepayments for business development, rent, internet connection and 

association dues. 

*SGVMC116501*

10. Investments in Subsidiaries and Associates 

- 27 - 

The Parent Company’s investments in subsidiaries and associates consist of the following: 


Subsidiaries: 

IRCGmbH P=103,215,083 P=78,200,341 

IGRL 78,653,145 71,200,000 

LSML 42,554,665 42,554,665 

WEPL 21,336,890 9,033,072 

IRCL 13,444,000 13,444,000 

IAPL 8,552,000 8,552,000 

PSAGL 5,958,800 5,958,800 

KKIJ 5,413,120 – 

INZL 

Associates: 

32,400 32,400 

ISPL 12,600,000 12,600,000 

HKHCL 3,573,974 3,573,974 

P=295,334,077 P=245,149,252 

Establishment of subsidiaries 

IRCGmbH 

The Parent Company’s BOD approved IRCGmbH’s incorporation on July 8, 2005 as a stock 

corporation to be organized and registered in Austria. Accordingly, the Parent Company made an 

investment of P=3.55 million on July 18, 2005. 

On December 21, 2009, the shareholders of IRCGmbH made a non-refundable shareholders’ 

contribution amounting to EUR1.50 million (P=99.66 million) to the entity to strengthen its equity. 

The additional investments were taken from the outstanding receivables of the Parent Company 

from IRCGmbH amounting to P=91.16 million and were recognized by the latter as capital reserves 

to wipe out its accumulated deficit amounting to GBP0.56 million (P=52.41 million). As a result of 

the application of receivables, the Parent Company recognized a receivable amounting to 

P=16.52 million from the noncontrolling shareholder. The remaining P=8.49 million was recognized 

as a receivable from the noncontrolling shareholder in the separate financial statements of 

IRCGmbH. On September 28, 2010, the Parent Company advanced the P=8.49 million to 

IRCGmbH as payment of the receivable from the noncontrolling shareholder. This resulted to the 

increase in the Parent Company’s receivable by P=8.49 million (see Note 8). The existing 

ownership ratio of 74.90% and 25.10% was maintained towards the end of December 31 2010. 

On May 5, 2011, the Parent Company acquired the remaining 25.10% ownership interest in 

IRCGmbH from the noncontrolling stockholder for a consideration of P=25.01 million. The 

acquisition increased the Parent Company’s ownership interest in IRCGmbH to 100.00% from 

74.90%. The receivable from noncontrolling shareholder was applied in full against the total 

consideration (see Note 8). 

Consequently, on October 11, 2011, IERCAG changed its legal name to IREMIT Remittance 

Consulting GmbH (IRCGmbH) and changed its legal status from a stock company to a limited 

liability company. It also amended its Articles of Incorporation to include management 

consultancy in its business activities. 

*SGVMC116501*

- 28 - 

INZL 

On August 17, 2007, the Parent Company’s BOD approved the incorporation of INZL as a stock 

corporation to be organized and registered in New Zealand. Accordingly, the Parent Company 

made an investment of NZD1,000 (P=32,400). INZL started commercial operations on 

February 13, 2008. 

KKIJ 

On June 10, 2011, the Parent Company incorporated KKIJ in Japan with the primary purpose of 

engaging in money remittance services and other activities related thereto. Accordingly, the 

Parent Company made an investment of JPY10.00 million (P=5.41 million). KKIJ has not started 

commercial operations as of March 23, 2012. 

Acquisition of subsidiaries 

IGRL and IAPL 


interest in both IGRL and IAPL for a consideration of P=71.20 million and P=8.55 million, 

respectively. IGRL and IAPL are based in United Kingdom and Australia, respectively. These 

two entities, which are in the remittance business, have the same operations as the Parent 

Company. Accordingly, on June 29, 2007, the Parent Company acquired 100.00% ownership 

interest in IGRL and IAPL through the execution of deeds of assignment by the previous 

stockholders (who are also the stockholders of the Parent Company) of the two entities. Under the 

deeds of assignment, the existing advances by the Parent Company to certain stockholders were 

applied as payment for the purchase of IGRL and IAPL. 

On April 15, 2011, IGRL was authorized by the Financial Services Authority (FSA) of the United 

Kingdom as an Authorized Payment Institution under the European Payment Services Directive, a 

legislation adopted by the European Union that aims to harmonize laws across Europe pertaining 

to the provision of payment services, including money transfer services. Prior to this grant, the 

BOD of IGRL approved the increase of IGRL’s authorized shares to 105,000. Accordingly, the 

Parent Company invested GBP0.10 million (P=7.45 million) for the additional capital requirement. 

WEPL 

On June 2, 2007, the Parent Company’s BOD also approved the acquisition of 20.00% ownership 

interest in WEPL for a consideration of P=5.60 million. WEPL was incorporated and is based in 

Australia, and has the same operations as the Parent Company. Accordingly, on June 29, 2007, 

the Parent Company acquired 20.00% ownership interest in WEPL through the execution of a 

deed of assignment by the previous stockholders (who are also stockholders of the Parent 

Company) of the entity. Under the deed of assignment, the existing advances of the Parent 

Company to certain stockholders were applied as payment for the purchase of WEPL. On 

September 4, 2007, an additional 15.00% ownership interest in WEPL was acquired by the Parent 

Company for a consideration of P=3.43 million. 

On March 25 2011, the Parent Company’s BOD approved the acquisition of 35.00% ownership 

interest from the noncontrolling stockholders of WEPL for a consideration of AUD0.27 million 

(P=12.30 million), consequently making the ownership of the Parent Company over WEPL at 

100.00%. The Parent Company applied its receivables from the noncontrolling shareholders 

against the acquisition cost (see Note 8). 

As discussed in Note 1, WEPL is effectively 100.00% owned by the Parent Company through its 

direct interest of 70.00% and indirect interest of 30.00% through IAPL. 

*SGVMC116501*

- 29 - 

IRCL 

On October 1, 2004, the Parent Company’s BOD approved the acquisition of 65.00% of IRCL for 

a consideration of P=10.34 million. IRCL was incorporated on July 16, 2001 and is based in 

Canada and has the same operations as the Parent Company. On July 26, 2006, the additional 

30.00% ownership interest from a noncontrolling stockholder in IRCL was transferred to the 

Parent Company at no additional cost. 


interest from a noncontrolling stockholder for a consideration of P=3.10 million thereby taking its 

ownership in IRCL to 100.00%. Accordingly on June 29, 2007, the IRCL noncontrolling 

stockholder executed a deed of assignment to transfer the ownership interest to the Parent 

Company. Under the deed of assignment, the existing advances by the Parent Company to certain 

stockholder were applied as payment for the purchase of IRCL. 

PSAGL 

On November 28, 2008, the Parent Company’s BOD ratified the acquisition of 100.00% 

ownership interest in PSAGL for a consideration of P=5.96 million. PSAGL is based in Hong 

Kong and was incorporated on April 28, 2008 to engage in foreign currencies trading services. 

LSML 

LSML was incorporated on March 16, 2001 and is based in Hong Kong and has the same 

operations as the Parent Company. On April 2001, the Parent Company’s BOD approved the 

acquisition of 51.00% ownership interest in LSML for a consideration of P=17.85 million. On 

June 2, 2007, the Parent Company’s BOD approved the acquisition of the 49.00% ownership 

interest in LSML from its noncontrolling stockholder for a consideration of P=24.70 million. 

Accordingly on June 29, 2007, the noncontrolling stockholder of LSML (who is also a stockholder 

of the Parent Company) executed deed of assignment to transfer its ownership interest to the 

Parent Company. 

Acquisition of associates 

HKHCL 

On July 1, 2009, the Parent Company acquired 49.00% ownership interest in HKHCL, for a 

consideration of NTD2.45 million (P=3.57 million). HKHCL is a remittance business based in 

Taiwan. 

ISPL 

On June 29, 2007, the Parent Company acquired 49.00% ownership interest in ISPL through the 

execution of a deed of assignment by the previous stockholders (who are also stockholders of the 

Parent Company) of the entity for a consideration of P=12.60 million. ISPL is a remittance 

business based in Singapore. 

*SGVMC116501*

- 30 - 

The following tables present the summarized financial information of the Parent Company’s 

subsidiaries and associates as of and for the years ended December 31, 2011 and 2010: 



Total Total 




Income (Loss) 

Subsidiaries: 

PSAGL P=260,768 P=1,959 P=70,608 P=70,409 P=66,526 

IRCL 87,150 50,795 102,900 92,629 16,148 

IRCGmbH 76,487 64,317 7,053 6,174 9,930 

IGRL 49,057 49,256 60,754 50,653 (10,809) 

WEPL 33,093 28,188 36,404 34,563 302 

LSML 26,072 16,658 17,064 17,055 (265) 

INZL 13,083 22,286 6,338 5,277 (3,047) 

IAPL 12,301 8,236 953 623 15 

KKIJ 11,223 5,612 − − − 

Associates: 

569,234 247,307 302,074 277,383 78,800 


HKHCL 26,875 23,906 19,340 13,151 1,223 

P=669,363 P=320,916 P=377,338 P=322,428 P=83,150 



Total Total 




Income (Loss) 

Subsidiaries: 

PSAGL P=193,141 P=1,722 P=62,610 P=62,413 P=63,271 

IRCL 62,144 40,718 109,058 97,525 666 

IRCGmbH 68,553 70,507 13,400 11,711 (46,642) 

IGRL 16,662 13,645 55,240 43,769 1,019 

WEPL 21,785 17,111 30,546 29,226 200 

LSML 24,435 14,722 25,562 25,553 6,107 

INZL 11,870 18,025 9,618 8,798 (1,129) 

IAPL 5,600 1,526 628 308 29 

Associates: 

404,190 177,976 306,662 279,303 23,521 

ISPL 61,209 40,638 56,130 33,198 4,754 

HKHCL 69,159 53,006 65,648 22,037 5,996 

P=534,558 P=271,620 P=428,440 P=334,538 P=34,271 

*SGVMC116501*

- 31 - 



Total Total 


Assets 


Liabilities Revenue Income (Loss) 

Subsidiaries: 

PSAGL P=156,824 P=19,388 P=55,647 P=55,480 P=86,354 

IRCL 81,580 60,602 112,284 99,665 6,725 

IRCGmbH 57,672 7,355 10,750 9,146 (17,022) 

IGRL 16,217 14,018 62,353 46,910 1,003 

WEPL 27,696 23,595 33,940 32,627 2,975 

LSML 21,719 17,771 21,404 21,392 2,236 

INZL 13,113 17,987 8,243 7,580 (2,654) 

IAPL 28,877 25,058 590 244 3,719 

Associates: 

403,698 185,774 305,211 273,044 83,336 


HKHCL 31,970 30,572 21,096 14,295 (966) 

P=509,827 P=259,260 P=364,353 P=325,047 P=95,397 

11. Property and Equipment 

The composition of and movements in this account follow: 

Office and 

Communication 

Equipment 


and Delivery 

Equipment 


Furniture 

and Fixtures 

Leasehold 


Cost 


Additions 2,222,849 35,315 285,181 50,000 2,593,345 

Disposals – – (10) – (10) 



Amortization 


Depreciation and amortization 2,483,026 1,309,027 414,913 785,010 4,991,976 


Net Book Value at End of Year P=3,290,121 P=2,616,021 P=665,617 P=522,715 P=7,094,474 

Office and 

Communication 

Equipment 


and Delivery 

Equipment 


Furniture 

and Fixtures 

Leasehold 


Cost 

Balance at beginning of year P=22,623,757 P=5,920,959 P=3,692,945 P=11,762,843 P=44,000,504 

Additions 2,621,930 3,116,461 177,934 32,500 5,948,825 

Disposals (195,500) (2,202,818) (91,412) – (2,489,730) 



Amortization 


Depreciation and amortization 3,521,442 1,303,027 415,880 1,310,452 6,550,801 

Disposals (88,344) (708,790) (25,900) – (823,034) 


Net Book Value at End of Year P=3,550,298 P=3,889,733 P=795,359 P=1,257,725 P=9,493,115 

As of December 31, 2011 and 2010, the cost of fully depreciated property and equipment still in 

use amounted to P=23.13 million and P=22.64 million, respectively. 

*SGVMC116501*

- 32 - 

Details of depreciation and amortization follow: 


Property and equipment P=4,991,976 P=6,550,801 P=6,948,635 

Software cost (Note 12) 1,543,083 1,507,900 1,665,896 

P=6,535,059 P=8,058,701 P=8,614,531 

12. Software Costs - net and Other Noncurrent Assets 

Movements in software costs follow: 


Cost 


Additions 1,071,252 671,288 

Balance at end of year 

Accumulated Amortization 

13,167,949 12,096,697 

Balance at beginning of year 10,228,625 8,720,725 

Amortization (Note 11) 1,543,083 1,507,900 


Net Book Value at end of year P=1,396,241 P=1,868,072 

Other noncurrent assets consist of: 


Input VAT P=21,242,725 P=28,493,804 


Deferred input VAT 326,056 350,550 

Others 44,000 44,000 

P=26,181,442 P=32,988,285 

The Parent Company has applied for tax credits on Input VAT with the BIR and is waiting for the 

issuance of Tax Credit Certificates (TCCs). In 2011, the BIR issued two tax credit certificates to 

the Parent Company for its input VAT filed for years 2005 and 2006 amounting to P=1.71 million 

and P=3.82 million, respectively. Management of the Company believes that it will able to collect 

the rest of the TCCs applicable to its outstanding claims. The carrying amounts are already net of 

claims disallowed by the BIR amounting to P=2.06 million, nil and P=1.34 million in 2011, 2010 and 

2009, respectively (see Note 20). 

