BANKARD, INC. - RCBC Bankard

SEC Number 102165
File Number _______
____________________________
BANKARD, INC.
____________________________
29 th Floor, Robinsons-Equitable Tower,
#4 ADB Avenue Corner Poveda Street,
Ortigas Center, Pasig City 1605
____________________________________________
Telephone Number: (632) 688 - 1888
_________________________________
Fiscal Year Ending
31 December 2006
_______________________
SEC FORM 17-A
ANNUAL REPORT
___________________________________________________
______________________
31 December 2006
______________________

SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURITIES REGULATION CODE
AND SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES
1. For the fiscal year ended 31 December 2006
2. SEC Identification No. 102165 3. BIR Tax Identification No. 000-803-498-000
4. Exact Name of Registrant as specified in its charter: BANKARD, INC.
5. Philippines 6. [ ] (SEC Use Only)
Province, Country, or other jurisdiction
Industry Identification Code
of incorporation or organization
7. 29 th Floor, Robinsons-Equitable Tower, #4 ADB Avenue Corner Poveda Street, Ortigas Center,
Pasig City 1605 .
Address of principal office
Postal Code
8. (632) 688 - 1888 .
Registrant’s Telephone Number, including area code
9. No change .
Former name, former address, and former fiscal year, if changed since last report
10. Securities registered pursuant to Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock
Outstanding and Amount of Debt Outstanding
Common Stock, P1 par value 311,419,900
11. Are any or all of these securities listed on the Philippine Stock Exchange
Yes [ x ] No [ ]
12. Check whether the registrant:
(a) has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17
thereunder or Section 11 of the RSA and RSA Rule 11(a)-1 thereunder, and Sections
26 and 141 of the Corporation Code of the Philippines during the preceding 12
months (or for shorter period that the registrant was required to file such reports)
Yes [ x ] No [ ]
(b)
has been subject to such filing requirements for the past 90 days
Yes [ x ] No [ ]
13. Aggregate market value of the voting stock held by non-affiliates: P 89,181,680 as of December 31,
2006.
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference in any part of this report:
Annual report containing audited financial statements as attached.
______________________________
Bankard, Inc. 2006 SEC Form 17-A

TABLE OF CONTENTS
PART I
BUSINESS AND GENERAL INFORMATION
Page No.
Item 1 Business 1
Item 2 Properties 9
Item 3 Legal Proceedings 9
Item 4 Submission of Matters to a Vote of Security Holders 9
PART II
OPERATIONAL AND FINANCIAL INFORMATION
Item 5 Market for Issuer’s Common Equity and
Related Stockholders’ Matters 10
Item 6 Management’s Discussion and Analysis or
Plan of Operations 11
Item 7 Financial Statements 18
Item 8 Changes in and Disagreements with Accountants and
Financial Disclosure 18
PART III
CONTROL AND COMPENSATION INFORMATION
Item 9 Directors and Executive Officers of the Registrant 19
Item 10 Executive Compensation 24
Item 11 Security Ownership of Certain Beneficial Owners and
Management 26
Item 12 Certain Relationships and Related Transactions 27
PART IV CORPORATE GOVERNANCE 28
PART V
EXHIBITS AND SCHEDULES
Item 14 a. Exhibits 29
b. Reports on SEC Form 17-C 29
SIGNATURES 30
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES 31
INDEX TO EXHIBITS 86
______________________________
Bankard, Inc. 2006 SEC Form 17-A

PART I - BUSINESS AND GENERAL INFORMATION
Item 1. BUSINESS
A. Description of Business
1. Business Development
(a) Form and year of organization
Bankard, Inc. was organized as a wholly owned subsidiary of PCIBank on 4 December 1981. Initially
named “Philippine Commercial Credit Card, Inc.” (PCCCI), it was set up for the purpose of operating a
domestic credit card business and its full commercial operations commenced in June 1982. On 8 July
1992, PCCCI changed its name to “Bankard, Inc.”. On 20 June 1991, Philippine Commercial International
Bank (PCIBank) was granted a license by MasterCard International to issue credit cards in the Philippines
accepted by the MasterCard network of affiliated banks and establishments worldwide. PCIBank
subsequently signed an agreement with Bankard, Inc. designating the latter to manage and operate its
PCIBank MasterCard international credit card operations. Bankard, Inc. currently has an affiliate member
license from MasterCard, International, Inc., through the principal member license of its new ultimate
parent company, Rizal Commercial Banking Corporation.
In March 1995, Bankard, Inc. was publicly listed in the Philippine Stock Exchange, becoming the first
credit card company to be listed in the Philippines, and only the second to achieve this distinction in the
Asia-Pacific region.
In May 1995, Visa International granted Bankard, Inc. an associate license to acquire merchant billings and
to issue credit cards carrying the Visa brand through its then parent company PCIBank. Bankard’s Visa
associate license was converted to a principal license on 26 September 2000. Bankard Inc.’s license with
VISA has been converted back to associate license through Rizal Commercial Banking Corporation when
it acquired its principal license with VISA on 22 December 2005.
In May 1999, Equitable Banking Corporation (EBC), together with EBC Investments, Inc. acquired 38%
of Philippine Commercial International Bank, Inc. (PCIBank) common shares, the then parent company of
Bankard, Inc.
On 24 May 2000 a Sale and Purchase Agreement (SPA) was executed between RCBC Capital Corporation
(Buyer) and Equitable PCI Bank (Seller) wherein the former bought 67% interest of the latter and its
affiliates in Bankard, Inc. under certain terms and conditions which were fulfilled to the satisfaction of
both Buyer and Sellers except for certain suspensive conditions which were only deemed fulfilled on
December 29, 2000, as provided in the SPA.
On 01 May 2001, Bankard, Inc. was authorized by JCB International Co., Ltd to issue JCB cards and to
enter into agreements with Merchants.
On 31 May 2001, a Deed of Sale was signed between Bankard, Inc. and Rizal Commercial Banking
Corporation (RCBC) whereby Bankard, Inc. bought/purchased all of the assets, and assumed all liabilities
of the RCBC Credit Card Division at net asset value. Bankard, Inc.’s purchase of the RCBC Credit Card
portfolio is consistent with RCBC’s decision to consolidate its credit card business to save on costs and
avoid duplication as a result of the acquisition of the controlling interest by RCBC Capital Corporation
(RCBC Capital) in the company. RCBC Capital is a wholly-owned investment house subsidiary of RCBC.
Effective 01 June 2001, the books of RCBC Card Division and Bankard, Inc. were consolidated.
On 29 December 2006, sale of substantially all assets to RCBC was consummated. Subsequently, Bankard
entered into a Service Agreement to manage the credit card business of RCBC.
Bankard, Inc. 2006 SEC Form 17-A Page 1

(b) Any bankruptcy, receivership or similar proceeding?
None.
(c) Any material reclassification, merger, consolidation, or purchase or sale of a significant amount
of assets not in the ordinary course of business?
Sale of substantially all assets of the Company to Rizal Commercial Banking Corporation (RCBC) on
29 December 2006.
2. Business of Issuer
(a) Description of Registrant
(i) Principal Products or Services
Products
Bankard, Inc. issued the following brands of credit cards in the year 2006 and continues to issue the same
for the account of RCBC under the Services Agreement:
Bankard MasterCard Classic and Gold
Bankard MasterCard is accepted in over 23 million establishments in over 275 countries. Bankard
MasterCard provides cardholders with financial flexibility and unsurpassed acceptance. Cardholders can
use it abroad to charge items in any currency and then enjoy the convenience of paying their outstanding
balance in pesos. A Classic and Gold MasterCard Dollar card is still being serviced (although no longer
being actively marketed) for cardholders who desire to be billed in dollars.
Bankard Visa Classic and Gold
Bankard Visa is accepted in more than 21 million establishments. Like the MasterCard brand, it allows
cardholders to charge in various currencies abroad and then pay in pesos when they get back home.
Bankard JCB Standard and Premiere
Bankard JCB has a merchant network of 7.28 million and worldwide acceptance in over 167 countries.
Bankard JCB specializes in a wide range of travel and entertainment services. When abroad, cardholders
can visit any JCB Plaza, Airport Service Desk and Lounge for information on local area merchants,
reservation service for hotels, rent-a-car or limousine service, and other travel convenience-related
services.
myDream JCB
myDream JCB, which was launched in April 2003, is Bankard’s no-frills, straight-talking, easy-to-pay,
low-interest credit card. A breakthrough product, myDream JCB is Bankard’s price card which offers the
lowest annual fee of P800 among all international card brands and the lowest effective revolving interest
rate of 2.75% a month. myDream JCB is also accepted for PEP installment at effective monthly installment
rates as low as 1.75% per month for 3 months, 2% per month for 6 months, 2.25% per month for 12
months, 2.50% per month for 18 months and 2.75% per month for 24 months.
The Black Card, the Bankard Platinum MasterCard
The year 2006 saw the launch of the Black Card, Bankard’s Platinum MasterCard which took the place of
the Presidential MasterCard issued to select cardholders only. Maintaining the same high standards and
selective criteria for membership, the premium Black Card makes available to its highly esteemed circle of
Platinum members world-class privileges and benefits which include: high credit limit; two currency
Bankard, Inc. 2006 SEC Form 17-A Page 2

option with peso and dollar payment facility; FREE Insurance Coverage for Life and Personal Accident,
Travel Protection and Travel Inconvenience; FREE-FOR-LIFE 1 st Supplementary card; automatic waiver
of annual membership fee upon card renewal if the cardholder charges at least P500,000 accumulated
purchases within a year; cash advance of as much as 50% of the credit limit; an annual summary of the
total year’s spending using the card to help the cardholder manage his funds better; emergency card
replacement through MasterCard Global Service anytime, anywhere the cardholder travels and access to
www.mastercardmoments.com, a monthly newsletter that brings to Platinum cardholders the various offers
and benefits exclusively available to them.
Other Product Features and Services
Bankard Infinite Rewards
Bankard Infinite Rewards, which is available only to holders of Bankard MasterCard, Bankard Visa,
Bankard JCB, and the Black Card allows cardholders to earn one (1) Rewards point for every P25 they
charge to their card. These points are accumulated and can be redeemed thru Rewards vouchers which can
be exchanged for gift checks from Robinsons, ShoeMart or Rustan’s Department Stores or used directly as
payment for goods and services from participating merchants. Additionally, rewards points can be applied
as payment for cardholders’ succeeding year’s annual fees or used to purchase travel packages from Pan
Malayan Travel or to pay insurance premiums from Malayan Insurance. Bankard Infinite Rewards is the
first non-catalog rewards program which allows cardholders to choose the rewards items they want.
Bankard Pay Easy Plan (PEP) Installment Program
The PEP Installment Program offers cardholders convenience by allowing them to pay for purchases on
installment. Below are the various terms with their respective low effective interest rates:
Balance Conversion
TERM
EFFECTIVE INSTALLMENT INTEREST RATES
MasterCard, Visa
myDream JCB
& JCB
3 months 3.00% 1.75%
6 months 3.25% 2.00%
9 months 3.25% Not available
12 months 3.30% 2.25%
18 months 3.75% 2.50%
24 months 4.00% 2.75%
30 months 4.25% Not available
36 months 4.50% Not available
A feature of the PEP Installment program, balance conversion allows cardholders to convert their retail
purchases or upcoming retail transactions to installment using the regular PEP installment rates listed
on the table above just by calling Bankard Customer Service at 888-1-888 (for Bankard MasterCard, Visa
or regular JCB cardholders); 24/7 Black Card Concierge Service at 888-1883 (for Black Card cardholders),
or the myDream JCB Customer Hotline at 888-1818 (for myDream JCB cardholders).
Balance Transfer (BT)
Balance Transfer, which is offered to all Bankard cardholders in good standing, allows them to transfer
their outstanding balances from their non-Bankard credit cards to their Bankard or myDream JCB cards
Bankard, Inc. 2006 SEC Form 17-A Page 3

either on straight payment mode (using the regular monthly interest rate) or on PEP Installment using the
following installment interest rates just by calling Bankard Customer Service at 888-1-888 (for Bankard
MasterCard, Visa or regular JCB cardholders), 24/7 Black Card Concierge Service at 888-1883 (for Black
Card cardholders), or the myDream JCB Customer Hotline at 888-1818 (for myDream JCB cardholders).
BALANCE TRANSFER EFFECTIVE INSTALLMENT RATES
TERM
Reduced Interest Rates
myDream JCB
for MasterCard,
Visa & JCB
3 months 2.50% per month 1.75% per month
6 months 2.50% per month 2.00% per month
9 months 2.75% per month Not available
12 months 2.75% per month 2.25% per month
18 months 3.00% per month 2.50% per month
24 months 3.50% per month 2.75% per month
Bankard’s Interactive Voice Response System (IVRS)
Bankard’s 24-hour, state-of-the-art IVRS gives cardholders a more convenient way to access information
and services pertaining to their account such as available credit line, account balance, fax copies of their
latest Statement of Account and the latest card promos and features.
Through the IVRS, cardholders can call Bankard anywhere from over 20 countries just by dialing +8000-
BANKARD (where “+” is the country access code). When in the Philippines but outside of Metro Manila,
they can call Bankard at 1-800-10-888-1888 using PLDT NDD access for information pertaining to
Bankard MasterCard, Visa or JCB, 1-800-10-888-1883 for information pertaining to the Black Card, or 1-
800-10-888-1818 for information regarding myDream JCB. Within Metro Manila, cardholders of Bankard
MasterCard, Visa or JCB can call Bankard Customer Service via 888-1-888; Black Card cardholders via
888-1883 and myDream JCB cardholders via 888-1818.
Bankard Website
Bankard’s marketing website at www.Bankard.com was launched in October 2003. Among its flagship
features are the following state-of-the-art e-services: (1) an online Statement of Account Viewing facility
that lets cardholders view their statements for the past two years; (2) an online payment facility powered by
BancNet which allows cardholders with ATM accounts to pay their credit card dues via the Internet; (3)
interactive and downloadable application forms for all card brands as well as a balance transfer request
form and the latest updates on the newest card features and benefits; (4) online enrolment to the Bankard e-
Statement Via E-mail Service and various other services like an online PEP Installment calculator.
Bankard e-Statement Via E-Mail Service
Bankard’s e-Statement Via E-mail Service allows cardholders to have their monthly Statements of Account
delivered directly to their own email addresses thereby eliminating the problem of late receipt of monthly
statements. Enrolment in this service is done through the Bankard website or by calling Bankard Customer
Service (for Bankard MasterCard, Visa and regular JCB cardholders), 24/7 Black Card Concierge Service
at 888-1883 (for Black Card cardholders) or the myDream JCB Customer Hotline (for myDream JCB
cardholders). Cardholders who enroll in this facility will no longer receive their printed statements.
Bankard, Inc. 2006 SEC Form 17-A Page 4

Fees and Charges
I. Annual Membership Fees
Card Brand Principal Extension
Bankard MasterCard (peso)
Gold
Classic
Bankard MasterCard (dollar)
Gold
Classic
Bankard JCB
Premiere
Standard
P3,000
1,500
$ 100
50
P3,000
1,500
P1,500
750
$ 50
25
P1,500
750
Bankard Visa
Gold
Classic
P3,000
1,500
P1,500
750
Black Card (peso) P3,600 P1,800
Black Card (dollar) $ 100 $ 50
myDream JCB P 800 P 400
II. Other Fees
Interest
Rate Per
Month
Lost Card
Replacement
Fee
Reactivation
Fee
Cash
Advance
Fee
Late Payment Fee
Bankard
MasterCard /
Bankard Visa/
Bankard
JCB/Black
Card
Bankard
MasterCard/
Black Card
($ billings )
3.5 % P500.00 P300.00 5% or
P100.00
whichever
is higher
3.5 % $10.00 P300.00 5% or
P100.00
whichever
is higher
7% of unpaid
minimum payment
due or P200.00
whichever is higher
7% of previous unpaid
minimum payment
due or US $ 5.00
whichever is higher
myDream JCB 2.75 % P500.00 P300.00 5% or
P100.00
whichever
is higher
7% of unpaid
minimum payment
due or P200.00
whichever is higher
Bankard, Inc. 2006 SEC Form 17-A Page 5

Target Market/Segments of Business
Bankard’s prime target is composed of individuals in the 25 to 55 age bracket, generally married and
coming from the A, B and Upper C economic classes, mainly coming from Metro Manila and key
provincial cities.
As of December 31, 2006, the Company has been engaged only in credit card operations and does not have
any other reportable segment where income is generated.
Accredited Establishments
As of December 2006, Bankard’s merchant discounting business had 499 accredited establishments which
honor MasterCard, JCB, Visa and myDream JCB. However, Bankard’s credit cards are accepted in all
merchants bearing the Mastercard, Visa or JCB logos, as the case may be.
(ii) Foreign Sales
None.
(iii) Distribution methods of the products or services
New cardholders are acquired through solicitation by direct sales agents, referrals by RCBC & RCBC
Savings Bank branches, and through direct marketing and telemarketing. Issued cards are delivered
through couriers. Cards are used by clients at accredited merchants, locally and internationally. Customer
Service is largely through telephone using our call center or through mail/fax communications. Card
payments are through various accredited banks’ branches, ATMs, online via the Internet and other select
payment centers.
(iv) Status of any publicly-announced new product or service
The year 2006 saw the launch of the Black Card, Bankard’s Platinum MasterCard which took the place of
the Presidential MasterCard issued to select cardholders only. Maintaining the same high standards and
selective criteria for membership, the premium Black Card makes available to its highly esteemed circle of
Platinum members world-class privileges and benefits which include: high credit limit; two currency
option with peso and dollar payment facility; FREE Insurance Coverage for Life and Personal Accident,
Travel Protection and Travel Inconvenience; FREE-FOR-LIFE 1 st Supplementary card; automatic waiver
of annual membership fee upon card renewal if the cardholder charges at least P500,000 accumulated
purchases within a year; cash advance of as much as 50% of the credit limit; an annual summary of the
total year’s spending using the card to help the cardholder manage his funds better; emergency card
replacement through MasterCard Global Service anytime, anywhere the cardholder travels and access to
www.mastercardmoments.com, a monthly newsletter that brings to Platinum cardholders the various offers
and benefits exclusively available to them.
.
(v) Competition
RCBC’s credit card business being managed by Bankard, has the following principal competitors:
Citibank, Hongkong & Shanghai Bank, Bank of the Philippine Island, Metrobank Card Corp., Equitable
Card Network, AIG, Banco De Oro, Security Bank Card and Standard Chartered Bank. Based on the
quarterly survey of the Credit Card Association of the Philippines (CCAP), total cards-in-force and billings
of these companies as of December 31, 2006 are indicated below:
Cards-in-Force (000) Billings (P M)
Citibank 1,101 66,196
Hongkong Shanghai Bank 816 29,633
BPI 818 27,367
Bankard, Inc. 2006 SEC Form 17-A Page 6

Metrobank Card Corp. 745 26,285
Equitable Card 517 18,700
Bankard 327 7,521
AIG 208 6,879
Banco De Oro 241 6,515
Security Bank Card 195 5,223
Standard Chartered Bank 166 5,036
(vi)
Disclose dependencies on single or limited number of suppliers for essential raw materials,
energy or other items
Bankard consolidates its purchasing requirements for hardware, software and various supplies with other
members of the Yuchengco Group of Companies through the House of Investments which acts as a central
purchasing agent.
(vii) Disclose dependencies on single customer
At present, Bankard services the credit card business of Rizal Commercial Banking Corporation (RCBC).
Other revenue sources are being explored for diversification.
(viii) Transactions with and/or dependence on related parties
Refer to note 15 of the Audited Financial Statements.
(ix) Summarize principal terms & expiration dates of all patents, trademarks, copyrights, licenses,
franchises, concessions & royalty agreements
Bankard acquired its affiliate member license from MasterCard International through the principal member
license of its ultimate parent company Rizal Commercial Banking Corporation. In May 1995, Visa
International granted the Company license to acquire merchant billings and issue credit cards carrying the
Visa brand. On May 1, 2001, Bankard was authorized by JCB International Co., Ltd. to issue JCB cards
and to enter into agreements with merchants.
Bankard is obliged to operate under strict compliance with MasterCard, Visa & JCB International’s
(Associations) by-laws and rules. As member, the Company is required to pay the joining fees and other
fees as may be established from time to time by their Board of Directors.
A member ceases to become a member either voluntarily or involuntarily when it is in violation of the rules
of the Associations.
(x) Need for any government approval of principal products or services
There are no principal products or services that need government approval.
(xi)
Effect of existing or probable government regulations on the business
• Refer to discussion of BSP Circular 398 and its impact on the Company’s financial
statements in Note 5 of the Audited Financial Statements. With the sale of substantially
all its assets to RCBC, this BSP Circular ceased to impact Bankard effective the date of
sale.
Bankard, Inc. 2006 SEC Form 17-A Page 7

(xii)
Indicate amount spent on research & development
In 2006, Bankard incurred capital expenditures of P8.7 million for hardware & software and to develop
functionalities and service offerings.
(xiii)
Cost & effects of compliance with environmental laws
Not applicable
(xiv)
State the number of the registrant’s present employees
Employees
Bankard, Inc. had 248 permanent employees as of December 31, 2006. The employee population is
composed of 156 Officers and 89 rank and file personnel. Of the total rank and file personnel, 17
employees belong to the Non Collective Bargaining Units (Non CBU). Notwithstanding non-membership
in the Collective Bargaining Units (CBU), these 17 employees are able to avail themselves of the benefits
granted by the CBA.
All of the Non-Collective Bargaining Units (Non-CBU) personnel are from the Human Resources Group
(inclusive of all Executive Assistants), General Services Department, Information Technology Group, all
probationary employees and all level 5 employees prior to April 01, 1997.
(xv)
Discuss the major risk/s involved in each of the businesses of the company. Include a disclosure
of the procedures being undertaken to identify, assess & manage such risks
Bankard’s main business is managing the credit card business of RCBC. The performance of the said
business is therefore, the primary concern. The major risk faced by Bankard is credit risk which is
influenced to a great extent by the quality of the portfolio it manages. Having a good portfolio translates to
manageable credit losses.
Efforts centered mainly on further improving portfolio management capabilities, translating to significant
improvements in credit quality /lower delinquencies and lower losses from our credit card issuing business.
The delinquency levels of Bankard continued to decline in 2006, particularly the 30-179 days past due
portfolio. From a high of 22% in February 2004, 30-179 days delinquency went down significantly to
11.36% in December 2006 and further down to 10.9 % in March 2007. The Company expects this
favorable trend to continue in 2007.
(b) Additional Requirements as to Certain Issues or Issuers
None.
Bankard, Inc. 2006 SEC Form 17-A Page 8