Refundable deposits pertain to the security deposits made by the Parent Company in relation to 

rental lease agreements for its office spaces. 

*SGVMC116501*

13. Beneficiaries and Other Payables 


- 33 - 


Beneficiaries P=155,140,304 P=144,960,550 

Advances from related parties (Note 22) 79,753,117 74,161,090 

Agents, couriers and trading clients 44,404,974 27,101,817 

Accrued expenses 7,019,510 6,250,462 

Payable to suppliers 1,391,836 2,958,634 

Withholding tax payable 819,129 814,996 

Payable to SSS, Philhealth and HDMF 639,773 7,754 

Vat payable 17,875 − 

Others 476,730 803,350 

P=289,663,248 P=257,058,653 

Payables to beneficiaries, agents, couriers and trading clients are noninterest-bearing and are 

normally settled within 1 to 30 days. 

Accrued expenses include accruals for various operating expenses such as vacation and sick leave 

benefits, courier charges, training and development, professional fees and utilities. 

14. Interest-Bearing Loans 

This account pertains to the Parent Company’s unsecured, short-term interest-bearing pesodenominated 

bank loans. 

As of December 31, 2011 and 2010, the outstanding loans payable of the Parent Company 

amounted to P=666.00 million and P=877.00 million, respectively. 

In 2011, 2010 and 2009, these loans bear annual interest rates ranging from 5.00% to 7.00%, 

5.50% to 6.00% and 7.00% to 8.00%, respectively. In 2011, 2010 and 2009, the Parent Company 

recognized interest expense of P=38.32 million, P=29.21 million and P=48.68 million, respectively. 

The Parent Company has unused credit facilities with various banks amounting to P=1.48 billion 

and P=1.02 billion as of December 31, 2011 and 2010, respectively. 

The loans outstanding as of December 31, 2011 were subsequently paid on various dates in 

January and February 2012. 

*SGVMC116501*

15. Equity 

- 34 - 

Capital Stock 

The Parent Company’s capital stock consists of: 


Number of 

Shares Amount 

Number of 

Shares Amount 

Number of 

Shares Amount 

Common Stock 

Authorized - P=1 par value 

per share 1,000,000,000 P=1,000,000,000 1,000,000,000 P=1,000,000,000 1,000,000,000 P=1,000,000,000 

Issued: 


of the year 562,417,000 P=562,417,000 562,417,000 P=562,417,000 562,417,000 P=562,417,000 

Stock dividends 55,308,800 55,308,800 – – – – 

Balance at end of the year 617,725,800 617,725,800 562,417,000 562,417,000 562,417,000 562,417,000 

Treasury stock: 


of the year (9,329,000) (40,115,150) (9,329,000) (40,115,150) (10,006,200) (40,792,350) 

Acquisitions (5,544,000) (12,872,058) – – (130,900) (130,900) 

Reissaunce – – – – 808,100 808,100 

Balance at end of the year (14,873,000) (52,987,208) (9,329,000) (40,115,150) (9,329,000) (40,115,150) 

Issued and outstanding 602,852,800 P=564,738,592 553,088,000 P=522,301,850 553,088,000 P=522,301,850 

On September 13, 2007, the SEC approved the registration of 140,604,000 common shares with 

offer price of P=4.68 and 454,950,000 outstanding shares with par value of P=1.00. There are 17 

registered common stockholders as of December 31, 2011 and 13 registered common stockholders 

as of December 31, 2010 and 2009. Shares lodged with the Philippine Central Depository are 

registered under the name of PCD Nominee Corporation and as such are treated as being held by 

only one shareholder. 

Dividends 


P=26.01 million or P=0.0471 per share, payable to shareholders-of-record as of April 7, 2009. 

The declaration was subsequently ratified and confirmed by the Parent Company’ shareholders 

during their annual meeting held on July 17, 2009. The payment of dividends was made on 

May 6, 2009. 


P=26.60 million or P=0.0481 per share, payable to shareholders-of-record as of April 8, 2010. 

The declaration was subsequently ratified and confirmed by the Parent Company’ shareholders 

during their annual meeting held on July 23, 2010. The payment was made on May 5, 2010. 

On June 17, 2011, the Board of Directors of the Parent Company authorized the declaration of 

stock dividends equivalent to 10% of outstanding shares of 553,088,000 in favor of its 

stockholders-of-record as of August 15, 2011. The declaration was subsequently ratified and 

confirmed by the Parent Company’s stockholders during their annual meeting held on 

July 29, 2011. 

Treasury Stock 

On August 15, 2008, the Parent Company’s BOD approved the buy-back program to acquire up to 

ten million (10,000,000) of its shares, representing approximately 1.87% of the Parent Company’s 

total outstanding common shares, from the market. The Parent Company purchased 9,329,000 

shares (P=40.12 million) in 2008 under the buy-back program. 

*SGVMC116501*

- 35 - 

In 2009 and 2008, the Parent Company purchased 130,900 shares (P=0.13 million) and 

548,500 shares (P=0.55 million), respectively, under the SSPP. The 808,100 shares (including 

128,700 shares purchased in 2007) purchased under the SSPP, were subsequently transferred on 

September 2009 to the retirement fund of the Parent Company (see Notes 16 and 17). 

On September 16, 2011, the Board of Directors of the Parent Company adopted a resolution 

authorizing the buy-back of up to ten million (10,000,000) of its shares from the market. The 

Parent Company purchased 4,873,000 shares (P=11.35 million) under the buy-back program. 

In 2011, the Parent Company also purchased 671,000 shares (P=1.52 million) under the buy-back 

program approved in August 15, 2008 as discussed above. 

Capital Management 

The Parent Company’s capital is composed of its equity, which amounts to P=1.20 billion and 

P=1.16 billion as of December 31, 2011 and 2010, respectively. 

The Parent Company’s capital management activities seek to ensure that it maintains a healthy 

capital ratio in order to support its businesses and maximize shareholder value by optimizing the 

level and mix of its capital resources. Decisions on the allocation of capital resources are being 

performed as part of the strategic planning review. 

The Parent Company manages its capital structure and makes adjustments to it, in light of changes 

in economic conditions. To maintain or adjust the capital structure, the Parent Company may 

adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. 

No changes were made in the objectives, policies or processes during the years ended 

December 31, 2011 and 2010. 

The Parent Company’s objective is to ensure that there are no known events that may trigger direct 

or contingent financial obligation that is material to the Company, including default or 

acceleration of an obligation. 

The Parent Company is not subject to externally imposed capital requirements. 

16. Retirement Plan 

The Parent Company has a noncontributory defined benefit retirement plan covering substantially 

all of its regular employees. Under this retirement plan, all qualified employees are entitled to 

cash benefits after satisfying age and service requirements. 

Provisions for pension obligations are established for benefits payable in the form of retirement 

pensions. Benefits are dependent on years of service and the respective employee’s latest monthly 

salary. 

The Parent Company determined its transitional liability for defined benefit retirement plan merely 

as the present value of the obligation since the Parent Company had no plan assets at the date of 

the adoption. Transitional liability is amortized prospectively over five (5) years starting on 

January 1, 2005. 

The latest actuarial valuation report on the retirement plan is dated December 31, 2011. 

*SGVMC116501*

- 36 - 

The principal actuarial assumptions used in determining the retirement liability of the Parent 

Company as of January 1, 2011 and 2010 follow: 


Discount rate 9.69% 11.25% 

Future salary increases 8.00% 9.00% 

Expected return on plan assets 6.00% 6.00% 

Average remaining working life (in years) 32.10 31.8 

The discount rates used to arrive at the present value of the obligation as of December 31, 2011 

and 2010 are 6.70% and 9.69%, respectively. 

The amounts recognized in the parent company balance sheets follow: 


Present value of obligation P=22,524,680 P=21,847,360 

Fair value of plan assets 21,816,324 15,196,930 

Deficit (surplus) 708,356 6,650,430 

Unrecognized actuarial losses (1,076,750) (5,872,169) 

Retirement (asset) liability (P=368,394) P=778,261 

The movements in the fair value of plan assets in 2011 and 2010 are as follows: 



Contributions 6,895,233 5,229,490 

Expected return on plan assets 1,118,673 738,073 


Actuarial (loss) gain (1,394,512) (2,643,029) 


The actual return on the plan assets of the Parent Company in 2011 and 2010 amounted to a loss 

of P=1.90 million and a gain of P=4.45 million, respectively. 

The Parent Company expects to contribute P=6.53 million to its retirement fund in 2012. 

The movements in the present value of obligation are as follows: 



Current service cost 4,618,548 2,143,246 

Interest cost 2,117,009 1,134,058 


Actuarial loss (6,058,237) 9,038,166 


*SGVMC116501*

- 37 - 

The amounts of retirement expense included in ‘Salaries, wages and employee benefits’ in the 

parent company statements of income are as follows: 


Current service cost P=4,618,548 P=2,143,246 P=1,819,273 

Interest cost 2,117,009 1,134,058 999,326 

Expected return on plan assets (1,118,673) (738,073) – 

Actuarial (gains) loss recognized 131,694 (163,104) (53,418) 

Amortization of transitional liability – – 252,228 

P=5,748,578 P=2,376,127 P=3,017,409 

The movements in the retirement (asset) liability recognized in the parent company balance sheets 

are as follows: 


Balance at beginning of year P=778,261 P=3,631,624 

Retirement expense 5,748,578 2,376,127 

Contributions (6,895,233) (5,229,490) 

Balance at end of year (P=368,394) P=778,261 

Movements in the unrecognized actuarial (gains) losses are as follows: 


Balance at beginning of year 5,872,169 (P=5,972,130) 

Actuarial loss (gain) during the year (4,663,725) 11,681,195 

Actuarial (loss) gain recognized (131,694) 163,104 


The major categories of plan assets follow: 


Private equity securities* P=9,245,139 P=10,249,745 

Deposits in banks 7,613,374 2,047,387 

Government debt securities 4,763,467 2,760,719 

Interest receivable 215,615 162,126 

Trust fee payable (21,271) (23,047) 

P=21,816,324 P=15,196,930 

*This includes P=0.81 million of the Parent Company’s own equity securities bought under the SSPP (see Note 17). 

The amounts of experience adjustments relating to the plan liabilities of the Parent Company 

follow: 

2011 2010 2009 2008 2007 

Present value of obligation 22,524,680 P=21,847,360 P=10,080,516 P=6,574,511 P=7,770,113 

Fair value of plan assets 21,816,324 15,196,930 12,421,022 3,168,050 − 

Deficit (surplus) 708,356 6,650,430 (2,340,506) 3,406,461 7,770,113 

Changes in actuarial assumptions (498,493) 9,932,542 1,070,082 (3,766,312) (9,785,892) 

Experience adjustments on plan 

liabilities (5,559,744) (894,376) (382,676) (206,448) 4,176,250 

Experience adjustments on plan assets (1,394,512) (2,643,029) 4,452,972 – − 

*SGVMC116501*

17. Special Stock Purchase Program (SSPP) 

- 38 - 

On July 20, 2007, the Parent Company’s BOD approved the proposal to set up an SSPP totaling 

15,000,000 shares for the employees of the Parent Company who have been in the service for at 

least one (1) calendar year as of June 30, 2007, as well as its BOD members, resource persons and 

consultants (collectively referred to as “the Participants”). A Notice of Exemption under 

Section 10.2 of the Securities Regulations Code had been approved by the SEC on 

September 13, 2007. Notwithstanding the aforesaid confirmation by the SEC of the exempt 

status of the SSPP shares, the SEC nonetheless required the Parent Company to include the SSPP 

shares among the shares of the Parent Company which were registered with the SEC prior to the 

conduct of its Initial Public Offering in October 2007. The registration of the Parent Company 

shares, together with the SSPP shares, was rendered effective on October 5, 2007. 

All 15,000,000 shares were exercised. The shares subject to the SSPP were sold at par value or 

P=1.00 per share. Total shares amounting to P=11.74 million were paid in full, while the difference 

totaling P=3.26 million were paid by way of salary loan. Shares acquired through SSPP are subject 

to a lock-up period of 2 years from date of issue, which ended on September 19, 2009. 

The sale is further subject to the condition that should the officer or employee resign from the 

Parent Company prior to the expiration of the lock-up period, the shares purchased by such 

resigning employee or officer shall be purchased at cost by the Parent Company as Treasury 

stock. As of December 31, 2009, 24 employees resigned (9 in 2009, 13 in 2008 and 2 in 2007) 

and their shares totaling 808,100 (130,900 in 2009, 548,500 in 2008 and 128,700 in 2007) were 

bought back by the Parent Company. 