Item 2. DESCRIPTION OF PROPERTY
Bankard moved its operations in April 1999 to the 29 th Floor, Robinson’s Equitable Tower, ADB Avenue
corner Poveda Street, Ortigas Center, Pasig City. Bankard owned the 29 th , 30 th and 31 st floors until its sale
to RCBC at the end of 2006.
Bankard continues to occupy the said property as part of the condition of the Services Agreement.
Item 3. LEGAL PROCEEDINGS
Please refer to note 18 of the Audited Financial Statements.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None was submitted during the fourth quarter of the fiscal year covered by this report to a vote of security
holders.
Bankard, Inc. 2006 SEC Form 17-A Page 9

PART II – OPERATIONAL AND FINANCIAL INFORMATION
Item 5. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT’S COMMON EQUITY AND
RELATED STOCKHOLDERS’ MATTERS
1. Market Information
Bankard, Inc.’s shares of stock are being traded at the Philippine Stock Exchange under Banks and
Financial Institutions and classified as Financials.
Stock Prices
2007
2006
2005
2004
2. Holders
High
Low
First Quarter P .71 P .71
First Quarter P .90 P .89
Second Quarter .83 .78
Third Quarter .64 .64
Fourth Quarter .80 .78
First Quarter P .98 P .98
Second Quarter .72 .72
Third Quarter .75 .75
Fourth Quarter .77 .77
First Quarter P 1.00 P 1.00
Second Quarter .92 .92
Third Quarter .93 .93
Fourth Quarter .95 .95
The number of stockholders of record as of 28 February 2007 was 852. Common shares outstanding as of
this date were 311,419,900.
Top twenty stockholders as of 28 February 2007:
Name
Title of No. of Shares % to Total
Class Held
1 PCD Nominee Corporation #350053646 Common 170,232,256 54.66
2 RCBC Securities, Inc. Common 73,000,000 23.44
3 PCD Nominee Corporation #350053824 Common 34,284,534 11.00
4 RCBC Capital Corporation Common 25,236,200 8.10
5 Christopher Chua Common 500,000 .16
6 Nancy Saw Common 400,000 .13
7 Fortune Guarantee & Ins. Corp. Common 246,000 .08
8 Fortune Life & General Ins. Co., Inc. Common 239,000 .08
9 Francisco Ortigas Sec., Inc. A/C #9288 Common 198,000 .06
10 Jardine CMG Life Common 146,000 .05
11 Knights of Columbus Fraternal
Common 130,000 .04
Association of the Phils. Inc.
12 Virgilio B. Baello Common 120,000 .04
13 Ma. Teresita Batara &/or Anita Batara Common 104,000 .03
14 Phillip Kua Common 102,000 .03
15 Elaine L. Lao Common 100,000 .03
Bankard, Inc. 2006 SEC Form 17-A Page 10

16 AMA Rural Bank of Mandaluyong, Inc. Common 100,000 .03
17 Yu Ke Ping Common 100,000 .03
18 Ernesto B. Salazar Common 100,000 .03
19 Ric Castaneda &/or Hector Uy Common 100,000 .03
20 Calvin C. Chua Common 100,000 .03
3. Dividends
No dividends were declared during the year 2006.
4. Recent Sales of Unregistered or Exempt Securities, Including Recent Issuance of Securities
Constituting an Exempt Transaction
None.
Item 6. MANAGEMENTS’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
OR PLAN OF OPERATION
♦
Cards-In-Force
2004 2005 2006
MasterCard 163,820 159,580 163,349
Visa 82,583 80,251 76,717
JCB 29,323 23,697 19,897
myDream JCB 48,068 56,166 66,668
Bankard MF1/PL 1,063 865 841
Bankard One 183 8 5
Total 325,040 320,567 327,477
♦
Billings (in P millions)
2004 2005 2006
Total All Brands 6,444 7,040 7,521
♦
Comparative Statement of Income
2004 2005 2006
REVENUES
Finance charges 1,499,784,991 1,414,322,055 1,346,665,623
Membership fees 288,128,963 256,323,805 227,474,924
Late Payment fees 126,732,190 111,164,560 92,856,714
Merchant discounts – net 102,126,186 173,276,313 234,319,533
Interchange fees 76,265,041 81,356,310 88,781,146
Other revenues 48,193,056 37,790,264 27,533,287
Total 2,141,230,427 2,074,233,307 2,017,631,227
COST & EXPENSES
Losses on doubtful 1,323,280,760 921,916,673 978,827,888
accounts
Interest & other financing 811,666,513 876,085,911 656,503,749
charges
Other operating expense 854,049,512 889,726,253 957,854,824
Total 2,988,996,785 2,687,728,837 2,593,186,461
Bankard, Inc. 2006 SEC Form 17-A Page 11

Income/(Loss) before (847,766,358) (613,495,530) (575,555,234)
income tax
Income tax
(270,359,783) (191,110,025) 22,060,078
expense/(benefit)
Net income/(Loss) (577,406,575) (422,385,505) (597,615,312)
Earnings/(Loss) per share (1.85) (1.36) (1.92)
♦
Comparative Balance Sheet
2004 2005 2006
CURRENT ASSETS
Cash and cash equivalents 435,710,566 377,212,245 346,763,977
Credit card and other
3,448,300,126 3,290,189,448 50,699,279
receivables – net
Prepayments and other current 33,442,883 26,682,887 3,485,396
assets
NON-CURRENT ASSETS
Deferred tax assets 309,959,110 516,416,422 518,325,035
CURRENT LIABILITIES
Interest-bearing loans 2,697,060,400 2,369,060,000 -
Cardholders’ credit balances,
trade and other payables 1,380,752,566 1,936,152,982 268,177,953
Income tax payable 8,347,810 5,692,955 -
Other current liabilities 5,301,646 8,785,971 837,282
♦
Key Performance Indicators
2004 2005 2006
Return on Assets (%) 1/ (10.6) (7.9) (11.1)
Return on Equity (%) 2/ (112.9) (151.3) (87.7)
Non-Performing Loan Ratio (%) 3/
(Delinquency) 30 – 179 dpd
15.2 12.9 11.4
1/ Return on assets (ROA) was computed based on the ratio of net income/(net loss) to average assets.
2/
Return on equity (ROE) was computed based on the ratio of net income/(net loss) to average equity.
3/ Non-performing loans (NPL) ratio Delinquency 30-179 dpd was the sum of 30-179 days past due over current to
179 dpd.
Bankard, Inc. 2006 SEC Form 17-A Page 12

2004
♦
♦
♦
♦
♦
Bankard ended the year 2004 with a net loss of P577 million translating to a net loss per share of P
(1.85). In 2003, the Company reported a net income of P87 million translating to a net income per
share of P0.27. These two sets of figures are not comparable in that the 2004 numbers reflect the full
impact of Bankard’s shift to more conservative revenue recognition and provisioning practices that are
consistent with the provisions of BSP Circular 398. The effects of these more conservative accounting
practices are in the reduction in finance charges by 18.1% or P331.7 million and in the significant
increase in losses for doubtful accounts by P462 million or 53.6% higher vs 2003.
Funding costs were 13.9% higher in 2004 versus 2003, or by P98.8 million mainly because of higher
interest rates ranging from 11% to 14.5% in 2004 vs 7% to 13% in 2003 for peso loans.
Operating expense (excluding funding costs, provisions for doubtful accounts and business taxes)
amounted to P738 million, lower by P90.4 million or 10.9% vs 2003.
The Company’s diversification into card-not-present, m-commerce and e-commerce merchant
acquiring combined with selective card-present acquiring, are generating new fee income that are
expected to contribute significantly to turning Bankard’s profit picture around. 2004 net merchant
discounts reached P102.1 million, a growth of +115.4% or P54.7 million vs. 2003. Expected continued
growth of merchant acquiring, combined with new initiatives in the arena of prepaid or debit cards,
should further build our fee-based businesses and develop lower cost funding sources for the
company.
In 2004, Bankard incurred capital expenditures of P 9.8 million for hardware & software to develop
additional functionalities and service offerings.
♦ In 2004, there is no expected purchase or sale of plant and significant equipment.
♦ Bankard, Inc. had 283 permanent employees and 8 probationary employees as of December 31, 2004.
The employee population is composed of 170 Officers and 121 rank and file personnel. Of the total
rank and file personnel, 26 employees belong to the Non Collective Bargaining Units (Non CBU).
Notwithstanding non-membership in the Collective Bargaining Units (CBU), these 26 employees are
able to avail themselves of the benefits granted by the CBA. There are no expected significant
changes in the number of employees.
♦
♦
♦
Bankard’s, reported total assets in 2004 amounted to P4,601 million, lower by P795.4 million or
14.7% vs 2003 on account of lower credit card and other receivables. The decline in credit card and
other receivables in 2004 is a result of higher allowance for doubtful accounts which was reported at
P1,513 million in 2004 vs P219 million in 2003. This declining trend continues in the 2005 as Bankard
reports total receivables of P 3,290 million. Again, such decline is brought about by higher allowance
for doubtful accounts. The 2004 year-end changes in credit card and other receivables are discussed
more fully in note 5 of the audited financial statements.
Meanwhile, cash and cash equivalents followed an opposite trend as it grew to P435 million in
December 2004, 845% higher than 2003. This is mainly because of higher payables to merchants
arising from higher acquiring volumes.
Deferred tax assets in 2004 amounted to P310 million basically due to higher provisions for credit
losses.
Bankard, Inc. 2006 SEC Form 17-A Page 13

♦
♦
♦
Outstanding loans as of 31 December 2004 were P 2,697,060,400. Breakdown as follows:
Dec. 31, 2004
Rizal Commercial Banking Corporation (RCBC) P 2,377,340,000
Easwest Bank 221,720,400
Banco de Oro 98,000,000
Total P 2,697,060,400
There are no events that will trigger 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 and other relationships
of the company with unconsolidated entities or other persons created during the reporting period.
♦ There are no material commitments for capital expenditures as of 31 December 2004.
♦
The company has budgetted P75.6 million for capital expenditures for full-year 2005 to improve
productivity and to enhance operating system.
There is nothing else to disclose with respect to demands, trends events or uncertainties that will result
in or reasonably likely to result in the decrease or increase of the company's liquidity. The business
has been able to meet its liquidity requirements in 2004 despite incurring losses and shall continue to
meet its funding requirements in 2005 through the combination of cash generated by its core business,
fee-based revenues, bank borrowings, higher level of payable to merchants and sale of receivables.
Bankard will continue to be able to meet its financial and trade obligations.
2005
In 2005, Bankard reported a net loss of Php 422.4 million which translated to a loss per share of
Php1.36. This is an improvement over 2004 during which Bankard reported a net loss of Php577.4
million or a loss per share of P1.85. Both years continued to reflect the full impact of the shift to
revenue recognition and provisioning practices that are consistent with BSP Circular 398 (the effect of
the implementation of this circular are more fully discussed in Note 5 of the Financial Statements).
The net loss reported in 2005 has reduced Bankard’s total equity to Php 279.2 million (inclusive of
RCBC Capital’s deposit on future stock subscription amounting to Php 190.5 million, and discussed
fully in Note 16.1 of the Financial Statements) from 2004’s Php 511.5 million. The company has a
pending application in the Philippine Stock Exchange for a Stock Rights Offering covering a total of
262 million common shares at Php1.00 per share.
Our diversification into card-not-present, m-commerce and e-commerce merchant acquiring
significantly improved our net merchant discounts revenues to Php173.3 million from Php102.1
million in 2004.
On the other end of the spectrum, with tighter operations and cost controls, our operating expenses
were contained at a minimal 3% increase over 2004.
Equally important is the continuous improvement of service processes which resulted to sustained high
levels of customer satisfaction. Overall customer satisfaction based on quarterly contactor surveys was
maintained at 87%. The sustained improvements in service levels translated to increased total billings
of Bankard holders to Php 7.040 billion vs. Php 6.422 billion in 2004.
Bankard, Inc. 2006 SEC Form 17-A Page 14

Losses on doubtful accounts increased by P87 million as a result of the booking of a higher amount of
the unbooked provisions required by the BSP. The amount required for booking in 2006 is Php 648
million from Php 180 million in 2005.
♦
♦
In 2005, Bankard incurred capital expenditures of P11.1 million for hardware & software to develop
additional functionalities and service offerings.
The Bankard Board of Directors has approved the proposed sale of all or substantially all of the assets
of the Corporation to a third party.
♦ Bankard, Inc. had 274 permanent employees and 7 probationary employees as of December 31, 2005.
The employee population is composed of 186 Officers and 95 rank and file personnel. Of the total
rank and file personnel, 25 employees belong to the Non Collective Bargaining Units (Non CBU).
Notwithstanding non-membership in the Collective Bargaining Units (CBU), these 25 employees are
able to avail themselves of the benefits granted by the CBA. There are no expected significant
changes in the number of employees.
♦
♦
♦
♦
♦
♦
Bankard’s reported total assets in 2005 amounted to P4,609 million, lower by P6 million vs 2004. The
decline in credit card and other receivables is a result of higher allowance for doubtful accounts which
was reported at P2,433 million in 2005 vs P1,513 million in 2004. The 2005 year-end changes in
credit card and other receivables are discussed more fully in note 5 of the audited financial statements.
Meanwhile, cash and cash equivalents amounted to P377 million in December 2005, 13% lower than
2004. This is mainly because of payment of interest bearing loans.
Deferred tax assets in 2005 amounted to P516 million basically due to higher provisions for credit
losses.
Outstanding loans to Rizal Commercial Banking Corporation as of December 31, 2005 and September
30, 2006 were P 2,369,060,000 and P 2,366,250,000 respectively.
In separate letters from the Bangko Sentral ng Pilipinas (BSP), Bankard has been instructed to stop
selling its Accounts Receivable and to discontinue its Advance Payment Program. Bankard has
written BSP to request for a reasonable time within which to unwind these transactions. BSP has
given Bankard six months to comply with its instruction covering the Advance Payment Program.
Bankard has been funding its working capital requirements from the said sources.
There are no material off-balance sheet transactions, arrangements, obligations and other relationships
of the company with unconsolidated entities or other persons created during the reporting period.
♦ There are no material commitments for capital expenditures as of December 31, 2005.
♦
The company has budgetted P30 million for capital expenditures for full-year 2006 to improve
productivity and to enhance operating system.
Aside from note 5 to the Audited Financial Statements, there is nothing else to disclose with respect to
demands, trends events or uncertainties that will result in or reasonably likely to result in the decrease or
increase of the company's liquidity. The business has been able to meet its liquidity requirements in 2005
despite incurring losses and shall continue to meet its funding requirements in 2006 through the
combination of cash generated by its core business, fee-based revenues, bank borrowings, and sale of
receivables. Bankard will continue to be able to meet its financial and trade obligations.
Bankard, Inc. 2006 SEC Form 17-A Page 15

2006
In 2006, Bankard reported a net loss of Php597.6 million which translated to a loss per share of Php1.92.
This has reduced the total equity to a deficit of Php318.4 million. However, with the deposit on future
subscription of Php1 billion as a result of the debt to equity conversion of Bankard’s bills payable to
RCBC, the Company ended with a positive equity of Php681.6 million as of 31 December 2006.
Bankard was able to contain its operating expenses in 2006 at the same level as in 2005. Total operating
expenses in 2006, net of expenses booked in relation to the sale transaction and “clean up” of the
company’s balance sheet of Php 96.1 million, of Php 757.7 million is even less than the 2005 level of
Php764.1 million, net of Php 23.4 million swap differential, that was shown as funding cost in 2006.
The 2006 efforts to improve portfolio quality resulted in the steady decline of delinquency rate from 15.2%
in 2004 to 12.9% in 2005 to 11.4% in 2006. The losses for doubtful accounts pertaining to the fresh flows
showed significant improvements as it declined to Php492.5 million in 2006 from Php741.8 million in
2005. This was, however, offset by the higher provisions required for the non-performing portfolio that is
being provided for on a staggered basis over seven years as mandated by Bangko Sentral ng Pilipinas (see
Note 5 of the Financial Statements). Bankard provided Php486.3 million in 2006 compared to Php180.1
million in 2005.
Bankard’s diversification into card-not-present merchant acquiring significantly improved our net
merchant discount revenues to Php227.5 million from Php173.3 million the previous year. The growth of
this business segment had contributed significantly in terms of funding saves bringing down finance costs
to Php656.5 million from Php876.1 million despite higher card receivables from card issuing volumes.
However, certain issues raised by both VISA and MasterCard regarding this type of online commerce have
convinced the Board of Directors to terminate this segment of the business in November.
♦
♦
In 2006, Bankard incurred capital expenditures of P8.7 million for hardware & software to develop
additional functionalities and service offerings.
Bankard, Inc. had 248 permanent employees as of December 31, 2006. The employee population is
composed of 156 Officers and 89 rank and file personnel. Of the total rank and file personnel, 17
employees belong to the Non Collective Bargaining Units (Non CBU). Notwithstanding non-membership
in the Collective Bargaining Units (CBU), these 17 employees are able to avail themselves of the benefits
granted by the CBA. There are no expected significant changes in the number of employees.
♦ Bankard’s reported total assets in 2006 amounted to P50.7 million, lower by P3.239.3 million vs 2005.
The decline in credit card and other receivables is a result of the sale of substantially all assets including
the credit card receivables. The 2006 year-end changes in credit card and other receivables are discussed
more fully in note 5 of the audited financial statements.
♦
♦
Meanwhile, cash and cash equivalents amounted to P346.8 million in December 2006, 13% lower than
2005.
There are no material off-balance sheet transactions, arrangements, obligations and other relationships of
the company with unconsolidated entities or other persons created during the reporting period.
♦ There are no material commitments for capital expenditures as of December 31, 2006.
♦
Aside from note 5 to the Audited Financial Statements, there is nothing else to disclose with respect to
demands, trends events or uncertainties that will result in or reasonably likely to result in the decrease or
increase of the company's liquidity.
Bankard, Inc. 2006 SEC Form 17-A Page 16

As Bankard continues to manage the credit card business for RCBC under a service agreement, we look
forward to the year 2007 with the following strategic focus and priorities to improve the profitability of the
business: (1) aggressively grow our customer base and portfolio while we strengthen further the improvements
in portfolio/asset quality, (2) expand our merchant acquiring by leveraging on existing merchant relationships
and establishing new ones, and (3) improve further the operating cost structure. Additionally, we will expand
the development of card product offerings geared towards addressing specific needs of certain market
segments.
Likewise, we have identified major cost improvements in the areas of (1) decreasing card processing costs with
a plan to explore alternative card administration systems that will substantially reduce the operating costs per
card while maintaining time to market competitiveness, (2) reducing occupancy costs as a result of
consolidating the three floors currently occupied by the office premises to two, (3) working with a leaner
organization which at the end of 2006 was 14% less than the beginning and (4) implementing a less expensive
strategy to acquire new customers by leveraging on existing sales and distribution channels of the Yuchengco
Group of Companies (YGC).
While these cost-saving initiatives will now redound to the benefit of RCBC as the new owner of the business,
the task to effectively manage the business continues to be the paramount responsibility of the company.
External Audit Fees
For the audit of its annual financial statements, the aggregate amounts billed by its independent accountant
amounted to about P714,260 and 601,931 for the years 2005 and 2006, respectively.
The aggregate fees billed in each of the last two (2) years for professional services rendered by the external
auditor for tax accounting compliance, advice, planning and any other form of tax services are as follows:
For 2004
paid in
2005
For 2005
paid in
2006
Tax Fees 39,050 -
All Other Fees 38,060 624,658
The Audit Committee recommends to the Board the selection of external auditors considering independence
and effectiveness and recommends the fees to be paid.
Bankard, Inc. 2006 SEC Form 17-A Page 17

Item 7. FINANCIAL STATEMENTS
♦
The financial statements and schedules listed in the accompanying Index to Financial Statements and
Supplementary Schedules (see page 29) are filed as part of this Form 17-A (see attached Audited
Financial Statements)
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES
Except as stated in the report of independent auditors, Bankard, Inc. has no disagreements with its
accountants.
Changes and adoption of new Accounting Standards are fully summarized under note 2 to Financial
Statements.
Bankard, Inc. 2006 SEC Form 17-A Page 18

PART III – CONTROL AND COMPENSATION INFORMATION
A. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
1. Directors and key executive officers of Bankard, Inc. as of April 01, 2007:
Rizalino S. Navarro 68 Chairman of the Board Filipino
Cesar E. A. Virata 76 Vice Chairman of the Board Filipino
Oscar B. Biason 51 President & Chief Executive Officer/Director Filipino
Francisco C. Eizmendi, Jr. 70 Director (Independent) Filipino
Eduardo S. Lopez, Jr. 62 Director (Independent) Filipino
Raul M. Leopando 56 Director Filipino
Teodoro D. Regala, Sr. 73 Director Filipino
Teodoro Q. Peña 74 Director (Independent) Filipino
Ma. Celia H. Fernandez-Estavillo 35 Director Filipino
Roberto F. De Ocampo 60 Director (Independent) Filipino
Lorenzo V. Tan 45 Director Filipino
Samuel V. Torres 43 Corporate Secretary Filipino
Ma. Angelina V. Angeles 54 Vice President Filipino
Fe Fortunata R. Rio 48 Vice President Filipino
Ma Liwayway M. Tan 55 Vice President & Compliance Officer Filipino
Zenaida F. Torres 52 Senior Vice President, Chief Financial Officer &
Chief Information Officer & Treasurer
Filipino
All Directors shall hold office until a new Board of Directors are elected during the Company’s annual
stockholders’ meeting.
Atty. Samuel V. Torres resigned as Director effective 25 January 2007. Mr. Francisco S. Magsajo, Jr.
resigned effective 31 March 2007 and elected Mr. Lorenzo V. Tan as Director effective 01 April 2007.
Incumbent Directors
Rizalino S. Navarro
Chairman of the Board
July 23, 2004 to present
Director
May 10, 2001 to Present
68 years old/Filipino
Mr. Rizalino S. Navarro has been a Director of the Rizal Commercial Banking Corporation
(RCBC) since 1999 and Senior Adviser starting 2007. He was the Executive Vice-
Chairman/Chief Executive Officer from 2004 to 2006 of RCBC. Currently, he is Chairman (nonexecutive)
of Clark Development Corp. and Member of Subic-Clark Area Development Council.
He is also Chairman of EEI Corporation, Seafront Resources Corporation, Petroenergy
Corporation, and Director of Great Pacific Life Assurance Corp., Mapua Institute of
Technology, House of Investments, Inc., Malayan Insurance Co., Inc, YGC Corporate
Services, Inc., and Upline Food Corporation. He held various positions in the government
including Secretary of Trade and Industry and member of the Monetary Board of the Bangko
Sentral ng Pilipinas. Mr. Navarro graduated from the University of the East with a degree in
Bachelor of Science in Business Administration. He completed his Masters in Business
Administration from Harvard Business School.
Bankard, Inc. 2006 SEC Form 17-A Page 19

Cesar E. A. Virata
Vice Chairman of the Board
July 23, 2004 to present
Director
February 20, 2001 to Present
76 years old/Filipino
Mr. Cesar E. A. Virata has been the Corporate Vice-Chairman since June 2000, Senior
Adviser starting 2007, and Director since 1995 of Rizal Commercial Banking Corporation.
(RCBC). He is also the Chairman and President of the C. Virata and Associates, Inc. and
Management Consultants Inc. Concurrently, he is a Director and/or Chairman of various
companies, such as RCBC Savings Bank, RCBC Capital Corporation, RCBC Forex Brokers
Corporation, RCBC Realty Corporation, RCBC Land, Inc., Malayan Insurance Company, Inc.,
Nippon Life Company of the Philippines Inc., Business World Publishing Corporation, Belle
Corporation, Coastal Road Corporation, Luisita Industrial Park Corporation, Manila Electric
Company, Pacific Fund Inc., Mapua Institute of Technology, AY Foundation, Inc. and YGC
Corporate Services, Inc.
Mr. Virata has held positions in the Philippine government, including Prime Minister and
Chairman of the Committee on Finance of the Batasan Pambansa (National Assembly). He
also became the Secretary/Minister of Finance and member of the Monetary Board of the Central
Bank of the Philippines. He served as Governor for the Philippines of the World Bank (WB)
and Asian Development Bank (ADB). He was Chairman of the Development Committee of
the WB and International Monetary Fund (1976-1980) and Chairman of the Board of Governors
of ADB (1973-1986). He was Chairman of the Land Bank of the Philippines. Prior to his
government positions, he was a Professor and Dean of the College of Business Administration
of the University of the Philippines.
He graduated from the University of the Philippines with degrees in Mechanical Engineering
and Business Administration (Cum Laude). He completed his Masters in Business
Administration major in Industrial Management from the University of Pennsylvania.
Oscar B. Biason
Director/President & Chief Executive Officer
January 25, 2007 to Present
51 years old
Mr. Oscar B. Biason has held various management positions in the Company since assisting in its
organization in 1982. He is currently the Company’s Chief Executive Officer. He graduated
from Mapua Institute of Technology with a Bachelor of Science degree in Management and
Industrial Engineering.
Francisco C. Eizmendi, Jr.
Independent Director
May 30, 2002 to Present
70 years old/Filipino
Mr. Francisco C. Eizmendi, Jr. is a Director of Great Pacific Life Assurance Corp. He was the
Bank’s Advisory Board Member. Mr. Eizmendi is also an Independent Director at RCBC
Forex Brokers Corp. He was formerly President & Chief Operating Officer of San Miguel
Corporation. He graduated from the University of Sto. Tomas with a Bachelor of Science
degree in Chemical Engineering.
Bankard, Inc. 2006 SEC Form 17-A Page 20

Eduardo S. Lopez, Jr.
Independent Director
July 28, 2006 to Present
62 years old/Filipino
Mr. Eduardo Lopez, Jr. is the Chairman of Board of Jumel Holdings Inc. He is the President of
Rustan’s Coffee Corporation. He is also a Director of Rizal Commercial Banking Corporation,
RCBC Savings Bank, RCBC Securities, Inc., Bacsay Management Corporation, and Liberty Flour
Mills. He graduated from the University of Ateneo de Manila with a Bachelor of Arts degree in
Economics. He completed his Masters in Business Administration from the University of San
Francisco.
Raul M. Leopando
Director
February 24, 2005 to Present
56 years old/Filipino
Mr. Raul M. Leopando is a Director and President of RCBC Capital Corporation. He is the
Chairman of the Board of RCBC Securities. He is also a Director of PAXYS and Charter Land
Inc. He is also a Director and Treasurer of the Investment Houses Association of the Philippines
(IHAP). He graduated from the University of Philippines with a Bachelor of Arts degree in
Economics and Bachelor of Science in Commerce degree in Accounting at the University of
Ateneo de Manila.
Teodoro D. Regala, Sr.
Director
May 30, 2002 to Present
73 years old/Filipino
Atty. Teodoro D. Regala has been a Director of Rizal Commercial Banking Corporation from
June 28, 1999 to present. He is the Founding & Senior Partner and a member of the Executive
Committee of Angara Abello Concepcion Regala & Cruz Law Offices. He is a Director of
Malayan Insurance Co. Inc., Datacraft Communications Systems, Inc., Datacraft Opsis Inc.,
MICO Equities, Inc., Safeway Philtech, Inc., and Director/Corporate Secretary of OEP
Philippines, Inc., Asahi Glass Philippines, Inc., General Motors Automobiles Phils., Inc. and
Republic Asahi Realty Corporation. He graduated from the University of the Philippines (Cum
Laude) with the degree in Bachelor of Laws.
Teodoro Q. Peña
Independent Director
May 37, 2004 to Present
74 years old/Filipino
Atty. Teodoro Q. Pena is an Independent Director since 2002 and Director from 1995 to 2002
of Rizal Commercial Banking Corporation. He is also Chairman of the Bank’s Audit Committee
and Personnel & Evaluation Review Committee. He is also an Independent Director of RCBC
Securities, Malayan Zurich Insurance Co. Inc., and RCBC Capital Corporation. He holds
various positions in Philippine Constitution Association, Palawan State University, RCBC
Savings Bank, EEI Corporation, Educators Inc.; and Institute of Corporate Directors. He
graduated from the University of the Philippines with a degree in Bachelor of Laws. He took
up Master of Laws at the Yale University.
Bankard, Inc. 2006 SEC Form 17-A Page 21

Ma. Celia H. Fernandez-Estavillo
Director
May 26, 2005 to Present
35 years old/Filipino
Atty. Ma. Celia H. Fernandez- is a Director (June 27, 2005 to present) and Corporate Secretary
(March 1, 2005 to present) of Rizal Commercial Banking Corporation. She is also a
director/corporate secretary in Luisita Industrial Park, Philippine Integrated Advertising Agency,
Averon Holdings, Inc., and RCBC Capital Corporation, and a Trustee of Mapua Institute of
Technology. Before joining RCBC, she was the Assistant Vice-President for Global Business
Development at ABS-CBN Broadcasting Corp., and Chief of Staff at the Office of Senator
Edgardo J. Angara. She graduated at the University of the Philippines with a Bachelor of
Science degree in Business Economics (Summa Cum Laude). She also graduated from the
same university with a Bachelor of Laws degree (Cum Laude). She earned her Master of Law
(LL.M) in Corporate Law (Cum Laude) at the New York University School of Law, New York.
She ranked no. 1 in the Philippine Bar examinations of 1997.
Roberto F. de Ocampo
Independent Director
July 28, 2006 to present
60 years old/Filipino
Mr. Roberto F. de Ocampo is the Independent Director since 2006 of Rizal Commercial
Banking Corporation. He holds various chairmanship and/or directorship positions in other
companies as well. He was the President of Asian Institute of Management. He also became
Advisory Board Member of Metropolitan Bank & Trust Co. and Director of ABS-CBN
Broadcasting, Inc. He also held various positions in the government such as Secretary of the
Department of Finance, Chairman of Cabinet Cluster on Macro-Economy, and Chairman of
Committee on Privatization and Fiscal Incentives Review Board. He graduated from Ateneo de
Manila University with a Bachelor of Arts degree in Economics. He finished his Masters at
the University of Michigan with a degree in Business Administration.
Lorenzo V. Tan
Director
April 01, 2007 to present
45 years old/Filipino
Mr. Lorenzo V. Tan is currently the Director, Executive Vice-Chairman and President &
Chief Executive Officer of Rizal Commercial Banking Corporation. He is also an
Independent Director of Smart Communications, Inc. Before joining RCBC, he was the
President and CEO of Sun Life of Canada (Phils.), Inc., President and CEO of Philippine
National Bank, President and COO of United Coconut Planters Bank, and Group Managing
Director of Guoco Holdings (Phils.), Inc. He also held various positions in Citibank N.A.
and Citibank Singapore from 1987 to 1995. He graduated from De La Salle University with a
Bachelor of Science degree in Commerce, major in Accounting. He earned his Master of
Management degree from the J. L. Kellogg Graduate School of Management. He is a
Certified Public Accountant in Pennsylvania, USA and the Philippines.
Bankard, Inc. 2006 SEC Form 17-A Page 22

Samuel V. Torres
Corporate Secretary
January 23, 2004 to present
43 years old/Filipino
Atty. Samuel V. Torres is the Corporate Secretary of RCBC Realty Corporation, Pan Malayan
Management & Investment Corporation, House of Investments, Inc. AY Foundation, Inc., Mapua
Institute of Technology and the Assistant Corporate Secretary of Malayan Insurance Co., Inc. He
graduated at the University of the Philippines with a Bachelor of Science degree in Business
Economics. He also graduated from the University of Ateneo de Manila with a Bachelor of Laws
degree.
Executive Officers:
Ma. Angelina V. Angeles
Vice President
54 years old
Ms. Ma. Angelina V. Angeles has been with Bankard, Inc. since March 1997 and has held various
management positions in the Company. Currently, she is the Group Head for Customer Service.
Fe Fortunata R. Rio
Vice President
48 years old
Ms. Fe Fortunata R. Rio has been with Bankard, Inc. since April 1995 and has held various
management positions in the Company. Currently, she is the Group Head for Merchant/Card
Operations.
Ma. Liwayway M. Tan
Vice President & Compliance Officer
55 years old
Ms. Ma. Liwayway M. Tan is Bankard, Inc.’s Group Head for Compliance, Risk Management
and Internal Audit. She has been an employee of Bankard, Inc. since November 2004.
Zenaida F. Torres
Senior Vice President & Chief Finance Officer & Chief Information Officer & Treasurer
52 years old
Zenaida F. Torres is Bankard’s Chief Financial Officer. Starting 1981, she has held various
positions at Rizal Commercial Banking Corporation (RCBC) in Account Management, Branch
Management, Training and Development, and Office of the CEO as Executive Assistant prior to
her secondment to Bankard, Inc. in February 2004.
Bankard, Inc. 2006 SEC Form 17-A Page 23

2. Significant Employees
The company is not highly dependent on any individual who is not an executive officer.
3. Family Relationships
There are no family relationships among the officers listed.
4. Involvement in Certain Legal Proceedings
There are no events that occurred during the past five (5) years that are material to an evaluation of the
ability or integrity of any director, any nominee for election as director, executive officer, underwriter or
control person.
There is no bankruptcy filed by or against any business of which a Director or Executive Officer is a
general partner.
B. EXECUTIVE COMPENSATION
Summary of Compensation Table
Information as to aggregate compensation paid or accrued during the last two fiscal years and to be paid in
the ensuing fiscal year to Bankard, Inc.’s Chief Executive Officer and four other most highly compensated
executive officers follows:
Oscar B. Biason, President & CEO
Zenaida F. Torres, Senior Vice President &
CFO/CIO
Maria Angelina V. Angeles, Vice President
Fe Fortunata R. Rio, Vice President
Lily M. Tan, Vice President
Oscar B. Biason, Executive Vice President & COO
Zenaida F. Torres, Senior Vice President & CFO
Elizabeth L. Legarda, Senior Vice President
Christina C. Calderon, Vice President
Maria Angelina V. Angeles, Vice President
Joven D. Reyes, President & CEO
Oscar B. Biason, Executive Vice President & COO
Zenaida F. Torres, First Vice President & CFO
Elizabeth L. Legarda, Senior Vice President
Christina C. Calderon, Vice President
Basic Bonuses Total
Compensation
2007 (Estimate) P 5,617,771 1,519,746 7,137,517
2006 5,401,703 1,461,294 6,862,997
2005 7,886,580 1,947,061 9,833,641
For all other Executive Officers as a group unnamed 2007 (Estimate) P 9,113,370 2,252,002 11,365,372
2006 8,762,856 2,165,387 10,928,243
2005 9,766,440 2,419,200 12,185,640
Compensation of Directors
(a) Standard Arrangements
Except for nominal per diem for attending board & committee meetings, there are no standard
arrangements by which Directors are compensated directly or indirectly.
Bankard, Inc. 2006 SEC Form 17-A Page 24

(b) Other Arrangements
There are no other arrangements by which Directors are compensated. However, the by-laws of the
company provide that board directors may be paid a share of the company’s profit as compensation, subject
to approval by the stockholders.
Employment Contract and Termination of Employment and Change-in-Control Arrangements
There are no employment contracts to disclose.
Bankard, Inc. 2006 SEC Form 17-A Page 25

C. SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS AND
MANAGEMENT
(1) Owners of more than 5% of voting securities as of 28 February 2007
Title of
Class
Name, Address of Record
and Relationship with Issuer
Name of Beneficial
Owner /Relationship
with Record Owner
Citizenship
Number of
Shares Held
Percent
of Class
Common -PCD Nominee Corporation 5
-Tower 1 – Ayala Triangle
Makati Avenue cor. Paseo de
Roxas Makati City
-Registered owner in the books of
stock transfer agent
-RCBC Capital Corporation/
Client
Filipino 128,282,700 1 41.19 %
Common
-RCBC Securities Inc.
-Unit 100B Tower 1 & Exchange
Plaza Makati City
-Broker of owner of shares
-RCBC Capital Corporation/
Client Filipino 73,000,000 2 23.44 %
Common
-Hongkong & Shanghai Banking
Corp. Ltd.
-33/F West Tower
Tektite Bldg. Pasig City,
Philippines
-Broker of owner of shares
-HSBC-Fund SVCS Clnts
A/Cs/Clients
Foreign
23,920,000 3 7.68 %
Common
-RCBC Capital Corporation
-Unit 1008 Tower I & Exchange
Plaza, Makati City
-Registered owner
-RCBC Capital Corporation
Filipino 25,236,200 4 8.10 %
Total 257,213,900 82.59%
RCBC Capital Corporation’s President, Mr. Raul M. Leopando, has the voting power over RCBC Capital
Corporation’s shareholdings. HSBC-Fund, on the other hand, instructs its broker HSBC to appoint via proxy the
person who will have voting power over its shares. To date, HSBC has not identified the person who will have
voting power in this year’s stockholders’ meeting.
_________________________________________
1 These were sold by Equitable PCIBank, Inc. (Equitable PCI) to RCBC Capital Corporation (RCBC Capital).
2 73,000,000 shares are held in trust by RCBC Securities for RCBC Capital Corporation.
3
24,020,000 shares (7.71%) are held in trust by Hongkong & Shanghai Banking Corp. Ltd.
4 RCBC Capital is the beneficial owner of the shares in accordance with the Share Purchase Agreement (SPA) executed between RCBC Capital
and Equitable-PCIBank and various sellers dated May 24, 2000. These shares plus the aforementioned shares in footnote 1 (128,497,700) and in
footnote 2 (73,000,000) constitute the 226,733,900 shares sold by PCI to RCBC Capital.
5 PCD Nominee Corporation, a wholly-owned subsidiary of Philippine Central Depository, Inc (“PCD”) is the registered owner of the shares in
the books of the Company’s transfer agents in the Philippines. The beneficial owners of such shares are PCD’s participants, who hold the shares
on behalf of their clients. PCD is a private company organized by the major institutions actively participating in the Philippine capital markets
to implement an automated book-entry system of handling securities transactions in the Philippines
Bankard, Inc. 2006 SEC Form 17-A Page 26

(2) Security Ownership of Management as of 28 February 2007:
Title of
Class
Name Beneficial Owner
Amount and Nature of
beneficial ownership
Citizenship
Percent of
Class
Common Rizalino S. Navarro/Director/Chairman 100 Sole Voting Rights Filipino .00002959%
Common Cesar E. A. Virata/Director/Vice Chairman 100 Sole Voting Rights Filipino .00002959%
Common Oscar B. Biason/Director/President and CEO 1,000 Sole Voting Rights Filipino .00029586%
Common Francisco C. Eizmendi, Jr./Independent Director 100 Sole Voting Rights Filipino .00002959%
Common Eduardo S. Lopez, Jr./Director 100 Sole Voting Rights Filipino .00002959%
Common Francisco S. Magsajo, Jr./Director 100 Sole Voting Rights Filipino .00002959%
Common Raul M. Leopando/Director 2,100 Sole Voting Rights Filipino .00062130%
Common Teodoro D. Regala, Sr./Director 100 Sole Voting Rights Filipino .00002959%
Common Teodoro Q. Peña./Independent Director 100 Sole Voting Rights Filipino .00002959%
Common Ma. Celia H. Fernandez-Estavillo/Director 100 Sole Voting Rights Filipino .00005917%
Common Roberto F. de Ocampo 100 Sole Voting Rights Filipino .00029586%
Total – Directors as a group 4,000
Total – Officers as a group 1,000
Nothing to disclose with respect to any changes in control.
D. CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
The Company has had banking and borrowing relationships with Rizal Commercial Banking Corporation
transacted at prevailing market rates even before the sale of the company to RCBC Capital, and still
continues to do business with it. Starting the last quarter of 2000, the Company entered into a deposit and
collection agreement with Rizal Commercial Banking Corporation authorizing the latter to process
payments made by cardholders in RCBC branches nationwide. Furthermore, in July 2002 the company
established a deposit and collection arrangement with RCBC Savings Bank authorizing it also to accept
payments by cardholder in their branches. RCBC Capital may also be engaged as an arranger for
contemplated term loans and issuance of short term and long term commercial papers for working capital
and capital expenditures.
The significant transactions of Bankard in the normal course of business with related parties are described
in note 15 to the Audited Financial Statements.
Bankard, Inc. 2006 SEC Form 17-A Page 27

PART IV – CORPORATE GOVERNANCE
A. Discuss the evaluation system established by the company to measure or determine the level of
compliance of the Board of Directors and top-level management with its Manual of Corporate
Governance
To measure the level of compliance of the Board of Directors and top-level management with its Manual of
Corporate Governance, the Company has established an evaluation system which is composed of the
following:
1. Self-rating system to be done by Management and an independent rating by the Compliance
Officer.
2. Independent audit mechanism wherein an Audit Committee composed of three members of the
Board, two of whom is an independent director, regularly meets to discuss and evaluate financial
reports against its compliance with both internal financial management handbook and pertinent
accounting standards, perform oversight financial management functions specifically in the areas
of managing credit, market, liquidity, operational, legal and other risks and perform direct
interface with the internal and external auditors.
Additionally, other mechanisms are put in place to support the evaluation system in ensuring compliance
with Bankard’s Manual of Corporate Governance:
1. Policy on disclosure and transparency
2. Grievance procedure through which a stockholder may complain.
The Compliance Officer shall proactively monitor compliance and perform evaluation to examine level of
compliance.
B. Discuss measures being undertaken by the company to fully comply with the adopted leading
practices on good corporate governance
Bankard has established a plan of compliance which forms part of its Manual of Corporate Governance.
The plan enumerates in detail five ways to ensure full compliance:
1. Establishing the specific duties and responsibilities and functions of the Board of
Directors to ensure a high standard of best practice for the company.
2. Constituting committees by the Board and identifying each committee’s functions
3. Identifying the role of the Corporate Secretary
4. Establishing the roles of the external and internal auditors
5. Instituting penalties that are to be imposed on violators after notice or hearing
Additionally, the Company shall see to it that the Manual of Corporate Governance is available for
inspection by any stockholder of the company and is disseminated to all employees and related third parties
via an orientation program. Moreover, each department will be provided a copy of the Manual.
C. Disclose any deviation from the company’s Manual of Corporate Governance and the person
involved
There is none to disclose.
D. Discuss any plan to improve corporate governance of the company
To improve corporate governance of the company, Bankard plans to do the following steps/actions:
Bankard, Inc. 2006 SEC Form 17-A Page 28

1. Increase awareness of the adopted leading practices on good corporate governance in the
organization by training select officers who will serve as “educators” of good corporate
governance within the organization.
2. Appoint more independent directors in the Board as and when appropriate.
3. Enhance policy on conflict of interest, confidentiality of corporate information and care of
corporate documents.
4. Audit Committee and the members of the Board to regularly review operations and compliance
with established policies and procedures.
5. The Compensation Committee to strengthen provisions on conflict of interest, salaries and
benefits policies, promotions and career advancement directives and compliance of personnel with
all pertinent statutory requirements.
PART V - EXHIBITS AND SCHEDULES
Item 14. EXHIBITS AND REPORTS ON SEC FORM 17-C
(a) Exhibits
See accompanying Index to Exhibits (page 86)
The following exhibits are filed as a separate section of this report:
(9) Material Contracts
The other exhibits, as indicated in the Index to Exhibits are either not applicable to the Company or require
no answer.
(b) Reports on SEC Form 17-C
Items reported under SEC Form 17-C during the last six months covered by this report:
Date of Report
Event Reported
(1) 10 November 2006 Bankard and GE Consumer Finance reached an impasse and deadlock in
the negotiations
(2) 23 November 2006 Increase in Bankard’s Authorized Capital
(3) 14 December 2006 Sale of Bankard’s assets to and the assumption of certain liabilities by
Rizal Commercial Banking Corporation or to other interested parties
(4) 27 December 2006 Increase in Bankard’s Authorized Capital from 600 million shares to 2
billion shares at Php1 per share
Conversion of Php1 billion Notes Payable and Php190.474 million of
Deposit for Subscription of RCBC to equity
Sale of Bankard’s assets to and the assumption of certain liabilities by
Rizal Commercial Banking Corporation or to other interested parties
(5) 29 December 2006 Sale of all or substantially all of the assets by certain liabilities of
Bankard, Inc. to RCBC
(6) 25 January 2007 Resignation of Atty. Samuel V. Torres as Director and appointment of Mr.
OscarB. Biason as Director and President & CEO of Bankard
(7) 22 March 2007 Resignation of Mr. Francisco S. Magsajo, Jr. as Director and election of
Mr. Lorenzo V. Tan as Director
(8) 27 March 2004 Change of stock transfer agent
Bankard, Inc. 2006 SEC Form 17-A Page 29