As approved by the Parent Company’s BOD, the fair value of the shares issued under the SSPP 

was measured at the grant date using the price-earnings multiple model taking into account the 

terms and conditions upon which the shares were granted. The fair value at grant date was 

P=1.33 per share. This transaction also resulted in an increase in equity by P=1.53 million, 

P=2.16 million and P=1.00 million recognized as ‘Share-based payment’ under equity in 2009, 2008 

and 2007, respectively. 

On September 19, 2009, which is the end of the lock up period, the 808,100 shares bought back at 

cost was transferred to the Parent Company’s retirement fund upon reimbursement of the 

P=0.81 million paid by the Parent Company for those shares (see Note 16). 

The expense arising from the share-based payment plan is recognized over the two-year lock-up 

period. The expense recognized under ‘Salaries, wages and employee benefits’ in the parent 

company statements of income amounted to P=1.53 million in 2009. 

18. Operating Lease Commitments 

The Parent Company has entered into the following lease agreements for its office spaces: 

(a) On September 30, 2008, a lease agreement with Sta. Elena Divisoria Condo was made for a 

period of 60 months commencing on October 1, 2008 to September 30, 2013 with a 10.00% 

escalation rate effective on the second year up to the fifth year of the lease term. The contract 

was cancelled in May 2009. 

*SGVMC116501*

- 39 - 

(b) A lease agreement with Wynsum Realty was entered into for a period of 24 months 

commencing on September 1, 2008 to August 31, 2010 with a 5.00% escalation on the 

monthly rental on the second year of the lease term. The contract was renewed for another 

period of 2 years from September 1, 2010 to August 31, 2012 with the same terms. 

(c) On February 7, 2007, a lease agreement with Oakridge Properties (Unit 2503) was made for a 

period of 36 months commencing on February 1, 2007 to January 31, 2010 with a 10.00% 

escalation on the monthly rental payable effective on the 13th and 25th month of the lease 

term. The contract was renewed for another period of 2 years from February 1, 2010 to 

January 31, 2012 with the same terms. 

(d) A lease agreement with Oakridge Properties (Unit 2603) was entered into for a period of 12 

months, which commenced on December 1, 2008 and expired on November 30, 2009. The 

contract was renewed for a period of 2 years commencing on December 1, 2009 to 

November 30, 2011 with a 10.00% escalation on the monthly rental on the 13th month of the 

lease term. The contract was renewed for another period of 2 years from December 1, 2011 to 

November 30, 2013 with the same terms. 

(e) On January 6, 2009, a lease agreement with Oakridge Properties (Unit 2703) was entered into 

for a period of 24 months commencing February 1, 2009 to January 31, 2011 with a 10.00% 

escalation rate on the aggregate monthly rental effective on the 13th month of the lease term. 

The contract was renewed for a period of 2 years from February 1, 2011 to January 31, 2013 

with the same terms. 

(f) On July 1, 2011, the Parent Company entered into a sublease agreement with Surewell 

Equities Pte Ltd., one of the stockholders of the Parent Company, for the use of the latter’s 

office space in Singapore for an initial term of two (2) years. 

Total rent expense of the Parent Company amounted to P=14.23 million, P=11.74 million and 

P=11.11 million in 2011, 2010 and 2009, respectively (see Note 22). 

Future minimum rentals payable under non-cancelable operating leases are as follows: 


Within one year P=10,458,903 P=11,225,119 

After one year but not more than five years 7,101,949 3,122,961 

P=17,560,852 P=14,348,080 

19. Marketing Expenses 



Marketing and promotions P=22,310,186 P=27,448,244 P=11,465,823 

Advertising and publicity 5,937,904 4,950,676 3,378,503 

P=28,248,090 P=32,398,920 P=14,844,326 

*SGVMC116501*

20. Other Operating Expenses 


- 40 - 


Taxes and licenses P=6,726,300 P=6,085,301 P=2,253,135 

Association dues 3,230,078 1,927,949 2,066,643 

Business development 2,974,650 2,679,500 943,210 

Disallowance of input VAT by BIR 2,058,616 – 1,338,804 

Insurance 814,865 613,229 754,666 

Repairs and maintenance 691,037 799,563 508,566 

Donations and contributions – 1,155,280 1,209,115 

Miscellaneous 2,136,107 1,784,742 1,730,305 

P=18,631,653 P=15,045,564 P=10,804,444 

‘Miscellaneous’ includes various expenses incurred on recruitment, Christmas parties, and 

Christmas giveaways. 

21. Realized Foreign Exchange Gains - Net and Other Income 

‘Realized foreign exchange gains - net’ represents currency exchange income (net of losses) 

arising primarily from trading third currencies to Philippine pesos. These third currencies are 

sourced from the remittance transactions. 

‘Other operating income’ consists of: 


Service fees P=6,316,114 P=– P=– 

Rebates 2,881,469 687,509 2,595,006 

Foreign exchange gain - net 2,722,754 116,205 5,172,171 

Reversal of foreign income tax − 2,406,695 − 

Dividends – 596,381 34,242,442 

Others 1,504,014 1,077,589 2,594,154 

P=13,424,351 P=4,884,379 P=44,603,773 

Service fees pertain to revenue earned from services rendered by the call center agents employed 

by the Parent Company to service the phone in transactions of its foreign subsidiary offices in 

Canada, New Zealand, Australia and UK (see Note 22). Also included on this classification is the 

service fee collected from the Social Security System (SSS) for remittance accepted and transacted 

by the Parent Company on its behalf amounting to P=0.15 million. 

Foreign exchange gain - net represents currency exchange income (net of losses) arising from 

revaluation of foreign currency denominated assets and liabilities. 

Rebates pertain to the refund of bank service charges. 

*SGVMC116501*

22. Related Party Transactions 

- 41 - 





In the ordinary course of business, the Parent Company transacts with its related parties. Under 

the Parent Company’s existing policies, these transactions are made substantially on the same 

terms and conditions as transactions with other individuals and businesses of comparable risks. 

The Parent Company engages in transactions with related parties consisting primarily of the 

following: 

(a) Delivery fees earned from clients of subsidiaries and associates are as follows: 


IRCL P=55,556,118 P=55,227,017 P=51,071,109 

HKHCL 46,127,251 33,202,567 25,364,567 

IAPL and WEPL 28,136,596 26,166,135 30,787,242 

ISPL 24,463,777 25,080,948 27,016,303 

IGRL 17,147,494 21,562,260 22,736,884 

LSML 7,562,975 10,342,216 9,633,356 

INZL 4,032,091 3,498,875 2,697,639 

IRCGmbH 1,242,098 3,899,549 4,368,628 

P=184,268,400 P=178,979,567 P=173,675,728 

(b) The Parent Company leases office spaces from Oakridge Properties (see Note 18). Rent 

expense amounted to P=9.88 million, P=9.25 million and P=8.17 million in 2011, 2010, and 2009, 

respectively. Oakridge Properties is owned by JTKC, one of the stockholders of the Parent 

Company. 

(c) The Parent Company entered into a sublease agreement with Surewell Equities Pte Ltd., one 

of the stockholders of the Parent Company (see Note 18). Rent expense amounted to 

P=0.90 million in 2011. 

(d) The Parent Company’s retirement fund is maintained with Sterling Bank of Asia (SBA), an 

affiliate due to common stockholders, as trustee (see Note 16). The Parent Company also has 

deposits amounting to P=118.62 million and P=129.71 million with SBA as of 

December 31, 2011 and 2010, respectively. These deposits earned P=0.43 million, P=1.12 

million and P=1.16 million interest income in 2011, 2010, and 2009, respectively. 

(e) In 2011, the Parent Company provides call center services to process the phone-in transactions 

of IRCL, INZL, IGRL and WEPL. Service income earned amounted to P=6.17 million. 

*SGVMC116501*

- 42 - 

In addition to the related information disclosed elsewhere in the Parent Company’s financial 

statements, the following are the yearend balances in respect of transactions with related parties 

which were carried in terms that prevail in arm’s length transactions during the year: 


Accounts receivable (Note 7): 

Subsidiaries: 

IRCL 42,142,000 28,873,378 

WEPL 23,569,790 11,794,898 

IGRL 19,114,840 – 

LSML 8,434,669 8,750,196 

INZL 5,149,801 7,113,107 

IRCGmbH – 9,476,775 

IAPL 

Associates: 

– 25,949 


HKHCL 29,463,514 35,543,489 

P=194,196,519 P=140,259,648 

Advances to related parties (Note 8): 

Subsidiaries: 

IRCGmbH P=62,811,308 P=54,579,655 

IGRL 20,421,294 5,099,127 

INZL 15,725,924 9,285,149 

LSML 6,778,807 4,454,735 

KKIJ 5,611,520 – 

WEPL 604,175 94,113 

IAPL 373,740 – 

IRCL 150,199 71,646 

PSAGL 33,166 – 

Associates: 


HKHCL 8,715,507 8,078,542 

P=137,260,244 P=97,767,888 

Advances from related parties (Note 13): 

Subsidiaries: 

PSAGL P=75,534,429 P=70,214,989 

IAPL 4,218,688 3,946,101 

P=79,753,117 P=74,161,090 

Accounts receivable pertains to advances made by the Parent Company to beneficiaries of 

remittance transactions processed by the subsidiaries and associates. 

Advances to subsidiaries include operational cash advances from the Parent Company. These are 

non-interest bearing and are due on demand. 

Advances to associates pertain to unpaid delivery fees. These are non-interest bearing and are due 

on demand. 

*SGVMC116501*

- 43 - 

The amounts payable to PSAGL pertain to cash advances for Parent Company’s trading 

transactions. These are non-interest bearing and are due on demand. 

Advances from IAPL include unremitted dividend income from dividends declared by WEPL. 

This is non-interest bearing and is due on demand. 

As of December 31, 2011 and 2010, no provision for credit losses has been recognized for the 

amounts due from related parties. 

In 2010, the Parent Company recognized dividend income amounting P=0.60 million from 

dividends declared by ISPL. In 2009, the Parent Company’s dividend income includes dividends 

declared by ISPL (P=14.40 million), IRCL (P=9.54 million), WEPL (P=3.93 million), IAPL (P=3.30) 

and PSAGL (P=3.07 million). 

The compensation of the key management personnel of the Parent Company in 2011, 2010 and 

2009 are as follows: 




Share-based payment − – 435,303 

P=22,882,376 P=20,154,871 P=18,993,407 

23. Income Taxes 

The provision for income tax consists of: 


Current 

RCIT P=23,174,172 P=15,785,947 P=25,662,740 

Final 589,871 643,945 1,534,105 

P=23,764,043 P=16,429,892 P=27,196,845 

Republic Act (RA) No. 9337, An Act Amending National Internal Revenue Code, provides that the 

RCIT rate shall be 35.00% until December 31, 2008. Starting January 1, 2009, the RCIT rate shall 

be 30.00%. It also provides that the interest allowed as a deductible expense is reduced by an 

amount equivalent to 42.00% until December 31, 2008 and 33.00% starting January 1, 2009 of 

interest income subjected to final tax. 

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

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

income tax liability for the next three years. In addition, current tax regulations provide for the 

ceiling on the amount of entertainment, amusement and recreation (EAR) expenses that can be 

claimed as a deduction against taxable income. The actual EAR expenses incurred by the Parent 

Company was P=4.46 million, P=2.84 million and P=2.62 million in 2011, 2010 and 2009, 

respectively. The allowed EAR limit was P=4.90 million, P=4.63 million and P=4.73 million in 2011, 

2010 and 2009, respectively. Under the regulation, EAR expenses allowed as deductible expense 

for taxpayers engaged in the sale of services, including exercise of profession and use of lease 

properties, like the Parent Company, is limited to the actual EAR paid or incurred but not to 

exceed 1.00% of net revenue. 

*SGVMC116501*

- 44 - 

RA No. 9504, An Act Amending National Internal Revenue Code, provides that starting 

July 1, 2008, the optional standard deduction (OSD) equivalent to 40.00% of gross income may be 

claimed as an alternative deduction in computing for the RCIT. For the 2011 and 2010 RCIT 

computation, the Parent Company elected to claim itemized expense deductions instead of the 

OSD. 

As of December 31, 2011 and 2010, the deferred tax assets and liability recognized by the Parent 

Company relates to the tax effects of the following: 


Deferred tax assets on: 

Accrued courier charges P=245,354 P=249,069 

Other accrued expenses 184,629 − 

Retirement liability − 281,692 

Subtotal 

Less deferred tax liability on 

429,983 530,761 

Unrealized foreign exchange gain 361,652 530,761 

Retirement asset 68,331 − 

Subtotal 429,983 530,761 

Net deferred tax assets P=– P=– 

The Parent Company did not set up deferred tax assets on the following temporary differences: 


Temporary differences on: 

Accrued interest P=1,994,506 P=2,074,213 

Accrued courier charges − 393,793 

Others 808,582 381,961 

P=2,803,088 P=2,849,967 

The management of the Parent Company believes that it is not highly probable that these 

temporary differences will be realized in the future. 

A reconciliation of the statutory income tax rates and the effective income tax rates in 2011, 2010 

and 2009 follows: 


Statutory income tax 30.00% 30.00% 30.00% 

Tax effects of: 

Unrecognized deferred tax asset (0.02) (1.15) (2.59) 

Interest income subject to final tax (0.37) (0.57) (0.77) 

Nondeductible interest expense 0.37 0.56 0.76 

Effective income tax 29.98% 28.84% 27.40% 

24. Contingencies 

The Parent Company has various contingencies arising in the ordinary conduct of business which 

have either pending decision by the courts or are being contested, the outcome of which are not 

presently determinable. 

*SGVMC116501*

- 45 - 

In the opinion of management and its legal counsel, the eventual liability under these lawsuits or 

claims, if any, will not have a material or adverse effect on the Parent Company’s financial 

position and results of operations. The information usually required by PAS 37 is not disclosed on 

the grounds that it can be expected to prejudice the outcome of these lawsuits, claims and 

assessments. 

25. Approval of the Release of the Parent Company Financial Statements 

The accompanying financial statements of the Parent Company were approved and authorized for 

issue by the BOD on March 23, 2012. 

26. Supplementary Information Required Under Revenue Regulations No. 19-2011 

On December 9, 2011, the BIR issued RR No. 19-2011 prescribing the new income tax forms to 

be used effective calendar year 2011. In the case of corporations using BIR Form 1702, the 

taxpayer is now required to include as part of its notes to the financial statements, schedules and 

information on taxable income and deductions. 

In compliance with the requirements set forth by RR 19-2011, the schedule and information of 

taxable income and deductions are as follows: 

Service income P=490,087,163 

Cost of services 175,332,116 

314,755,047 

Non-Operating Taxable Other Income 

Miscellaneous Income 14,350,754 

Total Gross Income 329,105,801 

Less: Itemized deductions 

Salaries and Allowances 89,059,553 

Interest 38,322,540 

Advertising and promotions 28,248,090 

Transportation and travel 21,159,472 

Rent 14,230,999 

Communication, Light and Water 13,782,359 

Office Supplies 8,941,140 

Professional fees 8,488,153 

Taxes and Licenses 6,726,300 

Depreciation and amortization 6,535,059 

Representation and entertainment 4,459,545 

Insurance 814,865 

Repairs and maintenance 691,037 

Miscellaneous 7,169,373 

Others 3,230,078 

251,858,563 

Net Taxable Income P=77,247,238 

*SGVMC116501*

- 46 - 

27. Supplementary Information Required Under Revenue Regulations No. 15-2010 

The Parent Company reported and/or paid the following types of taxes in 2011: 

Value added tax (VAT) 

The Parent Company’s sales are subject to output VAT while its purchases from other VATregistered 

individuals or corporations are subject to input VAT. The VAT rate is 12.0%. 

a. Output VAT for 2011 

Zero-rated sales of goods and services consist of export sales and those rendered to persons or 

entities whose exemptions are provided under special laws or international agreements to 

which the Philippines is a signatory. 

The Parent Company, being engaged in the business of fund transfer and remittance services 

of any form or kind of currencies or monies, is registered as a zero-rated VAT taxpayer under 

Section 108 (B)(2) of NIRC . 

By way of exception, the Parent Company started collecting service fee from the Social 

Security System in July 2011 for contributions remitted by SSS members abroad to the foreign 

subsidiary offices of the Parent Company and released subsequently to SSS’s offices by the 

Parent Company. The output VAT recognized related to the service fee collected amounts to 

P=17,875 as of December 31, 2011. 

b. Input VAT 

Amount 

Balance at January 1, 2011 P=28,493,804 

Current year’s domestic purchases/payments for: 

Goods other than for resale or manufacture − 

Capital goods subject to amortization 24,493 

Capital goods not subject to amortization 11,820 

Services lodged under other accounts 307,055 

Total 28,837,172 

Write-off (2,058,616) 

Penalty (6,250) 

Claims for Tax Credit/Refund (5,529,581) 

Balance at December 31, 2011 P=21,242,725 

c. Withholding taxes 

Details of total remittances in 2011 and balance as of December 31, 2011 of withholding taxes 

are as follows: 

Total Remittances Balance 

Withholding taxes on compensation and benefits P=9,242,698 P=284,404 

Expanded withholding taxes 6,400,381 534,725 

P=15,643,079 P=819,129 

*SGVMC116501*

- 47 - 


Other taxes and licenses include all other taxes, local and national, recognized as ‘Taxes and 

licenses’. Details follow: 

Amount 

Documentary stamp taxes: 

Applied on loans P=3,708,779 

Applied on other transactions 323,286 

Licenses and permits 2,163,071 

Others 531,164 

P=6,726,300 

*SGVMC116501*

INDEPENDENT AUDITORS’ REPORT 

ON SUPPLEMENTARY SCHEDULES 

The Stockholders and the Board of Directors 

I-Remit, Inc. 

26/F Discovery Centre, 25 ADB Avenue 


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

I-Remit, Inc. (the Parent Company) and have issued our report thereon dated March 23, 2012. Our 

audits were made for the purpose of forming an opinion on the basic financial statements taken as a 

whole. The accompanying Schedule of Retained Earnings Available for Dividend Declaration as of 

December 31, 2011 is the responsibility of the Parent Company’s management. This schedule is 

presented for the purpose of complying with Securities Regulation Code Rule 68.1 and Securities and 

Exchange Commission Memorandum Circular No. 11, Series of 2008, 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 states in all material respects the financial 

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

SYCIP GORRES VELAYO & CO. 

Josephine Adrienne A. Abarca 

Partner 

CPA Certificate No. 92126 

SEC Accreditation No. 0466-AR-1 (Group A), 

February 11, 2010, valid until February 10, 2013 

Tax Identification No. 163-257-145 

BIR Accreditation No. 08-001998-61-2009, 

June 1, 2009, valid until May 31, 2012 

PTR No. 3174577, January 2, 2012, Makati City 

March 23, 2012 

SyCip Gorres Velayo & Co. 

6760 Ayala Avenue 

1226 Makati City 

Philippines 

Phone: (632) 891 0307 

Fax: (632) 819 0872 

www.sgv.com.ph 

BOA/PRC Reg. No. 0001, 

January 25, 2010, valid until December 31, 2012 

SEC Accreditation No. 0012-FR-2 (Group A), 

February 4, 2010, valid until February 3, 2013 

*SGVMC116501* 

A member firm of Ernst & Young Global Limited

I-REMIT, INC. 

26/F Discovery Centre, 25 ADB Avenue, 


SCHEDULE OF RETAINED EARNINGS 

AVAILABLE FOR DIVIDEND DECLARATION 


Unappropriated retained earnings, as adjusted to available for dividend 

distribution, beginning P=161,219,561 

Add: Net income earned during the year 

Net income during the year 55,506,145 

Less: Unrealized foreign exchange gains - net (except those attributable 

to cash and cash equivalents) 1,205,505 

Subtotal 54,300,640 

Add: Realized income categorized as unrealized in previous years 6,419,981 

Net income actually earned during the year 60,720,621 

Less: Dividend declarations during the year 55,308,800 

Treasury shares 12,872,058 

Subtotal (7,460,237) 

Retained earnings available for dividend distribution, ending P=153,759,324 

*SGVMC116501*

COVER SHEET 

A 2 0 0 1 0 1 6 3 1 







Mr. HARRIS EDSEL D. JACILDO (632) 706–9999 Local 100/105/109 


1 2 3 1 1 7 - Q 0 7 










S T A M P S 

Remarks: Please use BLACK ink for scanning purposes.

I-REMIT, INC. 

AND SUBSIDIARIES 


26/F Discovery Centre, 25 ADB Avenue, 

Ortigas Center, Pasig City, 1605 Metro Manila 

(Company’s Address) 

(02) 706 – 9999 Local 100 / 105 / 109 

(Telephone Number) 

December 31 

(Fiscal Year Ending) 

(Month and Day) 

SEC FORM 17-Q 

Form Type 

Amendment Designation (if applicable) 


Period Ended Date 

(Secondary License Type and File Number) 

SEC Number A200101631 

PSE Code 

File Number

ASSETS 


Consolidated Balance Sheets 

Unaudited Audited 


Current Assets 

Cash and cash equivalents 1,151,790,714 891,235,623 

Financial assets at fair value through profit or loss 109,017,759 125,226,264 

Accounts receivable 781,790,402 933,545,989 

Other receivables 82,784,461 114,431,259 

Other current assets 15,177,939 28,928,836 

Total Current Assets 2,140,561,275 2,093,367,971 

Noncurrent Assets 

Investments in associates 18,649,016 23,064,091 

Property and equipment - net 23,336,044 19,207,458 

Goodwill 92,980,773 92,655,340 

Deferred tax asset 7,186,380 4,980,348 

Software costs - net 1,591,865 1,450,944 

Retirement asset 368,394 368,394 

Other noncurrent assets 40,754,263 38,904,367 

Total Noncurrent Assets 184,866,735 180,630,942 

2,325,428,010 2,273,998,913 

LIABILITIES AND EQUITY 

Current Liabilities 

Beneficiaries and other payables 303,386,845 240,081,152 

Income tax payable 16,419,879 6,563,877 

Interest-bearing loans 618,000,000 666,000,000 

Total Current Liabilities 937,806,724 912,645,029 

Noncurrent Liabilities 

Retirement liability 92,099 0 

Deferred tax liability 32,313 31,969 

Total Noncurrent Liabilities 124,412 31,969 

Total Liabilities 937,931,136 912,676,998 

Equity Attributable to Equity Holders of 

the Parent Company 

Capital stock 617,725,800 617,725,800 

Capital paid-in excess of par value 391,232,478 391,232,478 

Retained earnings 474,009,002 440,654,359 

Cumulative translation adjustment (42,350,458) (35,303,514) 

Treasury stock (53,119,948) (52,987,208) 

1,387,496,874 1,361,321,915 

Noncontrolling Interest 0 0 

Total Equity 1,387,496,874 1,361,321,915 

2,325,428,010 2,273,998,913 

1


Consolidated Statements of Income 

Unaudited Unaudited 

Jan. 1 to Jan. 1 to 


REVENUE 

Delivery fees 132,436,858 128,162,854 

Realized foreign exchange gains - net 66,835,913 85,976,112 

Other fees 79,104 207,386 

199,351,875 214,346,352 

COSTS OF SERVICES 

Bank charges 47,905,668 45,629,322 

Delivery charges 3,194,145 3,169,479 

51,099,813 48,798,801 

GROSS INCOME 148,252,062 165,547,551 

OTHER OPERATING INCOME (LOSS) 

Net trading gains (loss) 5,829,999 2,088,822 

Other income 3,075,304 (5,909,955) 

8,905,303 (3,821,133) 

OPERATING EXPENSES 

Salaries, wages and employee benefits 58,959,274 62,258,705 

Rental 14,313,814 13,857,319 

Marketing 6,892,916 9,188,279 

Professional fees 6,997,497 10,827,036 

Transportation and travel 4,523,776 6,955,819 

Communication, light and water 6,435,976 6,392,805 

Photocopying and supplies 2,776,132 2,773,347 

Depreciation and amortization 2,742,410 3,268,675 

Entertainment, amusement and recreation 1,609,160 919,309 

Other operating expenses 6,988,194 4,267,316 

112,239,149 120,708,610 

TOTAL OPERATING INCOME 44,918,216 41,017,808 

Equity in net earnings of associates 481,496 660,427 

Interest income 2,824,172 3,738,367 

Interest expense (5,771,869) (8,324,962) 

INCOME BEFORE TAX FROM 

CONTINUING OPERATIONS 42,452,015 37,091,640 

PROVISION FOR INCOME TAX 9,097,372 8,724,086 

INCOME FROM CONTINUING OPERATIONS 33,354,643 28,367,554 

INCOME (LOSS) AFTER TAX FROM 

DISCONTINUED OPERATIONS 0 0 

NET INCOME 33,354,643 28,367,554 

Attributable to: 

Equity holders of the Parent Company 33,354,643 31,531,076 

Noncontrolling interest 0 (3,163,522) 

33,354,643 28,367,554 

Basic/Dilutive Earnings Per Share 

0 0 

Attributable to Equity Holders of the Parent 

Company 

0.06 0.05 

2


Consolidated Statements of Changes in Equity 



Mar. 31, 2012 Mar. Mar. 31, 2011 

CAPITAL FUNDS, BEGINNING 1,361,321,915 1,271,902,623 

Add / (Deduct) Changes in Capital: 

Net Income for the Period 33,354,643 31,531,076 

Acquisition of Minority Interest 0 (4,914,297) 

Purchase of Own Stock (132,740) 0 

Other Equity Adjustment (7,046,944) (11,627,256) 

CAPITAL FUNDS, ENDING 1,387,496,874 1,286,892,146 

3


Consolidated Statements of Cash Flows 




CASH FLOWS FROM OPERATING ACTIVITIES 

Income before tax from continuing operations 42,452,015 37,091,640 

Income (loss) before tax from discontinued operations 0 0 

Income before tax 

Adjustments for: 