BANKARD, INC
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES
SEC FORM 17-A
FINANCIAL STATEMENTS
• Statement of Management’s Responsibility for Financial Statements
• Report of Independent Public Accountants
• Balance Sheets as of December 31, 2006 and 2005
• Statements of Income and Earnings Per Share for the Years Ended
December 31, 2006, 2005 and 2004
• Statements of Changes In Equity for the Years Ended
December 31, 2006, 2005, and 2004
• Statements of Cash Flows for the Years Ended
December 31, 2006, 2005, and 2004
• Notes to Financial Statement
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON
SUPPLEMENTARY SCHEDULES
SUPPLEMENTARY SCHEDULES
Schedule Description Page No.
A
B
C
Marketable Securities – (Current Marketable Securities
and other Short-Term Cash Investments) *
Amounts Receivable from Directors, Officers, Employees, Related Parties
and Principal Stockholders (Other than Related Parties) 84
Non-Current Marketable Equity Securities, Other Long-Term
Investments in Stock,, and other Investments *
D Indebtedness of Unconsolidated Subsidiaries and Related Parties *
E Intangible Assets – Other Assets *
F Long-Term Debt *
G Indebtedness to Related Parties *
H Guarantees of Securities of Other Issuers *
I Capital Stock 85
* These schedules which are required by Part IV(e) of RSA Rule 48, have been omitted
because they are either not required, not applicable or the information required to be
presented is included in the Company’s financial statements or the notes to consolidated
financial statements.
Bankard, Inc. 2006 SEC Form 17-A Page 31

BANKARD, INC.
Financial Statements, December 31, 2006 (With Comparative for 2005 and 2004)
Bankard, Inc. 2006 SEC Form 17-A Page 34

REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Bankard, Inc.
We have audited the accompanying financial statements of Bankard, Inc., which comprise the balance
sheets as at December 31, 2006 and 2005, and the income statements, statements of changes in
equity and cash flow statements for each of the three years in the period ended December 31, 2006,
and notes to financial statements comprising of a summary of significant accounting policies and
other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with Philippine Financial Reporting Standards (PFRS). This responsibility includes:
designing, implementing and maintaining internal controls relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud
or error; selecting and applying appropriate accounting policies; and making accounting estimates
that are reasonable in the circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with Philippine Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
Bankard, Inc. 2006 SEC Form 17-A Page 35

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal controls
relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Bases for Qualified Opinion
A. 2006 transactions pending approval by the Bangko Sentral ng Pilipinas (BSP)
During the latter part of 2006, the Company entered into several transactions with Rizal Commercial
Banking Corporation (RCBC), the Company’s ultimate parent company. These transactions are fully
discussed in the next two paragraphs.
As mentioned in Note 1 to the financial statements, on November 27, 2006, the Board of Directors
(BOD) of RCBC approved RCBC’s capital infusion of P1 billion into the Company. RCBC, in its
letter to the BSP dated January 9, 2007, requested for the approval of such capital infusion by way of
conversion of the Company’s bills payable to RCBC into equity. The Company reflected the effects
of the transaction in its 2006 financial statements. However, the approval of these transactions was
obtained only subsequent to 2006. The effects of this matter in the 2006 financial statements of the
Company are more fully described and presented in Notes 1 and 17.
As also discussed in Note 1, on December 29, 2006, the Company entered into the following
transactions with RCBC: (a) irrevocable sale and transfer of the Company’s various credit card
receivables totaling P7.2 billion under a Deed of Assignment of Receivables; (b) absolute sale of the
Company’s 30 condominium units for a consideration of P285.1 million; (c) sale of the Company’s
various assets in consideration for the assumption by RCBC of certain liabilities due to creditors and
suppliers of the Company; and, (d) a services agreement relative to the credit card business of
RCBC. RCBC also requested BSP’s approval/confirmation of these transactions. The Company
reflected the effects of the above transactions in its 2006 financial statements, however, as of the
date of this report, the approval/confirmation of these transactions is still pending with the BSP.
Bankard, Inc. 2006 SEC Form 17-A Page 36

Management is confident that BSP’s approval/confirmation of these transactions will be obtained.
We believe, however, that the full consummation of such transactions is contingent upon BSP’s
approval/confirmation, and, therefore, these transactions should not be recorded until such
approval/confirmation is obtained. The effects of these matters on the 2006 financial statements
are more fully described and presented in Notes 1 and 17.
B. Staggered booking of required additional allowance for impairment on credit card receivables
As fully discussed in Note 5, based on BSP Circular No. 398, the Company obtained BSP approval
for it to stagger over a period of seven years starting in 2004 the booking of the P3.6 billion required
additional allowance for impairment on its credit card receivables as of December 31, 2003. Of the
P3.6 billion required additional allowance, the Company already recognized P846.5 million in its
books as of December 31, 2006 as follows: P180.1 million of which was recognized in 2004, P180.1
million in 2005 and P486.3 million in 2006. However, under PFRS the required additional
allowance for impairment should have been taken up in the balance sheet as of December 31, 2003
and charged against the operations in 2003 and affected prior years, with the amount pertaining to
years prior to 2003 taken up as an adjustment to retained earnings as at January 1, 2003. The effects
of these matters on the financial statements are more fully described in Notes 5 and 17.
In addition, as mentioned in the third paragraph of the Bases for Qualified Opinion section of this
report, the Company sold and transferred to RCBC its various credit card receivables on December
29, 2006 totaling P7.2 billion under a Deed of Assignment of Receivables. The credit card
receivables that were sold and transferred by the Company to RCBC included those receivables
which, as approved by the BSP, are being provided with allowance for impairment on a staggered
basis. As a result of the sale and transfer of the credit card receivables to RCBC, the Company
determined that the remaining unbooked allowance of P2.75 billion under the BSP approved
staggered amortization of allowance for impairment is no longer required. However, the
approval/confirmation of this transfer is still pending with the BSP. We believe that the full
consummation of these transactions is contingent upon BSP’s approval/confirmation, hence, the
transfer should be recorded only upon such approval/confirmation. The effects of these matters on
the 2006 financial statements are more fully described in Notes 5 and 17.
C. Derecognition of credit card receivables sold
As discussed in Note 5, the credit card receivables of the Company that were sold to RCBC and
other third parties in 2005, which receivables the Company had derecognized, would not have
qualified for derecognition under PFRS to which the Company transitioned in 2005. Hence, we
believe that the receivables sold and the related liability representing the considerations received
from RCBC and other third parties should have been presented in the balance sheet as of December
31, 2005 and measured at their respective amortized costs. The effects of this departure from PFRS
on the 2005 financial statements are more fully described in Notes 5 and 17.
Bankard, Inc. 2006 SEC Form 17-A Page 37

As mentioned in the third paragraph of the Bases for Qualified Opinion section of this report, the
Company sold and transferred to RCBC its various credit card receivables on December 29, 2006
totaling P7.2 billion under a Deed of Assignment of Receivables. As a result of this sale and transfer
of the credit card receivables to RCBC, the Company derecognized the amount of the credit card
receivables sold, which is in accordance with existing accounting standards. However, the
approval/confirmation of this transaction is still pending with the BSP. We believe that the full
consummation of such transaction is contingent upon BSP’s approval/confirmation, hence, this
should not have been recorded prior to such approval/confirmation. The effects of these matters
on the 2006 financial statements are more fully described in Notes 5 and 17.
D. Realizability of deferred tax assets
As of December 31, 2005, the deferred tax assets arising from allowance for impairment on its credit
card receivables amounted to P518 million as presented in Note 14. The balance of the deferred tax
assets increased significantly due to the additional amounts recognized under the staggered
recognition of the additional allowance for impairment discussed in the fifth paragraph of the Bases
for Qualified Opinion section of this report. Such additional amounts are much higher than the
accounts written off in 2005 and prior years. Further, the Company’s regular corporate income
taxes for prior years have been lower than the computed minimum corporate income taxes for those
years, which indicates that the level of its taxable income that is subject to the regular tax rate is not
sufficient for the Company to be able to utilize the benefits of its deferred tax assets. To comply
with PFRS, the Company should not have recognized the additional deferred tax assets arising from
additional allowance for impairment in 2005 amounting to P214 million and should have written off
or derecognized, also in 2005, the balance of the deferred tax assets as of December 31, 2004
relating to such allowance for impairment amounting to P304 million. The effects of this matter on
the 2005 financial statements are more fully described in Notes 5 and 17.
In 2006, the Company no longer recognized any additional deferred tax assets arising from the
impairment losses that it recorded in the current year. However, the Company has retained the
balance as of December 31, 2005 of its deferred tax assets amounting to P518 million arising from
the allowance for impairment. Based on our evaluation of the Company’s earning projections in the
future, we assessed that the Company will not be able to realize the future income tax benefit of
these assets. The effects of this matter on the 2006 financial statements are more fully described in
Notes 5 and 17.
Bankard, Inc. 2006 SEC Form 17-A Page 38

BANKARD, INC.
BALANCE SHEETS
DECEMBER 31, 2006 AND 2005
(Amounts in Philippine Pesos)
Notes 2006 2005
A S S E T S
CURRENT ASSETS
Cash and cash equivalents 4 P 346,763,977 P 377,212,245
Credit card and other receivables - net 5 50,699,279 3,290,189,448
Prepayments and other current assets 6 3,485,396 26,682,887
Total Current Assets 400,948,652 3,694,084,580
NON-CURRENT ASSETS
Property and equipment - net 7 6,951,904 388,594,002
Deferred tax assets - net 14 518,325,035 516,416,422
Other non-current assets - net 8 24,293,710 9,488,952
Total Non-current Assets 549,570,649 914,499,376
TOTAL ASSETS P 950,519,301 P 4,608,583,956
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Cardholders' credit balances, trade
and other payables 10 P 268,117,953 P 1,936,152,982
Bills payable 9 - 2,369,060,000
Derivative financial liabilities 18 - 9,712,670
Income tax payable 14 - 5,692,955
Other current liabilities 11 837,282 8,785,971
Total Current Liabilities 268,955,235 4,329,404,578
EQUITY
Capital stock 338,000,000 338,000,000
Deposits on future stock subscription 16 1,190,474,000 190,474,000
Additional paid-in capital 390,301,874 390,301,874
Fair value loss on available-for-sale securities 8 (380,050) (380,050)
Treasury shares - at cost 16 (37,875,581) (37,875,581)
Deficit (1,198,956,177) (601,340,865)
Total Equity 681,564,066 279,179,378
TOTAL LIABILITIES AND EQUITY P 950,519,301 P 4,608,583,956
See Notes to Financial Statements.
Bankard, Inc. 2006 SEC Form 17-A Page 40

BANKARD, INC.
INCOME STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Amounts in Philippine Pesos)
Notes 2006 2005 2004
REVENUES
Finance charges P 1,346,665,623 P 1,414,322,055 P 1,499,784,991
Membership fees 227,474,924 256,323,805 288,128,963
Merchant discounts - net 234,319,533 173,276,313 102,126,186
Late payment fees 92,856,714 111,164,560 126,732,190
Interchange fees 88,781,146 81,356,310 76,265,041
Other revenues 13 27,533,287 37,790,264 48,193,056
2,017,631,227 2,074,233,307 2,141,230,427
COSTS AND EXPENSES
Impairment losses 5, 15 978,827,888 921,916,673 1,323,280,760
Finance costs 9 656,503,749 876,085,911 811,666,513
Occupancy and equipment-related expenses 7 127,582,528 154,093,036 165,914,605
Employee benefits 12 139,106,148 142,097,088 138,898,092
Taxes and licenses 14 133,018,918 122,422,377 112,980,063
Advertising, rewards and promotions 230,052,164 119,027,327 91,200,824
Management, professional and other fees 128,824,462 115,691,743 122,756,815
Communication, light and water 53,859,959 57,833,172 43,601,176
Franchise fees 1 50,339,722 50,160,097 50,563,892
Commissions 16,166,473 31,521,825 30,391,078
Bank and collection charges 17,488,008 20,974,231 24,713,029
Supplies and subscriptions 15,688,403 15,190,201 15,945,593
Other operating expenses 13 45,728,039 60,715,156 57,084,345
2,593,186,461 2,687,728,837 2,988,996,785
LOSS BEFORE TAX (575,555,234) (613,495,530) (847,766,358)
TAX EXPENSE (INCOME) 14 22,060,078 (191,110,025) (270,359,783)
NET LOSS ( P 597,615,312 ) ( P 422,385,505 ) ( P 577,406,575 )
Loss Per Share 17 ( P 1.92 ) ( P 1.36 ) ( P
1.85 )
See Notes to Financial Statements.
Bankard, Inc. 2006 SEC Form 17-A Page 41

BANKARD, INC.
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Amounts in Philippine Pesos)
Notes 2006 2005 2004
CAPITAL STOCK - P1.00 par value
Authorized - 600,000,000 shares
Issued - 338,000,000 shares
Outstanding - 311,419,900 shares P 338,000,000 P 338,000,000 P 338,000,000
DEPOSITS ON FUTURE
STOCK SUBSCRIPTION 9, 16
Balance at beginning of year 190,474,000 - -
Subscriptions during the year 1,000,000,000 190,474,000 -
Balance at end of year 1,190,474,000 190,474,000 -
ADDITIONAL PAID-IN CAPITAL 390,301,874 390,301,874 390,301,874
TREASURY SHARES - At cost 16 (37,875,581) (37,875,581) (37,875,581)
RETAINED EARNINGS (DEFICIT)
Balance at beginning of year
As previously stated (601,340,865) (180,606,638) 393,663,076
Effects of transition to
PFRS, net of taxes 2 - 1,651,278 4,788,139
As restated (601,340,865) (178,955,360) 398,451,215
Net loss (597,615,312) (422,385,505) (577,406,575)
Balance at end of year (1,198,956,177) (601,340,865) (178,955,360)
FAIR VALUE GAIN (LOSS) ON
AVAILABLE-FOR-SALE SECURITIES
Balance at beginning of year
As previously stated (380,050) - -
Effects of transition to
PFRS, net of taxes 2 - 69,950 79,975
As restated (380,050) 69,950 79,975
Fair value losses 8 - (450,000) (10,025)
Balance at end of year (380,050) (380,050) 69,950
TOTAL EQUITY P 681,564,066 P 279,179,378 P 511,540,883
Net Losses Recognized
Bankard, Inc. 2006 SEC Form 17-A Page 42

BANKARD, INC.
CASH FLOW STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(Amounts in Philippine Pesos)
2006 2005 2004
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax ( P 575,555,234 ) ( P 613,495,530 ) ( P 847,766,358 )
Adjustments for:
Interest and other financing charges 656,503,749 876,085,911 811,666,513
Depreciation and amortization 40,285,160 45,236,319 48,852,307
Loss (gain) on disposal of property and equipment (7,492,384) - 328,250
Loss on forward contracts - 9,712,670 -
Interest income - (6,307,553) (1,599,181)
Operating income before working capital changes 113,741,291 311,231,817 11,481,531
Decrease (increase) in credit card and other receivables (4,620,728,869) (414,377,792) 997,837,595
Decrease (increase) in prepayments and
other current assets 23,197,491 3,173,135 (11,844,786)
Increase (decrease) in cardholders' credit balances,
trade and other payables 1,682,038,753 (3,331,056,453) (4,131,151,326)
Increase (decrease) in other current liabilities (17,661,359) 6,485,476 (36,534,313)
Cash used in operations (2,819,412,693) (3,424,543,817) (3,170,211,299)
Cash paid for income taxes (29,661,646) (18,002,142) (26,770,006)
Interest paid (667,097,366) (303,597,441) (345,827,908)
Net Cash Used in Operating Activities (3,516,171,705) (3,746,143,400) (3,542,809,213)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of property and equipment (9,620,339) (70,387,349) (24,362,546)
Proceeds from sale of property and equipment 358,469,661 738,870 79,679
Decrease (increase) in other non-current assets (14,804,758) 2,055,536 4,549,135
Interest received - 6,307,553 1,599,181
Net Cash From (Used in) Investing Activities 334,044,564 (61,285,390) (18,134,551)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from deposit on future stock subscription - 190,474,000 -
Net proceeds from discounting of credit card receivables 719,179,662 3,886,456,869 4,343,804,115
Proceeds from assignment of credit card receivables 2,432,499,211 - -
Payments of interest-bearing loans - (328,000,400) (393,253,000)
Net Cash From Financing Activities 3,151,678,873 3,748,930,469 3,950,551,115
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (30,448,268) (58,498,321) 389,607,351
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 377,212,245 435,710,566 46,103,215
CASH AND CASH EQUIVALENTS
AT END OF YEAR P 346,763,977 P 377,212,245 P 435,710,566
Supplemental Information on Noncash Financing Activities
Bankard, Inc. 2006 SEC Form 17-A Page 43

BANKARD, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2006, 2005 AND 2004
(Amounts in Philippine Pesos)
1. CORPORATE INFORMATION
1.1 Operations of the Company
Bankard, Inc. (the “Company” or “Bankard”), was incorporated in the Philippines as a credit
card corporation. It is majority-owned (72.7% owned as of December 31, 2006, 2005 and
2004) by RCBC Capital Corporation (“RCBC Capital”). The Company’s ultimate parent
company is Rizal Commercial Banking Corporation (“RCBC”). Both RCBC and RCBC
Capital are incorporated and domiciled in the Philippines.
The Company is engaged mainly in the business of issuing credit cards and acquiring credit
card transactions from various merchants and does not have any other reportable segment
where income is generated. The Company is a licensee of MasterCard International
Incorporated (“MasterCard”), JCB International Co., Ltd. (“JCB”) and VISA International
Service Association (“VISA”) to issue credit cards which could be accepted by the
MasterCard, JCB and VISA card networks of affiliated banks and merchant establishments
worldwide. The Company pays franchise fees to the credit card networks in accordance with
their license agreements.
The Company’s registered office, which is also its principal place of business, of the
Company is located at the 29 th Floor, Robinsons Equitable Tower, ADB Avenue corner
Poveda Street, Ortigas Center, Pasig City.
1.2 Capital Infusion of RCBC
On November 27, 2006, the Board of Directors (BOD) of RCBC approved the capital
infusion of P1 billion in the Company. RCBC, in its letter to the Bangko Sentral ng Pilipinas
(BSP) dated January 9, 2007, requested for the approval of its capital infusion of P1 billion in
the Company by way of conversion of the Company’s bills payable to RCBC into equity
which the Company’s BOD approved on December 27, 2006. The Company reflected the
effects of the transaction in its 2006 financial statements by reclassifying the remaining
balance of its bills payable to RCBC of P1 billion to deposits on future stock subscription
(see Note 16). However, the BSP approval of these transactions was obtained only
subsequent to 2006 (see Note 20).
Bankard, Inc. 2006 SEC Form 17-A Page 44

1.3 Sale of Assets and Liabilities to RCBC
On December 14, 2006, the Board of Directors of the Company approved the sale,
assignment, disposal and transfer of all or substantially all of the Company’s assets and
liabilities to RCBC. This was effected by the Company on December 29, 2006 through the
following transactions with RCBC:
a. The Company executed a Deed of Assignment of Receivables in favor of RCBC under
which both parties agreed that in consideration of the assumption by RCBC of certain
liabilities due to creditors and other suppliers, the Company irrevocably sold and
transferred its credit card receivables to RCBC amounting to P7.2 billion. Both parties
also agreed that the credit card accounts of the Company’s cardholders will be
transferred to RCBC;
b. The Company and RCBC executed a Deed of Absolute Sale for the sale of Bankard’s 30
condominium units located at the Robinsons Equitable Tower, the Company’s principal
place of business, with a net book value of P278.2 million for a consideration of P285.1
million. The sale resulted to the Company’s recognition of a gain amounting to P6.9
million.
c. The Company executed a Deed of Sale of Assets with RCBC for the sale of its various
assets in consideration for the assumption by RCBC of certain liabilities due to creditors
and suppliers.
RCBC also requested BSP’s approval/confirmation on the above transactions. The
Company reflected the effects of the above transactions in its 2006 financial statements
thereby reducing substantially its total assets and total liabilities by P7.4 billion and
recognizing a net loss from the transactions of P0.8 million in 2006. However, to date, the
approval/confirmation of these transactions is still pending with the BSP.
1.4 Services Agreement
On December 29, 2006, the Company entered into a services agreement with RCBC. Under
this agreement, the Company agreed to provide RCBC with marketing, distribution,
technical, collection and selling assistance and processing services to RCBC in connection
with the operation of the credit card business. This agreement is pursuant to the terms and
conditions of the Deed of Assignment of Receivables where the Company sold its right, title
and interest to its receivables to RCBC. The agreement is subject to the
approval/confirmation of BSP.
Bankard, Inc. 2006 SEC Form 17-A Page 45