42,452,015 37,091,640 

Interest expense 

Unrealized market valuation (gain) loss on financial 

instruments at fair value through profit or loss 

5,771,869 8,324,962 

(16,593,655) (13,803,422) 

Depreciation and amortization 2,742,410 3,214,537 

Interest income (2,824,171) (3,738,367) 

Equity in net earnings of associates (481,496) (660,427) 

Unrealized foreign exchange gain - net 

Changes in Operating Assets and Liabilities: 

Decrease (Increase) in the amounts of: 

(3,064,563) 8,321,898 

Financial Assets at FV through PL 32,802,160 5,674,600 

Accounts receivables 154,820,150 683,923 

Other receivables 30,538,108 (117,686,781) 

Other current assets 

Increase (Decrease) in the amounts of: 

13,750,897 18,806,355 

Beneficiaries and other payables 63,305,693 334,210,994 

Retirement liability 92,099 0 

Net cash used in operations 323,311,516 280,439,912 

Income taxes paid (1,447,058) (724,156) 

Interest received 3,932,861 2,781,083 

Interest paid (5,771,869) (8,868,102) 

Net cash provided by (used in) operating activities 320,025,450 273,628,737 

CASH FLOWS FROM INVESTING ACTIVITIES 

Acquisitions of: 

Noncontrolling interest in subsidiaries 0 (11,097,286) 

Property and equipment (6,503,429) (3,408,419) 

Software cost (418,397) (902,426) 

Decrease (increase) in other noncurrent assets (1,849,896) (451,968) 

Proceeds from disposals of property and equipment 11,719 23,250 

Dividends received from associate 4,896,570 0 

Net cash used in investing activities (3,863,433) (15,836,849) 

CASH FLOWS FROM FINANCING ACTIVITIES 

Payment of: 

Short-term loans payable (666,000,000) (877,000,000) 

Buy-back of shares (132,740) 0 

Proceeds from short-term loans payable 618,000,000 701,000,000 

Net cash provided by (used in) financing activities (48,132,740) (176,000,000) 

EFFECT OF CHANGE IN FOREIGN EXCHANGE 

RATE TO CASH AND CASH EQUIVALENTS (7,474,186) (4,193,633) 

NET INCREASE (DECREASE) IN 

CASH AND CASH EQUIVALENT 260,555,091 77,598,255 

CASH AND CASH EQUIVALENTS AT 

BEGINNING OF YEAR 891,235,623 883,817,947 

CASH AND CASH EQUIVALENTS AT 

END OF YEAR 1,151,790,714 961,416,202 

4


Aging of Consolidated Receivables 

Unaudited 


Total Current 2-30 Days 31-60 Days Over 60 Days 

Agents 775,789,070 775,789,070 

- 

- 

- 

Couriers 9,928,743 - 9,928,743 

- 

- 

Related Parties 25,131,100 - 

- 

- 25,131,100 

Others 53,725,950 - 

- 

- 53,725,950 

864,574,863 775,789,070 9,928,743 - 78,857,050 

5

Item 1. Financial Statements 

PART I – FINANCIAL INFORMATION 

The following financial statements are submitted as part of this report: 

a. Consolidated Balance Sheets as of March 31, 2012 (unaudited) and December 31, 2011 

(audited); 

b. Unaudited Comparative Consolidated Statements of Income for the three (3) months 

ended March 31, 2012 and March 31, 2011; 

c. Unaudited Comparative Consolidated Statements of Changes in Equity for the three (3) 

months ended March 31, 2012 and March 31, 2011; 

d. Unaudited Comparative Consolidated Statements of Cash Flows for the three (3) months 

ended March 31, 2012 and March 31, 2011; 

e. Unaudited Aging of Consolidated Receivables as of March 31, 2012. 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of 

Operations 

March 31, 2012 vs. December 31, 2011 

The total assets of the Company increased by PHP 51.4 million or 2.3% to PHP 2.325 billion 

as of March 31, 2012 against PHP 2.273 billion as of December 31, 2011. Cash and cash 

equivalents increased by PHP 260.6 million or 29.2% from PHP 891.2 million as of December 

31, 2011 to PHP 1.151 billion as of March 31, 2012. Financial assets at FVPL, which consist 

of investments in private debt securities (listed overseas) held for trading, decreased by PHP 

16.2 million or -12.9% from PHP 125.2 million as of December 31, 2011 to PHP 109.0 million 

as of March 31, 2012. Accounts receivable decreased by PHP 151.8 million or -16.3% from 

PHP 933.5 million as of December 31, 2011 to PHP 781.8 million as of March 31, 2012. 

Other receivables decreased by PHP 31.6 million or -27.7% from PHP 114.4 million as of 

December 31, 2011 to PHP 82.8 million as of March 31, 2012. Other current assets 

decreased by PHP 13.8 million or -47.5% from PHP 28.9 million as of December 31, 2011 to 

PHP 15.2 million as of March 31, 2012. Investments in associates decreased by PHP 4.4 

million or -19.1% from PHP 23.0 million as of December 31, 2011 to PHP 18.6 million as of 

March 31, 2012. Property and equipment-net increased by PHP 4.1 million or 21.5% from 

PHP 19.2 million as of December 31, 2011 to PHP 23.3 million as of March 31, 2012. 

Goodwill increased by PHP 0.3 million or 0.3% from PHP 92.7 million as of December 31, 

2011 to PHP 93.0 million as of March 31, 2012 due to foreign exchange adjustment. Deferred 

tax asset increased by PHP 2.2 million or 44.3% from PHP 5.0 million as of December 31, 

2011 to PHP 7.2 million as of March 31, 2012. Software costs–net increased by PHP 0.1 

million or 9.7% from PHP 1.4 million as of December 31, 2011 to PHP 1.6 million as of March 

31, 2012. Other noncurrent assets increased by PHP 1.8 million or 4.7% from PHP 38.9 

million as of December 31, 2011 to PHP 40.8 million as of March 31, 2012. 

6

Total liabilities increased by PHP 25.2 million or 2.8% from PHP 912.7 million as of December 

31, 2011 to PHP 937.9 million as of March 31, 2012. Current liabilities increased by PHP 25.2 

million or 2.8% from PHP 912.6 million as of December 31, 2011 to PHP 937.8 million as of 

March 31, 2012 mainly due to the increase in Beneficiaries and other payables by PHP 63.3 

million or 26.4% from PHP 240.0 million as of December 31, 2011 to PHP 303.4 million as of 

March 31, 2012. Interest-bearing loans decreased by PHP 48.0 million or -7.2% from PHP 

666.0 million as of December 31, 2011 to PHP 618.0 million as of March 31, 2012. Interestbearing 

loans consist of unsecured, short-term peso-denominated loans from various local 

financial institutions with interest rates ranging from 5.0% to 6.75% per annum in First Quarter 

2012 and 5.0% to 7.0% in 2011. 

Accounts payable and other liabilities increased by PHP 73.2 million or 29.7% to PHP 319.8 

million as of March 31, 2012 compared with PHP 246.6 million as of December 31, 2011. 

Comprising Accounts payable and other liabilities are payables to beneficiaries of PHP 232.9 

million, payables to agents, couriers and trading clients of PHP 34.6 million, accrued 

expenses of PHP 17.2 million, withholding tax payable of PHP 2.2 million, advances from 

related parties of PHP 12.2 million, income tax payable of PHP 16.4 million, payables to 

government agencies of PHP 1.4 million, and other non-trade payables of PHP 2.9 million. 

Noncurrent liabilities amounting to PHP 0.12 million as of March 31, 2012 consist of 

retirement liability of PHP 0.09 million and deferred tax liability of PHP 0.03 million. 

The Company’s stockholders’ equity as of March 31, 2012 stood at PHP 1.387 billion, higher 

by PHP 26.2 million or 1.9% against the year-end 2011 level of PHP 1.361 billion due to 

higher net income. 

The Bangko Sentral ng Pilipinas reported last month that money transfers by overseas 

Filipinos grew by 5.8% to USD1.587 billion in February 2012 from USD1.5 billion a year 

earlier. On a year-to-date basis, the total remittance inflows amounted to USD3.144 billion in 

January to February of 2012, growing by 5.6% against the inflows of USD2.977 billion in the 

first two (2) months of 2011. The continued inflow of remittances is supported by the 

sustained demand for Filipino manpower in various foreign labor markets. The Philippine 

Overseas Employment Administration (POEA) recently announced that it expects over a 

million highly skilled Filipino workers would be hired abroad this year. The latest data from the 

POEA showed that for the period January-March 2012, job orders for professional and 

technical, service and production workers increased 24.6% to 200,010 compared with the 

same period last year. These are mainly intended for employment opportunities in Saudi 

Arabia, United Arab Emirates, Qatar, Taiwan, Kuwait, Singapore and Hong Kong, among 

others. 

7


Performance Indicator Definition Mar. 31, 2012 Dec. 31, 2011 

Net income* over average 


Return on Equity (ROE) stockholders’ equity during 

the period 

2% 10% 

Return on Assets 

(ROA) 


total assets during the period 

1% 5% 


(EPS) 


number of outstanding shares 

Total transaction value in 

PHP 0.06 PHP 0.22 

Sales Growth 

USD in present period over 

the previous year 

47% 17% 

Gross Income 

Revenue less total cost of 

services (PHP millions) 

148.2 588.4 

* Net Income attributable to equity holders of the Parent Company and Minority Interest. EPS computed 

using Net Income attributable to equity holders of the Parent Company for the period ended 

March 31, 2012 and for the year ended December 31, 2011 are PHP 0.06 and PHP 0.23, respectively. 



Performance Indicator Definition Mar. 31, 2012 



(ROA) 


(EPS) 

Sales Growth 

Gross Income 

Net income over average 

stockholders’ equity during 

the period 

Net income over average total 

assets during the period 








8 

(Three Months) 

Dec. 31, 2011 

(Full Year) 

0.5% 56% 

0.2% 22% 

PHP 0.46 PHP 43.64 

-5% 2% 

21.9 92.6





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










9 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 











(Full Year) 

-7% -3% 

-2% -1% 

PHP -3.08 PHP -1.33 

-14% -25% 

3.5 17.0 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 











(Full Year) 

-96% -767% 

-3% -33% 

PHP -20,881.96 PHP -108,090.79 

61% 28% 

18.4 50.7 



(Full Year) 

0.1% 0.4% 

0.04% 0.2% 

PHP 2,225.00 PHP 7,306.00 

- - 

0.05 0.6





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










10 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 











(Full Year) 

0.3% 6% 

0.04% 1% 

PHP 0.13 PHP 3.02 

32% 11% 

9.2 34.6 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 











(Full Year) 

19% 40% 

-14% -24% 

PHP -1,908.51 PHP -3,046.61 

39% 23% 

-0.7 5.3 



(Full Year) 

-22% 194% 

-4% 14% 

PHP -35.28 PHP 141.86 

-99% -19% 

0.03 0.5





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 








March 31, 2012 vs. March 31, 2011 



11 



(Full Year) 

8% 30% 

8% 29% 

PHP 22.46 PHP 66.53 

- - 

17.2 70.4 

I-Remit realized a consolidated net income of PHP 33.4 million in First Quarter 2012, an 

increase of PHP 5.0 million or 17.6% over the consolidated net income of PHP 28.4 million in 

First Quarter 2011. 

Revenues decreased by PHP 15.0 million or -7.0% to PHP 199.3 million in First Quarter 2012 

from PHP 214.3 million in First Quarter 2011. Accordingly, the Company’s gross income 

decreased by PHP 17.3 million or -10.4% from PHP 165.5 million in First Quarter 2011 to 

PHP 148.2 million in First Quarter 2012. 

Transaction count increased by 4.4% from 698,007 in First Quarter 2011 to 728,465 in First 

Quarter 2012). USD remittance volume increased by 47.3% from USD 320.4 million in First 

Quarter 2011 to USD 471.8 million in First Quarter 2012). Of the total transaction count in 

First Quarter 2012, the percentage contributions per region are as follows: Asia-Pacific, 43%; 

Middle East, 29%; North America, 13%; and Europe, 12%. In terms of USD remittance 

volume, the regional contributions are as follows: Asia-Pacific, 26%; Middle East, 13%, North 

America, 10%, and Europe, 9%. 

Other operating income increased by PHP 12.7 million from a net loss of PHP 3.8 million in 

First Quarter 2011 to an income of PHP 8.9 million in First Quarter 2012. 

Total operating expenses was lower by PHP 8.5 million or -7.0% from PHP 120.7 million in 

First Quarter 2011 to PHP 112.2 million in First Quarter 2012 mainly on account of lower 

professional fees, salaries, wages and employee benefits, transportation and travel, and 

marketing expenses. Interest expense was lower by PHP 2.6 million from PHP 8.3 million in 

First Quarter 2011 to PHP 5.8 million in First Quarter 2012. 