1.5 Change in the Nature of Business of the Company
As a result of the sale of substantially all of the assets to and the assumption of liabilities of
the Company by RCBC, the Company entered into a Services Agreement with RCBC. The
Company continues to be eligible to engage in the business of card issuance, acquiring of
card transactions and payments processing. At present, the Company is considering several
projects in the mentioned lines of business.
1.6 Approval of Financial Statements
The financial statements of the Company for the year ended December 31, 2006 (including
the comparatives for the years ended December 31, 2005 and 2004) were authorized for
issue by the Company’s Board of Directors on February 5, 2007. Additional approval was
also obtained from the Company’s President on February 23, 2007 with respect to
the disclosure of a subsequent event in Note 20.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies that have been used in the preparation of these financial
statements are summarized below. The policies have been consistently applied to all years
presented, unless otherwise stated.
2.1 Basis of Preparation of Financial Statements
(a) Statement of Compliance with Philippine Financial Reporting Standards
The financial statements of the Company have been prepared in accordance with
Philippine Financial Reporting Standards (PFRSs). PFRSs are adopted by the Financial
Reporting Standards Council (FRSC), formerly the Accounting Standards Council, from
the pronouncements issued by the International Accounting Standards Board (IASB).
PFRSs consist of:
(i) PFRSs – corresponding to International Financial Reporting Standards;
(ii.) Philippine Accounting Standards (PASs) – corresponding to International
Accounting Standards; and,
(iii.) Interpretations to existing standards – representing interpretations issued by the
International Financial Reporting Interpretations Committee (IFRIC), formerly the
Standing Interpretations Committee, of the IASB which are adopted by the FRSC.
These financial statements have been prepared on the historical cost basis, except for the
revaluation of certain financial assets. The measurement bases are more fully described
in the accounting policies that follow.
Bankard, Inc. 2006 SEC Form 17-A Page 46

(b) Transition to PFRS in 2005
In compliance with the pronouncements of the FRSC and the regulations of the
Securities and Exchange Commission, the Company adopted all the relevant PFRSs for
the first time in its financial statements for the year ended December 31, 2005, with
January 1, 2004 as its transition date.
The transition from the previous generally accepted accounting principles in the
Philippines to PFRS was made in accordance with PFRS 1, First-time Adoption of Philippine
Financial Reporting Standards.
The Company’s transition to PFRS in 2005 resulted in the restatement of the balance of
Equity as of January 1, 2005 and 2004. The total adjustments to Equity, particularly in
the balance of Retained Earnings and Fair Value Gain (Loss) on Available-for-sale
Securities, arising from the transition are broken down as follows:
January 1, 2005
Fair Value Gain
(Loss) on
Relevant Available-for- Retained Total
PFRS sale Securities Earnings Adjustment
Recognition of transitional
asset on defined benefit
plan PAS 19 P - P 757,853 P 757,853
Remeasurement of investment
property PAS 40 - 893,425 893,425
Remeasurement of availablefor-sale
financial assets PAS 39 69,950 - 69,950
P 69,950 P 1,651,278 P 1,721,228
January 1, 2004
Recognition of transitional
asset on defined benefit
plan PAS 19 P - P 3,759,004 P 3,759,004
Remeasurement of investment
property PAS 40 - 1,029,135 1,029,135
Remeasurement of availablefor-sale
financial assets PAS 39 79,975 - 79,975
P 79,975 P 4,788,139 P 4,868,114
In addition to the foregoing adjustments to Equity, the structure of the balance sheet and
income statement was also revised.
Bankard, Inc. 2006 SEC Form 17-A Page 47

(c) Functional and Presentation Currency
These financial statements are presented in Philippine pesos, the Company’s functional
currency, and all values represent absolute amounts except when otherwise indicated (see
also Note 2.9).
2.2 Impact of New Standards, and Amendments and Interpretations to Existing
Standards that are Relevant to the Company
(a) Effective in 2006
In 2006, the Company adopted the amendments and interpretations to existing
accounting standards issued by the IASB and adopted by the FRSC which are mandatory
for accounting periods beginning on or after January 1, 2006. These amendments and
interpretations are as follows:
PAS 19 (Amendment) : Employee Benefits
PAS 39 (Amendment) : The Fair Value Option
PAS 39 and PFRS 4
(Amendment) : Financial Guarantee Contracts
Philippine Interpretation
IFRIC 4 : Determination Whether an Arrangement
Contains a Lease
Discussed below are the impact on the financial statements of each of these amendments
and interpretations.
(i)
(ii)
PAS 19 (Amendment), Employee Benefits. The amendment introduces an option
for an alternative recognition approach for actuarial gains and losses. It also adds
new disclosure requirements and imposes additional recognition requirements for
multi-employer plans where insufficient information is available to apply defined
benefit accounting. Because the Company does not intend to change its current
accounting policy for recognition of actuarial gains and losses and does not
participate in any multi-employer plans, the adoption of this amendment did not
result in a material adjustment to the financial statements.
PAS 39 (Amendment), The Fair Value Option. This amendment changes the
definition of financial instruments classified as at fair value through profit or loss
and restricts the ability to designate financial instruments as part of this category.
The adoption of this amendment did not result in a material reclassification of
financial instruments because their current designation conforms with the
amendments to PAS 39.
Bankard, Inc. 2006 SEC Form 17-A Page 48

(iii)
(iv)
PAS 39 and PFRS 4 (Amendment), Financial Guarantee Contracts. The amendment
requires the recognition of guarantee liability, at its fair value, of the parent company
in relation to a third party loan to a subsidiary guaranteed by the parent company.
The Company’s adoption of the amendment did not result in a material adjustment
to the financial statements.
Philippine Interpretation IFRIC 4, Determining Whether an Arrangement Contains a
Lease. Philippine Interpretation IFRIC 4 requires the determination of whether an
arrangement is or contains a lease based on the substance of the arrangement. It
requires an assessment of whether: (a) fulfillment of the arrangement is dependent
on the use of a specific asset; and (b) the arrangement conveys a right to use the
asset. Based on the management’s current year assessment, the adoption of
Philippine Interpretation IFRIC 4 has no significant impact on the Company’s
current operations because there were no outstanding arrangements that were
identified to be a lease or contains a lease.
(b) Effective Subsequent to 2006
There are a few new standards, and amendments and interpretation to existing standards
that are effective for periods subsequent to 2006. Of these new standards, and
amendments and interpretations, the following are relevant to the Company but the
Company has opted not to adopt them early.
PAS 1 (Amendment) : Presentation of Financial Statements
PFRS 7 : Financial Instruments: Disclosures
Below is a discussion of the possible impact of the foregoing standards, amendments
and interpretations which the Company will apply in 2007 in accordance with their
transitional provisions.
PFRS 7, Financial Instruments: Disclosures and complementary amendment to PAS 1
(effective for annual periods beginning on or after January 1, 2007). PFRS 7 introduces
new disclosures to improve the information about financial instruments. It requires the
disclosure of qualitative and quantitative information about exposure to risks arising
from financial instruments, including specified minimum disclosures about credit risk,
liquidity risk and market risk, including sensitivity analysis to market risk. It replaces
PAS 30, Disclosures in the Financial Statements of Banks and Similar Financial Institutions, and
disclosure requirements in PAS 32, Financial Instruments: Disclosure and Presentation. It is
applicable to all entities that report under PFRS. The amendment to PAS 1 introduces
disclosures about the level of an entity’s capital and how it manages capital. The
Company has assessed the impact of PFRS 7 and the amendment to PAS 1 and
concluded that the main additional disclosures will be the sensitivity analysis to market
risk and the capital disclosures required by the amendment of PAS 1.
Bankard, Inc. 2006 SEC Form 17-A Page 49

2.3 Financial Assets
Financial assets include cash and financial instruments. Financial assets, other than hedging
instruments, are classified into the following categories: financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity investments and available-for-sale
financial assets. Financial assets are assigned to the different categories by management on
initial recognition, depending on the purpose for which the investments were acquired. The
designation of financial assets is re-evaluated at every reporting date at which date a choice
of classification or accounting treatment is available.
Cash and cash equivalents are defined as cash on hand, demand deposits and
short-term, highly liquid investments readily convertible to known amounts of cash and
which are subject to insignificant risk of changes in value.
All financial assets are recognized on their trade date. All financial assets that are not
classified at fair value through profit or loss are initially recognized at fair value, plus
transaction costs.
The Company’s financial assets are lodged in the following categories:
• Financial Assets at Fair Value through Profit or Loss. This category includes financial
assets that are either classified as held for trading or are designated by the entity to be
carried at fair value through profit or loss upon initial recognition. A financial asset
is classified in this category if acquired principally for the purpose of selling in the
short term or if so designated by management. Derivatives are also categorized as
‘held for trading’ unless they are designated as hedges. Assets in this category are
classified as current assets if they are either held for trading or are expected to be
realized within 12 months of the balance sheet date.
Subsequent to initial recognition, the financial assets included in this category are
measured at fair value with changes in fair value recognized in profit or loss.
Financial assets originally designated as financial assets at fair value through profit or
loss may not subsequently be reclassified.
• Loans and Receivables. Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market. They
arise when the Company provides money, goods or services directly to a debtor.
They are included in current assets, except for maturities greater than 12 months after
the balance sheet date which are classified as non-current assets.
Loans and receivables are classified as Credit Card and Other Receivables in the
balance sheets (see Note 5).
Bankard, Inc. 2006 SEC Form 17-A Page 50

Credit card receivables as financial assets classified by the Company as loans and
receivables, are stated at amortized cost using effective interest method reduced by
various reserves and allowance for impairment. The credit card receivables’
outstanding balance consists of the principal amount, finance charges and late
payment fees. The principal amount pertains to the purchase cost of goods or
services bought by cardholders, cash advances, first year or renewal membership fees
and charges other than finance charges and late payment fees.
Credit card-related receivables represent temporarily lodged receivables, inclusive of
outgoing settlement and chargeback transactions, resulting from normal timing
differences that are not yet settled as of balance sheet date. These receivables are
immediately settled subsequent to the balance sheet date.
Sale of credit card receivables
The Company has existing arrangements with RCBC and RCBC Capital covering the
sale of credit card receivables (see Notes 5 and 15). The Company agrees to sell to
RCBC and RCBC Capital, the latter acting as financial broker to third parties, all the
rights and interest in certain credit card receivables at an agreed rate of discount,
inclusive of the broker’s fee. Collection of the accounts is undertaken by the
Company for and on behalf of RCBC and RCBC Capital and, ultimately, third parties.
The agreement also provides certain conditions and events wherein the Company can
reacquire certain receivables sold.
The Company derecognizes the credit card receivables sold. It records the excess of
the principal balance of credit card receivables sold over the cash value received as
part of the Finance Costs account in the income statements. Collections from sold
credit card receivables are recognized as part of the Cardholders’ Credit Balances,
Trade and Other Payables account in the balance sheets.
Impairment of credit card receivables
Prior to the effectivity of the BSP Memo Circular No. 398 on December 1, 2003, the
allowance for impairment was estimated based on the credit card receivable balances
which are assessed by the Company as fully impaired (see Note 5).
In 2003, the BSP issued Memo Circular No. 398 prescribing the computation of the
allowance for doubtful accounts based on the following rates and classifications:
Past due accounts over 90 days
but not over 120 days 25%
Past due accounts over 121 days
but not over 180 days 50%
Past due accounts over 181 days 100%
Bankard, Inc. 2006 SEC Form 17-A Page 51

Starting December 1, 2003, for purposes of its prudential reporting to the BSP, the
Company computes the allowance for impairment on its credit card receivables
following BSP Memo Circular No. 398 which is based on an accelerated approach,
i.e., based on the total outstanding balances of accounts classified according to the
age of the oldest unpaid balance of said accounts. The Company, however, after
discussion with and approval of the BSP, has recognized the required additional
allowance for impairment as of December 31, 2003 on a staggered basis over a
period of seven years starting 2004 (see Note 5).
In 2004, the BSP issued Circular No. 494 prescribing the guidelines on the adoption
of the PFRSs and PASs effective from the annual financial reporting period
beginning January 1, 2005, for purposes of preparing the prudential reports and
audited financial statements of entities regulated by the BSP. In relation to those
guidelines, the Company is required to meet the BSP recommended valuation
reserves in accordance with Circular 398 as mentioned above. Under Circular No.
494, however, the BSP allows entities to account for certain items in the prudential
reports in accordance with BSP rules which differ from the requirements of certain
PFRSs and PASs. Notwithstanding these exceptions allowed in prudential reports,
the audited financial statements required to be submitted to the BSP shall in all
respects comply with PFRS.
For purposes of the annual audited financial statements, the Company assesses at
each balance sheet date whether there is evidence of impairment in accordance with
the general principles and methodology set out in PAS 39 and the relevant
implementation guidance.
For credit card and other receivables, accounts for which payment of interest or
principal is overdue by at least one day are tested for impairment. If no cash
collections are expected from these accounts, then impairment is assessed at 100% of
the outstanding balance of all past due accounts.
• Available-for-sale Financial Assets. These include non-derivative financial assets that are
either designated to this category or do not qualify for inclusion in any of the other
categories of financial assets. They are included in other non-current assets account
in the balance sheets.
All financial assets within this category are subsequently measured at fair value,
unless otherwise disclosed, with changes in value recognized in equity, net of any
effects arising from income taxes. Gains and losses arising from securities classified
as available-for-sale are recognized in the income statement when they are sold or
when the investment is impaired.
In the case of impairment, any loss previously recognized in equity is transferred to
the income statement. Losses recognized in the income statement on equity
investments are not reversed through the income statement. Losses recognized in
prior period income statements resulting from the impairment of debt instruments
are reversed through the income statement.
Bankard, Inc. 2006 SEC Form 17-A Page 52

For investments that are actively traded in organized financial markets, fair value is
determined by reference to stock exchange quoted market bid prices at the close of business
on the balance sheet date. For investments where there is no quoted market price, fair value
is determined by reference to the current market value of another instrument which is
substantially the same or is calculated based on the expected cash flows of the underlying net
asset base of the investment.
Derecognition of financial assets occurs when the rights to receive cash flows from the
financial instruments expire or are transferred and substantially all of the risks and rewards
of ownership have been transferred.
2.4 Property and Equipment
Property and equipment are carried at cost less accumulated depreciation and amortization
and any impairment in value. The cost of property and equipment comprises its purchase
price, including import duties, purchase taxes and any costs directly attributable to bring the
asset to its working condition and location for its intended use and an estimated cost of
dismantling and removing the asset and restoring the life to the extent that the Company has
a legal and constructive obligation for such decommissioning and restoration costs.
Expenses incurred after the property and equipment have been put into operation, such as
repairs and maintenance and overhaul costs, are normally charged against income in the
period 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 the asset.
After consideration of residual value, depreciation and amortization is computed on the
straight-line basis over the estimated useful lives of the assets as follows:
Buildings and improvements
Office furniture, fixtures
and equipment
Transportation equipment
Software development
Leasehold improvements
50 years
5 years
5 years
3 years
3 years or the term of the lease,
whichever is shorter
An asset’s carrying amount is written down immediately to its recoverable amount if the
asset’s carrying amount is greater than its estimated recoverable amount.
The residual values and estimated useful lives of property and equipment are reviewed, and
adjusted if appropriate, at each balance sheet date.
An item of property and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. 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 item) is included in the income statement
in the year the item is derecognized.
Bankard, Inc. 2006 SEC Form 17-A Page 53

2.5 Investment Property
Investment property (shown as part of Other Non-current Assets) pertains to a
condominium unit acquired by the Company as payment from a defaulting borrower.
Investment property is initially recognized at cost, which includes acquisition price and
directly attributable expenditures such as legal fees, transfer taxes and other transaction
costs. Subsequent to initial recognition, investment property is stated at cost less
accumulated depreciation and any impairment losses.
Investment property is derecognized upon disposal or when permanently withdrawn from
use and no future economic benefit is expected from its disposal. Any gain or loss on the
retirement or disposal of an investment property is recognized in the income statement in
the year of retirement or disposal.
2.6 Financial Liabilities
Financial liabilities include bills payable, cardholders’ credit balances, trade and other
payables, derivative financial liabilities and other current liabilities.
Financial liabilities are recognized when the Company becomes a party to the contractual
agreements of the instrument. All interest related charges is recognized as an expense in the
income statement under the caption Finance Costs.
Financial liabilities are recognized initially at their nominal value and subsequently measured
at amortized cost less settlement payments.
Bills payable are raised for support of long-term funding of operations. They are recognized
at the amount of proceeds received, which is net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and direct issue costs, are charged
to profit or loss on an accrual basis using the effective interest method and are added to the
carrying amount of the instrument to the extent that they are not settled in the period in
which they arise.
Cardholders’ credit balances represent advance payments made by certain cardholders.
These advances were entitled to advance payment peso points as determined by the
Company until November 30, 2006. The earned peso points (shown as part of the
Advertising, Rewards and Promotions account in the income statements) are not
withdrawable but applied against incoming card billings of the said cardholders.
Derivative financial liabilities represent the cumulative net fair value losses arising from the
Company’s foreign currency forward transactions.
Financial liabilities are derecognized from the balance sheet only when the obligations are
extinguished either through discharge, cancellation or expiration.
Bankard, Inc. 2006 SEC Form 17-A Page 54

2.7 Provisions
Provisions are recognized when present obligations will probably lead to an outflow of
economic resources and they can be estimated reliably even if the timing or amount of the
outflow may still be uncertain. A present obligation arises from the presence of a legal or
constructive commitment that has resulted from past events.
Provisions are measured at the estimated expenditure required to settle the present
obligation, based on the most reliable evidence available at the balance sheet date, including
the risks and uncertainties associated with the present obligation. Any reimbursement
expected to be received in the course of settlement of the present obligation is recognized, if
virtually certain, as a separate asset at an amount not exceeding the balance of the related
provision. Where there are a number of similar obligations, the likelihood that an outflow
will be required in settlement is determined by considering the class of obligations as a
whole. In addition, long term provisions are discounted to their present values, where time
value of money is material.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate.
In those cases where the possible outflow of economic resource as a result of present
obligations is considered improbable or remote, or the amount to be provided for cannot be
measured reliably, no liability is recognized in the financial statements.
Probable inflows of economic benefits that do not yet meet the recognition criteria of an
asset are considered contingent assets, hence are not recorded.
The Company, under its rewards program, offers monetized rewards to active cardholders.
Provisions for rewards are recognized at a certain rate of cardholders’ credit card availments,
determined by management based on redeemable amounts. At present, the Company has
not set a prescription period for the redemption of the reward points.
2.8 Revenue and Cost Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to
the Company and the revenue can be reliably measured. The following specific recognition
criteria must also be met before revenue is recognized:
• Finance charges on revolving accounts, other than those classified as installment
accounts, are recognized as income as long as those outstanding accounts are not 90
days past due or older. In 2003, these finance charges were recognized as income
provided the accounts were not 180 days past due or older.
• Finance charges on installment accounts and first year and renewal membership fees
are recognized as income when billed to cardholders. Purchases by the Company’s
cardholders which are collected on installment basis are recorded at the cost of the
items purchased.
Bankard, Inc. 2006 SEC Form 17-A Page 55

• Late payment fees are billed on delinquent credit card receivable balances until 179
days past due. These late payment fees are recognized as income upon collection.
• Merchant discounts, net of interchange costs, are recognized as income upon
presentation by member establishments of charges arising from Bankard and non-
Bankard (associated with MasterCard, JCB and VISA labels) credit card availments
passing through the Company’s credit card terminals. These discounts are computed
based on agreed rates and are deducted from amounts remitted to the member
establishments. Interchange costs pertain to the other credit card companies’ share
in Bankard’s merchant discounts whenever their issued credit cards transact in a
Bankard terminal.
• Interchange fees are recognized as income by the Company upon settlement of daily
credit card transactions. Interchange fees arise when other credit card companies
acquire Bankard-issued credit card transactions. Interchange fees pertain to the
Company’s share of other credit card companies’ merchant discount earnings
whenever a Bankard-issued credit card transacts at their terminals.
Costs and expenses are recognized in the income statement upon utilization of the service or
at the date the costs and expenses are incurred. Finance costs are reported on an accrual
basis.
2.9 Functional Currency and Foreign Currency Transactions
• Functional and Presentation Currency
Items included in the financial statements of the Company are measured using the
currency of the primary economic environment in which the entity operates
(the “functional currency”). The financial statements are presented in Philippine
pesos, which is the Company’s functional and presentation currency.
• Transactions and Balances
The accounting records of the Company are maintained in Philippine pesos. Foreign
currency transactions during the year are translated into the functional currency at
exchange rates which approximate those prevailing on transaction dates.
Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income statement.
Bankard, Inc. 2006 SEC Form 17-A Page 56

2.10 Impairment of Non-financial Assets
The Company’s property and equipment and investment property are subject to impairment
testing.
An impairment loss is recognized for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell and value in use, based on an internal
discounted cash flow evaluation.
All assets are subsequently reassessed for indications that an impairment loss previously
recognized may no longer exist and the carrying amount of the asset is adjusted to the
recoverable amount resulting in the reversal of the impairment loss.
2.11 Employee Benefits
• Retirement Benefit Obligations
Pension benefits are provided to regular employees through a defined benefit plan.
A defined benefit plan is a pension plan that defines an amount of pension benefit
that an employee will receive on retirement, usually dependent on one or more factors
such as age, years of service and salary. The legal obligation for any benefits from this
kind of pension plan remains with the Company, even if plan assets for funding the
defined benefit plan have been acquired. Plan assets may include assets specifically
designated to a long-term benefit fund as well as qualifying insurance policies. The
Company’s defined benefit pension plan covers all regular full-time employees. The
pension plan is tax-qualified, noncontributory and administered by a trustee.
The liability recognized in the balance sheet for defined benefit pension plans is the
present value of the defined benefit obligation (DBO) 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 DBO is calculated every two years by
independent actuaries using the projected unit credit method. The present value of the
DBO is determined by discounting the estimated future cash outflows using interest
rates of high quality corporate bonds that are denominated in the currency in which
the benefits will be paid and that have terms to maturity approximating to the terms
of the related pension liability.
Bankard, Inc. 2006 SEC Form 17-A Page 57

Actuarial gains and losses are not recognized as an expense or income unless the total
unrecognized gain or loss exceeds 10% of the greater of the obligation and related
plan assets. The amount exceeding this 10% corridor is charged or credited to profit
or loss over the employees’ expected average remaining working lives. Actuarial gains
and losses within the 10% corridor is disclosed separately. Past-service costs are
recognized immediately in the income statement, unless the changes to the pension
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.
• Termination Benefits
Termination benefits are payable when employment is terminated by the Company
before the normal retirement date, or whenever an employee accepts voluntary
redundancy in exchange for these benefits. The Company recognizes termination
benefits when it is demonstrably committed to either: (a) terminating the employment
of current employees according to a detailed formal plan without possibility of
withdrawal; or (b) providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than 12 months after the
balance sheet date are discounted to present value.
• Compensated Absences
Compensated absences are recognized for the number of paid leave days (including
holiday entitlement) remaining at the balance sheet date. They are included in
Cardholders’ Credit Balances, Trade and Other Payables account at the undiscounted
amount that the Company expects to pay as a result of the unused entitlement.
2.12 Income Taxes
Current tax assets or liabilities comprise those claims from, or obligations to, fiscal
authorities relating to the current or prior reporting period, that are uncollected or unpaid at
the balance sheet date. They are calculated according to the tax rates and tax laws applicable
to the fiscal periods to which they relate, based on the taxable profit for the year. All
changes to current tax assets or liabilities are recognized as a component of tax expense in
the income statement.
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.
Under the balance sheet liability method, with certain exceptions, deferred tax liabilities are
recognized for all taxable temporary differences and deferred tax assets are recognized for all
deductible temporary differences and the carryforward of unused tax losses and unused tax
credits to the extent that it is probable that taxable profit will be available against which the
deferred tax assets can be utilized.
Bankard, Inc. 2006 SEC Form 17-A Page 58

The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is probable that sufficient taxable profit will be available to allow
all or part of the deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply 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 substantively enacted at the balance sheet date.
2.13 Related Parties
Parties are considered related when 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.
2.14 Equity
Capital stock is determined using the nominal value of shares that have been issued.
Additional paid-in capital includes any premiums received on the initial issuance of capital
stock. Any transaction costs associated with the issuance of shares are deducted from
additional paid-in capital, net of any related income tax benefits.
Deposit on future stock subscription represents cash or noncash considerations received
from stockholders as deposit on the subscription to the Company’s unissued shares.
Treasury shares are stated at the cost of re-acquiring such shares.
Fair value gain (loss) on available-for-sale securities comprises the net gains and losses due to
the revaluation of available-for-sale securities.
Deficit includes all current and prior period results as disclosed in the income statement.
2.15 Loss Per Share
Loss per share is determined by dividing the net loss by the weighted average number of
common shares subscribed and issued during the year considering the acquisition of treasury
shares, if any, and after giving retroactive effect to stock dividends declared in the current
year, if any.
3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The Company’s financial statements prepared in accordance with PFRS require management
to make judgments and estimates that affect amounts reported in the financial statements
and related notes.
Bankard, Inc. 2006 SEC Form 17-A Page 59

3.1 Judgments
In the process of applying the Company’s accounting policies, management has made the
following judgments, apart from those involving estimation, which have the most significant
effect on the amounts recognized in the financial statements:
(a) Functional Currency
The Company has determined that its functional currency is the Philippine peso which is the
currency of the primary environment in which the Company operates.
(b) Impairment of Available-for-sale Securities
The Company follows the guidance of PAS 39 on determining when an investment is otherthan-temporarily
impaired. This determination requires significant judgment. In making this
judgment, the Company evaluates, among other factors, the duration and extent to which the
fair value of an investment is less than its cost; and the financial health of and near-term
business outlook for the investee, including factors such as industry and sector performance,
changes in technology and operational and financing cash flow.
(c) Distinction Between Investment Properties and Owner-occupied Properties
The Company determines whether a property qualifies as investment property. In making its
judgment, the Company considers whether the property generated cash flows largely
independently of the other assets held by an entity. Owner-occupied properties generate
cash flows that are attributable not only to property but also to other assets used in the
production or supply process.
Some properties comprise a portion that is held to earn rental or for capital appreciation and
another portion that is held for use in the production and supply of goods and services or
for administrative purposes. If these portion can be sold separately (or leased out separately
under finance lease), the Company accounts for the portions separately. If the portion
cannot be sold separately, the property is accounted for as investment property only if an
insignificant portion is held for use in the production or supply of goods or services or for
administrative purposes. Judgment is applied in determining whether ancillary services are
so significant that a property does not qualify as investment property. The Company
considers each property separately in making its judgment.
(d) Provisions and Contingencies
Judgment is exercised by management to distinguish between provisions and contingencies.
Policies on recognition and disclosure of provision and disclosure of contingencies are
discussed in Note 2.7 and relevant disclosures are presented in
Notes 5 and 15.
Bankard, Inc. 2006 SEC Form 17-A Page 60

3.2 Estimates
The estimates and assumptions used in the financial statements are based upon
management’s evaluation of relevant facts and circumstances of the Company’s financial
statements. Actual results could differ from those estimates. The following are the relevant
estimates performed by management on its December 31, 2006 and 2005 financial
statements:
(a) Useful Life of Property and Equipment and Investment Property
The Company estimates the useful lives of property and equipment and investment property
based on the period over which the assets are expected to be available for use. The
estimated useful lives of property and equipment and investment property are reviewed
periodically and are updated if expectations differ from previous estimates due to physical
wear and tear, technical or commercial obsolescence and legal or other limits on the use of
the assets. In addition, estimation of the useful lives of property and equipment and
investment property is based on collective assessment of industry practice, internal technical
evaluation and experience with similar assets. It is possible, however, that future results of
operations could be materially affected by changes in estimates brought about by changes in
factors mentioned above. The amounts and timing of recorded expenses for any period
would be affected by changes in these factors and circumstances. A reduction in the
estimated useful lives of property and equipment and investment property would increase
recorded operating expenses and decrease non-current assets.
Property and equipment net of accumulated depreciation, amortization and impairment
losses amounted to P6,951,904 and P388,594,002 as of December 31, 2006 and 2005,
respectively (see Note 7).
Investment property net of accumulated depreciation, amortization and impairment losses
amounted to P622,005 and P757,715 as of December 31, 2006 and 2005, respectively (see
Note 8).
(b) Allowance for Impairment of Credit Card and Other Receivables
Allowance is made for specific and groups of accounts, where objective evidence of
impairment exists. The Company evaluates these accounts based on available facts and
circumstances, including, but not limited to, the length of the Company’s relationship with
the customers, the customers’ current credit status based on third party credit reports and
known market forces, average age of accounts, collection experience and historical loss
experience.
Provisions for impairment losses on credit card and other receivables amounted to about
P978.6 million in 2006 and P921.9 million in 2005 (see Note 5).
Bankard, Inc. 2006 SEC Form 17-A Page 61

(c) Valuation of Financial Assets Other than Credit Card and Other Receivables
The Company carries certain financial assets at fair value, which requires the extensive use of
accounting estimates and judgment. Significant components of fair value measurement were
determined using verifiable objective evidence such as foreign exchange rates, interest rates,
volatility rates. However, the amount of changes in fair value would differ if the Company
utilized different valuation methods and assumptions. Any change in fair value of these
financial assets and liabilities would affect profit and loss and equity.
(d) Realizable Amount of Deferred Tax Assets
The Company reviews its deferred tax assets at each balance sheet date and reduces the
carrying amount to the extent that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred tax asset to be utilized.
Deferred tax assets amounted to P518,325,035 and P516,416,422 as of December 31, 2006
and 2005, respectively (see Note 14).
(e) Impairment of Non-financial Assets
Except for intangible assets with indefinite useful lives, PFRS requires that an impairment
review be performed when certain impairment indicators are present. The Company’s policy
on estimating the impairment of non-financial assets is discussed in detail in Note 2.10.
Though management believes that the assumptions used in the estimation of fair values
reflected in the financial statements are appropriate and reasonable, significant changes in
these assumptions may materially affect the assessment of recoverable values and any
resulting impairment loss could have a material adverse effect on the results of operations.
(f) Retirement Benefits and Other Retirement Benefits
The determination of the Company’s obligation and cost of pension and other retirement
benefits is dependent on the selection of certain assumptions used by actuaries in calculating
such amounts. Those assumptions are described in Note 12 and include, among others,
discount rates, expected return on plan assets and salary increase rate. In accordance with
PFRS, actual results that differ from the assumptions are accumulated and amortized over
future periods and therefore, generally affect the recognized expense and recorded obligation
in such future periods.
The retirement benefit obligation and net unrecognized actuarial gains amounted to
P855,867 and P4,680,838, respectively, in 2006 and P4,291,633 and P4,680,838, respectively,
in 2005 (see Note 12).
Bankard, Inc. 2006 SEC Form 17-A Page 62

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of December 31 are as follows (see Note 15):
2006 2005
Cash on hand and in banks P 337,052,077 P 282,212,245
Short-term placements 9,711,900 95,000,000
P 346,763,977 P 377,212,245
Cash accounts with banks generally earn interest based on daily bank deposit rates. Shortterm
placements have an average maturity of 2 days and annual effective interest rates of 2%
and 2% to 8.75% for Philippine peso placements in 2006 and 2005, respectively, and 2.5%
and 2.625% to 2.875% for U.S. dollar denominated placements in 2006 and 2005,
respectively.
5. CREDIT CARD AND OTHER RECEIVABLES
This account is composed of the following:
Notes 2006 2005
Credit card:
Regular 15 P 3,143,167,884 P 9,733,909,264
Installment 10,393,465 260,281,603
3,153,561,349 9,994,190,867
Others:
Credit card-related - 160,288,253
Due from related parties 15 44,285,916 476,405
Due from employees - net
of long-term portion 8 7,208,511 4,754,038
Miscellaneous 6,330,545 9,904,883
57,824,972 175,423,579
Allowance for impairment on:
Credit card receivables ( 2,205,321,325) ( 1,627,608,760 )
Miscellaneous ( 7,260,080) ( 7,354,974 )
( 2,212,581,405) ( 1,634,963,734 )
Reserves for penalties and others ( 948,105,637) ( 798,143,322 )
( 3,160,687,042) ( 2,433,107,056 )
Credit card receivables sold 15 - ( 4,446,317,942 )
P 50,699,279 P 3,290,189,448
In accordance with its policy, the Company has derecognized the credit card receivables sold
in 2005. However, for financial statement presentation, the amounts sold are presented as
deduction from the gross amounts of the credit card receivables as of December 31, 2005.
Bankard, Inc. 2006 SEC Form 17-A Page 63

The changes in the allowance for impairment on credit card receivables are shown below:
Note 2006 2005
Balance at beginning of year P 1,627,608,760 P 940,943,344
Provision for impairment losses 978,639,388 921,916,673
Reversal due to sale to RCBC 1 ( 70,762,845 ) -
Write-offs ( 330,163,978 )( 235,251,257 )
Balance at end of year P 2,205,321,325 P 1,627,608,760
The Company’s credit card receivables are aged as follows:
Note 2006 2005
Current P - P 3,581,833,872
1 day to 29 days - 298,398,881
Past due
30 days to 59 days - 153,340,785
60 days to 89 days - 116,544,825
90 days to 119 days - 102,314,289
120 days to 179 days - 200,351,189
180 days and over 3,153,561,349 5,541,407,026
3,153,561,349 9,994,190,867
Credit card receivables sold 15 - ( 4,446,317,942 )
P 3,153,561,349 P 5,547,872,925
On August 21, 2003, the BSP issued Memo Circular No. 398 which became effective on
December 1, 2003. The BSP Circular prescribes, among others, the standard valuation
reserves requirements for delinquent and potentially non-collectible credit card receivables.
Based on this BSP Circular, the Company has determined that the required allowance for
impairment in the amount of P3,602,000,000 on the total credit card receivable portfolio as
of December 31, 2003 would have a significant impact on the 2003 financial statements of
the Company if the whole amount would be recognized as of December 31, 2003. The
Company’s management requested an approval from the BSP to allow the staggered booking
of the required allowance impairment in 2003 over a period of seven years starting in 2004.
Bankard, Inc. 2006 SEC Form 17-A Page 64

The BSP, through its letter dated January 14, 2004, informed the Company that the
Monetary Board, under its Resolution No. 1872 dated December 22, 2003, has granted the
Company’s request to stagger the booking of the valuation reserves of P3,602,000,000 over
seven years. Also, Resolution No. 1872 requires the Company to infuse fresh capital equal
to the amount of valuation reserves booked in accordance with the terms of the BSP
approval. On December 29, 2005, the Company made a fresh capital infusion amounting to
P190,474,000 to comply with this BSP requirement (see Note 16).
The staggered booking over the seven year period is shown below:
Year Percentage Amount
2004 5 P 180,100,000
2005 5 180,100,000
2006 18 648,360,000
2007 18 648,360,000
2008 18 648,360,000
2009 18 648,360,000
2010 18 648,360,000
100 P 3,602,000,000
Based on a separate determination made by the Company of the required valuation reserves
as of December 31, 2003 following the provisions of the BSP Circular, the computed
required additional allowance for impairment approximates the BSP-approved amount of
P3.6 billion. However, in 2005, it was ascertained that this required additional allowance of
P3.6 billion determined in 2003 did not pertain wholly to 2003, but a significant portion of
such amount pertained to 2002 and prior years. Based on the Company’s recomputation, of
the required additional allowance, P749.355 million pertained to 2003 and P2.852 billion
pertained to 2002 and prior years. In computing these amounts, the rules under BSP
Circular No. 398 were applied.
Of the P3.6 billion required additional allowance, the Company already recognized P846.5
million in its books as of December 31, 2006 as follows: P180.1 million of which was
recognized in 2004, P180.1 million in 2005 and P486.3 million in 2006. Under PFRS, the
Company should have taken up these additional impairment losses in 2003 and affected
prior years.
In addition, the Company sold and transferred to RCBC its various credit card receivables
on December 29, 2006 totaling P7.2 billion under a Deed of Assignment of Receivables.
The credit card receivables that were sold and transferred by the Company to RCBC
included those receivables which, as approved by the BSP, are being provided with
allowance for impairment on a staggered basis. As a result of the sale and transfer of the
credit card receivables to RCBC, the Company determined that the remaining unbooked
allowance of P2.75 billion under the BSP approved staggered amortization of allowance for
impairment is no longer required. However, the approval/confirmation of this transaction is
still pending with the BSP.
Bankard, Inc. 2006 SEC Form 17-A Page 65

The balance of the credit card receivables as of December 31, 2005 is net of the accounts
sold to RCBC and other third parties, with RCBC Capital acting as the Company’s financial
broker to the other third parties (see Note 15), which the Company has derecognized in its
books.
Under PAS 39, Financial Instruments: Recognition and Measurement, and PAS 32, Financial
Instruments: Disclosures and Presentation, the credit card receivables sold by the Company to
RCBC and other third parties would not have qualified for derecognition. Had the credit
card receivables sold not been derecognized, as of December 31, 2005, the Credit Card
Receivables and Cardholders’ Credit Balances, Trade and Other Payables accounts would
have been increased by P4,446,317,942, respectively. The effects of the derecognition on the
Company’s reported net loss for the years ended December 31, 2005 and December 31,
2004 could not be quantified.
The following summarizes the effects of the staggered booking of additional valuation
reserves and derecognition of the credit card receivables sold as compared with PFRS (as
discussed earlier in this note), and the deferred tax effects (as presented in Note 14):
2006
Per PFRS As Reported Difference
Balance sheets:
Credit card and other receivables - net P 4,492,975,810 P 50,699,279 P 4,442,276,531
Deferred tax assets 320,853 518,325,035 ( 518,004,182)
Total assets 5,045,893,208 950,519,301 4,095,373,907
Cardholders’ credit balances, trade and
other payables 6,095,776,593 268,117,953 5,827,658,640
Equity (capital deficiency) ( 3,592,734,722) 681,564,066 ( 4,274,298,788)
Income statements:
Impairment losses P 492,536,888 P 978,827,888 (P 486,291,000)
Loss before tax ( 90,472,860 ) ( 575,555,234 ) 485,082,374
Net loss ( 112,109,919 ) ( 597,615,312 ) 485,505,393
2005
Per PFRS As Reported Difference
Balance sheets:
Credit card and other receivables - net P 4,494,707,390 P 3,290,189,448 P 1,204,517,942
Deferred tax assets (liabilities) ( 1,587,760) 516,416,422 ( 518,004,182 )
Total assets 5,295,097,716 4,608,583,956 686,513,760
Cardholders’ credit balances, trade and
other payables 6,382,470,924 1,936,152,982 4,446,317,942
Equity (capital deficiency) ( 3,480,624,804 ) 279,179,378 ( 3,759,804,182 )
Income statements:
Impairment losses P 741,816,673 P 921,916,673 (P 180,100,000 )
Loss before tax ( 433,395,530 ) ( 613,495,530 ) 180,100,000
Deferred tax expense (income) 311,546,870 ( 206,457,312 ) 518,004,182
Net loss ( 760,289,687 ) ( 422,385,505 ) ( 337,904,182 )
Bankard, Inc. 2006 SEC Form 17-A Page 66

2004
Per PFRS As Reported Difference
Balance sheets:
Credit card and other receivables - net P 4,594,714,305 P 3,448,300,126 P 1,146,414,179
Deferred tax assets 1,404,967,110 309,959,110 1,095,008,000
Total assets 6,844,425,484 4,603,003,305 2,241,422,179
Cardholders’ credit balances, trade and
other payables 5,949,066,745 1,380,752,566 4,568,314,179
Equity (capital deficiency) ( 1,815,351,117 ) 511,540,883 ( 2,326,892,000)
Income statements:
Impairment losses P 1,143,180,760 P 1,323,280,760 (P 180,100,000 )
Loss before tax ( 667,666,358 ) ( 847,766,358 ) 180,100,000
Deferred tax income ( 235,501,365 ) ( 293,133,365) 57,632,000
Net loss ( 454,938,575 ) ( 577,406,575) 122,468,000
The carrying amount of these short-term financial assets, net of unrecognized allowance for
impairment in 2006 recorded on a staggered basis amounting to P2.75 billion, is a reasonable
approximation of fair value.
6. PREPAYMENTS AND OTHER CURRENT ASSETS
This account includes the following:
2006 2005
Prepaid expenses P 2,633,479 P 23,172,616
Supplies inventory 851,917 3,510,271
7. PROPERTY AND EQUIPMENT
P 3,485,396 P 26,682,887
A reconciliation of the carrying amounts at the beginning and end of 2006 and 2005 and the
gross carrying amounts and the accumulated depreciation and amortization of property and
equipment are shown below:
Office
Furniture,
Buildings and Fixtures and Software Transportation Leasehold
Improvements Equipment Development Equipment Improvements Total
Balance at January 1, 2006,
net of accumulated
depreciation and amortization P 284,698,588 P 48,243,942 P 45,539,780 P 10,111,692 P - P 388,594,002
Additions - 5,359,077 4,261,262 - - 9,620,339
Disposals - net ( 278,167,392) ( 35,097,969 ) ( 37,165,652 )( 546,264) - ( 350,977,277 )
Depreciation and amortization
charge for the year ( 6,531,196) ( 18,505,050 ) ( 12,529,900 ) ( 2,719,014) - ( 40,285,160 )
Balance at December 31, 2006,
net of accumulated
depreciation and amortization P - P - P 105,490 P 6,846,414 P - P 6,951,904
Bankard, Inc. 2006 SEC Form 17-A Page 67

Office
Furniture,
Buildings and Fixtures and Software Transportation Leasehold
Improvements Equipment Development Equipment Improvements Total
December 31, 2006
Cost P - P - P 1,096,367 P 12,425,170 P - P 13,521,537
Accumulated depreciation
and amortization - - ( 990,877 ) ( 5,578,756) ( - ) ( 6,569,633)
Net carrying amount P - P - P 105,490 P 6,846,414 P - P 6,951,904
Balance at January 1, 2005,
net of accumulated
depreciation and amortization P 291,182,484 P 52,103,072 P 16,178,177 P 4,718,109 P - P 364,181,842
Additions 47,300 17,054,441 44,307,380 8,978,228 - 70,387,349
Disposals - net - ( 135 ) - ( 738,735) - ( 738,870 )
Depreciation and amortization
charge for the year ( 6,531,196) ( 20,913,436 ) ( 14,945,777 ) ( 2,845,910) - ( 45,236,319 )
Balance at December 31, 2005,
net of accumulated
depreciation and amortization P 284,698,588 P 48,243,942 P 45,539,780 P 10,111,692 P - P 388,594,002
December 31, 2005
Cost P 325,739,471 P 291,799,027 P 108,105,836 P 14,917,145 P 6,833,376 P 747,394,855
Accumulated depreciation
and amortization ( 41,040,883) ( 243,555,085 ) ( 62,566,056 ) ( 4,805,453) ( 6,833,376) ( 358,800,853 )
Net carrying amount P 284,698,588 P 48,243,942 P 45,539,780 P 10,111,692 P - P 388,594,002
Depreciation and amortization of P40,285,160 in 2006, P45,236,319 in 2005 and
P48,852,306 in 2004 are shown as part of the Occupancy and Equipment-related Expenses
account in the income statements.
On December 29, 2006, the Company sold its buildings and improvements for P285,029,306
to RCBC. The sale resulted in the recognition of gain amounting to P6,909,214 (see Note
15).
8. OTHER NON-CURRENT ASSETS
The composition of this account as of December 31 is as follows:
2006 2005
Long-term portion of amounts due from
employees (see Note 5) P 9,320,735 P 3,479,620
Investment property - net of accumulated
depreciation of P735,096 in 2006 and
P599,386 in 2005 622,005 757,715
Advances to gratuity fund - 2,686,280
Acquired assets - net - 188,500
Miscellaneous 12,122,020 147,887
Balance carried forward P 22,064,760 P 7,260,002
Bankard, Inc. 2006 SEC Form 17-A Page 68

2006 2005
Balance brought forward P 22,064,760 P 7,260,002
Available-for-sale securities:
Equity securities 1,678,950 1,678,950
Golf club shares 550,000 550,000
2,228,950 2,228,950
P 24,293,710 P 9,488,952
The Company’s investment property includes real estate properties which are owned for
investment purposes only. No income or direct operating expenses were recognized during
the reporting periods presented. Real estate tax amounting to P6,764 and P6,544 was
recognized as a related expense in 2006 and 2005.
The fair value of investment property as of December 31, 2006 and amounted to P1,479,500
as determined by the internal appraisers of RCBC.
8.1 Available-for-Sale Securities
The reconciliation of the carrying amounts of available-for-sale securities are as follows:
2006 2005
Balance at the beginning of year P 2,228,950 P 2,678,950
Changes in fair value - ( 450,000 )
Balance at end of year P 2,228,950 P 2,228,950
Equity securities mainly consist of investment in preferred shares of a company listed in the
Philippine Stock Exchange.
Golf club shares are proprietary membership club shares. In 2005, the fair value of these
shares declined by P450,000. This amount was recognized as fair value loss on available-forsale
securities and presented as part of equity.
The fair values of available-for-sale securities have been determined directly by reference to
published price in an active market.
9. BILLS PAYABLE
Bills payable consist of short-term unsecured Philippine peso and U.S. dollar-denominated
loans from RCBC maturing within one year. These loans are subject to monthly repricing
and bear annual interest rates ranging from 10% to 10.25% in 2006 and 10% to 11% in 2005
for Philippine peso-denominated loans and 7% to 7.46% in 2006 and 6.5% to 10% in 2005
for U.S. dollar-denominated loans.
Bankard, Inc. 2006 SEC Form 17-A Page 69