The total assets of the Company decreased by PHP 212.4 million or -8.4% to PHP 2.325 

billion as of March 31, 2012 against PHP 2.537 billion as of March 31, 2011. Cash and cash 

equivalents increased by PHP 190.4 million or 19.8% from PHP 961.4 million as of March 31, 

2011 to PHP 1.151 billion as of March 31, 2012. Financial assets at FVPL, which consist of 

investments in private debt securities (listed overseas) held for trading, stood at PHP 109.0

million as of March 31, 2012, a decrease of PHP 2.0 million or -1.8% against PHP 111.0 

million as of March 31, 2011. Receivables decreased by PHP 387.8 million or -31.0% from 

PHP 1.252 billion as of March 31, 2011 to PHP 864.6 million as of March 31, 2012. Other 

current assets decreased by PHP 2.7 million or -15.1% from PHP 17.9 million as of March 31, 

2011 to PHP 15.2 million as of March 31, 2012. Investments in associates decreased by PHP 

2.9 million or -13.6% from PHP 21.6 million as of March 31, 2011 to PHP 18.6 million as of 

March 31, 2012. Property and equipment-net decreased by PHP 4.8 million or -17.0% from 

PHP 28.1 million as of March 31, 2011 to PHP 23.3 million as of March 31, 2012. Goodwill 

decreased by PHP 1.5 million or -1.6% from PHP 94.5 million as of March 31, 2011 to PHP 

93.0 million as of March 31, 2012 due to foreign exchange adjustment. Deferred tax asset 

increased by PHP 1.9 million or 36.5% from PHP 5.3 million as of March 31, 2011 to PHP 7.2 

million as of March 31, 2012. Software costs–net decreased by PHP 1.0 million or -38.8% 

from PHP 2.6 million as of March 31, 2011 to PHP 1.6 million as of March 31, 2012. Other 

noncurrent assets decreased by PHP 2.3 million or -5.4% from PHP 43.1 million as of March 

31, 2011 to PHP 40.8 million as of March 31, 2012. 

Total liabilities decreased by PHP 313.0 million or -25.0% from PHP 1.250 billion as of March 

31, 2011 to PHP 937.9 million as of March 31, 2012. Current liabilities decreased by PHP 

312.4 million or -25.0% from PHP 1.250 billion as of March 31, 2011 to PHP 937.8 million as 

of March 31, 2012 mainly due to the decrease in beneficiaries and other payables by PHP 

229.8 million or -43.1 from PHP 533.2 million as of March 31, 2011 to PHP 303.4 million as of 

March 31, 2012 as well as to interest-bearing loans by PHP 83.0 million or -11.8 from PHP 

701.0 million as of March 31, 2011 to PHP 618.0 million as of March 31, 2012. Interestbearing 

loans consist of unsecured, short-term peso-denominated loans from various local 

financial institutions with interest rates ranging from 5.0% to 6.75% per annum in First Quarter 

2012 and 5.0% to 6.0% in First Quarter 2011. 

Accounts payable and other liabilities decreased by PHP 229.4 million or -41.8% to PHP 

319.8 million as of March 31, 2012 compared with PHP 549.2 million as of March 31, 2011. 

Comprising accounts payable and other liabilities are payables to beneficiaries of PHP 232.9 

million, payables to agents, couriers and trading clients of PHP 34.6 million, accrued 

expenses of PHP 17.2 million, withholding tax payable of PHP 2.2 million, advances from 

related parties of PHP 12.2 million, income tax payable of PHP 16.4 million, payables to 

government agencies of PHP 1.4 million, and other non-trade payables of PHP 2.9 million. 

Noncurrent liabilities amounting to PHP 0.12 million as of March 31, 2012 consist of 

retirement liability of PHP 0.09 million and deferred tax liability of PHP 0.03 million. 

The Company’s stockholders’ equity as of March 31, 2012 stood at PHP 1.387 billion, higher 

by PHP 100.6 million or 7.8% against the March 31, 2011 level of PHP 1.286 billion due to 

higher net income and stock dividend. 

The Bangko Sentral ng Pilipinas reported last month that money transfers by overseas 

Filipinos grew by 5.8% to USD1.587 billion in February 2012 from USD1.5 billion a year 

earlier. On a year-to-date basis, the total remittance inflows amounted to USD3.144 billion in 

January to February of 2012, growing by 5.6% against the inflows of USD2.977 billion in the 

first two (2) months of 2011. The continued inflow of remittances is supported by the 

sustained demand for Filipino manpower in various foreign labor markets. The Philippine 

Overseas Employment Administration (POEA) recently announced that it expects over a 

million highly skilled Filipino workers would be hired abroad this year. The latest data from the 

POEA showed that for the period January-March 2012, job orders for professional and 

technical, service and production workers increased 24.6% to 200,010 compared with the 

same period last year. These are mainly intended for employment opportunities in Saudi 

Arabia, United Arab Emirates, Qatar, Taiwan, Kuwait, Singapore and Hong Kong, among 

others. 

12


Performance Indicator Definition Mar. 31, 2012 Mar. 31, 2011 



Return on Equity (ROE) stockholders’ equity during 

the period 

2% 2% 


(ROA) 


total assets during the period 

1% 1% 


(EPS) 




PHP 0.06 PHP 0.05 

Sales Growth 


the same period in the 

previous year 

47% 9% 

Gross Income 



148.2 165.5 

* Net Income attributable to equity holders of the Parent Company and Minority Interest. EPS computed 

using Net Income attributable to equity holders of the Parent Company for the periods ended 

March 31, 2012 and March 31, 2011 are P 0.06 and P 0.05, respectively. 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










13 


Mar. 31, 2011 


0.5% 5% 

0.2% 2% 

PHP 0.46 PHP 3.12 

-5% 7% 

21.9 23.7





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










14 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 












-7% 19% 

-2% 9% 

PHP -3.08 PHP 10.39 

-14% -29% 

3.5 6.7 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 












-96% 5% 

-3% 1% 

PHP -20,881.96 PHP 1,650.29 

61% 15% 

18.4 10.5 




0.1% 0.1% 

0.04% 0.1% 

PHP 2,225.00 PHP 2,433.00 

- - 

0.05 0.1





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










15 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 












0.3% -40% 

0.04% -5% 

PHP 0.13 PHP -15.52 

32% 21% 

9.2 7.5 






(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 












19% 11% 

-14% -6% 

PHP -1,908.51 PHP -719.31 

39% 19% 

-0.7 1.4 




-22% 149% 

-4% -22% 

PHP -35.28 PHP -180.05 

-99% 19% 

0.03 8.3





(ROA) 


(EPS) 

Sales Growth 

Gross Income 



the period 










16 




8% 11% 

8% 11% 

PHP 22.46 PHP 22.72 

- - 

17.2 21.7 

The Company is not aware of any known trends, demands, commitments, events or 

uncertainties that will have a material impact on the Company’s liquidity. The Company 

has not defaulted in paying its currently maturing obligations. In addition, obligations of the 

Company are guaranteed up to a certain extent by the Company’s majority stockholders. 

The Company is not aware of any events that will trigger a direct or contingent financial 

obligation that is material to the Company, including any default or acceleration of an 

obligation. 

There are no material off-balance sheet transactions, arrangements, obligations (including 

contingent obligations), and other relationships of the Company with unconsolidated 

entities or other persons created during the reporting period. 

The Company has no material commitments for capital expenditures. 

Except as discussed above, the Company is not aware of any known trends, events or 

uncertainties that have had or that are reasonably expected to have a material favorable or 

unfavorable impact on sales, revenues or income from continuing operations. 

There are no significant elements of income or loss that did not arise from the Company’s 

continuing operations. 

There are no seasonal aspects that had a material effect on the financial condition or 

results of operations. 

The Company does not expect any purchase of significant equipment in the next twelve 

(12) months. 

The Company does not expect any significant changes in the number of employees in the 

next twelve (12) months.

I-REMIT, INC. 

COMPLIANCE WITH SEC LETTER 

DATED OCTOBER 29, 2008 

The information required by SEC letter dated October 29, 2008 can be found in the following 

pages: 

a. Financial risk exposures of I-Remit, Inc. (“Company”) 

Please refer to pages 23 to 24. 

b. Disclosure on the financial instrument of the Company 

(1) Description of the financial instruments of the Company and the 

classification and measurements applied for each. 


(2) Amount of Company’s investments in foreign securities. 

Not applicable as the Company has no investments in foreign securities. 

(3) Significant judgments made in classifying a particular financial instrument 

in the fair value hierarchy. 

Please refer to page 22. 

(4) Explanation of how risk is incorporated and considered in the valuation of 

assets or liabilities. 


(5) Comparison of the fair values as of date of the recent interim financial 

report and as of date of the preceding interim period, and the amount of 

gain/loss recognized for each of the said periods. 

Not applicable. 

(6) Criteria used to determine whether the market for a financial instrument is 

active or inactive as defined under PAS 39-Financial Instruments. 


17

Summary of Significant Accounting Policies 

Financial Instruments - Initial Recognition and Subsequent Measurement 


Financial instruments within the scope of PAS 39 are classified as financial assets at 

FVPL, loans and receivables, held-to-maturity (HTM) investments, available-for-sale 

(AFS) investments, financial liabilities at FVPL and other financial liabilities. The 

classification of financial instruments at initial recognition depends on the purpose for 

which the financial instruments were acquired and their characteristics. All financial 

assets and financial liabilities are recognized initially at fair value plus any directly 

attributable cost of acquisition or issue, except in the case of financial assets and 

financial liabilities at FVPL. Management determines the classification of its instruments 

at initial recognition and, where allowed and appropriate, re-evaluates such designation 

at every balance sheet date. 

Financial instruments are recognized in the consolidated balance sheet when the Group 

becomes a party to the contractual provisions of the instrument. In the case of regular 

way of purchase or sale of financial assets, recognition and derecognition, as applicable, 

are done using settlement date accounting. Settlement date accounting refers to (a) 

recognition of an asset on the day it is received by the Group, and (b) the derecognition 

of an asset and recognition of any gain or loss on disposal on the day that it is delivered 

by the Group. 

The subsequent measurement bases for financial instruments depend on its 

classification. 

As of March 31, 2012 and December 31, 2011, the Group has no AFS investments, HTM 

investments and financial liabilities at FVPL. 



Financial assets at FVPL includes financial assets held for trading (HFT) and financial 

assets designated upon initial recognition at fair value through profit or loss. Financial 

assets are classified as HFT if they are acquired for the purpose of selling and 

repurchasing in the near term. Included in this classification are debt securities which 

have been acquired principally for trading purposes. 

The Group evaluates its HFT investments to determine whether the intention to sell them 

in the near term is still appropriate. When in rare circumstances the Group is unable to 

trade these financial assets due to inactive markets and management’s intention to sell 

them in the foreseeable future significantly changes, the Group may elect to reclassify 

these financial assets. The reclassification to loans and receivables, AFS or HTM 

depends on the nature of the asset. This evaluation does not affect any financial assets 

designated at FVPL using the fair value option at designation, these instruments cannot 

be reclassified after initial recognition. 

HFT investments are recorded in the consolidated balance sheet at fair value. Changes 

in fair value are recognized as ‘Net trading gains’ in the consolidated statement of 

income. Interest earned is recognized as interest income included under ‘Other income’ 

in the consolidated statement of income. Quoted market prices, when available, are 

used to determine the fair value of these financial instruments. If quoted market prices 

are not available, their fair values are estimated based on inputs that are observable in 

the market. 

18

Classified under this category are the Group’s HFT investments in debt and equity 

securities. 

Loans and Receivables 

Loans and receivables are non-derivative financial assets with fixed or determinable 

payments that are not quoted in an active market. After initial measurement, receivables 

are carried at amortized cost using the effective interest method less any allowance for 

credit losses. Amortized cost is calculated by taking into account any discount or 

premium on acquisition and fees and costs that are an integral part of the effective 

interest rate (EIR). Gains and losses are recognized in the consolidated statement of 

income when the receivables are derecognized or impaired, as well as through the 

amortization process. Receivables are classified as current assets when the Group 

expects to realize or collect the asset within twelve months from the balance sheet date. 

Otherwise, these are classified as non-current assets. 

Classified under this category are the Group’s ‘Cash and cash equivalents’, ‘Accounts 

receivable’, ‘Other receivables’ and refundable deposits included under ‘Other 

noncurrent assets’. 


Issued financial instruments or their components, which are not designated as at FVPL, 

are classified as other financial liability, where the substance of the contractual 

arrangement results in the Group having an obligation either to deliver cash or another 

financial asset to the holder, or to satisfy the obligation other than by the exchange of a 

fixed amount of cash or another financial asset for a fixed number of its own equity 

shares. These include liabilities arising from operations or borrowings. The components 

of issued financial instruments that contain both liability and equity elements are 

accounted for separately, with the equity component being assigned the residual amount 

after deducting from the instrument as a whole the amount separately determined as the 

fair value of the liability component on the date of issue. 

After initial measurement, other financial liabilities are subsequently measured at 

amortized cost using the EIR method. 

Other financial liabilities are classified as current liabilities when the Group expects to 

settle the liability within twelve months from the balance sheet date. Otherwise, these 

are classified as noncurrent liabilities. 

Other financial liabilities include ‘Beneficiaries and other payables’ and ‘Interest-bearing 

loans’. 


The fair value for financial instruments traded in active markets at the balance sheet date 

is based on their quoted market prices or dealer price quotations (bid price for long 

positions and ask price for short positions), without any deduction for transaction costs. 

When current bid and ask prices are not available, the price of the most recent 

transaction provides evidence of the current fair value as long as there has not been a 

significant change in economic circumstances since the time of the transaction. 

For all other financial instruments not listed in an active market, the fair value is 

determined by using appropriate valuation methodologies. Valuation methodologies 

include net present value techniques, comparison to similar instruments for which market 

observable prices exist, option pricing models, and other relevant valuation models. 

19


Where the transaction price in a non-active market is different from the fair value from 

other observable current market transactions in the same instrument or based on a 

valuation technique whose variables include only data from an observable market, the 

Group recognizes the difference between the transaction price and fair value (a Day 1 

difference) in the consolidated statement of income unless it qualifies for recognition as 

some other type of asset. In cases where use is made of data which is not observable, 

the difference between the transaction price and model value is only recognized in the 

consolidated statement of income when the inputs become observable or when the 

instrument is derecognized. For each transaction, the Group determines the appropriate 

method of recognizing the Day 1 difference amount. 



A financial asset (or, where applicable a part of a financial asset or part of a group of 

similar financial assets) is derecognized when: 


• the Group retains the right to receive cash flows from the asset, but has assumed an 

obligation to pay them in full without material delay to a third part under a ‘pass 

through’ arrangement; or 

• the Group has transferred its rights to receive cash flows from the asset and either 

(a) has transferred substantially all the risks and rewards of the asset, or (b) has 

neither transferred nor retained substantially all the risks and rewards of the asset, 

but has transferred control of the asset. 

When the Group has transferred its rights to receive cash flows from an asset or has 

entered into a pass-through arrangement, and has neither transferred nor retained 

substantially all the risks and rewards of the asset nor transferred control of the asset, 

the asset is recognized to the extent of the Group’s continuing involvement in the asset. 

Continuing involvement that takes the form of a guarantee over the transferred asset is 

measured at the lower of the original carrying amount of the asset and the maximum 

amount of consideration that the Group could be required to repay. 



cancelled or has expired. When an existing financial liability is replaced by another from 

the same lender on substantially different 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 consolidated statement of income. 


Financial assets and financial liabilities are offset and the net amount reported in the 

consolidated balance sheet if, and only if, there is a currently enforceable legal right to 

offset the recognized amounts and there is an intention to settle on a net basis, or to 

realize the asset and settle the liability simultaneously. 

20


The Group assesses at each balance sheet date whether there is an objective evidence 

that a financial asset or group of financial assets is impaired. A financial asset or a 

group of financial assets is deemed to be impaired if, and only if, there is an objective 

evidence of impairment as a result of one or more events that has occurred after the 

initial recognition of the asset (an incurred ‘loss event’) and that loss event (or events) 

has an impact on the estimated future cash flows of the financial asset or the group of 

financial assets that can be reliably estimated. Evidence of impairment may include 

indications that the borrower or a group of borrowers is experiencing significant financial 

difficulty, default or delinquency in interest or principal payments, the probability that they 

will enter bankruptcy or other financial reorganization, and where there are observable 

data that indicates that there is a measurable decrease in the estimated future cash 

flows, such as changes in arrears or economic conditions that correlate with defaults. 


For financial assets carried at amortized cost, the Group first assesses whether objective 

evidence of impairment exists individually for financial assets that are individually 

significant, or collectively for financial assets that are not individually significant. 

If there is objective evidence that an impairment loss has been incurred, the amount of 

the loss is measured as the difference between the asset’s carrying amount and the 

present value of the estimated future cash flows (excluding future credit losses that have 

not been incurred). The carrying amount of the asset is reduced through the use of an 

allowance account and the amount of loss is charged to the consolidated statement of 

income. Interest income continues to be recognized based on the original EIR of the 

asset. Receivables, together with the associated allowance accounts, are written off 

when there is no realistic prospect of future recovery and all collateral has been realized. 

If subsequently, the amount of the estimated impairment loss decreases because of an 

event occurring after the impairment was recognized, the previously recognized 

impairment loss is reduced by adjusting the allowance account. If a future write-off is 


If the Group determines that no objective evidence of impairment exists for an 

individually assessed financial asset, whether significant or not, it includes the asset in a 

group of financial assets with similar credit risk characteristics and collectively assesses 

for impairment. Those characteristics are relevant to the estimation of future cash flows 

for groups of such assets by being indicative of the debtors’ ability to pay all amounts 

due according to the contractual terms of the assets being evaluated. Assets that are 

individually assessed for impairment and for which an impairment loss is, or continues to 

be, recognized are not included in a collective assessment for impairment. 

The present value of the estimated future cash flows is discounted at the financial 

asset’s original EIR. If a financial asset has a variable interest rate, the discount rate for 

measuring any impairment loss is the current EIR, adjusted for the original credit risk 

premium. 

For the purpose of a collective evaluation of impairment, financial assets are grouped on 

the basis of such credit risk characteristics as geographical classification. Future cash 

flows in a group of financial assets that are collectively evaluated for impairment are 

estimated on the basis of historical loss experience for assets with credit risk 

characteristics similar to those in the group. 

21

Historical loss experience is adjusted on the basis of current observable data to reflect 

the effects of current conditions that did not affect the period on which the historical loss 

experience is based and to remove the effects of conditions in the historical period that 

do not exist currently. 

Estimates of changes in future cash flows reflect, and are directionally consistent with 

changes in related observable data from period to period (such as changes in payment 

status, or other factors that are indicative of incurred losses in the group and their 

magnitude). The methodology and assumptions used for estimating future cash flows 

are reviewed regularly by the Group to reduce any differences between loss estimates 

and actual loss experience. 

Significant Accounting Judgments and Estimates 

The preparation of the financial statements in compliance with PFRS requires the Group 

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

income and expenses and disclosure of contingent assets and contingent liabilities. 

Future events may occur which will cause the assumptions used in arriving at the 

estimates to change. The effects of any change in estimates are reflected in the 

financial statements as they become reasonably determinable. 

Judgments and estimates are continually evaluated and are based on historical 

experience and other factors, including expectations of future events that are believed to 

be reasonable under the circumstances. 

Fair Value Measurement 

The following methods and assumptions were used to estimate the fair value of the 

financial instruments: 

Cash and cash equivalents, Account receivables, Other receivables, Beneficiaries and 

other payables and Interest-bearing loans - carrying amounts approximate fair values 

due to the relatively short-term maturities of these instruments. 

Financial assets at FVPL - fair values are based on quoted market prices. 

Refundable deposits - fair values are based on the present value of future cash flows 

discounted using prevailing interest rates ranging from 2.71% to 8.00% and 4.05% to 

10.19% as at March 31, 2012 and December 31, 2011, respectively. 

Fair Value Hierarchy 

The Group uses the following hierarchy for determining and disclosing the fair value of 

financial instruments by valuation technique: 

Level 1: quoted prices in active markets for identical assets or liabilities; 

Level 2: inputs other than quoted prices included in Level 1 that are observable for the 

asset or liability, either directly (as prices) or indirectly (derived from prices); and 

Level 3: inputs that are not based on observable market data or unobservable inputs. 

22

As of March 31, 2012 and December 31, 2011, the financial instruments carried at fair 

value only pertains to the Group’s financial assets at FVPL, which consist of investments 

in debt and equity securities. The fair values of these debt and equity securities are 

based on quoted prices (Level 1). There were no transfers between Level 1 and Level 2 

fair value measurements, and no transfers into and out of Level 3 fair value 

measurement in 2012 and 2011. 

Financial Risk Management Objectives and Policies 

The Group’s principal financial instruments mainly comprise of short-term loans from 

banks. The main purpose of these financial instruments is to raise funds for the Group’s 

fulfillment or delivery of remittance transactions to beneficiaries. The Group also has 

various other financial assets and liabilities such as cash and cash equivalents, accounts 

receivables, and accounts payable to beneficiaries, which arise directly from its 

remittance operations. 

The main risks arising from the Group’s financial instruments are credit risk, foreign 

currency risk, cash flow interest rate risk, fair value interest rate risk and liquidity risk. 

The BOD reviews and approves policies for managing each of these risks and these are 

summarized below: 

Credit Risk 

Credit risk is the risk of loss resulting from the failure of a borrower or counterparty to 

perform its obligations during the life of the transaction. This includes risk of nonpayment 

by borrowers or issuers, failed settlement of transactions and default on 

contracts. 

The nature of its business exposes the Group to potential risk from difficulties in 

recovering transaction money from foreign partners. Receivables from agents arise as a 

result of its remittance operations in various regions of the globe. In order to address 

this, the Group has maintained the following credit policies: (a) implement a contract that 

incorporates a bond and advance payment cover such that the full amount of the 

transaction will be credited to the Group prior to their delivery to the beneficiaries, which 

applies generally to all new agents of the Group and in certain cases to old agents; (b) all 

foreign offices and agents must settle their accounts within the agreed credit terms, 

otherwise, the fulfillment or delivery of their remittance transactions will be put on hold; 

(c) evaluation of individual potential partners and preferred associates’ creditworthiness, 

as well as a close look into the other pertinent aspects of their partners’ businesses 

which assures the Group of the financial soundness of their partner firms; and (d) 

receivable balances are monitored daily by the regional managers with the result that the 

Group’s exposure to bad debts is not significant. 

Receivables from agents and couriers are highly collectible and have a turnover ranging 

from 1 to 5 days and 30 to 60 days, respectively. Other receivables, which include 

advances to related parties, are also highly collectible and are due in less than one year. 

There are no past due receivables as of March 31, 2012 and December 31, 2011. 

The Group classifies its neither past due nor impaired receivables as high grade. High 

grade financial assets includes instruments with credit ratings of excellent, strong, good, 

or satisfactory, wherein the borrower has a low probability of default and could withstand 

the normal business cycle. Financial assets at FVPL are also assessed as high grade 

since these are issued by reputable companies. 

23


Foreign currency risk is the risk to earnings or capital arising from changes in foreign 

exchange rates. It is the Group’s policy that all daily foreign currencies, which arise as a 

result of its remittance transactions, must be traded daily with bank partners only at 

prevailing foreign exchange rates in the market. The daily closing foreign exchange rates 

shall be the guiding rate in providing wholesale rates and retail rates to foreign offices 

and agents, respectively. The trading proceeds will be used to pay out bank loans and 

other obligations of the Group. 


Interest rate risk arises from the possibility that changes in interest rates will affect future 

cash flows of financial instruments. 

As of March 31, 2012 and December 31, 2011, the Group’s exposure to cash flow 

interest rate risk is minimal. The Group’s policy is to manage its interest cost by entering 

only into fixed rate short-term loans from banks. 

Fair Value Interest Rate Risk 

Fair value interest rate risk is the risk that the fair value of a financial instrument will 

fluctuate due to changes in market interest rates. 

The Group accounts for its debt investments at fair value. Thus, changes in the 

benchmark interest rate will cause changes in the fair value of quoted debt instruments. 

There is no impact on the Group’s equity other than those already affecting the profit or 

loss. 

Equity Price Risk 

Equity price risk is the risk to earnings or capital arising from changes in stock exchange 

indices relating to its quoted equity securities. The Group’s exposure to equity price risk 

relates primarily to its investments in equity securities. 

The Group’s policy is to maintain the risk to an acceptable level. Movement of share 

price is monitored regularly to determine impact on its consolidated balance sheet. 


Liquidity or funding risk is the risk that an entity will encounter difficulty in raising funds to 

meet commitments associated with financial instruments. 

The Group’s objective is to maintain a balance between continuity of funding and 

flexibility through the use of short-term debts. In addition, the Group maintains credit 

facilities with local banks. 

24

Other Required Disclosures 

PART II – OTHER INFORMATION 

A. Accounting Policies and Methods of Computation. 

The attached interim financial reports were prepared in accordance with the Philippine 

Accounting Standards. The accounting policies and methods of computation followed in 

these interim financial statements are the same compared with the audited financial 

statements for the period ended December 31, 2011. 

B. Unusual Items Affecting Assets, Liabilities, equity, net Income or Cash Flow. 

Except as reported in the Management’s Discussion and Analysis of Financial Condition 

and Results of Operations (“MD&A”), there were no unusual items affecting assets, 

liabilities, equity, net income or cash flows for the interim period. 

C. Changes in Estimates of Amounts Reported. 

There were no material changes in estimates of amounts reported in prior periods that 

have material effects in the current interim period. 

D. Issuances, Repurchases and Repayments of Debt and Equity Securities. 

Except as disclosed in the MD&A, there were no other issuances, repurchases and 

repayments of debt and equity securities. 

E. Material Events Subsequent to the End of the Interim Period Not Reflected in the 

Financial Statements. 

There were no material events that happened subsequent to March 31, 2012 up to the 

date of this report that needs disclosure herein. 

F. Changes in Composition of the Issuer During the Interim Period. 

There were no changes in the composition of the Company during the interim period 

such as business combination, acquisition or disposal of subsidiaries and long-term 

investments, restructurings, and discontinuing operations except as disclosed in the 

MD&A. 