On December 27, 2006, the Company’s BOD approved the conversion of the remaining
outstanding balance of bills payable to RCBC amounting to P1 billion into equity. This is
presented as part of the Deposit on Future Stock Subscription in the 2006 statement of
changes in equity pending approval from the BSP (see Notes 1 and 16).
The fair values of bills payable were not individually determined and disclosed as, due to
their short duration, management considers the carrying amounts recognized in the balance
sheets to be a reasonable approximation of their fair value.
10. CARDHOLDERS’ CREDIT BALANCES, TRADE AND OTHER PAYABLES
This account consists of:
Notes 2006 2005
Cardholders’ credit balances P - P 545,931,131
Trade:
Merchant establishments 188,078,903 995,876,678
Collections on credit card
receivables sold 5, 15 - 128,398,859
Credit card networks - 69,308,466
Suppliers 374,190 31,165,345
188,453,093 1,224,749,348
Others:
Accrued other operating expenses 59,537,508 130,862,485
Due to a related party 15 13,021,039 230,300
Accrued compensation and
fringe benefits 5,147,500 4,291,633
Accrued interest on credit card
receivables sold - 26,970,820
Miscellaneous 1,958,813 3,117,265
79,664,860 165,472,503
P 268,117,953 P1,936,152,982
Included in the Accrued Other Operating Expenses account is the provision for rewards
amounting to P20,240,844 as of December 31, 2005.
The fair values of cardholders’ credit balances, trade and other payables have not been
disclosed as, due to their short duration, management considers the carrying amounts
recognized in the balance sheet to be a reasonable approximation of their fair values.
Bankard, Inc. 2006 SEC Form 17-A Page 70

11. OTHER CURRENT LIABILITIES
The breakdown of this account is as follows:
2006 2005
Withholding tax P 837,282 P 7,455,737
Miscellaneous - 1,330,234
P 837,282 P 8,785,971
12. EMPLOYEE BENEFITS
Expenses recognized for employee benefits are analyzed as follows:
2006 2005 2004
Salaries and wages P 116,237,260 P 114,943,400 P 114,470,677
Retirement costs 5,147,500 5,049,487 2,573,809
Social security costs 3,916,735 4,046,339 3,935,333
Other benefits 13,804,653 18,057,862 17,918,273
P 139,106,148 P 142,097,088 P 138,898,092
The Company obtained an updated actuarial valuation as of January 1, 2004 to ascertain its
transitional liability or asset as of that date in accordance with PAS 19. Actuarial valuations
are made every two years to update the retirement benefit costs and the amount of
contributions.
The amounts of retirement benefit obligation (asset) recognized in the balance sheets in 2006
and 2005 are determined as follows:
2006 2005
Present value of the obligation P 66,252,651 P 71,400,151
Fair value of plan assets ( 62,427,680) ( 62,427,680 )
Deficiency of plan assets 3,824,971 8,972,471
Unrecognized actuarial gains 4,680,838 4,680,838
Retirement benefit obligation (asset) (P 855,867) P 4,291,633
Bankard, Inc. 2006 SEC Form 17-A Page 71

The amounts of retirement benefit expense recognized in the income statements are as
follows:
2006 2005
Current service cost P 5,218,916 P 5,120,903
Interest cost 5,409,932 5,409,932
Expected return on plan assets ( 5,286,371) ( 5,286,371 )
Net actuarial losses recognized ( 194,977 ) (_______194,977)
Retirement benefits P 5,147,500 P 5,049,487
The movement of the retirement benefit obligation (asset) recognized in the books is as
follows:
2006 2005
Balance at beginning of year P 4,291,633 ( P 757,854)
Expense recognized 5,147,500 5,049,487
Balance at end of year (P 855,867) P 4,291,633
For determination of the pension liability, the following actuarial assumptions were used
both in 2006 and 2005:
Discount rates 11.0%
Expected rate of return on plan assets 9.0%
Expected rate of salary increases 8.0%
13. OTHER REVENUES AND OTHER OPERATING EXPENSES
These accounts are composed of the following:
2006 2005 2004
Other revenues:
Recoveries on accounts
previously written off P 11,650,175 P 15,014,161 P 26,401,070
Merchandising income 3,818,703 5,181,491 4,823,461
Miscellaneous 12,064,409 17,594,612 16,968,525
P 27,533,287 P 37,790,264 P 48,193,056
Bankard, Inc. 2006 SEC Form 17-A Page 72

2006 2005 2004
Other operating expenses:
Representation and
entertainment P 12,172,537 P 11,505,655 P 9,488,011
Transportation and travel 10,674,698 10,464,206 8,850,363
Insurance 3,288,922 3,714,248 4,236,669
Miscellaneous 19,591,882 35,031,047 34,509,302
P 45,728,039 P 60,715,156 P 57,084,345
14. TAXES
14.1 Current and Deferred Taxes
The major components of tax expense (income) in the income statements for the years
ended December 31 are as follows:
2006 2005 2004
Current tax expense:
Regular corporate income
tax (RCIT) at 32% and
35% in 2005 and at 32%
in 2004 P - P 14,797,035 P 19,330,074
Minimum corporate
income tax (MCIT) at 2% 23,766,755 - 3,242,174
Final tax on passive income
at 7.5% and 20% 201,936 550,252 201,334
23,968,691 15,347,287 22,773,582
Deferred tax income relating
to origination and reversal of
temporary differences ( 1,908,613) ( 206,457,312 ) ( 293,133,365 )
Tax expense (income) reported
in the income statements P 22,060,078 (P191,110,025) (P270,359,783)
Bankard, Inc. 2006 SEC Form 17-A Page 73

14.2 Income Tax Reconciliation
The reconciliation of tax on pretax income (loss) computed at the statutory tax rate to tax
expense (income) is as follows:
2006 2005 2004
Tax on pretax loss
at 35% (P201,444,332) P - P -
at 32% - ( 214,723,435 ) ( 271,285,235)
Adjustment for income subjected
to lower income tax rates ( 291,008) ( 1,657,391) ( 310,400)
Tax effects of:
Increase in deductible
temporary differences
due to change in RCIT rate - 15,555,360 1,003,792
Unrecognized deductible
temporary differences 223,413,381 8,865,498 -
Nondeductible expenses 207,037 849,943 232,060
Excess of MCIT over RCIT 175,000 - -
Tax expense (income) reported
in the income statements P 22,060,078 (P191,110,025) (P270,359,783)
14.3 Deferred Tax Assets
The net deferred tax assets as of December 31 relate to the following:
Balance Sheets
2006 2005
Deferred tax assets:
Allowance for impairment on:
Credit card receivables P 515,161,951 P 515,161,951
Other receivables 2,401,559 2,401,559
Other non-current assets 440,672 440,672
Unamortized past service cost 320,853 535,185
Deferred tax liability:
Unrealized foreign exchange gains - ( 2,122,945 )
Net Deferred Tax Assets P 518,325,035 P 516,416,422
Bankard, Inc. 2006 SEC Form 17-A Page 74

Income statements
2006 2005 2004
Deferred tax assets:
Allowance for impairment on:
Credit card receivables P - (P214,060,081 )(P 286,613,885)
Other receivables - - ( 2,401,559)
Other non-current assets - - 10,241
Prepaid MCIT - 5,394,027 ( 3,242,174)
Unamortized past service cost 214,332 234,440 173,107
Deferred tax liability:
Unrealized foreign exchange gains ( 2,122,945) 1,974,302 ( 1,059,095)
Deferred Tax Income (P 1,908,613) (P 206,457,312) (P 293,133,365)
Under PFRS, deferred tax assets shall be recognized only to the extent that it is probable that
the taxable income will be available against which the benefits of the deferred tax assets can
be utilized. Had this been complied with by the Company, the balance of the deferred tax
assets on allowance for impairment as of December 31, 2006 and 2005 of P518,004,182
would have been written off.
The Company’s management, however, believes that the Company will be able to utilize the
benefits of the deferred tax assets in the future.
14.4 MCIT and RCIT
The Company is subject to the MCIT which is computed at 2% of gross income, as defined
under the tax regulations. In 2006, the computed MCIT exceeded the amount of RCIT due
by P175,000.
In 2005, the Company is subject to RCIT which is computed at 35% of its taxable income
(32% from January 1, 2005 to October 31, 2005). In 2005, the Company applied its excess
MCIT over RCIT amounting to P3,242,174.
As of December 31, 2006, the Company has no income tax liability after deducting income
taxes paid during the first three quarters of 2006 and applying its creditable withholding tax
totaling P23,766,755. The income tax liability of the Company as of December 31, 2005
amounted to P5,692,955 after deducting income taxes paid during the first three quarters of
2005 amounting to P9,104,080.
14.5 VAT and Gross Receipts Tax (GRT)
On January 29, 2004, the bill which reverted the imposition of GRT on banks and financial
institutions was passed into law. This law is effective retroactive from January 1, 2004.
For the years ended December 31, 2006, 2005 and 2004, GRT paid by the Company
amounted to P104,237,052, P103,073,695 and P105,434,240, respectively, and is shown as
part of the Taxes and Licenses account in the income statements.
Bankard, Inc. 2006 SEC Form 17-A Page 75

As a result of the Company entering into a Services Agreement with RCBC, bulk of the
Company’s revenues will come from the service fees from its managed credit card
operations. In view of this, the Company’s tax classification will be changed from NON-
VAT to VAT taxpayer. Moving forward, the Company intends to still engage in the card
operations business (see Note 1).
14.6 New Tax Regulation
On May 24, 2005, Republic Act No. 9337 (“RA 9337”), amending certain sections of the
National Internal Revenue Code of 1997, was signed into law and became effective
beginning November 1, 2005. The following are the major changes brought about by RA
9337 that are relevant to the Company:
a. RCIT rate is increased from 32% to 35% starting November 1, 2005 until
December 31, 2008 and will be reduced to 30% beginning January 1, 2009;
b. VAT rate is increased from 10% to 12% effective February 1, 2006;
c. 12% VAT rate is now imposed on certain goods and services that were previously zerorated
or subject to percentage tax;
d. Input tax on capital goods shall be claimed on a staggered basis over 60 months or the
useful life of the related assets, whichever is shorter; and,
e. Creditable input VAT is capped by a maximum of 70% of output VAT per quarter (the
70% cap on input VAT was lifted effective December 13, 2006).
15. RELATED PARTY TRANSACTIONS
15.1 Sale of Assets and Liabilities to RCBC
On December 14, 2006, the Board of Directors of the Company approved the sale,
assignment, disposal and transfer of all or substantially all of the Company’s assets and
liabilities to RCBC. On December 29, 2006, the Company entered into the following
transactions with RCBC (see Note 1):
• Irrevocable sale and transfer of the Company’s various credit card receivables
totaling P7.2 billion under a Deed of Assignment of Receivables;
• Absolute sale of the Company’s 30 condominium units with a book value of P278.2
million for a purchase price of P285.1 million; and
• Sale of the Company’s various assets in consideration for the assumption by RCBC
of certain liabilities due to creditors and suppliers of the Company.
15.2 Services Agreement
On December 29, 2006, the Company entered into a services agreement with RCBC relative
to the credit card business of RCBC (see Note 1).
Bankard, Inc. 2006 SEC Form 17-A Page 76

15.3 Others
The significant transactions of the Company in the normal course of business with related
parties are described below:
a. The Company maintains various savings and demand deposits and short-term
placements in various RCBC branches (see Note 4).
b. Prior to the end of 2006 the Company sold to RCBC and third parties, with RCBC
Capital acting as the Company’s financial broker to third parties, certain credit card
receivables at agreed rates of discount (see Note 5). Total receivables sold as of
December 31, 2005 amounted to P4,446,317,942. The Company, however, continues to
act as the collecting agent of the accounts sold. Outstanding liabilities on collected
accounts receivable arising from this transaction amounted to P128,398,859 as of
December 31,2005, and is shown as part of the Cardholders’ Credit Balances, Trade and
Other Payables account in the balance sheets (see Note 10). The excess of the balance
of credit card receivables sold over the cash received amounted to P412,323,947 in 2006,
P572,488,470 in 2005, and P465,838,605 in 2004, and are shown as part of Finance
Costs account in the income statements.
c. The Company obtains interest-bearing loans from RCBC for working capital
requirements. The outstanding loans amounted to P2,369,060,000 as of December
31, 2005 (see Note 9). The related interest charges arising from these transactions
amounted to P244,179,802 in 2006, P314,882,247 in 2005 and P289,185,591 in 2004,
and are shown as part of the Finance Costs account in the income statements. In 2006,
the Company paid the loans amounting to P1.37 billion to RCBC. In addition, the
Company, upon approval by its BOD, converted the remaining liability of P1 billion to
stockholders’ equity. The amount is presented as Deposit on future stock subscription
in the 2006 balance sheet (see Notes 1 and 16).
d. The executive officers of the Company received a total remuneration amounting to
P24,466,190, P22,631,270 and P22,908,483 for the years ended December 31, 2006,
2005 and 2004, respectively, which are shown as part of Compensation and Fringe
Benefits account in the income statements. The members of the Board of Directors
received nominal per diems for attending Board and Committee meetings.
e. In 2005, the Company paid certain expenses amounting to P476,405 on behalf of RCBC
Capital. As of December 31, 2005, P476,405 remains outstanding and is shown as part
of Credit Card and Other Receivables account in the balance sheets (see Note 5).
f. Collections made on the RCBC credit card portfolio are made by the Company on
behalf of RCBC. Payables pertaining to this transaction amounted to P13,021,039 and
P230,300 as of December 31, 2006 and 2005, respectively and are shown as part of
Cardholders’ Credit Balances, Trade and Other Payables account in the balance sheets
(see Note 10).
Bankard, Inc. 2006 SEC Form 17-A Page 77

g. The Company’s ultimate parent company issued Standby Letters of Credit (“SBLC”) in
favor of VISA and Mastercard on behalf of the Company. As of December 31, 2006
and 2005 unused foreign denominated SBLC issued by RCBC are as follows:
2006 2005
VISA $ 25,835,000 $ 442,000
Mastercard 5,500,000 -
$ 31,335,000 $ 442,000
h. The Company has credit line facilities with its ultimate parent company. These include
omnibus line which is available as loan, foreign/domestic standby letters of credit,
domestic/foreign bills purchase and forward contract and foreign settlement line for the
Company’s spot transactions.
16. EQUITY
16.1 Deposits on future stock subscription
On December 27, 2006, the Company’s Board of Directors approved the conversion into
equity of the remaining outstanding bills payable to RCBC amounting to P1 billion. As of
December 31, 2006, this is included in Deposits on Future Stock Subscription account in the
statement of changes in equity. The conversion of the Company’s bills payable into equity
was approved by the BSP on February 23, 2007 (see Note 20).
On October 27, 2005, the Company’s Board of Directors approved the Stock Rights
Offering covering a total of 262,000,000 unissued common shares at a price of P1.00 per
share (par value).
On December 29, 2005, RCBC Capital made a fresh capital infusion amounting to
P190,474,000 to comply with BSP’s requirement (see Note 5). This capital infusion is
presented in the Company’s 2006 and 2005 balance sheets as part of the Deposits on Future
Stock Subscription.
The capital infusion made above was part of the P262 million capital infusion that the
Company’s stockholders agreed to provide. The balance of P72 million will be provided by
the minority shareholders, or by RCBC Capital if the preemptive rights of the minority
shareholders are waived.
The Company is also planning to apply for an increase in authorized capital stock after the
capital infusion of P262 million is completed to fully comply with the BSP requirement (see
Note 5).
16.2 Treasury Shares
These represent the 26,580,100 shares of capital stock bought back by the Company on
April 8, 2003 at market value for an aggregate amount of P37,875,581. The acquisition of
these shares was approved by the Company’s Board of Directors.
Bankard, Inc. 2006 SEC Form 17-A Page 78

17. LOSS PER SHARE
17.1 Loss per share computation
Loss per share was computed as follows:
2006 2005 2004
Net loss (P 597,615,312) (P 422,385,505) (P 577,406,575)
Divided by the weighted average
number of outstanding
common shares 311,419,900 311,419,900 311,419,900
Loss per share (P 1.92) (P 1.36) (P 1.85)
17.2 Summary of effects of matters giving rise to Auditors’ qualified opinion
The effects of the matters discussed in Subsection A to D of the Bases for Qualified Opinion
section of the auditors’ report are summarized below (amounts in thousands):
Increase (Decrease)
Assets Liabilities Equity Profit or loss
2006
A. Recording of transactions
pending BSP’s approval P 7,368,887 P 8,369,673 (P 1,000,786) (P 786)
B. Nonrecognition of additional
allowance for impairment ( 2,755,509) - ( 2,755,509) -
C. Recognition of impairment
loss relating to prior years - - - 486,291
D. Recognition of unrecoverable
deferred tax assets ( 518,004) - ( 518,004) -
P 4,095,374 P 8,369,673 (P 4,274,299) P 485,505
Bankard, Inc. 2006 SEC Form 17-A Page 79

Increase (Decrease)
Assets Liabilities Equity Profit or loss
2005
A. Nonrecognition of additional
allowance for impairment (P 3,241,800 ) P - (P 3,241,800 ) P -
B. Recognition of impairment
loss relating to prior years - - - 180,100
C. Derecognition of credit card
receivables sold which
did not qualify for
derecognition 4,446,318 4,446,318 - -
D. Recognition of unrecoverable
deferred tax assets ( 518,004 ) - ( 518,004 )( 518,004)
P 686,514 P 4,446,318 (P 3,759,804 ) (P 337,904)
Increase (Decrease)
Assets Liabilities Equity Profit or loss
2004
A. Nonrecognition of additional
allowance for impairment (P 3,421,900 ) P - ( P 3,421,900) P -
B. Recognition of impairment
loss relating to prior years - - - 180,100
C. Nonrecognition of deferred tax
effects of A and B above 1,095,008 - 1,095,008 ( 57,632 )
D. Derecognition of credit card
receivables sold which
did not qualify for
derecognition 4,568,314 4,568,314 - -
P 2,241,422 P 4,568,314 (P 2,326,892) P 122,468
18. COMMITMENTS AND CONTINGENCIES
The following are the significant commitments and contingencies involving the Company.
a. In 2005, the Company entered into foreign currency forward contracts with a local bank. These
derivative instruments are marked-to-market with the revaluation gains and losses credited to or
charged against current operations. The Company’s foreign currency forward contracts
receivable and foreign currency forward contracts payable as of December 31, 2005 amounted to
P745,574,130 and P755,286,800, respectively or a net derivative liability of P9,712,670.
Bankard, Inc. 2006 SEC Form 17-A Page 80

. The Company has credit line facilities with various banks. These facilities include credit line,
bills purchase line, foreign exchange settlement line.
c. There are commitments and contingent liabilities that arise in the normal course of the
Company’s operations which are not reflected in the accompanying financial statements in
accordance with the generally accepted accounting principles. Management is of the opinion that
losses, if any, from these commitments and contingencies will not have material effects on the
Company’s financial statements.
d. The Company is a defendant in legal actions arising from normal business activities.
Management believes that these actions are without merit or that the ultimate liability, resulting
from them, will not materially affect the Company’s financial position and results of operations.
19. RISK MANAGEMENT OBJECTIVES AND POLICIES
19.1 Strategy in using financial instruments
The Company maintains a high interest margin in its credit card receivables. Funding is
obtained from sale of receivables and bank borrowings on top of other internally-generated
funding sources, managing the levels to minimize costs while maintaining sufficient liquidity
to meet all funding requirements.
The Company is exposed to various forms of risks. These risks can be grouped into credit,
market, currency and operational. In managing these risks, the approach is not always risk
minimization but managing risks to make an optimal contribution to company revenues.
19.2 Credit risk
Acceptance of cardholders is based on criteria that management continuously review and
improve based on on-going analyses of demographic statistics on cardholder behavior. The
objective is to continuously improve the Company’s portfolio quality. Management carefully
manages its exposure to credit risk.
The Company structures the levels of credit risk it undertakes by placing limits on the
amount of risk accepted in relation to groups of cardholders depending on their
demographic characteristics. Such risks are monitored on a revolving basis and are subjected
to monthly review.
The cardholder payment performance and other indicators are closely monitored to
immediately determine high risk cardholders. In these cases, exposures to the said
cardholders are minimized by immediately blocking the credit cards.
Bankard, Inc. 2006 SEC Form 17-A Page 81

19.3 Market risk
The Company’s exposure to market risk would be in both the lending rates and the
borrowing and swap rates. Movements in the lending rates to cardholders are very minimal.
Industry players are very conscious of being in the same level as competition to keep their
cardholders. Since it is easy to obtain credit cards from various competitors, the Company’s
cardholder must be kept satisfied with the Company’s services so that their loyalty is
maintained.
Risks in borrowing and swap rates can be covered by maintaining a host of creditor banks to
be able to avail of the lowest rate in the market.
19.4 Currency risk
The Company takes a very low currency risk in the form of dollar-denominated credit card
receivables. This risk is mitigated by dollar-denominated payables to suppliers and service
providers. Dollar-denominated payable to merchants are covered by forward contracts to
eliminate the currency exchange rate risk.
19.5 Operational risk
The Company has a General Internal Control Policy Manual which serves as the general
framework of all policies and procedures for the various areas of company operations.
To enhance the Company’s risk management, the Compliance, Risk Management and
Internal Audit Group (CRMIA) was set-up. The CRMIA was established to:
• implement the Company’s compliance system,
• assess and improve the effectiveness of its risk management, control and governance
processes, and
• execute annual audit plan using risk-based audit methodology.
20. SUBSEQUENT EVENT
Subsequent to February 5, 2007, the date of the approval of the financial statements by the
BOD, on February 23, 2007, BSP approved the conversion of P1 billion of its bills payable
to RCBC into equity subject to certain conditions.
Bankard, Inc. 2006 SEC Form 17-A Page 82

SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS,
EMPLOYEES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES)
FOR THE YEAR ENDED DECEMBER 31, 2006
Name and Balance at Additions Deductions
Ending Balance
Balance at
Disignation beginning Amount Amount end
of debtor of period Collected Written-off Current Non-current of period
Abane, Genalyn, D. 58,667.50 4,648.96 22,902.80 40,413.66 40,413.66
Abangan, Marilyn - 62,703.94 13,135.53 49,568.41 49,568.41
Adan, Lemuel 15,777.75 64,415.94 36,847.85 43,345.84 43,345.84
Agbayani, Shelly Rose - 39,361.64 1,383.92 37,977.72 37,977.72
Agbunag, Madeline M. 33,011.26 64,351.59 50,810.60 46,552.25 46,552.25
Alcaide, Lilibeth 116,065.33 4,213.83 120,279.16 - -
Anaud, Myra - 62,703.94 13,135.53 49,568.41 49,568.41
Andeza, Jane - 38,000.00 415.89 37,584.11 37,584.11
Angeles, Bienvanido - 63,030.95 13,132.75 49,898.20 49,898.20
Anore, Manolito - 62,686.15 11,181.19 51,504.96 51,504.96
Aquino, Ivy - 61,618.48 7,281.29 54,337.19 54,337.19
Aquino, Ma. Liberty D. 47,382.24 3,569.23 23,008.03 27,943.44 27,943.44
Aquino, Vergel - 10,422.08 1,615.00 8,807.08 8,807.08
Aranel, Jerry - 60,000.00 2,349.96 57,650.04 57,650.04
Austria, Joseph Dennis - 62,421.30 67,409.67 (4,988.37) (4,988.37)
Ballesta, Joyce (0.01) - (0.01) (0.00) (0.00)
Ballesteros, Jane - 62,686.15 11,181.19 51,504.96 51,504.96
Baltazar, Marita - 61,484.21 7,282.43 54,201.78 54,201.78
Baranda, Edmund T. - 61,139.47 19,892.47 41,247.00 41,247.00
Baratilla, Mildred - 61,134.64 5,330.91 55,803.73 55,803.73
Barcelon Jr., Ulyses 17,088.85 61,368.92 22,150.94 56,306.83 56,306.83
Barola, Cheryll Mae - 62,910.47 13,133.77 49,776.70 49,776.70
Barola, Romel - 55,776.35 18,147.51 37,628.84 37,628.84
Barrantes, Erwin E. 49,759.34 3,796.49 22,985.87 30,569.96 30,569.96
Bautista, Liza Gay - 62,862.64 19,016.60 43,846.04 43,846.04
Bautista, Michelle 31,431.43 53,965.89 44,370.06 41,027.26 41,027.26
Bernardo II, Isagani 54,916.36 4,337.66 21,765.29 37,488.73 37,488.73
Bernardo, Melinda - 62,686.15 11,181.19 51,504.96 51,504.96
Bernardo, Raquel - 395,265.36 53,235.28 342,030.08 342,030.08
Bernardo, Rhodalyn P. 35,236.47 58,723.62 40,053.55 53,906.54 53,906.54
Bernardo, Roniel 37,319.52 2,847.38 17,239.40 22,927.50 22,927.50
Betito, Marivic S. 41,758.70 64,324.12 65,944.81 40,138.01 40,138.01
Bongo, Geralda 39,686.72 2,717.65 25,903.94 16,500.43 16,500.43
Bonus, Editha - 63,324.68 24,603.85 38,720.83 38,720.83
Bulan, Mary - 60,230.14 2,406.87 57,823.27 57,823.27
Cacho, Glenda - 61,201.22 5,330.34 55,870.88 55,870.88
Cacnio, Emelissa - 64,125.55 19,957.75 44,167.80 44,167.80
Cajucom, Cyrus 57,806.68 4,565.96 22,910.82 39,461.82 39,461.82
Calderon, Cristina - 60,673.97 10,089.53 50,584.44 50,584.44

SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS,
EMPLOYEES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES)
FOR THE YEAR ENDED DECEMBER 31, 2006
Name and Balance at Additions Deductions
Ending Balance
Balance at
Disignation beginning Amount Amount end
of debtor of period Collected Written-off Current Non-current of period
Camorongan, Vilma V. 40,431.17 2,904.61 23,072.85 20,262.93 20,262.93
Carpio, Maria Arzenith 50,749.94 3,013.75 53,763.69 (0.00) (0.00)
Comida, Danilo 38,923.75 50,614.84 50,710.01 38,828.58 38,828.58
Cruz, Alma Roselle 50,227.92 60,417.58 63,685.46 46,960.04 46,960.04
Cruz, Anna Marie 45,115.86 63,464.68 49,157.03 59,423.51 59,423.51
Cruz, Erwin - 60,000.00 4,731.37 55,268.63 55,268.63
Cruz, Merlie A. 56,340.24 64,589.11 63,006.65 57,922.70 57,922.70
Cuaton Jr. II, Ursulo - 62,377.80 62,377.80 (0.00) (0.00)
Dabuit, Joy E. 48,854.31 63,709.98 53,253.84 59,310.45 59,310.45
Dagum, Elizabeth 19,183.19 1,017.14 19,753.51 446.82 446.82
Daniel, Roel A. 44,134.83 64,745.90 108,830.48 50.25 50.25
Daniel, Roel A. - 311,000.00 - 311,000.00 311,000.00
De Leon, Van Leonard 54,760.09 65,634.21 74,620.53 45,773.77 45,773.77
De Ramos, Arnel D. 28,317.05 63,835.42 43,350.42 48,802.05 48,802.05
de Vera, Augusto Francis - 62,581.77 62,581.77 - -
De Vera, Ofelia M. 54,894.96 61,431.97 64,817.06 51,509.87 51,509.87
Dela Cruz, Ferdinand B. 51,074.58 64,209.91 59,732.57 55,551.92 55,551.92
Dela Cruz, Regina M. 31,412.47 64,495.95 52,616.06 43,292.36 43,292.36
dela Paz, Marjorie - 62,703.94 13,135.53 49,568.41 49,568.41
Destacamento, Yvette 46,703.69 393.89 23,312.64 23,784.94 23,784.94
Dizon, Jumely F. 17,582.64 60,946.78 20,722.72 57,806.70 57,806.70
Duran, Arlene - 61,484.21 7,282.43 54,201.78 54,201.78
Dy, Jerez, T. - 22,120.55 2,728.21 19,392.34 19,392.34
Ebonia, Jona V. 22,148.77 64,435.03 43,273.52 43,310.28 43,310.28
Encontro, Arlene L. 569,453.04 46,790.22 62,678.27 553,564.99 553,564.99
Enero, Anna Lissa - 123,946.73 65,535.92 58,410.81 58,410.81
Estrella, Eufemia M. 51,128.96 60,000.00 54,304.41 56,824.55 56,824.55
Fernandez' housing int. income - 11,341.54 11,341.54 - -
Fernandez, Michael 52,670.74 64,205.38 59,003.10 57,873.02 57,873.02
Flores, Donato - 70,062.78 24,377.61 45,685.17 45,685.17
Flores, Donato - 281,201.89 52,654.74 228,547.15 228,547.15
Fradejas, Maureen - 63,664.43 18,013.60 45,650.83 45,650.83
Francisco, Sonia - 330,953.17 74,380.13 256,573.04 256,573.04
Francisco, Sonia - 41,000.00 1,660.98 39,339.02 39,339.02
Fulgencio, Allyn - 64,356.65 20,938.75 43,417.90 43,417.90
Gadier, Joana May - 63,034.77 16,632.00 46,402.77 46,402.77
Garcia Luis Miguel - 85,270.90 41,548.49 43,722.41 43,722.41
Gaspar, Cinderella A. 55,467.96 4,342.35 22,932.63 36,877.68 36,877.68
Gaspar, Reynaldo F. 32,897.67 2,184.26 23,143.10 11,938.83 11,938.83

SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS,
EMPLOYEES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES)
FOR THE YEAR ENDED DECEMBER 31, 2006
Name and Balance at Additions Deductions
Ending Balance
Balance at
Disignation beginning Amount Amount end
of debtor of period Collected Written-off Current Non-current of period
Gatdula, Ponciano - 63,151.43 13,131.72 50,019.71 50,019.71
Gino, Jennely Jemafe J 26,908.80 1,803.88 18,508.97 10,203.71 10,203.71
Godoy Jr, Felix C. 48,784.60 3,703.30 22,994.95 29,492.95 29,492.95
Gomapas, Geronimo - 63,182.96 21,809.47 41,373.49 41,373.49
Gonzales, Teresa T. 49,011.20 3,724.98 22,992.84 29,743.34 29,743.34
Gregorio, Erwin Eduardo - 62,979.31 13,133.19 49,846.12 49,846.12
Gutierrez, Gina - 15,024.66 916.09 14,108.57 14,108.57
Hallera, Stephanie Joan - 61,034.75 5,331.76 55,702.99 55,702.99
Ibo, Richard L. 48,854.26 64,699.94 63,864.34 49,689.86 49,689.86
Imperial, Maria Theresa - 62,442.96 36,709.74 25,733.22 25,733.22
Jaen, Reggie 25,869.60 49,307.03 38,782.85 36,393.78 36,393.78
Jalos, Angelica G. 43,292.36 63,235.67 48,771.02 57,757.01 57,757.01
Jao,Jose Enrico - 64,116.89 19,964.23 44,152.66 44,152.66
Laurilla, Rovel B. 55,535.14 64,348.78 60,573.43 59,310.49 59,310.49
Laurilla, Rovel B. 60,011.20 2,255.17 62,266.37 - -
Lazo, Julie 51,865.95 3,386.29 55,252.24 0.00 0.00
Leonardo, Ma. Socorro Q. 31,259.64 62,027.63 34,933.52 58,353.75 58,353.75
Lim, James - 59,019.88 59,019.88 - -
Llaneta, Joel - 62,979.31 13,133.19 49,846.12 49,846.12
Lopez, Richard Allan C. 43,318.28 335,345.28 80,760.50 297,903.06 297,903.06
Lozada, Milton 115,165.52 10,647.44 41,580.63 84,232.33 84,232.33
Lozada, Milton - 34,000.00 437.32 33,562.68 33,562.68
Luya, Armel R. 32,175.42 2,115.19 23,149.84 11,140.77 11,140.77
Maandal, Dante C. 55,652.64 64,360.01 61,642.33 58,370.32 58,370.32
Maandal, Dante C. 270,065.70 24,227.81 63,266.72 231,026.79 231,026.79
Macahia, Rommel - 60,000.00 1,090.11 58,909.89 58,909.89
Macalinao, Cristina - 60,000.00 4,549.76 55,450.24 55,450.24
Magpoc, Arlinda - 62,686.84 11,180.46 51,506.38 51,506.38
Magtoto, Luz - 60,980.11 15,411.77 45,568.34 45,568.34
Malaluan, Josephine - 54,552.12 55,076.95 (524.83) (524.83)
Malelang, Michelle R. 43,292.35 64,260.56 57,238.52 50,314.39 50,314.39
Mallari, Dionisio G. - 64,068.44 18,987.40 45,081.04 45,081.04
Mariano, Rodolf 39,054.81 2,901.16 19,959.04 21,996.93 21,996.93
Martinez, Ethel May - 60,000.00 1,073.67 58,926.33 58,926.33
Medina Jr., Jose 50,418.10 63,971.56 58,199.80 56,189.86 56,189.86
Meneses, Edlyn - 62,413.00 11,183.51 51,229.49 51,229.49
Mercado, Lorena - 60,405.94 5,059.54 55,346.40 55,346.40
Mesias, Constancio 50,435.40 3,861.16 22,979.56 31,317.00 31,317.00
Midel, Jennifer - 31,000.00 2,444.54 28,555.46 28,555.46

SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS,
EMPLOYEES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES)
FOR THE YEAR ENDED DECEMBER 31, 2006
Name and Balance at Additions Deductions
Ending Balance
Balance at
Disignation beginning Amount Amount end
of debtor of period Collected Written-off Current Non-current of period
Milan, Ernie M. 19,210.17 876.60 20,086.77 0.00 0.00
Millar, Gilla Verches 40,267.05 2,888.89 23,074.39 20,081.55 20,081.55
Mindo de Varona, Sharon 43,459.63 51,354.55 44,470.16 50,344.02 50,344.02
Mirana, Ronnel B. 52,534.17 64,127.19 58,854.65 57,806.71 57,806.71
Nadela, Joseph 14,690.45 709.23 15,399.68 (0.00) (0.00)
Nolasco, Fernando 51,883.08 64,574.98 63,838.57 52,619.49 52,619.49
Nunez, Ricardo O. 20,511.72 - - 20,511.72 20,511.72
Oliver, Frederick 35,129.71 2,750.17 14,524.00 23,355.88 23,355.88
Ongkeko, Amalia - 61,584.91 7,281.57 54,303.34 54,303.34
Opulencia, Marilou 46,936.30 57,844.90 52,650.73 52,130.47 52,130.47
Pabillore, Kristian - - 1,889.55 (1,889.55) (1,889.55)
Pacate, Ridella 20,011.44 161.96 20,168.40 5.00 5.00
Paderna, Rolando - 64,068.44 18,987.40 45,081.04 45,081.04
Padilla, Paul Gerald 53,964.83 4,198.64 22,946.65 35,216.82 35,216.82
Parpan, Ma. Theresa - 64,357.34 20,939.44 43,417.90 43,417.90
Pascua Jr., Alexander M. 43,599.39 55,473.19 48,944.70 50,127.88 50,127.88
Pascual, Mark David - 48,263.01 1,924.82 46,338.19 46,338.19
Pellas-Arceo, Ma. Aurora P. 14,294.94 1,094.45 6,510.83 8,878.56 8,878.56
Pellas-Arceo, Ma. Aurora P. 37,445.62 1,863.91 39,309.53 - -
Pena, Marriane - 60,000.00 1,382.05 58,617.95 58,617.95
Piosca, Nora 32,746.15 64,658.09 54,796.00 42,608.24 42,608.24
Ponce, Ronald - 60,587.50 5,058.00 55,529.50 55,529.50
Punzalan, Einnor 45,638.92 63,083.00 108,721.92 - -
Quintana, Nico Carlo - 51,279.45 2,045.13 49,234.32 49,234.32
Ramirez, Ma. Abigail 49,568.40 64,678.41 64,608.98 49,637.83 49,637.83
Rañoa, Louella 24,000.00 - 24,000.00 - -
Raytos, Rosemarie Y. 32,023.24 63,153.13 41,008.43 54,167.94 54,167.94
Recabar, Gilbert D. 39,351.94 62,801.37 43,816.05 58,337.26 58,337.26
Requilman, Michael 34,549.32 280.57 37,946.92 (3,117.03) (3,117.03)
Reyes, Marc Anthony - 60,230.14 2,406.87 57,823.27 57,823.27
Reyes, Vivian 7,981.11 21.90 8,003.01 - -
Rivera, Ma. Cecilia D. 33,011.27 62,380.92 37,552.35 57,839.84 57,839.84
Robles, Milagros 18,444.68 604.69 19,049.37 (0.00) (0.00)
Salas Jr., Robert 10,417.90 36,645.27 23,389.59 23,673.58 23,673.58
Salas, Elizabeth - 64,068.44 18,987.41 45,081.03 45,081.03
Salgado, Joel A. 380,490.01 30,624.28 53,694.11 357,420.18 357,420.18
Samala, Ariel 22,088.69 1,326.99 18,944.75 4,470.93 4,470.93
San Juan, Charina - 62,532.50 11,182.50 51,350.00 51,350.00
Santiago, Rosalinda - 61,584.91 7,281.57 54,303.34 54,303.34

SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS,
EMPLOYEES, AND PRINCIPAL STOCKHOLDERS (OTHER THAN AFFILIATES)
FOR THE YEAR ENDED DECEMBER 31, 2006
Name and Balance at Additions Deductions
Ending Balance
Balance at
Disignation beginning Amount Amount end
of debtor of period Collected Written-off Current Non-current of period
Silang, Armando - 55,199.85 6,555.34 48,644.51 48,644.51
Silvala, Jhonathan - 45,950.46 14,307.71 31,642.75 31,642.75
Sinconegue, Felix - 62,454.05 31,373.78 31,080.27 31,080.27
Siño, Francis - 63,151.43 13,131.72 50,019.71 50,019.71
Solver, Melanie - 61,034.75 5,331.76 55,702.99 55,702.99
Sy-Wico, Joan Marie - 25,798.98 25,798.98 - -
Taguba, Jesus - 245,026.47 50,968.36 194,058.11 194,058.11
Taguba, Jesus 41,123.38 345.76 41,469.14 - -
Tan, Mary Jane R. 42,644.24 63,556.61 50,648.96 55,551.89 55,551.89
Tardecilla, Eumirpio 8,181.44 63,304.34 24,235.44 47,250.34 47,250.34
Taylo, Irene - 60,000.00 - 60,000.00 60,000.00
Trajano, Elena 48,084.70 64,598.16 62,264.77 50,418.09 50,418.09
Trajano, Elena 451,869.37 37,426.44 59,141.40 430,154.41 430,154.41
Trias, Marianne U. 33,789.53 2,644.56 36,434.06 0.03 0.03
Tulio, Edwin - 62,474.61 12,160.24 50,314.37 50,314.37
Tulio, Queenie Marie Armada 34,696.75 64,666.11 56,754.61 42,608.25 42,608.25
Unson, Renan - 63,034.76 17,827.29 45,207.47 45,207.47
Urbano, Randolph - 30,139.73 1,831.42 28,308.31 28,308.31
Vergara, Henry 59,277.58 4,706.60 22,897.11 41,087.07 41,087.07
Vicedo, Leonida P. 31,928.10 62,200.01 36,371.15 57,756.96 57,756.96
Victoria, Ma. Victoria - 62,510.57 62,510.57 - -
Vidanes, Michelle - 37,361.64 1,286.61 36,075.03 36,075.03
Villaluna, Donna E. 34,080.93 57,072.87 52,864.71 38,289.08 38,289.08
Villanueva, Rosalie - 62,686.15 11,181.19 51,504.96 51,504.96
Yap, Carmela P. 30,397.39 1,945.21 23,166.41 9,176.19 9,176.19
Zaragoza, Leo B. 45,863.20 64,707.73 62,815.57 47,755.36 47,755.36
Zaragoza, Ma. Anita C. 54,894.93 64,227.24 61,431.55 57,690.62 57,690.62
TOTAL 5,380,434.60 9,809,961.27 5,536,463.42 - 9,653,932.45 - 9,653,932.45

Bankard, Inc.
Schedule I. Capital Stock
December 31, 2006
Number of Shares Number of
Issued and Shares Reserved Number of Shares Held By
Outstanding at for Options,
Number of shown under Warrants, Directors,
Shares related balance Conversions, and Affiliates Officers and Others
Title of Issue Authorized sheet caption Other Rights Employees
Common Shares 600,000,000 311,419,900*
- 226,518,900 4,000 84,897,000
* On April 8, 2003, the Company's Board of Directors authorized the buy back of 26,580,100 shares of the Company's Common stock at market value.

BANKARD, INC.
INDEX TO EXHIBITS
SEC FORM 17-A
Number
Page Number
(3) Plan of Acquisition, Reorganization, Arrangement, Liquidation, *
or Succession
(5) Instrument defining the Rights of Security Holders, *
including Indentures
(8) Voting Trust Agreement *
(9) Material Contracts 87
(10) Annual Report to Security Holders, Form 11-Q or Quarterly Report see attached AFS
to Security Holders
(13) Letter regarding Changes in Certifying Accountant *
(16) Report furnished to Security Holders *
(18) Subsidiaries of Registrant *
(19) Published Report regarding Matters Submitted to Vote of Security Holders *
(20) Consent of Experts and Independent Counsel *
(21) Power of Attorney *
(29) Additional Exhibits *
* These exhibits are either not applicable to the Company or require no answer.
Bankard, Inc. 2006 SEC Form 17-A Page 86

EXHIBIT #9 – MATERIAL CONTRACTS
The following contracts have been entered into by Bankard, Inc and are or may be material:
1. Service Agreement, between Equitable-PCIBank and Bankard, Inc. authorizing all the branches
of the former to act as collecting agents for payments from Bankard, Inc.’s cardmembers and
prescribing the procedure for such collection, including the distribution of documents from nonon-line-
collection branches.
2. Service Agreement, between Rizal Commercial Banking Corporation, RCBC Savings Bank and
Bankard, Inc. authorizing all the branches of the former to act as collecting agents for payments
from Bankard, Inc.’s cardmembers and prescribing the procedure for such collection including the
distribution of documents from non-on-line collection branches.
3. Information Service Agreement, between Bankard, Inc. and Atos Origin (formerly Sema Group
Outsourcing (Singapore) Pte. Std) whereby the latter will provide credit card processing services
for Bankard’s credit card products.
4. Agreement, between Bankard, Inc. and Statistical Analysis System (SAS) whereby the latter will
provide software products and services for Bankard’s use of the software for statistical analysis of
the card portfolio.
5. Service Agreement between ePLDT Ventus (formerly Vocativ) and Bankard, Inc. whereby the
former provides call center services to Bankard’s customer (May 30, 2002). This arrangement is
renewable every year.
6. Service Agreement, with SM Payment Centers, Metrobank, Union Bank, Banco de Oro, East
West Bank, CIS Bayad Center, Bancnet and Bankard, Inc. authorizing all the branches of the
former to act as collecting agents for payments from Bankard, Inc.’s card members and
prescribing the procedure for such collection, including the distribution of documents from nonon-line
collection branches.
7. Memorandum of Agreement with House of Investments, Inc. to whereby the latter will act as a
central purchasing agent for Bankard’s purchasing requirements for hardware, software and
various supplies.
Bankard, Inc. 2006 SEC Form 17-A Page 87