G. Changes in Contingent Liabilities or Contingent Assets. 

There were no changes in contingent liabilities or contingent assets since December 31, 


H. Material Contingencies and Any Other Events or Transactions. 

There exist no material contingencies and other material events or transactions affecting 

the current interim period except as disclosed in the MD&A. 

25

MINUTES OF THE ANNUAL STOCKHOLDERS’ MEETING OF 

I-REMIT, INC. 

29 July 2011, 8:00 a.m. 

42 nd Floor Discovery Centre, 25 ADB Avenue 

TOTAL NUMBER OF SHARES OUTSTANDING 533,088,000 

TOTAL NUMBER OF SHARES PRESENT/REPRESENTED 

AND ENTITLED TO VOTE 403,523,250 

Members of the Board of Directors Present: 

CALIXTO V. CHIKIAMCO 

BANSAN C. CHOA 

ARMIN V. DEMETILLO 

GILBERT C. GAW 

HARRIS D. JACILDO 

JOSE JOEL Y. PUSTA 

A. BAYANI K. TAN 

JOHN Y. TIU, JR. 

CALL TO ORDER 

The Chairman, Mr. Bansan C. Choa, called the meeting to order and presided over the 

same. Ms. Maria Cecilia V. Soria acted as Secretary and recorded the minutes of the proceedings. 

CERTIFICATION OF NOTICE AND QUORUM 

Upon the request of the Chairman, the Secretary certified that, based on the certification 

issued by La Cresenta Manpower Services, notices of the meeting were sent to all stockholders of 

record as of 4 July 2011 in accordance with the provisions of the By-Laws. The Chairman 

instructed the Secretary to append the certificates of mailing of notices to the original minutes of 

the meeting. 

The Secretary certified that out of the 553,088,000 outstanding shares of stock of the 

Corporation, there were present in person or by proxy, holders of 403,523,250 shares of stocks 

entitled to vote, representing an attendance of 72.96% of the total subscribed capital of the 

Corporation. Accordingly, the Secretary certified that a quorum existed for the transaction of 

business at hand. 

APPROVAL OF THE MINUTES OF THE 

PREVIOUS STOCKHOLDERS' MEETING 

Upon motion duly made and seconded, the reading of the minutes of the annual 

stockholders' meeting held on 23 July 2010 was dispensed with and the same was approved as 

previously circulated to the stockholders. 

PRESIDENT’S REPORT AND 

2010 FINANCIAL STATEMENTS 

Mr. Harris D. Jacildo, the Corporation’s President and Chief Operating Officer, presented 

his report for the year, a copy of which was filed with the Philippine Stock Exchange through 

ODiSy. 

Upon opening the floor for questions, a stockholder asked to be clarified why the Social 

Security System was not listed as among the top 16 shareholders of the Corporation. It was 

explained that the SSS shares were counted as part of those held under the name of the PCD 

Nominee Corporation, considering that the SSS shares are lodged with the PCD. There being no 

other questions, upon motion duly made and seconded, the President’s Report as well as the 2010 

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Audited Financial Statements of the Corporation and accompanying notes thereto were noted and 

approved by the stockholders. 

RATIFICATION OF ALL ACTS OF 

THE BOARD OF DIRECTORS AND OFFICERS 

Upon motion duly made and seconded, all acts of the Board of Directors, Officers, and 

Management of the Corporation from the date of the last meeting of the stockholders up to the 

present were, in all respects, confirmed, ratified, and approved. 

ELECTION OF DIRECTORS 

The Chairman noted that, as disclosed in the Information Statement previously furnished 

to all stockholders, the Nomination Committee has endorsed the nomination of eleven (11) 

stockholders to fill the eleven (11) seats in the Board of Directors. 

In compliance with the requirements of Rule 38 of the Revised Implementing Rules of 

the Securities Regulation Code, the Corporation's Nomination Committee, in its meeting on 10 

March 2011, passed upon and endorsed the nominations of Messrs. Gregorio T. Yu and Jose Joel 

Y. Pusta for election as independent directors of the Corporation. 

Thereafter, the above nominations were duly seconded, and the following stockholders 

were re-elected as directors of the Corporation for 2011-2012 or until their successors are elected 

and duly qualified: 

CALIXTO V. CHIKIAMCO 


ARMIN V. DEMETILLO 

GILBERT C. GAW 

HARRIS D. JACILDO 

JOSE JOEL Y. PUSTA 

A. BAYANI K. TAN 

JOHN Y. TIU, JR. 

BEN C. TIU 

RUBEN C. TIU 

GREGORIO T. YU 

APPOINTMENT OF EXTERNAL AUDITOR 

As recommended by the Board of Directors, the stockholders voted for the renewal of the 

auditing firm of SGV & Co. as the Corporation’s external auditor. Upon motion duly made and 

seconded, the following resolution was approved: 

“RESOLVED, that the auditing firm of SGV & Co. be re-appointed as 

the Corporation’s external auditor for the year 2011.” 

ADJOURNMENT 

There being no other business to transact, the meeting was thereupon adjourned. 

ATTESTED BY: 


Chairman 

MARIA CECILIA V. SORIA 

Corporate Secretary 

F:\data\Clients\685\CORP\MIN\2011 ‐ ASM.doc 

685‐200 ABKT/CVS/DRV 

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RELEVANT RESOLUTIONS APPROVED BY THE BOARD OF DIRECTORS 

MEETING OF THE BOARD OF DIRECTORS 


August 19, 2011 

(June 2011 to May 2012) 

FOR RATIFICATION BY THE STOCKHOLDERS 

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Annex “F” 

The Board of Directors authorized the Corporation to borrow money, arrange and negotiate with the 

Security Bank Corporation, for the grant of credit line facility, to secure trust receipts, to obtain other 

credit facilities, to enter into and assume any financial undertaking with the Bank, with or without 

security, in the aggregate amount of Philippine Pesos: Three Hundred Million (₱300,000,000.00) and 

Three Million Four Hundred Fifty Thousand Dollars ($3,450,000.00) or the equivalent of said amount 

or any portion thereof in foreign currency. 


Bank of the Philippine Islands for the grant of a credit line facility, to secure trust receipts, to obtain 

other credit facilities, to enter into and assume any financial undertaking with the Bank, with or 

without security, in the aggregate amount of Philippine Pesos: One Hundred Million 

(₱100,000,000.00) and One Hundred Fifty Thousand Dollars ($150,000.00) or the equivalent of said 

amount or any portion thereof in foreign currency. 


China Banking Corporation for the grant of a credit line facility, to secure trust receipts, to obtain other 

credit facilities, to enter into and assume any financial undertaking with the Bank, with or without 

security, in the aggregate amount of Philippine Pesos: Three Hundred Million (₱300,000,000.00) or 

the equivalent of said amount or any portion thereof in foreign currency. 

The Board of Directors authorized the Corporation to establish and open deposit account/s, whether 

time, current, savings, money market placement and other types of deposit accounts in Philippine 

pesos and/or foreign currencies with Mizuho Corporate Bank, Ltd. (Manila Branch) for the account of 

the Corporation. 

The Board of Directors authorized the Corporation to apply for accreditation with Twenty Two Forty 

One Properties, Inc. as a real estate collection partner for the Green Residences project of SM 

Development Corporation. 

The Board of Directors authorized the Corporation to enroll any and all of their accounts in Maybank 

Philippines, Inc. with the bank’s Internet Banking Facility. 

The Board of Directors authorized the Corporation to enter into an agreement with Mizuho Corporate 

Bank Ltd. – Manila Branch for the purpose of availing of the Bank’s Global Cash Management 

Services. 

The Board of Directors authorized the Corporation to borrow money, arrange and negotiate with 

Chinatrust (Philippines) Commercial Bank Corporation for the grant of a credit line facility, to secure 

trust receipts, to obtain other credit facilities, to enter into and assume any financial undertaking with 

the Bank, with or without security, in the aggregate amount of Philippine Pesos: Two Hundred Eighty 

Million (₱280,000,000.00). 

The Board of Directors authorized the Corporation to apply for and obtain with Security Bank 

Corporation on accommodation in the form of a Domestic Bills Purchase Line in the aggregate 

principal amount of Philippine Pesos: One Hundred Million (₱100,000,000.00), as well as the 

temporary excesses or permanent increases thereon as may be approved by the Bank from time to 

time, under such terms and conditions as the Bank may require.

September 16, 2011 

The Board of Directors authorized the Corporation to establish, open and maintain 

securities/investment account(s) with Fidelity Securities, Inc. 

The Board of Directors authorized the Corporation to borrow money, arrange and negotiate with East 

West Banking Corporation for the grant of a credit line facility, to secure trust receipts, to obtain other 

credit facilities, and to enter into and assume any financial undertaking with the Bank, with or without 

security, in the aggregate amount of Philippine Pesos: Fifty Million (₱50,000,000.00). 

The Board of Directors authorized the Corporation to buy back up to Ten Million (10,000,000) shares 

from the public through the facilities of the Philippine Stock Exchange until all the shares have been 

purchased or until the Corporation deems that the market price is no longer undervalued. 

October 28, 2011 

The Board of Directors authorized the Corporation to borrow money, arrange and negotiate with 

Union Bank of the Philippines for the grant of a credit line facility, to secure trust receipts, to obtain 

other credit facilities, to enter into and assume any financial undertaking with the Bank, with or 

without security, in the aggregate amounts of Philippine Pesos: One Billion Seven Hundred Fifty 

Million (₱1,750,000,000.00). 

The Board of Directors authorized the Corporation to renew its existing bond with Prudential 

Guarantee and Assurance Inc., with Policy No. BD-G-16-HOM-0012963 and endorsement number 

BD-G16-HOM-0009165A in connection with its accreditation as a non-bank remittance agent by the 

Social Security System. 

November 18, 2011 

The Board of Directors approved the write-off for taxable year 2010 of disallowed creditable input 

VAT for the years 2003 and 2004 amounting to P1,338,803.77. 

The Board of Directors approved the write-off for taxable year 2011 of disallowed creditable input 

VAT for the years 2004 and 2005 amounting to P2,058,615.71. 

January 20, 2012 

The Board of Directors authorized the Corporation to borrow money, arrange and negotiate with East 

West Banking Corporation for the grant of credit line facility, to secure trust receipts, to obtain other 

credit facilities, and to enter into and assume any financial undertaking with the Bank, with or without 

security, in the aggregate amount of Philippine Pesos: Three Hundred Thirty Million 

(P330,000,000.00). 

The Board of Directors authorized the Corporation to close its deposit account in United States 

Dollars with Union Bank of the Philippines – Emerald Branch for the account of Al Ansari & 

Behbehani Exchange Co. 

The Board of Directors authorized the Corporation to avail of and enroll in the Optima Online Banking 

Facility of Sterling Bank of Asia Inc. in accordance with the terms and conditions imposed by the Bank. 

The Board of Directors authorized the Corporation to avail of loans/credit facilities and enter into any 

contract or agreement for the purchase or sale of any currency with Equicom Savings Bank up to 

the principal amount of Philippine Pesos: Seventy Five Million (P75,000,000.00), or the equivalent 

of said amount or any portion thereof in foreign currency; and to enter into any contract for the 

renewal and extension of the foregoing transactions, including, wherever necessary, the 

restructuring of any loan obligation contracted in connection therewith. 

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February 17, 2012 


May 18, 2012 

The Board of Directors authorized the Corporation to write-off the Corporation’s receivables for the 

year ended 31 December 2010 booked under the account “Receivable – Others” amounting to One 

Million Four Hundred Thirteen Thousand Nine Hundred Pesos (P 1,413,900.00). 

The Board of Directors authorized Mr. Makoto Kinoshita to represent the Corporation and to negotiate 

for and on behalf of the Corporation, as well as to sign, execute, and deliver any and all documents, 

resolutions, agreements, and contracts relating to the Corporation’s operations, foreign offices, 

branches, and agents in Japan. 

The Board of Directors authorized the Corporation to establish and open foreign currency deposit 

accounts, whether time, current, savings, money market placement and other types of deposit 

accounts with Bank Internasional Indonesia. 


time, current, savings, money market placement and other types of deposit accounts in Indonesian 

Rupiah with Bank Internasional Indonesia. 


time, current, savings, money market placement and other types of deposit accounts in United States 

Dollars with Union Bank of the Philippines – Emerald Avenue Branch for the account of Al Fardan 

Exchange. 

The Board of Directors authorized the Corporation to close the Corporation’s deposit accounts nos. 2- 

8600-44791, 0142-62996-8, and 286-8008375 with Banco de Oro Unibank – Strata Branch. 

The Board of Directors authorized the Corporation to enter into an agreement or arrangement with 

Chinatrust Commercial Bank Corporation – Ayala Branch for the purpose of opening a cash 

management account with the Bank. 

The Board of Directors authorized the Corporation to appear before the National Labor Relations 

Commission and file the necessary pleadings therein in connection with NLRC-NCR Case No. 04- 

05177-12 titled “Junell F. Dassun vs. IRemit, Inc. and Harris D. Jacildo.” The Board of Directors 

likewise authorized the law firm of Gerodias Suchianco Estrella to represent the Corporation in said 

case. 

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SEC Form 20-IS - iRemit Global Remittance

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